Exam prep block 2 – ISLEU
Week 9: Introduction economic and legal integration in the EU
Lecture:
Part 1: why do we have an internal market?
- The internal market: self-interest or ideology?
o Why EU?
o The idea of econ. integration is at the heart of EU integration ECSC
o Why cooperate at econ. level?
To prevent war/maintain peace?
Or is it a game played at national level/for national interests?
Both are right:
Internal Market (IM) enhances fair trade and competition, appears in
treaties ideological endeavour
On the other side: the reason to cooperate economically far more
rational states do not want to fall victim of protectionist policies of
the neighbour and want to maximise their own national economic
prosperity; they do this by cooperating with others!
- Benefits of free trade (the general idea underpinning the IM)
o Free trade specialization comparative advantage economies of scale
increased consumer welfare & efficient use of products
- European common market
o Groundwork for the common market was laid down in Spaak Report
Three sets of actions were proposed:
National protections creating obstacles to trade had to be
suppressed
Distortions of competition needed to be dealt with
Conditions for common growth had to be ensured
o White Paper of Delors: completing the internal market (1985)
o Focus of EU should be on removing:
Physical barriers
technical barriers
Fiscal barriers (e.g. national taxation)
- Single European Act (SEA) (1986)
o Introduced new legal basis: 114 TFEU
o Introduction of QMV
o Name change: from “common market” to “single market” or “internal
market”
- Understanding the integration process
o The Monnet method
Neo-functionalism spillover
- The common market
o Negative integration: eliminating obstacles, removal of discriminatory
restrictions ( telling nations what not to do)
1
, o Positive integration: harmonization, modification of existing policies, joint
exercise of power (telling nations what they should do)
- Harmonization what does it mean?
o Unfair to set same regulations for everyone
o Not “one size fits all”
- Total vs. minimum harmonization
o Total harmonization:
When an EU measure, e.g. a directive, regulates something
exhaustively, not leaving any room for divergent rules of the MS
the directive has pre-empted MS activity; it has occupied the field
Legal consequence: a national rule that complies with an EU measure
totally harmonizing something is no longer open to challenge on the
basis of the four freedoms of the Treaty
o Minimum harmonization
Sets the floor below which no MS may go, but leaves them free to
adopt more demanding rules
Allows MS to impose more strict rules
Part 2: Principles underpinning the internal market
1. Non-discrimination
o “Out of state goods, services, persons and capital are to enjoy the same
treatment as their in-state equivalents”
2. Mutual recognition (goes hand in hand with the former)
o “Goods lawfully produced in one MS should presumptively have free and
unrestrictive access to the market in another MS”
Mutual recognition also means having mutual trust
o Home country control/country of origin principle
Alternatives: host country control
Harmonized model principle of mutual recognition only applies
when there is no harmonization
3. Market access
o “National rules preventing or hindering market access are unlawful,
irrespective of whether they actually discriminate against imports or
migrants”
o Bosman: market access to French market was hindered for him
ECJ: in EU not only ban discrimination but anything hindering market
access specific for IM
Part 3: Balancing the IM against other interests
- Distinctive vs. indistinctive rules
o Illegal.:E.g worker needs to have Dutch nationality (distinctive rule) direct
discrimination based on nationality
o Legal E.g. worker needs to have obtained diploma at Dutch university
(indistinctive rule) indirect discrimination because technically everyone can
reach this criteria)
- Treaty exceptions
o N.B.: limited and static!
Protection of the environment, morality, health and secu
2
, - Mandatory requirements/rule of reason (in book)
o N.B.: unlimited and dynamic!
o N.B.: can be relied on only in case of indistinctive applicable national rules
o Established by ECJ case-law, not in treaties
o Exceptions in treaties too limited
o Public goods:
Preservation of the machinery of the state
Protecting civil liberties
Etc.
- Economic reasons
o Purely economic reasons can never justify restrictions on free movement
- Additional requirements
o The national rule at hand must always be PEN
Proportional the least restrictive option available
Effective achieve the result strived for
Necessary
Not amount to arbitrary discrimination
Procedurally fair
In respect of fundamental rights
Important articles:
- Art. 114 TFEU: allows EU to legislate for internal market purposes
1. Residual provision can only be used if other legal bases are not available
2. Ordinary legislative procedure (OLP) majority voting in the Council (key
innovation of the SEA)
3. Allows EU to adopt ‘measures’ legislature has the discretion to choose the
legal instrument most suitable for the issue at hand
4. Measures adopted must have as their object the establishment and
functioning of the internal market (as defined in Art. 26 TFEU)
Crucial question: how far does this power reach?
