EUR-Charts

Exercise: (added for illustration purpose)

There is a (not very serious) booklet with the title “Bluff your way in the EEC, EC, EU”, in which both the words “EEC” and “EC” are crossed out. Using this title, please explain briefly the development from the EEC to the EU in legal terms.

Suggested solution:

The title of the booklet concerns the development of the European Economic Community (EEC), set up in 1958 and abolished (or, rather: changed in nature) in 2009. The EEC was set up as a novel type of international organisation through the EEC Treaty of 1957 (entry into force in 1958). The Treaty was repeatedly revised. The crossing out of the word “EEC” in the title of the “Bluff your way” booklet relates to the change of name of the Community through the Maastricht revision in 1992/1993. The “EEC” was renamed “European Community” (EC) and the European Union (EU) was set up. Especially in popular literature on the EU, it is sometimes stated that the EC, together with the two other European Communities that existed at that time (namely the European Coal and Steel Community (ECSC) and the European Atomic Energy Community (Euratom)), was superseded by the EU when this new international organisation was set up through the Maastricht Treaty. In fact, given that it was published in 1995, the title of the “Bluff your way” booklet indicates as much by crossing out “EEC”. However, this is not correct. Rather, the three Communities (EC, ECSC, Euratom) continued to exist when the EU came into being. As for the EC and the EU Treaties, they were also revised three times following the Maastricht revision.

From today’s perspective, it can be said that the crossing out of the word “EC” in the title of the “Bluff your way” booklet relates to the Lisbon revision (2007/2009). Through this revision, the EC was integrated into the EU. It no longer exists under the name EC, which is now part of the EU. The former EC Treaty is now called the Treaty on the Functioning of the EU. It is the repeatedly revised version of the original EEC Treaty of 1957. (Note: the Constitutional Treaty – which never entered into force – would have put an end to this Treaty by integrating its contents into the EU Treaty. Note also: as for the other two Communities, Euratom still exists but the ECSC does not. It had been given a limited lifetime of 50 years and expired in 2002.)

[Relevant Charts: Chapter 2, in particular Charts 2/4-2/23]

[V.1.0]

Exercise: (added for illustration purpose)

In a letter to the editor published in the news magazine “The Economist” of 14 May 2005, a reader wrote the following: “I believe that the citizens of the European Union would be best served if the next expansion of the EU was not to the east but rather to the west, to incorporate Canada […]. The advantages for both parties are too significant to ignore.” What do you think about the chances of applications for membership from countries such as Canada, Ukraine and Israel, in the event that they should wish to apply?

Suggested solution:

This question concerns the so-called EU enlargement or the joining of the EU by new Member States. Art. 49 TEU states two basic conditions for applications for EU membership: the State in question must be “European” and it must respect the Union’s fundamental values referred to in Art. 2 TEU. The letter by the reader of “The Economist” invites reflections on the term “European” against the background of the enlargement history. For example, it will be remembered that Morocco was told that it is not European within the meaning of the Treaty. On the other hand, Cyprus, an island in the region of Western Asia and an EU Member State since 2004, is considered European. So too is the candidate state Turkey, the greater part of which is located in Asia Minor. The enlargement history shows that the meaning of the term “European” is at least to some degree based on political decisions, rather than exclusively on geographical considerations. In addition, the reference to “the cultural, religious and humanist inheritance of Europe” in the preamble to the TEU may indicate that other issues may also play a role.

Geographically speaking, Canada and Israel are definitely not European, but the Ukraine (located to the West of the Ural mountains which have traditionally been considered the natural boundary between Europe and Asia) is. In an EU-Ukraine summit held in 2008, the EU cautiously acknowledged the “European aspirations of Ukraine” and welcomed its “European choice”. While the EU and Ukraine concluded an Association Agreement in 2014, the latter does not guarantee future EU membership to Ukraine. Debates on this issue prolonged the ratification process in the Netherlands. Regarding Israel, it may be interesting to note that the Italian prime minister said in February 2010 that he hopes to bring Israel into the EU. However, even if Israel were to be considered European, there would certainly be issues regarding the EU’s fundamental values (i.e. human rights).

[Relevant Chart: Chart 2/26]

[V.1.1]

Exercise: (added for illustration purpose)

Following many years of EU membership, and years of a development in a nationalist direction, a Member State contemplates the possibility of withdrawal under Art. 50 TEU. In the framework of the withdrawal procedure, what is the role of the EU institutions in this context? Who has to take what decisions? Within the Council (of Ministers), is unanimity of the representatives of the Member States necessary?

Suggested solution:

Following the internal decision-making process of the Member State in question and the notification of its intention to withdraw to the EU, the two sides (withdrawing state and EU) will conduct negotiations on a withdrawal agreement. On the EU side, under Art. 218(3) TFEU the Council (of Ministers) adopts negotiating directives, nominates the Union negotiator (or the head of the Union’s negotiating team) and authorises the opening of negotiations. The negotiations are conducted by the Commission (who also makes recommendations for the negotiating directives). If political agreement is reached, the Council, on a proposal by the negotiator, adopts a decision authorising the signing of the agreement (and, if necessary, its provisional application before entry into force). This requires a qualified majority within the Council as defined in Article 238(3)(b) TFEU. The two-year negotiation period can be extended; however, this requires that the European Council, in agreement with the Member State concerned, unanimously decides to extend this period. However, withdrawal can also happen without any formal decision on the EU side, namely when no political agreement is reached on a withdrawal agreement within two years after notification, and no extension of this period has been agreed upon.

[Relevant Charts: Charts 2/27 – 2/31]

[V.1.0]

Suggested solution:

The reference by Mr. Salman Rushdie (as he then was) to “the government of the European Union” invites reflections on the function and the tasks of the various EU institutions. The important point here is the fact that in the EU there is no classic division of the tasks of the legislative, the executive and the judicial powers as it is known from states. In particular, elements of executive power can be found in the European Council, the Council of Ministers and the Commission. Readers may use this question to list the functions and tasks of the various institutions. In a broader context, readers may recall that with the semi-permanent president of the European Council introduced through the Lisbon revision, there is now a concrete person standing for the EU as a whole (which, however, is not the same as saying that this person has the function of a “government”).

[Relevant Charts: Chapter 3]

[V.1.0]

Suggested solution:

a) The statement compares the Commission to the engine room of e.g. a large ship, i.e. the element that keeps the ship going. This refers to the important role of the Commission in the development of the EU’s secondary legislation (legislative plans, proposals etc.). It may also refer to the Commission’s role as a watchdog (i.e. enforcement proceedings, investigations in competition law), which makes sure that EU law is actually respected. It should be added that the Commission is not the only institution in charge of strategic thinking within the EU. Indeed, at the top political level, strategy is the particular responsibility of the European Council. In fact, it appears that the European Council is increasingly displacing the Commission as engine room, especially with the legitimacy that it now has after the Lisbon revision.

[Relevant Charts: Chapter 3, in particular Chart 3/5]

b) According to this statement, the main integration force in the Communities (and later the EU) is the Court of Justice, rather than other institutions. It is undoubtedly true that the ECJ plays an extremely important role in this context, as it is based on its case law that important doctrines of Community law (now: Union law) were developed.

