Weekend Edition Nº188

DANIEL SARMIENTO

CAN THE PUZZLE BE FIXED?

Integrated Decision-Making in The EU and Judicial Review Can The Puzzle be Fixed?

Daniel Sarmiento 1

I. Introduction

The European Union is shifting towards new forms of governance that change the way in which the EU and Member States have traditionally interacted and implemented EU policies together. This trend cannot be explained through the lens of a centralisation or a decentralision of institutions or policy. The new forms of governance involve a different approach in which hybrid governance structures emerge. The new mantra of EU governance is one of closely interconnected arrangements, a change in the model that turns both EU and Member State authorities into a single composite framework. From the European System of Central Banks and the Single Supervisory Mechanism to the European Data Protection Board, EU policy is expanding towards hybrid frameworks in which EU law and national law, as well as their authorities and staff, come together in highly interconnected ways with the aim of ensuring the effectiveness of EU policy.

The new forms of governance are altering the traditional approach toward EU decision-making and policy implementation, in which EU authorities acted at the supranational level, whilst national authorities enforced and made (mostly individual) decisions at the national level. A clear separation of tasks informed the definition of EU policy and its day-to-day activity, mostly leaving the regulatory responsibility to the EU, and the individual decision-making and the administrative enforcement to the Member States. Six decades of European integration were based on this model and, as a result, the interaction between both levels of governance was predefined by a clear separation of tasks.

The new mantra of EU governance is one of closely interconnected arrangements, a change in the model that turns both EU and Member State authorities into a single composite framework

1. Professor of EU Law (Complutense University of Madrid) and Editor-in-Chief of EU Law Live.

The traditional approach is now under review, as a result of new EU policy areas that demand high degrees of interaction between the EU and national authorities.2 The Banking Union, the new Border and Coast Guard policy, the European Public Prosecutor’s Office, personal data protection, and other relevant areas of EU policy are altering the terms in which EU and Member States traditionally interacted through joint procedures. This change has an impact in other areas of EU law that are closely attached to policy implementation. One such area is judicial review and the conditions of access to Union and national courts to ensure an effective legal protection. This is no minor field, inasmuch it touches the very core of the values of the EU enshrined in Article 2 TEU, including the Rule of Law and the protection of fundamental rights.

This Long Read will explain how the new forms of governance, and in particular those that are characterised by what will be termed as ‘integrated decision-making’, demand from the Court of Justice a more unitary approach towards the division of labour between EU and national courts. In fact, it will be argued that such a development has already started, and it can be found in the first rulings delivered by the Court of Justice when addressing the jurisdictional implications of the new institutional arrangements. However, as it will be argued, some cracks are starting to appear in the unitary approach towards judicial review, and the overall picture that emerges is not as clear, nor as unitary, as it looked when the first judgments of the Court of Justice were delivered. In this Long Read, the benefits and inconveniences of the unitary approach will be analysed, to conclude that it is imperative that the Court of Justice provides a consistent and mostly centralised interpretation of the remedies enshrined in the Treaties, or otherwise the new forms of governance, with all their promise and potential, run the risk of turning into black holes of legal uncertainty and disprotection for citizens and undertakings.

II: A brave new world for EU governance: the multiple faces of integrated decision-making

The financial crisis of 2008 triggered a process of reforms in the EU that resulted in the creation of new areas and models of policy and governance, sufficiently ambitious and effective to avoid future crises and provide resilient institutional structures. Banking and finance were the main immediate targets of the reforms, which ensued in the creation of a ‘Banking Union’ and a new array of EU agencies and new powers for the EU Institutions, in particular for the European Central Bank. The reforms materialised, inter alia, through the shape of ‘Mechanisms’, novel governance structures in which EU institutions/bodies interacted jointly, in close coordination, with national authorities. In the case of the Single Supervisory Mechanism, the European Central Bank, acting as a prudential supervisor of significant credit institutions, assumed a variety of powers and tasks in joint procedures with national supervisory authorities.3 Something similar occurred with the Single Resolution Mechanism, whereby an EU agency undertook the task of monitoring credit institutions and, if necessary, using different tools in a scenario of resolution, in close coordination with the national resolution authorities and the endorsement

2. See, more broadly, see Brito Bastos, F., ‘Derivative Illegality in European Composite Administrative Procedures’, Common Market Law Review, vol. 55, nº 1, 2018.

