The year 2009 has been a remarkable for the EU. Allegedly, it moved towards more intense cooperation between heads of state and a weakening of the Commission. However, we also saw the appointment of first European Council President, Herman Van Rompuy and EU ‘Minister’ of Foreign Affairs, Catherine Ashton. With the new Lisbon treaty on 1 December and a new European Commission headed by the – finally – reappointed Barroso, has the EU become more federal or more intergovernmental?

On the one hand, it might be said that the EU has become less federal, due to a seeming erosion of the EU institutions in recent years. This has been the result of among others, the financial crisis and an increase in Euroscepticism at the national level making politicians more hesitant to widen and deepen EU policies. EU decision-making has become more intergovernmental, with an explosion in the number of different European Council meetings composed of heads of state and governments. Now, there are not only the official European Councils (four per year), but also the ad hoc meetings of heads of states or governments including meetings with third country leaders and historic occasions (like the Fall of the Berlin Wall 20th anniversary celebrations); preparatory meetings for global rendezvous (Pittsburgh on G-20 on the economic crisis; Copenhagen on climate change) and sub-27 gatherings in G-3, G-6 and other formations. As a consequence, fewer decisions are being taken at the level of the sectoral Council formations (say, Economic or Environmental Councils), which decide by majority, and have been shifted to the highest level (where unanimity applies and the European Commission’s role is limited). This trend is just the tip of the iceberg because behind the more frequent meetings of the heads of state lies a world of informal bilateral contacts between the capitals. In short, the intergovernmental EU is flourishing.

This process towards intergovernmentalism has been propelled by other developments. First, in recent years the Barroso Commission has gained a reputation for primarily listening to the big member states, for example in the application of the Stability and Growth Pact rules or in turning a blind eye when it comes to state aid policy. In fact, the challenge for the European Commission is to regain relevance in the EU decision-making process: the longer-term perceived relevance decreased between 2004 and 2008 by 7%.

Second, the diminishing of powers of the European Commission in its role as defender of the European interest is linked to the fact that the institution itself is facing growing fragmentation. There is an ever-growing number of EU agencies (now over 30) with approximately 6000 staff; the entire European Commission has some 25,000 officials. With the new treaty, there is a possibility of creating a new super-agency of a sui generis type; the European External Action Service, with some 3000 staffers on its own of which a significant part will be coming from the national administrations. In recent years the European Commission has also been displayed problems in understanding the newer EU member states’ sensitivities. Five-and-a-half years after the ‘big bang’ enlargement, only 2.4% of top decision-makers in the Commission are newer EU members’ nationals. As a result, some of the Commission’s proposals are somewhat out-of-touch. This was for example the case with the proposals on financing the climate change negotiations.

Moreover, there was the process of appointment of the EU top jobs. Despite complaints about a lack of ambition and charisma, Barroso was re-elected as President of the European Commission in a lengthy three-month process of fierce battles between the European Parliament and the governments, which seemed nothing more than naval gazing over the only candidate. The president of the European Parliament, Jerzy Buzek, was ultimately decided in a dispute between the Italian and Polish prime ministers, and won by the latter. The secrecy in appointing the first permanent president of the European Council and new foreign policy chief is the quintessence of the intergovernmental approach. The position of the ‘European President’ (in fact, President of the European Council) was degraded from a leader with star power (Tony Blair) to mere coordinator (Herman Van Rompuy – a politician with limited international prestige, whose primary job is to serve the interests of other European Council members, such as the German Chancellor or the French President) may act as further illustration of the power of the larger member states in decision making procedures.

Yet, the growing intergovernmentalism of the European project is matched by a growing federalisation. First, there are important policy developments that have actually strengthened the European Commission. The Barroso Commission has in fact been much more powerful than its public image might suggest. To name just a few of the important victories: state aids in the car industry have been fought back; the deal between Magna and Opel was far from approved, and the €6 billion Sarkozy intended to offer to Peugeot on the condition of closing production in other states to save employment in France was shelved. Support to banks has led to rulings on the break-up of major financial institutions, such as ABN-Amro, RBS, ING, Lloyds, etc. Beyond the realm of competition policy, in other policy areas the EU has been highly active too (and the role of the Commission was crucial here) such as leading the climate change discussions within the UN and devising policies to safeguard the EU’s influence between its eastern borders and Russia; opening debates on the future of the agriculture policy; furthering the Europeanisation of fragmented research policies – to name but a few recent developments.

