Liberal Intergovernmentalism, Illiberalism and The Potential Superpower of The European Union

JCMS 2018 pp. 1–17 DOI: 10.1111/jcms.
12793
Liberal Intergovernmentalism, Illiberalism and the Potential

Superpower of the European Union*
SOPHIE MEUNIER1 and MILADA ANNA VACHUDOVA2
1
Princeton University 2 University of North Carolina-, Chapel Hill
Abstract
Andrew Moravcsik has long argued that the EU is the world’s second superpower, albeit a quiet
and overlooked one. This article explores how the EU behaves as a global power, and how the
illiberal turn may diminish it. We present Moravcsik’s four core claims about the EU as the second
superpower using the lens of Liberal Intergovernmentalism. We argue that the EU is more a poten-
tial than an actual superpower because its considerable hard and soft resources are not always con-
verted into global influence. We focus on two challenges to this power conversion, which we
illustrate in the areas of trade and enlargement: first, the uneven transfer of competences to the
EU level and, second, the presence of illiberal regimes in the EU, which makes it more difficult
to agree on common policies and tools anchored in democratic values.
Keywords: Enlargement; trade; EU; superpower
Introduction
The transformation of the European continent after the collapse of communism elevated
the status and power of the European Union (EU) in international politics. The 1990s
were a decade of rational exuberance: the choice for democracy and integration in many
post-communist states was twinned with the choice to broaden the scope and mettle of the
EU by fortifying supranational institutions, adopting a common currency, creating a com-
mon external border and bolstering international trade. The early 2000s brought a sub-
stantial enlargement that crowned the EU as the champion of democracy and prosperity
across Europe. The EU became bigger and stronger – and proud of the values and way
of life it modeled for the rest of the world.
How much difference a decade can make: the period from 2008 to 2018 was a dark one for
the EU. The financial crisis brought the EU to its knees economically and politically.
Economic misery opened the door for far-right populists to tar as failures the EU’s common
currency, and to demonize refugees, migrants and EU nationals in a nativist war of words
against Brussels. Hungarian and Polish voters, the standard-bearers of liberal democracy’s suc-
cess in post-communist Europe, elected illiberal and authoritarian leaders who vilify the Union.
When a majority of British voters backed Brexit, the power of the EU seemed all but gone.
* We wish to thank the participants to the Ninth Annual Princeton Workshop on European Integration on 8 May 2017; the
participants at the workshop ‘Liberal Intergovernmentalism and Its Critics’ at the European University Institute in Florence
on 15–16 March 2018; our discussants Robert Keohane, Maria Snegovaya, Richard Maher and Federicha Bicchi for
comments on an earlier version of this article. We are particularly grateful for the input of three anonymous referees and
our superb Editors Mareike Kleine and Mark Pollack. We are grateful for support from The European Union’s Horizon
2020 research and innovation programme EUENGAGE: “Bridging the gap between public opinion and European
leadership: engaging a dialogue on the future path of Europe” (No. 649281) as well as the Jean Monnet Chair of
European Integration and the Center for European Studies at the University of North Carolina, Chapel Hill.
© 2018 University Association for Contemporary European Studies and John Wiley & Sons Ltd
2 Sophie Meunier and Milada Anna Vachudova
Yet through all of this Andrew Moravcsik has consistently argued that the EU is not just a
great power, it is a superpower, whose weight on the world stage has been overlooked and
undersold. Liberal Intergovernmentalism (LI), Moravcsik’s central contribution to the de-
bate on what drives European integration posits that governments act purposefully on EU
matters on the basis of goals that are determined through domestic preference formation
(Moravcsik, 1997). Moravcsik uses this lens to understand how the EU exercises power in-
ternationally, assembling coalitions that act based on intergovernmental bargains. For
Moravcsik, the EU is powerful because of its immense and multifaceted resources, which
member states in ever changing constellations can deploy depending on the issue at stake.
This article has two central objectives: to consider how the EU behaves as a super-
power, and to explore how the rise of illiberal regimes internally may affect its power ex-
ternally. Following Dahl, we define power as the influence that the EU wields over the
behaviour of states and other international actors, using both hard (military and economic)
and soft (normative) tools (Dahl, 1957). A superpower is a country (or entity) that can ex-
ert such power on a global scale. We find that, rather than a quiet or second superpower,
the EU is a potential superpower, for two reasons. First, the EU’s portfolio of resources
and flexibility in how it uses institutions to pool sovereignty when deploying these re-
sources are, as Moravcsik argues, a cornerstone of its global power. But we show that
the formal transfer of national competences to EU institutions has been critical for tools
that depend on asymmetric interdependence and conditionality to translate EU resources
into changing the behaviour of other states. This is often downplayed by LI, which aggre-
gates intergovernmental co-operation and formal delegation of authority when arguing
that the EU is a superpower. We illustrate this in the cases of two of the greatest success
stories of the EU’s global power – trade and enlargement.
Second, we note that the rise of illiberal and even authoritarian regimes within the EU
poses a new challenge to its power projection. We use the term ‘regime’ because the
dismantling of liberal democratic institutions and norms is fundamentally changing the
system of government in Hungary and Poland. We use ‘illiberal turn’ as a shorthand
for these changes. The central insight of Liberal Intergovernmentalism is that European
integration is shaped by the domestic preferences that governments bring to the EU nego-
tiating table. We argue that the illiberal turn is changing these preferences: contestation
among EU governments is no longer just about policies and competences, but also about
regime type and the very identity of the EU as an institution intertwined with the pro-
cesses and values of liberal democracy.
We argue that these changes in domestic preferences are setting the stage for changes
in the EU’s global influence. When it comes to hard power, member governments will
have more disparate preferences, which may complicate agreement on common policies
that are anchored in democratic values (such as sanctions on Russia) and on the use of
tools that have enabled the EU to influence other states (such as empowering liberal allies
and supporting a free press). How much the divergence of preferences matters depends on
the extent to which competence is pooled and the decision rules in place in a particular
issue-area. When it comes to soft power, the EU’s normative appeal may wane as citizens,
civil society groups and elites in third countries no longer see the EU as a model of liberal
democracy, human rights and the rule of law. Liberal domestic politics and institutions are
not a prerequisite to being a superpower, but they are integral to the way the EU projects
global power today. We argue therefore that we are at the beginning of a new agenda for
Liberal Intergovernmentalism, Illiberalism and the Potential Superpower of the European Union 3
European integration scholarship that considers the internal and external implications of
having illiberal regimes within the EU.
Our objective in this article is to present Moravcsik’s argument about the EU as the
second superpower through the LI lens. We cannot systematically evaluate the effective-
ness of the EU as a global actor or build an alternative theory of power. Instead, we turn to
two of the EU’s success stories on the global stage – trade and enlargement – to illustrate
the role of formal competence transfers in converting the EU’s resources into power, a
role often downplayed by LI. The relationship between global influence and competence
transfers in other policy areas may tell a different story. We then employ LI to understand
why and how the illiberal turn may diminish this power. We focus on the illiberal turn
instead of the EU’s other crises because of its potential to fundamentally transform
preferences over both the strategies and the outcomes of EU power.
The rest of this article is divided into four sections. Section I lays out Moravcsik’s
liberal intergovernmentalist argument about the EU as the second superpower. Section
II presents the EU’s main power resources. Section III shows that in the successful areas
of trade and enlargement the transfer of competences to the EU level helps to convert
resources into influence. Section IV considers why and how the illiberal turn may affect
the EU’s global power and complicate the conversion of resources into influence. The
conclusion suggests avenues for future research on the illiberal turn and EU power.
I. The EU as a Second Superpower