3. Council Regulation (EU) No 1024/2013 of 15 October 2013 conferring specific tasks on the European Central Bank concerning policies relating to the prudential supervision of credit institutions (OJ L 287, 29.10.2013, p. 63-89).

New integrated procedures emerged in which a national authority proposed a measure to an EU Institution or to a composite body for final decision, or an EU Institution referred a matter to the national authority for further implementation

of the Commission.4 New integrated procedures emerged in which a national authority proposed a measure to an EU Institution or to a composite body for final decision, or an EU Institution referred a matter to the national authority for further implementation. A broad array of integrated procedures emerged in which EU and national authorities interact closely, with the aim of giving prevalence to the overarching EU aims that inform the relevant field of policy.

At the same time, the digital economy has evolved to the point of developing new markets in areas unconceivable to date. The emergence of a market for personal data is one of the major developments of the digital economy, in which big data, including personal data, has transformed the way in which international and national businesses are currently run. The EU’s efforts to create a uniform framework that provides equal protection to individuals’ privacy has turned into an ambitious regulatory landscape in which the General Data Protection Regulation (GDPR) stands out. This time around, the EU did not create a European agency with robust powers to enforce GDPR, it relied instead on national data protection authorities to provide the goods.5 To facilitate the effective enforcement of policy, the EU legislature introduced a one-stop-shop system, in which the national authority of the place of the main establishment of the undertaking assumes supervisory powers, in coordination with other national data protection authorities. In case the national authorities disagree, a European Data Protection Board arbitrates and solves disputes among authorities through soft or hard law mechanisms. In contrast with the model in the Banking Union, the GDPR model relies more closely on autonomous decisions of national authorities, individually or cooperatively, but eventually an EU decision is made when the Board is asked to step in. A

4. Regulation (EU) No 806/2014 of the European Parliament and of the Council of 15 July 2014 establishing uniform rules and a uniform procedure for the resolution of credit institutions and certain investment firms in the framework of a Single Resolution Mechanism and a Single Resolution Fund and amending Regulation (EU) No 1093/2010 (OJ L 225, 30.7.2014, p. 1–90).

5. Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/ EC (OJ L 119, 4.5.2016, p. 1–8).

similar pattern is now emerging in the newly enacted frameworks for crypo-assets6 and anti-money laundering,7 where national authorities participate in bodies that channel and condition the implementation of EU policy at the local level.

The European Public Prosecutor’s Office (EPPO) is another example of a novel institutional design, this time of a horizontal model of integrated decision-making. The protection of the EU’s budget and its own resources is enshrined in the Treaties, with obligations imposed on the Member States to procure its enforcement. The emergence of unprecedented finance programmes such as NextGeneration EU,8 together with the rise of authoritarian movements in some Member States undermining the role of independent watchdogs of public finances, reinforced the need for the EU to establish a specific body entrusted with the protection and, where appropriate, prosecution in court of conducts undermining the EU budget.9 The task was not simple, considering the vast landscape of potential cases to be handled in the territory of twenty-seven countries operating with twenty-seven different criminal court systems. As a result, the model relied on pre-existing national prosecutors, whose tasks were to be transformed and turned into European Prosecutors, incardinated in a complex institutional web in which the European Public Prosecutor sits at the apex. To put it bluntly, the EPPO turns national prosecutors into European prosecutors, creating a double bond that links the prosecutor with his/her national services of origin and their new European hierarchy. In any event, the competent courts to hear the cases brought by the European prosecutors are national criminal courts, with the ability to refer cases to the Court of Justice through preliminary references. The EPPO is a case of horizontal integrated decision-making, in which EU and national authorities decide within a coordinated structure that mostly rests on the cooperation among European prosecutors operating at the national level.

