The aim of this paper is to explain the unexpected "relaunching" of the European Community, which took the form of the Single European Act and the program for completing the internal market by 1992. The data presented here challenge the common view that the Single Act was the result of an elite alliance between the Commission, Parliament, and supranational business interest groups-a view consistent with neofunctionalist regional integration theory. An alternative view is presented, whereby EC reform rests on interstate bargains between Britain, France, and Gennany. The essential precondition for reform was the convergence of European economic policy preferences following the reversal of French domestic policy in 1983, combined with the bargaining leverage that France and Germany wielded against Britain by exploiting the threat of creating a "two-track" Europe and excluding Britain from it. These findings suggest that neofunctionalist theories of regional integration must be supplemented, or perhaps supplanted, by a "modified structural Realist" approach drawn from regime theory, which stresses more traditional conceptions of national interest and power.