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EU Law. A Review

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Manuel Gimenez

on 2 December 2015

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Transcript of EU Law. A Review

Unit 1. European Integration Process
1. International Organizations in the European Integration Process
Schuman declaration
1951. ECSC
1952. EDC
1957. Rome Treaty
1966. Empty Chair Crisis
1981. Spinelli Project
1986. Single European Act
1992. EU Treaty
1997. Amsterdam Treaty
2001. Nice Treaty
1950. Schuman Declaration

French foreign minister Robert Schuman on 9 May 1950. It proposed the creation of a European Coal and Steel Community, whose members would pool coal and steel production.

The ECSC (founding members: France, West Germany, Italy, the Netherlands, Belgium and Luxembourg) .

Historical context

In 1950, the nations of Europe were still struggling to overcome the devastation wrought by World War II.

Monnet: Various unsuccessful attempts at integration after the 1948 Congress organized by the European Movement in The Hague had solemnly called for unity.

The European Economic Co-operation, 1948, given coordinating powers was unable to prevent economic recovery in a purely national context.

The creation of the Council of Europe, on 5 May 1949, showed that the governments were jealous of their prerogatives. The Consultative Assembly had no more than deliberative powers. Its resolutions could be vetoed by the Committee of Ministers.

A complete institutional edifice at one go was a pipe dream.

The agreement Schuman - Adenauer, open to all European nations:

'Limited, but decisive target': Franco-German coal and steel production, which would be placed under a common High Authority"
- The merging of economic interests would help to raise the standard of living.
- The High Authority's decisions would be binding on the countries. Its members would be independent, enforceable decisions.

1951. ECSC

Principles

1. Superiority of Institutions: International relations ruled by the principles of equality, arbitration and conciliation (democracy)

2.
Independence of Community organs
. Power to act. ECSC High Authority:

Members appointed by agreement between governments. Not national delegates

3. Inter-institutional co-operation: A
Council of Ministers
added to the High Authority.

Majority rather than unanimous decisions. Assent required in limited cases only.

After ECSC, eternal debate between Intergorvernmentalism and Supranationalism.
"A ever closer union among the peoples of Europe"

Wallace: "pendulum"

1952. European Defence Community (EDC)

A plan proposed in 1950 by René Pleven, French Prime Minister, in response to the American call for the rearmament of West Germany.

Pan-European defence force as an alternative to Germany's proposed accession to NATO, to harness its military potential in case of conflict with the Soviet bloc.

West Germany, France, Italy, and the Benelux countries.


1952. European Political Community (EPC)

The draft E
PC treaty, as drawn up by the ECSC assembly
(now the European Parliament), would have seen a directly elected assembly ("the Peoples' Chamber"), a senate appointed by national parliaments and a supranational executive.

Proposed by
Spaak
, president of th ECSC Assembly

EPC failed in 1954 when it became clear that France would not ratify the EDC, (unacceptable loss of national sovereignty)
1957. Rome Treaty. European Economic Community (EEC)

Treaties establishing the European Economic Community (EEC) and the European Atomic Energy Community (EAEC)


Spaak Report:
Set out the broad lines of a future European Economic Community (EEC) and European Atomic Energy Community (EAEC).
common market (supranational)
Euratom, (supranational)
areas where the need for action was considered most urgent (coordinated, intergovernmental)

International context: the Suez Crisis (1956) and the Hungarian Uprising

Four broad principles: progressiveness, irreversibility, the prohibition of discrimination, and the open nature of the Community


The way towards Intergovernmentalism: Davignon and Spinelli

Davignon Report

Report on the future foreign policy of European Economic Community member nations. It was written by a council chaired by Étienne Davignon of the Belgian Foreign Office.

It resulted first in European Political Cooperation and later in the European Union's Common Foreign and Security Policy in 1992.


The Spinelli Projec
t

Signed by the then 10 heads of state and government on 19 June 1983, in Stuttgart.
Pure political declaration to
1. Intensify the development of European policies
2. Pursue a common voice in common foreign and security policy
3. Harmonization of non-European criminal policies


European citizenship

Fundamental rights: not only to the classic rights of the ECHR, but also to the new economic and social rights guaranteed by the National Constitutions

Principle of subsidiarity: Union action is necessary if it proves to be more effective than the action of the Member States

Legislative co-decision between the Council and the European Parliament
Article 23(3) provided for the maintenance of the "Luxembourg Compromise" to prevent majority voting for a transitory period of ten years
Parallel action by some MC to remove physical borders
Signed in 1985 symbolically in the town of Schengen bordering LUX, GER and FR

Intergovernmental treaty between BENELUX, GER and FR; not part of acquis communitaire

Removal of internal borders while strengthening the external borders (so-called Schengen border)

Schengen Agreement

The Common Market

Slimmer version of internal market:
Defined as a ‘space without internal frontiers, where free movement of goods, services, persons and capital is ensured’
Had to be completed by 31/12/1992
It did not include obligations to create EMU and an extensive economic and tax harmonisation

Goods (TEC, Arts. 23-31) – mainly removal of NTBs
Persons (TEC, Arts. 39-48) – mutual recognition of qualifications, removal of discriminatory measures
Capital (TEC, Arts. 56-60) – removal of restriction on cross-border movement of capital
Services (TEC, Arts. 49-55) – cross-border provision of services without need of settling at the recipient’s state territory – problematic due to diverging legal requirements


Institutional Changes

Qualified Majority Voting (QMV) in the Council in majority in common market issues
Strengthening the European Parliament (EP) by cooperation and assent procedures

Expanding the EEC mandate to the areas such as social legislation, environment, R&D
External Policy cooperation

Consultations in foreign policy affairs (European Political Cooperation - EPC)
Towards political union?


Creation of the European Union: Maastricht Treaty

Two IGCs convened in 1991 reflect the new dimensions proposed
-Conference on political union
-Conference on economic and monetary union (EMU)

Most controversial points:
- New spheres of influence for the Community/Union (foreign policy, monetary union, social policy…)
- Institutional balance (strengthening the EP)
- Citizenship
- Variable geometry: closer cooperation or enhanced cooperation:
lack of unity, fragmentation vs reaching unity, consensus.

Consolidation of a single structure, different rules depending on subject matter:
1. European Communities (EEC changed to EC)
2. Common foreign and security policy (CSFP)
3. Justice and home affairs (JHA)



Consolidation of the European Union: Amsterdam Treaty


Extension
Pillar 1
. The EU will now be able to
legislate on immigration, civil law or civil procedure
,
when necessary for the free movement of persons
Intensified Intergovernmental cooperation in the police and criminal justice

Respect of HR, ECHR, democracy and rule of law

Introduced a
High Representative for EU Foreign Policy


Reforms concerning the
codecision procedure
, affecting its scope - most legislation was adopted by the codecision procedure

Pro-comunitate interpretation (Pupino case)
Supranationalism versus Intergovernmentalism: dark 70's and 80's
The Fouchet Plan and the Empty Chair Crisis (1966)


The
Fouchet Plan was a plan proposed by President Charles de Gaulle of France in 1961
. It was written by Christian Fouchet, France's ambassador to Denmark. The idea was to form a new 'Union of States', an intergovernmental alternative to the European Communities. De Gaulle feared a loss of French national influence in the European Communities, which at the time was becoming more and more supranational, so the Plan was an attempt to keep the balance of power in France’s favor.

Hallstein Commission and empty chair crisis
In 1965 president Hallstein put forward the Commission's proposals for financing the Common Agricultural Policy (CAP). The proposals would have allowed the Community to develop its own financial resources, independently of the states, and given more budgetary powers to Parliament. Furthermore though, it applied the majority voting into the Council, which the French government stated it could not agree to.

France held this policy for six months until the impact upon its economy forced it back into negotiations.

Luxembourg compromise: veto making unanimity in the Council the norm and was removed under the Single European Act

1986. Single Act
Treaty Establishing a Constitution for Europe: Rome 2004

Introduction
"Treaty for a constitution...", it actually was an international Treaty.

Necessity to address the entire EU system.

Modification of the legislative initiative: Appointment of a group of experts, instead of an IGC in favor of the Council

Listening stage, examination stage, proposal stage

Structure - 448 Articles - 36 Protocols proposed to the Council in July 2003
PREAMBLE
Part I BASIC OBJECTIVES AND VALUES OF THE EU
Part II THE CHARTER OF FUNDAMENTAL RIGHTS OF THE UNION
Part III THE POLICIES AND FUNCTIONING OF THE UNION
Part IV — GENERAL AND FINAL PROVISIONS
PROTOCOLS AND ANNEXES

It included a binding norm on Human Rights: ECHR (2000)
Definitive supranational legislative process
Constitution: Act defining the limits and conditions to the exercise of power in a political entity.