The EPPO turns national prosecutors into European prosecutors, creating a double bond that links the prosecutor with his/ her national services of origin and their new European hierarchy

6. Regulation (EU) 2023/1114 of the European Parliament and of the Council of 31 May 2023 on markets in crypto-assets (OJ L 150, 9.6.2023, p. 40–205).

7. Proposal for a Regulation of the European Parliament and the Council establishing the Authority for Anti-Money Laundering and Countering the Financing of Terrorism (COM/2021/421 final).

8. NextGenerationEU is the sum of the Recovery and Resilience Facility, the Recovery Assistance for Cohesion and the Territories of Europe (REACT-EU), and additional funding for several other EU programmes in addition to the funding planned in the EU long-term budget 2021-2027, including Horizon Europe, InvestEU and the Just Transition Fund €10 bn), among others.

9. As a consequence, a framework on financial conditionality and the protection of the rule of law was introduced through Regulation (EU, Euratom) 2020/2092 of the European Parliament and of the Council of 16 December 2020 on a general regime of conditionality for the protection of the Union budget (OJ L 433I, 22.12.2020, p. 1–10).

Finally, triangular integrated decision-making has made its appearance. A revealing example can be found in the case of the Single Resolution Mechanism. According to a long-standing case-law, the EU legislature cannot entrust discretional powers on EU agencies, a task that is to be exclusively held by EU Institutions.10 To comply with this requirement, the broad powers entrusted to the Single Resolution Board during a resolution process must be endorsed by the Commission.11 This might seem like a mere formalism, but during the resolution of a bank, in which time is of the essence, the delay of a decision in order to acquire the endorsement of the Commission can make the difference between the success or doom of the resolution procedure. The EU legislature was confronted with this dilemma and designed a governance structure in which the Commission is closely involved in the SRB’s tasks, allowing for speedy reaction and endorsement on the part of the Commission. At the end of the day, if a bank is to come under resolution the SRB and the Commission will be able to act efficiently and with no undue delay, including the involvement of national resolution authorities. In the case of a sale of business, the national resolution authority will enter a sale negotiation following instructions from the SRB, eventually agreeing a sale contract, whilst the guidance addressed from the SRB will rely on the endorsement of the Commission. In contrast with cases of vertical or horizontal joint decision-making, the Single Resolution Mechanism introduces triangular integrated decision-making procedures, in which two EU authorities act jointly and national authorities participate in the framework as well, uniting to provide a consistent resolution decision on an individual case.

III. Judicial Review of Joint Decision-Making

The new governance models have an immediate effect in the EU’s system of judicial review.

The new governance models have an immediate effect in the EU’s system of judicial review. How are Union courts to confront integrated decision-making between EU and national authorities, in a judicial system that traditionally divided the jurisdiction on the basis of the competence of each authority? The standard principle states that Union courts are entrusted with the review of validity of EU acts, whilst it is for national courts to review the validity of national acts.12 Some blurring has taken place in the course of time, but the division of tasks is quite well entrenched in the theory and practice of Union and national courts. So how will this division work when the EU and national authorities decide within an integrated framework in which decisions are made through an intricate web of decisions in which both authorities are equally involved?

10. See the judgments in the case of Meroni (9/56, EU:C:1958:7) and Romano (98/80, EU:C:1981:104).

11. See Article 18(7) of Regulation 806/2014, which states as follows: ‘Within 24 hours from the transmission of the resolution scheme by the Board, the Commission shall either endorse the resolution scheme, or object to it with regard to the discretionary aspects of the resolution scheme in the cases not covered in the third subparagraph of this paragraph.’

