byist. However, it is useful to have a grasp of the main institutions and their interre-
lationship. The permanent executive of the EU is the European Commission. The
Commission itself consists of 20 members, nominated by member states (the larger
states, such as the United Kingdom, have the right to nominate two commissioners),
but the working brief of each commissioner is just one of the many decisions which
are made by trade-offs between countries. Accounting and audit currently come
under Internal Market Commissioner Frits Bolkestein. Commissioners have a five
year term of office, renewable once. Most commissioners have been prominent na-
tional politicians before being appointed, and have held at least ministerial rank. Ro-
mano Prodi, for example, the current president of the Commission, was previously a
prime minister in an Italian government.
The Commissioners are supported by permanent officials, organized into Direc-
torates General. Accounting comes under Directorate General XV (DGXV) whose
responsibilities include financial information, stock markets, and company law. The
head of accounting within DGXV is a Belgian lawyer, Professor Karel Van Hulle
(formally, his title is head of unit, financial information and company law).
The Commission has the sole right to initiate legislation and indeed to implement
statutes once passed, but the process of approval of its proposals is tortuous. The two
principal legislative institutions of the EU are the European Parliament and the Coun-
cil of Ministers. Members of the European Parliament are directly elected in member
states and the Parliament sits in Strasbourg. For the moment it has limited direct
power, although in the longer term its powers are supposed to be increased. The
Commission’s legislative proposals are referred to the Parliament (as well as to the
Council of Ministers and the Committee of Permanent Representatives—a standing
committee of member states) for debate and Parliament’s opinions are taken into ac-
count by the Commission in modifying these proposals.
(b) Role of the Council of Ministers. The decision-making power is increasingly
being passed to the European Parliament from the Council of Ministers. This is not a
single council, but rather a series of councils, each dealing with a different subject
area and made up of the relevant ministers from member states, so a finance matter
would be decided by the council of finance ministers, an agricultural matter by min-
isters of agriculture and so on. The presidency of the Council of Ministers rotates be-
tween member states every six months, and so the foreign minister of the member
state is in effect head of the EU, and the individual ministers chair their respective
subject councils. The rapid rotation means that no state ever sees through a decision
from beginning to end, although states do try to make their mark by making some
positive achievement during their presidency.
Theoretically, the Council of Ministers can accept or reject the Commission’s pro-
posals, but can amend them only with a unanimous vote. In practice, of course, the
whole EU decision-making process operates through informal consensus seeking,
with much behind the scenes negotiation before formal meetings. There are many
trade-offs and temporary alliances between states along the lines of Country A, for ex-
ample, agreeing to support Country B’s position on beef subsidies, in return for Coun-
try B’s support on a taxation question. In practice therefore, the Commission’s pro-
posals are widely debated and frequently modified in the process of arriving at a form
which can command approval in the Council of Ministers. This can result in a major
statute taking several years to be finalized, or in proposals being permanently stalled.
Different company law proposals from DGXV have suffered both fates in the past.
17 • 2 EUROPEAN HARMONIZATION