Introduction

In his Opinion in the Federutility case, Advocate General Colomer observed that:

Introduction

As demonstrated in the last chapters, through its early rulings in Van Gend en Loos and Costa v. ENEL the Court of Justice (ECJ) had created a European economic constitution. It was revolutionary in the sense that, through this constitution, a unique legal system was created which proved to be a powerful means of pushing forward liberalisation and economic integration. The famous cases Viking, Laval and Rüffert, however, demonstrated the inability of this constitution to defend social norms in the same manner and raised the question as to whether and how the EU’s economic dimension can be realigned with a social one. This chapter explores this issue taking a different field as a starting point: European company law. It is an area in which harmonisation attempts are nearly as old as Van Gend en Loos and the academic discussions even older. While the clear objective of company law is to support profit maximisation, another goal is to regulate the diverging interests between shareholders, managers, creditors and employees. In the EU, several national models exist which afford different degrees of influence and levels of safeguards to those constituencies. Whilst the German approach of a social market economy provides more influence to employees, the Anglo-Saxon liberal model in the UK grants more power to shareholders. European company law is therefore required to incorporate these contrasting social and economic approaches.

Introduction

Tensions between the economic and the social dimensions of European integration are being perceived as increasing, and so is the potential for conflict between national and European levels of policy-making. Both are well illustrated by a highly controversial line of Court of Justice of the European Union (ECJ) cases on industrial relations: Viking and Laval have become symbols for the continuing dominance of the economic over the social dimension of European integration and for an increasing tendency of the EU to diminish national autonomy. As one consequence, demands to protect Member States’ social policy choices from EU law pressures arise. For such demands to be tenable, isolation of national and EU policy-making and of economic and social dimensions of European integration would have to be possible. This is arguably not the case. Economic and social dimensions of integration will thus have to be reconciled across EU and national levels, if the EU and its Member States are to maintain the ability of enhancing social justice against the pulls of economic globalisation.

Introduction

While the asymmetry of the economic and social dimension of the European integration project has been thoroughly analysed and documented, it remains open as to what could and should be done to achieve a more balanced integration process. In particular, it is disputed whether related efforts should focus on the national or supranational level and whether these efforts should be of a regulatory or soft-law nature. With regulation having become more difficult after the Eastern enlargement rounds, considerable attention has been directed towards so-called new modes of governance, in particular the open method of co-ordination (OMC). Another instrument that emerged on the EU agenda in the context of the Lisbon Strategy in 2000 is ‘corporate social responsibility’ (CSR). The aim of CSR is to call upon firms’ sense of responsibility to contribute to certain social standards, to social cohesion, to environmental awareness or sustainable development. CSR could thus be seen as an attempt to balance the economic and social dimensions of the European integration project. This chapter asks, in an explorative way, in how far a European CSR policy that would work in favour of the social dimension is possible in light of the institutional differences between Member States.

Introduction

Ten years ago the Lisbon Strategy proclaimed that the EU was to become ‘the most dynamic and competitive knowledge-based economy in the world’. In order to guarantee sustainable economic growth, full employment and an increase of highly skilled labour participants is considered to be essential. Beyond this, international migration must also be regarded in its global context, both socially and economically. From economists’ perspectives, liberalisation of migration will achieve greater welfare benefits than liberalisation of trade in goods and services and of capital flows.

In the light of Europe’s declining fertility rates and an ageing population, the Member States and the EU, specifically in the 2009 Stockholm Programme, have argued in favour of a more demand-driven immigration policy even in a period of economic crisis. At the same time, the idea of temporary and specifically circular labour migration has regained increasing popularity.

Preface

This book results from a ‘Multilateral Jean Monnet Research Group’ called ‘European Economic and Social Constitutionalism after the Treaty of Lisbon: an Interdisciplinary Perspective’, which took up its work in September 2008. The idea for the group originated in collaborations between Hildegard Schneider and Dagmar Schiek within the framework of the IUS COMMUNE research school, where both had attempted to establish a research focus ‘Economic and Social Constitutionalism’, as well as in the contacts between Ulrike Liebert and Dagmar Schiek, who had been working at neighbouring universities for quite a while, often noticing that they had some overlap in research interests, but not succeeding in teaming up for research.