The statement compares the ECJ to the emperor in the famous Danish writer Christian Andersen’s fairy tale “The Emperor with no clothes”. In the story, the emperor parades his new clothes which, according to the makers, are extremely beautiful and precious but invisible to the uninitiated. In fact, there are no such clothes and the emperor is naked. Is the ECJ naked when handing down judgments such as on the existence of direct effect of EU provisions (Van Gend en Loos), indirect effect (von Colson and Kamann), primacy (Costa), Member State liability (Francovich) and, more recently, on the meaning of EU citizenship (Baumbast and others) – all of which decisions that led to outcomes that do not spring to the eye when looking at the wording of the relevant provisions? Critiques will say yes, but the Court asserts that it limits itself to finding that which is implied in the law, thus keeping within the limits of its powers (and of the limits of the principle of conferral of powers to the EU as a whole). In a broader context, it may be argued that the Court simply applies the interpretation rules of the Vienna Convention on the Law of Treaties. According to Art. 31 of this Convention, a treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose.

The statement further indicates that in practice, the Court’s approach so far has always been accepted. There are very few exceptions to this. An example is the famous case of Daniel Cohn-Bendit (today an important Member of the European Parliament), where a French court refused to accept the direct effect of a provision of an EEC directive (formally, the Cohn-Bendit case has been revoked only very recently, in the decision of the Conseil d’Etat of 30 October 2009 in the case Perreux). Another issue where the ECJ’s approach is not fully accepted, at least in theory, is the extent of the doctrine of primacy where certain Member States pose limits. Readers may use the statement to recall the relevant national case law (e.g. the reservations expressed by Italy and Germany in relation to the protection of human rights). Finally, in certain cases the Member States have responded to ECJ case law by adopting Protocols or secondary law on a particular issue (e.g. in the fields of social law and of employment law).

[Relevant Charts: Chapter 3, in particular Charts 3/10-3/11, further Chart 1/9 and Charts 6/1-6/2]

c) and d): These are two contradictory statements about the European Parliament, each of which exaggerates one side of the truth. The statements invite reflections on the functions of the EP. However, in the particular case of the EP, it is not sufficient to merely list these functions under the present law. Rather, it is important to state that these functions have developed very significantly through Treaty revisions. They changed the EP from a rather powerless institution that played a merely monitoring and – in the context of secondary legislation – consultative role to a much more powerful institution which, in the ordinary legislative procedure, acts as a co-legislator with the Council of Ministers. Parliament is not, however, the legislator within the meaning of the national systems of the Member States. Readers may use the two statements to recall this development and to list the functions of the EP today, in particular in relation to the EU budget, the appointment of the Commission and the making of secondary law.

An interesting concrete example of the EP’s present position concerns the European External Action Service (EEAS). In relation to the creation of the EEAS, the EP has a merely consultative function Art. 27(3) TEU). However, the EEAS will need its own budget, and legislation on this needs to be approved by the EP. In this context, therefore, the EP has a de facto veto right.

[Relevant Charts: Chapter 3, in particular Chart 3/5, further Chart 5/3]

[V.1.1]

Suggested solution:

According to the principle of conferral of powers (e.g. Art. 5 TEU), the EU only enjoys the powers given to it. All other powers remain with the Member States, a fact that, post Lisbon, is explicitly mentioned in the EU Treaty (e.g. Art. 4(1) TEU). Legal basis provisions are the means of conferring powers on the EU. As for the internal market, the relevant legal basis provisions can be found in the parts of the TFEU that deal with free movement (including in particular Arts. 46, 48, 50, 59, 64 to 66 and 91 TFEU, but also Arts. 43 and 100 TFEU) and the general legal basis provisions of Arts. 114 and 115 TFEU. (Note: unlike before the Lisbon revision, the third general legal basis provision, Art. 352 TFEU, no longer refers to the internal (then: common) market but rather only to “the objectives set out in the Treaties” in a general sense.)

[Relevant Charts: Chapter 4, in particular Charts 4/1 and 4/4]

[V.1.0]

Suggested solution:

A basic difference between the two provisions is that Art. 91(1) TFEU is a specific legal basis provision and Art. 114 TFEU is a general one. Following a general legal principle, special provisions always take precedence over more general provisions. Accordingly, it must first be ascertained whether Art. 91(1) TFEU would be a suitable legal basis. According to the Court’s case law (as of Titanium Dioxide), this must be done on the basis of objective criteria, taking into account the aim and content of the planned measure. Art. 91(1) TFEU is the specific legal basis provision for, amongst others, rail transport. This is the area that the Council is planning to address. We do not know more details about the planned measure. As long as the planned measure concerns the objectives of the Treaties in the field governed by the transport title (Art. 90 TFEU et seq.), Art. 91(1) TFEU would appear to be the correct legal basis provision.

[Relevant Charts: Chapter 4, in particular Charts 4/4 and 4/8]

[V.1.0]

Suggested solution:

The Single CMO covers potatoes only partially. The present exercise suggests that the Commission is contemplating the adoption of a special CMO also for potatoes (which would then probably mean taking potatoes out of the Single CMO).

a) The role of the EP depends on the applicable legislative procedure. The special legal basis in the field of agriculture, Art. 43(2) TFEU, provides for the ordinary legislative procedure. In this procedure, the EP has the function of a co-legislator (together with the Council). This means in particular that it can block the adoption of the act.

[Relevant Charts: Chart 8/30 and Chapter 5, in particular Chart 5/5]

b) Under the ordinary legislative procedure, the adoption of an act requires a qualified majority. Following the Lisbon revision, the TFEU contains two formulae for such a majority. For the time being, the old (pre-Lisbon) formula as described in the Protocol on transitional provision, remains applicable. This means that a majority of the Member States can adopt the measure if they represent at least 255 of the weighted votes (a number relevant since the accession in 2007 of Romania and Bulgaria). This means that it is certainly possible that a single Member State can be overruled.

[Relevant Charts: Chart 8/30 and Chapter 5, in particular Chart 5/7-5/8]

c) They might argue that the adoption of such a CMO is contrary to the principles of subsidiarity and proportionality, as set out in Art. 5 TEU and described in the relevant Protocol. The two principles concern the exercise of EU competences. Put simply, the principle of subsidiarity demands that the EU acts only when it really makes sense to deal with a matter on the EU level. In the present case, it applies due to the fact that competence of the EU in the field of agriculture is not an exclusive one (Arts. 3 and 4(2)(d) TFEU). The principle of proportionality demands that EU action does not go further than necessary.

[Relevant Charts: Chart 8/30 and Charts 4/3]

[V.1.2]

Suggested solution:

The answer to this question will depend on the provisions chosen. Three examples:

Art. 83 TFEU on criminal law defines the type of act as “directives”. The procedure is the ordinary legislative procedure. Note: this is one of the rare legal basis provisions that also determines the degree of harmonisation to be achieved (“minimum rules”, i.e. minimum harmonisation or harmonisation at the lowest common level).

Art. 153(2)(b) TFEU on certain aspects of social law defines the type of act as “directives”. (This provision also proscribes minimum harmonisation.) The procedure depends on the issue to be regulated. For example, for rules on the improvement of the working environment to protect workers’ health and safety (Art. 153(1)(a) TFEU) it is the ordinary legislative procedure, but for the rules on the protection of workers where their employment contract is terminated (Art. 153(1)(d) TFEU) it is the consultation procedure.

Under Art. 169(3) TFEU on consumer protection, the type of act is not specifically defined (“measures”) and the procedure is the ordinary legislative procedure.