2. European Communities and their evolution
Supranationalism is the traditional method of the 1st pillar (Lisbon normal method)(Haas):
EC has the monopoly of the initiative
Council: majority vote
EP: Active in co-legislating with Council
ECJ: Uniform interpretation

Intergovernmentalism 3rd pillar (Hoffman):
EC shares its right of initiative
Council: unanimity
EP: Informed or consulted
3. The European Union of Maastricht and Lisbon
4. EU: Principles and Objectives
Philosophical Conception of the European Union

It is generally accepted that the modern project of European integration, as conceived by the French bureaucrats Jean Monnet and Robert Schuman and communicated to the German Chancellor Konrad Adenauer, had a preeminently
Kantian inspiration
.

However, reducing the complexity and antiquity of European integration to the figure of Kant constitutes an erroneous oversimplification: the EU is the first anti-hegemonic structure.

Point of Departure: Declaration made by Robert Schuman on 9th May, 1951 that symbolizes the creation of the EU

We will examine other philosophical conceptions of the EU:

1. Gartonian Europe

2. Montesquieuan Europe

3. Schmittean Europe
Regulative ideal
is the inspiration of the current European Union

real transfer of sovereignty

EU citizenship: The cardinal principle of the free movement of persons + essential principle of non-discrimination on the grounds of nationality,

Citizens new rights vis-à-vis the states where they resided

Transnationality of 'injustice'. the fact that an offence in one place is perceived as personal in another place.

Intrinsically cosmopolitan

Cultural, folkloric, Geopolitical evidence
Reaction to the growing influence of the US in Europe

The French attempt to control the growth of Germany to avoid the possibility of another war

Literature of the text: "the hope of a federal-state" in the making of the founding fathers

Renouncement expressed towards the use of preemptive violence by the creation of a Court,
Gartonian Europe (Timothy Garton-Ash)

New form of 'multilevel multilateralism' .

A great achievement of the EU was to overcome the feared hegemony of France over the big three—UK and Germany—by eliminating any potential risk of solitary leadership.

Solid architectural argument

Internationalization consensus —Garton Ash, Posner— More realistic internationalist genesis
Montesquieuan Europe

Commerce and the principle of subsidiarity

identification of peace with the interdependence of nations through commerce. Sovereignty is thus overcome by a federation of states under a transnational rule of law, where the right of war only prevails outside the federation in cases of self preservation.

preservation of internal governance combined with effective external coordination by means of the federation, the creation of a 'society of societies'



Europe needs a certain degree of struggle: industrial, in research and investment, educative
EMU stages

First stage
: Greater convergence of economic policies and closer cooperation between central banks, incorporating greater consistency between monetary practices in the framework of the European Monetary System [Decision 64/300]
Entry into force of the Directive on the complete liberalisation of capital movements in July 1990
Frozen composition of the ECU basket on 1 November 1993
European Council of Madrid on 15 and 16 December 1995, decided that, as of the start of stage three, currency should be “euro”

Second stage
(1st January 1994, 31 December 1998)
Avoid excessive public deficits
Independence of MS central banks: Prohibited ECB from granting governments overdraft facilities or any other type of credit facility and from purchasing public sector debt instruments directly
Rules: Council Regulation of the excessive deficit procedure (EDP) [Regulation 479/2009, last amended by Regulation 220/2014].

Third stage
Outcome: high degree of convergence by reference to four specific criteria
(a) a rate of inflation which is close to that of the three best performing Member States in terms of price stability;
(b) deficit not exceeding 3% of GNP and total government debt not greater than 60% of GNP;
(c) durability of convergence: long-term interest rate levels;
(d) observance of the normal fluctuation margins provided for by the Exchange Rate Mechanism of the European Monetary System for at least two years (Article 140 TFEU, ex Article 121 TEC and Protocol on the excessive deficit procedure).





Principles, structure, and objectives of the European Union
Initially no room for HR in the Treaties

Stork v. High Authority (1959)
Fast evolution (Van Gend en Loos and Costa v. Enel, 1963-64): Protection of HR for market integration
Yet, a secondary role (
Stauder
, Van Eick cases)
Internatioale Handelgesellschaft (1970): Affirmed that EEC lacked a HR policy and competences. Thus, in case of conflict, German fundamental rights would prevail (also in Italy, Frontini v. Ministero delle Finance, 1974)- the case allowed for the development of rigorous FR doctrine. In Solange II, 1986) German Constitutional Court concluded that the level of protection at EC level was identifiable to German protection

The foundational principles of the EU: democracy, HR, equality among MC, collaboration, solidarity

Article 1
TEU
, common provisions
- "new stage in the process of creating an ever closer union among the peoples of Europe".
- "decisions are taken as openly as possible and as closely as possible to the citizen".
- Universal Values

Article 2 TEU, Values + Article 6
- "Respect for human dignity, freedom, democracy, equality, the rule of law and respect for human rights, including the rights of persons belonging to minorities".
- "pluralism, non-discrimination, tolerance, justice, solidarity and equality between women and men"
- Universal values
- "Rights, freedoms and principles set out in the CFREU, with the same legal value as the Treaties".
- "The EU shall accede to the ECPHR. Such accession shall not affect the Union's competences as defined in the Treaties".
- "Fundamental rights shall constitute general principles of the Union's law".

Article 3, Objectives
- "uphold and promote its values and interests and contribute to the protection of its citizens".
- "contribute to peace, security, the sustainable development of the Earth, solidarity and mutual respect among peoples, free and fair trade, eradication of poverty and the protection of human rights, in particular the rights of the child"
- "strict observance and the development of international law, including the United Nations Charter"
- European values

Article 4, Respect to MC: Collaboration
- "Respect the equality of Member States before the Treaties as well as their national identities, inherent in their fundamental structures, political and constitutional, inclusive of regional and local self-government".

Article 5, Competence
- "The limits of Union competences are governed by the principle of
conferral
".
- "governed by the principles of
subsidiarity and proportionality
".


Competence, Supremacy, Subsidiarity, Proportionality
Competence
Article 5 TEU + 7 TFEU + 13(2) TFEU for the Institutions
Exclusive (Article 3 TFEU) + shared (Article 2.2 TFEU)

Supremacy
of EU Law
No legal basis, but developed by ECJ (Declaration 37 Lisbon Treaty)
controversial status for many Constitutional bodies across the EU
The EC constituted a new legal order
- Contractual argument
- Necessity to attain the outcomes of the EC
- Contingency of the obligations otherwise
- Presupposes direct effect to EU Law (automatic effect of EU norms when they are clear, precise and unconditional), but those requirements are not necessary
- All MC Courts must give immediate effect to EU Law (Factortame), even if the Constitutional Court (the only empowered to pronounce on the constitutionality of a law)

Subsidiarity and Proportionality (Article 5(3) an 5(4) TEU

Protocol on application of these principles: use of quantitative indicators

Subsidiarity
- First described in the Spinelli Project (1984)
- Limited to exclusive competence matters.
- Motivation of EU acts is to justify compliance with subsidiarity principle

Proportionality
5(4) TEU
An act of the Union shall not exceed what is necessary to achieve the objectives of the Treaties
Three parts in the analysis of the ECJ: Suitability, necessity, impact on individuals' interests
Also requires a decision on the best legislative instrument: Regulation, Directive


European Council (summit)

European Commission

Council of Ministers
(The Council)

Court of Justice
Unit 2. Law and Power in the EU

European Parliament

The European Parliament
Comitology

Original procedure: substantially amended through Art. 290 and 291 TFEU and, subsequently, Regulation (EU) 182/2011



TFEU, MS implement European law ( subsidiarity and proximity) .

Implementing powers may also be attributed to the Commission: Uniformity (or to the Council for CFSP, Articles 24 and 26TEU)).

The EC is assisted by representatives of the MS: the “comitology” procedure.

The committees are forums for discussion consisting chaired by the EC. They

Committees are based on models set out in the Council "Comitology Decision".

In 1999, it accorded the European Parliament a “right to scrutiny” in implementing legislative acts adopted by codecision. The “Comitology Decision” was amended again in 2006. It introduced a new way of exercising implementing powers: the
regulatory procedure with scrutiny
.

