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What is the European Union? What does a state need to be a state? A state needs a 3 Element stock tree, and does the EU have those? - State Territory: The EU doesn’t have a Territory that isn’t territory of its members, so when we say there is sth like the EU territory, technicall...

What is the European Union? What does a state need to be a state? A state needs a 3 Element stock tree, and does the EU have those? - State Territory: The EU doesn’t have a Territory that isn’t territory of its members, so when we say there is sth like the EU territory, technically yes, but not in itself, it is somehow transmitted through the member states. - State People (Citizenship): Their isn’t a European citizenship, but you can be a European Citizen. There is a right, that is called a EU Citizenship, which come with rights (Work in any EU Country, can study, you can travel, you can vote for the European Elections and Local Elections like Gemeinderatswahlen) As a EU citizen you can make use of diplomatic protection (If you have Problems abroad and there is no Austrian Embassy, you get help from German embassy). Again there is sth, but its transferred trough the Member state - State Powers (Legislation, system of enforcing the rules): Yes, the EU is legislating, they are making rules. But who told the EU to do this? The Member states, it’s the member states responsibility to tell the EU what they are responsible for. If we want to change the EU Constitution, all 27 Member States have to give the Okey, They are “The Herren der Verträge”. Again there is sth like it, but it’s not a power that comes out of the state of the power itself, it has to come from its members You don’t have a separation of state powers, because the EU is not a state! That’s the problem you have a set of vocabulary you describe states with, and nothing fits with the EU perfectly. The EU is an international Organization, but it has reached such a level of power, that it has many tasks that states have. Which state can be seen as European is not a legal decision, its decided politically. What is the EU? - 27 member states - 1 currency for 20 Eurozone countries+4+2 For example other countries that have the euro but are not members of the EU, but are so called associated with the EU (Monaco, Andorra, Vatican, San Marino (the first 4, they are associated with countries like Vatican with Italy etc.), Montenegro and Kosovo (they politically decided to use the Euro) - 24 official languages - 448 Mio. inhabitants - GDP ca. 17.000B Euro - Annual budget ca. 140B Euro 1 EU! There is no single definition for the European Union, but the Principles are based on: - Supranationality: Sovereign states don’t act out of force but out of their free will, giving a part of their decision making to the EU. (most important word to describe EU) - The EU law: Is different, they give their citizen rights and obligations, that have to be enforced by authorities of all member states. - Principle of subsidiarity means: The smallest closest capable should deal with the problem. ▪ EU may only legislate if specific topic needs a European solution ▪ If possible, to solve on national level EU isn’t allowed to touch it - Principle of solidarity: The rich support the poor. Which means they pay a membership fee, which is paying for poorer countries. o Transfer of money (around 1% of GDP) and is distributed among the member states ▪ net payers and net benefiter - rule of law - Degressive proportionality: The small ones have proportionally more power than the big ones. - The last principle is compromises: It is essential for the EU to talk with all the stakeholders, and come to a solution that all parties somewhat agree with, which usually takes a very long time. Schumann-Declaration „Europe will not be made all at once, or according to a single plan. It will be built through concrete achievements which first create a de facto solidarity.“ The “birth” of the European idea The way countries cooperated was turned upside down. 2 Preamable of the EC-Treaty DETERMINED to lay the foundations of an ever closer union among the peoples of Europe. RESOLVED to ensure the economic and social progress of their countries by eliminating the barriers which divide Europe. RESOLVED by pooling their resources to preserve and strengthen peace and liberty, and calling upon the other peoples of Europe who share their ideal to join in their efforts. − 1952 ECSC–treaty (Paris treaty) enters into force France, Germany, Belgium, Netherlands, Luxemburg, Italy (Founding States) − 1958 EEC–treaty and EAC–treaty enter into force (Rome-treaties) ▪ EEC = European Economic Community ▪ EAC = European Atomic Community − 1973 North enlargement: Accession of UK, Ireland and Denmark − 1975 first referendum if UK should leave − 1981 1. South enlargement: Accession Greece − 1986 2. South enlargement: Accession Spain and Portugal ▪ Those three were young democracies back then The EU won the Nobel Peace Prize in 2012 History II End of war → economic freedoms: internal market The economic freedoms is not the reason why there is the EU, it’s just an instrument. 3 History III End of was → economic freedom: internal market → Maastricht: a political union Was a huge economic union, not a political one, so the result was the Maastricht community. This construction was then called the European Union − There was a letter from President of Austria to President of France, asking to join the union ▪ Frace had EU presidency at this time − 1993 Entry into force Treaty of Maastricht: Creation of European Union − 1995 Accession Austria, Sweden and Finland ▪ Another country signed treaty but afterwards there was a referendum and country did not enter (Norway) − 2004 Accession Estland, Estonia, Latvia, Lithuania, Poland, Czech Republic, Slovakia, Hungary, Slovenia, Malta, Cyprus („Eastern enlargement“) − 2007 Accession Bulgaria and Romania − 2009 Entry into force Lisbon-Treaty ▪ today’s legal foundation for EU are still the treaties of the 50’s and Maastricht which was renewed in the Lisbon-Treaty − 2013 Accession Croatia − 2016 Brexit-Referendum − 2020 Brexit Accession to the EU Art. 49 TEU Any European State which respects the values referred to in Article 2 and is committed to promoting them may apply to become a member of the Union. […] 4 Art. 2 TEU The Union is founded on the values of respect for human dignity, freedom, democracy, equality, the rule of law and respect for human rights, including the rights of persons belonging to minorities. These values are common to the Member States in a society in which pluralism, non-discrimination, tolerance, justice, solidarity and equality between women and men prevail. Accession criteria… Copenhagen Criteria 1993 - Political Criteria - Economic Criteria - Legislative Criteria Nice Criteria 2000 Integration Capacity − Political Criteria ▪ Same as written in Art. 2 of the Treaty ▪ Respect for human rights … − Economic Criteria ▪ State that wants to join must be able to participate in the internal market ▪ Functioning market economy − Legislative Criteria ▪ EU has around 20.000 legislative acts/regulations all of these must be implemented into the legal frame of the country − Nice Criteria ▪ EU must also be able to integrate the countries 5 If all criteria are met should there be a accession? No it’s a political question to, Every member state has to accept it to. They don’t even have to give a reason. …and the other way round…withdrawal - Member state notifies EU: o 2 year period starts o It is only necessary that the country notifies that it wants to leave o Need to be in accordance with the legal system o as soon as country notifies -> period of 2 years starts ▪ agreements need to be signed until then, if not you still leave - European Council: Negotiation Guidelines - Negotiations - Content: o Modalities of withdrawal o Framework for future relations o follow-up agreement - Agreement: o Approval EP o Decision Council with qualified majority (72%+65%) o Member state - 3 possibilities: o Agreement o Extension of Notice Period o Sunset Clause Overview ▪ each important decision in the EU & all legislative acts are made in a corporation of these three institutions (all three are needed) 6 What are institutions? 7 European institutions, 8 EU bodies and over 30 decentralized agencies Cross border Challenges → International Organizations → Transnational Institutions European Commission − president = Ursula van der Leyen − each member state has a commissioner ▪ Austria: Markus Brunner responsible for migration Legal foundation Article 17 TEU 1. The Commission shall promote the general interest of the Union and take appropriate initiatives to that end. It shall ensure the application of the Treaties, and of measures adopted by the institutions pursuant to them. It shall oversee the application of Union law under the control of the Court of Justice of the European Union. It shall execute the budget and manage programmes. It shall exercise coordinating, executive and management functions, as laid down in the Treaties. With the exception of the common foreign and security policy, and other cases provided for in the Treaties, it shall ensure the Union's external representation. It shall initiate the Union's annual and multiannual programming with a view to achieving interinstitutional agreements. 2. Union legislative acts may only be adopted on the basis of a Commission proposal, except where the Treaties provide otherwise. Other acts shall be adopted on the basis of a Commission proposal where the Treaties so provide.[…] They cannot do anything without proposal of the European Commission Characteristics 27 members, 1 member/member state 5 yrs term of office Portfolio system but majority decisions weekly College meetings Staff: 33 DGs, around 24.000 employees (2.300 GD translation) Even though everyone has one topic, the person cannot decide for everyone, they have to have a majority. 7 Appointment Process − European Council proposes a candidate for the President to the EP ▪ happens after election for the European Parliament in the member states − EP elects president ▪ president distributes portfolios ▪ e.g. Austria cannot decide for which area the commissioner is responsible for − Council and president elect list of members designated for one Portfolio − Parliamentary hearing, vote of consent (whole body) by EP − Commission appointed by European Council − Institutional balance ▪ system of checks-and-balances ▪ different institutions must cooperate to form another Commission – Tasks − Monopoly of initiative (Union´s „engine“) ▪ every piece of legislation must start with a proposal of the Commission ▪ right of legislative initiative ▪ important task! − Enforcement of EU Law (e.g. competition, state aid) ▪ investigate if there are any violations in member states ▪ must take it to European Court ▪ safeguard that there is an enforcement of EU Law − Guardian of EU Law − External relations − Commission promotes general interest of the EU − Franz Fischler was first Austrian commissioner (for agriculture) ▪ not responsible (not allowed) to act for the own country not country against country − commissioners decide with majority − represents interest of EU in general ▪ does not serve national interests of single countries Council - Rat der Europäischen Union – Legal foundation Article 16 1. The Council shall, jointly with the European Parliament, exercise legislative and budgetary functions. It shall carry out policy-making and coordinating functions as laid down in the Treaties. 