[Relevant Charts: Chapter 4, in particular Chart 4/5]

[V.1.0]

Suggested solution:

The relevant provisions can be found by going through the provisions regulating the free movement of goods. This will show that there is no specific legal basis provision on the free movement of goods within the EU. (This is different in the case of the other three freedoms). Accordingly, the relevant legal basis provision is Art. 115 TFEU. List the legal basis provision(s) in the TFEU that can be used in the context of the free movement of goods. For the customs aspect of the entry of goods from third countries into the EU there is Art. 31 TFEU. Note: the legal basis for agricultural goods does not concern free movement within the EU, as here the general rules apply (Art. 38(2) TFEU). It does, however, concern the entry of goods from third countries.

[Relevant Charts: Chapter 4, in particular Chart 4/4, further Chart 8/30]

[V.1.0]

Suggested solution:

The answer to this question will depend on the proposal chosen. The question invites the reader to analyse both the legal basis provision suggested in the proposal and the proposed measure’s aim and content, and to draw conclusions from this. Electronic versions of proposals published in the Official Journal can be found in the EUR-Lex database (http://eur-lex.europa.eu/oj/direct-access.html).

[V.1.1]

Suggested solution:

The Italian judge will not agree with this view, since in Italy – as in all other Member States – the doctrine of the primacy of EU law over national law is accepted. However, like the judges in many other EU Member States, the Italian Supreme Court will probably base its acceptance of this doctrine on the Italian constitution, rather than on the very nature of EU law, as was done by the Court of Justice in its case law (Costa; then: in relation to EEC law). The fact that the Italian Supreme Court (like the supreme courts of some other Member States) formulated limits to the extent of the primacy of EU law as accepted in Italy will not play a role in this exercise which – as far as we know – does not concern a human right.

Note: the exercise case is modelled after the famous Leonesio case which concerned the issue of direct effect (of provisions of a regulation). In contrast, the exercise case concerns the more general issue of the relationship between national law and EU law.

[Relevant Charts: Chapter 6, in particular Chart 6/1-6/2]

[V.1.1]

Suggested solution:

In order to succeed, Ms. Henonen’s claim must be well founded and it must be possible for her to rely on the relevant provision of EU law before a national court. The Court has held long ago, in Defrenne II, that the principle of equal pay under what is now Art. 157 TFEU is directly effective, i.e. it fulfils the conditions of being clear and precise, unconditional and leaving no legislative discretion to the Member States. Ms. Henonen can rely on this judgment, without having to make any arguments regarding the conditions for direct effect.

In Defrenne II, the Court also held that direct effect exists both in vertical and horizontal situations. Accordingly, it does not make a difference if Ms. Henonen’s employer is a private enterprise such as a supermarket. Note: this would be different in other contexts where the prohibition of discrimination in relation to pay is based on a directive rather than on a Treaty provision (e.g. under Directives 2000/43/EC and 2000/78/EC; see the next exercise question).

[Relevant Charts: Chapter 6, in particular Charts 6/3-6/6, further Chart 10/3]

[V.1.0]

Suggested solution:

First of all, it should be checked what the national law says about this issue. If the national law is line with the Database Directive, then the case can be dealt with simply on the basis of national law. In this context, it needs to be kept in mind that national law needs to be interpreted, so far as possible, in the light of EU law.

In the case where there is a discrepancy between the national law and the Directive, the issue of direct effect has to be checked. The case involves two individuals, namely a private company and a student, i.e. a horizontal situation. Under the Court’s case law (e.g. Faccini Dori), directives can only directly impose obligations on Member States and not on individuals. Accordingly, they are not capable of being directly effective. You will therefore tell Vermande that, in the absence of national law implementing the Database Directive, this directive will not help it in its dispute with Adam Louwerse.

[Relevant Charts: Chapter 6, in particular Charts 6/3-6/6, further Chart 6/11]

[V.1.1]

Suggested solution:

In this case, the situation at issue is of a vertical nature, i.e. the opponent of the company Vermande is the state. Direct effect is, therefore, possible in principle. Whether it is actually possible in the present case depends on whether the relevant provision fulfils the criteria of being sufficiently precise and unconditional, and whether the implementation period for the directive has expired.

[Relevant Charts: Chapter 6, in particular Charts 6/3–6/5]

[V.1.1]

Suggested solution:

According to Art. 288 TFEU, regulations become immediately part of national law (direct applicability). This is what distinguishes them from directives, which require implementation (i.e. unless a given Member State already has rules that are in line with the directive), in which framework the Member States enjoy a certain degree of liberty. (But it remains that some regulations will require implementing legislation, in which case normal rules of equivalence and effectiveness apply.) In its case law on the direct effect of regulations (Leonesio), the Court has used the direct applicability as an important element from which it follows that regulations are directly effective. In other words, the very nature of regulations implies direct effect.

[Relevant Charts: Chart 5/1, Chapter 6, in particular Charts 6/3 and 6/5]

[V.1.0]

Suggested solution:

The reason is that this particular case involved a dispute between individuals (lack of direct effect of directives).

[Relevant Charts: Chapter 6, in particular Chart 6/6]

[V.1.0]

Suggested solution:

They might point to the duty of the national court to EU-consistent interpretation (so-called indirect effect; von Colson and Kamann). However, this will only be of use if the relevant provision leaves room for an EU-conform interpretation (i.e. an interpretation against the clear wording of the national law will not be possible). A further alternative, which, however, will not lead to national law actually being in line with EU law, is Member State liability under the Francovich line of case law.

[Relevant Charts: Chapter 6, in particular Chart 6/11]

[V.1.1]

Suggested solution:

Given that the direct effect of a provision of a directive can only be relied on against the state, the meaning of this term is particularly important in this context. The Court has coined a broad definition of the meaning of “state” in Foster.

[Relevant Charts: Chapter 6, in particular Chart 6/6]

[V.1.0]

Suggested solution:

A free trade area is the first out of a number of different stages of economic integration between two or more countries. It denotes an area with free movement for the goods produced in this area (i.e. to the exclusion of common customs rules in relation to goods from third countries and of common rules on the free movement of such goods within the common territory). Readers may wish to explore the fundamental importance of the definition of origin to a free trade area, look at an example, and consider ways in which companies in third states will seek to circumvent it.

Note: the so-called Barcelona process was relaunched in 2008 by the setting up of the Union for the Mediterranean, which is a partnership between the EU Member States and six partners across the Southern Mediterranean and the Middle East (see http://ec.europa.eu/external_relations/euromed/index_en.htm).

[Relevant Charts: Chapter 7, in particular Chart 7/4]

[V.1.0]

Suggested solution:

A customs union also includes common rules about goods from third countries, notably a common customs tariff. Besides the customs union between Turkey and the EU, the EU itself comprises a customs union (Art. 28 TFEU). In contrast, the EEA does not cover goods from third countries.

[Relevant Charts: Chapter 7, in particular Chart 7/4, further Chart 2/6]

[V.1.1]

Suggested solution:

According to Art. 28(1) TFEU, the EU comprises a customs union (see above, question 2). Further, within the system of the EU, the internal market is a means to achieve the objectives of the Union (Art. 3(3) TEU) and so is the Economic and Monetary Union (Art. 3(4) TEU). The exercise question may also be used as an invitation to readers to look for Treaty provisions with further information about the meaning of these terms.

According to Art. 26(2) TFEU, the internal market comprises an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured in accordance with the provisions of the Treaties.