12. Oleificio Borelli v Commission (C-97/91, EU:C:1992:49), paragraphs 9 and 10.

The first opportunity for the Court of Justice to rule on the matter arrived within the context of the Single Supervisory Mechanism. In the case of Berlusconi,13 the Italian Consiglio di Stato questioned whether national courts could review a decision of Banca d’Italia rejecting an acquisition of a qualifying holding in a credit institution. This decision was the result of an integrated decision-making procedure in which Banca d’Italia referred the matter to the European Central Bank, acting as a Supervisory Council, and then left a subsequent non-discretional decision to the national supervisory authority. Whilst the traditional case-law of the Court of Justice pointed at a strict separation of tasks between EU and national authorities and left the final decision and review in the hands of national authorities and, consequently, of national courts,14 the Single Supervisory Framework was sufficiently novel and complex to justify a referral to the Luxembourg court.

In its judgment, the Court of Justice departed from the traditional stance and opted for a centralised approach towards judicial review of integrated decision-making procedures. It reached this solution by asserting the existence of an EU institution holding ‘exclusive decision making-power’. In such cases, the exclusivity of the EU’s competence translates into the exclusivity of EU courts to review the legality of EU acts ‘and examine any defects vitiating the preparatory acts or the proposals of the national authorities that would be such as to affect the validity of the final decision’.15 The wording of the judgment is categorical in this regard:

‘Where the EU legislature opts for an administrative procedure under which the national authorities adopt acts that are preparatory to a final decision of an EU institution which produces legal effects and is capable of adversely affecting a person, it seeks to establish between the EU institution and the national authorities a specific cooperation mechanism which is based on the exclusive decision-making power of the EU institution.’16

The only exception to this rule appears when the act adopted by the national authority ‘is a necessary stage of a procedure for adopting an EU act in which the EU institutions have only a limited or no discretion, so that the national act is binding on the EU institution’.17 In other words, when there is a clear separation of tasks whereby the EU cannot interfere in the decision-making process and outcome at the national level, and vice versa, such separation has an impact in the jurisdiction of the courts, attributing exclusive competence to Union and national courts to, respectively, review the legality of Union and national acts through separate proceedings.

In sum, the judgment in Berlusconi is a robust reaction to the emergence of integrated decision-making frameworks that introduces a system of ‘single judicial review’, to be conducted by Union courts alone. This ‘single judicial review’ shall take place once the EU institution or body brings the administrative procedure to an end, and as long as the challenged decision is, “alone, capable of producing binding legal effects such as to affect the applicant’s interests by bringing about a distinct change in his legal position”. This final reference to the applicant’s interests introduces a link between matters of jurisdiction and matters of standing, a parallelism to which further reference will be made later.

13. Berlusconi and Fininvest (C-219/17, EU:C:2018:1023).

14. Oleificio Borelli, cited above.

15. Berlusconi and Fininvest, cited above, at paragraph 44.

16. Berlusconi and Fininvest, cited above, at paragraph 48.

17. Berlusconi and Fininvest, cited above, at paragraph 45.

Berlusconi and Iccrea set the framework of vertical integrated decisionmaking procedures

The next development in the case-law arrived in the case of Iccrea Banca, 18 a preliminary reference revolving around the conditions of access to justice within the system of ex ante contributions to the Single Resolution Fund by credit institutions. Once again, the system is based on an integrated bundle of decisions, but operating in reverse to how they appeared in Berlusconi. Whilst in the latter case it was a non-binding decision of the national authority that was subsequently referred to an EU institution, the ex ante contributions framework was first triggered by the Single Resolution Board and then forwarded to the national authorities for service and enforcement. In line with the precedent laid down in Berlusconi, the Court of Justice focused on how the institutional arrangement was designed.19 It highlighted that the substantive decision on the ex ante contribution is made by the Single Resolution Board, whilst the task of the national resolution authorities is solely to notify and give effect to that decision. In such a context, the national authorities do not have the power to re-examine the calculations made by the Single Resolution Board.20 Consequently, the system of ‘single judicial review’ steps in, precluding any review by national courts of the EU’s decisions, a review that must be channeled through Union courts either through actions of annulment or a preliminary reference of validity.21