Committees may be formed in accordance with the following typology:

Advisory
committees: these give their opinions to the Commission, which must try to take account of them;
Management committees: they intervene when implementing measures relate to the management of programmes and when they have budgetary implications;
Examination or advisory procedures
Regulatory
committees: they are responsible when the implementing measures relate to legislation applicable in the whole of the European Union (EU).
Regulatory procedure with scrutiny:
these must allow the Council and the European Parliament to carry out a check prior to the adoption of measures of general scope designed to amend non-essential elements of a basic instrument adopted by codecision
Powers of the EC (17 TEU)
Traditionally, barely clarified in the Treaties

Legislative power
Right of initiative (17(2) TEU) before evaluation by the EP and EU Council
Overall yearly legislative plan
White papers on general policy strategies
Enactment of other EU norms isolated
Delegated power

Administrative power
Surveillance of EU policies using national agencies

Executive power
Finance: budget, agriculture and structural policy
External relations: determining and enforcing EU external trade relations and other external agreements. Deals with foreign representations before the EU, application for membership

Judicial Power (258 TFUE)


President of the EC
:
After Lisbon, the EC President is indirectly elected: politization vs. legitimacy
Election by the EP (Article 14 TEU), where the Council holds power (Article 17 TEU)

College of Commissioners
:
Until October 31, 2014, one member per MC. After that date, 2/3 of the MC.
Each MC proposes 3 names and the EC President chooses 1

Decisions: meetings of the College, written procedure, empowerment of an individual commissioner, delegating to a DG

EC Bureaucracy
:
Permanent officials, distributed in Directorate General (DG)
Units that provide general services: OLAF, Eurostat, Communications and Publications Office, Translation and Legal services, Personnel, etc.


Meetings: Initiative of its president, EC, MC,
Transparent meetings after 2006: while dealing with legislative matters: open meetings
Council's rules of procedure
10 Council's configurations (chaired on rotation, 18 months):

Powers of the Council (16 TEU)

legislative and budgetary functions jointly with the EP
Vote all legislative initiatives of the EC: scrutinized by the Coreper and working party
Delegate in the EC, collaborate with the EP
Budgetary functions
Conclude international agreements
CFSP: following the guidelines of the European Council

Composition (16 TEU)
- One representative (ministerial level) per MC, also representatives of Regional governments

Presidency
- 18 months
- define the agenda: legislative + non legislative initiatives
- neither an institution nor a body, but a function
- Prior to Lisbon, the Council chair also chaired the European Council, but now the presidency must cohere with the strategy of the European Council

Coreper
Committee of permanent representatives that prepare the meetings of the Council
Staffed by senior national officials : Coreper (and deputy permanent representatives, in Coreper I)
Over 150 working groups: experts from permanent representations
Agenda for the Council is divided into Parts A (decided) and Parts B (disagreement)

Secretariat: administrative services to the Council and the Coreper
Article 15 TEU

meetings of head of governments in the 60's: institutionalized in Paris, 1974
Preeminent role in CFSP
Chaired by the MC of in turn presidency: Since Lisbon, a single president
The idea of a double presidency (EC, European Council): better for an enlarged Union

Rationale: strategic decisions at the highest level

The General Affairs Committee prepares its meetings

Powers


Future membership

Ordinary Revision Procedure
Simplified Revision Procedure

Passerelle Procedure

Appointments
Its president, EC President, EC Commissioners, HR, Executive Board of the ECB

Definition of CFSP

Evolution

1952 Assembly of the ECSC, 78 members both MP and ECSC MP
Non executive powers
Non independent chambers in EEC and EUROATOM
Only pro-European legislators
De Gaulle: 1960s and 70s intended to prevent supranational integration

Changes in 1970s:
Community budget, meaning that— within certain limits —it could raise or lower Community spending, redistribute spending across different Budget sectors.
Case: Roquettes Frères v. Council (138/79)
Use of parliamentary questions
SEA: Consultation procedure
Maastricht: Cooperation procedure in Single Market



Structure

President
14 Vice presidents
Conference of president: heads of all political groups
Bureau of the EP: President and Vice presidents
Conference Committee chairs
Relevance of Conciliation Committee
Members of the EP
(paid by their governments)


Competences
Powers over
legislation
No initiative
Capacity to send delegates and reports to the EC
Legislative procedures
Initially, advisory role
Second stage: consultation (1st reading)
Third stage: Cooperation SEA (2nd reading)
Codecision: single market, research and development, consumer protection, the environment, education, and culture, and then expanded again by Lisbon to agriculture, fisheries, structural funds and transports
Consent: veto on new members, associate status, international agreements, sanctions on persistent violations of HR in a MC, electoral system of the EU

Also plays a role in
CFSP


Budgetary powers

Powers
over
other institutions
Annual discussion on the EC Initiatives
Venue to file actions against Council and EC for EU Law violations
Appointment and motion of censure against EC to force resignation
Oral and written questions to the Council

Legislative Procedures: Power Dynamics

Legislation
Role of the European Parliament: SEA, Maasticht
Article 95 EC: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:12002E095:EN:HTML
Luxembourg Compromise
Qualified Majority voting and the Council of Ministers
Subsidiarity
Trilogue

National Parliaments
Subsidiarity and participation


Delegated acts
Comitology
Articles 290 and 291 TFEU

Enhanced cooperation:
The position of Germany and the UK, Europe 'à la carte', Hard core group, Multi Speed Europe



Legislative Procedures: Power Dynamics


Consultation
Art. 289 TFEU. Limited number of legislative areas
Internal market exemptions and competition law
Non-mandatory instruments
(recommendations and opinions issued by the Council and the Commission).
Roquette Frères: Fundamental democratic principles
General Tariff Preferences: Urgency, duty to collaborate

QMV at CMe, Unanimity if CMi wants to modify EC Proposal
EP -> invites the EC to react


Consent (Assent)
SEA.
Initiative: EC, MS, ECo, EP
Non-legislative: ratification of certain agreements;
Article 7 TEU
Accession / withdrawal from the EU
Legislative procedure: legislation on combating discrimination /
EP veto under Article 352 TFEU (subsidiary legal basis): Flexibility!



Hierarchy
Legal Instruments

Soft Law
Unit 3. EU Legal Order:
Hard Law, Soft Law

Soft Law

Not binding

Recommendations and opinions (Art. 288 TFEU)

There are others: Declarations, Actions Programmes, Plans, EC Communications guidelines, Inter-institutional Agreements



Recommendations
Allow the institutions to make their views known and to suggest a line of action without imposing any legal obligation

Opinions

Allow the institutions to make a statement in a non-binding fashion Commission, Council, Parliament, the Committee of the Regions and the European Economic and Social Committee.
While laws are being made, the committees give opinions from their specific regional or economic and social viewpoint.
For example, the Committee of the Regions issued an opinion on how regions contribute to the EU’s energy goals

Declarations
Commitments about the conduct of institutions, ex. to respect values,


Action Plans

Programming legislation: "Environment Action Programme 2020" (7th Environment Programme),
Single Market Programme


Guidelines, Communications

Used to interpret legislation. Guidelines

288 FFEU


Legislative, delegated, implementing acts
Art
296 and 297 TFEU
: No need for a specific kind of act

Necessity: Publication in the OJ


Broader definition than what Art.
288 TFEU
reads: International Agreements


Simplification after the Constitutional Treaty and Lisbon Treaty

Treaties and CFREU

General Principles
Art. 263.2 TFEU
Ground for invalidation of EU norms
Proportionality, fundamental rights, legal certainty, legitimate expectations, procedural justice
Art 19 TFEU : ECJ Role
Precautionary Principle: Artegodan v. EC (2002)
Narrow interpretation of a general principle of law

Legislative acts: Acts adopted by Legislative procedure
The content is not relevant
Lisbon: Only ordinary and special legislative procedures: 289.1 and 289.2 TFEU

Delegated and implementing acts
290 / 291 TFEU
Comitology
Only formally non-legal acts as they are not approved following a legislative procedure
Implementing acts are intended to be of general application and adding features that are not necessary to understand the measure they implement

Article 296 TFEU
(ex Article 253 TEC)

case-by-case basis, in compliance with the applicable procedures (proportionality)

Legal acts shall state the reasons on which they are based and shall refer to any proposals, initiatives, recommendations, requests or opinions required by the Treaties.