As for the EMU, according to Art. 119(1) TFEU the economic policy of the EU is based on the close coordination of Member States’ economic policies, on the internal market and on the definition of common objectives and it is conducted in accordance with the principle of an open market economy with free competition. The ultimate stage of the EMU is a single currency, namely the euro. However, in order to participate at this last level, the Member States must meet certain economic criteria. That is not yet the case for some of the Member States. Some Member States did not wish to join, even though at the time when the euro was introduced they did meet the criteria (however, they are still part of the EMU, just not of its last stage). Therefore, the euro is an example of differentiated integration. According to Art. 119(2) TFEU, the single currency is accompanied by a single monetary policy and an exchange rate policy, the object of both of which is to maintain price stability and support of the general economic policies in the Union, in accordance with the principle of an open market economy with free competition.

[Relevant Charts: Chapter 7, in particular Charts 7/4-7/5]

[V.1.0]

Suggested solution:

In the Van Gend en Loos case, a Dutch company complained about the fact that the Netherlands had in effect raised the customs duties due for a product imported by the company into the Netherlands. Under the present law, the relevant provision would be Art. 30 TFEU. It contains an absolute prohibition of customs duties. Accordingly, the outcome would be that the Netherlands would not be allowed to impose any such duties.

[Relevant Charts: Chapter 8, in particular Charts 8/7 and 8/9-8/10]

[V.1.0]

Suggested solution:

The exercise question refers to a real case and thus invites the reader not only to reflect on the question but also to find the case and study it (Case C-72/03 Carbonati Apuani Srl v Comune di Carrara, ECLI:EU:C:2004:506).

A customs duty within the meaning of Art. 30 TFEU is a charge imposed on a product in a unilateral manner, i.e. only on the product that crosses a border. In contrast, an internal tax within the meaning of Art. 110 TFEU is imposed in a general manner, i.e. on all of the relevant products on the market of the country in question, independent of whether they have crossed or will cross a border. In the case at issue, the charge, which is not borne by all marble, does not fall within the category of a general taxation measure.

This leaves Art. 30 TFEU (charge having equivalent effect to a customs duty). In the real case, the Italian government argued that Art. 30 TFEU “must refer only to customs duties and charges having equivalent effect in trade ‘between Member States’” (para. 21). On that, the Court noted that the free movement of goods must be ensured not in trade between Member States alone, but more broadly throughout the territory of the customs union (meaning that territorial boundaries are also relevant). However, the Court added immediately that the present case is not a purely internal one since the rule in question does not make a distinction between marble transported outside of Carrara to other Italian places or to other Member States.

If the charge has to be paid only on marble transported out of Italy or worked abroad, then the case is even clearer (Art. 30 TFEU).

[Relevant Charts: Chapter 8, in particular Charts 8/9-8/14]

[V.1.1]

Suggested solution:

The exercise raises the question of whether beer, wine, whisky and the other spirits that are taxed more highly than raki, on the one hand, and whether beer, wine, whisky, the other spirits or any of them and raki, on the other hand, are similar products within the meaning of Art. 110(1) TFEU and, further, whether (some of) the products that are taxed higher have been imported. The concept of similarity has been defined by the Court in the so-called Beer and Wine cases, among them John Walker. If the products are comparable, it is prohibited to tax the imported product higher than the domestic product. If they are not similar but still in competition, the taxation of the foreign product must not be protective.

[Relevant Charts: Chapter 8, in particular Charts 8/11-8/13]

[V.1.1]

Suggested solution:

The element defined in this case law is that of “measures having an effect equivalent to a quantitative restriction” (MEEQR) in Art. 34 TFEU. It is part of the prohibition contained in Art. 34 TFEU in order to make this provision more effective (application by analogy of the reasoning used by the Court in relation to the concept of charges having equivalent effect under Art. 30 TFEU; Diamond Workers). The question further invites the reader to recall the Court’s statements on the meaning of the legal concept of an MEEQR in the four landmark cases. These will be useful in view of the next exercise.

[Relevant Charts: Chapter 8, in particular Charts 8/18-8/23]

[V.1.0]

Suggested solution:

a) The new law amounts to a quantitative restriction under Art. 34 TFEU. However, it raises the question of whether there might be a justification under Art. 36 TFEU. The Animist party might try to argue that the measure involves the protection of the health and life of animals as well of the humans who eat their meat. However, it must remembered that the derogation grounds listed in Art. 36 TFEU must be interpreted strictly (Irish Souvenirs).

[Relevant Charts: Chapter 8, in particular Charts 8/18 and 8/24]

b) The case involves harmonising secondary law. In principle, such law leaves no room for the application of the Treaty rules on the free movement of goods. However, in the case of Art. 114(4) TFEU (which provides one possibility for the Member States for derogating from the harmonising law adopted on the basis of Art. 114 TFEU, with Art. 114(5) TFEU being the other one) there is a link with the Treaty provisions on the free movement of goods, in that Art. 114(4) TFEU refers to Art. 36 TFEU. In order to be acceptable, the stricter national law must be necessary to maintain national provisions on grounds of major needs referred to in Art. 36 TFEU. However, unlike in “real” free movement cases, this is not simply for the Member State to evaluate but must be examined and accepted by the Commission in the procedure provided for by Art. 114 TFEU.

[Relevant Charts: Chapter 8, in particular Charts 8/1 and 8/24, further Chart 4/6]

c) This rule is not expressed in numbers (i.e. it is not a quantitative restriction proper) and it applies to all products in the Member State in question (i.e. it is indistinctly applicable). The question then arises of whether it concerns the circumstances of selling, which would make it fall outside the scope of Art. 34 TFEU, thereby avoiding a finding that it amounts to an MEEQR (Keck). This may be a matter of dispute. Arguably the view can be taken that to a Catholic a blessing adds something to the product as such, thereby making the rule a product rule. If so, it can easily be argued that it affects market access (Dassonville, Towing Trailers). However, the question is whether the government can rely on a mandatory requirement (Cassis de Dijon). It might be difficult to convince a judge of this. Even if so, the judge would probably find that it is disproportionate to impose criminal sanctions for breaches. Note: the fact that the rule is limited to Catholic artefacts is irrelevant in the context of the free movement of goods, which is not concerned with issues such as discrimination on grounds of religion.

[Relevant Charts: Chapter 8, in particular Charts 8/16 and 8/19-8/23]

[V.1.1]

Suggested solution:

In principle, licence systems will usually amount to restrictions of free movement. In the present exercise case, the rule is indistinctly applicable and therefore raises the suspicion of it being an MEEQR. However, in the context of the free movement of goods, it must be asked whether the rule concerns a selling rule within the meaning of Keck, thereby making it fall outside the scope of Art. 34 TFEU. Here, the rule in question indeed concerns the circumstances of selling. It may also be assumed that it affects domestic and imported goods in the same way. Accordingly, it does not amount to an MEEQR and as such is not prohibited by Art. 34 TFEU. Note: a special derogation ground (protection of health) is not needed where a rule is a selling rule meeting the Keck conditions.

[Relevant Charts: Chapter 8, in particular Charts 8/16 and 8/21]

[V.1.0]

Suggested solution:

a) This is an indistinctly applicable product rule, which is acceptable only if there is a mandatory requirement and if the rule is proportionate to its aim. Otherwise it is an MEEQR prohibited under Art. 34 TFEU.

[Relevant Charts: Chapter 8, in particular Charts 8/16 and 8/20]

b) This is a purely internal case, as the goods in question do not cross any intra-EU border. Accordingly, it is not covered by Art. 34 TFEU (Mathot). Note: the dealer’s foreign nationality is not relevant in the context of the rules on the free movement of goods, which focuses on the goods rather on the people dealing with them (though it is, of course, the people or companies who will complain about any treatment of the goods that is contrary to EU law).

