The problem-solving capacity, and hence the democratic legitimacy, of national governments is being weakened by the dual processes of legal and economic integration in Europe; and the loss is not fully compensated by the development of effective and legitimate problem-solving capabilities atthe European level. Professor Scharpf supports his position by examining the normative underpinnings of democratic legitimacy and by a detailed analysis of the structural asymmetry between the effectiveness of the legal instruments of `negative integration' which prevents governments frominterfering with the free movements of goods, services, capital, and persons and the political constraints impeding positive political action at the European level. This is particularly true for policies pertaining to the welfare state. Governing in Europe explores strategies at the national level that could succeed in maintaining welfare state goals even under conditions of international economic competition, and it also discusses the conditions under which European policy could play a protective and enabling role with regard tothese national solutions. The author suggests that if these opportunities should be used, multi-level governance in Europe could indeed regain both effectiveness and legitimacy.