18. Iccrea Banca (C-414/18, EU:C:2019:574).

19. Ibidem, at paragraphs 44 and 45.

20. Ibidem, at paragraph 57.

21. Ibidem, at paragraph 58.

Berlusconi and Iccrea set the framework of vertical integrated decision-making procedures, characterised by the presence of an EU institution (the ECB) or an EU agency (the SRB) with binding decision-making powers that condition subsequent decisions by national authorities, but with the aim of preserving the prevalence of the overall EU objectives underlining the policy choices applied to the individual case. The system is integrated because there is a relevant role to play by the national authorities prior and following the EU’s intervention, but it is clear that the substantive decision is made at the EU level and the interests pursued are of a European scale, thus channeling any form of judicial control through a system of ‘single judicial review’ centralised in the Union courts.

Having reached this point, one can wonder what response should be given to other models of vertical integration in which the EU participates not through an EU Institution or agency, but through a more flexible or weaker structure such as a ‘body’ or an ‘office’, or through arrangements that issue non-binding decisions that, nevertheless, severely condition the action of national authorities. That is the case of the European Data Protection Board (‘EDPB’), a ‘body’ of the EU with legal personality, empowered to adopt non-binding opinions, but also binding decisions on national data protection authorities.

In a surprising turn of events, the General Court departed from the approach of the judgments in Berlusconi and Iccrea and opted for a decentralised system judicial review, in contrast with the ‘single judicial review’ espoused in the previously mentioned judgments. In the Whatsapp v. EDPB case,22 the General Court was confronted with a binding decision of the EDPB, followed by a final decision of the Irish supervisory authority implanting the findings of the EDPB. The decision of the EDPB was annexed to the final Irish decision, which was challenged in Irish courts. However, Whatsapp brough a separate action in Union courts through Article 263, fourth paragraph TFEU, questioning the validity of the EDPB’s decision. Reversing the legal reasoning of the Berlusconi and Iccrea judgments, the General Court focused preeminently on the standing of Whatsapp, rather than on the institutional arrangements governing the EU’s data protection policy. The General Court concluded that Whatsapp was not directly concerned by the EDPB’s decision, since it did not affect Whatsapp’s legal situation and, furthermore, it left discretion to its addressee (the Irish supervisory authority), in charge of implementing the contested decision.23 The outcome of this decision resulted in a split of the system of judicial review into two separate segments: one in Union courts for decisions that private parties have standing to challenge, and one in national courts, in which national decisions sit at the center stage and can collaterally allow a national court to refer the matter to the Court of Justice through a preliminary reference of validity. As it can be seen, the model emerging from the General Court’s Order is radically different from the one envisaged by the Court of Justice in Berlusconi and Iccrea

Whilst vertical integrated frameworks put EU and national authorities operating through hierarchical arrangements, in which the EU holds the exclusive competence to rule on the main decisions at policy level, horizontal integrated frameworks work differently. Through the creation of hybrid arrangements, in which EU and national authorities turn into a single authority, the model is not based on a hierarchical integration of tasks, but on the fusion of both authorities into a single body. The paradigm of such a model is the European Public Prosecutor’s Office, through which national prosecutors are turned into European prosecutors holding specific European powers provided by Regulation 2017/1939,24 intervening in national courts

Through the creation of hybrid arrangements, in which EU and national authorities turn into a single authority, the model is not based on a hierarchical integration of tasks, but on the fusion of both authorities into a single body

22. WhatsApp Ireland Ltd. v European Data Protection Board ( T-709/21, EU:T:2022:783).

23. Ibidem, at paragraphs 52 to 61.

24. Council Regulation (EU) 2017/1939 of 12 October 2017 implementing enhanced cooperation on the establishment of the European Public Prosecutor’s Office (OJ L 283, 31.10.2017, p. 1–71).