Against conventional wisdom, Moravcsik has argued since 2002 that Europe is the
world’s ‘second superpower’ (Moravcsik, 2002, 2009, 2010, 2017). Not only have
Europeans pulled their weight on the world stage, contrary to what successive American
presidents have claimed, but it is in fact the United States that has been free-riding on
European power (Moravcsik, 2016). Moravcsik’s ‘second superpower’ thesis also holds
that while China’s rise has been overrated, Europe’s influence has been overlooked. This
section lays out his argument about the multifaceted resources at the heart of EU power
and his claim that these resources have indeed translated into global influence.
As early as 2002, Moravcsik identified Europe as a superpower whose influence has
been rising since the end of the Cold War, contrary to Realist predictions based on coer-
cion as the only way to exercise power in a Hobbesian, zero-sum world (Moravcsik,
2002). Moravcsik has reprised this argument many times since, even in the face of the
profound crises now challenging European integration. His thesis about Europe’s super-
power status hinges on the liberal intergovernmentalist premise that the constellation of
state preferences is variable – across countries, across issues and over time. This implies
that the world is neither a realist one, in which hard power resources are key, nor one
where the more persuasive argument wins the day. Based on the LI view that states are
rational actors maximizing their utility on the basis of preferences that are mostly deter-
mined by domestic economic interests, Moravcsik makes four related arguments that
offer a nuanced view of power. We briefly present each in turn.
First, Moravcsik argues that since power is situation-specific, having a portfolio of re-
sources is essential to being an international power. It allows the EU to avail itself of the
best possible means for achieving its objectives and to match military with civilian forms
of power. This argument implies that the aggregate external power of the EU is not
correlated with its level of internal unity or centralization. Some challenges are better
served by a unified Europe, others by loose co-ordination or unilateral action by some
member states (Moravcsik, 2009, p. 417). In this LI view of power, ‘European govern-
ments have struck a prudent trade-off: the precise level of commitment shifts over time
and across issues, depending on the potential collective gains and the possible risks from
being overruled’ (Moravcsik, 2010, p. 170). Other scholars have shown that, in a variety
of EU policy areas, internal cohesiveness does not determine external effectiveness (da
Conceição-Heldt and Meunier, 2014; Macaj and Nicolaïdis, 2014).
Second, Moravcsik claims that the EU has been a strong geopolitical and military
actor. Contrary to many realists, Moravcsik argues that Europe in fact possesses consid-
erable hard military power. If measured by military spending, Europe is the second power
in the world – behind the US, but far ahead of China and Russia (Moravcsik, 2017). If
measured by total deployments all over the world, Europe is second to the US with an av-
erage of 107,000 soldiers per year on land over the past decade (Moravcsik, 2017). Many
military operations, from Macedonia to Mali, have been led by Europe. Military analysts
have disputed the numbers used by Moravcsik (Soesanto, 2016), but if all member state
military resources are aggregated, the pre-Brexit EU is the world’s second largest military
power. Whether these resources should be aggregated is also disputed, since these oper-
ations are always conducted by small ‘coalitions of the willing’.
Third, Moravcsik argues that Europe has mainly exerted global influence through ci-
vilian power. American beliefs that Europeans do not share a fair burden rest ‘on a mis-
leadingly narrow conception of national security’ that overvalues military power and
undervalues non-military instruments (Moravcsik, 2016). Here Moravcsik rejoins the lit-
erature on Europe as a civilian power, a notion initially developed by Francois Duchene in
the early 1970s in opposition to a Gaullist conception of ‘Europe puissance’ (Bull, 1982;
Duchene, 1972; for an overview, see Smith, 2005). According to Moravcsik, Europe has
behaved as a smart civilian power, thanks to a series of non-military policy instruments –
most notably trade, foreign aid, support for multilateral institutions and enlargement. It
‘remains remarkably successful at projecting its geopolitical influence, not least in critical
zones of conflict, such as Ukraine, Iran and Libya’ (Moravcsik, 2017).
Fourth, Moravcsik argues that the shared values underpinning common preferences
among EU members have also enhanced EU global power by facilitating co-operation
with other Western countries. The more external partners are ideologically ‘compatible’
with the EU, the greater the EU’s global influence (Moravcsik, 2010). This reasoning no-
tably motivated EU efforts to ‘manage globalization’ in the late 1990s by expanding the
number of multilateral institutions and members of these institutions in order to increase
the EU’s global power (Jacoby and Meunier, 2010).
Even as the EU was confronting the crises of the last decade, Moravcsik doubled
down and argued that Europe still is, and will remain for the time being, the world’s sec-
ond superpower: ‘The conventional wisdom is that Europe today is a weak geopolitical
actor. [ …] Yet nothing could be further from the truth. […] In most respects, [Europe’s]
global and regional reach far surpasses that of China and Russia – and even, in some
areas, the US. […] Overall, Europe is the world’s ‘second superpower’ – the only
political entity able to project dominant military, economic and cultural influence
transcontinentally. It will be decades, even generations, before Europe loses this status’
(Moravcsik, 2017).
II. The Resources of a Potential Superpower

