Category Archives: Organisations and Leadership (GV4D5)

EXPLAINING CONSENSUS IN THE EUROPEAN COUNCIL

EXPLAINING CONSENSUS IN THE EUROPEAN COUNCIL

Rory Creedon 

Should we interpret high consensus in the European Council as reflecting cultural norms, thus making power index approaches irrelevant?

There is a wealth of qualitative evidence documenting that despite formal procedures for decision making by qualified majority in The Council of Ministers (“the Council”), there is a cultural norm that dictates that decisions should strive to be arrived at by consensus. Indeed the web portal for the European Union (“EU”) states that “The European Council decides by consensus”[1], which confirms the existence of the norm although it cannot speak as to its cultural or other roots. However, despite this fact there are those who argue that when analyzing power within the Council it is still productive to take a power index approach which abstracts away from how power is actually exercised to make statements about the power each member “possesses by virtue of the [decision] rule itself”[2]. Characteristic of the debate is the differing stance taken by Moberg as against Holsi & Machover. The former argues that the power index approach is inferior to a cultural norm based analysis of Council decision-making because the underlying assumption of power indices is that every potential voting outcome has the same probability of occurrence, whereas in reality states have a fairly stable set of interests. This means that “the vast majority of the millions of theoretically conceivable coalitions are highly unlikely”[3]. The latter maintain that in the long-run, national interests can change and also the issues which the council will decide upon are varied and “highly unpredictable”.[4] As such, power indices provide us with the best estimates of how power will be exercised in a wide time horizon. This essay argues that due to the institutional design of the Council it is impossible to verify categorically which approach is most successful. Specifically the system of pre-negotiation in Le Comité des Représentants Permanents (COREPER) only allows us to observe successful legislative motions, that is those where a consensus can be achieved. Without data on the proposals rejected in the COREPER stage that never made it to the main Council negotiations, and the reasons for their being so rejected, it cannot be observed empirically what the implicit decision rule is in committee stage and hence whether there is a true cultural norm based drive for consensus which would question the relevance of a power indices approach. That being said, upon inspecting the data that are available on Council decisions, certain inferences can be made regarding the rejection of proposals in the COREPER stage which indicate that a cultural norm based analysis is more successful. These inferences are based on the assumption that we would see more contestation in Council level voting data if COREPER negotiations were based to some large extent on the explicit decision rules as opposed to a cultural preference for consensus. The strength of this assumption, however compelling, is challenged only weakly by the ability of states to bargain across issues.

Data on decisions taken by the Council indicate that there is a strong tendency to consensus. Of those decisions formally subject to qualified majority voting in the 1998-2004 period, 75-80 per cent were not explicitly contested.[5] In the post enlargement EU this figure has actually risen.[6] In some sense it is futile to argue that this observed consensus is not driven at least in part by cultural norms that operate within the Council; countless interviews with those involved in the day-to-day workings of the Council confirm that there exists a culture of compromise, and a “consensus reflex”[7]. Whilst the origins of this culture are fascinating and frequently debated, to try to determine them would be outside the scope of this essay. Therefore, this essay starts from the non-controversial assertion that such a culture does exist, a fact accepted even by scholars who advocate analysis based upon power indices (Renshaw et al, Hosli & Machover). This notwithstanding, much time and energy has been devoted in the EU Intergovernmental Conferences (“IGCs”) to debating, upon successive enlargements, how voting weights should be distributed and at what level the threshold for passing legislation by qualified majority voting (“QMV”) should be set. This would appear to affirm that voting procedures continue to be important in spite of the existence of the informal norm of consensus which would seem to make them a somewhat less contentious agenda item. Heisenberg argues that the consensus norm renders voting weights “largely irrelevant”[8], and that they are argued over as no more than an insurance policy in the event that stable repeated interactions break down in the Council. Whilst this may indeed be case, the existence of the consensus culture, the disagreements as to procedure, the testimony of officials and the voting weights as insurance argument are not logically inconsistent with each other. Thus it remains to be determined whether a cultural norm based approach is sufficiently strong in explaining consensus in the Council thereby making analysis based upon power indices redundant.

