Leiden Law Blog

Hard law versus soft law: The Open Method of Coordination

Hard law versus soft law: The Open Method of Coordination

The Open Method of Coordination (OMC) is a fairly young instrument of European Integration. It was introduced in the Lisbon strategy of 2000 to achieve greater convergence between the member states in areas where the EU did not have competence, most notably the labour market and social policies. It usually involves a cycle of benchmarking processes, an exchange of best practices and the peer review of national policies and as such is a bottom up approach towards integration. It is widely studied by social scientists. Beryl ter Haar, who defended her PhD thesis – Open Method of Coordination. An analysis of its meaning for the development of a social Europe – on November 8, takes a legal perspective on the OMC. She concludes that “as a soft law instrument the OMC aims to converge the laws and policies of the member states, while as a mode of governance it is potentially able to form the input for further rulemaking on EU level, either by soft law or by hard law.” (p.157)

At the thesis defense, one of the opponents challenged Beryl with the much greater success of hard law as an integration force in the EU in the creation of the common market and again in the current crisis. In the latter case, major legal advancements are being prepared in the areas of banking supervision, budget policies among others.

As an economist I was surprised by the claim of hard law as a driving force towards further integration in the monetary union. In 2004, the sanction for violating the 3 per cent deficit rule failed to spring into action because the offenders were Germany and France. It is the deep financial crisis which lays bare design flaws in the monetary union, the absence of common labour market policies and social policies among others, and the need for further EU competences. The pressure cooker circumstances of the deep economic crisis force member states, in particular those that need assistance, to put aside their objections towards EU involvement in their national policy domains. And even then, countries are adverse to submitting their labour market  and social policies to European conditions. Hard law is riding the tail of the crisis.

The top down approach of hard law has not been very successful in advancing European integration beyond the common market until the crisis changed the rules of the game and enabled progress in capital market integration and budget rules. Social and labour market policies, however, remain  outside the EU competence, even if the financial needs of some member states allow for conditional support. An interesting conclusion of Beryl’s thesis is that the bottom up approach of OMC and soft law might indeed help to advance economic integration, which in turn is a prerequisite for a good functioning of the monetary union. Therefore, the OMC deserves as much attention from lawyers as it receives from scholars in other disciplines. 

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