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EUROPEAN UNION LAWLEIDEN UNIVERSITY

WEEK 2



EU DECISION MAKING

Welcome to the second week of this Courseracourse. In the rst week we talked about the

origins and the development of the EuropeanUnion and about the main actors in itsinstitutional framework. This week, the focus isgoing to shift to EU law. To how it is being made,

to its main features, and importantly, to how it isenforced. Both, at National level and at EU level.

In these videos, we are going to talk about EU decision making and about the interaction of the EUinstitutions in this decision making process. Specically, we are going to talk about the attribution of

competences, about the division of competences between Member States in the Union. About thelegislative procedures. Voting procedure in a Council and the form of EU secondary legislation.

STARTING POINTSBy way of preliminary I want to make two important observations. First of all, you should forgetany preconceived idea you may have, or preexisting idea you may have about decision making atNational level. At EU level this is completely different. There is no separation of powers between

the judicial, the legislative, and the executive branch of government at the EU level.

The Commission, the Parliament, and the Council are all involved in the legislative process. Crucially important the EU legal order cannot be seen as separate from the National legal

order.

Europe, the Union, and EU law are not a so-called, far from my bed show. To the contrary, EU law isan integral part of National law, and it is even an important one because one can easily say that 75% ofNational legislation is inuenced in some way or the other by Brussels.Now Brussels that is not them ,contrary to how it is often perceived. Brussels Europe, the European Union, that is us ,

When the counsel of Ministers adopts EU legislation it is actually the National governmentsgathered in the Council that do adopt EU legislation.

• Attribution of Competences• Types of EU competence

• Limitations to exercise EU competence Principle of Subsidiarity Principle of Proportionality



COMPETENCY - Article 5 - THE PRINCIPLE OF CONFERRALThe rst question that always needs to be addressed is, does the Union have the competence toact in a particular eld or not? In that respect we have to look rstly at Article 5 of the Treaty on

the Union, which contains the principle of conferral. Articles 5 reads as follows

“ the Union shall act only within the limits of the competence conferred upon it by

the Member States in the Treaties to attain the objectives set out therein. ”

In other words. The Union only has the competences which have been transferred to it by theMember States. The Union does not have a general EU lawmaking power. The residualcompetences remain rmly in the hands of the Member States.

If the Union is competent we can distinguish between 3 types of EU Competence. We theTYPES OF EU COMPETENCES:1. EXCLUSIVE - Only the EU can act; Monetary Policy, Customs, etc.2. SHARED - Member States can only act if EU hasn’t and only so far as the EU hasn’t

acted in a par ticular thing.3. SUPPORTING OR COMPLIMENTARY -

Parallel competences with the States. Cannot supersede State action.

Exclusive competence which means that only the EU can act, and the Member States cannot, such

as for example in the eld of monetary policy or in the eld of the Customs Union Policies.Secondly we have the shared competences between the Union and the Member States, a termwhich is self-explanatory. In the sense that the Member States can only act if and so far as and to theextent the Union hasn't acted in this particular eld. Problems with this example is the internal mark

to which we will turn in the next week. And thirdly we have the so called complementarycompetances of the Union. The Union has parallel competences with the Member States but cannotsupersede Member State action. The Union can only support the Member State action in this eld.

How do you know now in practice whether the Union is competent, and what competences it

has in a particular eld? I don't know, really you will have to look at the Treaty and search for a particular legal basis to ndout. Now apart from the question of the existence of EU competence. We come to the questionof the exercise of the EU competence.



How is that competence actually exercised? In general, we have to take into accountTWO LIMITING FACTORS LAID DOWN IN Article 5:

Principle of Subsidiarity - the Union shall act only if and only so far as the objectives of theproposed action can not be sufciently achieved by the Member State

Early Warning System - Treaty of Lisbon - 1/3 of all Parliaments feel Commission lawinfringes or violates the Principle of Subsidiarity, they can issue a Yellow Card procedure

that forces the Commission to review the action.

Principle of Proportionality - the content and the form of Union action shall not exceedwhat is necessary to achieve the objectives of the Treaties.

Test of suitability or of appropriatenessTest of necessity

The Principle of Subsidiarity means that in areas which do not fall within it exclusive competence theUnion shall act only if and only so far as the objectives of the proposed action can not besufciently achieved by the Member State but can rather by reason of the scale of the effects of

the proposed action better be achieved at Union level. In other words the starting point is thatdecisions are taken as closely as possible to the citizens, so star ting point National level. Only when

they can be taken better at EU level and they cannot be sufciently achieved at National level. Oneis going to adopt measures at EU level. In practice this principle of subsidiary hasn't exerted yet, a

great inuence on EU decision making. Now to change that, the Treaty of Lisbon has provided theso called early warning system. If one third of all National Parliaments of the 27 Member States isof the opinion that a proposal from the Commission infringes, violates the Principle of Subsidiarity,

they can issue a so-called yellow card to the Commission which is then forced to review theproposed action.

The second limiting factor is the Principle of Proportionality.Principle of propor tionality involves orimplies that the content and the form of Union action shall not exceed what is necessary toachieve the objectives of the Treaties. This principle is often used in practice. It consists of 2 tests.

A test of suitability or of appropriateness is a means chosen appropriate to reach the goal that onehave set. And secondly a test of necessity is it also necessary to achieve this goal. An example, doyou really need a bazooka to kill a mosquito? Well, arguably it's a suitable means, but not anecessary one.

Two Tests

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In Concreto: Legal BasisHow does this process go concretely? First of all, we have to look for a legal basis in the Treaty. Thislegal basis is going to reveal to us a lot. It is going to reveal to us the eld of action in whichlegislation is going to be adopted. It is going to tell us the procedure and it is going to tell us the

type of action. That can be adopted.

If we look at for example Article46 of the Treaty on theFunctioning of the Union, this is

to be situated in the eld of freemovement of workers. The rightof workers to move and reside inother Member States of the

European Union. The procedure to adopt legislation on this legal basis is the so-called ordinary legislative procedure.

And thirdly, which type of secondary legislation can be adopted on this particular basis?Both directives and regulations.