The problem for scholars thus far has been that this is impossible to so determine as the voting data are highly biased. This is due to the structure of decision making in the Council. Prior to a decision being taken by the Council, legislation is discussed in various committees and specialised working groups . The most important of these committees is COREPER[9] which is comprised of permanent representatives from each member state. In practice nearly everything is agreed in the COREPER stage. “Real negotiations” take place in these pre-Council stages which can last for “months and sometimes years”.[10] Although COREPER never formally votes it does take decisions and has “de facto legislative competencies”[11]. This institutional design means that observed voting data at the Council level do not have much descriptive power as COREPER is unlikely to send a proposal to the Council if it is likely to fail subsequent to Council negotiations. This is evidenced by the fact that a majority of points passed to the Council for deliberation are “A points” on which no further discussion is needed.[12] What is observed then in Council level voting data does not include data on failed proposals, as proposals anticipated to fail would not be passed from committee to Council, and as such it is highly selective sample.

More troubling however, is that if negotiations progress by implicit voting in the COREPER committee stage as qualitative studies indicate,[13] then Council level voting data do not contain data that can allow a substantiation of the claim that decisions are arrived to pursuant to a culture of consensus. [14] Indeed, the structure of pre-Council negotiations can be interpreted as either a mechanism for reaching consensus, or a series of unofficial votes[15]. However, even if that latter interpretation is correct, there is no way of knowing what the decision rule is for the series of pre-Council implicit votes. If the implicit decision rule is the same as the explicit decision rule (a qualified majority in the case of decisions to be taken by QMV), then proposals in the COREPER stage will have be abandoned or killed if it appears that  there would be a blocking minority in the Council stage. Were this to be the case, then in spite of a high level of consensus at the Council level, a power index model would still have a lot of descriptive power as the a priori power derived from the decision rule is still of key importance at committee stage if not Council stage. If on the other hand there is “issue specific” power which leads to different “preference intensities”[16] and these preferences are respected, then even a single state or minority coalition not sufficient for a blocking minority in the Council, may have their point of view considered in a “compromise by accommodation of divergent interests”.[17] An implicit decision rule that accommodates interests even when such interests are pursued by a number of states insufficient to form a blocking minority in the Council, would seem to suggest a culture of compromise, thus making power index analysis somewhat redundant. Without specific data on how implicit decisions are taken in the pre-Council negotiations, and particularly in the COREPER stage it is impossible to conclude definitively whether analysis of Council decisions is adequately explained by the cultural norms thus rendering power index analyses irrelevant. This is the basic conclusion of this essay.

However, in spite of the data problem outlined above, it seems that it should in fact be possible to infer conclusions about the decision rule in the COREPER stage even though there is no extant data pertaining specifically those negotiations. As Hayes-Renshaw et al point out only 25 per cent of Council decisions decided upon by QMV were subject to a contested vote.[18] This figure seems to imply that the implicit decision rule in the committee stages is founded upon a desire to achieve consensus rather than based upon the explicit qualified majority rules that pertain at Council level. If the implicit decision in rule COREPER were qualified majority, then we would expect negotiations to proceed as follows: a proposal is discussed, negotiated and tabled which may or may not command a supporting majority. If it does command a majority then the proposal is passed to the Council with no further amendments. If it does not, then additional negotiations are held up until the point where it commands a majority, and no blocking minority coalition is feasible. At this point the proposal is passed to the Council. If on the other hand the implicit rule is consensus then following the tabling of the proposal, negotiations would proceed until all views that are capable of being accommodated without contradiction, would be included as amendments, and only at the stage where no further agreement is possible would the proposal be passed to the Council for approval.

Whilst it is not possible to conclude categorically from the voting data available which mechanism is in fact at work, it seems that the number of contested votes is simply too small to support the argument that the implicit COREPER decision rule is QMV. Absent a culture of consensus, there would be no incentive for those who form a majoritarian coalition of states supporting a proposal to allow for negotiations to proceed beyond the point where a majority is garnered. Yet of the votes decided at Council level by QMV, only a small fraction are contested. Moreover, 47 per cent of those contested decisions are only contested by a single state and a further 19 per cent by only two states[19]. The assumption here is that if decision making in the committee stages were based upon an implicit QMV, the number of contested votes in the Council would be significantly higher, and in particular the number of instances where a coalition of member member states simultaneously recording their contestation would be a lot higher. It is argued here that assumption is strong even if it is the case that member states that are in the losing coalition do not wish to record the fact officially in the vote, for sake of preserving domestic political capital. Thus it seems that even from the voting data that are available we can lean toward a conclusion that when looking at decision making in the Council an analysis based on a cultural norm of consensus is the most appropriate, and this tends to make power index analyses unwarranted.

