ABSTRACT
The European Union (EU) has, in the past two decades, developed a remarkable regulatory activity inside and outside its borders. It has become, also beyond its borders and particularly in its neighbourhood, a point of reference for economic regulatory activity (see, for instance, Bach and Newman 2007). There is a correlation between regulatory alignment and institutional perspectives, or at least there should be. This chapter examines the relationship between the regulatory convergence and the institutional arrangement within the Union and between the EU and its neighbouring countries. The proliferation of ‘opt-outs’ and of related formal and informal institutional set-ups in the EU illustrates the significance of this link. The chapter argues that the institutional arrangements are of crucial importance for the effectiveness of the EU’s policies vis-à-vis neighbouring countries and, in particular, their regulatory convergence. The differentiation of external relations is examined in terms of the various forms of EU ‘external governance’. The real costs and benefits of reforms proposed to partner countries need to be assessed more closely, as they determine in fine the effectiveness of the EU policies vis-à-vis its neighbours. The costs of aligning to the EU acquis are often immediate and considerable, whereas the benefits are long term and hypothetical. For effective domestic reforms, a clear institutional perspective is necessary, as it exists for (potential) candidate countries and in the European Economic Area (EEA) but is lacking for the European Neighbourhood Policy (ENP).