So summarizing, in the rst par t of this video concerning decision making, we looked at theprinciple of attribution of competences, at the various types of EU competence, and at the generallimitations to the exercise of this European competence. Namely the principle of subsidiarity and

the principle of proportionality. In the next part of this video, the focus will be on the variousdecision making procedures, the voting procedures within the Council of Ministers, and the actualforms that EU secondary legislation may take.

LEGAL BASIS REVEALSLooks for the legal basis in the Treaty Articles, they will tell us:

Which eld of action.Which procedure.Which type of action can be adopted.



EU DECISION MAKING - 2 Welcome, in the rst part of this video concerningdecision making we looked at division of

competences between Member States and theUnion. And at the general limitations to the exerciseof this EU competence. In this second part of this

video, we will focus on the involvement of the European Parliament, in the legislative procedure, on the voting procedures in the Council. And, on the forms that the EU secondary legislation can take.

Decision Making Procedures• Legislative Procedures

• Ordinary Legislative Procedures - EP is Co-Legislator & Can VETO

• Special Legislative Procedures - Role of European Parliament is Limited• Consultation Procedure - EP is only consulted • Consent Procedure - EP only consents

• Non-Legislative Procedures

Turning to the procedure that needs to be formed. In that respect we have to distinguish between the legislative procedures and the non legislative procedures. We're only going to talk about thelegislative procedure in this context. Within the legislative procedures we have to distinguishfurther between the ordinary legislative procedures and the special legislative procedures. These

procedures are to be distinguished on the basis of the involvement of the European Parliament in theprocedure.

In the ordinary legislative procedure, the Parliament is a real co-legislator together with theCommission and the Council. In the Special Legislative Procedures, such as in the consultationprocedure or in the consent procedure, iIt has a more limited role.

Consultation procedure, it can only be consulted, and the Council is not bound tofollow the advice of the European Parliament.

Consent procedure, such as for example in the accession procedures, the Parliament

must give its consent, but it cannot exert a real hard inuence on the content of themeasure.

The ordinary legislative procedure is now at least the most commonly used legislative procedure.The ordinary legislative procedure is to be found in Article 294 in the Treaty on the functioningof the Union . It is the so called co-decision procedure which means that the department acts as a

• Decision making procedures• Voting procedures in the Council• Forms of EU secondary legislation



full co-legislature with the counsel. And that is the distinguishing factor, with the special legislativeprocedures where the involvement of the Parliament is more limited.

In the Court decision procedure, the Parliament is a full co-legislator on a equal footing with theCouncil. This means that EU legislation cannot be adopted without the Parliament rmlyagreeing with the substance and the form of the measure. The Parliament can, if necessary, give aveto to the adoption of a particular act. If the Parliament uses the veto, the act cannot beadopted. Now in practice it will not often make use of that veto. The threat of the veto or themere fact that it exists can already exert enough practical relevance.

DECISION MAKING IN THE COUNCILTurning to the issue of the voting procedures in the Council. The Council can adopt act by:

Simple majority,

Unanimity - required for the politically most sensitive issues. Qualied majority voting (QMV)

The latter two are by far the most commonly used. Unanimity means that not one Member Statemay disagree with the proposed act. Abstention is not a problem. Once a Member State vetoes aparticular act it can no longer be adopted. Unanimity is required for the politically most sensitiveissues.

To make decision making at EU level more effective one has created the possibility of qualied

majority vote. Now, qualied majority voting means in practice, that each Member State isallocated with a certain number of votes in the Council, grossly based on its population. Germany has the largest Member State, with 29 votes. Malta has the smallest, with 3. This indicates

that the system is only grossly based on population. Malta has one vote per hundred thousandinhabitants. If one were to follow the same procedure for Germany, it would have 800 votes, andnot 29.

In total, 345 votes are allocated to the 27 Member States . 255 votes need to beexpressed in favor of a particular measure in order for it to be able to be adopted underQMV.

Additional requirements are that a majority of Member States votes in favor of themeasure and; 62% of the population backs a par ticular proposal.

If a Member State abstains from voting it is counterproductive.

We are going to look at two examples. The rst example is of an example of a measure thatcannot be adopted by QMV because of the fact that the third of these criteria, namely the 62%



population requirement, is not fullled. The two others are there are 24 Member States in favor of the measure. And more than 255 votes expressed in favor. The second example, is an example ofa measure that can be adopted on the basis of qualied majority voting. There is more than 62%of the population, more than half of the Member States in favor of the measure, and more than255 votes expressed in favor of the measure.

Theoretically speaking, the system of qualied majority voting can entail that a Member State can bebound by an EU act without having voted for it.This is true, but it is predominantly a theoretical or aremote possibility. Because in reality one tries to refrain from voting as much as possible. And one

tries to achieve a consensus within the Council as much as possible. It is realistically mainly in theelds of agriculture and sheries alone that won't effectively comes to a vote.

FINAL NOTESTwo nal remarks in this respect. Qualied majority voting still requires the majority of MemberStates. In the Lisbon Treaty now the possibility exists, as well, which had been created beforealready, of moving ahead by enhanced cooperation. This means that if 9 Member States want tointegrate further on a particular eld, and has failed to achieve the required consensus, they cando so. Provided that for the Member States that remain behind they will still have theopportunity to join at a later stage , and it can only be done as a kind of “ultimum remedum” or lastresort.

DECISION MAKING BEHIND THE SCENESSecondly this procedure of decision making is complex. In reality, it is even more complex becausewe see that the representatives of the Council, the Commission, and the Parliament, also meetbehind closed doors, in the lobbies basically, in the form of the so-called trilogues where in a limitedsetting, they already concoct and try to come to an agreement on a particular issue. The system of

trilogues is not very transparent. It is very effective though. But inevitably it also raises concerns ofdemocratic legitimacy .



SOURCES & INSTRUMENTS OF EU LAWIn the previous video, we talked about EU DecisionMaking. In this one, were going to look specically at

the outcome of this decision making process. Namely, the forum of secondary legislation that is going beadopted. We are going to focus specically in thisrespect on the difference between hard law and soft

law. And secondly we're going to look at relation of this secondary EU legislation. With EU primarylaw.