with their European powers, in a framework in which Union and national law are both applied. This novel approach towards EU policy puts most of the pressure on national courts, inasmuch the decisions of the European prosecutors are mostly to have an impact in criminal proceedings which take place in national criminal courts. Therefore, the main concern of the EU legislature (and of the Court of Justice when having had the chance of interpreting the rules of the system) is not so much on creating a ‘single judicial review’, but to make sure that the different European prosecutors operating in their respective Member States work in a smooth and effective single framework subject to the instructions emanating from one European prosecutor in charge of an investigation, whose decisions are subject to the review by one national criminal court.

In the first (and so far, only) judgment interpreting Regulation 2017/1939, the Court of Justice has reinforced the design of the model by confirming that the rationale of one European prosecutor and one national criminal court must translate into the mutual recognition of decisions taken by European prosecutors and national criminal courts in all the participating Member States. In the case of G.K., 25 in which powers of the ‘handling European prosecutor’ (in Germany) were being questioned in the courts of an ‘assisting European prosecutor’ (in Austria), the Court of Justice rejected an interpretation that would have granted the Austrian courts the power to review acts of the handling European prosecutor. A different outcome would have led to a system in which the acts of a European prosecutor, acting by its very nature in one Member State, would be subject to review in any, or in all, of the courts of the other participating Member States. According to the Court, the aim of the EU legislature was to establish ‘a mechanism ensuring a degree of efficiency of cross-border investigations conducted by the EPPO at least as high as that resulting from the application of the procedures laid down under the system of judicial cooperation in criminal matters between the Member States which is based on the principles of mutual trust and mutual recognition’.26 Such a mechanism is incompatible with an atomization of judicial review over the acts of the European prosecutors.

25. G.K. (C-281/22, EU:C:2023:1018).

26. Ibidem, at paragraph 67.

A scenario of triangular integrated decision-making emerges in contexts in which a plurality of EU institutions and agencies interact, together with national authorities, for the purpose of achieving a common policy decision

Finally, a scenario of triangular integrated decision-making emerges in contexts in which a plurality of EU institutions and agencies interact, together with national authorities, for the purpose of achieving a common policy decision. The paradigm of this model can be found, yet again, within the Single Resolution Mechanism, particularly in the context of resolution tools as applied to credit institutions. When choosing and putting into action a resolution tool, the Single Resolution Board (SRB) interacts closely with the national resolution authority, thus producing decisions from both authorities that will eventually result in the resolution decision. However, due to the restrictions imposed by the case-law of the Court of Justice on the delegation of discretional powers to EU agencies, the main decisions of the SRB must be endorsed by the European Commission. The outcome is a triangular decision in which the SRB, as endorsed by the Commission, issues a decision that is enforced by the national authorities in close cooperation with the latter. This arrangement has important consequences from the perspective of judicial review, as it has been seen in the recent case of Commission/SRB,27 whereby the Commission appealed the judgment of the General Court that ruled on an action brought by a shareholder of a bank put under resolution, for the fact that the defendant was the SRB only, and not the Commission. In the view of the Commission, the General Court indirectly ignored the Meroni case-law by recognising the standing of the SRB to be sued on an autonomous basis. This case is still pending in the Court of Justice, but Advocate General Ćapeta has already expressed her support to the Commission’s interpretation of the framework.28

IV. A puzzle to be fixed, or a defective puzzle beyond repair?

The portrait thus far is one of new governance models in which the interactions between the EU and its Member States in the implementation of EU policy are being reshaped