The EU brings to international politics a unique portfolio of resources. In this section we
briefly survey its material and normative resources, often dubbed the EU’s ‘hard’ and
‘soft’ power.
The EU’s hard power is anchored above all in its vast and prosperous internal market.
Since gaining access to the single market is very valuable for non-members, and since
member states generally speak with one voice on matters of trade, the EU is often de-
scribed as a ‘market power’ (Damro, 2012). The EU is the second-largest economy by
gross domestic product, with a collective GDP of US$ 16.91 trillion in 2016 (nominal
rates), trailing only the US and ahead of China.1 Until 2014, the EU actually outranked
all other countries in GDP. In trade, the EU is one of the world’s top two traders: the sec-
ond exporter of goods (after China) and importer of goods (after the US), and the first ex-
porter and importer of services (World Trade Organization, 2017). In Foreign Direct
Investment (FDI), the EU is also the largest player in the world. In 2015, members of
the EU were collectively both the first destination and the first source of both FDI flows
and stocks (European Commission, 2017). Moreover, the EU has become a formidable
‘regulatory power’: it has developed standards across a variety of policy areas that now
must be followed by anyone wishing to enter the internal market (Bradford, 2012;
Newman and Posner, 2011; Young, 2015). As we explore below, Europe’s 500 million
wealthy consumers are a powerful incentive for third countries to comply with the
EU’s demands in international negotiations and adopt its stringent regulatory standards.
Contrary to common perceptions, the EU also has considerable military resources.
Fifty years ago, Stanley Hoffmann (1966) famously wrote that member states would
deepen integration in the realm of ‘low politics’ encompassing the economy, but that they
would not pursue it in areas of ‘high politics’ that deal with foreign policy and national
security. Over the last twenty-five years, EU member states have done just that. The Com-
mon Security and Defense Policy (CSDP) expanded the scope of integration to crisis
management abroad (Howorth, 2010). The EU developed the ability to deploy small mil-
itary and police forces beyond the EU’s borders, launching about 35 missions between
2001 and 2018. The European External Action Service created by the 2007 Treaty of
Lisbon now resembles a foreign ministry and diplomatic corps for the EU. Since 2017,
the EU has also put in place Permanent Structured Cooperation (PESCO), which inte-
grates military capabilities, pools resources and embarks on operational projects – though
on a limited scale. These and other developments show that integration has indeed taken
place in ‘high politics’.
The EU also possesses ‘soft power’ anchored in a set of ‘normatively desirable
values’: peace, human rights and democracy. Popularized by Ian Manners, the concept
of ‘normative power’ understands the EU to be influential by attracting others to its
way of thinking (Manners, 2002). The diffusion of EU norms happens mostly by model-
ling a free, democratic and caring society and by emphasizing long-term conflict preven-
tion through structural transformation instead of force and coercion (Epstein, 2008;
Manners, 2006). Liberal Intergovernmentalism sees shared values as facilitating and
1
World Bank GDP data are available online at: https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?locations=EU-
US-CN.
underpinning common preferences rather than making the EU attractive to others.