[Relevant Charts: Chapter 8, in particular Chart 8/2]

c) This is an indistinctly applicable selling rule, which does not amount to an MEEQR under Art. 34 TFEU if it affects domestic and imported goods in the same manner.

[Relevant Charts: Chapter 8, in particular Charts 8/16 and 8/21]

[V.1.1]

Suggested solution:

This case concerns an export ban, and therefore a quantitative restriction proper under Art. 35 TFEU. The Maltese State will rely on Art. 36 TFEU (protection of national treasures of historic value). They have a good chance that this will be accepted, in particular by reason of the proportionality of the measure.

[Relevant Charts: Chapter 8, in particular Charts 8/27 and 8/24]

[V.1.0]

Suggested solution:

a) If the rule of the football association remains the same (limitation of the number of non-EU/EEA nationals), then there is no problem and thus also no issue under EU law.

Should the rule limit the number of non-Spanish EU-nationals who can be fielded, then there is a problem that has to be assessed in the light of Art. 45 TFEU and Art. 7 of Regulation 492/2011/EU on equal treatment in relation to employment. These provisions apply because the footballer in question is a worker within the meaning of the Court’s definition in Lawrie-Blum and because the case involves a cross-border situation. Not relevant in this type of case is Directive 2004/38/EC, since the case does not involve the movement or residence of the worker or his or her family members.

More generally, note that it will depend on the circumstances of an individual case whether the footballer is a worker (Art. 45 TFEU) or a service provider (Art. 56 TFEU). In cases concerning sports other than team sports, Art. 56 TFEU will usually be relevant.

[Relevant Charts: Chapter 8, in particular Chart 8/40, further Chart 8/49]

b) The case concerns the right to market access (which includes the right to equal treatment in this market). The type of infringement at issue is discrimination on grounds of nationality. The case involves direct discrimination on grounds of nationality, since it involves unequal treatment of a non-Spanish citizen explicitly because of his nationality of another Member State.

[Relevant Charts: Chapter 8, in particular Chart 8/42]

c) Direct discrimination on grounds of nationality can be justified on the basis of the derogation grounds mentioned in Art. 45(3) TFEU only. No other derogation grounds are available. Note: the protection of human rights has been accepted as an imperative requirement (objective justification) by the Court in the context of restrictions of the free movement of goods.

[Relevant Charts: Chapter 8, in particular Charts 8/42 and 8/36]

[V.1.2]

Suggested solution:

a) The case concerns Ms. Iannidi’s right to enter another Member State under Art. 5 of Directive 2004/38/EC. The rights granted under this directive can be limited under Arts. 27 et seq. of the same directive, where the protection of public health is also mentioned. However, Art. 29 sets limits. If the tuberculosis suffered is contagious, Denmark may indeed use it as a reason to refuse Ms. Iannidi access to its territory.

[Relevant Charts: Chapter 8, in particular Chart 8/42, and Chart 7/23]

b) Family rights are regulated in Directive 2004/38/EC, with the exception of the right of a worker’s children to education and training, which remains covered by Art. 12 of Regulation 492/2011/EU (formerly, this regulation also covered other family rights).  If the husband and children of Ms. Iannidi are EU citizens, they have a right to enter Denmark upon showing their passport or an identity card (Art. 5(1) of Directive 2004/38/EC). If they are third-country nationals, they need a passport and, possibly, a visa (Art. 5(1) and (2) of Directive 2004/38/EC). Family members enjoy a right of residence according to the conditions set out in the relevant provisions of the Directive, i.e. Art. 6(1) or (2), as the case may be, for residence up to three months, Art. 7(1)(a) and (d) or (2), as the case may be, for residence of more than three months and Art. 16(1) or (2), as the case may be, for permanent residence.

As for the criterion of having sufficient means, under the present law it only exists in the context of residence for more than three months and in relation to persons who are neither workers nor self-employed nor family members of such persons (Art. 7(1)(b) and (c) of Directive 2004/38/EC). This was different under the secondary legislation that existed before Directive 2004/38/EC. Note: the case law that relates to this previous legislation is no longer relevant in the context of family members of workers or the self-employed, but it might be relevant by analogy in other contexts.

[Relevant Charts: Chart 8/42, and Charts 7/20-7/22]

c) No, it is not. Art. 7(2) of Regulation 492/2011/EU grants migrant workers the right to equal treatment in relation to tax advantages. It is therefore not acceptable to grant a certain tax advantage to the nationals of the Member State in question but not in relation to workers with the nationality of another EU Member State.

[Relevant Charts: Chapter 8, in particular Chart 8/42]

[V.1.2]

Suggested solution:

Directive 2005/36/EC regulates the mutual recognition of diplomas for regulated professions. Mr Manninen’s case is an establishment case (long-term economic activity in another Member State), which means that Arts. 10 et seq. of the Directive are relevant. The exercise invites the reader to study these provisions and to reflect on their meaning in a case like that of Mr. Manninen. If Mr. Manninen is a regulated profession, he should be able to obtain a certificate in Finland, which will then have to be recognised in Austria. Accordingly, EU law should indeed be of use to Mr. Manninen.

[Relevant Charts: Chapter 8, in particular Chart 8/54]

[V.1.1]

Suggested solution:

Art. 49 TFEU explicitly mentions the setting up of branches as part of the freedom of establishment. However, the Treaty rules on free movement apply only insofar as there is no applicable secondary law. In this context, it must be remembered that the so-called Services Directive (Directive 2006/123/EC) applies not only to services provided in a short-term context (i.e. services within the meaning of Arts. 56 and 57 TFEU), but also to services provided in a long-term context (i.e. establishment). However, according to its Art. 2(2)(b), this Directive does not cover insurance services. In fact, there is specific EU secondary law about the insurance business. This legislation is not dealt with in “Essential EU Law in Text”. For exercise purposes, the question should therefore be answered in the framework of Art. 49 TFEU (of course keeping in mind that it is the specific secondary law that applies insofar as it covers a certain issue).

The rule that in order to be allowed to set up a branch, an insurance company must have been doing business in the host country for at least twenty years obviously limits the company’s access to the market of the host Member State. Given that it will be mostly national companies who are able to meet this criterion and mostly foreign companies who will not be able to do so, the criterion in question amounts to indirect discrimination on grounds of nationality, unless there is objective justification and the measure is proportionate. Consumer protection is undoubtedly a legitimate aim, but it is more than doubtful that the requirement of 20 years of residence is suitable and appropriate in this context. Accordingly, it would seem that the measure is not acceptable.

Regarding the rule that the setting up of branches is possible only for insurance companies of the host country, it is a clear case of direct discrimination on grounds of nationality. This type of infringement can only be justified on the basis of the derogation grounds listed in the Treaty, i.e. public policy, public security and public health. These grounds cannot be extended and must be interpreted restrictively. Therefore, the host Member State cannot rely on consumer protection.

[Relevant Charts: Chapter 8, in particular Charts 8/56 and 8/44-46]

[V.1.1]

Suggested solution:

The situation is different from the previous exercise question because now the company remains in its country of origin and offers its services across the border. The economic activity is temporary and for payment; it does not fall under another freedom. Accordingly, it concerns a service (Arts. 56 and 57 TFEU). Again, the same caveat in relation to secondary law on the insurance business applies as in the previous exercise question. Again, the Services Directive does not apply but there is specific secondary law on insurance. Again, for exercise purposes the question is answered in the framework of the Treaty provisions (of course keeping in mind that it is the specific secondary law that applies insofar as it covers a certain issue).