The portrait thus far is one of new governance models in which the interactions between the EU and its Member States in the implementation of EU policy are being reshaped. At the decision-making level, Union and national authorities participate in an integrated system with the aim of boosting EU policy altogether. The institutional design of each policy field is left to the EU legislature, the outcome of which is a broad range of integrated models of decision-making, as explained in Section II. The EU legislature will thus choose, within its broad discretion, the model the best fits for the requirements and challenges of each policy area. However, when it comes to judicial review, the model is not subject to design by legislation, it relies on a fixed set of rules in the Treaties, the scope of which cannot be altered by the EU legislature. As a result, the ‘single judicial review’ to which the has Court of Justice referred to in its case-law is not the result of EU legislative law-making, but of the interpretation of the Treaties. On the one hand, the system of remedies under Union law cannot be left in the hands of the EU legislature, but, on the other hand, the Treaties cannot be blind to the diverse models of governance conceived by the EU legislature, adjusted to the specific needs of each policy field. This is the difficult balance that the Court of Justice has handled thus far, but with cracks expanding quickly.

27. Commission v SRB (C-551/22 P).

28. See the Opinion of AG Çapeta in Commission v SRB (C-551/22 P, EU:C:2023:846).

The approach taken in the first decisions of the Court of Justice focused prioritised the effectiveness of the Union’s system of judicial review, thus allowing for a considerable degree of centralisation to take place in Union courts, to the detriment of national courts. When national authorities make a preparatory act or an implementing act that supports the main policy decision made by an EU institution, agency, office or body, the system of ‘single judicial review’ will require applicants to bring their cases in Union courts. This is the stance confirmed in Berlusconi and Iccrea in the field of Banking Union, expanded to situations of horizontal integration decision-making, as confirmed in the case of G.K. when reviewing the functioning of the European Public Prosecutor’s Office. This is a jurisdictional approach that puts the emphasis on the determination of the competent court, a decision that will drive applicants either towards national or Union courts. According to this case-law, it is the jurisdiction of Union courts to adjudicate on the policy decisions made by EU authorities and they shall be given preference visà-vis national courts. However, this approach sits uncomfortably with a parallel line of case-law emerging in the General Court, whereby integrated decision-making procedures should be viewed not from a jurisdictional angle, but from the perspective of standing and the interests of the applicant to bring an action. With this approach in mind, the General Court has rejected the direct concern of undertakings attempting to bring an action in Union courts to challenge a binding decision of the EDPB, thus forcing them to bring the action in national court. This line of reasoning is inconsistent with the Court of Justice’s findings in Iccrea Banca, in which an applicant faced an SRB decision followed by an implementing act by the national authorities, but nevertheless was drawn to bring an action in the Union courts in order to preserve the effectiveness of the system of ‘single judicial review’.

The cracks that are starting to emerge in the case-law can be justified by arguing that national courts can always refer a point of validity of Union acts to the Court of Justice through a preliminary reference. However, this line of reasoning is problematic. First, national courts of first instance have no duty to refer a case through a preliminary reference, and even when there is, the current conditions for waiving such an obligation are extremely broad.29 Second, national courts cannot rule on the invalidity of a Union act, but they can rule on its validity.30 This means that, for the sake of expediency, national court may have an incentive not to refer the case to Court of Justice and declare the validity of the act, thus dismissing the action with no further consequence. Third, even if a preliminary reference of validity is made to the Court of Justice, the procedural guarantees and the status of the intervening parties are not the same as in a direct action in Union courts. While a direct action provides strict contradiction between the two parties and generous conditions of access to interveners, thus maximising the input of views for the Union court in solving the dispute, a preliminary reference of validity limits the stages of the written phase in which parties can participate (with stricter limits on the extension of written pleadings, limited at 20 pages), precludes any written reply to the submissions, and no interveners, besides the parties in the main proceedings, the Institutions and the Member States, are entitled to join the procedure in the Court of Justice. Finally, the degree of detail and expert input that the Union courts can receive through evidentiary material in a direct action is simply lost in a preliminary reference of validity, where access to evidence and expert opinions are restricted to the utmost. In sum, a ‘single judicial review’ comes severely undermined if it must rest, directly or indirectly, in the preliminary reference of validity.