The issue not capable of firm resolve at this point however as it is further clouded by the ability of states to bargain across interests. It is well known that inter-temporal vote swapping is a method used in pre-Council negotiations in order to achieve agreement.[20] This involves member states who might well be a part of a minority coalition opposing a bill, agreeing to the proposal in exchange for some consideration of their interests in another area being decided upon by the Council. Interpreting such behaviour through the lens of Robert Putnam’s two-level game theory[21], it seems clear that for issues that are not significantly salient to the domestic constituencies, member states negotiating in COREPER can effectively “lose out” in one area under negotiation if they are compensated for this loss by a “win” in a different area. In the language of Putnam, the Level II constituency win-set is contoured such that a level I bargain involving vote-swapping and issue-trading is possible. This is problematic for the analysis presented above because a lack of contestation in the voting data, rather than supporting the assertion that consensus is the implicit decision rule in COREPER, could instead be reflecting the ability of states to trade votes. If states are willing to support proposals they would otherwise vote against, in return for concessions in another area, and this system of compensation occurs in the COREPER stage then it is to be expected that levels of contestation at Council level should be low. This is because, states that form a potential blocking minority, can be persuaded to agree to a proposal through vote trading.

However, whilst this may challenge the above interpretation of low levels of contestation indicating a decision rule founded on consensus, the fact remains that nearly half of all contested votes are only contested by one member state. If the implicit decision rule in COREPER were QMV then states that support a proposal that currently cannot garner a majority would only be willing to compensate members of a blocking minority until such a point where the minority was no longer capable of voting down the proposal in the Council. Given that a blocking minority consists of 50 per cent of states[22], absent a cultural norm for consensus it would be rational for supporting states only to grant concessions to the minority until 50 per cent minus one state would agree to the proposal (assuming the voting weight/population conditions are also satisfied). Yet what is observed is that in the majority of contested decisions, only one state is willing to go on the record as a dissenter. This strongly suggests that the implicit decision rule in the committee stages is consensus and not QMV, and this consensus is reached both by trying to accommodate divergent views, and vote trading across issues.

This essay has argued that it is not possible to categorically state whether decision making in the Council is adequately analysed using a cultural norm based approach to understanding consensus thereby making a power index approach irrelevant. This is because the institutional design of decision making in the Council means that much is decided in pre-Council committees, particularly COREPER. As it is not possible to observe how decision making occurs in those bodies and specifically what the implicit decision rule is, it cannot be stated with certainty that decisions are made predominantly pursuant to an informal rule of consensus, or rather based upon the explicit rule of QMV. If it is the former then power index analysis is not useful, whereas if it is the latter, then power indices can still be of use to scholars analysing decision making. That being said, low levels of contestation in votes in the Council seem to imply that consensus informs decision making in committee stage rather than the explicit voting rules. This assertion rests on the assumption that contestation would be higher at council level if COREPER decision making were based on implicit QMV. This conclusion is challenged somewhat by the ability of states to vote trade across policy issue. However, the number of states that contest a vote appears too low to plausibly support the thesis that it is QMV rather than consensus that is driving decision making in COREPER. This is because absent a cultural norm that dictates consensus, it would be irrational for supporting states to grant more concessions than strictly necessary in order to gain a majority. Therefore although it cannot be proved empirically, consensus in the Council is best understood from a cultural norm perspective, and this leaves analysis based on power indices somewhat irrelevant.


[2] Felsenthal & Machover A Priori Voting Power: What is it all about? Political Studies Review Vol. 2 (2004) p.3

[3] Moberg The Nice Treaty and Voting Rules in the Council Journal of Common Market Studies Vol. 40, No. 2 (2002) p. 261

[4] Holsi & Machover The Nice Treaty and Voting Rules in the Council

[5] Hayes-Renshaw, Van Aken & Wallace When and Why the EU Council of Ministers Votes Explicitly, Journal of Common Market Studies Vol. 44, No. 1, (2006) p. 163

[6] Hagemann & De Cleck-Sachsse Decision-Making in the Enlarged Council of Ministers: Evaluating the Facts Centre for European Policy Studies, Policy Brief No. 119 (2007) p. 3

[7] Lewis The Methods of Community in EU Decision-Making and Administrative Rivalry in the Council’s Infrastructure, Journal of European Public Policy, 7:2 (June 2000), pp. 270-271