Under the Treaty rules on the free movement of services: authorisation requirements typically are restrictions within the meaning of the Court’s case law (e.g. French Tourist Guides), unless they can be objectively justified. This requires an imperative requirement and proportionality of the measure in question, on both of which we do not have any information.

The second rule is directly discriminatory. The derogation grounds provided for by the Treaty are the same in the context of the free movement of person and of services. Accordingly, the same assessment applies as in the previous exercise question.

[Relevant Charts: Chapter 8, in particular Chart 8/56 and Chart 8/49-8/51]

[V.1.1]

Suggested solution:

The case concerns a service. According to the Court’s case law (Luisi and Carbone), tourism is a service and service recipients (here: the tourists) are covered by the Treaty provisions even though Arts. 56 and 57 TFEU only mention the providers of services. Again, is must be asked whether this type of service is covered by the Services Directive (Directive 2006/123/EC). Tourism is not mentioned as being exempt from the field of application of the Directive. Since the present case concerns recipients of services, Arts. 19 et seq. are applicable.
a) In the context of free movement law, age discrimination is not relevant (on this issue, see the exercises on social non-discrimination law). Residence requirements typically amount to indirect discrimination on grounds of nationality. However, this is different under the Services Directive, since Art. 20 prohibits discrimination on grounds of nationality as well as on grounds of residence. The discrimination at issue therefore is direct discrimination on grounds of nationality. At the same time, Art. 20(2) allows justification based on objective criteria (rather than only on the basis of the derogation grounds mentioned in the TFEU). In its handbook on the Services Directive, the Commission has suggested that different prices for services based on residence are acceptable in view of the fact that the locals contribute towards the costs of the services through taxes. However, this appears contrary to the Court’s case law on entry prices to tourist sights, in particular Commission v Italy (Case C-388/01).

[Relevant Charts: Chapter 8, in particular Charts 8/58-59]

b) Yes, it does: free movement of persons under Arts. 56 and 57 TFEU as well as under the Services Directive (Art. 4(3)) concerns EU citizens only.

[Relevant Charts: Chapter 8, in particular Chart 8/32]

c) Yes, it does: in such case, the cross-border element that is necessary for any free movement case is missing. The case is a purely internal case and as such not covered by Arts. 56 and 57 TFEU or by the Services Directive.

[Relevant Charts: Chapter 8, in particular Chart 8/2]

[V.1.1]

Suggested solution:

The Treaty itself does not provide a definition. The Court, in defining the term, gives Annex I of Directive 88/361/EEC (a measure adopted before the entry into force of the present regime on the free movement of capital, and within the framework of that former regime) an indicative value. The annex lists numerous examples of investments that fall under the term “capital”. Investment in a company is a relevant form of investment if the investor through this investment does not gain decisive influence over the company (in which case the rules on the free movement of establishment would apply; Baars).

Unlike the other freedoms, free movement of capital covers both movement between two EU Member States as well as movement between an EU Member State and a third country. The investment of a Swiss person in the EU would be covered, as long as it is an investment within the meaning of Art. 63(1) TFEU and as long as the situation in which the right to free movement is relied on is not covered by a different freedom (Fidium Finanz).

[Relevant Charts: Chapter 8, in particular Chart 8/63]

[V.1.1]

Suggested solution:

Loans are listed in Annex I to Directive 88/361/EEC as a form of investment that falls under the term capital. To establish different fees for guarantees for loans according to the country wherein the relevant bank is located is a restriction to the free movement of capital. Such restrictions are prohibited, unless there is objective justification. We do not have any information about this latter point.

[Relevant Charts: Chapter 8, in particular Charts 8/61-8/66]

[V.1.1]

Suggested solution:

The participation in undertakings is listed in Annex I to Directive 88/361/EEC as a form of investment that falls under the term capital. Given the modest extent of participation, it is indeed the rules on the free movement of capital that apply, rather than the rules on the freedom of establishment. The Court will probably see the different tax treatment at issue in this case as a restriction on the free movement – it rarely finds discrimination on grounds of nationality. Again, we do not have information concerning the issue of objective justification.

[Relevant Charts: Chapter 8, in particular Chart 8/61-8/66]

[V.1.1]

Suggested solution:

Such a scenario might involve two different situations:

First, it seems possible that the three companies agreed on the price rise, though this may be difficult to prove. If so, the case involves a horizontal agreement by which prices are fixed within the meaning of Art. 101(1) TFEU. The further conditions for the prohibition under Art. 101(1) TFEU to apply is that the conduct may affect trade between the Member States (inter-state element) and that it has as its object or effect the prevention, restriction or distortion of competition (competition element). The fact that all participating companies are in Austria does not mean that the inter-state element is not present. First, the companies may sell their products in other EU Member States and, second, the Austrian market is susceptible to imports. Conduct meeting the conditions of Art. 101(1) TFEU is prohibited unless an exemption applies, i.e. a block exemption or an individual exemption under Art. 101(3) TFEU. However, price fixing is a hardcore restriction (namely because a price fixing agreement has as its object to restrict the market). Agreements containing hardcore restrictions cannot benefit from the block exemptions.

Second, in the absence of an agreement, it remains that there is parallel behaviour, which raises the question of whether this parallel behaviour is caused by a concerted practice. In this context, it needs to be remembered that parallel conduct may be the natural state of the market, for example where there are only few market players (oligopolistic market). The fact that the companies involved are big might play a role in this context. If the parallel conduct is the natural state of the market, rather than that of a concerted practice, then Art. 101(1) TFEU does not apply (Woodpulp). If not and if it can be proven that the companies exchanged price information, then there is a presumption of a concerted practice (see further question 2).

[Relevant Charts: Chapter 9, in particular Chart 9/7-9/8]

[V.1.1]

Suggested solution:

According to the Court’s case law, the exchange of sensitive business information is deemed to constitute a concerted practice within the meaning of Art. 101(1) TFEU, even if it does not lead to adaptations in the companies’ conduct (Case C-49/92 P Commission v Anic Partecipazioni SpA, ECLI:EU:C:1999:356). This is a rebuttable presumption. A concerted practice is prohibited if the other conditions are met, i.e. the conduct may affect trade between the Member States (inter-state element) and that it has as its object or effect the prevention, restriction or distortion of competition (competition element) and if there is no exemption (block exemption or individual exemption under Art. 101(3) TFEU). The large market shares indicate the possibility that the relevant market only consists of very few players (oligopolistic market). In that case, it might well be that parallel conduct is the natural state of the market, rather than that of a concerted practice. In that case, Art. 101(1) TFEU would not apply.

Milk is an agricultural product within the meaning of Art. 38(1) TFEU. According to Art. 42 TFEU, the TFEU chapter on competition rules applies to the production of and trade in agricultural products only to the extent determined by the European Parliament and the Council. The relevant secondary law (i.e. the Single CMO Regulation 1234/2007, and Regulation 1184/2006 applying certain rules of competition to the production of, and trade in, agricultural products) provides for a limited number of derogations from the applicability of competition rules to certain agreements and decisions of farmers and farmers’ associations. With respect to raw milk, the CMO Regulation allows joint sales by agricultural producers within certain limits.

[Relevant Charts: Chapter 9, in particular Charts 9/7-9/8; and, with respect to milk, Chart 8/30]

[V.2.0]

Suggested solution:

Indeed, it can do so. The fact that the two companies are established outside the EU and have probably entered into their agreement in a location outside the EU does not matter in this respect, as long as their conduct is implemented within the EU.