Why is this important? Well specically because of the fact that certain acts of secondary legislationcan be directly invoked in National Court proceedings before the National judge. So they have a

very concrete relevance for individuals and companies in the issue of enforcement of EU law.Secondary Law

Directly invoked in National Courts Relevant for individuals and companies

EU PRIMARY LAWFirst of all, we have to identify what is EU primary law. First of all, undoubtedly, the Treatiesconstitute primary law .

Treaty on the functioning of the Union - TFEU is Primary Law Treaty on the Union - TEU is Primary Law

The Protocols which are attached to the Treaties have the same legal value ; Theprotocol on the application of the principles of proportionality and subsidiarity havethe same legal value as the Treaties , and is primary law .

General Principles of Law are Primary Law found in the case law of the Courts of Justice;

Some of these General Principles of Law are to be found in the Treaties, such as theprinciple of propor tionality.

Some principles are to be found in the administrative law of the Member StatesSome found in the National Legal Order - such as the laws of principles of legal

certainty, or legitimate expectations. An important category of General Principles of Law are the Charter of

Fundamental Rights, this is also Primary Law.

• Outcome of decision making process

• Forms of Secondary Legislation• Hard laws vs. Soft Laws• Primary and Secondary Law



In addition, also the protocols which are attached to the Treaties have the same legal value . Theprotocol on the application of the principles of propor tionality and subsidiarity have the same legalvalue as the Treaties, and is primary law.

A third category of primary law are the so-called General Principles of Law. Most of these general

principles are to be found in the case law of the Cour ts of Justice. Some of these general principlesare to be found in the Treaties, such as the principle of proportionality. Some principles are to befound in the administrative law of the Member States and in the National Legal Order, such as thelaws of principles of legal certainty, or legitimate expectations.

The general principles have two important functions. They constitute an impor tant tool to interpret the Treaties,They can also amount to a ground of review of the legality of EU secondary legislation in anenforcement procedure.

And additional important category of General Principles of Law are the fundamental rights. Withthe Charter of the Fundamental Rights now being recognized as primary law as well.

Since the Treaty of Elizabeth, the fundamental rights are becoming more and more importance in the EU league of order. The European institutions must comply with human rights, and so must theMember States when they act within the scope of application of EU law.

The main instruments of EU secondary legislation are laid down in Article 288 on the Treaty ofthe Functioning of the Union, that Article reads as follows.

“To exercise the Unions competences, the institutions shall adopt regulations, directives,decisions, recommendations and opinions.”

Arguably these are the ve most prominent, most important instruments of EU secondary legislation.Regulations - BindingDirectives - BindingDecisions - Binding

Recommendations - Not BindingOpinions - Not Binding

Three of these ve are binding, two of them are not. The three binding ones are regulations,directives, and decisions. Regulations have a general application. They are applicable all over theUnion to everyone and everybody. Individuals, companies, Member States. They also binding in

their entirety. So every provision of a regulation is binded and they are directly applicable. Meaning



that they can directly be relied upon before National Courts. They can in principle, not beimplemented in the National legal order. A good example of abinding provision over regulation is Article 7, second paragraph ofregulation 492/2011. On the rights of free movement of workers. Article 7 indicates that migrant workers shall have the same socialand tax advantages as the Nationals or the host Member State. Outof a 100 instruments of secondary instruments, roughly 1/3 areregulations. Regulations are meant to ensure uniformity of EU lawall over the Union regardless of whether it is applied in the southof Portugal. Or in the north of Sweden .

The second instrument of secondarylegislation is the Directive. A directive isalmost diametrically opposed to a regulation.It is not generally applicable rather it isaddressed only to the Member States. It isnot directly applicable, rather it needsimplementation in the National legal order.And it is not binding in it's entirety, rather it

is only binding as to the result to be achieved . Member States have the choice of form and methodsto implement it in a National legal order . Out of 100 instruments of EU secondary legislation, roughly10 are directives. (so 10% are Directives, 33% are Regulations) Impor tant examples of EUdirectives are Directive 2004/38, on the rights of citizens in the EU, or Directive 2006/123, on theLiberalisation of Services in the Internal Market, the so-called former Bolkestein Directive.

Where regulations are primarily intended to ensure absolute uniformity of EU law, all of over theUnion, directives are primarily intended involve the Member States in the decision makingprocess.

Thirdly, we also have the decisions. Decisionsare only binding to the parties to whomthey are addressed. They are binding in theirentirety, and they are also directlyapplicable. A good example of a decision is adecision in the eld of competition law issued

by the Commission. For example In the Commission can issue a decision concerning the conditionalapproval of a merger between two undertakings. This means that only under these conditions and after

REGULATIONS• General application

• Binding in their entirety • Directly applicable• Uniformity of EU law

DIRECTIVES

• No general application• Needs implementation in National legal order • Binding as to the results to be achieved• Intended to involve Member States in decisionmaking process

DECISIONS

• Binding to specic parties• Binding in their entirety



the conditions that a Commission has imposed are complied with that planned merger or acquisition cantake place. Out of a 100 instruments of EU secondary legislation, roughly one quarter or 25%are Decisions. So, directives, regulations and decisions are the three instruments of bindingsecondary legislation at EU level.

Besides the binding instruments of secondary legislation, Article 288 also contains a number ofnon-binding instruments of secondary legislation. As I indicated already, recommendations andopinions are the most commonly used types of non binding legislation or the so called soft law. This soft law was for a long time considered second rate secondary EU legislation, the ugly ducklingof EU secondary legislation, so as to say . The reason for this being that these instruments arenonbinding, that individuals could not directly rely upon them before the National Court. Now thatis no longer the case now a days.

More or less since 2000 the use of soft law has exploded . So that now a days it is fair to say thealmost 15% of all instruments of EU secondary legislation consists of soft law. We nd a lot of softlaw in the eld of employment policy, culture, education, health, sports, for examples. The reasonsbeing that notwithstanding the fact that they lack a binding effect, that they have the advantage ofbeing exible . And that even at moments or in elds where one doesn't necessarily wants torealize further integration or when there's no real political for legislation. That nevertheless, someprogress can be achieved in this eld. So EU soft law is very much an integral part of EUsecondary legislations at this moment.