Moravcsik, however, has brought elements of soft and hard power together to extol the
EU as a great ‘civilian power’: ‘Most global influence today rests on various forms of ci-
vilian power: high per capita income; a central position in networks of trade, investment,
and migration; an important role in international institutions; and the attractiveness of so-
cial and political values. All of these are areas in which Europe is and will remain preem-
inent for the foreseeable future’ (Moravcsik, 2010, p. 93).
III. Converting Resources to Power through Competence Transfer

Does the vast portfolio of resources of the EU make it a superpower? We use here a sim-
ple definition of power as the visible ability to influence other states to do what they
would not have done otherwise (Dahl, 1957). This influence manifests itself in different
ways, such as impacting decisions, setting the agenda, and shaping the preferences of ex-
ternal actors (Lukes, 1974). We conceptualize the EU as a potential superpower: many
resources that could be activated are indeed, metaphorically, at the ready, but are con-
verted into influence by the EU’s existing member states only in limited ways. We argue
that the EU’s ability to project power is hampered by the uneven transfer of competences
to the EU level. We do not disagree with Moravcsik’s second core claim that the EU has
been a strong geopolitical actor, even in military terms, but the examples of trade and en-
largement pose the question of whether further delegation of competences in areas such as
defence and foreign policy would reinforce the EU’s power.
Most decision-making on matters of foreign and security policy among EU member
states takes place on an intergovernmental basis. EU members have not been able to agree
on a common response to some recent crises (Iraq, Syria) but have brokered deals (Iran,
climate change) and launched joint interventions in others (Mali, Libya). We cannot as-
sess the EU’s superpower status by cataloguing its accomplishments, misfires and inac-
tions on the global stage; some of this influence also depends on the difficulty of the
issue at hand (Young, 2015). Instead, we focus on two of the areas where Moravcsik
and others have lauded the EU’s global influence: trade and enlargement (Moravcsik,
2017). In these policy areas, as well as in other successful ones such as foreign aid and
climate change, member states have voluntarily transferred some competence to EU
institutions in ways that have enhanced the Union’s global influence.
Moravcsik downplays the costs of dissonance among EU members, and instead argues
that the EU’s superpower abilities stem directly from its portfolio of resources, flexibility,
lack of centralization and even its incoherence. The absence of supranational delegation
enables the formation of ad hoc coalitions by member states with intense preferences,
while others sit on the sidelines because they do not care enough to block a particular
policy. We agree that this flexibility can be useful as long as member states do not work
at cross-purposes. But member state preferences vary in intensity depending on the policy
area and on the government in power. In areas with intense preferences, such as trade and
enlargement, the delegation of competences to the supranational level mitigates conflict-
ing preferences and enables the EU to present a consistent and credible EU policy to
outside actors. In such cases, the decision rules through which national preferences are
aggregated impact the global power of the EU. Such competence transfer, because it pre-
vents member states with outlying preferences from dealing directly with foreign
countries to strike their own deal, reinforces the power of the EU – though it can also pre-
clude any action if there is no agreement. We leave open the question of whether central-
izing competences is a sufficient condition for the EU to exercise global power, but we
suggest below that it may play a greater role given the illiberal turn.
Trade and enlargement are the two areas where the EU’s global power has been
heralded as the most consequential for the behaviour of other states. In both, the EU
has amplified and capitalized on asymmetric interdependence with third states by transfer-
ring competences to EU institutions, making it easier for the EU to speak consistently
with one credible voice, to deploy resources and tools to further a common goal, and to
shape the preferences of citizens and governments in the target states.
Trade, the genesis of European integration and the first policy transferred to the supra-
national level, has played a crucial role in spreading the global power of Europe. The EU
has used its single voice in trade negotiations to conclude favourable agreements and le-
verage its internal market to set the agenda and shape outcomes around the world. It has
also used trade policy as foreign policy, even if this was not anticipated by the founders of
the Common Market (Meunier and Nicolaidis, 2011). Indeed, the non-commercial princi-
ples guiding the common commercial policy were explicitly laid out for the first time in
the Lisbon Treaty (Art. 207). Despite the EU’s successes in using its trading power to in-
fluence other states, however, there are limits to the EU’s influence, especially on political
matters such as labour standards and human rights.
The internal market has converted the EU’s resources into global power through several
mechanisms. Most importantly, member states cannot act on their own. The obligation to
negotiate international trade agreements collectively with autonomy conferred to the
European Commission through a principal-agent delegation has enabled the EU to shape
the rules of international trade (Elsig, 2002; Meunier, 2005; Young, 2002). The EU has
also leveraged access to its market to set the regulatory agenda and transform the standards
of other countries (Drezner, 2007; Newman and Posner, 2011; Young, 2015), as well as to
strong-arm large companies to comply with its stringent competition policy.
The EU has used trade policy for political purposes by conditioning access to its mar-
ket on a variety of domestic policy changes related to human rights, labour rights, envi-
ronmental protection and liberal democracy, especially in the Least Developed
Countries (Hafner-Burton, 2009; Smith, 1998). It has also sought to shape the preferences
of its trade partners by fostering regional trade blocs in its own image through Economic
Partnership Agreements (EPAs), organized on a regional basis. How influential the EU
has been in fostering change and facilitating regional integration among these countries
using the EPAs is debatable, with little progress outside of the Caribbean, the East African
Community and West Africa (Heron and Murray-Evans, 2017).
The enlargement process mirrors trade policy in that member states made the decision
to task the European Commission to create the mechanisms that would translate the EU’s
resources into influence. In enlargement, the EU’s resources are its ‘passive leverage’: the
keen interest of countries to gain the benefits of membership. The Commission devised
the pre-accession process to turn this into ‘active leverage’: the requirements of member-
ship and instructions about how to satisfy them. For most candidates, the equation has
been the same: The benefits of joining – and the costs of being excluded – create strong
incentives for governments to satisfy the EU’s far-reaching requirements (Vachudova,
2005).
After the collapse of communism, member states immediately delegated substantial

