The Brussels defect: when compromise goes wrong

Last week in this column I discussed the so-called "Brussels effect", the term coined by law professor Anu Bradford to describe how the European Union acts as the world's regulatory superpower, setting global standards through its economic heft.

This time I’d like to posit the existence of a flipside to the combined legislative efforts of the 27 countries: the “Brussels defect”.

The Brussels defect is when the requirement to reach compromise builds fatal flaws into policies and laws that makes them redundant or even work against their original intended purpose.

The taxonomy recently proposed by the European Commission is a particularly clear example of the phenomenon in action.

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The original aim was to establish a classification system for economic activities – like the “Guaranteed Irish” or “organic” labels for food – that would certify what is a green investment.

This would set a global standard, it was hoped. It would advance Europe as the global leader in the growing Green Bonds market, reduce the so-called "greenwashing" whereby non-ecofriendly activities are falsely marketed as green, and ultimately drive investment into the economic activities that will help achieve the EU's carbon-reduction goals and counter climate change.

But there was a problem. A group of countries, particularly France, were adamant that nuclear energy production should be included on the list. Another group insisted that gas had to be included as well, arguing that there was no other way to phase out coal and that gas would be comparatively much better.

Both arguments were deeply controversial. Bridging the divisions required a grand accord between the EU's two largest economies: France securing nuclear in the taxonomy, and Germany getting gas.

Some policies are never actually designed to achieve an outcome but serve a political purpose, such as to show that politicians are 'doing something'

The proposal is expected to be subject to a vote in the European Parliament. But if confirmed it risks having the opposite effect to that which was intended: to rubber stamp greenwashing, damage the EU's credibility in the area of Green Bonds, and potentially divert investment from projects like renewable energy into gas and nuclear under the guise of "green".

Commission officials have pointed to phase-out deadlines and high standards conditions, and insist that the proposal is based in science. If anything this shows that they know better – that policy is not supposed to be made like this. It should be evidence-based rather than bent around political imperatives.

But let’s not pretend that Brussels has a monopoly on badly-designed or politically-driven policy.

At home in Ireland for years housing policies have perversely helped to drive up prices and make it harder to find a decent place to live.

Some policies are never actually designed to achieve an outcome but serve a political purpose, such as to show that politicians are “doing something” or to communicate a stance to the electorate.

A very pure example of this was Denmark’s floridly cruel “jewellery law” of 2016, which allowed police to seize cash and valuable possessions from arriving migrants and refugees. In the three years after its introduction the law was hardly used, and no piece of jewellery had been seized by 2019, according to Danish reporting.

This reflects that the law was the product of a local competition between Danish political parties about who could pose as the toughest on immigration. This was the legislation’s purpose, rather than its pretended effect – to make migrants and refugees with assets help pay for the cost of their stay.

Longtime EU observers all have their own nominations for the hall of infamy, for example, fishing policy that led to over-fishing

Nevertheless, there is something particular about the way in which policies are botched in Brussels that deserves its own coinage as the Brussels defect. It’s not, as Eurosceptic stereotypes would have it, through the incompetence or malice of a disembodied, anonymous bureaucracy.

It happens through the combination of the commission’s wish to regulate and be seen to regulate, and the bargaining and horse-trading that goes on as the executive is pushed around by the member states, usually keeping industry interests close at heart.

Longtime EU observers all have their own nominations for the hall of infamy: fishing policy that led to over-fishing; a decision to classify biomass fuel as a renewable energy that incentivised the destruction of forests; fiscal rules intended to ensure economic robustness that almost tore the euro zone apart.

One cheeky suggestion is the naming of Charles Michel and Ursula von der Leyen to be presidents of the European Council and Commission, the result of a famous backroom deal between France and Germany to balance the EU's big political groups.

Compromise in politics is usually a good thing. But it is not a universal good. It can result in policies that are like the old joke about the tourist asked for directions to Dublin, who was told: “Well if that’s where you’re going, I wouldn’t start from here.”