[8] Heisenberg The Institution of ‘Consensus’ in the European Union: Formal versus informal decision-making in the Council, European Journal of Political Research 44, (2005)  p.71

[9] Mattila Contested Decisions: Empirical analysis of voting in the European Union Council of Ministers European Journal of Political Research 34 (2004) p. 30

[10] Moberg Op cit. p. 277

[11] Lewis Op cit. p 264

[12] Matilla Op cit. p. 30

[13] Moberg Op cit. p. 278

[14] Hayes-Renshaw et al Op cit. p. 164

[15] Holsi & Machover Op cit. p 512

[16]Tallberg Bargaining Power in the European Council Journal of Common Market Studies Vol. 46 No.3, pp. 692-3

[17] Lewis Op cit. p.271

[18] Hayes-Renshaw et al Op cit. p165

[19] Ibid. p. 169

[20] Heisenberg Op cit. p.69

[21] Putnam Diplomacy and the Logic of Two-Level Games International Organization, Vol. 42 No. 3 (1988) pp. 427-460

[22] Kirsch The New Qualified Majority of the Council of the EU

 

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David Cameron and the Treaty Veto

TWO-LEVEL GAMES AND LEADERSHIP IN THE EUROPEAN UNION

Question: How can we understand the exercise of political leadership in international politics through ‘two-level games’? Discuss with reference to recent British policy in the EU.

Two-level game theory can inform an understanding of how political leadership is exercised in the European Union (“EU”). This essay begins with a theoretical discussion to briefly place two-level game theory as it related to leadership in the wider context of international relations theory before going on to show how it can be applied to leadership settings in an EU context. As a case study, the essay then looks at the decision of David Cameron on December 9 2011 to veto the Fiscal Treaty being negotiated in Brussels in an attempt to prevent a collapse of the Eurozone. It is argued that this event poses challenges for understanding leadership in the EU in terms of two-level games for two key reasons. Firstly, standard analysis of the relevant conditions and supporting coalitions in the UK at the time indicate that agreement should have been possible in Brussels. Secondly, as the policy alternative to agreement was not a reversion to the status quo but rather a treaty excluding the UK, agreement should have been possible as this would have been less bad than political isolation. I will conclude that whilst curious, this challenge to the usefulness of two-level game theory in assessing leadership in the EU is ultimately not fatal if we understand that there was a mismatch between the constraints faced by Cameron domestically and internationally, and the diplomatic tactics he employed at the negotiations in Brussels. The inability to reach agreement was thus a diplomatic failure.

Two-level games theory in international relations stands at the nexus between two rival traditions that seek to explain international cooperation. One such tradition looks to societal conditions as determinants of international outcomes and is characterized by the work of Ronald Rogowski. The main thrust of his argument is that international outcomes affect domestic groups in different ways.[1] Those that benefit from international outcomes will press for further change in the same direction, whilst those who lose will press for reversion. Importantly, as the wealth of the beneficiaries increases so does their political influence, and hence “the likelihood grows that political entrepreneurs will devise mechanisms that can surmount the obstacles to collective action”[2] in order to successfully pressure their domestic politicians for their preferred international policies. International political leadership in this view, is exercised on behalf of domestic coalitions, as international actors (such as ministers negotiating at the EU) rationally pursue the policies preferred by the domestic groups upon which their power base is dependent. To use the language of Slaughter and Scheve, “cleavages” in public preferences over policy are channeled through leaders to result in international outcomes.[3]

In contrast to this school of thought stands realist theory. This posits a much more substantial role for the state as the key determinant of international outcomes. “States are the major actors in world affairs”[4], argues Grieco and they have fundamentally different interests from domestic coalitions. Whilst domestic parties may be interested in their “individual absolute gains” that accrue pursuant to international politics, states are concerned with relative gains.[5] This is because the international political environment is “anarchic”,[6] meaning that states must increase their relative power vis-à-vis other states in order to stave off ever present security threats. For realists, leadership for international actors is not then characterized by deference to domestic preferences. Rather, leaders stand apart from their constituencies in pursuing the goals of the state, which may appear diverse (economic growth, improved political positioning, increased social stability etc.[7]), yet they all relate to the fundamental aim of achieving the greatest possible relative gains in order for the state to “enhance prospects for survival”[8].