What is now the relation between EU secondary legislation and EU primary law? Now secondarylegislation is subordinate to even primary law. It is based on primary law and it can furtherexplain and supplement primary law. To give an example in the context of free movement, Article45 on the Treaty of the functioning of the Union, contains the basic rights of freedom of movementof all EU citizens —o f the workers wanting to look for a job in another Member State. This right offreedom of movement is further explained, for example, in regulation 492 of 2011 on the rights ofEU migrant workers in the host Member State. And in directives 2004/38 on the rights of citizensin the European Union. Importantly, the legality of EU secondary law can be reviewed on thebasis of primary law. As we will see in the context of the enforcement procedures.

Relation Between Primary and Secondary Law Secondary law is subordinate to primary law Based on primary law Explains and supplements primary law



Now to conclude one nal remark. In all of this, I haven't mentioned yet the case law of the Cour tof Justice. In addition to the sources of EU law that I have mentioned already in these videos, also

the case law constitutes an important additional source of EU law. The judgements of the Courtsof Justice are binding on the parties, and they also have a persuasive force of precedent. Only in

a very, very limited amount of cases, the Court of Justice deviates from its earlier rulings in later judgements. The case rule of the Court of Justice therefore is instrumental or has beeninstrumental in shaping the EU legal order as it stands today. But this is an issue to which I willcome back in the remaining videos of this week.



PRINCIPLES OF SUPREMACY OF EU LAW

Ladies and gentlemen, in this video, I will talk about the Principle of Supremacy, one of the

cornerstone principles of EU Law.

Basically, this principle entails that in case of conict between measure of National law andmeasure of European law. primacy has to be given to the application of the latter, of Europeanlaw. We will look at this principle from two different perspective, from two different view points.

First of all, from the point of view of the Cour t of Justice of the European Union, which has arather absolute opinion on supremacy. And secondly from the point of view of the NationalCourts, which have a more nuanced view on this principle of supremacy.

PRINCIPLE OF PRIMACYNow what is the meaning of this principle of primacy? Well primarily, it means that:

EU law prevails over all forms of National law, even over the National constitutions. Secondly, it alsomeans that

EU law prevails over prior and over subsequent National legislation.

In other words, it is not possible to circumvent this primacy by adopting later subsequentconicting legislation.

Starting with a viewpoint from the Cour t of Justice, there is no mention of primacy in the Treaties.There is only Declaration 17 attached to the Treaty of Lisbon, which stipulates that the Treaties and

the laws adopted by the Union on the basis of the Treaties have primacy over the laws of theMember States. This declaration is essentially a codication of case law by the Court of Justice. In its

two landmark rulings, in the beginning of the 60s, mainly the Van Gend en Loos case, which is mainlyon direct effect . And secondly, the, the Costa versus ENEL case, the Court rmly established thisprinciple of supremacy of EU law.

To illustrate; the Costa case involved a dispute about the payment of an electricity bill, actually of avalue of 1925 lira, which corresponds to the price of one Italian espresso. On the basis of a casewith such a limited value, the Court created this important feature of EU law. Mr. Costa waschallenging the validity of an Italian Nationalization law in the electricity markets, claiming that his,Nationalization law was contrary to EU law . Now the Court ultimately disagreed with him but,nevertheless, rmly established this principle of primacy of EU law in this case, motivating it on grounds



of primarily the uniform application of EU law and the principle of effectiveness. For practicalpurposes, it is essential that EU law is applied in the same way in Copenhagen, as well as in Athens.

PRACTICAL EFFECTS OF PRINCIPLE OF SUPREMACY

Now, what are the concrete, practical effects of this principle of supremacy.Conicting National legislation has to be set aside.The National judge also has to do this of his own motion.

We can illustrate this on the basis of the famous case of Simmenthal. The Simmenthal caseconcerned an Italian legislation which imposed a fee on a veterinary inspection on the impor tationof of beef in Italy. Now, this law allegedly conicted with the Treaty rules on the free movement ofgoods. Now Italian legislation provided that the lower Italian judge is always obliged to apply anItalian law, unless, it has been set aside, or annuled by the Constitutional Court.

Now in Simmenthal, the Court clearly established that even the lower judge had to set aside theNational legislation even when the Constitutional Courts in Italy had not set aside this legislation, so

the lower judge had to do it himself. It may very well be that a Court of Justice has a ratherabsolute view on this principle of supremacy. That doesn't change anything about the fact that theviewpoint from the National Courts is a bit more nuanced. First of all, as far as ordinary legislationis concerned, there is no problem with accepting the primacy of EU law. However, when we aredealing with conicting constitutional provisions there is a problem with the unconditionalacceptance of the principle of primary. To give two examples the Polish Constitutional Tribunal isstill of the opinion that the Polish Constitution is the highest law of the land. This is of course anapparent conict with thisunconditional view from theCourts of Justice on the principleof supremacy of EU law.

Secondly, the Court that has posed the most problems in this respect is of course the FederalConstitutional Court in Germany. The Bundesverfassungsgericht in Karlsruhe, which has challengedon a number of occasions, the unconditional primacy of the EU law. Most specically, in the context of

the division of competences between the Union and the Member States and the fundamentalrights protection.

And at some point, the Court stated that it was of the opinion that the fundamental rightsprotection at the EU level was not of the same level as in Germany, and hence, it reserved the

VIEW FROM THE National CourtSNo problem with supremacy over ordinary National lawProblem with supremacy over their Constitutional law



right to check on the basis of the German constitution. But, ultimately a compromise has alwaysbeen found between the Court in Germany and the European Court in Luxembourg.

Two nal notes on supremacy. As I already indicated in practice this principle is widely accepted,and there are not very many problems with regard to this principle. And in case some problemsmay arise on the horizon, they are relatively smoothly solved. Most recently with regard to theacceptance of the European Stability Mechanism. Both the Court of Justice and the GermanConstitutional Court were in agreement. The introduction of this ESM was in conformity with theEuropean Treaties.

