State Legislatures in the Post-Rüffert Reform of EU Public Procurement. From Contained Compliance to Subnational Mobilization?

This paper examines the involvement of the German federal states and their legislatures in the reform of the European Union’s (EU’s) procurement policy. It compares the magnitude and strategies of mobilization by Länder parliaments; and it analyses the causal impact of partisan, institutional, and socio-economic factors. Public procurement is covered by EU law at the intersection of social regulation and competition policy. Accounting for almost 14% of EU GDP, it is a major factor in public spending. Its redistributive and social implications render procurement policy highly salient for authorities and legislatures at the regional level, where most tenders are offered. Two of the three “yellow cards” under the subsidiarity control mechanism concerned initiatives related to EU procurement policy. A series of judgements by the Court of Justice of the EU in the mid-2000s provoked and extensive overhaul of the multilevel procurement regime. In particular the Rüffert judgement (C-346/06), which outlawed certain “social protectionist” clauses in the procurement procedure of the German state Niedersachsen, led several member states as well as all 16 German Länder to adapt their domestic procurement policies. Focusing on the short-term, top-down Europeanization of domestic policies, existing research found no convergence on a market-conforming procurement regime but a variety of responses, some of which “contained” the judgement’s liberalizing impact. Meanwhile, procurement policy also underwent a major reform at EU level. Focusing on the role of the German states in the overhaul of EU level procurement legislation, this paper takes account of the yet unexplored bottom-up Europeanization dynamics at play in the procurement reform. The paper moreover contributes to the burgeoning research on subnational actors in EU politics. As national competences were transferred to the EU, state legislatures in federal polities became increasingly constrained in the exercise of their hitherto considerable legislative prerogatives. Yet especially since the Lisbon Treaty, regions also gained new information and scrutiny rights in EU affairs on the federal and EU levels. The procurement reform offers a chance to examine if and how the Länder and their respective parliaments used these rights in practice. Finally, the paper also informs the ongoing debate about the limits of overriding CJEU decisions via secondary law-making. The paper traces the mobilization activities – including the extent, goals, and strategies – of several German state legislatures from the first consultations to the final negotiations of the EU procurement package, focusing on directive 2014/24/EU. Comparing institutional, partisan, and societal factors across states, I argue that: First, parliaments dominated by a left majority mobilize more strongly than those dominated by centrist, liberal, and right majorities. Moreover, state legislatures dominated by parties in opposition at the federal Bundestag rely more on extra-state mobilization. Second, the strength of mobilization also depends on the extent to which states subjugated their procurement to CJEU jurisprudence, resulting in different degrees of policy mismatch and legal uncertainty. Finally, cross-class coalitions between employer associations and trade unions contributed to stronger mobilization in favour of social procurement criteria.