Abstract

　During the last decade, Europe has experienced consecutive crises, beginning with the Great Recession, followed by the Euro crisis, the refugee crisis, and the rise of populism, the latter of which has successfully combined Euroscepticism and xenophobia. Before answering whether the pessimistic scenario that liberal democratic Europe will backslide or the optimistic scenario whereby more integration can be achieved through crisis is accurate, we should examine how the phases of politicization and the democratic deficit in Europe have been transformed. Peter Mair indicates that the emergence of a non-political polity in Europe （a sedated giant） has hollowed out opposition, both at the national and the European level. This article focuses on the de-politicization of Europeanization as the background of the present crisis in accordance with the work of Mair. However, the dynamic changes in politicization and de-politicization are also central to the discussion. As studies of politicization （Gary Marks and Liesbet Hooghe; Swen Hutter, Edgar Grande, and Hanspeter Kriesi） have observed, conflicts over European integration exist and are growing. Quantitative studies have also shown to what extent economic crises can lead to the politicization of integration and Euroscepticism. Based on such studies, this article distinguishes three stages of politicization/democratic deficit within the development of European integration. The first stage, politicization/democratic deficit 1.0, was shaped by technocratic governance, which, as per the intentions of national political elites, insulated European integration from public politics. The second, politicization/democratic deficit 2.0, made room for public debate on European integration and introduced national referenda, while the political mainstream contained or marginalized any opposition. The third stage, politicization/democratic deficit 3.0, is characterized by higher electoral volatility that undermines the dominance of mainstream parties. There are furious debates regarding Europe in present member states. These centrifugal effects have led to a renewed democratic deficit in the sense that the present state of politicization is losing sight of any stable solution, as is also suggested by the data analyses given in the last section of the article. The conclusions of this article support neither the scenario of backsliding nor that of integration by crisis but identify a new phase in politicization/democratic deficit that is spinning out standoffs in a multilevel politics across Europe.

　Populism is defined as a kind of political movements, which fight against so-called established elites belonging to political, economic and other spheres and maintain that they protect interests of the general people. A lot of populist movements have taken place in member countries of the EU and they have been strengthened since victory of populist movement in the Brexit referendum in 2016 even in the developed European countries and the United States of America.

　Today, they proposed mainly two kinds of explanation about the rise of populist movements in the EU: cultural or national backlash towards immigrants, and widening disparity in the member countries and the European Union.

　The first objective of this article is to seek how the widening disparities have been related with lack in solidarity actions and solidarity-related integration in the EU/euro area during the so-called euro area crisis. The EU/euro area was lacking in solidarity actions in the euro area crisis during 2010 and 2013. The western European governments and the EU deepened the sovereign and financial crises since they lost solidarity with the southern European countries. This lack of solidarity caused very severe unemployment in the South and Eastern European countries. It was a fundamental cause to bring a rise of anti-EU populist parties there.

　The solidarity crisis pushed up mass unemployment and economic stagnation in the EU and the euro area. Several researches on votings for anti-establishment parties found, based on statistical methods using regional data across Europe, that a strong relationship between increases in unemployment and voting for populist parties. Increases in unemployment go in tandem with a decline in trust in national and European institutions, but they have only muted correlation towards immigrants.

　Increases in unemployment can be interpreted as an indicator of widening disparity. On the basis of these previous researches, this article seeks historical development of widening income disparities in the end of the twentieth century and almost two decades in the 21^st century.

　There have been several types of populism in Europe. The second objective of this article is to study relationship between types of populism and types of widening disparity. Picking up the Brexit movement, the movement of the German AfD and the East European populism in Poland and Hungary, this article found characteristics of these three populist movements with their specific widening disparities.