Regulations
288 TFEU

Directly applicable: EC v. Italy, 1973 (Variola v Administratione delle Finanze)

Directives

288 TFEU

Outcome: ensure a result
Addressed at MS (not all)
Harmonization of complex matters
Direct effect
Horizontal
Vertical
Term to transpose any directive

Relevant fields:
- Consumer protection, Environment, culture, accounting, IP protection, Pharma, data protection,

Decisions

Binding upon those to which they are addressed
Bechluss: decisions with no addressee


EU International Agreements

288 TFEU
Always under EU Law scope: competence
Implicit v. Explicit competence (Art. 216 TFEU)
Procedure (Art 218 TFEU)

EU and International General Principles of Law

good faith, legality, pacta sunt servanda, stoppel, cooperation (EU), proportionality (EU)





Article 218

(ex Article 300 TEC)

2. The Council shall authorise the opening of negotiations, adopt negotiating directions, authorise the signing of agreements and conclude them.

3. The EC or the HR (CFSP), shall submit recommendations to the CMi , which shall adopt a decision authorising the opening of negotiations and, nominating the
Union negotiator


4. The CMi may address directives to the negotiator

6. The Council (QMV), on a proposal by the negotiator, shall adopt a decision concluding the agreement: (or) Unanimity for association agreements; for the agreement on accession to ECHR

EP consent: (i) association agreements; (ii) agreement on Union accession to ECHR ; (iv) agreements with important budgetary implications ; (v) Agreements where the ordinary legislative procedure applies, or the special legislative procedure where EP consent is required.

11. ECJ: A MS , EP, CMi or the EC may obtain the opinion of the ECJ . Where the opinion of the Court is adverse, the agreement envisaged may not enter into force unless it is amended or the Treaties are revised.







FCSP Acts

Principles: democracy, the rule of law, the universality and indivisibility of human rights and fundamental freedoms, respect for human dignity, the principles of equality and solidarity, and respect for the principles of the United Nations Charter and international law

Decisions in the European Council
on the strategic interests and objectives of the with a specific country or region or may be thematic in approach: duration, and the means

Unanimously on a recommendation from the
CMi
. Implemented in accordance with Treaties

In other areas, the HR and the EC may submit joint proposals to the CMi.
Then, the CMi will (Art. 25 TEU)

(b) adopting decisions defining:

(i) actions to be undertaken by the Union;

(ii) positions to be taken by the Union;

(iii) arrangements for the implementation of the decisions referred to in points (i) and (ii);

and by

(c) strengthening systematic cooperation between Member States in the conduct of policy.



Fidelity principle. Art. 4.3 TEU
Supremacy Principle

Direct Effect
Unit 4: EU Legal Order v. MS Legal Order: RELATIONSHIP

Direct effect. Self executing

VGEL:
Clear, unconditional and with no further legislative intervention
Only against the State
Only negative actions

Reyners
case: No discrimination, even if the MS should have taken actions to dismantle discrimination

Defrenne v. Sabena
Also against corporations
Also positive actions
Avoid MS ignoring the principles

EU Remedies
National, but no less favorable than internal
Sufficient to guarantee EU rights:
Unibet
Case



Fully applicable to primary norms:
Treaties
(free movement of workers, Competition...)

Fully applicable to
decisions
and
regulations


Questionable for
directives
(Faccini Dori)
Denying direct effect would be incoherent (hierarchy)
Vertical
effect:
Van Duyn
case: when additional actions are needed
Term to transpose the directive
Horizontal
effect:
Degree of State control:
Paradoxical
Foster test
Is this compatible with Defrenne case?
What happens if a directive includes general principles of EU law?
...and if a Regulation is based on a directive?

Costa V. Enel.

No mention in the Treaties
Lisbon: Declaration 17

Although EU Law prevails over constitutions, but the ECJ avoids conflict
France, Germany deny


Fidelity principle. Art. 4.3 TEU



Definition

Costa v. Enel

Justification

Agreement
(contractuarian)
The Union would not work (funcional)
The Union would not be effective (analytical)

Application in time

Simmenthal: Irrespective of the date of the domestic law (para. 21)
Winner Wetten (2010): How to adapt to EU Law?

Adjudicatory Body at a domestic level
Simmenthal
B & others case (Sep, 2014)
Larsy (2001): also administrative bodies
Power given to the national judge
In the merits (Simmenthal, Cilfit)
Procedurally: interim decision (Factortame)
Res judicata (Luccini, 2007)
Jurisdiction

Kompetenz - Kompetenz

Article 19 TEU

Article 5.2 Conferral

Supremacy and EU Countries

France


Semoules (Conseil d'Etat) vs. Café JAcques Vabres (Cour de Cassation).
Followed by acceptance: Nicolo
Based on the French Constitution and not in Costa v. Enel: It denies supremacy over the constitution itself

Germany


"Identity lock"
23.1 German Constitution
Limitations: Fundamental Rights, competence, constitutional identity
Solange cases: "I would not exercise jurisdiction as long as the EU gives sufficient guarantees"

Article 4.2 TEU: Protection of democratic authority
"respect the equality of Member States before the Treaties as well as their national identities, inherent in their fundamental structures, political and constitutional, inclusive of regional and local self-government.
Respect their essential State functions



Indirect Effect

Interpretation in light of the outcome of the norm

Von Colson: Fidelity Principle 4(3) TFEU

Marleasing
: interpreting the Spanish Civil Code in light of EU norms, whenever possible.

Kükücdevecy: Fundamental rights in the directive whose direct effect is invoked

Incidental Horizontal Effect
Exclusion effect vs. substitution effect



State liability

Francovich: Italy failed to transpose a Directive that favored employees in Insolvency proceedings
National systems failed to provide remedies against EU Law violations
Again, art 4(3) TFEU founded this decision

Factortame III, Brasserie du Pêcheur:
1. Infringed Law shall confer rights to individuals
Identifiable, precise, unconditional
2. Substantial violation
3. Casual link with the damage
ex. re ipsa damages require no casual link

Liability of judicial institutions :
Kobler
case
Failure to file a preliminary ruling, failure to interpret domestic law in light of EU Law
Only considered in extreme circumstances (intentional)
3. Pursuant to the principle of sincere cooperation, the Union and the Member States shall, in full mutual respect, assist each other in carrying out tasks which flow from the Treaties.

Institutional Dialogue (Spanish Constitutional Court Decision 1/1994)

Incidental Horizontal Effect
Pure horizontal effect:
Marshall case: Dietist dismissed at 62 (unlike men) by British Health authority
Foster case: Employee of British Gas (a nationalized industry)

Incidental effect: shield against attacs

Arcor case: A private individual can sue the MS for a review of their rights. The decision may impose a burden on a Third party

CIA case: CIA was sued (unfair competition) for failing to obtain a mandatory certification. Such certification violated EU Law. CIA prevailed and the claim against it was dismissed

Unilever case: Italian counterpart refused to accept some olive oil because of breaching Italian law on labeling. This Italian law violated EU Law. Unilever could not suffer a prejudice


The European Patent Court
National Judge as EU Judge
Unit 5: Judicial Application of EU Law

EU Law is applied either by the ECJ or National Courts

Art. 274 TFUE governs division of duties

The ECJ is composed of 3 different tribunals
Its mandate is that
the
law is observed in the interpretation and application of the Treaties
Claims before the ECJ are
Direct or indirect
Before the ECJ or / General Court


Introduction

Simmenthal

All EU competences
Marshall
Johnston

Full competence
- Acte clair
- National judge is not competent to adjudicate on the validity of EU norms

EU directives ->
Francovich
(1991)
- "In conformity with"
- non-contractual liability (to avoid state liability)


3. Pursuant to the principle of sincere cooperation, the Union and the Member States shall, in full mutual respect, assist each other in carrying out tasks which flow from the Treaties.

Institutional Dialogue (Spanish Constitutional Court Decision 1/1994)
The Court of Justice (ECJ) promotes uniformity thru legal disputes

No jurisdiction over CFSP (art 24 TEU and 275 TFEU)
Limited jurisdiction in criminal matters and police cooperation

Composition
ECJ and General Court
One judge per EU country
Nine ‘advocates-general’ present opinions publicly and impartially.
MS governments agree upon whom they want to appoint.

Jurisdiction

General Court
’ (Art. 254 TFEU): Central administrative court
cases by private individuals, competition law, cases by MS against the EC; EU Trademark, Office of Harmonization of the Internal Marked, appeal of ECSTrib.

ECJ

proceedings brought by MC against the EP or the CMi or among institutions
Appeals on points of Law
Preliminary Rulings 267 TFEU

National courts in each MS are responsible for ensuring that EU law is properly applied.

