This week, AK EUROPA and the ÖGB Europabüro, the Brussels office of the Austrian Trade Union Federation, hosted a panel discussion concerning the conflict between democracy and technocracy. According to many, the trend towards outsourcing sovereign supervisory competencies to independent agencies - for example in the energy or railway sector - means a weakening of democratic control. Apart from the study’s author, Dr. Konrad Lachmayer, the Executive Director of E-Control, Martin Graf, Monika Štajnarová of BEUC, the European Consumer Organisation and Edith Hofer of the European Commission also participated in the discussion.

Lack of democratic legitimacy vs. strict supervision

The well attended event at the Permanent Representation of Austria to the EU in Brussels started with author Dr. Konrad Lachmayer introducing the AK Study “Regulatie”. Following the statements by the panelists, the audience had the opportunity to pose their questions to the experts. Susanne Wixforth of AK Wien chaired the lively discussion.

Dr. Lachmayer, who recently published an article in the Arbeit & Wirtschaft Blog of AK and ÖGB (in German only), began his deliberations with the theoretical concept of modern regulation. Previous authorities bound by instructions are currently converted into independent “agencies” - inspired by the Anglo-Saxon area and due to EU requirements. Problematically, however, the latter combine executive, legislative and judicative competencies in one single organisation. This was not according to Austrian administrative tradition and would blur the boundaries between state and privately run organisations. Possibly unconstitutional aspects of the legal architecture of the EU regulatory regimes were elevated to constitutional status by the Austrian legislator. This would reduce the control over such institutions, as the Constitutional Court in case of constitutional provisions or laws was only able to examine issues to a limited degree. Overall, Lachmayer evaluated the uncoupling of regulatory agencies and state control as a democratic deficiency. In contrast to ministries or private organisations, courts would have a significant disadvantage in this area, as sometimes they would not have the necessary technical know-how. The scientist rejected plans to create a “super regulatory agency” for all sectors as only small organisations would enable reasonably effective control.

Martin Graf, the Executive Director of E-Control Austria saw no democratic problems in his organisation's activities. Due to the legal framework, room for manoeuvre would be very limited. The supervisory bodies, among them the Ministry of Economics, would continue to intensively exercise their functions. The main task of his organisation would concern technical matters (e.g. data formats) and market access, whilst fundamental energy policy decisions would continue to be taken by the elected legislator.

Referring to the openness of E-Control, Graf spoke of a “model pupil” compared to other European organisations. Various committees and dialogue forums would ensure intensive contact with representations of interest, among other also with AK and ÖGB. He made the critical comment that Austria had a lot of catching up to do when it came to energy infrastructure. He pointed out that this was also the responsibility of the Länder. He also observed that the liberalisation of the electricity market had above all benefited commercial customers. In cooperation with consumer representatives one would look for ways, which would ensure that private customers would also benefit from low prices.

Monika Štajnarová of BEUC (the European Consumer Organisation) saw a democratic deficit regarding legislation in general and in particular with regard to the energy sector. Currently, the population would hold energy suppliers in the same low esteem as banks. In future, regulators should increasingly act in partnership with consumer protection organisations. This would amongst others require more transparency, capacities and joint processes (e.g. for the development and implementation of regulations). The EU’s planned Energy Union could have a role model effect as it had been planned to involve citizens intensively.

Edith Hofer from the European Commission defended the Union’s regulatory architecture. The independence of regulators would make sense as many energy companies would be state-owned and private competitors had to be protected against being disadvantaged. The legitimation of agencies would be the result of the democratic process of their establishment. She too saw Austria as a model pupil in respect of consumer rights, even though many customers would obviously find it difficult to cope with the liberalisation. Consumer protection could also have consequences, if, as it is the case in Belgium, the rules were too strict to attract new providers to enter the competitive market.

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