authority to the Commission to design the EU’s new economic and political relationships
with its democratizing neighbours. The Commission won broad authority to evaluate can-
didates at every turn, making it easier for the EU to speak with one credible and consistent
voice. This has helped the process function largely as a meritocracy: an applicant’s place
in the membership queue has corresponded to the progress it has made toward fulfilling
the requirements. The Commission has usually been able to keep any bilateral tensions
or affinities from politicizing the process (Vachudova, 2007). In short, the EU’s potential
power has been turned into actual power in large part through the transfer of competences
and resources to the Union as such.
The Commission has also used an array of EU tools and resources to incentivize do-
mestic reforms and shape preferences in candidate countries. The high level of asymmet-
ric interdependence between the EU and a candidate state makes it possible for the EU to
insist that if requirements are not met, it will walk away from the deal (Moravcsik and
Vachudova, 2003). If they are met, the EU can draw on its resources to offer myriad re-
wards such as market access, visa-free travel and funding for regional development, civil
society, political cronies and state institutions. The EU has also traded on its ideational
resources: being in good standing as a candidate has real world repercussions for boosting
investment and qualifying for NATO membership (Epstein and Jacoby, 2014;
Schimmelfennig, 2007).
In the late 1990s and the 2000s, enlargement was heralded as the most powerful EU
foreign policy tool, and even the most successful democracy promotion programme ever
implemented by an international actor (Moravcsik, 2010; Vachudova, 2005). The initial
goal was not to export democracy but to import a buffer of stable democracies with grow-
ing economies. After a decade of foreign policy failures in the Western Balkans, the EU
harnessed the power of enlargement to help stabilize Western Balkan states (Mirel, 2018).
Croatia and Serbia still had brutal authoritarian regimes when they were designated as
credible future members by an EU keen to show its global power (Vachudova, 2014).
The EU also created the elaborate institutional structure of the European Neighborhood
Policy in order to project EU rules and encourage stable, liberal democratic states to
the east and south (Börzel and Risse, 2012; Lavenex, 2004).
Twenty years later, enlargement is not over. While Western Balkan states are for now
the only credible candidates in the membership queue, integrating the EU’s ‘inner court-
yard’ will greatly benefit regional stability and is considered, for reasons of geography
and security, a sine qua non for the EU’s global power (Vachudova, 2014). By incentiv-
izing political parties to moderate nationalist appeals and implement liberal democratic re-
forms, EU leverage pushes party systems away from identity-based polarization and
towards better policy-making (Vachudova, 2014). The breakthrough of pro-democracy
and pro-EU forces in Macedonia in 2017 after years of authoritarian rule is a further tes-
tament to and an opportunity for EU leverage (Kacarska, 2017).
Yet the enlargement process has also shown the limits of EU power. While member
states effectively delegated responsibility for running the pre-accession process to the
Commission, major decisions require unanimity, which can undermine EU goals. The
most striking example is Macedonia, where for years the preponderance of EU members
could not, or would not, force Greece to abandon its veto of Macedonia. While this suited
Greek politicians, it derailed liberal democracy in Macedonia for years (Bieber, 2018).
Greek intransigence similarly destroyed the possibility of solving the conflict in Cyprus as
part of joining the EU. The inability of member states to agree on high standards for the
rule of law and the fight against corruption has also weakened the EU’s enlargement
power (Vachudova, 2015). These anchors of good governance are addressed only indi-
rectly by the existing acquis communautaire (Closa and Kochenov, 2016; Spendzharova
and Vachudova, 2012).
IV. Illiberalism and Liberal Superpower