Robert Putnam’s two-level game theory[9] takes elements of both of the societal and realist perspectives and arrives at a much more nuanced view of international relations and leadership. He recognizes that domestic and international pressures act concurrently and both have a role to play in explaining international political outcomes. At home, leaders are pressured by groups to achieve certain international policies that benefit them whilst in the international arena these leaders seek to maximize their ability “to satisfy domestic pressures, whilst minimizing the adverse consequences of foreign developments”.[10] He models these interactions as a two-level game. At Level I there is bargaining between negotiators and they reach some provisional agreement. Level II is a ratification process (which may be formal or informal) whereby the Level I agreement will be voted upon by the Level II (domestic) constituency.[11] Thus there is a Level II constituency “win-set” that contains all the possible Level I agreements that will receive assent in the ratification process.[12] The shape of that win-set is critical when analyzing international politics, as there must be some overlap between the Level II win-sets of the respective negotiating parties for any agreement to be possible. The larger the win-sets are, the more likely it is that a successful international agreement will be concluded.[13] The size will also determine how the relative gains from agreement will be distributed and how strong a negotiating stance an international leader has with his opposing parties.

This theory leads to a radically different view of international political leadership than offered by the societal and realist perspectives. Rather than simply mouthpieces for domestic interests or isolated statesmen pursuing power, leaders are seen as “mediating domestic and international pressures”.[14] Leadership means playing a key role in the negotiation process as leaders try to maneuver their opponents closest to their ideal political outcome subject to domestic constraints, the ability to trade across issues, and the amount of information they have about each other’s respective level II win-sets.

The logic of two-level games has been extended and used to analyse a wide variety of international agreements from Brazilian debt negotiations[15] to agricultural policy reform.[16] In the context of the EU, two-level game theory has been used to explain the process of European integration by Andrew Moravcsik in a theory called “liberal intergovernmentalism”. This theory combines the idea that national preferences for economic integration are formed as a result of the costs and benefits of interdependence accruing to different domestic groups. At the same time, the intensity of these preferences, the possibility of alternative polices or coalitions, and, in the language of Putnam, the contours of the win-set will “determine the resolution of distributional conflicts among governments”.[17] National preference formation takes place as groups apply pressure to domestic leaders, and governments realize the costs and benefits from economic integration. Meanwhile, the outcomes of strategic interactions that take place in the EU are the rational responses of the negotiating parties delineated by the alternative policies and coalitions available to them.

Whilst this method has been criticized not paying enough heed to the institutional rules that govern decision making in the EU[18], it does not appear to have been challenged in the implications it generates regarding leadership in the EU. As with the above analysis of generalized two-level games, liberal intergovernmentalism implies leaders that are mediating between the domestic demands for both the level and type of European integration, and trying to position themselves within the EU such that an agreement closest to the domestic ideal can be reached subject to the positions of the other negotiating parties.

This is a general theory that models how international actors behave in their interactions at the EU, and the domestic factors that constrain them, and at that level of generality it is to be expected that there exist outliers that do not conform to the predictions of the model. Nevertheless, it should be instructive to look at specific instances of leadership in order to see how they fit into the two-level analysis, and indeed whether after the event, the two-level theory can help our understanding of what has occurred. The remainder of this essay will look at once such instance being the leadership exercised by David Cameron in the last month of 2011 when he vetoed the Fiscal Treaty being negotiated at the EU.

On the evening of December 8 2011 European leaders met in Brussels to flesh out the terms of a treaty aimed at strengthening fiscal discipline in the EU in order to ensure the survival of the Eurozone and “restoring market confidence”[19] in the wake of the sovereign debt. Cameron, leader of the Conservative-Democrat coalition government of the UK had promised in the lead up to the treaty discussions not to “throw a spanner in the works”,[20] and hence it was widely expected that a deal could be reached. A Conservative member of parliament is quoted as saying “The priority for the government has got to be to ensure that the Eurozone survives.”[21] Despite this need for agreement, in the early hours of December 9 Cameron decided that the UK could not agree to the treaty as proposed, as he did not receive the safeguards he wanted to ensure that the treaty would not undermine the EU single market nor technical safeguards for the City of London.[22] The exercise of the veto appears to challenge the two-level analysis of leadership in the EU for the following two reasons. Firstly, the level II win-set appears to have contained exactly the type of agreement that was rejected at level I by Cameron, and secondly the policy alternatives at Level I appear to have been profoundly unattractive.

