European Integration and Housing Policy

Mark Kleinman, Walter Matznetter, Mark Stephens

• Publisher: Routledge
• Year: 2005
• eBook ISBN: 9781134699193
• Edition: 1
• Topic: Physical Sciences
• Subtopic: Geography
• Index: Geography

This book presents a series of debates arising from the housing needs of different EU countries. The authors address key issues by examining in turn:
* the consequences of European integration for different housing markets * the impact of the Maastricht Treaty and other policy documents * the social consequences of integration including income distribution, homelessness and marginal housing estates
* current housing policy in the Nordic countries and in Eastern Europe.

1

INTRODUCTION

From comparative housing research to
European housing research

Walter Matznetter and Mark Stephens

Introduction: the context of European integration

Anyone who has followed the progress from the European Council meeting in Maastricht in December 1991, towards the creation of the European single currency, due to begin in 1999, would have been struck by the enormous difficulties that have been encountered. Indeed, on several occasions it looked as if the project would be abandoned. The key problem faced by the architects of monetary union has been the unexpectedly deep and long recession in Europe in the first half of the 1990s, which has been followed by the persistence of high unemployment in many countries. These economic difficulties have been associated with the progress towards the single currency in two ways: first, in the dramatic speculation that engulfed the European Exchange Rate Mechanism (the system of currency management within set bands established in 1979) both in 1992, when the UK, Spain and Italy were forced to withdraw, and in 1993 (when the French franc finally succumbed to the speculators); second, in the austerity programmes adopted by national governments to reduce their recession-bloated deficits to meet one of the requirements of the single currency membership. These provoked opposition in many countries, but the outcry had greatest impact in France where strikes and demonstrations erupted at the end of 1995.

During the ratification process, the first Danish referendum went against monetary union, although a second one reversed the decision; and, contrary to expectations, the French gave monetary union only the most grudging vote of approval in their referendum held in 1992. While the Treaty went through some European Parliaments with virtually no discussion, it was bogged down in the UK Parliament for months on end, the issue having split the ruling Conservative Party down the middle. And, when François Mitterrand’s presidency ended in 1995, so did the thirteen-year partnership with Chancellor Kohl, which had given such strength to the pro-integration Franco-German axis.

But, looking back, perhaps in a decade’s time, it is conceivable that in the last two decades of the twentieth century, Europe will appear to have undergone an extraordinarily rapid advance in integration. The European Economic Community (EEC) of old was notorious for possessing a Treaty whose objectives were the stuff of pipe dreams. The system by which decisions had to be agreed by all countries meant that it was difficult to secure agreement on anything. It is worth remembering that it took the original six members of the EEC ten years from its foundation in 1958 even to establish a customs union, i.e. a free trade area with a common external tariff. Expansion was achieved in the 1970s with the UK, Ireland and Denmark joining in 1973. But other moves towards integration, such as the currency ‘snake’, established after the collapse of the post-war Bretton Woods system of (nearly) fixed exchange rates based on the US dollar, ended in disappointment. The early years of the Exchange Rate Mechanism (ERM) were dogged by persistent realignments. Even the European Parliament, which was first elected in 1979, had few formal powers and made little public impact. Once again, the most noticeable achievement up to the mid-1980s was the continued steady expansion in the Community’s membership, now to include the recently democratised countries of Greece (1981), Spain and Portugal (both in 1986).

From the mid-1980s, the process of European integration speeded up. Lord Cockfield, then one of the British European Commissioners, drafted a White Paper that proposed the creation of a European single market, described as ‘an area without internal frontiers in which the free movement of goods, persons and capital is ensured’. On one level, this document can be seen as proposing technical changes to remove so-called ‘non-tariff’ barriers and to make free trade within the European Community (EC) (as the EEC was known after 1987) a reality. The sclerotic decision-making process was refined, so that most decisions in the Council of Ministers were made by ‘qualified majority voting’, which removed the veto held by individual countries. And, instead of detailed regulations being produced (and agreed) for each and every product or service, the White Paper proposed that trade within the EC should take place on the basis of basic standards established by the Council of Ministers (‘minimum harmonisation’). The White Paper led to the major Treaty amendments known as the Single European Act in 1987, and, while there were important exceptions, not least in the free movement of people, the bulk of the legislative programme connected with the single market was passed by the end of 1992, the deadline set for the completion of the single market.