Confronted in Tobacco Advertising
o Art. 114 does not provide a general power to regulate
the economy
o Measures adopted under it must genuinely seek to
establish the internal market or to improve its
functioning
Measure must eliminate obstacle
Must deal with appreciable distortions of
competition
o The case sent an important signal: Art. 114 TFEU was
not without limits and Court was ready to police them
5. Only gives the power for ‘the approximation of the provisions laid down by
law, regulation or administrative action in MS’ under the provision, the EU
can bring national laws closer to each other, to harmonize BUT does not give
the EU the competence to create something new that is unrelated to pre-
existing or anticipated national laws
3
, 6. Exceptions: Art. 114 is subject to highly circumscribed derogations that made
the majority voting palatable for high standard countries
Seminar:
Cases:
1. Cassis de Dijon Case 120/78: is an EU law case decision of the ECJ. The Court held that
a regulation applying to both imported and to domestic goods (an "indistinctly
applicable measure") that produces an effect equivalent to a quantitative import
restriction is an unlawful restriction on the free movement of goods. The case is a
seminal judicial interpretation of article 34 TFEU.
2. Dassonville Case 8/74: is an EU law case of the European Court of Justice, in which a
'distinctly applicable measure of equivalent effect' to a quantitative restriction of
trade in the European Union was held to exist on a Scotch whisky imported from
France.
a. Judgement: The Court of Justice held that the requirement for a certificate in
Belgian law was contrary to article 30.
3. Keck Case C-267/91: is an EU law case, concerning the conflict of law between a
national legal system and European Union law. The Court found that "selling
arrangements" did not constitute a measure having equivalent effect to a
quantitative restriction on trade between Member States of the European
Community, as it was then.
Keck and Mithouard were prosecuted in France under anti-dumping retail laws for
selling Picon liqueur at below cost price. The Court distinguished the case from its
earlier jurisprudence on the content or characteristics or the products concerned.
Thus the legislation in question fell outside the scope of the then article 30 of the
Treaty of the European Community (now codified as article 34 of the Treaty on the
Functioning of the European Union).
a. Judgement: Court of Justice held that the French law was not incompatible
with TEEC article 30 (now TFEU article 34) because the purpose was not to
regulate trade. If a rule applies to all traders in the same manner, and affects
them in the same way in law and in fact, it is lawful if it is merely a selling
arrangement. This was the case for the French anti-dumping rules.
Week 10: Free movement of goods
Lecture:
Part 1: Stages of economic integration
- Customs Union
o Concept:
Art. 28(1) TFEU
4
Week 9: Introduction economic and legal integration in the EU
Lecture:
Part 1: why do we have an internal market?
- The internal market: self-interest or ideology?
o Why EU?
o The idea of econ. integration is at the heart of EU integration ECSC
o Why cooperate at econ. level?
To prevent war/maintain peace?
Or is it a game played at national level/for national interests?
Both are right:
Internal Market (IM) enhances fair trade and competition, appears in
treaties ideological endeavour
On the other side: the reason to cooperate economically far more
rational states do not want to fall victim of protectionist policies of
the neighbour and want to maximise their own national economic
prosperity; they do this by cooperating with others!
- Benefits of free trade (the general idea underpinning the IM)
o Free trade specialization comparative advantage economies of scale
increased consumer welfare & efficient use of products
- European common market
o Groundwork for the common market was laid down in Spaak Report
Three sets of actions were proposed:
National protections creating obstacles to trade had to be
suppressed
Distortions of competition needed to be dealt with
Conditions for common growth had to be ensured
o White Paper of Delors: completing the internal market (1985)
o Focus of EU should be on removing:
Physical barriers
technical barriers
Fiscal barriers (e.g. national taxation)
- Single European Act (SEA) (1986)
o Introduced new legal basis: 114 TFEU
o Introduction of QMV
o Name change: from “common market” to “single market” or “internal
market”
- Understanding the integration process
o The Monnet method
Neo-functionalism spillover
- The common market
o Negative integration: eliminating obstacles, removal of discriminatory
restrictions ( telling nations what not to do)
1
, o Positive integration: harmonization, modification of existing policies, joint
exercise of power (telling nations what they should do)
- Harmonization what does it mean?