Secondly, on a nal note, we have to observe that Article 4 (2) of the Treaty on the Union indicates that Union shall respect the National identities of the Member States. The preciseimpact, the precise signicance of this provisor, of this provision is still unclear. But it is fair toassume that it may lead in the future or it might lead in the future to a more nuanced approachon supremacy of EU law.



ENFORCEMENT OF EU LAWIn the previous videos of this week, we have talked about how EU law is being made, and aboutarguably. Most principal feature, mainly the fact that it has primacy over conicting National Law.

Now it may, this may all look good in the books, but in order to create practical relevance of it, these rights and entitlements. One must be able to vindicate them.

Now in the EU, the system of enforcement has been set up through both, the National Courts and theCourt of Justice.

In this video, the focus will be rst of all with the Court of Justice, and then secondly on somegeneral features of this enforcement system. Before in the next videos we are going to look at theprecise details of this enforcement system. Now the Court of Justice is the highest judicial

authority In the European Union . It is established in Luxembourg, and nowadays, it consists of three different levels.

Court of Justice itself,The General CourtSpecial Court, namely, the Civil Services Tribunal

COURTS OF JUSTICE The Courts of Justice consists of 27 judges , - One judge per Member State.Currently 8 Advocates General - Deliver opinions to the Court in which they balance the old

arguments in particular dispute and present a concept judgement to the Court.

In practice in more than 7 out of 10 cases the opinions of the Advocate General are followed in practice. The Court has an almost general jurisdiction, it's task is to ensure observance of Europeanlaw. It's judgements are of course binding on the parties but

they have a far greater practical relevance.

There is no binding force of precedent, but there is a persuasive force of precedent.

And reality in practice we see that, that in next cases the Court hardly ever deviates from its principalStatements that it has made in previous cases .

In the EU system there is close cooperation between the National Courts and the Courts of Justice. Both are entitled to interpret EU law. Both are entitled to apply EU law. The only

JURISDICTIONGeneral JurisdictionEnsure observance of EU Law

Judgements binding on partiesPersuasive force of precedent



difference is that only the Court of Justice is entitled to rule upon the validity of an act ofsecondary EU legislation.

The main feature of this strong cooperation between the National Courts on the one hand, and the Courts of Justice on the other hand is the so called preliminary ruling procedure ,which is laiddown in Article 267 of the TFEU . The preliminary ruling procedure goes as follows,

A conict arises in National law, or in a Member StatesCase comes before a National Court.! The National judge has the opinion that a question arises regarding the interpretation ofEU law or about the validity of an act of EU secondary legislation.! The National judge may or under certain circumstances must refer the method to theCourt of Justice.! The National procedure is then stayed, or suspended in other words while the Court inLuxembourg is formulating an answer to the request for a preliminary ruling by theNational Courts.!

Once the Court of Justice, delivers its preliminary ruling, it sends it back to the NationalCourts, which subsequently, then resumes the National procedure and decides the conicton the basis of the answer given by the Court of Justice concerning the interpreting of EUlaw or the validity of an act of secondary legislation.

I have said that under certain circumstances the National Courts may be obliged to refer aquestion to the Court for a preliminary ruling. That is the case when there is no longer a judicialremedy available under National law. In other words, when there is no longer an appeal possible againsta judgement of a National Court, there are only a couple of exceptions to this obligation namelyEXCEPTIONS:

When a case or a question has already been asked before or when actually the questionis irrelevant and has no bearing to the case or

When the answer that a Court expects to give on the question is obvious and there isno reasonable doubt about a possible answer.

National COURTS

Interpret EU LawApply EU Law

COURT OF JUSTICE

Interpret EU LawApply EU Law

Review of validity



This is of course a difcult an obligation which is difcult to enforce. It is hard to oblige NationalCourts to ask a preliminary ruling from the Court of Justice and we do see in certain MemberStates Courts are more likely to ask preliminary ruling that in other Member States.

It can also be rather time consuming.The duration of a preliminary reference is currently about 16, 17months. Once the question has been referred to the Court of Justice for a pulmonary ruling, the

Court is in principle bound to answer to the National Court. There are only a number ofexceptions available in this specic circumstances.EXCEPTIONS:

When the National Court hasn't provided a Court with enough factual information, When the question actually bears no relation to the facts, or When it is a purely hypothetical question.

In other circumstances, the Court must provide an answer to the National Cour t.

A good example of a preliminary ruling constitutes the question asked by the highestAdministrative Court in the Netherlands, the Council of State in the so called Josemans case. And

the Josemans case which involved a Maastricht bylaw about the the possibility for non-residents in the Netherlands to enter into a coffee shop. The famous establishments where soft drugs arebeing sold.

Maastricht prohibited entry to coffee shops to nonresidents of the Netherlands. This prohibition waschallenged by the owner of one particular coffeeshop in Maastricht for violation of the Dutchconstitution, and for non-compliance with certain

provisions of EU law. Basically, the provisional citizenship, and some free movement provision. ACouncil of State was of the opinion that this case concerned or raised questions about theinterpretation of EU law and therefore referred the matter to Luxembourg. The Court of Justice wasof the opinion that soft drugs constitute illegal products, which cannot freely circulate in the EU unless formedical purposes, and if that is not the case, they do not fall under the free movement rules. Hence,

they answer this question in this particular way and they send it to the Council of State in theNetherlands, which was as a result, entitled to rule that the Maastricht bylaw did not violate EUlaw, and hence that it was possible to maintain this prohibition for nonresidents of the Netherlands

to enter into a coffee shop.

One nal observation. The Court of Justice is sometimes accused of going beyond its duty of ensuringobservance of EU law. And actually of making EU law.Prominent examples in this respect are the

MAASTRICHT BYLAW

Prohibits entry to coffee shops to nonresidents of the Netherlands.



Costa Case, in which the Court rmly established the principal of primacy of EU law—that EU lawprevails over conicting National law, or the case of Van Gend en Loos in which the Court rmlyestablished a principle of direct effect. Namely that individuals are entitled to rely on EU law beforeNational Courts. I will come back to this principle in one of the next videos in this week.

