Essential EU LAW IN IN TEXT by Boros Attila

Essential EU LAW IN TEXT Christa Tobler Jacques Beglinger

Companion to: Essential EU Law in Charts, 2nd, “Lisbon” edition, 2010 Webcompanion: http://webcompanion_essential.eur-charts.eu

EUR-Charts – The EU Law in Charts Project

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Essential EU LAW IN TEXT Christa Tobler Jacques Beglinger

Lap- és Könyvkiadó Kft. BUDAPEST, 2010

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HVG-ORAC Publishing House Ltd., 1137 Budapest, Radnóti M. u. 2., Hungary. Telephone: + 36 1 340-2304 Website: www.hvgorac.hu © Christa Tobler, 2010 © Jacques Beglinger, 2010 © HVG-ORAC Lap- és Könyvkiadó Kft., 2010

ISBN: 978-963-258-087-6

Printed in Hungary by PRIMERATE KFT. Companion to:

Essential EU Law in Charts, 2nd, “Lisbon” edition, 2010, ISBN: 978-963-258-086-9

Webcompanion: http://webcompanion_essential.eur-charts.eu All rights reserved. No part of this book may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or any information storage or retrieval system without prior permission from the publisher.

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PREFACE The Lisbon revision, which entered into force on 1 December 2009, has fundamentally changed the system of EU law. Against this background, to understand EU law is a challenge not only for students but also for practitioners who have been working in this field of law. The present book is intended as a companion to our publication “Essential EU Law in Charts”. We hope that it will be particularly useful for those who feel that, in addition to the charts book with its more condensed and graphically presented information, they need a brief text on EU law as it results from the Lisbon revision. We would imagine that this might include, among others, students taking courses on EU law for the first time, in particular those who do not have a background in law but also students coming to Europe from very different legal cultures. The book provides a brief and simple text on matters dealt with in the charts book, including references to charts that are relevant in a given context. We therefore recommend that the text be used together with the charts. It should be noted that it is in the charts that information on the relevant Treaties, secondary law and case law from the European Court of Justice can be found, including detailed tables on these matters and an index with keywords related to the subject matters that are dealt with in the charts. Being a companion text to the charts, the present text limits itself in terms of tables, it does, however, provide a table of the charts referred to in the text, so as to help the reader in making the link between the charts and the text. The book reflects the state of law on 1 December 2009, i.e. the date when the Lisbon revision entered into force. We plan to put any updates and, if necessary, any corrections to the present book on the companion website, http://webcompanion_essential.eur-charts.eu. We also plan to put suggestions for solutions to the exercises contained in the book on this website. Both the charts and the text are products of the EUR-Charts – EU Law in Charts project. Information on this project can be found at www.eur-charts.eu. We would like to dedicate this book to our respective families, in particular to our parents. Christa Tobler Leiden and Basel

Jacques Beglinger Zurich

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Content overview PART 1: THE LEGAL FOUNDATIONS OF THE EU.............................................................................

A. INTRODUCTION............................................................................................................................... B. THE DEVELOPMENT OF THE EUROPEAN UNION....................................................................... C. THE INSTITUTIONAL FRAMEWORK OF THE EU.......................................................................... D. COMPETENCES OF THE EU AND THE ADOPTION OF SECONDARY MEASURES.................. E. THE NATURE OF THE EU AND EU LAW........................................................................................

15 17 25 31 39

PART 2: BASIC ECONOMIC LAW OF THE EU...................................................................................

A. INTRODUCTION............................................................................................................................... B. THE INTERNAL MARKET................................................................................................................ C. COMPETITION LAW........................................................................................................................

49 53 79

PART 3: SOCIAL LAW..........................................................................................................................

A. EU SOCIAL LAW IN GENERAL....................................................................................................... B. BY WAY OF EXAMPLE: TWO IMPORTANT SUB-FIELDS.............................................................

91 93

PART 4: INTEGRATION TECHNIQUES...............................................................................................