Risk courts in different MC interpret EU law differently

Relation bw ECJ and national courts:
Bilateral/horizontal vs. Multilateral/vertical

If a national court has doubts about the interpretation or validity of an EU law, it
may
– and sometimes
must
– ask the ECJ for advice, called a ‘preliminary ruling’
Art 258TFEU

By EC and any MS

MS is failing to fulfill its obligations
under EU law.

Initiative:
EC
, even if individuals file complaints to the EC. They are not a party
Transparency concern
Regulation 1049/2001
Bavarian Lager II, claim for transparency before CFI
Sweden API, access to documents (appeal before ECJ)

The freezing out
: No EC obligation to explain which cases they decide
Star fruit case
: action against the ECJ for failure to act, after refusing to start proceedings against a MS

* Protest of the Ombudsman after Macedonian Metro Decision -> Led to EC "procedural entitlements", that allows complainants to request assistance from the Ombudsman

Annulment, 263 TFEU

The ECJ may
declare a law null and void if it was not correctly adopted or is not correctly based on the Treaties.

Standing:
Privileged: Any MS, the CMi, the EC (or under certain conditions, EP).
Non-privileged: Private individuals, to nullify a particular law that directly and adversely affects them
Plaumann v. Codorniu tests
More open in competition, anti-dumping, state aids
Jégo-Quéré: MS should allow a means to challenge EU measures

Grounds for illegality?
Actions for failure to act, 265 TFEU

The Treaty requires The EP, the CMi and the EC to make certain decisions under certain circumstances.

MS, other Community institutions

Damages, 340 TFEU

Any person or company, as a result of the action or inaction of the Community or its staff
Before the
General Court

Acts whether there is
discretion

General test
- In Plaumann, annulment of the norm was necessary
- Evaluate the discretion of the institution challenged
- Show
flagrant
discrimination , violation of general principles of law, similar to MS liability (Brasserie du Pêcheur)
This was narrowed by Bergaderm case

Acts
without discretion
- Illegality (with an specific view, not plausible)
- Causation
- Damage

Acts of EU servants and contractual claims
Functions
Ensuring legality of EU measures before national courts
Fotofrost case
Preserving unity of EU Law as regards interpretation and validity
Exclusivity of the ECJ to declare null and void an EU decision Fotofrost case, again (though very contested,
Schul case: an identical ECJ decision already exists
IATA case: the national court wants to dismiss the challenge to the EU norm


Cases before the ECJ

1. Preliminary reference: Requests for a
preliminary ruling
– when national courts ask the Court of Justice to interpret a point of EU law

2. Actions for failure to fulfill an obligation – brought against
MS governments
for not applying EU law
TFEU 258 to 260 ->
MS breaches

3. Actions for annulment –
EU laws
thought to violate EU treaties or fundamental rights

4. Art. 269 TFEU: Legality of an
Art 7 TEU
decision of the ECo

5. Actions for failure to act – against
EU institutions
for failing to make the decisions required of them

6.
Art. 273 TFEU: Claims
between MS

7. Art. 256 TFEU:Appeals against General Court decisions (JEGO-Queré case)

8. Art 263 TFEU, Art 51 ECJ Statute: Judicial
review

of
actions of
EU
institutions.

9. Art. 271 TFEU: Claims against ECB / EIB


Who decides whether to send a preliminary reference to the ECJ and in what terms?
What is considered to be a Court by the ECJ ?
What is the role of private parties before the ECJ in preliminary references?
When do nationals courts file a Preliminary reference?
What is the role of internal precedent or domestic higher courts?
Claims before the
General Court


Review of legality of legislative acts (263 TFEU) by
individuals

Plauman, Foto-Frost
Infringement and
actions for failure to act


Direct actions
brought by natural or legal persons for
annulment of acts of the institutions, bodies, offices or agencies
of the EU:
addressed to them or are of direct and individual concern to them (ex. an action brought by a company against a EC decision imposing a fine on that company),

actions brought by
MS
against
the EC
the CMi (acts adopted in the field of State aid, trade protection measures (dumping) and acts by which it exercises implementing powers;

Contractual and non-contractual liability (Art. 268 + 340 TFEU)
actions seeking
compensation for damage
caused by the EU institutions
contracts made by the EU which
expressly give jurisdiction
to the General Court;

IP actions against the Office for Harmonisation in the Internal Market (Trade Marks and Designs) and against the Community Plant Variety Office;

Appeals, limited to points of law, against the decisions of the Civil Service Tribunal.
actions brought against decisions of the European Chemicals Agency.
Formal notice and Reasoned opinion

Art. 296 TFEU

Not subject to annulment action ex. art. 263 TFEU

It has to clearly state the grounds for its decision, but no need to answer all the arguments of the MS (Italy v. EC

Confidential documents: no obligation to disclose (Petrie case, T-191/99) even after a Judgment (though this will be considered case by case, Sweden/API case).


Application before the ECJ

Based on the same grounds as the Reasoned Opinion. Full argumentation required
EC -> obliged to raise all its arguments in the pre-litigation stage (unlike MS)

Grounds for the ECJ claim

- Breach of 4(3) TEU: lack of information, obscurity
- Inadequate implementation of EU Law. Wrong transposal (Case 167/73, French crew)
- Interference of EU External relations (Open Skies case)
- Actions of MS

MS defences

- Force majeure
- Lack of intentional wrongdoing
- Illegality of the measure used by the EC
- Other MS are also in breach!

Interim measures: art. 279 TFEU

263 TFEU
Review the legality of legislative acts, of acts of the Council, of the Commission and of the European Central Bank, of the European Parliament and of the European Council intended to produce legal effects. Acts of bodies, offices or agencies of the EU

Lack of competence, infringement of an essential procedural requirement, infringement of the Treaties or of any rule of law relating to their application, or misuse of powers. Actions brought by the Court of Auditors, by the European Central Bank and by the Committee of the Regions

Natural or legal person may institute proceedings against an act addressed to that person or which is of direct and individual concern to them
ECJ
Monetary Union
Unit 6. THE FREEDOMS: Substantive Law
Common Foreign and Security Policy
Introduction

Monetary policy: Articles 127 to 133 TFEU

The ECB is the sole issuer of banknotes and bank reserves.It can set the conditions at which banks borrow from the central bank.
Monetary policy transmission mechanism: monetary policy decisions affect the economy in general and the price level in particular

Long-run neutrality of money: A change in the quantity of money in the economy will be reflected in a change in the general level of prices. But it will not induce permanent changes in real variables. Real income or the level of employment are essentially determined by real factors. In the long run a central bank cannot enhance economic growth by expanding the money supply or keeping short-term interest rates

Objective
: to maintain price stability.

Tools
Monetary policy operates by steering short-term interest rates, thereby influencing economic developments,

The ECB's monetary policy strategy
The ECB has defined price stability as a year-on-year increase in the
Harmonised Index of Consumer Prices (HICP)
for the euro area of below 2%.
Also maintaining inflation rates below, but close to, 2% over the medium term.
Analytical framework
for the assessment of all relevant information and analysis based on
two pillars
:
economic analysis and monetary analysi
s.

Decisions
: ECB Governing Council + Council

Implementation
The Governing Council of the ECB has adopted a set of monetary policy instruments and procedures described
in the General documentation on Eurosystem monetary policy instruments and procedures
.
Introduction

The CFSP was established by the Maastricht Treaty. It provides for the eventual framing of a common defence policy which might in time lead to a common defence.

Objectives of the CFSP: Article 24 of the TEU, are to be attained through specific legal instruments, such as joint actions and common positions adopted
unanimously in the Council
.

With the Lisbon Treaty, the CFSP now forms part of the larger framework of the Union’s external action. The Lisbon Treaty reiterates the principles which govern the definition of this policy. Furthermore, it increases the effectiveness of the CFSP by entrusting the HRVC with the mission to implement the strategies and decisions taken by the European Council and the Council in matters related to the CFSP. In carrying out their mandate, the HR is supported by the European External Action Service (EEAS) and the Political and Security Committee (PSC).
The Custom Union


Creation of a
Common customs policy and common foreign trade policy:
Stage of multinational integration: MS agreed, by treaty, to refrain from imposing any customs duties, charges having equivalent effect or quantitative
restrictions
on each other

and to adopt an
external common customs tariff

with third countries.
Completed on 1 July 1968
, 18 months ahead of schedule

Article 3 (1)(e) TFEU, exclusive competence.
Article 206 TFEU contribution
in accordance with the common interest, to the harmonious development of world trade
, the gradual removal of restrictions to international trade and the lowering of customs barriers.