2. The Council shall consist of a representative of each Member State at ministerial level, who may commit the government of the Member State in question and cast its vote. […] 8 Characteristics − 27 members at „ministerial level“ ▪ not always the same members ▪ 10 sub formations if there is a council meeting than the ministers responsible for the topics that are presented − rotating chair - Troika − seat: Brussels − Workflow: working party (150) – COREPER – Council meeting ▪ COREPER = representatives of each member states at the EU − A-Items in Coreper, B-Items in Council − 10 sub-formations − need to be on ministerial level (e.g. members of regional governance (Landesrat, Landeshauptmann)) to be able to be part of the council − head is always the minister of the country which has the chair ▪ now: Hungary Council – Tasks Legislation (Can not legislate alone) Foreign Relations Appointments Coordination Council promotes Member states interest can also sell vote if not important to own country (e.g. fishing for Austria) Decision Making − Simple majority ▪ amount of ministries count ▪ only for procedural things − Unanimity (Einstimmigkeit) ▪ 27 ministers and you need 27 ▪ each state has a veto − Qualified majority ▪ Double majority: 55% und 65% ▪ combines both perspectives ▪ 55% of the member states which represent 65% of EU population ▪ through this bigger member states have a bit more influence ▪ for most decisions 9 − Two perspectives ▪ if EU is organization sovereign equality = one member counts as one big or small doesn’t matter ▪ if EU is something like a state unlogic if bigger states don’t have more power in voting Councils - Council (of Ministers) → for Legislation - European Council → for Political Guidance - Council of Europe → as an International Organization European Council Article 15 TEU The European Council shall provide the Union with the necessary impetus for its development and shall define the general political directions and priorities thereof. It shall not exercise legislative functions Characteristics − Highest political body − Pre-legislative political guidelines and priorities − Composition: Heads of states and governments ▪ head of state is more important (e.g. Lithuania, Romania, France, Cyprus send head of states) − Permanent president − Consensus quorum (exceptions) − not involved in legislation − gives guidelines ▪ legislative institutions need to fulfill − president: Charles Michel European Parliament Legal foundation Article 14 TEU The European Parliament shall, jointly with the Council, exercise legislative and budgetary functions. It shall exercise functions of political control and consultation as laid down in the treaties. It shall elect the President of the Commission. 10 Characteristics - Seat: Strasbourg (…and Brussels…and a bit Luxembourg…) - 720 MEP (20 Austria), organized in 8 political groups (NEW 2024) - Directly elected - Seats attributed according to population but „degressive proportionality“ - Decisions-making: simple majority (presence quorum 1/3) with exceptions Tasks − Legislation ▪ ordinary legislative procedure only one part of the legislation institutions Council and parliament need to find an agreement (both have a veto) institutional balance goal to find compromise between three interests/institutions ▪ special procedures − Supervision ▪ actions for annulment ▪ vote of no confidence (Commission) ▪ right of interpellation (Commission, Council, European Council) ▪ petitions − Budget − are elected by people ▪ must represent people that elected them ▪ for 5 years EU legislation at a glance − the more democracy there is in the EU (direct democracy, European Parliament) the less power the member states have ▪ through this a state is created − idea of legislation is to find a compromise between national interests and people’s interests European Court of Justice − seat in Luxemburg − hearings are open to the public − 27 judges (each member state has one) − Consists of 2 courts ▪ Court of justice For important procedures ▪ General court 11  Competent for minor procedures − Only organ with French as working language − Advocate generals (11 – make recommendations for court – not binding) ▪ 2 search results Opinion: recommendation from advocate generals Judgment: should be presented (not opinions) − only court can interpret European law − juridic monopoly (can interpret laws how they want) Infringement procedure − member state messes with EU-Law ▪ then another member state or commission takes messing member state to the court ▪ this is how infringement functions ▪ member state fails to fulfill ▪ member state in this sense means a public body (e.g. land Steiermark is also member state in this sense) − mainly through the commission ▪ only 7 times through other member state directly otherwise, member states send a letter to the commission for them to sue the other member state last time actually was Austria (and Netherlands) against Germany (5 years ago – Germany decided after an election to establish a fair if you want to use German highways – tax relief for cars in Germany – all the others had to pay more) It is an infringement procedure if it’s the commission against member state Art. 18 TFEU: Within the scope of application of the Treaties, and without prejudice to any special provisions contained therein, any discrimination on grounds of nationality shall be prohibited. 12 Fare Regulation Verkehrsverbund Steiermark The Verbund Linie student card is issued to all regular students who receive family allowance in Austria and who are enrolled at a domestic educational institution in accordance with §3 Studienförderungsgesetz. − problem is the nationality of parents (is important in this case) ▪ even if you are a national student in Austria, you still don’t get the fare ▪ to not be discrimination on nationality they use family allowance in Austria (or country of residence) indirect discrimination ▪ law student from Innsbruck -> sued and commission sued Austria Austria replied & another notice from commission -> another reply from Austria -> then got to court × usually, solution found before court − currently (and usually) around 5-15 infringement procedure connected to Styria This is the judgment of an infringement procedure. Action for Annulment This doesn’t happen as often − if institution of EU has an unlawful conduct (violates EU-Law – e.g. in process of legislation) ▪ a lot of different possible applicants (member states, different EU-institutions – happens most often, persons – companies, court of audit, EZB) − no case for presentation belongs to this 13 Preliminary Ruling − system of mutual dialogue − example: ▪ employee & company have dispute and are at a national court for this dispute EU-Law is relevant in some way to decide in the dispute court has to apply EU-Law × if national court is not sure how to interpret -> can make a break and ask European court o they decide how to interpret it & national court continues with this information − idea is a dialogue between national courts and European court ▪ so EU-Law is enforced in the same way in the whole EU − only 2 questions a national court can ask ECJ ▪ interpretation of EU-Law (standard case) ▪ validity of EU-Law − like network with ECJ on top ▪ if something is unclear then national court has to ask Those are the Questions asked by the national court 14 System of Competences – Distribution of Competences – 3 Questions 1. Is the Union authorized to regulate a specific area? – Principle of conferred powers a. is there a specific competence for the EU in this case b. you need a direct legal basis which says that the EU is competent for the area c. there is a catalogue of competences d. everything that is not included cannot be legislated by the EU i. only then EU is allowed to regulate 2. May the Union also exercise a competence? – Principle of subsidiarity a. Example: air pollution b. there is a competence for EU (first question can be answered with yes) c. if EU has competence can EU regulate everything concerning this topic? i. no, EU needs to explain why there is added value if this area is regulated on EU level legislation ii. each proposal has chapter which is called subsidiarity 3. How can and must the Union finally exercise its competence? – Principle of proportionality a. If both answered before are answered with yes: i. you have to apply measure in the most member state friendly way ii. if a framework is enough you have to use the framework and not regulate each detail iii. have to use regulation that affects member states as little as possible Overview - What is EU law? - What are the sources of EU law? o Primary Law ▪ Fundamental Rights o Secondary Law ▪ Legislative/non-legislative ▪ Types of Legal acts Regulations and Directives Principles of EU Law ▪ Direct effect and Supremacy 15 Hierarchy of the legal system Principles of national constitution EU Primary Law EU Secondary Law Federal constitution State constitutions Federal and state law Structure of EU law EU Primary Law Treaties Member states Legislative Directives, EU Secondary Law Regulations, Decisions EU- institutions Non-Legislative Directives, Regulations, Decisions EU- institutions Non-binding instruments EU institutions Each Law in Austria derives from Constitutional Law, in EU Law completely the same. Primary Law is sth like the constitution, it isn’t one because it’s not a sate 16 Primary Law − comparable to constitutions in countries − has just as Austrias constitution different legal texts − bold ones are the most important (TEU, TFEU, Charter) ▪ core of primary law − TEU Treaty of European Union = EUV (EU-Vertrag) ▪ Basis of EU ▪ Includes that there is an EU, values of EU, how to join or withdraw ▪ Basic provisions and framework ▪ Around 50 articles − TFEU Treaty on the Functioning of the European Union = AEUV (Vertrag über die Arbeitsweise der EU) ▪ Makes framework operational ▪ e.g. in the TEU it says that there is a Commission, Council and Parliament In TFEU exactly elaborated how they function together ▪ e.g. TEU says we have an internal market TFEU says that internal markets is made up of free treaty of goods … ▪ Around 300 articles ▪ From 1957 But was