o Unfair to set same regulations for everyone
o Not “one size fits all”
- Total vs. minimum harmonization
o Total harmonization:
When an EU measure, e.g. a directive, regulates something
exhaustively, not leaving any room for divergent rules of the MS
the directive has pre-empted MS activity; it has occupied the field
Legal consequence: a national rule that complies with an EU measure
totally harmonizing something is no longer open to challenge on the
basis of the four freedoms of the Treaty
o Minimum harmonization
Sets the floor below which no MS may go, but leaves them free to
adopt more demanding rules
Allows MS to impose more strict rules
Part 2: Principles underpinning the internal market
1. Non-discrimination
o “Out of state goods, services, persons and capital are to enjoy the same
treatment as their in-state equivalents”
2. Mutual recognition (goes hand in hand with the former)
o “Goods lawfully produced in one MS should presumptively have free and
unrestrictive access to the market in another MS”
Mutual recognition also means having mutual trust
o Home country control/country of origin principle
Alternatives: host country control
Harmonized model principle of mutual recognition only applies
when there is no harmonization
3. Market access
o “National rules preventing or hindering market access are unlawful,
irrespective of whether they actually discriminate against imports or
migrants”
o Bosman: market access to French market was hindered for him
ECJ: in EU not only ban discrimination but anything hindering market
access specific for IM
Part 3: Balancing the IM against other interests
- Distinctive vs. indistinctive rules
o Illegal.:E.g worker needs to have Dutch nationality (distinctive rule) direct
discrimination based on nationality
o Legal E.g. worker needs to have obtained diploma at Dutch university
(indistinctive rule) indirect discrimination because technically everyone can
reach this criteria)
- Treaty exceptions
o N.B.: limited and static!
Protection of the environment, morality, health and secu
2
, - Mandatory requirements/rule of reason (in book)
o N.B.: unlimited and dynamic!
o N.B.: can be relied on only in case of indistinctive applicable national rules
o Established by ECJ case-law, not in treaties
o Exceptions in treaties too limited
o Public goods:
Preservation of the machinery of the state
Protecting civil liberties
Etc.
- Economic reasons
o Purely economic reasons can never justify restrictions on free movement
- Additional requirements
o The national rule at hand must always be PEN
Proportional the least restrictive option available
Effective achieve the result strived for
Necessary
Not amount to arbitrary discrimination
Procedurally fair
In respect of fundamental rights
Important articles:
- Art. 114 TFEU: allows EU to legislate for internal market purposes
1. Residual provision can only be used if other legal bases are not available
2. Ordinary legislative procedure (OLP) majority voting in the Council (key
innovation of the SEA)
3. Allows EU to adopt ‘measures’ legislature has the discretion to choose the
legal instrument most suitable for the issue at hand
4. Measures adopted must have as their object the establishment and
functioning of the internal market (as defined in Art. 26 TFEU)
Crucial question: how far does this power reach?
Confronted in Tobacco Advertising
o Art. 114 does not provide a general power to regulate
the economy
o Measures adopted under it must genuinely seek to
establish the internal market or to improve its
functioning
Measure must eliminate obstacle
Must deal with appreciable distortions of
competition
o The case sent an important signal: Art. 114 TFEU was
not without limits and Court was ready to police them
5. Only gives the power for ‘the approximation of the provisions laid down by
law, regulation or administrative action in MS’ under the provision, the EU
can bring national laws closer to each other, to harmonize BUT does not give
the EU the competence to create something new that is unrelated to pre-
existing or anticipated national laws
3
, 6. Exceptions: Art. 114 is subject to highly circumscribed derogations that made
the majority voting palatable for high standard countries
Seminar:
Cases:
1. Cassis de Dijon Case 120/78: is an EU law case decision of the ECJ. The Court held that
a regulation applying to both imported and to domestic goods (an "indistinctly
applicable measure") that produces an effect equivalent to a quantitative import
restriction is an unlawful restriction on the free movement of goods. The case is a
seminal judicial interpretation of article 34 TFEU.
2. Dassonville Case 8/74: is an EU law case of the European Court of Justice, in which a
'distinctly applicable measure of equivalent effect' to a quantitative restriction of
trade in the European Union was held to exist on a Scotch whisky imported from
France.
a. Judgement: The Court of Justice held that the requirement for a certificate in
Belgian law was contrary to article 30.
3. Keck Case C-267/91: is an EU law case, concerning the conflict of law between a
national legal system and European Union law. The Court found that "selling
arrangements" did not constitute a measure having equivalent effect to a
quantitative restriction on trade between Member States of the European
Community, as it was then.
Keck and Mithouard were prosecuted in France under anti-dumping retail laws for
selling Picon liqueur at below cost price. The Court distinguished the case from its
earlier jurisprudence on the content or characteristics or the products concerned.
Thus the legislation in question fell outside the scope of the then article 30 of the
Treaty of the European Community (now codified as article 34 of the Treaty on the
Functioning of the European Union).
a. Judgement: Court of Justice held that the French law was not incompatible
with TEEC article 30 (now TFEU article 34) because the purpose was not to
regulate trade. If a rule applies to all traders in the same manner, and affects
them in the same way in law and in fact, it is lawful if it is merely a selling
arrangement. This was the case for the French anti-dumping rules.
Week 10: Free movement of goods
Lecture:
Part 1: Stages of economic integration
- Customs Union
o Concept:
Art. 28(1) TFEU
4