Especially in periods of legislative activity the Court has sometimes assumed the role of the motor of theintegration process , pushing ahead the European integration process. It is, if we look at the internalmarkets to which we will come back next week, it is clear that the Court has played an inuentialrole in shaping and realizing this internal market. All in all it is fair to say that the Court has playedan absolutely crucial role in shaping the EU legal order as it stands today.



ENFORCEMENT OF EU LAWREVIEW OF LEGALITY

In the previous video, we have talked about how EU law is actually being made, and about theprinciple of supremacy of EU law. In this video, the focus will be on the enforcement of EU law.This is of course a crucial issue. It is one thing to to have rights, it is yet a completely different ballgame to be able to vindicate these rights.

We will distinguish between two situations. On the one hand, it may be that one is unhappy withEU law and hence that one wants to review the legality of that EU law, and this is what we're going

to do in this video. And secondly, it may be that for some reason or the other one is unhappy orone has questions about the legality of National law in the relation to EU law. And hence one can

envisage to start a challenge against or a challenge about the conformity of that National law inrelation to EU law. That we're going to look at in the second video, or in the next video.

Several possibilities exist to review the legality of an EU Act. The most prominent or mostimportant of these actions being the action for annulment laid down in Article 263 in the Treatyof the functioning of the Union.

In order to be able to challenge an an an an an act of EU Law, four conditions must be fullled. Threeconditions which relate to the admissibility of an action and one with regards to the substance.

ADMISSIBILITYNow, what are the three conditions related to the admissibility of such an action.The Reviewable Act— Which acts can actually be challenged before the Courts and lecture work.

Well, the reviewable acts are the acts of the European institutions that are intended to producelegal effects vis-a-vis the third parties. So in other words, the most important instrument of bindingsecondary legislation that we have seen, the regulations, the directives, and the decisions. They can all bethe subject of an action for annulment before the Court of Justice.

TIME LIMITSSecondly, since an action can only be star ted within a limited time frame. A period of a principletwo months after the publication of the act is foreseen in Article 263.

STANDINGThe nal and most important and most contested issue with regard to the admissibility of such anaction, deals with standing . Who is actually entitled to star t an action for annulment?



We distinguish between the:The Privileged Applicants

Those with unlimited standing to bring in action of annulment, which are essentially the main EU institutions

The Semi Privileged ApplicantsProtection of Prerogatives - Those institutions such as the European Central Bankwhen can only star t an action for annulment to protect their own prerogatives.

The Non Privileged Applicants Limited circumstances. Natural and legal persons, citizens and companies so to say.Only for acts addressed to applicantsActs not addressed to applicants where there is a direct and individual concern

In the category of the privileged applicants we further distinguish between the ones that have anunlimited standing to bring in action of annulment, which are essentially the main EU institutions.And those which has only a semi privileged status and those institution such as the EuropeanCentral Bank when can only start an action for annulment to protect their own prerogatives. And

then nally and most importantly for our purposes, are the non privileged applicants. And these canonly in a very limited number of circumstances star t an action for annulment.

Who are the non-privileged applicants? Well, primary the natural and legal persons. The citizensand the companies so as to say. They can only start an action for annulment for acts which areactually addressed to them or when these acts are not addressed to them when they are directlyand indirectly individually concerned by these acts. Acts to which they are addressed, which areaddressed to them. That is straightforward. The most straightforward example being a decision

taken in the eld of competition law against a particular company. Well of course it speaks for itself that in that case the company can review the legality of that act.

The problematic issue is when individuals or companies want to challenge the legality of an act to, whichis not addressed at them, but about which they claim to be directly and individually concerned.

When is a natural or a legal person directly concerned by measure? Well the Cour t hasstipulated that, that is the case when the challenged act directly affects their legal situation . Now,we can still get around that. The real problematic issue is of course, interpretation of what constitutesindividual concern. In an early case the Plaumann Case, concerning clementines actually, the Courthas given an extremely restrictive interpretation of this aspect of individual concern. The Courtstipulated that I'm going to cite it for you.



“That persons other than those to whom a decision is addressed may only claim to be individually

concerned if that decision affects them by reason of certain attributes which are peculiar to them or byreason of circumstances in which they are differentiated from all other persons, and by virtue of these

factors distinguishes them individually just as in the case of the person addressed.”

Well, essentially, it boils down to the fact that in view of the Courts, anybody will always be able atany moment in time to start a clementine business. And hence, Plaumann was not individuallyconcerned by this EU act, this is of course in practice, an almost untenable position. Not everybodywill ever be able to win Wimbledon, or to become a prolic violin player. But be that as it may, thisis the restrictive practical interpretation of the Court regarding individual concern.

Summarizing, in the rst part of this video concerning review of legality of EU law. We introducedthe conditions for an action for annulment focusing on the restrictive interpretation given bythe Court to the concept of direct and individual concern. In the second par t of this video, wewill continue with delimited exceptions to this restrictive interpretation by the Court. We will alsointroduce the grounds for annulment, the effect of such an annulment. And we will end withintroducing the separate action for damages.



ENFORCEMENT OF EU LAWREVIEW OF LEGALITY - 2

In the rst part of the video concerning the review oflegality of EU law we introduced the main conditionsconcerning an action for annulment. In the second par t of

this video, we will wrap up the conditions for this actionand specify further on the separate action for damages.

Only in the specic elds of State aid and anti dumping, forexample has the Court has been willing to adopt a more

lenient approach as to the interpretation of individual concern. Otherwise, it has always adhered to this

very strict interpretation.

There are actually, in the whole history of the Court, only a handful of examples in which a company oran individual has been able to overcome this hurdle of individual concern. One of the most prominentexamples is the case of Codorniu which involved a Spanish company which produces sparklingwines. They had registered a trademark on that sparkling wine so that they were able to use thename Gran Cremant Codorniu. Now, subsequently secondary legislation was established thatreserved the name Cremant for sparkly wines from Luxembourg in France. Hence, Codorniuclaimed to be individually concerned by this measure given that they had registered their

trademark. And the Court actually agreed to this. So ultimately this wine, or this sparkling wine isfamous also in legal circles.