changed many times afterwards Are now treaties in the version of Lisbon − Charter ▪ Unique for international organization − Unwritten primary law ▪ Inventions by European Court ▪ not explicitly in the treatys but between the lines − Enlargement treaties and Protocols ▪ If country joins there is a treaty − Euratom Treaty ▪ European Atomic Community still exists − Who makes primary law? ▪ Member states not institutions (can never change primary law) ▪ You need treaty between member states ▪ Only member states can change or invent primary law − Secondary law ▪ Legislated by the EU-institutions 17 Human Rights Protection in the EU Secondary Law I Regulatio n Recomme Secondary Directive ndation Law Decision Each of these 4 has its specific features, advantages and disadvantages A lot of it is done with Regulation (Verordnung) and Directives (Richtlinien). Before each legislation they have to decide which they are going to use 18 Secondary Law II − Most important ones: regulation (Verordnung – but different meaning than on national level), directive (Richtlinie) ▪ Hughe majority is done in these Regulation − Commission makes proposal − Council and parliament decide on a text − Works like a Gesetz in Austria − Passed by the parliament and enforced in all of Europe ▪ In 27 languages Directive − Commission makes proposal − Council and parliament decide on a text − Obligation to change legislation − If it does not change legislation ▪ Chance that directive becomes directly applicable If it’s not possible there is still chance to claim damage through state liability × Always puts individual first − Directive cannot be applied and enforced immediately ▪ Member states need to direct directive into national law ▪ Period of usually 2 years ▪ Need to implement content in national law (need to change legal system) ▪ What is enforced after is not the directive but the national/regional law that has implemented it 19 − each directive has article like here 44 with transposition ▪ until the date content of directive (transposition date), it needs to be implemented in national law − can be differences between directive and national law (e.g. directive allows 35 days, but national law only allows 25 days) − softer measure ▪ leaves member states more flexibility how and where to implement it − 2-step-legislation ▪ First legislation on European level, then on national level − Decision ▪ Applied on one person ▪ “Bescheid” − Recommendations & Opinions ▪ Are not binding ▪ Can be given to any topic 20 Rs C-52/75 There were very different national regulations on the use of vegetable seeds in the EU member states. This made trade in these products difficult. For this reason, Directive 70/458/EEC on common rules concerning the general requirements applicable to the marketing of seed was adopted in 1970. The deadline for national implementing measures was set at 1 July 1972.Italy enacted a ‘Seeds Act’ in November 1971 to implement the Directive and two related ordinances in April 1972. However, this did not implement the entire directive; individual provisions of the directive were still outstanding.In June 1975, the Commission brought an action against Italy before the ECJ for failure to transpose Directive 70/458/EEC. Italy conceded that the deadline had been missed, but argued that the delay was justified: - The transposition deadline had been too short because the implementation of the specific and detailed provisions of the Directive required thorough studies and consultations with all interested parties. The fact that not a single Member State had managed to meet the deadline was also proof of the inappropriateness of the deadline. - The draft law for full implementation had been submitted to parliament on time; however, a government crisis and new elections then occurred, which prevented the resolution from being passed. This unforeseeable crisis was not to blame for the delay. - EU made directive on marketing of seeds - With transposition deadlines of 2 years - Italy has failed to fulfill - Italy said that transposition deadline was too short - not a single member state was able to fulfill & we also had a governmental change and new elections (unforeseeable crisis) - would have needed to be told beforehand - not meaningful reasons - no reason to ever violate transposition dates Rs C-8/81 In 1977, the EU adopted the sixth VAT Directive 77/388 to harmonise the levying of VAT in the member states. This directive lists activities that are no longer subject to VAT, including the brokering of loans. The directive should have been implemented by 1 January 1979. However, the VAT law enacted by Germany for this purpose did not come into force until 1 January 1980. Credit broker Becker applied to the Münster tax office for tax exemption for her sales in 1979. This was rejected by the tax office as the new turnover tax law did not come into force until 1980. 21 Germany violated the deadline, so Miss Becker did have damages. What should happen now? Germany is the beneficiary of the own violation, because they took the money from Miss Becker. Generally speaking the directive is not directly applicable, but − Germany implemented 1 year too late ▪ Person who was affected by this directive had to pay more because Germany has violated the deadline ▪ Directive is not meant to be directly applicable But in this case court said that under exceptional circumstances a directive can be applied directly × Because of violation country took money from citizen (Germany would otherwise benefit from their violation – so Becker was right) can be circumstances where there are exceptions, like here. C-91/92 Article 5 of Directive 85/577 on the protection of consumers in respect of contracts negotiated away from business premises (‘Doorstep Selling Directive’) clearly and unambiguously stipulates that consumers can withdraw from the contract within seven days in such cases. The Directive had to be transposed into national law by the end of 1997. In spring 1999, a student is approached near the railway station and persuaded to sign a contract for an English correspondence course. Once home, however, he changed his mind and cancelled the contract in a letter. The company he signed the contract with rejects it, citing the legal situation in which the directive has not yet been implemented. Nevertheless, the student refuses to pay and is eventually sued. The student invokes the directive directly. It is about an employee and the employer went bankrupt. C-6/90 and C-9/90 As companies in financial difficulties often no longer pay wages and social security contributions, employees are particularly at risk in these cases if bankruptcy subsequently occurs. Directive 80/987/EEC on the protection of employees in the event of the insolvency of their employer obliges the Member States to set up to ensure that employees' outstanding wage claims canguarantee schemes be met in the event of bankruptcy. The Directive stipulates that Member States shall lay down the details of the organisation, funding and operation of the guarantee institution. Employers must contribute to the funding, unless it is borne entirely by the public authorities. 22 After the end of the implementation period in October 1983 and the delayed implementation by Italy, Mr Francovich's employer went bankrupt. In the last few months he had only received part of his salary. Mr Francovich then sued the Italian state. − Frankovich Case ▪ About employee and the employer went bankrupt ▪ Directive regulated that there must be a guaranteed scheme, so employer gets money Italy implemented too late -> damaged him In this case not directly applicable because precision was not precise enough × State liability (individual fails to meet EU-Law it is possible to claim damage from state) o Francovich can sue Italy for damage Principles of EU Law Principles I - van Gend & Loos − The Dutch transport company Van Gend & Loos filed an action against the Dutch customs authorities for imposing an import duty on a chemical product from Germany that was higher than duties on earlier imports. The company considered this an infringement of the earlier Article 12 of the Treaty establishing the European Economic Community (EEC Treaty), which prohibited the introduction of new import duties or any increase in existing customs duties between the Member States. − The court in the Netherlands then suspended the proceedings and referred the matter to the Court of Justice for clarification − Question: …WHETHER ARTICLE 12 OF THE EEC TREATY HAS DIRECT APPLICATION WITHIN THE TERRITORY OF A MEMBER STATE, IN OTHER WORDS, WHETHER NATIONALS OF SUCH A STATE CAN, ON THE BASIS OF THE ARTICLE IN QUESTION, LAY CLAIM TO INDIVIDUAL RIGHTS WHICH THE COURTS MUST PROTECT. − Infringement procedure about customs (in the 60’s) ▪ Quite clear regulation Netherlands increased custom duties which was a clear violation × Company said that they have the direct right to go to court and authorities and they have to enforce it (since it is a directly applicable right) 23 Principles II Costa/Enel In 1962, Italy nationalised the production and distribution of electricity and transferred the assets of the electricity undertakings to the national electricity board, ENEL. As a shareholder of Edison Volta, one of the companies that was nationalised, Mr Costa considered that he had been deprived of his dividend and consequently refused to pay an electricity bill. In proceedings before the arbitration court in Milan, one of the arguments put forward by Mr Costa to justify his conduct was that the nationalising act infringed a number of provisions of the EEC Treaty. The Italian Court requested a preliminary ruling. The Italian government considered the request to be ‘absolutely inadmissible’ because the state court had to apply national law. The Italian Government complains that the Italian court did not merely ask the Court of Justice to interpret the Treaty, but to rule on whether the contested Italian law was compatible with the Treaty. − Italy nationalized their electricity industry ▪ Person did not pay electricity bill because nationalization was against provisions European Court said that this is national law and does not affect them − Court can’t decide on how to apply ▪ Reasons: member states transfer powers and there is European interest For this reason EU law is an own legal order with direct effect and supremacy (of European Law – have to ignore national law if there is a contradiction of European Law) 24 Direct effect EU law provides individuals (and MS) with rights and obligations, enforceable before national authorities Primary Law: Yes, when clear and precise + unconditional (=> provision is „operational)“ Examples: Freedoms of the internal market, prohibition of discrimination Secondary Law: Regulations: Yes Directives: No, except for special circumstances Decisions: Yes Recommendations: No Supremacy Where national law and EU Law conflict, EU law will always be supreme EU law is supreme over all sources of national law (maybe not over basic constitutional principles) all sources of binding and directly effective EU law are supreme all national courts and authorities must enforce supremacy conflicting national law does not become invalid, it may only not be applied Introduction and Free Movement of Goods Internal Market − Four Freedoms od EU single Market (Workers, Goods, Capital, Services) − area with free circulation of workers, goods, capital, services − workers can be divided ▪ employed ▪ self-employed − Why is there an Internal Market? ▪ aim of EU was peace in Europe method was economic cooperation (starting with coal and steel – needed for weapons) × method not purpose × worked well -> created something like an internal market 25 How to create an internal market − 2 methods of how to make internal market ▪ Positive integration Legislation in order to create internal market E.g. different national legislations -> legal harmonization EU legislate/sets standards for products (then they can freely move in the EU) ▪ Negative integration Prohibit discrimination Mutual recognition: e.g. permit for workers in Austria is also valid in other member states, also for goods Structure of all Freedoms 1. Scope of the freedom (who, what,…)? 