INTRODUCTION

This chapter considers EU criminal law. It is organised as follows.

Section 2 considers the central traits of EU criminal law. EU criminal law is subject to particular sensitivities. In the first place, it is constrained by the requirements in Article 4(2) TEU that it respect essential Member State functions maintaining law and order and that national security be the sole responsibility of each Member State. In the second place, prior to the Lisbon Treaty it was subject to arrangements, which were predominantly intergovernmental in nature. This has left a legacy in that it still relies heavily on legal instruments from that period, notably Framework Decisions. Thirdly, a number of additional institutional checks are deployed to patrol it. Member States, when there are one-quarter of them, share the power of initiative with the Commission. ‘Emergency brake’ procedures allow any Member State to refer a proposal affecting fundamental aspects of its criminal justice system to the European Council. One-quarter of national parliaments (rather than one-third elsewhere) can ask the Commission to reconsider a proposal for failure to comply with the subsidiarity principle. Finally, this field is strongly marked by differentiated integration. Denmark does not participate in measures adopted since the Lisbon Treaty, and the United Kingdom and Ireland can choose whether or not to participate. Notwithstanding this, an EU criminal legal order has emerged, centred on two rationales. The first involves taking collective measures which augment the security of Member States, individually and collectively. The second is a European public order based around certain shared interests and values. These include the development of certain pan-Union crimes, the use of criminal law to secure the regulatory effectiveness of other EU policies, and the establishment of pan-Union rights for the victims of crime.

INTRODUCTION

This chapter sets out the central features of the European integration process, which provide the historical and political context for European Union law. It also introduces some of the central concepts, ideas and developments in EU law.

Section 2 explores how EU law is centred around an interplay between two themes. The first is the government of many contemporary problems through law. The second is the development of the ideals of Europe and European union. This interplay lays the ground for many of its debates. The European ideal conceives of Europe as the central place of progress, learning and civilisation, placing faith in humanity and its capacity to improve. Its dark side is its arrogance and its dismissal of ‘un-European’ ways of life or thought as violating these virtues. The idea of European union sets up a political community in competition with the nation-state but one, nevertheless, through which government policy is carried out.

Section 3 considers the establishment of the three Communities, the European Economic Community (EEC), the European Coal and Steel Community (ECSC) and the European Atomic Energy Community (EURATOM). It sets out the central institutions: the Commission, the Parliament, the Council and the Court of Justice. It also considers the central policies, most notably the common market. This section also compares two developments of the 1960s that set out the two dominant models of political authority in EU law: the Luxembourg Accords which set out an intergovernmental vision with political authority and democracy vested in the nation-state, and Van Gend en Loos which set out a supranational one in which these are vested in supranational institutions and the rights of European citizens. Finally, this section evaluates the Single European Act (SEA). This established the internal market, and transformed the legislative and political culture surrounding the European Communities by setting out both an ambitious legislative programme and providing for significant amounts of legislation to be adopted free from the national veto.

INTRODUCTION

This chapter considers economic and monetary union. It is organised in the following manner.

Section 2 considers the initial template for economic and monetary union. There are four elements to this template. There is to be, first, free movement of capital between Member States and between Member States and non-EU states. Secondly, an independent European Central Bank (ECB) is to have the exclusive right to authorise the issue of a single currency, the euro. Thirdly, states commit not to incur excessive government deficits. This is to be policed by a preventive mechanism in which the Council monitors medium-term budgetary policy by states, and a corrective mechanism, the Excessive Deficit Procedure, which allows the sanctioning of a Member State for running an excessive deficit. Fourthly, there is to be coordination of economic policy.

Section 3 considers the system of differentiated integration brought about by economic and monetary union. From 1 January 2014, eighteen Member States have the euro as the currency. Member States have, however, to meet certain criteria, the Convergence Criteria, before they can participate in the euro. Eight Member States, known as ‘states with a derogation’, have not met these criteria. In addition, Denmark and the United Kingdom have Protocols which allow them not to participate in the euro. Free movement of capital provisions apply to these ten states and they also participate in economic policy coordination. However, they are neither bound by ECB measures nor any Union measure which sanctions national governments in this field of activity for weak economic or fiscal performance. They can, furthermore, neither participate in ECB decision-making nor in the Euro Group, a group of euro area Finance Ministers who consider coordination of economic policy in relation to the euro.

INTRODUCTION

This chapter is about derogations from free movement, and their review by the Court of Justice. These derogations exist to protect important national interests – public goods – but they can also be used to disguise protectionism, which is why they are usually quite strictly reviewed.

Section 2 provides an introduction to the themes and context of the Treaty derogations. These Articles are at the heart of one of the most important current debates: whether globalisation unavoidably threatens non-economic interests and values, or whether reconciliation or compromise is possible. The Court uses a range of ideas and principles, from transparency to a margin of appreciation, in its search for the right approach.