Abolition of tariffs:
Article 28 TFEU.
The customs union covers
all trade in goods
Restrictions
EC examines the validity of trade restrictions (Article 258 of the TFEU)
MS to amend or suppress a rule or practice contrary to EU law
EC may bring the matter before the ECJ. An Advisory Committee on Customs Matters and Indirect Taxation.


Agreements with third countries
EC submits recommendations to the Council, which then authorises to open negotiations. The EC consults a special committee appointed by the Council to assist it in this task ( the ''207 Committee'')
Within guidelines issued by the Council (QM)
Freedom to provide services (ii): Financial services

- banks, insurance companies and stock exchanges - closely monitored by the official authorities. The freedoms of establishment and provision of services in the common market required that those services be liberalised from protectionism.

This liberalisation should reconcile two contradictory requirements:
the need to maintain very stringent criteria for control and financial security and
the need to leave the branch concerned enough flexibility for it to be able to meet the new and ever-more complex requirements of its customers throughout the European market.

European System of Financial Supervision
(ESFS) was established, bringing together the actors of financial supervision at national level and at the level of the Union, to act as a network. Its main task is to ensure that the rules applicable to the financial sector are adequately implemented . The ESFS comprises:

a) the European Systemic Risk Board (ESRB), responsible for the macro-prudential oversight of the financial system
b) the European Banking Authority, having as a main objective the protection of depositors and investors in the Union
c) the European Insurance and Occupational Pensions Authority; and
d) the European Securities and Markets Authority (ESMA), which should pay particular attention to any systemic risk

A Financial Services User Group advises the Commission in the context of the preparation of legislative acts or other policy initiatives affecting users of financial services, including consumers, retail investors and micro-enterprises [Decision 2010/C 199/02].

A History of Foreign Policy Coordination in the EU

European Political Community (
EPC
I) and European Defense Community (EDC) in 1953 original attempts (ECSC) to coordinate foreign policy and create a joint military.
Fouchet Plans
(1961/62, de Gaulle) to create a “Europe of States”.
The European Political Cooperation (EPC II) originated in 1970s the predecessor of European Council.
- Initiated byPompidou Created “summitry” Structurally follows organization of Council of Ministers (Coreper, shared President etc) minimum biannual meetings outside of the treaties and intergovernmental
- Throughout 1970s EPC II worked relatively well.
SEA
- EPC is reformed and officially recognized by the SEA treaty reforms within Title III: “the Member States, being members of the European Communities, shall endeavor jointly to formulate and implement a European foreign policy.”
- Title III was not officially incorporated as some MC refused to implement QMV.
- After SEA EPC II remained intergovernmental, voluntary and non- binding.

Recent Steps towards CFSP
During the Maastricht Treaty negotiations FP and increased cooperation was a central theme that resulted in the CFSP as the second pillar.
Fully incorporated the foreign policy into the EU but intergovernmental (no QMV)
The creation of the CFSP pillar also formally opened the door to security policy

Objectives of CFSP
Safeguard the common values, fundamental interests and the independence of EU
Strengthen the security of the EU and its MC in all ways
Preserve peace and strengthen international security
Promote international cooperation
Develop and consolidate democracy, the rule of law and respect for human rights and fundamental freedoms.

CFSP Process
EPC and CFSP are formally distinct and separate from the EEC and the Rome Treaties
In
Maastricht
:
- The European Council was given a formal role in outlining the principals for CFSP including an agenda
- The Council of Ministers was given the responsibility defining common positions and decide on joint actions with decisions on implementation open to QMV
- The EC was given the formal right to initiate in CFSP Required consultation to EP


CFSP
is based on unanimous consensus among MC.

CSDP
(2003), military coperation has the
following objectives
:
- First allow EU take necessary actions to address a considerable list of global challenges and security threats, including regional conflicts, proliferation of weapons of mass destruction, terrorism, state failure, organized crime, disease, and destabilizing poverty. (The 2008 Report on the Implementation of the European Security Strategy adds piracy, cyber security, energy security, and climate change to the list)
- Second allow EU focus on building regional security in the Balkans, Caucasus, Mediterranean region, Middle East.
- Third allow the EU construct a long term rules-based, multilateral world order in which international law, peace, and security are ensured by strong regional and global institutions.

Instruments

- Amsterdam: Principles and Guidelines, Common Strategies, Joint Actions, Common Positions.

- Lisbon Treaty
o Decisions:
(1) on the strategic objectives and interests of the EU: Highest level of decision. Conclusions of meetings of the European Council. Declarations of the HR-VC
European Security Strategy, EU Strategy Against Proliferation of Weapons of Mass Destruction (2003), EU Counterterrorism Strategy (2005), EU Internal Security Strategy (2010)
(2) on common positions,
Usually regarding specific countries (Cuba, Zimbabwe)
(3) on joint actions, both entail specific commitments by the MC.
Usually appointment of EU Special Representatives and financial commitments
(4) on the implementing arrangements for common positions and actions.

Decision-making procedures
Monetary policy: Articles 127 to 133 TFEU .

Taken by the ECB's Governing Council. The Council meets every month to analyse and assess economic and monetary developments and the risks to price stability and to decide on the appropriate level of the key interest rates, based on the ECB's strategy.
for the issue of
coins
by MC (Art. 128(2)TFEU), the cooperation procedure applies, after consultation of the ECB;
for the formulation of
exchange-rate policy guidelines
(Art. 219(2)TFEU), the Council decides QM on a recommendation from the ECB or from the EC after consulting the ECB;
for the
implementing

measures
referred to in the Statute of the ESCB (Art. 129(4)TFEU) and the limits and conditions under which the
ECB is entitled to

impose fines
(Art. 132(3)), the Council decides QM on a recommendation from the ECB and after consulting the EP and the EC;
for
technical adjustments
to the Statute of the ESCB (Art. 129(3)), the Council decides QM on a recommendation from the ECB and after consulting the EC with the assent of the EP;
for the
exchange rate of the Euro against non-Community currencies
(Art. 219(1)), the Council decides
unanimously
on a recommendation from the ECB or the EC, after consulting the EP.

The institutional provisions (Articles 134-135, 283-84) and transitional provisions (Articles 139-144) have their own special decision-making procedures which are separate from those identified here.
Strategy
Comprehensive framework to reach the appropriate level of short-term interest rates. Based on some general principles.
a
quantitative definition of price stability
, and
a t
wo-pillar approach to the analysis of the risks
to price stability.

Quantitative definition of price stability
The ECB’s Governing Council has defined price stability as a year-on-year increase in the Harmonised Index of Consumer Prices (HICP) for the euro area of below 2%.
Lack of definition of price stability
Relevance of medium-term orientation

Two-pillar approach
The ECB, like any other central bank, must analyse economic developments
Economic analysis



Monetary analysis

The economic analysis assesses the short to medium-term determinants of price developments.
The focus is on
real activity and financial conditions in the economy: P
rice developments are influenced largely by the interplay of supply and demand in the goods, services and factor markets.

The ECB regularly reviews, inter alia,
developments in overall output,
demand and labour market conditions,
a broad range of price and cost indicators,
fiscal policy, and
the balance of payments for the euro area.

The economic analysis also includes a thorough analysis of shocks hitting the euro area.

Asset prices and financial yields: These variables are also analysed to derive information about the expectations of the financial markets, including expected future price developments.
Macroeconomic projections are produced under the responsibility of ECB/Eurosystem staff using a number of analytical and empirical models.

Monetary analysis
Longer-term perspective: long-run link between money and prices. The monetary analysis mainly serves as a means of cross-checking, from a medium to long-term perspective
Monetary analysis
consists of a detailed analysis of monetary and credit developments.
The tools and instruments include a comprehensive analysis of the developments of the monetary aggregates, particularly those of the broad aggregate
M3
, based on information stemming from their components and counterparts.

The ECB’s definitions of euro area monetary aggregates are based on a harmonised definition of the money-issuing sector and the money-holding sector as well as of harmonised categories of MFI liabilities. The money-issuing sector comprises MFIs resident in the euro area. The money-holding sector includes all non-MFIs resident in the euro area excluding the central government sector.