2. Is the Freedom affected? a. Is there a restriction/obstacle 3. Is there a justification? a. Is it justified, is there a reasom? 4. Is the measure proportional? a. Or is it to wide? Free Movement of Goods How can you hinder free movement of Goods? Customs, Tariffs, Border Checks, Quantitative Restrictions State monopoly (taxes,…) Two types of measures: - Art 28 – 33 TFEU, Art 110 TFEU: fiscal measures – customs (customs union,) taxes (and measures having equivalent effects) - Art. 34-36 TFEU: non fiscal measures – quantitative restrictions and measures having equivalent effect All those measures are in the primary law Art. 34 TEFU „Quantitative restrictions on imports and all measures having equivalent effect shall be prohibited between member states“ ▪ Court has to decide what this means (only European Court can interpret) 26 Scope of the Freedom − Definition of „Goods“? ▪ What is an EU-good? 1st question that needs to be asked in case law Products that have value so it can be used in trade Has to have monetary value Subject of transactions in legal market × E.g. no drugs Electricity is also a good -> can still be traded on legal market & has value Products with negative value (e.g. waste) Copyrights can be traded and have value, but they are no good in the sense of the internal market (only a right attributed to it) Something that can be subject to commercial trade on a legal market Internal market does not include a car that is traded between USA and Mexico × only about things that are inside of the internal market − Who guarantees/violates the freedom? ▪ Who is responsible for free movement of goods? Member states are responsible for it Directed towards the member states (also include public body) There can be situations where private entities are violating the free movement of goods × E.g. private entity gets funded from state -> are connected to the public authority × E.g. demonstrations create an obstacle for trade o Missing reaction/preparation of this obstacle − Cross-border element? ▪ Measures between Styria and Carinthia would be no violation since it is not cross-border Is the Freedom affected? Dassonville Case 1974 Belgian Law prohibited the import and sale of whisky that have no certificate of origin Dassonville, a Belgian company imported Scotch Whisky from France to belgium without a certificate of origin from the British authorities because it is hard to obtain such a certificate once the product is in free circulation The imported the Whiskey not directly from Scotland, but from France, France didn’t need the certificate 27  ▪ Belgium company that imported drinks ▪ New law -> if you import Whisky, you need a certificate of origin ▪ They imported from UK to France and then to Belgium Certificate was not needed in France -> harder to get certificate Dassonville – Formula „All trading rules enacted by member states which are capable of hindering, directly or indirectly, actually or potentially, intra-Community trade are to be considered as measures having effect equivalent to quantitative restrictions.“ It is a broad definition Cassis de Dijon Case 1978 According to German law, the minimum alcohol content for fruit liqueur was 25% Cassis de Dijon is a French fruit liqueur with 15%-20% REWE wanted to import and sell Cassis des Dijon Where is the difference to the Dassonville-Case? And they were fined for doings so, what is the difference? In the Dasonville case it had to do with the import, here with the product itself, In the DV Case it was discriminating because they were only made for important goods, here the Liquor is treated the same, it didn’t matter if German or France. Cassis – Formula „Any product lawfully produced and marketed in one member state must, in principle, be admitted to the market of any other member state.“ applies to indistinctly applicable measures Principle of mutual recognition 28 EU-Good Selling Arrangement Member state Cross border Indistinctly -- Dassonville formula – distinctly Mandatory requirements 36 ----------------- Article36 proportional Justification I Art 36 TFEU: The provisions of Art 34 (…) shall not preclude prohibitions or restrictions on imports (…) justified on grounds of public morality, public policy, public security, protection of health and life of humans, animals or plants, protection of national treasures possessing artistic, historic or archaeological value, protection of industrial and commercial property. Provides for some of the most important reasons. Justification II „mandatory requirements“ Consumer protection Environmental protection Effectiveness of fiscal supervision Fairness of commercial transactions Protection of workers rights …. open ended These are good reasons, For indistinctly applicable measures if you are discriminating you only have art. 36, but if you have a measure that is applicabe to all product it can be verteidigen with mandatory requirements 29  Direct or indirect Art. 36 TFEU discrimination Art. 36 TFEU + Indiscriminate restrictions mandatory requirements Proportionality Is the measure suitable? in order to achieve the regulatory goal appropriate? and pursues the goal in a consistent manner necessary? because the goal cannot be achieved by less restrictive means × usually the most important question × e.g. for consumer protection -> labelling would be a less restrictive measure almost finished… − In Austria, supermarkets (with a few exceptions) are not allowed to be open on Sundays ▪ Is this a problem? ▪ In theory would also be case for Dassonville-Formula (also speed limits) Too many possible cases − Keck Formula 1993 ▪ „certain selling arrangements do not hinder trade (…) within the meaning of the Dassonville Judgement (…) so long as those provisions apply to all relevant traders operating (…) and so long as they effect in the same manner, in law and in fact, the marketing of domestic products and of those from other Member States“ ▪ only completely neutral selling arrangements are outside of Dassonville − selling arrangements based on how items are sold ▪ like opening hours for supermarkets, transporting stuff 30  ▪ if we have selling arrangements completely the same for national and international products it is outside of the Dassonville Formula (ECJ has changed mind here because Dassonville was too broad Example − The Biersteuergesetz (Beer Tax Act, often referred to as the Reinheitsgebot or Beer Purtiy Law) originally from 1516, banned marketing of beer with any additives. It also reserved the name “Bier” for malted barley, hops, yeast and water only. Maize and rice being used meant the product could not be called “Bier”. French brewers claimed the restrictions were protectionist to exclude imported beer. Germany argued that Germans drank a lot of beer, and long term effects of additives were unknown. Consumers were used to linking the word “Bier” only to those products with traditional ingredients. 1. Is it a EU-Good? – Yes 2. Is it a member state? - Yes 3. Is there a cross-border element? – Yes 4. Is it possible that this is capable of hindering, directly or indirectly, actually or potentially the free movement of goods? (Dassonville Formula) – Yes Is it discriminatory or not? – It is not discriminatory (same regulations for all countries) – indistinctly applicable 5. Justification - mandatory requirements (public health, consumer protection) 6. Is it proportional and are there less restrictive means? Labelling should be enough for a consumer (Germany said that’s ok for bottles and cans but not the direct one) there is no valid reason for prohibiting the ingredients (are allowed in other beverages) − Principle of some cases for written exam European Law V Overview Three groups of persons: ▪ Employed persons ->free movement of workers ▪ Citizens -> „market freedom without market“ ▪ Self employed persons / companies-> freedom of establishment Freedom of Establishment Art. 49 TEFU 1. Within the framework of the provisions set out below, restrictions on the freedom of establishment of nationals of a Member State in the territory of another Member State shall be prohibited. Such prohibition shall also apply to restrictions on the 31  setting-up of agencies, branches or subsidiaries by nationals of any Member State established in the territory of any Member State. 