But the importance of the single market goes further than this. The Cockfield White Paper conceived of the European Community in terms of the world economy, making it one of the first major decisions influenced by what is now commonly dubbed ‘globalisation’. The White Paper emphasised the need for the EC to become not just a single market place, but a single production base, too. As the world economy became more competitive and open, the existence of separate industries in each member state was seen as being inefficient. Far better for members, or regions within them, to maximise scale and agglomeration economies to produce efficient single European industries. To achieve this, it was essential to free the movement of capital, a decision which severely undermined the ability of member states to run independent monetary policies (or indeed resist speculation against currencies in the ERM). Of course there was an element of coincidence in the removal of exchange controls: it must have been easier for members of the EC to abandon exchange controls when world-wide factors, notably the effect of computer technology on the cost and detectability of the movement of money as well as the creation of financial instruments, made their retention implausible in the medium term.

The single market also had important spin-offs in terms of social and regional policy. The Single European Act (SEA) inserted a commitment to economic and social cohesion. Rather than paying for social welfare programmes, such as social security benefits, European social policy takes the form of a commitment to workplace rights, as manifested in the ‘social chapter’ of the Maastricht Treaty. More importantly, the SEA led the European Commission to establish a rationale for an expansion in its budget and system of regional aid. The Commission argued that, although the shift towards a single market would increase the EC’s general level of prosperity, there would be uneven regional and sectoral impacts. In particular, peripheral regions and old industrial regions might be expected to fare less well under the competitive environment created by the single market. Consequently, the European Structural Funds were reformed and expanded. For our purposes, the most relevant funds are the European Regional Development Fund, which aims to promote infrastructure projects which should enhance productive capacity in disadvantaged regions, and the European Social Fund, which is intended to assist workers to gain access to jobs by improving their skills. In the lead-in to the creation of a single currency a new Cohesion Fund was established to support communications and environmental projects in the four poorest member states. By the end of the century, Greece and Portugal are due to receive the equivalent of some 4 per cent of their national incomes in structural assistance from the European Union.

At the time of writing (in late 1997) it looks as if monetary union will proceed, although it is not entirely clear how many countries will qualify for membership initially. Opposition to the single currency has failed to be articulated coherently in Germany and France. The German Social Democrats have been inclined to tap emotional fears about the surrender of the mighty Deutschmark, rather than articulate concerns about unemployment. In France, first the newly elected President Chirac abandoned his concerns regarding the long-term deflationary impact of the franc-fort policy of maintaining the value of the French franc against the Deutschmark and has become a reliable supporter of monetary union as the logical development of this policy. The French Socialists, unexpectedly returned to government in the parliamentary elections in 1997 on a platform that explicitly expressed concerns about the impact of European integration on employment levels in France, were very soon placated by sympathetic noises being made at the European Council.

Even in the UK, neither Labour nor Conservative parties was prepared to rule out founder membership of the single currency in the 1997 election. Since then, the Conservative opposition has toughened its resistance to membership, while the new Labour government has stated that it is in favour of membership in principle, but it has effectively ruled out founder membership.

Even during the most difficult post-Maastricht years, the European Union (EU) (as the 1992 Treaty changed the organisation’s name once again) attracted three new members. Austria, Sweden and Finland joined in 1995, although Norway’s membership was rejected in a referendum. And just as it looked as if the single currency project had been secured, the European Commission pressed ahead with its proposals for further expansion, this time eastwards. In addition to Cyprus, the European Commission has given the green light for Hungary, Poland, Estonia, the Czech Republic and Slovenia to join the European Union. This expansion of the EU will be particularly challenging because it involves a number of countries that are much poorer than the existing members. At present, Greece is the poorest member of the EU with a per capita GDP of around two-thirds of the EU average. Of the proposed new members from Eastern Europe, the Czech Republic has a GDP per capita at one-half of the EU average, while the others have per capita GDPs in the range 25–40 per cent of the EU average.

Enlargement naturally implies a radical reassessment of the EU’s budgetary arrangements. It is clear from the Commission’s proposals for budgetary reform that the era of rapid budget growth is over. Although expenditure will continue to grow in real terms (by 17 per cent between 1999 and 2006), it will nevertheless remain constant at around 1.2 per cent of the European Union’s GDP up to 2006. The shift in the balance of expenditure from the Common Agricultural Policy to the Structural Actions (i.e. the Structural Funds and the Cohesion Fund) will cease, but the distribution of the funds will change. The prospective member states will receive support from the Structural Actions of up to 4 per cent of their GDPs. Some areas that previously qualified for assistance in the current EU will undoubtedly lose funding, although a transition period is envisaged.