Second, the re-election of Barroso actually resulted in the institutional re-enforcement of both the Commission and the European Parliament. In the absence of a new treaty the Parliament introduced new informal procedures for the appointment of the Commission President by asking for a government-type policy programme declaration and by insisting on specific priorities before confirming Barroso in his post. This greatly politicised the President’s profile and implies that he has become increasingly accountable to the Parliament.

Third, Europe’s political system is shifting inevitably towards a more Parliament-oriented system. The new treaty doubles the legislative powers of the Strasbourg assembly in decision-making and increases its say in the comitology process. Budgetary powers are also extended. Having a former head of government as its public face notably gives the chamber more formal recognition, but increases its informal influences, as well. If there were already calls for more transparency in appointing a European Council President, there will probably be even more pressure in the future to have those public hearings for EU ambassadors or even the European Council presidential candidates in the Parliament. This time, politically speaking, the Parliament and the Commission are increasingly sharing the responsibility to safeguard the European interest.

The ongoing parliamentarisation of the EU is well under way. President Barroso made a promise to the chamber to nominate a human rights commissioner. He granted this portfolio to Vice-President Reding. Also, Barroso had to present to the European Parliament a government-type declaration on what he intended to do. This will also serve as a point of reference to control Barroso II’s performance by the chamber. The European Council took into account that, in order to avoid any problems in the EP with nomination of a new foreign policy chief, the chosen candidate should be of a profile difficult to reject by the chamber. A female left-wing candidate with a solid EU background proved hard to be rejected by the Parliament. What this shows is that last year the standing of the European Parliament in relation to the other institutions has improved significantly.

As the Parliament gets stronger and has gained a bigger say on the composition of the Commission, some doubts on the Commission’s strengths remain. Last year the Commission gained a new source of its legitimate powers. A clear conservative-liberal composition of the European Commission – with a few left-wing leftovers – improves the institution’s standing. Mirroring a political majority in the EP and the Council reinforces the Commission’s position and strengthens its political mandate. It also strengthens the European Union because it proves that the Europeans’ June 2009 electoral choices have been respected.

The fourth argument is linked to the EP elections last year. In a situation where in fact there were simultaneous elections in all EU member states, and national campaigns were run by national actors, the message sent out by the peoples of Europe was clear: they trusted the conservative politicians to lead the way out of the crisis, regardless of whether they already held offices nationally (i.e. in France or Poland), or whether they were in opposition (i.e. in the UK and Spain). If this trend continues in years to come, it may mean that we witnessed in June last year the emergence of a European ‘political public’ – when people in their national contexts, asked by national politicians, give a pan-European answer. This development increases the legitimacy of actions taken by political leaders both in the Commission and in the European Parliament.

So, which of the two processes is dominant and will prevail over the other? Taken with all the changes brought in this year, including the appointment of President Van Rompuy; the EU’s external action service with Baroness Ashton as ‘Minister’ of foreign affairs; the formal and informal increased powers of the Parliament, and the multiplication of EU agencies, this may have been the year in which ‘Brussels’ did not fragment but instead emerged as a more normal European capital with different institutional roles akin to ‘normal’ capitals. After all, there is a president, a parliament and a fragmented executive with a emerging diplomatic corpus - External Action Service - and a central bank, numerous agencies and now even also a set of specific financial regulatory authorities. Fragmented executive is not bad for the Union; it is normal in administrations.

With all these trends, the EU seems to be operating on the same traditional balance it has always operated on between intergovernmentalism (the EU as a project of cooperation between states) and federalism (the EU as a project with supranational institutions). This year has demonstrated a mutual reinforcement of supranational ‘Brussels’ and of the political control from the member states. This seems to be a good – and more legitimate – starting point for the EU to face internal, regional and global challenges, such as the stability of internal market rules, guaranteeing the stability of the European neighbourhood in Eastern Europe, the South Caucasus and in the Middle East, in combating climate change within the UN context and, finally, in working towards a stable global financial regulatory system.

Adriaan Schout is Director of EU Studies at the Netherlands Institute of International Relations (‘Clingendael’) in The Hague;

Piotr Maciej Kaczyński is a Research Fellow at the Centre for European Policy Studies based in Brussels.