2. Freedom of establishment shall include the right to take up and pursue activities as self-employed persons and to set up and manage undertakings, in particular companies or firms within the meaning of the second paragraph of Article 54, under the conditions laid down for its own nationals by the law of the country where such establishment is effected, subject to the provisions of the Chapter relating to capital. Art. 51 / 54 TEFU − Art. 51 ▪ The provisions of this Chapter shall not apply, so far as any given Member State is concerned, to activities which in that State are connected, even occasionally, with the exercise of official authority. (…) − Art. 54 ▪ Companies or firms formed in accordance with the law of a Member State and having their registered office, central administration or principal place of business within the Union shall, for the purposes of this Chapter, be treated in the same way as natural persons who are nationals of Member States. ▪ ‘Companies or firms’ means companies or firms constituted under civil or commercial law, including cooperative societies, and other legal persons governed by public or private law, save for those which are non-profit-making. Scope of the Freedom − Definition of „establishment“: ▪ „undertakings of a member state“ legal person: corporation under private or public law, irrespective of legal form natural, self-employed person × EU-citizen, exc 3rd country nationals ▪ Engaged in an economic activity (offering services or goods on a market) – capable of remuneration ▪ Exception: official authority ▪ Cross border ▪ Addressee: Member State /Privates when equivalent to state measures − Examples catholic church ▪ not profit oriented (does not matter – can still be undertakings) ▪ what matters: economic activity 32 Typical situations − The self-employment of an individual in another Member State; ▪ on permanent basis ▪ establish oneself there ▪ e.g. Architect (no company just self-employed person) − the establishment and management of companies in another Member State by individuals or companies; − the right of secondary establishment in another Member State for a company by setting up agencies, companies and subsidiaries. ▪ Company establishes a branch in another Member State Is the freedom affected? − Art. 51 ▪ Within the framework of the provisions set out below, restrictions on the freedom of establishment of nationals of a Member State in the territory of another Member State shall be prohibited. Such prohibition shall also apply to restrictions on the setting-up of agencies, branches or subsidiaries by nationals of any Member State established in the territory of any Member State. ▪ Freedom of establishment shall include the right to take up and pursue activities as self-employed persons and to set up and manage undertakings, in particular companies or firms within the meaning of the second paragraph of Article 54, under the conditions laid down for its own nationals by the law of the country where such establishment is effected, subject to the provisions of the Chapter relating to capital. − Art. 54 ▪ Companies or firms formed in accordance with the law of a Member State and having their registered office, central administration or principal place of business within the Union shall, for the purposes of this Chapter, be treated in the same way as natural persons who are nationals of Member States. − Discriminatory (direct/indirect) measures − Same rules have to apply as for German architects (right for equal treatment from member state) ECJ: Gebhard Formula − “…measures that ‘prohibit, impede or render less attractive’ the freedom…” − non-discriminatory measures − Example: Latvian universities (C-391/20) ▪ offer courses only in Latvian language (except if it’s for international students) law of Latvia ▪ 1. private universities are engaging in an economic activity ▪ 2. Discriminatory or indirect discriminatory/nondiscriminatory 33  Court did not decide (leaves it open) ▪ 3. Justification Promote Latvian language (a lot of other speaking people in the country) ▪ 4. Proportionality Yes, in this circumstance it is proportional in this situation Justification Art 52 TFEU 1. The provisions of this Chapter and measures taken in pursuance thereof shall not prejudice the applicability of provisions laid down by law, regulation or administrative action providing for special treatment for foreign nationals on grounds of public policy, public security or public health. (…) − „mandatory requirements“ ▪ Consumer protection ▪ Environmental protection ▪ Effectiveness of fiscal supervision ▪ Fairness of commercial transactions ▪ Protection of workers rights ▪ …. ▪ Not economic reasons or administrative difficulties! ▪ open ended Proportionality − Is the measure ▪ suitable? in order to achieve the regulatory goal ▪ appropriate? and pursues the goal in a consistent manner ▪ necessary? because the goal cannot be achieved by less restrictive means Example (C-171 und 172/07) − DocMorris is a Dutch company that operates pharmacies and mail-order pharmacies. The company wanted a licence to operate a pharmacy in Germany. − In Germany, only trained pharmacists are allowed to operate a pharmacy. − can be an obstacle ▪ professional qualifications (typical restriction) justifiable but not always 34 Definition of „establishment“: − „undertakings of a member state“ ▪ legal person: corporation under private or public law, irrespective of legal form ▪ natural, self-employed person − Engaged in an economic activity (offering services or goods on a market) – capable of remuneration − Exception: official authority Addressee − “Are the provisions concerning freedom of establishment for capital companies (Articles 43 EC and 48 EC) to be interpreted as precluding [the rule excluding non- pharmacists], as provided for by subparagraphs 1 to 4 and 7 of Paragraph 2(1), the first sentence of Paragraph 7 and the first sentence of Paragraph 8 of the [ApoG]?” ▪ ApoG = Apothekengesetz Material scope − According to settled case-law, Article 43 EC precludes any national measure which, even though it is applicable without discrimination on grounds of nationality, is liable to hinder or render less attractive the exercise by Community nationals of the freedom of establishment that is guaranteed by the Treaty (see, in particular, Case C-19/92 Kraus ECR I-1663, paragraph 32, and Case C-299/02 Commission v Netherlands ECR I-9761, paragraph 15). − Legislation which makes the establishment in the host Member State of an economic operator from another Member State subject to the issue of a prior authorisation and allows self-employed activity to be pursued only by certain economic operators who satisfy predetermined requirements, compliance with which is a condition for the issue of that authorisation, constitutes a restriction within the meaning of Article 43 EC. Such legislation deters or even prevents economic operators from other Member States from pursuing their activities in the host Member State through a fixed place of business (see, to this effect, Hartlauer, paragraphs 34, 35 and 38). − The rule excluding non-pharmacists constitutes such a restriction because it allows only pharmacists to operate pharmacies, denying other economic operators access to this self-employed activity in the Member State concerned. − Indistinctly applicable ▪ Written justification & mandatory requirements E.g. public health (is here also a written justification) Justification − Restrictions on freedom of establishment which are applicable without discrimination on grounds of nationality may be justified by overriding reasons in 35  the general interest, provided that the restrictions are appropriate for securing attainment of the objective pursued and do not go beyond what is necessary for attaining that objective (see Hartlauer, paragraph 44). − In the main actions, first, the national legislation at issue applies without discrimination on grounds of nationality. − Second, the protection of public health is one of the overriding reasons in the general interest which can justify restrictions on the freedoms of movement guaranteed by the Treaty such as the freedom of establishment (see, inter alia, Hartlauer, paragraph 46). − More specifically, restrictions on those freedoms of movement may be justified by the objective of ensuring that the provision of medicinal products to the public is reliable and of good quality (see, to this effect, Deutscher Apothekerverband, paragraph 106, and Commission v Germany, paragraph 47). − Third, it must be examined whether the rule excluding non-pharmacists is appropriate for securing such an objective. − In this context, attention is to be drawn to the very particular nature of medicinal products, whose therapeutic effects distinguish them substantially from other goods. Those therapeutic effects have the consequence that, if medicinal products are consumed unnecessarily or incorrectly, they may cause serious harm to health, without the patient being in a position to realise that when they are administered. Overconsumption or incorrect use of medicinal products leads, moreover, to a waste of financial resources (…) − Three categories of potential pharmacy operators must be distinguished, namely natural persons having the status of pharmacist, persons operating in the pharmaceutical products sector as manufacturers or wholesalers, and persons neither having the status of pharmacist nor operating in that sector. − It is undeniable that an operator having the status of pharmacist pursues, like other persons, the objective of making a profit. However, as a pharmacist by profession, he is presumed to operate the pharmacy not with a purely economic objective, but also from a professional viewpoint. His private interest connected with the making of a profit is thus tempered by his training, by his professional experience and by the responsibility which he owes, (…) Unlike pharmacists, non-pharmacists by definition lack training, experience and responsibility equivalent to those of pharmacists. Accordingly, they do not provide the same safeguards as pharmacists. − A Member State may therefore take the view, in the exercise of its discretion referred to in paragraph 19 of the present judgment, that, unlike the case of a pharmacy operated by a pharmacist, the operation of a pharmacy by a non- pharmacist may represent a risk to public health, in particular to the reliability and quality of the supply of medicinal products at retail level, (…) 36 − DocMorris and the Commission have submitted before the Court that that objective could be attained by less restrictive measures, such as an obligation that a pharmacist be present in the pharmacy, an obligation to take out insurance or a system of adequate controls and effective penalties. − A Member State may take the view that there is a risk that legislative rules designed to ensure the professional independence of pharmacists would not be observed in practice, given that the interest of a non-pharmacist in making a profit would not be tempered in a manner equivalent to that of self-employed pharmacists and that the fact that pharmacists, when employees, work under an operator could make it difficult for them to oppose instructions given by him. − While an insurance might enable the patient to obtain financial reparation for any harm suffered by him, it operates after the event and would be less effective than the rule excluding non-pharmacists in that it would not in any way prevent the operator concerned from exerting influence over the employed pharmacists. − Other cases are irrelevant ▪ Important how to apply proportionality − If you are somehow connected to a company that runs pharmacy or a manufacturer -> products that get produced are preferred ▪ Differences in quality of products Main reason why Court said that there is no less restrictive measures to receive the same goal Justified and proportionate Example II − The establishment by a legal person of an optician’s shop in Greece was subject inter alia to the condition that authorization for the establishment and operation of that shop