A. POSITIVE AND NEGATIVE INTEGRATION AS LINKED TO PRIMARY AND SECONDARY EU LAW..................................................................................................................... 101 B. DIFFERENT INTEGRATION TECHNIQUES.................................................................................... 103 PART 5: ENFORCEMENT..................................................................................................................... 107 A. GENERAL REMARKS...................................................................................................................... B. THE ACTIONS FOR ANNULMENT AND FOR FAILURE TO ACT................................................... C. THE ENFORCEMENT PROCEDURE (ARTS. 258 TFEU ET SEQ.)................................................ D. THE PRELIMINARY RULING PROCEDURE (ART. 267 TFEU)...................................................... E. ACTIONS FOR DAMAGES AND FOR UNJUST ENRICHMENT..................................................... F. EXERCISES......................................................................................................................................

109 111 113 114 116 118

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Table of contents PART 1: THE LEGAL FOUNDATIONS OF THE EU............................................................................

A. INTRODUCTION............................................................................................................................... I. “EU law” and “Community law”................................................................................................... II. EU law as a special type of international law.............................................................................. III. Aim, means, specific objectives and fundamental values of the EU........................................... IV. Solidarity between the Member States and the EU.................................................................... V. Language versions of EU law and web-based information.........................................................

15 15 15 16 16 16

B. THE DEVELOPMENT OF THE EUROPEAN UNION...................................................................... I. European integration against the global background.................................................................. II. Early steps of integration in Europe: the European Communities............................................... III. From the Communities to the larger construct of the EU............................................................ 1. The creation of the EU through the Maastricht Treaty............................................................ 2. Subsequent changes in the structure of the EU..................................................................... a) The EU after the Amsterdam Treaty................................................................................... b) A failed attempt: the Constitutional Treaty.......................................................................... c) The EU after the Lisbon Treaty........................................................................................... IV. Changing the reach and content of the Treaties......................................................................... 1. EU membership...................................................................................................................... 2. Changing the content of the Treaties...................................................................................... a) Treaty revisions................................................................................................................... b) Renumbering of the Treaties............................................................................................... V. The global background of European integration revisited........................................................... VI. Exercises.....................................................................................................................................

17 17 17 18 18 19 19 20 20 20 21 21 21 22 23 24

C. THE INSTITUTIONAL FRAMEWORK OF THE EU......................................................................... I. General remarks......................................................................................................................... II. The political institutions of the EU............................................................................................... 1. The European Council (Art. 15 TEU and Arts. 235-236 TFEU).............................................. 2. The European Parliament (Art. 14 TEU and Arts. 223-234 TFEU)......................................... 3. The Council (of Ministers) (Art. 16 TEU and Arts. 237-243 TFEU)......................................... 4. The European Commission (Art. 17 TEU and Arts. 244-250 TFEU)...................................... 5. A new political office: the High Representative of the Union for Foreign Affairs and Security................................................................................................................................... III. The judicial institution: the European Court of Justice (Art. 19 TEU and Arts. 251-281 TFEU).... IV. Financial institutions and bodies................................................................................................. 1. The European Central Bank (Arts. 282-284 TFEU)................................................................ 2. The Court of Auditors (Arts. 285-287 TFEU).......................................................................... 3. The European Investment Bank (Arts. 308-309 TFEU).......................................................... V. Size and cost of the EU administration....................................................................................... VI. Exercises.....................................................................................................................................

25 25 25 26 26 27 27 28 28 29 29 29 30 30 30

D. COMPETENCES OF THE EU AND THE ADOPTION OF SECONDARY MEASURES................. I. The division of powers between the EU and its Member States................................................. 1. Conferral of powers on the EU................................................................................................ 2. Exercise of EU competences.................................................................................................. 3. Ways of attributing competences to the EU............................................................................ II. Legal basis provisions................................................................................................................. III. Form of action and procedures for the adoption of secondary measures.................................. 1. Form of action......................................................................................................................... a) Secondary measures or legal acts: an overview................................................................ b) Specification by legal basis provisions: the examples of Arts. 114 and 115 TFEU.............