Now, the Court has given a very restrictive interpretation of this concept of direct and individualconcern. And as a result, it cannot be denied that for the wrong privileged applicants there is only avery limited possibility to launch a successful action for annulment. The Court has always been of theopinion that they had an indirect possibility to review the act through the National proceedings.Whereby National Courts could subsequently ask the Courts of Justice to review the legality of this actin a preliminary ruling procedure. But in practice, this is a system that hasn't worked very well. Andhence one could possibly say that there is a vacuum in the legal protection and this particularcontext.

Apart from the standing the nal issue, the nal and forth substantive issue in regard to this directreview concerns the grounds for action Article 263 actually provides four grounds. These are lackof competence, an infringement of an essential procedural requirement, an infringement of the Treaty ora misuse of powers. Of any of these four grounds, an action for annulment can be started.

ACTION FOR ANNULMENTDirect and individual concern

CONDITIONS FOR DAMAGESLimited exceptions

Grounds for annulment



Which means that one has to show that byadopting this or that secondary act, forexample, the prerogatives of the Parliamenthas been disregarded. The Parliament shouldhave been called deciding on this issue andnot being merely consulted. ! Acts have been reviewed because of thefact that a wrong legal basis had been used such as in the famous tobacco advertisingcase.

! Acts have been reviewed because, for example the, the duty to motivate why a decision had beentaken were disregarded .

What is the effect of an action for annulment if succesfull? It means the act needs to be annulledand it is annulled ex tunc. Which basically mean that it isn't suppose to produce or to have producedany legal effects.

ACTION FOR DAMAGES - VERY DIFFICULT TO SUCCEEDMere annulment may not always provide satisfactory relief for every applicant. Hence, they mayconsider the option of starting an independent action for damages under Article 340 of theTreaty of the functioning of the Union . The underlying principle of that Article of that provisionbeing that the EU must make good the damage that it has caused.

Now, also for this action, a number of conditions need to be fullled. The applicant must be the damaged party.It must start an action for damages before the Courts in Luxembourg, the General

Court or the Court of Justice The defendant must be the EU institution that has actually caused the damage and;One has to respect a time limit of maximum ve years.

As far as the the substance:One must prove that the Union act was illegalThat it has caused the damage and;That there was a causal link between the illegal act and the damage.

Especially with regards to the illegal act, one has to be able to demonstrate that act was also intendedto confer rights on individuals. Otherwise, it is impossible to star t a successful action for damages.And it must also be demonstrated that we are faced with a sufciently serious breach. With this EUact, which means or it has been interpreted again restrictively by the Courts. In the sense that the

ARTICLE 263Provides 4 Grounds for Action for Annulment

• Lack of Competence

• Infringement of essential procedural requirement• Infringement of the Treaty • Misuse of powers



way that the act that the institution must have manifestly and gravely disregarded the limits of itslegislative and this discretion. And given that restrictive interpretation, we can again say that in reality,the chances of obtaining actual damages for, for non-contractual liability of the EU aren't very high.



ENFORCEMENT OF EU LAW-CONFORMITYIn the previous video, we talked about the review of legality of EU law and about, we noticed thelimited possibilities for individuals and companies to launch a successful action for annulment or an

action for damages.

CHALLENGES TO CONFORMITY OF NATIONAL LAW WITH EU LAWIn this video, the focus will be on challenges to the conformity of National law with EU law andwe're going to specically focus on public enforcement namely infringement procedures by the

Commission or alternatively byMember States. And secondly,about private enforcement,enforcement by individuals.

PUBLIC ENFORCEMENT - THE EUROPEAN COMMISSIONFirstly, public enforcement. The European Commission is the watchdog of the Treaties. It has beenentrusted with the task of observing compliance with the Treaties. If the Commission considers thata Member State has failed to fulll an obligation under the Treaties, it can start infractionprocedure under Article 258 of the Treaty.

What does that imply, what is the procedure? Well, if the Commission either on its own motion oron the basis of a private complaint, and after investigation, considers that the Member State isbehaving in an inappropriate way from the point of the view of compliance with the Treaty, it canstart an informal dialogue with that Member State to solve this problem.

This informal approach can become more formal if a Member State fails to comply with theobservations of the Commission . Ultimately, we can go from a prejudicial phase or a pre-litigation phase basically into our litigation phase into a judicial procedure. In the sense thatEuropean Commission can bring the matter before the Court of Justice if a Member State fails tocomply .

Ultimately then, the codes of Justice may render judgement and this judgement may conrm that the Member State has indeed infringed the Treaty. In principle, given that the Court of Justice isthe highest authority, the highest judicial authority in the Union, a Member State should complywith the judgment. If it doesn't, a Commission is in a position to restart a procedure for non-compliance with the Court judgment. And that can ultimately lead to an order, a follow up

CHALLENGES TO CONFORMITYPublic Enforcement: Infringement procedures by the CommissionPrivate Enforcement: Enforcement by individuals



judgment by the Court of Justice, in which at that moment on the basis of Article 260 of theTreaty, the Court imposes a nancial penalty upon the infringing Member State. This nancialpenalty can consist of a lump sum or over periodic penalty payment.

An example of such a procedure is the Commission versus Greece case, or one of the Commissionversus Greece cases. In which Greece was allegedly dumping dangerous or toxic waste in Crete incontravention of an obligation under EU law. The Commission star ted procedures in 1987.Ultimately, the Court found against Greece in 1992. After Greece failed to comply with the

judgement of the Court of Justice in 2000, the judgement found against Greece for the second time, then ned Greece with a periodic penalty payment of 20,000 euros per day.

Apart from the Commission, also a Member State itself may bring a case against another MemberState under the public enforcement. This is on the basis of Article 259 of the Treaty. In reality, thisis a mere theoretical possibility, it happens only very rarely. This occurs in practice for mainlypolitical or diplomatical reasons. An example of a case which almost occurred was in the aftermathof the mad cow crisis in the UK. A ban had been imposed upon the sale of English beef in Europe.After the ban had lifted, France had failed to lift or to open its National market for the British beefagain. The UK threatened to start an action against France before the Cour t. But ultimately, it was aCommission that commenced the proceedings against France. Which ultimately led to condemnation ofFrance before the Court of Justice.