29. Consorzio Italian Management (C-561/19, EU:C:2021:291).

30. Foto-Frost (C-314/85, EU:C:1987:230), paragraph 17.

The introduction of nuances and/or derogations to the centralised model of ‘single judicial review’ may have benefits

However, it is true that the introduction of nuances and/or derogations to the centralised model of ‘single judicial review’ may have benefits. For example, relying on national courts in integrated decision-making procedures can be preferable when certain areas of policy rely heavily on national law. This is particularly the case when EU authorities are entrusted with the application of national law, an anomalous scenario that is becoming growingly frequent in some policy areas, such as the Banking Union, the EPPO or the European Border and Coast Guard policy.31 EU acts in which national law is applied can be subject to national judicial review when the national implementing measures are challenged in national courts. If the General Court’s approach in the Whatsapp case was to expand into other fields, leaving the matter to national courts can provide a more appropriate forum for the indirect review of EU acts that apply national law. In case the national court has serious doubts as to the correctness of the EU’s decision that applies national law, the national court is an appropriate interlocutor to refer the matter to the Court of Justice on a point of validity.

In any event, the cases in which EU authorities make use of national law in integrated decision-making procedures is still rare and confined to very specific situations. The reality of integrated procedures is that EU authorities make decisions of policy based solely or mostly on EU law, and they make individual decisions with individual addressees by implementing EU law only. At the present time, the system of ‘single judicial review’ only rarely sees cases of national law being implemented by EU authorities. Overall, keeping the center of jurisdictional gravity in the Union courts has important benefits for the proper functioning of EU policies and an effective legal protection. Thus, there are several arguments in support of this system that merit careful consideration.

First, by putting the onus of judicial review in Union courts, the focus is set on the effectiveness of the overall remedial response, and not so much on the individual affectation of the applicant. The approach in Berlusconi, Iccrea and G.K. is not so much centered on the individual position of the applicant, but on the consistency and effectiveness of the system of ‘single judicial review’ that the field of policy demands. This approach provides a more pragmatic and realistic conception of standing rules that departs from the traditional individual analysis towards access to justice, placing the center of gravity on the effectiveness of the system altogether. Second, redirecting the disputes towards Union courts also provides a more balanced and effective fore for litigants: both parties will have the opportunity to discuss in detail the full extent of the issues involved, without the constraints that restrain the action of national courts or of the preliminary reference procedure of validity. Union courts are also in a position to give a speedier response to the parties, a feature of special value when the contested decision concerns a point of law of a broad scope that may affect entire industries or business models. Speed and clarity in the interpretation of the law in such situations is of the essence in those situations.

31. See Rosas, A., ‘EU Law and National Law: A Common Legal System’, Working Paper 2024/01, EUI.

The benefits of a centralised approach in cases of integrated decision-making are robust. The need to take them into account will grow as new policy areas drive into similar forms of integrated governance, as we are recently witnessing in the case of new institutional arrangements in the fields of crypto-assets or anti-money laundering. This tendency of integrated decisionmaking to expand into new areas of policy is not an exceptional event, but the normal result of EU and national authorities willing and more accustomed to work closely in tightly knit structures in which EU and national competence blend into a hybrid outcome, a hybrid in which EU goals prevail over national individual interests. It is therefore important that the ‘single judicial review’ enshrined in Berlusconi and Iccrea Banca remains as the main point of reference, and not a rule to be derogated from depending on each policy design choice. The alternative is to atomise the system of remedies into as many policy models the EU legislature decides to create, undermining the effectiveness of the EU legal order, its remedial framework and the hope of individuals and undertakings of relying in a consistent, stable and foreseeable system of judicial review in the EU.

This tendency of integrated decision-making to expand into new areas of policy is not an exceptional event, but the normal result of EU and national authorities willing and more accustomed to work closely in tightly knit structures in which EU and national competence blend into a hybrid outcome

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