Chapter 3 outlines our three conceptual innovations for the study of European integration and EU interventions in the socioeconomic field. First, we shift from the classical distinction of negative and positive integration to one that distinguishes horizontal and vertical integration modes. Second, we propose to go beyond the classical, state-centred (intergovernmental or federal) paradigms of EU law and political science, as we have found that the EU’s new economic governance (NEG) regime mimics the corporate governance regime that transnational corporations use to steer the activities of their subsidiaries and their workforce. Finally, we pursue an analytical approach that complements existing EU politicisation studies, which assess the salience of Eurosceptic views in media debates, opinion polls, elections, and referenda, as we must study EU politicisation also at the meso-level of interest politics. After all, the political cleavages that structure national politics have neither been created in individuals’ minds at the micro-level nor are they simply an outcome of systemic macro-level changes.

This chapter outlines what types of decision the EU takes and how these decisions are adopted. This includes explanations of the Ordinary Legislative Procedure, special legislative procedures and the Open Method of Coordination, as well as the role of informal trilogues, the way qualified majority voting in the Council works and the subsidiarity check by national parliaments. In addition, the chapter discusses the role of differentiated integration in EU decision-making. Throughout the text, the chapter highlights the rationales behind different forms of EU decision-making. It argues that the EU’s decision-making procedures seek to find a balance between competing objectives: fostering EU-wide approaches to issues, protecting the sovereignty of its member states and installing an element of democracy in the way decisions are made. If one understands the logic behind this balancing act, the complex and diverse world of legal instruments and decision-making procedures in the EU becomes much easier to navigate.

This chapter explores whether we can (and should) think of the EU as a unitary system or as one that allows for internal differentiation and layering, both in terms of the horizontal relationship between the EU Member States and the one between the EU and non-EU states. The chapter highlights the legal methods of differentiation, such as enhanced cooperation and opt-in and outs, and analyses the limits and pathologies of differentiating EU obligations. It also looks at the different models of differentiation that are available, beginning with the process of joining and leaving the EU, before moving on to think about the interaction between the EU and the EEA, the United Kingdom and the role of Free Trade Agreements. As we will see, the question of which model of cooperation to choose, or of how differentiated the EU should be, once again poses fundamental trade-offs between sovereignty and unity that ultimately depend on how we understand the EU’s purpose.