had to have been granted to a recognized optician who was a natural person and the person holding the authorization to operate the shop had to hold at least 50% of the company’s share capital and participate at least to that extent in the profits and losses of the company. − Same result? − In this case, it is sufficient to note that the objective of protecting public health upon which the Hellenic Republic relies may be achieved by measures which are less restrictive of the freedom of establishment both for natural and legal persons, for example by requiring the presence of qualified, salaried opticians or associates in each optician’s shop, rules concerning civil liability for the actions of others, and rules requiring professional indemnity insurance. − It is thus clear that the disputed restrictions go beyond what is required in order to achieve the objective pursued. There is therefore no justification for them. 37 − Objective of public health is ok, but it could lead to the same result if you guarantee that a trained optician is in the shop ▪ Not proportionate Structure Freedom to Provide Services Art. 56/57 TEFU − Art. 56 ▪ Within the framework of the provisions set out below, restrictions on freedom to provide services within the Union shall be prohibited in respect of nationals of Member States who are established in a Member State other than that of the person for whom the services are intended. ▪ (…) − Article 57 ▪ Services shall be considered to be "services" within the meaning of the Treaties where they are normally provided for remuneration, in so far as they are not governed by the provisions relating to freedom of movement for goods, capital and persons. ▪ "Services" shall in particular include: activities of an industrial character; activities of a commercial character; activities of craftsmen; 38  activities of the professions. ▪ Without prejudice to the provisions of the Chapter relating to the right of establishment, the person providing a service may, in order to do so, temporarily pursue his activity in the Member State where the service is provided, under the same conditions as are imposed by that State on its own nationals. − 1 difference –> temporarily Scope of the Freedom − Definition of „service“: ▪ Any remunerated activity, that does not come under another market freedom ▪ Exception: official authority ▪ „undertakings of a member state“ legal person: corporation under private or public law, irrespective of legal form natural, self-employed person × if not self-emplyed = free movement of workers ▪ Addressee: Member State /Privates when equivalent to state measures Exactly the same as in all the cases (except for free movement of workers) − Scope similar to the freedom of Establishment − Difference: ▪ Establishment means „activity on a stable and continuous basis“ ▪ Service means „temporary activity“ − Criteria: duration, regularity, continuity, permanence of the activity − Integrated in which market? ▪ In which of the markets am I economically integrated? Established in Austria and offering services in other countries (freedom to provide services) Establish another subsidiary in another country with workers there (freedom of establishment) − Any freedom that is not covered in the others = freedom to provide services Cross-border? − I´m an Austrian architect and I am planning a house in Slovenia and doing the building supervision there ▪ Provider crosses borders ▪ Active freedom to provide services − I’m a German tourist on holiday in Austria, going on the Schloßbergrutsche ▪ Paying = economic activity ▪ Schloßbergrutsche does not cross borders but recipient 39  ▪ Passive freedom to provide services − I’m living in Austria. A German company calls me via phone and offers investment consultancy. ▪ Information & service itself cross borders ▪ Corresponding freedom to provide services − I’m living in Austria and book a guided tour to Slovenia. The travel guide is also Austrian and travels to Slovenia with our group. ▪ Provider & recipient cross border together − I´m residing in Austria; I am taking out a contract with an Austrian insurance company to insure my second home in Greece. ▪ Part of service has to do with a crossed border element (relates to another member state) ▪ Something in another country can happen which has effect − Are all in the scope for freedom to provide services Types of cross-border − Active provision of a service across a border (Service provider crosses border) – active freedom − Recipient crosses border and receives a service in another Member state – passive freedom − Provider and recipient jointly cross border (travel guide-cases) − Only the Service crosses a border (via internet) − Provider and recipient are in one Member State, Service relates to another Member State Is the freedom affected? − Art. 51 ▪ Within the framework of the provisions set out below, restrictions on the freedom of establishment of nationals of a Member State in the territory of another Member State shall be prohibited. Such prohibition shall also apply to restrictions on the setting-up of agencies, branches or subsidiaries by nationals of any Member State established in the territory of any Member State. ▪ Freedom of establishment shall include the right to take up and pursue activities as self-employed persons and to set up and manage undertakings, in particular companies or firms within the meaning of the second paragraph of Article 54, under the conditions laid down for its own nationals by the law of the country where such establishment is effected, subject to the provisions of the Chapter relating to capital. − Art. 54 ▪ Companies or firms formed in accordance with the law of a Member State and having their registered office, central administration or principal place of 40  business within the Union shall, for the purposes of this Chapter, be treated in the same way as natural persons who are nationals of Member States. ▪ Discriminatory (direct/indirect) measures ECJ: Gebhard Formula − “…measures that ‘prohibit, impede or render less attractive’ the freedom…” − non-discriminatory measures Justification Art 52 TFEU − The provisions of this Chapter and measures taken in pursuance thereof shall not prejudice the applicability of provisions laid down by law, regulation or administrative action providing for special treatment for foreign nationals on grounds of public policy, public security or public health. (…) „mandatory requirements“ − Consumer protection − Environmental protection − Effectiveness of fiscal supervision − Fairness of commercial transactions − Protection of workers rights − …. − Not economic reasons or administrative difficulties! − open ended − services and establishment are really close and similar structure Proportionality − Is the measure ▪ suitable? in order to achieve the regulatory goal ▪ appropriate? and pursues the goal in a consistent manner ▪ necessary? because the goal cannot be achieved by less restrictive means Example − The Schindler brothers are self employed and are authorised representatives of the Süddeutsche Klassenlotterie. They send advertising material from the Netherlands to the UK; this is confiscated because, subject to exceptions (esp for charity), UK prohibits lotteries in its territory and consequently the importation of material intended to enable its residents to participate in foreign lotteries − Established in the Netherlands 41 − Marketing material is not relating to goods but rather services Scope − Goods or Services? ▪ The activity pursued by the defendants in the main proceedings appears, admittedly, to be limited to sending advertisements and application forms, and possibly tickets, on behalf of a lottery operator, SKL. However, those activities are only specific steps in the organization or operation of a lottery and cannot, under the Treaty, be considered independently of the lottery to which they relate. The importation and distribution of objects are not ends in themselves. Their sole purpose is to enable residents of the Member States where those objects are imported and distributed to participate in the lottery. ▪ Lottery activities are thus not activities relating to "goods", falling, as such, under Article 30 of the Treaty. ▪ They are however to be regarded as "services" within the meaning of the Treaty. ▪ The services at issue are those provided by the operator of the lottery to enable purchasers of tickets to participate in a game of chance with the hope of winning, by arranging for that purpose for the stakes to be collected, the draws to be organized and the prizes or winnings to be ascertained and paid out. ▪ Those services are normally provided for remuneration constituted by the price of the lottery ticket. ▪ The services in question are cross-border services when, as in the main proceedings, they are offered in a Member State other than that in which the lottery operator is established Addressee − The question is whether national legislation which, like the United Kingdom legislation on lotteries, prohibits, subject to specified exceptions, the holding of lotteries in a Member State constitutes an obstacle to the freedom to provide services. Material Scope − The Commission and the defendants in the main proceedings argue that, on any view of the matter, such legislation, being in fact discriminatory, restricts the freedom to provide services. The Spanish, French, Greek and United Kingdom Governments accept that such legislation may restrict freedom to provide services even though it is applicable without distinction. − According to the case-law of the Court national legislation may fall within the ambit of Article 59 of the Treaty, even if it is applicable without distinction, when it is liable to prohibit or otherwise impede the activities of a provider of services established in another Member State where he lawfully provides similar services. 