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In this paper, we present our view of the recent evolution of European integration. We first briefly describe the main features of the institution and decision making process in the European Union, with particular attention to the debate between federalists and super nationalists. We then identify two key issues in the process of European integration: 1) an emphasis on "institutional balance" based on a complex web of institutions with overlapping jurisdiction; 2) A conflict between a dirigistedoi:10.1257/0895330042632780 fatcat:m3acwgywp5bkzevcmcyjzo5aie