The EU’s ability to project power is facing a new challenge from the rise of illiberalism
among member states that could fundamentally alter preferences over both strategies
and outcomes of EU power. Most observers and many theories of European integration,
including Liberal Intergovernmentalism, have taken ideological convergence around lib-
eral values in the EU for granted. In recent years, however, this convergence has been
halted – and, in Hungary and Poland, reversed. Competition among parties across
Europe is shifting from the economy to identity, and this may reduce the ‘zone of agree-
ment’ among EU governments (Hix, this issue; Hooghe and Marks, 2018).
We ask in this section how much the EU as a liberal civilian power is under stress from
the illiberal turn. It is not necessary for a superpower to be liberal, but the EU’s hard and
soft power are both anchored in liberalism. We agree with Moravcsik’s third and fourth
core claims that the EU has mainly exerted its global influence through undervalued civil-
ian power, underpinned by shared values. We expect the preferences of illiberal regimes
about the strategies and goals of EU power to diverge in key areas, making it harder to
agree on whether, how and why to use the EU’s hard power tools. We find evidence that
this is happening already. We also expect the EU’s soft power to weaken over time, al-
though we do not have evidence for this here. In what follows, we first use the lens of
LI to sketch our theoretical expectations for how illiberal regimes within the EU may af-
fect its global power; next, we explore how illiberal governments transform domestic
preferences; finally, we present preliminary evidence for how the illiberal turn may shape
EU power in the areas of foreign policy, trade and enlargement.
Liberal Intergovernmentalism posits that governments act purposefully in the interna-
tional arena on the basis of goals determined through domestic preference formation in a
two-step process. In the first step, domestic groups compete to define a set of mainly eco-
nomic preferences taken up by the government. As a member state moves away from lib-
eral democracy rooted in pluralist society, how (and what) preferences are aggregated is
likely to change. When the regime takes control of large swathes of the economy while
eliminating an independent judiciary, dominating the media and silencing independent
groups, it is bound to skew economic preferences, as anticipated by the political economy
literature on the links between democracy and trade preferences (Mansfield and Milner,
2012). Over time, the domestic voices that are heard will narrow substantially, and so will
the electoral calculations of the incumbent party.
In the second step, governments bargain among themselves at the EU level, each
attempting to realize their domestically derived interests. We expect increasing regime
heterogeneity inside the EU to affect bargaining. In some areas, illiberal governments will
have not just different preference intensities but conflicts of interest with liberal govern-
ments. The most immediate consequence may be disagreement over outcomes (like
sanctions on Russia) and over strategies (like support for multilateral institutions in trade).
In cases where competence has been transferred, the decision-making rules that apply in
each area will mediate the impact of diverging preferences: in policies governed by una-
nimity, a shift in preferences by one illiberal government can have a disproportionate im-
pact; in policies governed by the majority, many member states would have to shift their
preferences in order to change the collective position of the EU and thereby its global
power. In the absence of competence transfer, the impact of the illiberal turn will depend
on preference intensity: less consequential if liberal states can continue to act as they
wish, more consequential if liberal and illiberal states work at cross-purposes in the name
of ‘Europe’.
Another likely consequence is the disuse or debilitation of some of the tools that the
EU has been using to achieve its broad policy goals. The EU’s foreign and security policy
is rooted in ‘democratic peace’ theory: the best way to spread peace is to spread democ-
racy. Yet now illiberal governments may block tools designed to build liberal democracy
as part of trade agreements and enlargement preparations. Or, more likely, they will be
hollowed out, no longer enforced by the EU and no longer seen as a credible ask by target
governments and groups. We present evidence below that this is happening already in the
context of enlargement. A third and related consequence of the illiberal turn may be the
erosion of the EU’s normative power as citizens, civil society groups and elites in third
countries no longer see the EU as a model of liberal democracy, human rights and the rule
of law.
Illiberal ruling parties accumulate and legitimize power at home in ways that transform
domestic preferences on EU issues. The victory of the Fidesz party led by Viktor Orban in
Hungary in 2010 launched a new era of contestation: suddenly a member government is
decoupling EU membership from liberal democracy and from the EU’s foundational
values (Laffan, 2018). The Orban government’s moves towards authoritarian rule have
been thorough, severely eroding the rule of law and shutting down institutions and voices
independent of the regime in the media, the judiciary, the economy, the arts and civil so-
ciety. The Hungarian model of illiberalism has spread. Since 2015 the Law and Justice
Party (PiS) in Poland has used its supermajority to dismantle the independent judiciary
and other counter-majoritarian institutions (Grzymala-Busse, 2017). Fidesz and PiS have
steeped society in the narrative that the nation is under threat from enemies at the door –
EU officials, liberals, opposition parties, multilateral institutions, refugees and Muslims
(Buckley, 2018; Greskovits, 2017; Grzymala-Busse, 2017). The ruling ANO party in
the Czech Republic shares some of the illiberal goals, if not the capabilities, of Fidesz
and PiS (Hanley and Vachudova, 2018).
The EU has been caught off guard by this internal threat to its liberal values and its co-
hesion (Closa and Kochenov, 2016; Scheppele, 2014). It faces many hurdles as it attempts
to use different tools to counter illiberal moves by Hungary and Poland and to safeguard
the foundational values spelled out in Art. 2 of the Treaty of European Union (TEU)
