One of the main achievements of the 2004 Draft Constitution Treaty in its endeavour to simplify European law and, thus, to make it more accessible to EU citizens, would have been the abolition of the three pillars under the common EU roof. Instead, one single EU would have replaced the existing supranational EC. The Union would have pursued both the supranational Community policies as well as the inter-governmental areas of cooperation, such as the CFSP. Also on the international plane, it would have simplified matters because one EU, endowed with international legal personality in Article I-7 CT, would have been able to enter into international agreements with third countries and international organisations. Alas, as things stand now, the adoption of both the Constitution Treaty and the Lisbon Reform Treaty remains unlikely and we have to live with the current complicated structures of an EC, acting on the international level mainly in the field of external trade and concluding various treaties touching upon Community powers, as well as an EU, trying to keep the Member States within the framework of the commonly agreed upon CFSP and within very limited powers of its own.

This final chapter tries to provide a brief overview of the different aspects of the activities of the EC/EU on the international plane.

Gradually establishing the free movement of goods, one of the four freedoms of the internal market, was one of the centre-pieces of early market integration in the EEC. This was pursued by internal and external measures. Article 9(1) of the original 1957 EEC Treaty (now Article 23(1) TEC) provided for the gradual establishment of a customs union between the Member States and a common customs tariff vis-à-vis third countries.

Internally, a customs union requires the elimination of customs duties and ‘charges having equivalent effect’ (Article 25 TEC) as well as of discriminatory or protectionist internal taxes (Article 90 TEC), plus the elimination of quantitative restrictions on imports and exports and ‘measures having equivalent effect’ (Articles 28 and 29 TEC).

Externally, the Common Customs Tariff is fixed by EC legislation in the form of Council regulations, which have been regularly updated since 1968. The Common Customs Tariff forms part of the Community's exclusive powers in the field of the Common Commercial Policy.

However, the establishment of a true internal market for goods freely circulating within the entire area of the EU was not only a ‘legislative’ task, pursued by rule-making through treaty norms as well as secondary legislation in the form of harmonisation directives and regulations. To a large extent, the common market is the ‘product’ of the ECJ.

The initial European Economic Community was largely about the creation of a Common Market, comprising a customs union and providing for the unhampered free movement of goods, persons, services and capital. Over the years, Community competences have been considerably extended into other fields, called policies in EC jargon. This chapter will briefly address those Community policies which have gained significantly in importance, such as the Common Agricultural Policy (CAP), environmental and social policy, with particular regard to non-discrimination issues. All were hardly visible in the original TEC and grew only as a consequence of judge-made law, Community legislation and Treaty amendments.

What are the objectives of the CAP?

According to Article 33(1) TEC the aims of CAP are:

1. (a) to increase productivity;

2. (b) to ensure a fair standard of living for the agricultural community;

3. (c) to stabilise markets;

4. (d) to ensure the availability of supplies; and

5. (e) to ensure reasonable prices for consumers.

Under the so-called lex specialis principle, which provides that specialised rules prevail over more general ones, CAP rules take precedence over other Treaty rules, such as those on the free movement of goods. According to Article 32(1) TEC, the CAP applies to agricultural products defined as ‘products of the soil, of stock farming and of fisheries and products of first-stage processing directly related to these products’.

To a considerable degree EC law has been shaped by the European Court of Justice (ECJ). The Court has rightly been called a ‘motor of integration’ because, in the years of Euroscepticism and political standstill on the question of ‘deepening’ the Community, it has largely created the ‘acquis communautaire’. Its case law, in particular in the field of the four freedoms, has made a significant contribution to the harmonisation and mutual recognition of national standards which, in turn, was essential for the creation of a true internal market.

The Court was able to attain this crucial role as a ‘quasi-lawmaker’ because of its broad jurisdictional powers. In fact, the ECJ acts as ‘constitutional court’ of the EU exercising ‘judicial review’ over both the EU/EC and its Member States. According to the ECJ's own reasoning in Case 294/83 Les Verts v. Parliament [1986] ECR 1356, the Community is:

For centuries, the history of the small continent, or quasi-continent, of Europe has been a history of war and peace, where rival political entities, predominantly in the form of nation-states, have tried to dominate each other. The terrible twentieth-century experience of two World Wars, fought mainly on European territory, provided the necessary impetus to seek alternative ways of political survival, co-existence, or even cooperation. In its historic context, European integration must be understood as an attempt primarily motivated by the desire to secure peace and stability through establishing appropriate institutions. The institutions created in post-war Europe were based on ideas, partly dating back to the Middle Ages. However, it was the situation after 1945 which made it possible to think about actually setting up new structures which would make war in Europe, if not impossible, then at least less likely. The creation of a European Coal and Steel Community (ECSC) in 1951, by which two strategically important industry sectors of rival nations like France and Germany were pooled, was such an important and highly pragmatic first step. It was soon followed by the establishment of two further organisations, the European Economic Community (EEC) and the European Atomic Energy Community (EURATOM) in 1957, which were designed as open regional organisations with a long-term goal of a yet undefined European unity.