Now, what do we learn from both these two public enforcement procedures, specically forindividuals and companies? For individuals and companies, they may have the advantage that it iseasy for individuals and companies to le a complaint with the Commission or with with theirMember States against the other Member States. On the other hand, once they le a complaint,

the case is out of their hands. And the Commission only has limited resources to start proceedingsagainst infringing Member States. So, it has to make choices.

The Commission has discretion whether to start with a case or not. Now, that is a bitproblematic from the point of view of enforcement for individuals and companies . Also, theseprocedures are cumbersome, they may take a very long time. Commission versus Greece case thatI mentioned, started in 1987 and nished only in 2000. That is 13 years. So from an, an efciencyperspective, this public enforcement procedure is sometimes less than perfect . The rst part of

this video concerning the challenges through the conformity of National law with EU law. The focuswas on public enforcement, through the infringement procedure led by the Commission oralternatively, another Member State. In the second part of this video, the focus will shift to privateenforcement through the introduction of the cardinal concept of direct effect.



ENFORCEMENT OF EU LAW-CONFORMITYIn the rst par t of this video introduced the infringement procedure lead by the Commission oralternatively by another Member State. In this second par t of this video, the focus shifts to private

enforcement. I will introduce the concept of direct effect, of harmonious interpretation, and ofState liability.

PRIVATE ENFORCEMENT - INDIVIDUALS AND COMPANIESNow, to improve the system of judicial protection in the EU, besides the public enforcement, also asystem of private enforcement has been set up. It was actually the Court of Justice of the EuropeanUnion that created the extra possibility for individuals.

To enforce EU law in the landmark judgment of Van Gend andLoos, the Court created the concept of direct effect. Now, whatdoes that concept entail? It means that EU law can be directlyinvoked, directly relied upon by individuals and companiesbefore National Courts in a National dispute. In the concreteVan Gend and Loos case, Van Gend and Loos was animportation company that wanted to import goods fromGermany into the Netherlands. And was charged with acustoms duty, which it considered to be incompatible with the Treaty of law on the free movementof goods. The Court ruled that Van Gend and Loos could indeed directly rely upon the Treaty

provisions in order to avoid the payment of that customs duty. This is of course an incrediblyimportant decision by the Court of Justice. The concept of direct effect, coupled with the principle ofprimacy of EU law, means that individuals now have the possibility to directly Enforce EU law before the National Courts. And that has, of course, been an incredibly important feature to strengthen theenforcement of EU law, specically for individuals and companies.

CONDITIONS FOR DIRECT EFFECT(Direct Effect in plain terms means that EU law, if implemented would directly effect that personscase) Individuals can only rely on EU law directly before the Courts under certain conditions. And

these conditions are that, rst of all,The provision of EU law must be binding.

That the provision confers rights upon them.

That the provision is considered to be clear, precise and unconditional—Meaning that it

requires no further implementation in the National legal order.

DIRECT EFFECTEU law can be directly invoked,directly relied upon byindividuals and companiesbefore National Courts in aNational dispute.



With regard to most provisions of EU law, there are hardly any problems as to the question ofwhether they have direct effect or not. If there are, ultimately the Court of Justice has the lastwords. And if the National Court has questions about it can ask them to the Court through theprimary rolling procedure.

A special case are the provisions of the Directives, which by denition are conditional in the sense thatthey need to be implemented at National level. However, the Court has recognized that undercertain circumstances, even provisions of a directive may be directly effective.! But they can only be directly effected after the deadline of implementation over directive

National law has expired .! And in addition, for brownie points basically, they cannot be relied upon in private conict or

resort of conict between two private parties.

Important as that concept of direct effect may be, there are always circumstances in which aprovisional EU law lacks direct effect. And hence, cannot be directly relied upon by an individualbefore a National Court.

In order to provide an extra judicial protection for individuals, the board has created the conceptof harmonious interpretation, or consistent interpretation. And what does that mean?

It means that a National judge is obliged to interpret National law as much as possiblein a way that is in conformity, with the EU law that likes direct effect.

Now, of course, that obligation is not unlimited. It only goes so far and it does not oblige the judge to interpret EU law or interpret National law in a way a contrario, basically.

Now, if even this concept of harmonious interpretation does not provide any legal thoughts to theindividual or the company. Then, as a last remedy, the Court have created the concept of Stateliability. Which means that in the last instance, there's no direct effect or harmoniousinterpretation. Doesn't help that the aggrieved individual or company can ask for nancialcompensation from the State. This requires that individuals start an action for State liability before theNational Courts.

1st Possibility: Harmonious InterpretationNational law has to be interpreted in conformity with EU law

2nd Possibility: State LiabilityFinancial compensation from the state



CONDITIONS FOR STATE LIABILITYThe Court has established this in the case of Francovich and has imposed three conditions forState liability to possibly be rewarded for compensation . First,

Rights should be granted to individuals — Rights are conferred on individuals

It should be possible to identify the content of those rights on the basis of the provisions of thedirective —Damage is established

A causal link should exist between the breach of the State's obligation and the loss and damage

suffered by the injured party —Causal link

What had been the situation in Francovich, a company had gone bankrupt, and employees like MrFrancovich needed to receive a certain salary. Italy had failed to implement in the National legalorder a directive that provided for a nancial compensation package in such a situation.

Now, the provisions of the directive failed direct effect and harmonious interpretation didn'tprovide for a solution. Hence, in that case, the Court established that other provisions for Stateliability were fullled, hence in an action before the National Court, the individual, MrFrankovich, could obtain nancial compensation from the State.

Now to conclude, I can not stress enough the importance of the creation of this concept of directeffect. Arguably,! Van Gend and Loos is the most important judgement the Court of Justice has ever rendered and;

! The fact that individuals have the possibility, under EU law, to invoke EU law directly beforeNational Courts is a unique feature of EU law sets it apar t from International law, and reallyconrms the statement of recording, Van Gend and Loos,! “the community constitutes a new legal oder of international law” — that the EU is a special, legalorder under international law.

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