Section 3 addresses the range of public goods which the Treaty protects. The explicit derogations are brief and limited, but the Court has extended them with its invention of the mandatory requirement, or the general public interest objective. The range of justifications which may be relied upon to restrict movement is now very broad, and only protectionist reasons, or purely economic reasons, have been excluded. This latter category is problematic: the distinction between an economic and a non-economic interest is often not clear. For example protecting national budgets protects the health of public institutions, and so also protects interests such as public health and public security.

Section 4 is about the principles governing derogations. The Court will critically examine whether they are truly necessary, or whether the goals could be achieved by less restrictive measures. In making this decision it is influenced by the coherence of national policy: if the Member State shows itself to be inconsistent in protecting a particular interest then this undermines its claim that the threat is serious and action is necessary. This, however, ignores the political compromises which legislation and policy-making entail. Consistency may not always be a feasible governmental goal. In deciding whether less restrictive measures could be adopted the Court may itself investigate the question, or instruct the national court to, or it may adopt a procedural approach and ask whether the Member State adequately investigated other possibilities before it acted.

INTRODUCTION

This chapter considers the treatment of non-EU nationals by EU law. It is organised as follows.

Section 2 looks at the central Union competences, Articles 77–79 TFEU, which provide for EU law to be adopted in the fields of border checks, asylum and immigration, respectively. Although subject, since the Lisbon Treaty, to the legislative and judicial procedures associated with others TFEU competences, this field is marked strongly by differentiated integration. The Protocol on United Kingdom and Ireland gives these states the right to decide whether to participate in the legislation. A Protocol on Denmark provides that any measure adopted in this field will only bind it as a matter of international law. The Protocols, however, compete with the Protocol on the Schengen Acquis. This allows the Union to adopt EU law developing the acquis implementing the 1985 and 1990 Schengen Conventions, which provide for common external frontiers, visa, immigration and asylum policies. This Protocol prevails over the other Protocol. Ireland and the United Kingdom are not signatories to these Conventions and can only participate in the development of such measures when all other members agree. There is a lack of clarity as to when EU law develops the Schengen Acquis, with only border control and visa policy so far being held to do this.

INTRODUCTION

As we noted in Chapter 16 one of the results of economic and monetary union is that the EU has considerable influence in national budgets. In this chapter we consider a specific power that the Union has had since the very beginning to control state spending: those rules that prohibit Member States from granting economic advantages to firms. In trade law, these forms of intervention go under the name of subsidies. In contrast, the EU refers to state aids because, as we show below, this term allows one to control a wider range of state intervention, for example tax exemptions or loans on preferential terms. These powers are highly controversial because they control the way states use their budgets to pursue their economic and social policies.

In Section 2 we summarise the state aid rules and place them in context. Here we note that the rules make little sense when seen as part of the competition law family and make more sense if they are seen as complementing the provisions of the Treaty pertaining to the internal market. However, even then the rationale for state aid law is perhaps best explained either by paternalism or by political considerations. We also identify the key policy considerations that have informed the Commission, in particular the most recent initiatives (the State Aid Action Plan of 2005 and State Aid Modernisation of 2012) that are designed to strengthen state aid enforcement, on the one hand, and enhance the EU’s industrial policy, on the other.

INTRODUCTION

This chapter considers judicial review by the Court of Justice. It is organised as follows.

Section 2 considers the scope of Article 263 TFEU, the central provision governing direct actions for judicial review of Union measures. It can be invoked against all EU institutions, agencies, offices and bodies. The measures susceptible to review include not just formal legal acts but any measure intended to produce legal effects. The latter will be any measure which is definitive, the culmination of an institutional process, and produces a change in the applicant’s legal situation.

Section 3 considers the grounds for review. A measure will be annulled, first, if the EU institution does not have the formal competence to adopt it. Review is possible, secondly, if the institution misuses its power. This may be an abuse of power where a power is used for purposes other than that for which it was granted. More common is a manifest error of assessment. This requires Union measures to be substantiated by the evidence provided, and for that evidence to be accurate, reliable, consistent and sufficiently complete. The third heading of review involves rights of process. These include rights to defence where EU measures will lead to sanction; the right to a hearing where one’s interests are adversely restricted by a Union measure; and finally, the right to administration of one’s affairs with due care by the EU institutions. The final heading of review is infringement of the Treaties or any rule of law relating to its application. This includes breach of any substantive provision of EU law and violation of fundamental rights. It also encompasses EU legal principles developed by the Court of Justice, namely, non-discrimination, proportionality, legal certainty and protection of legitimate expectations.