(Kelemen, 2017; Laffan, 2018; Sedelmeier, 2014). Orban, reelected triumphantly in
2018, seeks to block these moves and to weaken the EU (Janning, 2018). He claims he
will veto any EU sanctions of the Polish government for undermining the rule of law
and dismisses EU legal procedures against new Hungarian laws that silence non-govern-
mental organizations as a ‘laughing stock’ and conspiracy (Buckley, 2018; Euractiv.com,
2017). He celebrates that he is leading a coalition for a kind of white Christian
nationalism in the EU while pushing the EU’s response to the refugee crisis away from
multilateralism and international law (Euractiv.com, 2018). Hungary vetoed, for example,
an EU agreement with African countries on migration, causing French and German offi-
cials to decry ‘regular Hungarian efforts to undermine the EU’s important collective is-
sues’ (Szigeti, 2018).
The presence of illiberal regimes within the EU has dovetailed with the rise of illiberal
powers on the world stage. We have entered a period in global politics that is less
favourable to the EU’s brand of international power. Moravcsik predicted in 2010 that
as ‘underlying preferences converge due to trade, democracy, and ideological conver-
gence … we should expect to see widespread opportunities for cooperation with interde-
pendent, democratic, modern states, such as those of Europe’ (pp. 96–99). But 2018 is not
the era of converging preferences – or at least they are not converging towards the EU’s
longstanding multilateral, rules-based and liberal democratic model. Major global powers
including Turkey, India, Israel, and the United States are turning away from this model.
Russia is using soft power to increase hostility toward the EU and help elect political
parties that favour Russia (Orenstein and Kelemen, 2017). EU member states have tried
to counter the external as well as internal threats of illiberalism. They have, for example,
approved strong sanctions against Russia for annexing Crimea. They have also offered
aid, trade and support to Ukraine; indeed, scholars argue that the EU’s resolve, and thus
power, has been amplified by competition with Russia over Ukraine (Gehring et al.,
2017).
There are signs, however, that the EU finds it more difficult to deal with illiberal pow-
ers externally because its foreign policy positions are being undermined by illiberal re-
gimes internally. Leaders of illiberal regimes have a common playbook for accruing
power at home and tend to help each other legitimize their rule – and those outside look
to those inside to undercut the EU’s value-based foreign policy (Adler, 2018). The EU has
not been able to prevent Hungary, the Czech Republic, and other members from pursuing
divergent pro-Russia policies, becoming ‘Trojan horses’ for Russian interests (Hanley
and Vachudova, 2018; Orenstein and Kelemen, 2017). Similar dynamics, explored be-
low, are at play vis-à-vis China. We predict that over time the illiberal turn will make it
(even) more difficult for the EU to conduct a coherent foreign policy that promotes liberal
values, especially in areas that lack an institutional firewall through competence transfer
coupled with majority voting.
When it comes to trade, the illiberal turn may widen the gap between the trade policy
preferences of member states, complicating common action. The EU has exclusive com-
petence over most trade matters – almost all ruled by qualified majority and, since the
2009 Lisbon Treaty, approved by the European Parliament. This is not the case, however,
in the area of Foreign Direct Investment (FDI), an issue of great political sensitivity where
decision-making has been transferred only partially to the supranational level since
Lisbon (Meunier, 2017). Following this controversial transfer, the EU Court of Justice
ruled that international deals including both trade and investment are mixed agreements,
to be ratified both by the EU (Council of Ministers and European Parliament) and by each
member state according to its own domestic ratification procedures. This opens the door
to an enhanced role for individual member states in trade, even though the EU has tem-
porarily halted the negotiation of Preferential Trade Agreements with investment provi-
sions until the competence issue is resolved.
The current internal disagreements over how to respond to the unique economic and
political threats associated with Chinese FDI illustrate the potential of the illiberal turn
to undermine the EU’s trade power (Meunier, 2014). The Commission, supported by
France and Germany, proposed in 2017 the creation of a common FDI screening mech-
anism with the ability to limit certain foreign acquisitions determined to be a security
risk. Some member states such as Greece and Portugal oppose EU-wide investment
screening on economic grounds, because they have benefited from ample Chinese in-
vestment. Others, however, see China’s efforts to woo them as a political opportunity
(Spisak, 2017). Hungary, which has received 40 per cent of all Chinese investment in
CEE, dismisses any political threat and views unvetted FDI from China as an alterna-
tive to EU funds. Indeed, in 2010 Fidesz launched its ‘Eastern Opening Strategy’ de-
signed specifically to reduce Hungary’s economic dependency on the EU and reorient
its economy towards China. Hungary has also recently been the only member state to
refuse to sign a report prepared by 27 EU ambassadors to Beijing condemning the ‘Belt
and Road Initiative’ (Heide, 2018). As a result of the illiberal turn, the EU is not deal-
ing with the challenges posed by Chinese investment in a unified manner, which may
water down the proposed FDI screening mechanism in the Council and weaken
European bargaining power in the current negotiations for a China–EU Bilateral Invest-
ment Treaty.
The illiberal turn may weaken some of the tools that the EU uses to bolster liberal
democracy through trade policy. One such tool is the Generalized System of Prefer-
ences Plus (GSP+), which seeks to leverage access to the internal market for robust
commitments on human rights, labour rights, environmental protection and good
governance. The EU has been slowly increasing the number of countries participating
in GSP+ and improving enforcement (Kishore, 2017). However, since its purpose is
to strengthen rights and freedoms related to liberal democracy, the illiberal turn may