42 − It is sufficient to note that this is the case with national legislation such as the United Kingdom legislation on lotteries which wholly precludes lottery operators from other Member States from promoting their lotteries and selling their tickets, whether directly or through independent agents, in the Member State which enacted that legislation. − (…) legislation such as the United Kingdom legislation cannot be considered to be discriminatory. − Court said it is nondiscriminatory -> indistinctly applicable Justification − (All member states) argue that the legislation must be regarded as justified by overriding public interest considerations of consumer protection, prevention of crime, protection of public morality, restriction of demand for gambling and the financing of public interest activities. They consider, furthermore, that such legislation is proportionate to the objectives pursued thereby. − Given the peculiar nature of lotteries, which has been stressed by many Member States, those considerations are such as to justify restrictions, as regards Article 59 of the Treaty, which may go so far as to prohibit lotteries in a Member State. − First of all, it is not possible to disregard the moral, religious or cultural aspects of lotteries, like other types of gambling, in all the Member States. The general tendency of the Member States is to restrict, or even prohibit, the practice of gambling and to prevent it from being a source of private profit. Secondly, lotteries involve a high risk of crime or fraud, given the size of the amounts which can be staked and of the winnings which they can hold out to the players, particularly when they are operated on a large scale. Thirdly, they are an incitement to spend which may have damaging individual and social consequences. A final ground which is not without relevance, although it cannot in itself be regarded as an objective justification, is that lotteries may make a significant contribution to the financing of benevolent or public interest activities such as social works, charitable works, sport or culture. − When a Member State prohibits in its territory the operation of large-scale lotteries and in particular the advertising and distribution of tickets for that type of lottery, the prohibition on the importation of materials intended to enable nationals of that Member State to participate in such lotteries organized in another Member State cannot be regarded as a measure involving an unjustified interference with the freedom to provide services. Such a prohibition on import is a necessary part of the protection which that Member State seeks to secure in its territory in relation to lotteries. 43 Free Movement of Capital and Payments − Art. 63 TFEU ▪ Within the framework of the provisions set out in this Chapter, all restrictions on the movement of capital between Member States and between Member States and third countries shall be prohibited. ▪ Within the framework of the provisions set out in this Chapter, all restrictions on payments between Member States and between Member States and third countries shall be prohibited. − Any differences to the other freedoms? ▪ Third countries (only freedom that does not only apply within the internal market but also with third countries) ▪ Prohibits any restrictions (already in the text – not only in structure) Scope of the Freedom − Transactions within and beyond borders of the internal market; cross-border requirement − Personal scope: EU citizens and 3rd country nationals, legal and natural persons − Payments: money transfer in cash or electronically − Capital movement: any disposition over physical or virtual money or any other assets for investment purposes (=return of investment is sought) − Covers preparation of an investment, formalities during its conclusion, during performance or post-conractual − Addressee: Member states and their emanations; in principle privates with equivalent effect − Examples − Everything that has to do with payments/investments cross-border ▪ Any kind of direct investment (e.g. buying a house in Greece) ▪ Buying shares of companies ▪ Stock market ▪ inheritance from another member state − Two types of case law are interesting ▪ Golden shares Type of a share of a company that usually belongs to the government Gives owner of the share some veto rights × As if they had more than 50% of the shares in certain questions Makes shares less attractive to foreign investors (hinders free movement) 44 Is the freedom affected? − Art. 63 TFEU ▪ 1. Within the framework of the provisions set out in this Chapter, all restrictions on the movement of capital between Member States and between Member States and third countries shall be prohibited. ▪ 2. Within the framework of the provisions set out in this Chapter, all restrictions on payments between Member States and between Member States and third countries shall be prohibited. Justification − Article 65 − 1. The provisions of Article 63 shall be without prejudice to the right of Member States: ▪ (a) to apply the relevant provisions of their tax law which distinguish between taxpayers who are not in the same situation with regard to their place of residence or with regard to the place where their capital is invested; ▪ (b) to take all requisite measures to prevent infringements of national law and regulations, in particular in the field of taxation and the prudential supervision of financial institutions, or to lay down procedures for the declaration of capital movements for purposes of administrative or statistical information, or to take measures which are justified on grounds of public policy or public security. − „mandatory requirements“ ▪ Consumer protection ▪ measures to protect the stability of the value of money ▪ the functioning of the capital markets ▪ Not economic reasons or administrative difficulties! ▪ open ended Proportionality − Is the measure ▪ suitable? in order to achieve the regulatory goal ▪ appropriate? and pursues the goal in a consistent manner × was not the case in Denmark -> therefore not proportional × Danish law was not consistent ▪ necessary? because the goal cannot be achieved by less restrictive means 45 Example C-370/05 − Danish law: a condition for acquiring an agricultural property the requirement that the acquirer take up his fixed residence on that property for at least 8 years. − Material scope: “likely to discourage non-residents from making investments in a Member State” − Justification: As regards the condition relating to the pursuance of an objective in the public interest, the Danish Government submits that the national legislation seeks, first, to preserve the farming of agricultural land by means of owner- occupancy, which constitutes one of the traditional forms of farming in Denmark, and to ensure that agricultural property be occupied and farmed predominantly by the owners, second, as a town and country planning measure, to preserve a permanent agricultural community and, third, to encourage a reasonable use of the available land by resisting pressure on land. − Proportionality: Danish law has too many and too vague exceptions → does not pursue goal in a consistent manner − Applies to all Common Features of Freedoms − Direct effect ▪ I can try to convince the museum I want to buy tickets at that I as a Hungarian don’t have to pay more than the Polish person ▪ Has to be enforced by all courts and authorities (don’t have to wait for national law) − Supremacy ▪ Even if national law says the opposite, all authorities have to ignore this national law − Same structure applies to all freedoms Internal Market: Workers and Citizens Overview − Three groups of persons: ▪ Employed persons -> free movement of workers ▪ Citizens -> „market freedom without market“ ▪ Self employed persons / companies-> free movement of establishment Free Movement of Workers − What rights/guarantees do workers need in an internal market? ▪ recognition of education and qualifications ▪ being able to move to the country & take residency in this country 46  ▪ working permit (working visa, other documents …) ▪ possible issue: if you are only allowed to stay as long as you work ▪ What about family members? ▪ social benefits Art. 45 TEFU 1. Freedom of movement for workers shall be secured within the Union. 2. Such freedom of movement shall entail the abolition of any discrimination based on nationality between workers of the Member States as regards employment, remuneration and other conditions of work and employment. 3. It shall entail the right, subject to limitations justified on grounds of public policy, public security or public health: (a) to accept offers of employment actually made; (b) to move freely within the territory of Member States for this purpose; (c) to stay in a Member State for the purpose of employment in accordance with the provisions governing the employment of nationals of that State laid down by law, regulation or administrative action; (d) to remain in the territory of a Member State after having been employed in that State, subject to conditions which shall be embodied in regulations to be drawn up by the Commission. 4. The provisions of this Article shall not apply to employment in the public service. − Basis of the free movement of workers − What is a worker? ▪ A lot of cases before the ECJ to define what a worker is 1 - Scope of the Freedom − Definition of „worker“: ▪ European citizen ▪ Working activity in another member state than home member state (cross border-element) Does not apply between “Bundesländer” for example ▪ A person works not only marginally, for a given time period, in favor of a different person, under the supervision of the latter, against a payment or compensation, but regardless of the industry, regardless of the nature of the legal relationship Time period can also be quite short (e.g. 2 months) Not only work marginally there must also be some kind of gravity for a given time period under supervision while receiving compensation No public service (narrow!) − Who guarantees/violates the Freedom? ▪ Member states, collective bargaining agreements (Kollektivvertrag), UEFA contracts using Swiss law, private companies 47 − Horizontal effect (between privates) ▪ only freedom which can be applied between horizontal relationships Worker? Mr. Antonissen − Mr. Antonissen, a Belgian citizen, moved to UK in 1984 and tried to find a job (without success) − He was imprisoned for a drug related offence and UK decided to deport him − UK law: deportation after 6 months of unemployment − Question: Is Mr Antonissen a „worker“? ▪ he was a jobseeker − Job seekers are “workers” with limitations: ▪ Member States have to allow work seekers to enter their territory and to remain there for a “reasonable” time. 6 months was a reasonable time period but still doesn’t mean deportation is possible afterwards − Antonissen: 6 months, but no deportation if job seeker proves that she/he is still looking for a job and has genuine chances of being engaged ▪ Need to give good reasoning of how and where you are searching Mr. Bettray − Mr. Bettray was working under a compulsory social rehabilitation program to overcome his drug addiction designed to enable an individual to recover his capacity to take up ordinary employment. − Purpose of the employment is irrelevant but: ▪ ‘real and genuine’ paid activity (“constitute effective and genuine economic activity”) ▪ Bettray: restrictive interpretation ▪ Generally purpose of employment is irrelevant but not in this context (whole case is a social project -> employment is not the goal of this) – participation was not an economic but social activity − Could you be „workers“? ▪ … could be… ▪ „a person who has been a worker who undertakes university studies leading to a professional qualification is to be regarded as retaining worker status and is entitled to equal treatment with nationals in access to such educational grants, provided that there is a link between the previous occupational activity and the studies in question” 48  ▪ If I just go to another university abroad it is not in the scope of free movement of workers You have to be a worker in another country and then quit to go to university abroad -> direct preparation for job (can go under the scope) × Clear link between what you worked and university training necessary so students can be workers − I serve as a judge. Am I „worker“? ▪ “posts must involve participation in the exercise of powers conferred by public law, they must entail duties designated to safeguard the general interests of the state.” ▪ Examples? ▪ Yes, but not under the free movement of workers ▪ E.g. but teachers are workers in this case Who is a worker? − Nadal has a coach but is not an employee as Alaba is an employee of Real Madrid ▪ Nadal is not under supervision who receives payment from employer − Alaba is worker under free movement of workers − Nadal falls under free movement of establishment 2 - Is the Freedom affected? Art 45 TFEU 1. Freedom of movement for workers shall be secured within the Union. 