31 31 31 31 31 32 32 32 32 33

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2. The adoption of secondary legal acts..................................................................................... a) General remarks on the different procedures..................................................................... b) Legislative procedures and emergency brakes.................................................................. i. General remarks............................................................................................................. ii. The ordinary legislative procedure (Art. 294 TFEU)...................................................... iii. The consultation procedure............................................................................................ iv. The consent procedure.................................................................................................. v. Emergency brakes.......................................................................................................... c) Non-legislative procedures................................................................................................. d) Combination of different procedures....................................................................................... IV. What can be done if the institutions breach the rules?............................................................... V. Exercises.....................................................................................................................................

33 33 34 34 34 35 35 35 35 36 36 37

E. THE NATURE OF THE EU AND EU LAW....................................................................................... I. General remarks......................................................................................................................... II. Primacy or supremacy of EU law................................................................................................ III. Direct effect................................................................................................................................. 1. Introduction............................................................................................................................. 2. Direct effect of Treaty provisions............................................................................................. a) Vertical direct effect (as against the State)......................................................................... b) Horizontal direct effect (as against other individuals)......................................................... 3. Direct effect of secondary EU measures................................................................................ a) Direct effect of provisions of regulations............................................................................. b) Direct effect of provisions of directives............................................................................... c) Direct effect of provisions of decisions............................................................................... d) If there is no direct effect: alternatives................................................................................ IV. Exercises.....................................................................................................................................

39 39 39 40 40 41 41 42 43 43 43 44 45 45

PART 2: BASIC ECONOMIC LAW OF THE EU...................................................................................

A. INTRODUCTION............................................................................................................................... I. EU law in the context of economic integration............................................................................ II. Stages of economic integration and their relevance for the EU.................................................. III. “Overarching” substantive law..................................................................................................... 1. Overarching rules.................................................................................................................... a) The general principles of the EU......................................................................................... i. Fundamental rights......................................................................................................... ii. Proportionality................................................................................................................ iii. Equality and non-discrimination..................................................................................... b) The prohibition of discrimination on grounds of nationality................................................. c) EU citizenship..................................................................................................................... 2. Overarching tasks................................................................................................................... IV. Exercises.....................................................................................................................................

49 49 49 50 50 50 50 50 51 51 51 51 52

B. THE INTERNAL MARKET............................................................................................................... I. Introduction................................................................................................................................. 1. The internal market in the EU................................................................................................. 2. Analysing and applying free movement provisions................................................................. II. Free movement of goods (Arts. 28 TFEU et seq.)....................................................................... 1. General remarks..................................................................................................................... 2. Fiscal restrictions.................................................................................................................... a) The prohibition of customs duties....................................................................................... b) The prohibition of discriminatory and protective taxation................................................... 3. Quantitative restrictions.......................................................................................................... a) General remarks................................................................................................................. b) Quantitative restrictions on imports.................................................................................... i. The prohibition under Art. 34 TFEU...............................................................................