The size of the level II win-set appears to have been relatively large. The un-coordinated fiscal policies of the Eurozone countries were in effect creating large negative policy externalities on the UK. Roughly half of the UK’s exports are purchased by the EU and consequently “around 3.5 million jobs in the UK are linked to the export of goods and services to the EU.”[23] On 15th December 2011 The Confederation of British Industry reported that 41% of manufacturers were reporting below average export order books reflecting “on-going instability in the Euro area”.[24] In this type of case where a negotiating partner imposes negative externalities, and unilateral adjustment is not a feasible response there is an “unambiguous incentive to coordinate policy.”[25] Small win-sets are typical when the cost to constituents of “no-agreement” is small, notes Putnam.[26] The costs in this case were far from small. Cameron recognized that the fiscal crisis was having a “chilling effect on Britain’s economy”[27] and that failure to agree was widely reported to put the Eurozone in further danger thus risking British jobs and economic prospects.[28] High costs imply that the level II win-set was large meaning that it is likely to have contained the Fiscal Treaty as it was proposed. It is thus likely that there was considerable overlap between the Level II win-sets of the negotiating parties which should have made agreement possible at Level I.

However, it is not enough to simply state that the domestic costs from a particular policy were high. This is because how those costs are distributed through the population is important for understanding how Level II pressure is applied to leaders such as Cameron. For example, where the benefits or costs of a policy are distributed widely throughout the population (e.g. monetary policy[29]), the logic of collective action[30] dictates that less pressure will be applied by Level II constituents on their leaders as there is incentive to free ride upon the action taken by others affected by the policy. On the other hand, where costs are borne by specific groups (e.g. trade policy[31]) it is more likely that they will be able to coordinate to overcome these collective action problems and apply pressure on their leaders. The effect of the former situation is that leaders are less constrained by the Level II constituents and may negotiate more freely, perhaps toward their personal or party policy ideal at Level I, whilst the reverse is true of the latter situation. 

In the case in question, whilst it is undoubtedly true that the economic costs of “no-agreement” would be diffusely spread throughout the UK population this should not be interpreted to mean that Cameron was isolated from Level II pressures. He did not thus have a free hand to veto the fiscal treaty. This is because whilst costs were widespread, as noted above a high level of cost intensity accrued to certain sectors such as manufacturing, service exporters and all industries exporting to the EU. Their intense interest in agreement gave them a much greater incentive to organize in favour of the treaty. Moreover these particular groups have already overcome their collective action problems by having long established channels of access to government through which lobbying activity occurs, hence why we see in general “a political bias in favour of producers vis-à-vis those with more diffuse interests such as tax-payers and individual consumers.”[32]

For the sake of completeness it should be recognized that support for the fiscal treaty was by no means universal. There was what Putnam term “generic opposition”[33] in the form of Eurosceptic Conservative members of parliament and their sympathizers. Indeed a group of around 100 Conservative back bench MPs were calling for a referendum on the treaty[34] and others were calling on Cameron to use the treaty as a launching ground for repatriating certain powers from Brussels.[35] However, this opposition does not change the analysis of win-sets and preferences outlined above for two reasons. Firstly, this opposition was minority in nature, and secondly it was opposition based on a view of the treaty as a political project rather than a fiscal project. This is relevant because private producers and businesses (those affected by the commerical outcomes of the treaty) take little interest in political cooperation, and hence did not rally around the political clamour that was questioning Britain’s place in the EU. Additionally, as noted above Cameron had promised not to throw a spanner in the works at the Brussels summit.

On an initial review of the conditions in Brussels at the Level I negotiations, it likewise appears that agreement should have been possible. It was clear before the treaty negotiations began that the alternative to British participation in the treaty was not no-treaty, but a treaty involving the other members of the Eurozone and potentially the other nine non-Eurozone states.[36] The UK did not have what Gruber terms “go-it-alone power”[37], in that there were no unilateral policy options that they could take to achieve the outcomes desired by the fiscal union. Cameron was therefore faced with having to agree to the treaty, or face a Europe where the UK would be excluded participating in decisions that would undoubtedly affect the UK economy. Thus although a treaty without the safeguards desired by Cameron may not have been ideal, faced with the certainty of agreement irrespective of UK participation, and an arguably strong incentive to be on the inside rather than the outside of any fiscal deal, Cameron might have been expected to agree to the treaty as there was an absence of any attractive alternative.[38] As Moravcsik notes, it is under conditions exactly such as those described that “a government may seek to avoid exclusion by agreeing to terms of cooperation that leave it worse off in absolute terms than the status quo ante” [emphasis in original].[39] Indeed in aftermath of the treaty, Cameron was widely criticized for leaving Britain “without a voice”[40] in the EU.