jeopardize its expansion and credibility, though we do not have evidence that this has
happened already.
When it comes to enlargement in the Western Balkans, we also observe a widening
gap between the preferences and goals of liberal and illiberal EU member states. Over
the last two decades, enlargement has worked by strengthening domestic forces
supporting liberal democracy and weakening those opposed (Mirel, 2018; Vachudova,
2005, 2015). How much the EU’s illiberal turn now undermines this dynamic is worthy
of further research. Here, the issue is not halting enlargement: Hungary, eager to have
other illiberal regimes in the club, advocates for Serbia and Montenegro to enter by
2022 – before other member states believe they will be ready (Balfour, 2018; Cvijić,
2018). The impunity of illiberal EU governments undermines the EU’s conditionality tool
by giving illiberal leaders in candidate states, such as Aleksandar Vučić in Serbia and
Milo Dukanović in Montenegro, an easy foil: why should they allow an independent me-
dia, tolerate civil society, bolster checks and balances, treat opposition parties fairly, or
dismantle rent-seeking networks when others are doing even worse within the EU
(Bieber, 2018; Cvijić, 2018)? It is an open question whether leaders will continue to take
the Commission’s evaluations and admonishments seriously. If candidates are neither in-
spired nor compelled to build democratic institutions, enlargement will fail: either liberal-
minded members may block accession, or concerns about the growing influence of
Russia, China and Turkey in the region may allow more illiberal regimes into the EU.
In both trade and enlargement the illiberal turn, if it persists, may also erode the EU’s
normative power. Indeed, EU trade agreements have relied mostly on ‘soft’ measures to
ensure implementation and compliance, which depend on learning on the part of a robust
and institutionalized civil society (Bastiaens and Postnikov, 2017). If the EU can no
longer be a model of good governance and open dialogue with civil society, this kind
of conditionality will become even less saleable and enforceable. In enlargement, joining
the EU is desirable not just because of economic prosperity, but also because of democ-
racy, civil society, human rights and the rule of law. If those fall away, the EU will lose
part of its appeal.
Conclusion
The vast and prosperous internal market of the EU has given it tremendous hard and soft
power resources, which Moravcsik argues persuasively are the foundations of the EU as a
civilian power with a global reach. He also hails the flexibility that comes from sover-
eignty being pooled so variably across different areas. We observe, however, that the
EU has projected that power most consistently and credibly in areas where member states
have formally transferred substantial national competences to EU institutions. Similar
competence transfers in other areas may not be on the cards, especially now that the illib-
eral turn is sowing discord among EU members, degrading its power tools, and
diminishing its normative appeal. How much illiberal governments can disrupt or block
common actions depends on the degree of competence transfer and the decision rules
in each area, with those under supranational competence and qualified majority voting
the most immune. We argue that the EU therefore remains a potential superpower rather
than the second superpower described by Moravcsik, since liberalism is integral to its
particular brand of global power.
Our article raises sweeping questions about whether or not the EU will continue to be
anchored in liberal democratic values, and what consequences will follow. Could the EU
ratchet up its global power by giving in to the illiberal turn – by muting participation in
multilateral institutions, and decoupling EU foreign and trade policy from human rights
and liberal democracy? This could make it easier to reach agreements with illiberal
powers and also bring commercial results, for example with China and the United
States. Presumably, however, this would lead to severe discord and other high costs for
the EU’s global power. In a world where illiberal powers are rising, could the EU instead
stand more resolutely for liberal democracy and human rights? Could it hold the torch
while the United States under Trump has withdrawn support for multilateral institutions,
stopped advocating for democracy promotion, and reduced the resources allocated to the
defence of human rights? This seems to depend on whether the EU can contain illiberal
regimes inside the EU and help unravel them – and so far it hasn’t.
Our article also invites careful empirical research on how domestic preferences related
to projecting power are aggregated in this illiberal age. We have sketched some of the
possible implications of regime heterogeneity at the EU bargaining table, but future re-
search can also take into account ongoing EU efforts to change the behaviour of illiberal
regimes, as well as the nimbleness of illiberal leaders in banding together and in taking
inconsistent and contrarian positions in the name of ‘the people’ and in the service of
power. Since convergence on either liberal democracy or illiberal thuggishness among
the EU’s 27 members seems impossible in the short term, the EU will be struggling with
very different preferences and values related to the EU’s global power for some time.
Correspondence:
Sophie Meunier
Woodrow Wilson School of Public and International Affairs
Robertson 437
Princeton University
Princeton, NJ 08544
email: smeunier@princeton.edu
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Liberal Intergovernmentalism, Illiberalism and The Potential Superpower of The European Union

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Liberal Intergovernmentalism, Illiberalism and The Potential Superpower of The European Union

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JCMS 2018 pp. 1–17 DOI: 10.1111/jcms.

Liberal Intergovernmentalism, Illiberalism and the Potential

Keywords: Enlargement; trade; EU; superpower

I. The EU as a Second Superpower

II. The Resources of a Potential Superpower

underpinning common preferences rather than making the EU attractive to others.

III. Converting Resources to Power through Competence Transfer

After the collapse of communism, member states immediately delegated substantial

IV. Illiberalism and Liberal Superpower

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