53 53 53 54 55 55 56 56 56 57 57 57 57 9

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ii. Justification under Art. 36 TFEU.................................................................................... iii. Applying the complex provision of Art. 34 TFEU............................................................ c) Quantitative restrictions on exports.................................................................................... i. The prohibition under Art. 35 TFEU............................................................................... ii. Justification under Art. 36 TFEU.................................................................................... iii. Applying the complex provision of Art. 35 TFEU................................................................ 4. Exercises................................................................................................................................. III. Free movement of persons (Arts. 45 TFEU et seq.) and of services (Arts. 56 TFEU et seq.).... 1. Introduction............................................................................................................................. 2. EU citizens and third-country nationals.................................................................................. 3. Free movement for workers (Arts. 45 TFEU et seq.).............................................................. a) The scope of the provision.................................................................................................. b) The prohibition/rights.......................................................................................................... i. Market access................................................................................................................ ii. Movement and residence rights..................................................................................... iii. Family rights................................................................................................................... c) The possibility of derogations (justification)........................................................................ 4. Freedom of establishment (Arts. 49 TFEU et seq.)................................................................. a) The scope of the provision.................................................................................................. b) Rights/obligations................................................................................................................ c) The possibility of derogations (justification)........................................................................ d) Arts. 50 and 53 TFEU: the need for facilitating secondary legislation................................ 5. Free movement of services (Arts. 56 TFEU et seq.)............................................................... a) General remarks................................................................................................................. b) Scope.................................................................................................................................. c) Rights/obligations................................................................................................................ d) The possibility of derogations (justification)........................................................................ 6. An overarching issue: the mutual recognition of professional qualifications and other professional rules.................................................................................................................... a) Mutual recognition of professional qualifications................................................................ b) Other professional rules...................................................................................................... 7. Exercises................................................................................................................................. IV. Free movement of capital (Arts. 63 TFEU et seq.)...................................................................... 1. General remarks on the free movement of capital (and of payments).................................... 2. Free movement of capital........................................................................................................ a) Scope.................................................................................................................................. b) Rights/obligations................................................................................................................ c) Derogations and safeguard clauses................................................................................... 3. Exercises.................................................................................................................................

59 60 61 61 62 62 63 64 64 65 66 66 67 67 68 68 69 70 70 70 71 71 72 72 72 73 74

C. COMPETITION LAW........................................................................................................................ I. General remarks......................................................................................................................... II. Conduct of undertakings............................................................................................................. 1. General remarks..................................................................................................................... 2. Collusive conduct: Art. 101 TFEU........................................................................................... a) The prohibition: the relevant conduct.................................................................................. i. Three forms of relevant conduct..................................................................................... ii. The inter-state element................................................................................................... iii. The competition element................................................................................................ iv. Examples of prohibited conduct..................................................................................... b) The legal consequences..................................................................................................... c) Exemptions......................................................................................................................... 3. Abuse of a dominant position: Art. 102 TFEU......................................................................... a) The prohibition: the relevant conduct.................................................................................. i. Abuse of dominance....................................................................................................... ii. The inter-state element................................................................................................... b) The legal consequences.....................................................................................................

79 79 79 79 80 80 80 80 81 81 81 81 82 82 82 82 83

74 74 75 75 77 77 77 77 77 78 78

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4. Enforcement of Arts. 101 and 102 TFEU................................................................................ III. Merger control under Regulation 139/2004/EC.......................................................................... IV. Undertakings with a special position under national law: Art. 106 TFEU................................... V. State conduct.............................................................................................................................. 1. Art. 4(3) TEU, Protocol No 27 and Arts. 101 or 102 TFEU..................................................... 2. State aid control under Arts. 107 TFEU et seq....................................................................... a) The prohibition: the relevant state conduct......................................................................... i. The concept of “aid”....................................................................................................... ii. The inter-state and competition elements...................................................................... b) Derogations......................................................................................................................... c) The legal consequences..................................................................................................... d) Enforcement of Art. 108 TFEU............................................................................................ VI. Exercises.....................................................................................................................................

83 83 84 85 85 85 86 86 86 86 86 86 87

PART 3: SOCIAL LAW.........................................................................................................................

A. EU SOCIAL LAW IN GENERAL...................................................................................................... I. Introduction................................................................................................................................. II. The development of EU social policy.......................................................................................... III. Social policy objectives and the means to achieve them............................................................ IV. Exercises.....................................................................................................................................

91 91 91 92 92

B. BY WAY OF EXAMPLE: TWO IMPORTANT SUB-FIELDS............................................................ I. Social non-discrimination law..................................................................................................... 1. Relevant legislation................................................................................................................. 2. Field of application.................................................................................................................. 3. Forms of discrimination........................................................................................................... 4. Same and different treatment................................................................................................. 5. Remedies and sanctions......................................................................................................... II. Social security law...................................................................................................................... 1. Coordinating social security law............................................................................................. 2. Non-discrimination in social security law................................................................................ III. Exercises.....................................................................................................................................

