Transverse Integration and Crisis-Driven Incrementalism: 2021-2022 Price Shock and the Partial EU Power Market Reform

This paper explores why major external shocks often lead to incremental adjustments in EU policymaking rather than deeper integration or disintegration. The empirical puzzle arises from the EU’s response to the Russian invasion of Ukraine and the ensuing energy price crisis, which—despite challenging the foundations of the common power market—resulted only in limited reforms to the EU electricity market design. Drawing on Dyson and Marcussen’s (2010) notion of transverse integration as a dynamic equilibrium between unitary ambitions and differentiated realities, the study shows how competing national policy visions reinforced incremental change in the EU electricity market reform.