Eurosystem has defined a narrow (M1), an “intermediate” (M2) and a broad monetary aggregate (M3). These aggregates differ with regard to the degree of liquidity
M1 comprises currency
M2 comprises M1 and, in addition, deposits with an agreed maturity
M3 comprises M2 and certain marketable instruments
Operational framework of the Eurosystem
Open market operations
Main refinancing operations are regular liquidity-providing reverse transactions with a frequency and maturity of one week
. They are executed by the NCBs on the basis of standard tenders and according to a calendar.
Liquidity-providing reverse transactions
that are regularly conducted with a monthly frequency and a maturity of three months.
Fine-tuning operations,
ad hoc basis to manage the liquidity situation in the market and to steer interest rates. In particular, they aim to smooth the effects on interest rates caused by unexpected liquidity fluctuations.
The Eurosystem may select a limited number of counterparties to participate in fine-tuning operations.

Standing facilities
: aim to provide and absorb overnight liquidity, signal the general monetary policy stance and bound overnight market interest rates.

Minimum reserve requirements
for credit institutions: modification of the reserve requirement of each institution (which is determined in relation to elements of its balance sheet.

Introduction

EU Economic policy
. MS policies should be geared towards common objectives (art 119 TFEU).
EU Monetary Policy
. MC common objective is to maintain price stability (art 127 TFEU).

Differ from Eurogroup to non-Euro countries
About 30 financial legislative acts during the last term of the EP

Legal basis
Article 3 TEU + Article 3 TFEU
1. The EU shall have exclusive competence in the following areas:
(a) customs union; (
b) the establishing of the competition rules necessary for the functioning of the internal market; (c) monetary policy for the Member States whose currency is the euro
; (d) the conservation of marine biological resources under the common fisheries policy; (e) common commercial policy.
2. The Union shall also have exclusive competence for the conclusion of an international agreement when its conclusion is provided for in a legislative act of the Union or is necessary to enable the Union to exercise its internal competence, or in so far as its conclusion may affect common rules or alter their scope.

Art. 119 TFEU: "an economic policy which is based on the close coordination of economic policies, on the internal market and on the definition of common objectives, and conducted in accordance with the principle of an open market economy with free competition".
Art. 120 TFEU: "MC shall conduct their economic policies with a view to contributing to the achievement of the objectives of the Union, as defined in Article 3 TEU, and in the context of the broad guideline
s

The EMU
. Stages (i) No policy / Delors Report (ii) EMI / Maastricht (iii) EMU /ECB / Euro

Economic policies
Based in 2 types of commitments by the MC
Resolution of the European Council on the
Stability and Growth Pact
(Amsterdam, 17 June 1997)
BGEPs: Recommendations adopted by the Council. Their objective is to harmonise the economic policies of MC
Stability and growth pact: Public deficits control.
Council Recommendation 2010/410/EU of 13 July 2010 on broad guidelines for the economic policies of the Member States and of the Union

Multilateral Surveillance Procedure (monitoring) vs Excessive deficit procedure (EC Opinion + fines)

EC
supervises compliance addressing warnings to MC (before Lisbon, the EC could only request the Council to adopt a resolution)
The Council may adopt a resolution (the involved MC does not participate in the voting, only Euro MC may vote when a recommendation is related with an Euro MC)
Banking Union

Introduction

Worrying fragmentation of the Single Market in lending and funding.
Particularly damaging within the euro area, where monetary policy transmission is impaired and the ring-fencing of funding impedes efficient lending to the real economy.
Banking Union comprises single centralised mechanisms for the supervision and restructuring of banks.
(TFEU, article 127(6)) stipulates that supervisory tasks can be conferred on the ECB.
EC proposed to set up a single banking supervision mechanism in the euro area (see IP/12/953),

The pillars of the banking union

Single Supervisory Mechanism (SSM)
Single Supervisory Mechanism
Regulation
will be fully operational in November 2014.
The ECB is currently carrying out a comprehensive assessment of all banks which will be under its direct supervision and the balance sheets of those banks. In parallel it is recruiting high quality supervisory staff and building up a new supervisory structure that integrates national supervisors before it commences its activities. (MEMO/13/1155).
Main features (SSM):

New supervision powers on the ECB for the banks of the euro area: coherent and consistent application of the
single rulebook
in the euro area, the direct supervision of banks significant banks, including all banks having assets of more than €30 billion or constituting at least 20% of their home country's GDP (around 130 banks), the monitoring of the supervision exerted by national supervisors on less significant banks. The ECB may at any moment decide to directly supervise one or more of these credit institutions to ensure consistent application of high supervisory standards.
SSM is open to all non-euro area Member States.

Governance structure : a separate
Supervisory Board s
upported by a steering committee, the ECB Governing Council with the right to object to Supervisory Decisions from the Board, and a mediation panel. Clear separation between the ECB's monetary tasks and supervisory tasks is fully ensured.

Single Resolution Mechanism (15 April 2014)
: Apply the substantive rules of the draft Bank Recovery and Resolution Directive thanks to
a Single Resolution Board
and common resolution financing arrangements including a
Single Resolution Fund
.

The SSM is governed by two texts:
a Single Resolution Mechanism regulation
covering the main aspects of the mechanism and an
intergovernmental agreement (IGA)
related to some specific aspects of the
Single Resolution Fund (SRF)
.
6.1. Historical evolution
Free movement of goods

Tariff
disarmament
thanks
to the customs union (July 1968)
eliminated
customs barriers to intraCommunity trade

Technical obstacles : disparity of the legislation within the original Community: producers to manufacture different components, increase production lines, diversify stocks according to country of destination...

Articles 28 and 29 TFEU safeguarded by Article 258 TFEU

Adoption of the
directives establishing the single market
solved major problem

Restrictions
: 36 TFEU allows restrictions on imports
public morality, policy or security,
must not constitute disguised restrictions on trade
ECJ: "a desire to ensure the survival of a company cannot be a justification founded on this Article" [case 324/93].


Obstacles against FMG
custom duties or charges
Taxes
Imposing quotas
Aids of State
Competition Law : Collusion
Art. 30 -> Duties and charges also MEE and CEE are prohibited
Permitted if they are related to a service provided in the border
6.2. Free movement of goods
Freedom to provide services


Article 56 TFEU
: restrictions on "freedom to provide services" within the Union are prohibited in respect of nationals of MS other than that of the person for whom the services are intended. Any discrimination (nationality) is prohibited (directly).

Directive on the recognition of professional qualification

Services Directive
general legal framework facilitating the exercise of the freedom of establishment for service providers and the free movement of services [Directive 2006/123].

Definition of service vs permanent establishment
. Article 57 TFEU, services (remuneration), not governed by the provisions relating goods, capital and persons.

activity limited in time
, against payment and with foreign aspect. e service provider may temporarily pursue his activity in the State where the service is provided
Article 57(3) TFEU. May be of a long
duration
.
Acquisition of real estate in the country of provision of services is allowed


The ECJ (
3 December 1974 in the Van Binsbergen case
) established the direct applicability of the prohibition on discrimination in respect of the provision of services.
6.3. Free movement of services
6.3. Free movement persons and workers
Freedom of capital movement

Article 63 TFEU

Directive 88/361 and EEA Agreement ensure the full liberalisation of capital movements

Applicable under certain conditions, to six categories of payment service providers:
- credit institutions,
- electronic money institutions,
- post office giro institutions,
- payment institutions within the meaning of the Directive,
- the ECB and national central banks and MS or their regional or local authorities

All restrictions on capital movements between persons (natural or legal) resident were removed

Monetary and quasi-monetary operations (financial loans and credits, operations in current and deposit accounts and operations in securities and other instruments normally dealt in on the money market) in particular were liberalised

Directive 2007/64 harmonises the
legal frame of payment services
in the EU, including the conditions of information as well as the rights and obligations of the parts.
Payments sector developed infrastructures, procedures, common rules and standards needed for a pan-European payment system which reduce the cost of payments and enhance safety and efficiency.

Registration system based on a license granted by the competent authority of the MS of origin. This registration should enable payment service providers to operate in other MS, either by free provision of services or by setting up a branch.

Horizontal effect

There are exceptions: art. 65 TFEU
, but these cannot be discriminatory or arbitrary
6.4. Free movement of capitals

Positive integration
: Difference in regulation may create barriers:
Harmonization (114 and 155 TFEU): Requires unanimity in the CMi, if no other (43, 50, 53, 91 apply)
Article 114(4) TFEU: Very controversial

Difficult and intrusive

Art. 27 TFEU "least possible disturbance"
Negative integration: Prohibit norms that discriminate or hinder trade
- deregulation
- mutual recognition : Cassis de Dijon

There are limits to integration (Tobacco Advertising Directive): Now, Plain Packaging Directive

Old approach, v.
New approach to Harmonization

MS are required to notify the EC of any TBT (remember the CIA Belgian case?)
Spread the voice about mutual recognition: include clauses in internal laws
Control how (and when) MS are able to derogate from free movement
European Standardization bodies and structures
Since 2008: wide consultation strategy
Free movement of workers
Article 21 TFEU gives every citizen of the Union the right to move and reside freely within the territory of the Member States.