93 93 93 93 94 95 95 96 96 96 97

PART 4: INTEGRATION TECHNIQUES...............................................................................................

A. POSITIVE AND NEGATIVE INTEGRATION AS LINKED TO PRIMARY AND SECONDARY EU LAW ............................................................................................................................................ 101 I. Positive and negative integration................................................................................................ 101 II. Primary and secondary law: which level applies?....................................................................... 102 B. DIFFERENT INTEGRATION TECHNIQUES.................................................................................... I. Harmonisation............................................................................................................................. 1. Formal and substantive aspects............................................................................................. 2. Intensities or degrees of harmonisation.................................................................................. II. Mutual recognition....................................................................................................................... III. Coordination................................................................................................................................ IV. Notification of standards............................................................................................................. V. Exercises.....................................................................................................................................

103 103 103 103 103 104 104 104

PART 5: ENFORCEMENT.................................................................................................................... 107 A. GENERAL REMARKS..................................................................................................................... 109 B. THE ACTIONS FOR ANNULMENT AND FOR FAILURE TO ACT................................................. 111 I. The action for annulment (Arts. 263 TFEU et seq.) and alternatives.......................................... 111 1. Admissibility............................................................................................................................ 111 11

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a) Reviewable act.................................................................................................................... b) Standing of applicants......................................................................................................... c) Time-limit............................................................................................................................ 2. Annulment grounds................................................................................................................. 3. Finding by the ECJ.................................................................................................................. 4. Alternatives to the annulment procedure................................................................................ II. The action for failure to act (Arts. 265 and 266 TFEU)...............................................................

111 111 111 112 112 112 112

C. THE ENFORCEMENT PROCEDURE (ARTS. 258 TFEU ET SEQ.)............................................... 113 I. First round of the enforcement procedure................................................................................... 113 II. Second round of the enforcement procedure............................................................................. 113 D. THE PRELIMINARY RULING PROCEDURE (ART. 267 TFEU)..................................................... I. Two types of questions................................................................................................................ II. National courts and tribunals...................................................................................................... III. Types of preliminary rulings........................................................................................................ IV. Ruling by the ECJ........................................................................................................................

114 114 114 114 114

E. ACTIONS FOR DAMAGES AND FOR UNJUST ENRICHMENT.................................................... I. Actions for damages and for unjust enrichment against the EU (Art. 340 TFEU)...................... 1. Contractual liability and internal liability.................................................................................. 2. Non-contractual liability of the EU........................................................................................... 3. The action for unjust enrichment............................................................................................. II. Non-contractual liability of the Member States (based on case law)..........................................

116 116 116 116 116 117

F. EXERCISES...................................................................................................................................... 118

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PART 1: THE LEGAL FOUNDATIONS OF THE EU

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A. introduction I. “EU law” and “Community law” The present text deals with EU law, i.e. the law relating to the European Union [Chart 1/1]. The EU is a complex international organisation whose legal order was recently fundamentally revised through the socalled Lisbon revision.1 In order to understand the EU legal system, it is helpful to know that an important part of the present EU law used to be the law of the European Community (EC; originally called “European Economic Community”, EEC), an international organisation older than, and separate from, the EU. Through the Lisbon revision, the EC was integrated into the EU and no longer exists under this name. Nevertheless, it will be apparent from this text that even after the Lisbon revision, the law of the former European Community remains important for various practical purposes. For example, numerous important decisions (“case law”) of the European Court of Justice (an institution of the EU that plays a particularly important role in the EU legal system) that remain relevant under the present law go back to the time before the Lisbon revision. Further, there is a large body of secondary law (i.e. legislation adopted by the EU institutions) that is formally based on the EC or even the EEC Treaty and that continues to exist. Also, numerous international agreements with non-Member States have formally been concluded by the EEC/EC and are still valid (with the EU now replacing the Community as a party to these agreements).