It appears therefore that conditions both at Level I and Level II were such that Cameron could have achieved agreement in Brussels. As leader, the balance of his Level II constituents were demanding a resolution through treaty. The Level II win-set was large and hence the universe of possible Level I agreements was also large. At Level I the range of his leadership options was constrained by the lack of viable alternative options (both unilateral and as part of a coalition). How then can we understand the decision to exercise the veto when an initial analysis of Cameron’s leadership in the EU using a two-level approach indicates that an agreement should have been made?

It is argued here, that the failure to reach agreement was due to a failure on the part of Mr. Cameron to realize the constraints facing him and this was revealed in the tactics he employed at the summit. One of the consequences of being a member of the EU is that negotiating parties have a wealth of information about the domestic situation of their counterparts. It is therefore highly likely that the other EU members, particularly France and Germany, were aware that the Level II win-set facing Cameron was large. This is of great importance because the “larger the perceived win-set of a negotiator the more he can be pushed around by the other Level I negotiators.”[41] Cameron should then have been aware that he had a weak negotiating hand at the summit, and that if he demanded too much “Eurozone leaders could call his bluff”[42] and press ahead without participation of the UK. It appears that his Level I leadership tactic of remorselessly demanding what Angela Merkel termed “politically impossible”[43] carve outs for British industry, was mismatched with the his negotiating possibilities as dictated by the Level II constituency win-set.

Additionally it appears that he was not sensitive enough to the fact that the alternative policy options for the other negotiating parties at Level I were virtually identical to full treaty agreement. Indeed it was suspected that France in fact preferred a treaty excluding the UK.[44] The primary downside of a treaty without the UK is that the institutions of the EU would not be automatically available to enforce and monitor the terms of the treaty. However, it was believed by EU lawyers that this constraint could be got around,[45] and in any event Cameron’s objection to the use of EU institutions has since softened.[46] In other words, the negotiating positions of Cameron’s counterparts were extremely strong due to the consensus nature of the coalition available in the case of no-agreement at full treaty level. The other European leaders therefore had no incentive whatsoever to pander to demands made by the UK at Level I, as they could achieve an equally attractive agreement without the participation of Britain. Therefore, pursuant to a two-level analysis of Cameron’s leadership in the EU at the fiscal treaty summit I conclude that he was not sensitive enough to the negotiating constraints placed upon him by a large Level II constituency win-set, nor the constraints placed upon him by the possibility of alternative Level I agreements between the other EU members. As such, the outcomes of this particular instance of leadership should be viewed as the consequences of diplomatic failure and not as a challenge to the two-level framework itself.

This essay has used a two-level games framework to posit leadership based on mediation of domestic and international pressures. In the EU specific context it has shown how the logic of two-level games has been incorporated into a liberal intergovernmentalist theory of European integration, and how that applies to leadership in the EU. As a case study it has reviewed an important instance of leadership being exercised in the EU, namely at the fiscal treaty summit held in Brussels in December 2011. I argued that given a large win-set and relative lack of alternative options, Cameron should have sought agreement with the other members of the EU. Whilst it seems that the fact of the veto could challenge the usefulness of the two-level approach in analyzing this instance of leadership, I conclude that it is still a good method, and can help us understand how the failure of the UK to agree in Brussels was due to a diplomatic failing on the part of David Cameron for not recognizing that there was a critical mismatch between his bargaining stance, and the feasible bargaining possibilities determined by conditions at both Level I and level II.


[1] R. Rogowski, Commerce and Coalitions: How Trade Affects Domestic Political Alignments (1989) Princeton University Press p. 1

[2] Ibid. p. 5

[3] K.F. Scheve & M. J. Slaughter Globalization and the perceptions of American Workers (2001) Institute For International Economics Chapter 3

[4]  J.M. Grieco Anarchy and the Limits of Cooperation: A Realist Critique of the Newest Liberal Institutionalism, International Organization, Vol. 42, No. 3 (1988) p.488

[5] J.M. Grieco op. cit.  p. 487

[6] S. Huntington International Security, Vol. 17 No. 4 (Spring, 1993) p. 72

[7] S. Krasner State Power and the Structure of International Trade World Politics, Vol. 28, No. 3 (1976), pp. 319-321