2. Such freedom of movement shall entail the abolition of any discrimination based on nationality between workers of the Member States as regards employment, remuneration and other conditions of work and employment. 3. It shall entail the right, subject to limitations justified on grounds of public policy, public security or public health: (a) to accept offers of employment actually made; (b) to move freely within the territory of Member States for this purpose; (c) to stay in a Member State for the purpose of employment in accordance with the provisions governing the employment of nationals of that State laid down by law, regulation or administrative action; (d) to remain in the territory of a Member State after having been employed in that State, subject to conditions which shall be embodied in regulations to be drawn up by the Commission. 4. The provisions of this Article shall not apply to employment in the public service. − Discriminatory (direct/indirect) measures ▪ Measures that treat workers differently of different nationality 49  Direct: some law says that German workers only get paid half Indirect: base it on other facts but has almost the same outcome × e.g. education (whoever has Austrian Matura can study medicine – Germans could not) – country where you finished school × e.g. need to speak Gälic in order to be university professor in Dublin (but was not a necessity for people coming from Ireland -> yes, can be justified because of national identity – promoting languages is a valid reason -> but proportionality: you only need some knowledge for it to be proportional) − What about family members ▪ if they are EU citizens? ▪ if they are third country nationals? If I as a worker go to another country my spouse/children/(parents) still have rights from the free movement of workers × e.g. residence, allowance to work, going to school × derived from a family member that is a worker in a country × only works if free movement of workers is applied (so not applicable for nationals who didn’t leave the country) − ECJ: Gebhard Formula ▪ “…measures that ‘prohibit, impede or render less attractive’ the freedom…” ▪ Graf-Case: minimum concrete gravity required ▪ Non-discriminatory measures ▪ Same as the Dassonville Formula ▪ Broad definition (later court took a little step back in Graf-Case (not hypothetical that can maybe influence my decision to go to another country – must be concrete) Structure 50 3 - Justification Art 45 TFEU 1. Freedom of movement for workers shall be secured within the Union. 2. Such freedom of movement shall entail the abolition of any discrimination based on nationality between workers of the Member States as regards employment, remuneration and other conditions of work and employment. 3. It shall entail the right, subject to limitations justified on grounds of public policy, public security or public health: (a) to accept offers of employment actually made; (b) to move freely within the territory of Member States for this purpose; (c) to stay in a Member State for the purpose of employment in accordance with the provisions governing the employment of nationals of that State laid down by law, regulation or administrative action; (d) to remain in the territory of a Member State after having been employed in that State, subject to conditions which shall be embodied in regulations to be drawn up by the Commission. 4. The provisions of this Article shall not apply to employment in the public service. − Justification for public security or health (pandemic, mafia) − criminals (can’t lose freedoms solely because of former crimes -> is dependent on how it influences public security (e.g. serial killer) Ms Adoui − Ms Adoui, a French citizen, worked in Belgium and was refused a residence permit in Belgium because she “worked in a morally questionable bar” where waitresses displayed themselves in the window and had the opportunity to be alone with customers. − Belgium justified this with ‘public order’ − Do you agree? − Request for preliminary ruling (did not know how to interpret public order) − Or she/her lawyer filed a complaint (infringement procedure ▪ It was the 1st one ▪ Could not be justified − “Prostitution as such is not prohibited by Belgian legislation, although the law does prohibit certain incidental activities” − (…) the existence of “a genuine and sufficiently serious threat affecting one of the fundamental interests of society.” ▪ A fundamental interest of the state would be needed to justify − principle of proportionality − based on the personal conduct of the individual concerned 51 − cannot be applied to serve economic ends and past criminal conviction (exc where the previous conviction in some way gives evidence of a prese − Examples? − „mandatory requirements“ − Consumer protection − Environmental protection − Effectiveness of fiscal supervision − Fairness of commercial transactions − Protection of workers rights − Not economic reasons or administrative difficulties! ▪ economic reasons, administrative burdens are not mandatory requirements (only if it is impossible but not if it’s only more difficult) − open ended Proportionality − Is the measure ▪ suitable? in order to achieve the regulatory goal ▪ appropriate? and pursues the goal in a consistent manner ▪ necessary? because the goal cannot be achieved by less restrictive means Example C-415/93 Bosman − Belgian football player, playing for a Belgian team − After his contract was dissolved, he wanted to play for a french team − Extensive regulations on transfers by UEFA (payments from new team to old team) − (Max numbers of players from other nations on each team) ▪ Problem 1: only 3 players of other nationality allowed to play at the same time Direct discrimination National identity ▪ Problem 2: even if contract with old team was expired other team needed to pay fee for players − Bosman´s contract with the new team fell through − Worker? 52  ▪ European citizen ▪ Working activity in another member state than home member state (cross border-element) ▪ A person works not only marginally, for a given time period, in favor of a different person, under the supervision of the latter, against a payment or compensation ▪ Yes, he wanted to work as a worker in France (cross-border), marginally, for a given time period, in favor of a different person, under the supervision against payment − Adressee ▪ (…) it is to be remembered that, as the Court held in paragraph 17 of its judgment in Walrave, cited above, Article 48 not only applies to the action of public authorities but extends also to rules of any other nature aimed at regulating gainful employment in a collective manner. Like UEFA regulations -> are applicable ▪ The Court has held that the abolition as between Member States of obstacles to freedom of movement for persons and to freedom to provide services would be compromised if the abolition of State barriers could be neutralized by obstacles resulting from the exercise of their legal autonomy by associations or organizations not governed by public law ▪ It has further been observed that working conditions in the different Member States are governed sometimes by provisions laid down by law or regulation and sometimes by agreements and other acts concluded or adopted by private persons. Accordingly, if the scope of Article 48 of the Treaty were confined to acts of a public authority there would be a risk of creating inequality in its application (see Walrave, cited above, paragraph 19). Also by private persons (horizontal) ▪ Article 48 of the Treaty therefore applies to rules laid down by sporting associations such as URBSFA, FIFA or UEFA, which determine the terms on which professional sportsmen can engage in gainful employment. ▪ Art. 48 = free movement of workers ▪ Yes, there is a set of regulations that is regulating employment by a group of employees − Material Scope ▪ Provisions which preclude or deter a national of a Member State from leaving his country of origin in order to exercise his right to freedom of movement therefore constitute an obstacle to that freedom even if they apply without regard to the nationality of the workers concerned (…) 53  ▪ Since they provide that a professional footballer may not pursue his activity with a new club established in another Member State unless it has paid his former club a transfer fee agreed upon between the two clubs or determined in accordance with the regulations of the sporting associations, the said rules constitute an obstacle to freedom of movement for workers. ▪ It is sufficient to note that, although the rules in issue in the main proceedings apply also to transfers between clubs belonging to different national associations within the same Member State and are similar to those governing transfers between clubs belonging to the same national association, they still directly affect players' access to the employment market in other Member States and are thus capable of impeding freedom of movement for workers. ▪ Obstacle for free movement of workers (former & next employer decide) ▪ Is it discrimination? also apply to transfers within a country not only international nondiscriminatory measure just obstacle to change employer − Justification and Proportionality ▪ First, URBSFA, UEFA and the French and Italian Governments have submitted that the transfer rules are justified by the need to maintain a financial and competitive balance between clubs and to support the search for talent and the training of young players.(…) and of encouraging the recruitment and training of young players must be accepted as legitimate. ▪ (…) the application of the transfer rules is not an adequate means of maintaining financial and competitive balance in the w