In addition to the effective implementation of the free movement of goods, characteristic of a customs union, the Community has always aimed at guaranteeing the free movement of persons in order to create a true internal market. This ‘internal market’ is defined in Article 14(2) TEC as ‘an area without internal borders in which the free movement of goods, persons, services and capital is ensured’. The history of the EC/EU is the history of the gradual implementation of these so-called four freedoms which follows a similar regulatory pattern, that is, ensuring non-discrimination and eliminating intra-Community restrictions by Member States.

This chapter will provide an overview on the Community rules on the free movement of natural and legal persons, that is, individuals and companies. They originate in three sets of Treaty provisions: the free movement of ‘workers’; the freedom of establishment; and the freedom to provide services. The resulting, rather narrow economic rights have been broadened through the case law of the ECJ and secondary Community legislation, which has almost led to a general right of free movement. The Luxembourg Court did so by broadly interpreting the entitlements contained in Treaty provisions and by gradually restricting the powers of Member States to limit these rights.

Is there a general right to free movement for all EU citizens?

The Maastricht Treaty introduced the concept of Community citizenship which, according to Article 17 TEC, derives from and complements the nationality of the Member States.

This little book owes its existence to a number of factors, most importantly the persistent requests of my students both at the Bologna Center of Johns Hopkins University and at Bocconi University in Milan for a simple and readable, and preferably short, introduction to the law of the European Union. It was, and remains, a particular challenge to teach EU/EC law in institutions with mostly economics and political science students, who are not always wholly enthusiastic about learning the law. That made me realise that there is a lack of available academic resources for this particular purpose. Of course, there are the excellent treatises by Craig and De Burca on EU Law, now already in its fourth edition (2008), and the European Union Law by Chalmers, Hadjiemmanuil, Monti and Tomkins (2006), as well as a number of other first-rate law books – needless to say, not always a light fare even for law students. The students at my home law school at the University of Vienna equally demanded access to learning the law in a most time-efficient manner.

Being brief on EU law is, of course, like squaring the circle, with the additional, hermeneutic complication that it is almost impossible to understand anything fully without first understanding everything, at least a little. This book has been written against all these odds.

The initial Community treaties establishing the ECSC, the EEC and EURATOM did not contain any fundamental rights provisions at all. The 1953 Draft Treaty embodying the Statute of a European Political Community envisaged human rights protection as a major task and proposed to incorporate the European Convention on Human Rights (ECHR), a treaty concluded by many European states in 1950 under the auspices of the Council of Europe and enforced by the European Court of Human Rights (ECtHR) in Strasbourg. After the plans for a European Defence Community were buried by the French National Assembly in 1954, this idea also became obsolete. With the resurgence of the ‘functionalist approach’, culminating in the 1957 Rome Treaties, the view prevailed that the economic integration now pursued did not warrant the inclusion of human rights guarantees.

With the growth of Community activities, however, the likelihood of infringement of fundamental rights also increased. Clearly, the extension of Community law into many fields beyond the core aspects of the four freedoms was not a wholly unintended ‘spill-over effect’ of economic integration. This tendency was reinforced by the specific development of EC law, in particular of direct effect and supremacy in such landmark cases as Van Gend en Loos and Costa v. ENEL. Both direct effect and supremacy increase the probability that it is EC law itself and not any national implementation of Community obligations that may infringe human rights.

Community law, that is, the treaties and secondary law made according to the different legislative procedures, is directly applied and enforced by EU institutions only exceptionally. The most important exception relates to the Commission's power to enforce EC competition law (Articles 81 and 82 TEC, as well as Regulation 17, now Regulation 1/2003). In addition, the Commission also exercises other treaty-based or delegated powers.

Most Community law, however, is applied and enforced in a decentralised fashion by national authorities. As a rule, the courts and administrative agencies of the Member States apply and enforce ‘directly applicable’ EC law as well as nationally implemented non-directly applicable Community law.

This chapter will explain how the European Court of Justice has made Community law ever more effective by declaring not only regulations, but also Treaty provisions and provisions in directives – under certain circumstances – directly applicable/effective in the legal systems of the Member States.

What do we understand by ‘direct effect’?

A norm of international or supranational law is said to have ‘direct effect’ if it is sufficiently clear, precise and unconditional to be invoked before national courts or administrative agencies.

In EC law ‘direct effect’ may attach to provisions of the Treaty, of international agreements of the Community and secondary legislation, including, under certain circumstances, even to directives.