The document discusses three key challenges faced by national states in Europe due to globalization and European integration: 1. National states have lost some control over their economies as major corporations have moved operations to other countries and the EU has taken on more governance roles. This diminishes national autonomy. 2. There are pressures for policy and institutional convergence across countries, but the realities are more complex with continued divergence at the micro-level between countries. 3. Both globalization and European integration subject national corporations and policies to greater regulatory controls and competition between countries to attract businesses, creating tensions around balancing economic and regulatory goals.

1. Do the national states of Europe share fundamentally similar or
fundamentally different challenges when it comes to whether globalization or
integration are the way to go in their countries? These two words that have been at
the center of arguments in recent European history. The issue is no longer whether
Europe matters but how it matters, to what degree, in what direction, at what pace,
and at what point of time (Paragraph 2, page 60, Borzell). Although I concedethat
there are some fundamentally different obstacles, Globalization and European
integration posefundamentally similar challenges to the national states in Europe.
The globalizing of Europe, which can also be referred as Europeanization, is
seen similarly to integration. For the countries that formed the European
Community, regional integration was not seen just as a way to ensure peace, but it
also appeared the only reasonable answer to the problems to international and
inter-European competition. Globalization since then has increased in magnitude,
speed, and volatility while at the same time decreased national governments ability
to control their effects. “In globalization, governments have given up significant
control of the national autonomy, in other words, the ability to make decisions
independently without regard to external forces…” Some of the effects from this
allow for national governments to alter their own country’s monetary policy. By
doing this the governments focus on tight budgets, low inflation, and caps on
public debt, and other major changes. While radicals insist that governments have

2. lost both their uniqueness and the control necessary to maintain postworld war II
commitments of the welfare state in the face of global forces that have taken away
gradually welfare entitlements and workers’ rights while promoting inequality and
unemployment, skeptics respond by saying that globalizing has done little to help
the problems of the welfare state. This can be explained however by changing
demographics, new developing technologies, and forms of work organizations
have all done every little to change the welfare state (Paragraph 2, page 1, The
Challenges of Globalization and Europeanization)
Another challenge facing the national states in Europe is having all your
major corporations in another country to be able to compete on a global level. The
major hub of European globalization is England, specifically London. The city has
been “the centre of a system of global payments,” since as far back as the 1800’s.
When World War I came around, Londonremained a stable financial center with a
high presence of foreign banks. The city has acted as a central pillar of the global
economy. The globalization launched London onto a new status and has helped its
connection with lower level cities, but also with global cities such as Tokyo and
New York City. Another European city, Brussels, is more concerned with shaping
European integration. European Integration is mirrored in the development of the
city of Brussels, which in turn was heavily influenced by the arrival of the
European institutions such as the European Commission and their international

3. employees. The integration of Europe in two other ways, social structure and its
influence on the urban economy (http://eurozone.over-
blog.org/pages/Europeanization_and_Globalization_in_perspective-828371.html
July 4, 2014).
Another similarity is the national states have to not only worry about
globalizing and integration on a national level, but on a continental level too.
European governance now takes precedenceover national ones now. Member
states of the European Union now are not only emerged a European economic
system that includes tying national currency to the euro, encouraging firms to
become European firms, but also in a European multi-level government (Paragaph
1, page 21, The Challenges of Globalization and Europeanizaton)
European integration has created a whole new dynamic of collective law
which has served to diminish EU member’s control over European only issues.
That amount of networks has ensured that the European level is more privileged in
most business sectors except in financial markets or long-internationalized
industries such as chemicals. (Paragraph 2, page 22, The Challenges of
Globalization and Europeanization).
In both globalization and European integration, member state’s corporations
cannot escape regulatory control. What may be ok in the other countries, like a
merger in the US such as Honeywell and General Electric (GE), may not be alright

4. in Europe. The reason why this merger was not allowed in Europe was it was
thought to have created a monopoly. In the areas of technical standard-setting,
environmental protection, and the health and safety policies, the European
Commission has becomeever-increasingly more of a global force.
Europeanization has been an even greater force for change in the European Union
member states than globalization, greatly diminishing national autonomy and
control in exchange for much greater shared EU supranational authority and
control (Paragraph 3, page 22, The Challenges of Globalization and
Europeanization). With multiple national regulators governing international
markets, the regulators themselves are thrust into competition. On one hand, the
work on comparative economic systems implies that differences in regulatory
regimes can lead to an increasingly better chance of determining winners and
losers in the global market. As governments reduce the forms of industrial
protection and promotion, domestic regulatory systems become more important to
the competitive advantage of national firms. Skeptics of this believe that the very
competition between regulators erodes differences between national regulatory
regimes, rendering them out-of-date as a sourceof comparative advantage
(Paragrpaph 2, page 170, Vogel). Authors McKenzie and Lee (1991) and Wriston
(1992) stress that in a world of international markets governed by national
regulations, corporations can engage in regulatory arbitrage. Regulatory arbitrage

5. is the corporations shifting their capital or their business activities to other
countries with lighter less harsh regulatory burdens. As a result of this action by
corporations, countries or national authorities compete to design regulations to
attract capital and business activities. To do this, the national authorities reduce
regulatory burdens (Paragraph 3, Page 170, Vogel,). As stated by David M.
Konisky, this is called the race to the bottomtheory. The theory states that
confronted with economic competition, states have incentives to adoptan
excessively lax in his case environmental standards, but I feel this could be applied
to regulatory standards in an effort to attract capital and corporations. “Therace to
bottom argument is an example of the “Prisoner’s Dilemma”; the equilibrium
outcome is suboptimal, since states would be better off collectively maintaining
their own standards rather than relaxing them. (Paragraph 3, page 854)”
When it comes to Europeanization, adaptational pressures are generated by
the fact that the emerging European policy encompasses structures of authoritative
decision making with might clash with national structure of policy making, and
that given that the EU member states have no exit option given that EU law
constitutes the law of the land. This conceptis very different from other
international institutions which are simply based on voluntary intergovernmental
arrangements (Paragraph 3, page 61, Borzell).