A right of residence there by direct application of Article 21(1) TFEU [Case C-413/99]

Freedom of movement may contribute to the attainment of the objectives of the common market, while giving more flexibility and thus greater efficiency to the labour market

Disadvantages such as the impoverishment of regions of emigration



Discriminatory taxes

If a measure is not considered under art. 30 TFEU...

Internal taxation can lead to the same situation as border measures

Prohibition of direct discrimination: those not applicable to nationals /or foreingers

on indirect discrimination: intrinsically only applied to foreigners
Humblot case: 16CV cars in France

Differential taxation is permitted
Italy, Chemial Farmaceuti case
Article 110(1) v. article 110(2) TFEU: similar products
The determination of likeness
The determination of "protective effect"




Measures with an equivalent effect (MEE)

ECJ case law excluded discrimination: change of paradigma. Discrimination v. recognition

Essential case: Dassonville
Effect, and not intention

The list of tantamount measures is broad
- promotion of domestic products
- rules of origin (marking): only acceptable if it implies a feature of the product
- regulation of public procurement
- administrative practices that systematically difficult foreigners from having access to certification /licensing

Also, there were measures that were not applied to imports (indistinctly)
- Mutual recognition unless mandatory requirements existed (Cassis de Dijon)

It does not apply when the measure is a dual-burden (Keck)


Exceptions
Art 36 TFEU

Public Morality
MS will have to show that the norm is not discriminatory
Henn and Darby
Opposite conclusion in Conegate

Public Policy
Cullect v. Centre leclerc: Minumum oil prices based on French production

Public Security
Campus Oil: Irish Oil production

Protection of health, animals, etc
Harmonization v. Scientific evidence, the Sandoz case

Defences against indistinctly applicable measures: Mandatory Requirements
Definition of service?
4 types of service
Those of a mixed nature: Schindler Case (ancillary good in a lottery)
Scnithzer: Service v. Establishment
Remuneration
charity?
Humbel case
Corporate structure?
The
official authority exception
and the
Reyners
case


Restrictions
: equally applicable, proportional, justified onl egitimate interest.
Arblade
Gebhard
: a German
avvocato.
Equivalence of goods (Dassonville), persons (Bosman) Services (Alpine Investments): Read
para 37
No need for discrimination

Alpine Investments: useful both for freedom and for tantamout measures


Horizontal effect?
This come from the discussion of applicability to Art. 45 TFEU, Bosman Case
Koch case: any institution with a regulatory aim
Freedom of establishment

Art. 49 TFEU together with articles 51 to 54 (establishment of companies)
Removal of restrictions on the provision of services by maintaining permanent settled place
it covers any treatment, and not only national treatment
Then, what would happen to the national? Reverse discrimination

Reyners
case: Dutch national, Belgian Lawyer
Exceptions contained in Art. 52 TFEU

Gebhard case (paras 25 to 27): stable and continuous basis

it is an exception to the exercise of public power (Art. 51 TFEU): Reyners case

Other exceptions
Public order
Public security
Public health
General interest (professionales, deonthology, consumer protection, etc.

Restrictions?
Citizenship of the EU

Maastricht: Political Union
Rights held as long as the nationality of a MS is maintained
Rottmann
case: Lost Austrian nationality when acquiring German nationality, then lost German: governed by national law, but has to be examined under EU principle of proportionality

Articles 20-25 TFEU
Directive 2004/38: both workers and self employed

ECJ decisions:
- explicitly manifests that citizen rights are independent from movement and residence
- nationality, prohibition of discrimination. Rights of families
Social benefits
Taxation
criminal matters
dual-nationality

Meaning of "
citizenship
"
"fundamental status of nationals of the EU": see article 20 TFEU
Additional to national citizenship
Specific rights: movement, vote, diplomatic protection, petition before EP
Free movement and residence

Articles 21-25 TFEU
Developed under Ordinary legislative procedure
In case of social security: Special legislative procedure: Unanimity plus EP consultation

Direct effect
Certain limitations
Baumblast
case: Colombian family of a German national, after separation, in the UK. Treaty limitations under proportionality

Chen case: Chinese citizen UK resident who gives birth in Ireland. Confirmed Baumblast doctrine:
- Art 20 TFEU is directly applicable and limitations shall apply subject to proportionality principle
Rottmann
case: Lost Austrian nationality when acquiring German nationality, then lost German: governed by national law, but has to be examined under EU principle of proportionality

Applicability to purely internal cases? Ruiz Zambrano v. McCarthy Doctrines

Applicability to

- non economically active persons: Martinez Sala case
- students: Grzelczyk case, students rights in Belgium
-
Job seekers
: Article 45 TFEU

Free movement of workers
Citizenship obviously affected workers
Article 45 TFEU
Regulation 492/2011
Directive 2004/38, basic conditions for entry and exit
ECJ Case law
Discrimination (both direct and indirect) is prohibited

Scope of the protection
Content
Right to move freely to take up employment
Social protection

Exclusions
Purely internal situations
Public service situations
Nationality: Defined under the laws of the MS

Definition of "
worker
"
Hoekstra case (1964) autonomous concept
Levin case: broad definition of worker. Even for part time workers
Lawrie:
- services of economic value
- non self employed
- remuneration in return
Job-seekers
Martinez Sala case
Antonissen: reasonable time


Exceptions

Article 65 TFEU

Never discriminator. Applicable to like situations

Objective justification

- Taxation
However, fiscal coherence shall be applied restrictively
- Supervisory measures
- public policy, public security
Narrowly interpreted. MS have the BoP
The High Representative for Foreign Affairs and Security Policy (HR-VC) and The European External Action Service

Before the Treaty of Lisbon
The previous office of High Representative for the common foreign and security policy was introduced in 1999 (Amsterdam Treaty). It assisted the Council in foreign policy matters, in the External Relations Council configuration:
- Contributing to the formulation, preparation and implementation of policy decisions.
- Acting on behalf of the Council in conducting political dialogue with third parties.
The six-monthly rotating Presidency was in charge, representing the Union in CFSP matters, implementing the decisions taken and for expressing the EU position internationally.

Appointment
The European Council (QM) with the agreement of the President of the EC.
She is subject, together with the President of the EC and the other EC members, to a vote of consent by the EP


Duties

The HRVC (Articles 17 and 28 TEU):
- Conducts the Union's common foreign and security policy;
- Contributes by her proposals to the development of that policy, which she will carry out as mandated by the Council, and ensures implementation of the decisions adopted in this field;
- Presides over the Foreign Affairs Council;
- Is one of the Vice-Presidents of the EC.
o Ensures the consistency of the Union's external action.
o Is responsible within the EC for responsibilities incumbent on it in external relations and for coordinating other aspects of the Union's external action.
- Represents the Union for matters relating to CFSP, conduct political dialogue with third parties on the Union's behalf and expresses the Union's position in international organisations and at international conferences.
- Exercises authority over the European External Action Service and over the Union delegations in third countries and at international organisations.

Duties

European External Action Service (EEAS).
Article 27(3) TEU is the legal basis for the Council decision on the organisation and functioning of the EEAS.
“In fulfilling his mandate, the High Representative shall be assisted by a European External Action Service. This service shall work in cooperation with the diplomatic services of the Member States and shall comprise officials from relevant departments of the General Secretariat of the Council and of the Commission as well as staff seconded from national diplomatic services of the member states. The organisation and functioning of the European External Action Service shall be established by a decision of the Council. The Council shall act on a proposal from the High Representative after consulting the European Parliament and after obtaining the consent of the Commission.”

The European Council agreed on guidelines for the EEAS (doc. 14930/09), inviting the then future HR to present a proposal for the organisation and functioning of the EEAS as soon as possible after the entry into force of the Lisbon Treaty.

Requirements (guidelines)
- a single service under the authority of the HRVC.
- organisational status reflecting and supporting the HRVC
- Composition: 1/3 Council, 1/3 EC, 1/3 Diplomats of the MC.

EU Delegations
Former Commission's delegations became Union delegations under the authority of the HRVC, as part of the EEAS structure.
Delegations contain regular EEAS staff and staff from relevant EC services.
EU delegations will work in close cooperation with diplomatic services of the MC.



EU Law
Institutions and Instruments
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