Alongside EU law post-Lisbon, there is also the law of the European Atomic Energy Community (commonly referred to as “Euratom”). Like the former European Community, Euratom predated the EU. Following the Lisbon revision, Euratom continues to exist. Euratom law is not discussed in the present materials, and neither is the law of the former European Coal and Steel Community, which also predated the EU and which expired in 2002. As a result of these developments, after the Lisbon revision the term “Community law” now relates exclusively to Euratom law.

II. EU law as a special type of international law EU law is a special type of public international law that is characterised by a number of features that set it apart from traditional public international law [Chart 1/2, Chart 1/3]. This includes notably the strong effect of EU law within the legal orders of the Member States, even in favour of individuals, and more generally a sophisticated enforcement system. Again, the special features of present EU law go back to the original Communities, in particular the EEC. The law of the EEC combined features traditionally typical to such law with features that were quite original at the time when the EEC was founded. Recognised by the European Court of Justice in the context of Community law, these special characteristics can now also be discerned in EU law.

Given that EU law is founded on international treaties, important principles of public international law apply, including most notably the duty of the Member States to honour the obligations entered into by them under EU law [Chart 1/4]. However, as distinct from public international law, where the means to be employed in view of the fulfilment of these obligations are often left to the States, EU law prescribes specific approaches in a number of contexts [Chart 1/5, Chart 1/6]. Similar to traditional international law, EU law provides for a combination of uniformity and differentiation. In principle, all Member States have the same obligations under EU law (uniformity). However, to a certain extent differences have developed over time. An example is provided by the so-called Schengen law, which does not apply to some Member States.2 These differences evolved, as a result of political developments and without a particular legal framework that would have regulated differentiation. Subsequently, specific provisions on how to adopt legislation that is not binding on all EU Member States have been inserted into the TEU [Chart 1/7]. They represent a special characteristic of EU law.

1 2

See PART 1, B. III. 2. c). See PART 1, B. III. 2. a).

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Finally, a particularly important characteristic of EU law is its multi-layered nature [Chart 1/8] and the fact that the decisions of the European Court of Justice (ECJ) play a particularly important role in the legal system of EU law (“case law system”) [Chart 1/9]. Note: these short introductory paragraphs provide but a few initial glimpses of the special nature of EU law. More detailed information can be found in later parts of this text.

III. Aim, means, specific objectives and fundamental values of the EU According to Art. 3(1) TEU, the pre-dominant aim of the EU is “to promote peace, the Union’s values and the well-being of its people” [Chart 1/10]. The means used by the EU in this context include the creation of an area of freedom, security and justice, the establishment of an internal market and of an economic and monetary union (EMU) and the Union’s relations with the wider world. The Union’s fundamental values include respect for human dignity, freedom, democracy, equality, the rule of law and respect for human rights [Chart 1/11].

IV. Solidarity between the Member States and the EU At the basis of the relationship between the Union and the Member States is the principle of sincere cooperation [Chart 1/12]. According to this principle, the EU and the Member States are to assist each other in carrying out tasks flowing from the Treaties. The Member States are obliged to take all appropriate measures to ensure fulfilment of their obligations under EU law. The principle of sincere cooperation, and in particular the obligations of the Member States flowing from it, has been highly influential in the ECJ’s case law.

V. Language versions of EU law and web-based information EU law exists in the 23 languages, which are at present the official languages of the EU [Chart 1/13]. All important texts of EU law as well as the case law of the ECJ is in principle available in each of these languages. The various language versions of EU law can be found on the EU’s internet website. This website offers a wealth of information on the EU itself (Treaties and secondary legislation, institutions, policies and so forth) as well as on its relationship with countries that do not belong to its membership (so-called third countries) and with other international organisations [Chart 1/14]. The address of the multilingual entry page is http:// europa.eu.

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