Introduction

The most recent global financial and economic crisis has accelerated the European Union to a crossroads where it can either strengthen or fall apart. Amidst the contemporary capitalist constellation, achievements of several decades of economic and social integration are at stake. Hence, after a decade-long contentious EU Treaty reform, the newly enacted Lisbon Treaty has to prove itself under quite unfavourable conditions. Faced with failing markets and states, many suspect the EU under the new Lisbon rules of seeking to further empower ‘Market Europe’ while others are concerned it might unduly advance a burdensome supranational ‘European social polity’. As a matter of fact, European integration has been shaped by the ‘competitive fight for survival’ between these two paradigms of a legitimate social and economic order at least since the 1980s. While the economic liberalistic project has been striving for monetary unification and financial rigidity, the social solidarity venture has sought to promote a ‘Social Europe’ with redistributive ambitions, albeit ‘less in financial terms than in terms of equal standards and political co-ordination’. Moreover, in the complex multilayered EU, tensions between national and EU levels have grown over the years, ‘as economic decision-making has increasingly moved upwards towards the EU level while social politics and identity have largely remained national, along with the mechanisms of electoral sanctions’.

This introduction contextualises the hypothesis of the two-year research project on which this book is based, and explains how the single chapters relate to this hypothesis. The reader will see that we are opening a new debate with new questions, which still await definite answers.

Introduction

Writing in 2002, Fritz Scharpf warned: ‘the only thing that stands between the Scandinavian welfare state and the market is not a vote in the Council of Ministers or in the European Parliament, but merely the initiation of . . . legal action by potential private competitors before a national court that is then referred to the European Court of Justice for a preliminary opinion. In other words, it may happen one day’. The day appeared to come with the referral of two cases to the Court of Justice of the European Union (ECJ) in 2005: Laval and Viking. At issue in each case was whether industrial actions by unions to force firms to abide by nationally negotiated collective agreements constituted an infringement of free movement of services. Coming in the wake of contentious battles over the Services Directive and in ongoing political negotiations leading up to Lisbon, the cases attracted a great deal of attention as to how the Court would reconcile these competing economic and social demands. Moreover, given that the cases involved employers based in old Member States (Sweden and Finland) seeking to employ workers from new Member States (Latvia and Estonia), the cases also exacerbated ongoing concerns that eastward enlargement would spur a race-to-the-bottom in wages and social protections. With the ECJ ultimately ruling in favour of the employers the cases appeared to vindicate concerns raised by Scharpf and others that direct interventions by the courts pose the most significant threat to existing national socio-legal frameworks.

Introduction

The project of ‘European economic integration’ has never been an end in itself. Economic integration has, on the contrary, always been considered an instrument to attain non-economic goals. Economic rule-making should in that respect facilitate and promote the realisation of non-economic objectives, including the protection of weaker (contract) parties, protection of the environment or prevention of climate change and protection of fundamental social rights.

Finding the right balance between non-economic goals and purely economic objectives in principle remains a matter for political decision-making. Political balancing is nevertheless said to take place within the confines of a European economic constitution framework. This chapter discusses and assesses that framework in the current stage of European integration.

Introduction

It is commonplace that directly applicable EU Treaty law exerts influence on various social fields at national level, including healthcare. There has been ample debate about the impact of free movement rights and public healthcare systems, recently complemented by an analysis of the relationship between public healthcare and EU competition law. This case study aims to highlight a different aspect of the tensions between social and economic dimensions of European integration. By providing healthcare as a service of general interest, some Member States have taken recourse to the ‘third sector’, consisting of not-for-profit organisations offering social services based on a specific ethos. At the same time, a need to respond to ever diversifying social demands has developed. Co-operating with not-for-profit organisations as service providers as well as including them in the process of conceptualising services may be one way to respond to this. Such inclusion can be perceived as enhancing social integration through active civil society participation – a strategy which may also be suitable to enhance social dimensions of European integration.