　In Poland, as a result of the victory of Law and Justice （PiS） party in the parliamentary election in October 2015, a single-party-government was established for the first time since 1989. PiS, enacting one after another statutes of questionable constitutionality, has transformed the Constitutional Tribunal, by replacing its judges, into an organ which is not to control the legislative and the executive from the view point of constitutionality of their acts, but only to legitimate them. Next, PiS moved to the judicial reforms in order to put the whole system of judiciary under the control of the political branches （the legislative and the executive）. Such a motion of the ruling party, which undermines the principles of judicial independence and division of power as the bases of democratic state ruled by law, has brought about protests and oppositions of lawyers and citizens within the country. At the same time, this situation in a member state of the European Union puts a serious problem under its nose.

　Facing an almost unprecedented situation, the European Commission launched the procedure based on the article 7 of the Treaty of the European Union, aiming at resolution of the problem by the “dialog” with the Polish government. But the conflict between the Polish government and the Commission was not settled by the beginning of July 2018, a crucial moment when a group of judges of the Supreme Court （SC） were to be obliged to retire due to the new Act on the SC, lowering of the retirement age for SC judges. So the Commission at last decided to use the infringement procedure on the bases of the article 258 of the Treaty on the Functioning of the EU to protect the independence of the Polish SC. Some courts of the other member states began to seek preliminary ruling of the Court of Justice of EU （ECJ） in the context of execution of European arrest warrant issued by the Polish courts. Polish judges, including ones of the SC, also put preliminary questions as to compatibility of some provisions of the Act on the SC with the EU law. In such a situation, in which motions within Poland and those at the EU level, involving the other member states, are complicatedly intertwined, on 19 October the ECJ decided that Poland must immediately suspend the application of the Act on the SC relating to the lowering of the retirement age for SC judges. Now Poland is waiting for the final judgement of the ECJ.

　The world today is full of many challenges, such as climate change, pollution, as well as threats such as the proliferation of nuclear arms that no single state or country can deal with alone.

　The post-World War II order was built around a multilateral and international system with the United Nations at its core, but this is being challenged. Although faced with internal challenges ranging from Brexit, aging populations, issues of financial stability, to questions of security, there are many issues such as foreign policy, and climate change, where the European Union is united.

　We have a stake in the multilateral system and of course many of the challenges we face are global ones, be it space, oceans, or climate related. The EU has therefore been an advocate of the multilateral policy approach and will remain so.

　The EU is becoming more global, and we understand Europe and the EU today as a global actor. Examples include the nuclear deal with Iran, as well as the successful negotiation of many new trade agreements, including with Japan, one of our most important like-minded partners.

　The Strategic Partnership Agreement （SPA） and the Economic Partnership Agreement （EPA） illustrate the EU and Japan’s political will and determination to work together on shared interests, and similar challenges.

　The EPA brings together two huge economic spaces, and will see the abolishment of more than 90％ of existing tariffs over the next few years, many of them immediately. It also contains provisions on procurement, services and the investment market.

　The gains from agreements such as this are big and real, and have the potential to indirectly tackle other issues such as the rise in populism we have seen in recent years. The lowering of tariffs and the easing of economic exchange should lead to lower prices for consumer goods, leading to increased business opportunities for all.

　The intention of the SPA is for the EU and Japan to engage in much stronger cooperation and burden sharing to shore up our respective positions on issues such as cybersecurity and space, science & technology/research & development, as well as peace and security. Maritime security is also a priority area, with both the EU and Japan depending on maintaining maritime security in order for our relationship to truly flourish.

　If we can create an alliance of like-minded partners, the EU and Japan, alongside countries such as Canada or Australia, we should be able to overcome these challenges and get through these difficult waters we are in right now.

　This article deals with a case where the discretionary power of the host country’s authority on the M&A of banks has been restricted by the amendment of the provisions on the qualifying holdings of the EU Banking directive.

　Previous research on the harmonization of EU bank regulations has focused on the fact that the European Commission and Member States have promoted regulatory harmonization and that Member States with different banking systems have conflicted or compromised over harmonization of regulations, but it is often outside the analysis that not only the European Commission and Member States but also EU banks are interested in harmonizing the banking system and are trying to promote harmonization of banking regulation. Therefore, the author’s aim is to focus on the large banks as well as the European Commission and Member States as important actors in harmonizing the EU banking regulation.