[Relevant Charts: Chapter 9, in particular Charts 9/3 and 9/24-9/29]

[V.1.1]

Suggested solution:

A dominant position is not by itself considered something bad under EU law. According to the Court of Justice (Michelin), such a position simply implies a particular responsibility on the economic operator involved. Art. 102 TFEU only prohibits the abuse of such a position. The existence of a dominant position depends on the strength of the economic operator in question in the relevant market (United Brands). The relevant market must be determined in terms of the products and services (substitutability) and the geographical dimension (a sufficiently homogeneous area), sometimes it also has a temporal dimension. The main criterion for determining the economic operators’ strength in the relevant market is his/her/its market share. If the market share is less than 50%, other factors (e.g. relative market shares, financial strength, technical advantages) will be needed in order to support a finding of dominance.

[Relevant Charts: Chapter 9, in particular Chart 9/20-9/23, further Chart 9/4]

[V.1.1]

Suggested solution:

Indeed, they do. If the planned merger meets the thresholds laid down in the Merger Regulation, then that Regulation applies. The planned merger has to be notified to the Commission, which has to approve it before it can be effected. The Commission will examine whether the planned merger would significantly impede effective competition in the internal market or in a substantial part of it. If the planned merger does not meet the thresholds of the Merger Regulation, the merger will have to be examined under national competition law (i.e. it needs to be notified to the national competition authorities).

[Relevant Charts: Chapter 9, in particular Chart 9/31-9/34]

[V.1.1]

Suggested solution:

The term “state aid” denotes a financial advantage granted in a selective manner by the State or through State resources. State aid is acceptable if either 1) the other conditions mentioned in Art. 107(1) TFEU are not fulfilled (i.e. the aid does not affect trade between Member States or it does not distort or threaten to distort competition) or 2) it falls under the block exemption or under a derogation listed in Art. 107(2) or (3) TFEU, Art. 106(2) TFEU (services of general economic interest) or Art. 93 TFEU (rail, road and inland waterway transport). If it constitutes state aid, the Commission still has to approve it. Only in the case of the block exemption is a notification not necessary.

[Relevant Charts: Chapter 9, in particular Chart 9/39-9/44]

[V.1.1]

Suggested solution:

Participation in the capital of a company is a form of state aid (Art. 107 TFEU) if a private investor would not have made the same investment (market economy investor principle). It is not acceptable if it meets the other conditions stated in Art. 107(1) TFEU (effect on trade, distortion of competition) and if it cannot be justified (Art. 107(2) and (3) TFEU). In a case like the one at issue, one should check the Commission’s Guidelines on State aid for rescuing and restructuring firms in difficulty.

[Relevant Charts: Chapter 9, in particular Chart 9/39-9/44]

[V.1.1]

Suggested solution:

The EEC from the very beginning contained a title on social policy, though this title was rather weak at the time (only one substantive provision – on equal pay, which had been put in the Treaty for economic reasons – but with no legal basis provisions). Further, the Treaty envisaged coordinating secondary law in the field of social security. Early on, the EEC adopted additional social law, in particular in the field of the free movement of persons, on issues such as social security law, the right of workers to bring family members to the host Member State and to remain in the Member State after the termination of their economic activity. Later, social elements were further developed in secondary law concerning other fields, such as company law.

[Relevant Charts: Chapter 10, in particular Chart 10/3]

[V.1.1]

Suggested solution:

The relevant fields are listed in Art. 153(1) TFEU. In addition, secondary legislation adopted under Art. 19 TFEU concerning measures against discrimination also covers issues of social law. Indeed, Art. 19 TFEU also covers the field of social law, though this is not stated explicitly and no specific subfields are indicated.

[Relevant Charts: Chapter 10, in particular Charts 10/1 and 10/5]

[V.1.1]

Suggested solution:

Art. 157(1), (2) and (4) TFEU are of a substantive nature, i.e. they impose obligations and they grant rights. In contrast, Art. 157(3) TFEU is a legal basis provision, i.e. it gives the EU the competence to act in the relevant field (which is broader than equal pay). Note: Art. 157(3) TFEU is very similar to Art. 153(2)(b) TFEU. However, the latter only allows for the adoption of minimum directives. In that regard, Art. 157(3) TFEU is broader.

[Relevant Charts: Chapter 10, in particular Charts 10/3 and 10/5]

[V.1.1]

Suggested solution:

The most important types of discrimination that are prohibited are nationality (Regulation 883/2004/EC), sex (Directives 97/7/EC, 86/613/EEC, 2004/113/EC and 2006/54/EC), racial or ethnic origin (Directive 2000/43/EC) as well as religion or belief, disability, age and sexual orientation (Directive 2000/78/EC). In addition, there is legislation that prohibits other types of discrimination, such as discrimination against workers performing part-time work or fixed-term work.

As for types of discrimination not mentioned either in the TFEU or in secondary law, it may be prohibited under the Charter of Fundamental rights. According to Art. 21(1) of the Charter, any discrimination based on any ground such as sex, race, colour, ethnic or social origin, genetic features, language, religion or belief, political or any other opinion, membership of a national minority, property, birth, disability, age or sexual orientation shall be prohibited. This list is longer than the list of types of discrimination prohibited under the Treaties and secondary law. Further, the words “such as” indicate that this list is not exhaustive, i.e. other grounds may be included. However, according to Art. 51, the provisions of the Charter apply only within the scope of EU law. In particular, they are addressed to the Member States only when they are implementing Union law. It remains to be seen what this means for the effect (in particular the direct effect) of the provisions of the Charter.

As for types of discrimination that are not mentioned in EU law, it remains open to the Member States to include prohibitions in their national law. For example discrimination on grounds of health is prohibited under French employment law.

[Relevant Charts: Chapter 10, in particular Charts 10/8 and 10/18, further Chart 7/10]

[V.1.2]

Suggested solution:

In the context of social law, the question is whether the age limits in this case are acceptable under EU law (regarding the residence requirement, see the exercises on the free movement of persons and services). However, the directive that prohibits age discrimination, namely Directive 2000/78/EC, does not cover access to services. At present, there is no other secondary EU law that could apply in this context but there might be such law in the future, if the Commission proposal from 2008 is adopted. Although some progress has recently been made, further political discussions are needed before the required unanimity can be reached in the Council.

[Relevant Charts: Chapter 10, in particular Chart 10/8]

[V.1.1]

Suggested solution:

This exercise case concerns the same directive as in the previous case, i.e. Directive 2000/78/EC, which does not cover the access to services. Under possible future secondary law, the measure in question would amount to prima facie indirect discrimination on grounds of disability: it concerns an apparently neutral measure with a disparate effect on people with disabilities. Whilst we have no information on objective justification, it seems difficult to imagine such justification in relation to people with a disability (in other words: the rule should exempt people with a disability).

[Relevant Charts: Chapter 10, in particular Charts 10/8 and 10/10-10/11]

[V.1.1]

Suggested solution:

Yes, the answer is different, as there is applicable EU law that covers the access to services both in relation to discrimination on grounds of sex (Directive 2004/113/EC) and on grounds of racial or ethnic origin (Directive 2000/43/EC). Given the reasoning by the nightclub, the relevance of Directive 2004/113/EC is obvious. The discrimination at issue is direct sex discrimination. Under Art. 4(5) of Directive 2004/113/EC, such discrimination can be objectively justified. The answer to the question of whether there is discrimination would therefore depend on the existence of a legitimate reason (gender balance in the night club? Would reliance on this ground be convincing in the concrete circumstances of the case?) and the proportionality of the measure taken. Again, there is no case law from the Court of Justice on such issues yet. Again, the exercise question invites reflections on these issues.