The cover of this book portrays the Myth of Europa. The story has it that Europa, a Phoenician princess, was abducted by Zeus, the god of thunder, disguised as a bull. Zeus had been searching for a wife beautiful enough to become Queen of his native Crete. When he saw Europa he was smitten. Europa was gathering flowers by the seaside with her friends when she came upon the bull. Uncommonly gentle, the bull inspired no fear. Decking its horns with flowers, Europa climbed upon its back, whereupon the bull – Zeus – took off at a trot and dived into the sea. Europa was carried off to Crete, where she became the mother of Minos, the mythical King of Crete, who periodically demanded a tribute of young men and women of Athens to be sacrificed to the Minotaur.

This myth has not died with the ancients. In 1956, the six countries that were to sign the EEC Treaty appropriated her name to issue a set of Europa stamps to symbolise a community of interests and objectives. And today, Zeus’s kidnap of Europa is depicted on the Greek 2 euro coin. The myth has been understood in a variety of ways. On one level it is a story of virtue, innocence and romance; on another, it is a warning of violence and exclusion. As with many of the ancient myths, misunderstanding and contestation lie at its very heart. The Roman depiction on our cover is one of the first depictions and, insofar as the human participants are depicted as Romans, reminds us too that the myth has been repeatedly appropriated and reinvented. We have also here a tale with its origins in modern Lebanon, which was told by the Ancient Greeks, and which then became a central fable of Ancient Rome. Yet Europa’s myth is now seen as the origin of a territory whose cultural heartland lies somewhere in central Europe, Mitteleuropa, perhaps in the modern Czech Republic, perhaps in Vienna, but certainly somewhere in a nation that became a Member State of the European Union only very recently.

INTRODUCTION

This chapter provides an overview of what the internal market is, and the current debates about what it should be. It provides background and context to the chapters on free movement which follow. The chapter is organised as follows.

Section 2 sets out the purposes of the internal market. Primarily, the internal market aims to integrate the national markets of the Member States into a single European market. It does this by removing regulatory barriers to trade between states. The reasons for pursuing this project are partly economic, but also social and political: for some, the market entrenches a form of individualism (ordoliberalism) that has strong roots in continental European philosophy, while for others, its main benefit is that it sucks Member States into deeper integration in other areas. More recently, it has come to be seen by many as a regulatory project, balancing social and economic interests.

Section 3 considers the legal tools used to build the internal market and the concepts underlying them. As well as free trade, a central idea in the internal market is that of ‘undistorted competition’. If states have different rules on matters relevant to industry (for example, environmental or labour law), then companies in states with low regulatory burdens will have an advantage. This may be economically problematic, but is also seen as unfair. Harmonisation often aims to remove such distortions.

INTRODUCTION

Article 63 TFEU deals with the free movement of capital and of payments. The former concept describes any kind of investments in bonds, shares or real estate as well as loans, gifts, inheritances and other transfers. The latter describes transactions that constitute remuneration for goods, employed or self-employed services or capital provided, and therefore are a necessary correlate to the other Treaty freedoms.

While the free movement of capital was not fully implemented until the late 1980s, the movement of payments was already liberalized in the decade that followed the signature of the Treaty of Rome. Article 106 EEC required Member States “to authorise, in the currency of the Member State in which the creditor or the beneficiary resides, any payments connected with the movement of goods, services or capital, and any transfers of capital and earnings, to the extent that the movement of goods, services, capital and persons between Member States has been liberalised pursuant to this Treaty.” As the Treaty freedoms had to be realized by the end of the transitional period in 1969, Member States could no longer restrict the movement of payments from this point onward.

INTRODUCTION

This chapter is about the right to pursue an occupation in another Member State. It is organised as follows.

Section 2 outlines the scope of this right. Article 45 TFEU provides a right to work in other Member States, while Article 49 TFEU provides a right to self-employment in other Member States. While these are separate Treaty provisions, the Court of Justice often interprets them in parallel. Beneficiaries are EU citizens (and companies in the case of Article 49) who engage in a more than marginal economic activity with some cross-border element. If the subject lives in one state and works in another, this is sufficiently cross-border.

Section 3 considers national measures which restrict access to an occupation. In the past, certain professions were often restricted to nationals, but more recent cases tend to concern refusals to recognise foreign qualifications, or measures which make establishment of a business or professional practice subject to various requirements: these may be to do with the legal form of the business, the qualifications of the owner or shareholders, local economic need, or limits on the number of establishments which one person or company may run. The Court of Justice’s approach, as ever, is to permit only those justified by the public interest and proportionate. However, because access restrictions have the effect of excluding some people from labour and business markets, the Court has been strict, and has been prepared to review even non-discriminatory national rules.