　This paper uses the “assessing the degree of preference attainment” approach in “interest group theory” which is a related field of policy process theory. Then, to compare the preferences of each actor （the European Commission, member countries, large banks and small and medium size banks） with the consequences of regulatory changes. The Second Banking Directive （1989） granted discretionary powers to the host country regarding the review of the bank merger by the article on qualifying holdings. At that time this was consistent with preferences of banks and Member States who had been seeking protection and the development of domestic banks. In contrast, since the end of the 1990s, large banks in the EU have tried to internationalize through cross-border M&A. As a result, host country intervention is regarded as a barrier to entry and the preference of large banks has shifted to restricting the authority to examine qualifying holdings by host countries. The preference of such a large bank was rather consistent with that of the European Commission. Finally, along with the preferences of the major banks and the European Commission, the EU Banking Directive was revised in 2007 resulting in the review authority of the Member States being largely restricted. This paper concludes that harmonization of bank regulation in the EU has been realized in the form of restricting the examiner’s authority to exercise large share holdings by host countries as a result of the interaction between the management strategy of the large bank and the policy of the European Commission.

　This paper studies the Italian banking crisis and its stabilization policy by Italian authority since the European debt crisis. Italian economy faced serious recession by the global financial crisis and Italian banking system also failed into the crisis. Non-performing loans （NPLs） ratio reached 18.2％ in 2015 and the ratio of the 4^th largest bank “Banca Monte dei Paschi di Siena” was over 30％. In 2017, NPLs ratio improved to 14.5％ but the situation has not converged yet.

　The European Union （EU） wanted to terminate the Italian banking crisis to stabilize European financial system. However, the final execution entity of the stabilizing policy was not EU but Italian authority. Namely, to terminate the Italian banking crisis, there was the principal-agent relationship between EU and Italian authority.

　However, EU as the principal could not stimulate the incentive of Italian authority as the agent adequately. EU introduced the bank recovery and resolution directive （BRRD）, so called, bail-in rule, in spring 2014. Though, to prevent banking crisis contagion, Italian authority tried to avoid the adaption of bail-in rule and could not do policy intervention adequately. As the result, bail-in rule made the agency cost increase seriously.

　Italian experience tells us that the bail-in rule introduced by EU occurred the conflict of interest between EU and its constituent country. The economic management in the Economic Monetary Union is constantly shaking between principle and discretion. Italian case revealed that discretion takes precedence over principle in the crisis response. To decrease the agency cost, this paper concluded that EU needs to relax the constraint to fiscal expenditure in the banking crisis.

　The new Italian cabinet born in June 2018 is based populism and Euroscepticism. In addition, in the late half of 2018, Italian economy has gone to recession again. In such a circumstance, improvement of banking problem will be delayed and be continuing to smolder as the mid and long-term down side risk of European economy.

　Securing the connection to power transmission and distribution networks and promoting new entries into the electricity market are crucial for the rapid expansion of renewable energy sources （RES）. The EU’s energy policies guarantee the connection to power transmission and distribution networks and entry into the electricity market for RES in order to increase the amount of RES in EU countries.

　The priority measures for RES are especially important. However, there are two technical terms that describe priority measures. Firstly, “Priority Access” mentioned in the Renewable Energy Directive in 2001 （Directive 2001/77/EC） and secondly, “Priority Connection” as described in the RES Directive in 2009 （Directive 2009/28/EC）.

　This article examines what the two technical terms mean in relation to the development of the concept of priority measures in the RES Directives in 2001 and 2009.

　Three procedures of Priority Access were established in Directive 2001/77/EC: 1） priority connecting to the grid, 2） priority access to the electricity markets and 3） priority access in case of congestion. Thus, Priority Access in Directive 2001/77/EC included not only access to the market but also the concept of grid connection.