Housing research in Europe

Since the mid-1980s, serious attempts have been undertaken to make housing research more international. Within Europe, two broad traditions have emerged from these ambitions: comparative housing studies on the one hand, and research on the effects of European integration on the other. Both traditions are present in this volume. They can also be found in the literature published to date: variants of comparative housing research, employing different theories and methods, at different levels of analysis; and studies on European integration, mainly commissioned by supranational organisations interested in the housing question.

These traditions have been running parallel for some years now, with a few exceptions mentioned below. We argue for co-operation between comparative and EU-related housing research. European integration has advanced to the point where national housing systems cannot be treated as autonomous units of comparative analysis any longer. This is not because of any prospect of a housing policy being developed at the Union level, but due to the indirect, back-door effects of European integration upon national housing markets and policies.

A new agenda had been set by European policy makers, not by the housing research community itself, referred to by Kemeny (1992: 16) as ‘epistemic drift’ at the national level. The comparative policy agenda almost disappeared beneath the bulk of European integration-cum-housing studies precipitated by the drive towards European integration. This was helped by the fact that other disciplines and researchers were doing the job: economists, lawyers and European specialists joined the political scientists, sociologists and geographers who had been active in comparative housing research previously. Only some economists have contributed to both sides of the camp (e.g. Ghékiere 1991, 1992; Kleinman 1992, 1996; McCrone and Stephens 1995).

Since Maastricht, comparative housing studies have continued to be published (e.g. Balchin 1996; Barlow and Duncan 1992, 1994; Boelhouwer and van der Heijden 1992; Doling 1997; Forrest and Murie 1995; Hallett 1993; Harloe 1995; Hedman 1994; Karn and Wolman 1992; Kemeny 1995; Kleinman 1996; Oxley and Smith 1996; Padovani 1995; Papa 1992; Power 1993; Rudolph and Cleff 1996; Wiktorin 1993), but in many cases they are being developed in relative isolation from EU-focused housing research, and sometimes from each other too. Hence two types of housing studies may be distinguished: comparative housing studies, both at the international and the inter-regional levels, and studies on the impact of European integration upon housing. A third type of research is only emerging, i.e. a more integrated view of developments at the European, national and regional levels. The following sections discuss the strengths and weaknesses of these three types of international housing research in turn. The next section includes some brief comments as to the contributions of the following chapters towards a more comprehensive, truly European housing research.

Comparative housing research

As is the case with housing research in general, comparative housing research can be described as a multi-disciplinary field of studies, not as a field of truly inter-disciplinary analysis (Kemeny 1992: 11); and even this is true only for the most theorised attempts at comparison. Many other and most earlier comparative housing studies lack a theoretical and a disciplinary focus at all, at least in an explicit form. By means of implicit and covert statements, many of these studies can still be related to broader traditions in cross-national research, such as convergence theory, and corporatist theory (e.g. Schmidt 1989; Kleinman in this volume). The kind of housing research which is not explicitly related to any discipline, paradigm or theory, was encouraged by the early institutionalisation of housing studies, at least in a number of European countries. For example, building research institutes used to be organised around the lowest common denominator, around bricks and mortar and other purely empirical and policy issues.

In his book on Housing and Social Theory (1992), Kemeny proposes a way out of the current isolation of housing studies from contemporary debates in the social sciences. It is a strategy that seems viable also in comparative research on housing: researchers should turn to the disciplinary bases of their kind of (comparative) housing research, and reconceptualise it as part of these separate disciplines. That means, there should be more of a (comparative) housing sociology, more of (comparative) housing economics, more (comparative) housing policy, etc. Only after such a transitional phase of ‘firm anchoring in the individual disciplines … interactive analysis across disciplines can be developed’ (Kemeny 1992: 11–18).

Let us consider one example of what such a re-integration of comparative housing research into a particular discipline would look like, and what theoretical and methodological advances such a reconceptualisation might yield. Political science has been chosen because of its leading role in international comparative research. Any literature search will come out with similar results: apart from comparative linguistics, there is an abundance...

Table of contents

• Cover
• Halftitle
• Title
• Copyrights
• Contents
• List of figures
• List of tables
• List of contributors
• 1 Introduction: from comparative housing research to European housing research
• Part I Markets
• Part II Policies
• Part III Outcomes
• Part IV Diversity in the European Union
• Index