6. Firstly, the European policies might lead to a policy misfit between European
rules and regulations, on one hand, and on the other, domestic policies. “European
policies can challenge national policy goals, regulatory standards like stated
previously, the instruments or technologies used to achieve policy goals, and/or the
underlying problem-solving approach(Heritier et al 1996).” As policy misfits
produceadaptational costs at the domestic level, member states try to achieve
greater policies at a European level in order to reduce their compliance problems
(Paragraph 4, page 61, Borzell).
Europeanization can also cause institutionalmisfit challenging domestic
rules and procedures and the collective understandings attached to them. European
rules and procedures which give governments decision power challenges “the
territorial institutions of highly decentralized member states which grant their
regions autonomous decision powers (Paragraph 3, page 62, Borzell).” The
accessibility of the European Commission for societal interests “challenges the
statist business-government relations in France and the corporatist systems of
interest mediation in Germany (Conant 2001).” Europeanziation might even
threaten deeply collective understandings of national identity as it touches upon
constitutive norms such as sovereignty (Checkel 2001). Institutional misfit is less
direct than policy misfit. “Although it can result in substantial adaptational

7. pressure, its effect is more likely to be long term and incremental (Paragraph 3,
pages 62-63, Borzell).”
Another fundamentally similar challenge is measuring convergence and
divergence in Europe. What looks like convergence at the macro level may still
show a significant degree of divergence at the micro-level. The Economic and
Monetary Union gave rise to policy convergence among the existing twelve
member states with regard to inflation and budgetary constraints, as well as to
institutional convergence concerning the independence of national bank. This did
not lead to similar institutional arrangements in the economic and fiscal policy
area. And the means by which the member states reduced their budget deficits
varied drastically- from austerity programs to new “euro” taxes in Italy (Sbragia,
2001). “While all member states responded to the liberalization of
telecommunication by creating independent regulatory agencies, they adopted
different institutional setups, reflecting variation in organizational structures
(Bolhoff 2002).” Policy convergence seems to be more likely to work than
institutional convergence as policy changes are more easily achieved. EU rules
and regulations require convergence in policy outcomes (such as low inflation or
budgetary restraint in the case of EMU), while they leave substantial extra power
to the member states with regard to the means of ensure compliance. Thus,
Europeans need to specify what they mean by “policy convergence”; convergence

8. in outcome or convergence in policy processes and instruments (Paragraph 3,
pages 71-72, Borzell). There is no convergence however when it comes to welfare.
Rather than all the countries following the Anglo-Saxon way, most non Anglo-
Saxon countries retain the basic feature of their traditional models even as they
introduce liberalizing measures. The Scandinavian countries have remained true to
eh social-democratic model by respecting values of equality and universality of
provision while maintaining a high level of benefits and services despite cuts in
benefits and the introduction of user fees (Paragrapht 2, page 7,The Challenges of
Globalization and Europeanization).
There can be little doubtthat multinational businesses have become
increasingly “stateless (Holstein 1990)” both “becausethey are much harder for a
country of origin to control as they have grown in size and scope(Ohmae 1990)
and becausethey are much more difficult to categorize by national origin in terms
of either ownership or products (Reich 1991).” While home and hostcountries
have been giving up their traditional controls over business in a wide range of
areas in responseto international and regional trade agreements as well as internal
reform initiatives, big business has grown even larger and more global than ever.
In 1970’s UN Center on Transnationals found that more than half of the seven
thousand multinationals were American or British. Fast forward twenty years,
fewer than half of the now thirty five thousand multinationals were Americans,

9. Japanese, German, or Swiss (Barnet and Cavanagh 1994). Globalization
encompasses not just the biggest corporations but also countless small and medium
size firms (SME’s) which have been integrated into production and distribution
networks globally (Castells 1996) (Paragrpah 2, page 7, Challenges of
Globalization and Europeanization).
In conclusion, the three terms of globalization, Europeanization, and
European integration are intertwined in meaning and common obstacles. These
issues will never go away and will be controversial in the future for the European
Union member states.

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Politics of Europeanization (2003): 57-80. Print.
"The Challenges of Globalization and Europeanization." (2002): n. pag. Print.
"Europeanization and Globalization in Perspective." N.p., n.d. Web. 4 July 2014.
"Globalization and European Integration in Perspective." Andre's Travel Blog. N.p., n.d. Web. 4
July 2014.
Konisky, David M. "Regulatory Competition and Environmental Enforcement: Is There a Race
to the Bottom." American Journal of Political Science 51.4 (2007): 853-70. Print.