　The concepts of priority measures were adjusted in the RES Directive in 2009. Priority Access in Directive 2009/28/EC means that access to electricity markets is ensured under the premise that the RES is connected to the grid. Furthermore, it involves technical constraints of the system and the Priority Dispatch of RES based on the Merit Order from the Internal Market in Electricity Directive in 2003 （Directive 2003/54/EC）. On the other hand, Priority Connection in Directive 2009/ 28/EC indicates a “physical connection” to the grid based on the premise that the RES is not connected to the grid.

　The conclusion of this discussion is that the clarification of the concepts of priority measures would help to establish an environment in which the use of RES can be maximized. It is helpful to take the technical constraints and economic precedence into consideration when making policies for the expansion of RES and forming the single energy market.

　Moreover, the development of priority measures is important to realize the four objectives in the energy sector mentioned in Article 194 of the Lisbon Treaty and achieving a low-carbon society.

　Since the 1990s, much debate has existed over the European Union’s （EU） democratic deficit problem. Some theorists argue that, while input legitimacy is essential in redistributive policies, the EU mainly relies on output legitimacy in regulatory policies. However, previous studies have insufficiently analyzed the EU’s exact position on this matter regarding specific regulatory policies. Against this background, this article focuses on the EU’s competition policy―a typical regulatory policy―and investigates a series of policy and institutional reforms conducted by the EU since the 2000s for the promotion of political participation by consumers and consumer organizations. The article will contribute to the literature on the EU’s legitimacy by analyzing the European Commission’s purpose for these reforms, focusing on the case of the failed plan to establish a collective redress system for consumers. Although this plan was not legislated, it constitutes an interesting case study because a decade-long policy debate about it possibly revealed the European Commission’s stance on the issue of consumers’ role in competition policy. The empirical analysis is mainly based on primary sources such as the European Commission’s policy documents, European Parliament resolutions, and responses of stakeholders to the Commission’s public consultations.

　Empirical findings reveal that the European Commission’s purpose for recent reforms, including the inborn collective redress system, was to enhance the legitimacy of EU competition policy on input and output sides. In other words, the Commission intended to encourage consumers’ political participation while improving policy effectiveness in this area. The failure of the collective redress plan implies that the policy remains largely technocratic despite some other institutional and policy remedies. In conclusion, consumers are now involved in the policy-making and implementation process more deeply than before, yet the process is not as inclusive as the Commission had expected a decade ago.

　The current difficulties of developing EU integration might be attributed to the diversity of European capitalism. Question is how the EU will handle its diversity.

　Bruno Amable （2004） “The Diversity of Modern capitalism” has induced us to study further on the diversity of European capitalism with the EU new member countries included, and then to investigate changes in the diversity of European capitalism under the influences of the global financial crisis and Euro crisis since 2008. This book works on this challenging research topics straight from the front.

　The content of this book consists of 3 parts and 11 sections. The first part is about literature review, devoted to institutional analysis of economics. The second part is concerning models and model-changes of the market economies under the global financial and economic crisis since 2008, which is the core of the research and analysis of this book. And the third part is about the relationship between European integration and the varieties of European capitalism.

　This book is successful to depict both the diversity of European capitalism and its changes in total and in that of each EU member country in a well-balanced and fine-grained manner. It also has enough academic value as a textbook that gave us materials for considering the future of the EU integration.

　The European Commission announced “White Paper on the Future of Europe” on March 1, 2017. Although five integration scenarios were presented in this Paper, “multi-speed integration scenario is said to be the most promising one. This scenario seems to be based on a kind of differentiated integration theory which is formalized by opening the present EU situation. Our next task is to clarify differences from that advocated by B. Farkas.

　The outcome of this book is to show that we can analyze variety of capitalism of all the EU old and new member countries in the same single theoretical framework. However, it seems that academic and social consensus has not been achieved even in that respect. Our next task is to overcome this gap.