Europeanization as an Interactive Process: German Public Banks Meet EU State Aid Policy

Much of the Europeanization literature assumes that while European integration may upset certain features of national policy-making structures, it will not be able to modify systemic characteristics. This article shows that central features of national policy-making structures may be overthrown by European integration. However, this usually requires a proactive attitude by subnational actors with an interest in further integration. The argument is illustrated by the case of German public banks and the conflict with regard to EU state aid rules. In this case, competing private banks finally chose to circumvent existing national policy-making structures in order to obtain the abolition of state guarantees, which it was considered put private banks at a competitive disadvantage. Copyright 2006 Blackwell Publishing Ltd.