[8] J.M Grieco op. cit. p. 503

[9] R.D. Putnam Diplomacy and Domestic Politics: The Logic of Two-Level Games International Organization, Vol. 42, No.3 (1988) pp.427-460

[10] Ibid. p. 434

[11] Ibid. p. 436

[12] Ibid. p. 437

[13] Ibid p.438

[14] Ibid p. 433

[15] H.P Lehman & J.L. McCoy The Dynamics of the Two-Level Bargaining Game: The 1988 Brazilian Debt Negotiations World Politics, Vol. 44 No. 4 (1992), pp. 600-644

[16] R. Paarlberg Agricultural Policy Reform and the Uruguay Round: Synergistic Linkage in a Two-Level Game? International Organization Vol.51, No. 3, (1997), pp. 413–44

[17] A. Moravcsik Preferences and Power in the European Community: A Liberal Intergovernmentalist Approach Journal of Common Market Studies Vol. 31, No.4, (1993) pp. 480-481

[18] G. Garrett and G. Tsebelis An Institutional Critique of Intergovernmentalism International Organization Vol. 50, No. 2 (1996) p. 270

[19] David Cameron, Hansard Commons Debates 12 December 2011, Column 519

[20] G. Parker (2011) Cameron Pledges not to Jeopardise Negotiations Financial Times (London Edition), 2 December, p. 8

[21] Ibid.

[22] G Parker & A. Barker (2011) Cameron’s Use of Treaty Veto Leaves Britain an Outsider in New Union Financial Times (London Edition) December 10, p. 2

[23] Department for Business, Innovation and Skills The UK and the Single Market: Trade and Investment Analytical Papers

Topic 4 of 18 (2011) p. 3

[24] The Confederation of British Industry Press Release Manufacturing output expected to fall further as demand remains weak – CBI 15 December 2011

[25] A. Moravcsik op. cit. p. 486

[26] R. Putnam op. cit. p. 442

[27] David Cameron, Hansard Commons Debates 12 December 2011, Column 519

[28] B. Groom (2011) Businesses More Worried Over Lack of Resolution to Crisis Financial Times (London Edition), 10 December p. 4

[29] J. Gowa Public Good and Political Institutions: Trade and Monetary Policy Processes in the United States International Organization, Vol. 42, No. 1, (1988) p. 26

[30] M. Olson The Logic of Collective Action: Public Goods and the Theory of Groups (1965), Harvard University Press

[31] J. Gowa op. cit. p. 22

[32] A. Moravcsik op. cit. p. 488

[33] R. Putnam op. cit. p. 442

[34] J. Kirkup & B. Waterfield (2011) Cameron Faces Another Revolt From the Ranks as Tory Rebels Demand Referendum on Euro Deal, The Daily Telegraph (National Edition) December 8, p. 1

[35] J. Kirkup & B. Waterfield (2011) Tories could wreck EU talks, says PM; France ‘trying to poison EU summit’ The Daily Telegraph (Scotland Edition) December 9 pp. 1-2

[36] G. Parker & A. Barker (2011) ‘Bulldog’ Cameron Risks Having His Bluff Called, Financial Times (London Edition), December 8, p. 7

[37] L. Gruber Ruling the World: Power Politics and the Rise of Supranational Institutions (2000),  Princeton University Press, p. 41

[38] L. Gruber op. cit. p. 47

[39] A. Moravcsik op. cit. p. 503

[40] G. Parker, D. Oakley & P. Spiegel (2011) Cameron Veto Exposes Coalition Rift Financial times (London Edition) December 13, p.1

[41] R. Putnam op. cit p 440

[42] G. Parker & A. Barker (2011) ‘Bulldog’ Cameron Risks Having His Bluff Called, Financial Times (London Edition), December 8, p. 7

[43] A. Barker & G. Parker (2011) A Brush-Off for Britain Financial Times (London Edition), December 18, p. 13

[44] T. Barber Summit was a Disaster for British Diplomacy Financial Times (London Edition) December 14, p. 6

[45] P. Spiegel (2011) UK Scuppers Merkel’s Desire for Legal Certainty Financial Times (Asia Edition) December 10, p. 3

[46] G. Parker & A. Barker Cameron and Sarkozy on Collision Course Financial Times (Europe Edition) January 7,  p. 3