Legislative Bargaining in the European Union

We analyse legislative bargaining in the European Union. In our model, EU member states bargain over the policy choices underlying legislation and over its `template': (1) the degree of discretion at the application stage, and (2) whether the discretionary power is delegated to the Commission (or retained by the Council). Our analysis classifies member states into `large', `medium-sized' and `small' based on their voting power in the Council. Large member states seek to adopt open-ended legislation in which the Council retains the discretionary power. Medium-sized ones prefer `clear rules' without discretion. Small member states prefer open-ended legislation in which discretion is delegated to the Commission. We discuss the Stability and Growth Pact (SGP) as an illustrative example.