Fit for the EU? The Europeanization of sectoral governance in telecommunications and electricity

This chapter examines the processes and outcomes of Europeanization in the German utilities' sectors. Employing an institutionalist perspective, it focuses on interaction between the institutional system of the EU and that of Germany. Adaptation pressures, it is argued, are reduced by Germany's ability to exert 'soft' power to ensure that EU policy is congruent with domestic governance. The tempo of EU reform is particularly significant. Incremental legislation in telecommunications permitted Germany to liberalize at its own pace in line with domestic policy style. In electricity, by contrast, the 1996 Directive created more acute adaptation pressures. Thus, in telecommunications Germany was activist in 'downloading' EU legislation in line with EU requirements. In electricity, it made considerable use of the zone of discretion in the Directive to minimize the impact on domestic governance. In examining the way in which Germany responds to adaptation pressures, particular attention is given to opportunity structures, veto points, and institutional norms in the domestic policy process. The experience of the electricity reform suggests that adaptation pressures are exacerbated by a highly pluralist institutional regime with numerous veto actors capable of blocking implementation. Moreover, German reluctance to embrace independent, sector-specific regulation suggests the resistance of domestic regulatory norms to the effects of Europeanization.