Whether there is discrimination on grounds of racial or ethnic origin rather than sex (and thus whether the real reason is something other than as indicated by the nightclub) is a matter of proof. Art. 8 of Directive 2000/43/EC concerns the burden of proof. Under this provision, the victim of the alleged discrimination must establish facts from which it may be presumed that there has been direct or indirect discrimination. It is then for the respondent to prove that there has been no breach of the principle of equal treatment. On the substantive level, it should be noted that direct discrimination on grounds of racial or ethnic origin can be justified only by reference to the specific derogation grounds mentioned in the directive (e.g. Art. 4 on occupational requirements).

[Relevant Charts: Chapter 10, in particular Charts 10/8, 10/10–10/13]

[V.1.1]

Suggested solution:

No, it is not. There is no common level of social security in the EU, but only coordinating law combined with prohibitions of discrimination (at this point in time: nationality, sex and racial or ethnic origin).

[Relevant Charts: Chapter 10, in particular Chart 10/17]

[V.1.1]

Suggested solution:

a) Positive integration, since the article sets out the conditions for a specific right.

[Relevant Charts: Chapter 11, in particular Chart 11/1]

b) Negative integration, since the article contains a prohibition (namely of discrimination on grounds of nationality).

[Relevant Charts: Chapter 11, in particular Chart 11/1]

c) Positive integration, since the article sets out the conditions for a specific obligation.

[Relevant Charts: Chapter 11, in particular Chart 11/1]

[V.1.1]

Suggested solution:

If garlic in capsules is a medicinal product, then it is covered by secondary law which in turn would mean that the imposition of a marketing authorisation is not only acceptable under EU law, but actually prescribed. In such a situation, there is no room for the application of the Treaty rules on free movement, including Art. 34 TFEU.

Conversely, if garlic in capsules is not covered by Directive 2001/83/EC, the Treaty rules on free movement apply. Under Art. 34 TFEU, an authorisation requirement that is applied indistinctly amounts to an MEEQR, unless there is an imperative requirement and the measure in question is proportionate. In other words, the Commission only has a case if Art. 34 TFEU applies.

[Relevant Charts: Chapter 11, in particular Chart 11/1, further Chart 8/23]

[V.1.1]

Suggested solution:

The fact that there is no specific EU law on a given matter does not mean that EU law sets no limits. Rather, it must be checked whether the Treaty rules providing for negative integration (free movement law, competition law and the equal pay principle under Art. 157 TFEU) apply. In the present case, the rules on the free movement for workers will be relevant in relation to migrant workers.

[Relevant Charts: Chapter 11, in particular Chart 11/1, further Chart 8/1]

[V.1.1]

Suggested solution:

The term “enforcement” refers to the elements and mechanisms in EU law that are meant to ensure that this law is actually respected, i.e. put into practice. Such elements can be found on different levels of EU law. In particular, secondary law may contain specific provisions concerning enforcement (e.g. in the context of EU social law) or there may even be specific directives on such issues (e.g. in the context of criminal sanctions in EU environmental law). In addition, the TFEU contains provisions on court procedures and on arguments that can be used before the courts. Further elements have been developed through the Court of Justice’s case law.

Five particularly important elements are: 1) the doctrine of direct effect as developed by the ECJ starting with van Gend en Loos, i.e. that individuals may rely on EU law that grants them rights where the national law of the Member States does not do so; 2) the action for annulment, i.e. review of the legality of an EU act by the ECJ (Art. 263 TFEU); 3) the action for damages against either the EU (Art. 268 TFEU) or a Member State (case law beginning with Francovich); 4) the preliminary ruling procedure (Art. 263 TFEU); 5) the enforcement procedure (Art. 258 TFEU).

[Relevant Charts: Chapter 12, in particular Charts 12/1-12/2]

[V.1.1]

Suggested solution:

Enforcement of EU law in general is based on the cooperation of national courts and the ECJ. This is particularly evident in the preliminary ruling procedure, where the ECJ answers questions put to it by the national court and necessary to this court for dealing with a matter before it. Further, certain important elements are entirely within the remit of the national courts. For example, the direct effect of a provision of EU law must be relied on before a national court. Further, Member State liability is a matter to be brought before a national court. In fact, it may be said that all national courts are Union courts of general jurisdiction.

[Relevant Charts: Chapter 12, in particular Charts 12/1-12/2]

[V.1.1]

Suggested solution:

It is not correct to say that all national courts are obliged to request a preliminary ruling when they have questions on the interpretation of EU law. Rather, according to Art. 267 TFEU it is only national courts of last instance (which means that last instance in the given case) that are obliged to ask questions, except where the questions asked are irrelevant or have already been answered (acte éclaré) or where the answer to the question is obvious (acte claire). These exceptions are based on case law (CILFIT). Courts other than last instance courts may ask a question whenever it seems necessary to them in view of the case before them. Their discretion in judging this necessity is very broad and must not be limited by national law (Rheinmühlen Düsseldorf).

Neither is it correct to say that the Court of Justice is obliged to answer all questions, even though it is true that the Court is bound in principle to answer questions. There are limits to this basic obligation. First and quite fundamentally, the Court can (and should) declare a question inadmissible where it does not relate to EU law (e.g. Grado Bashir). Also inadmissible are questions that bear no relation to the facts of the case before the national court (e.g. Alabaster) or are hypothetical (e.g. Foglia). Finally, the Court will refuse questions that are not accompanied by sufficiently clear and encompassing information about the facts and the (national) law at issue in the case (e.g. Servatius).

[Relevant Charts: Chapter 12, in particular Charts 12/22-12/23]

[V.1.1]

Suggested solution:

Given that the term is not explained in Art. 263 TFEU and does not appear elsewhere in the Treaty, it has been for the Court of Justice to explain its meaning. The Court ruled that the term “regulatory act” includes all acts of general application apart from legislative acts (Inuit 2011 and 2013). Art. 289(3) TFEU defines legislative acts as legal acts adopted by legislative procedure, either ordinary (Art. 289(1) TFEU) or special (Art. 289(2) TFEU). In particular, this includes regulations, directives and decisions in the form of delegated or implementing acts, i.e. non-legislative measures according to the formal definition in Art. 289(3) TFEU.

In fact, the term is inherited from the Constitutional Treaty which used it in the provision equivalent to the present Art. 263 TFEU. However, the background of that Treaty was different. Notably, the Constitutional Treaty mentioned a new type of EU act called “European Regulation”, which was non-legislative in nature. It has been argued that the term “regulatory act” as used in the Constitutional Treaty had to be seen in this context. Meanwhile, the interpretation by the Court of Justice has become settled case law (e.g. Case T-238/14 European Gaming and Betting Association (EGBA) v Commission, ECLI:EU:T:2016:259).

[Relevant Charts: Chapter 12, in particular Chart 12/8; with respect to legislative acts Chart 5/13]

[V.1.3]

Suggested solution:

a) Under Art. 263 TFEU, the German Government is a privileged applicant. Within the prescribed time period of two months, it can challenge any act adopted by an EU institution, body, office or agency that is intended to have legal effects vis-à-vis third parties. A directive is such a measure. As for the annulment grounds, it is likely that Germany would rely on a lack of competence or on an infringement of the principle of subsidiarity under Art. 5 TEU (infringement of EU law).

[Relevant Charts: Chapter 12, in particular Charts 12/5-12/8 and 12/11, further Charts 4/1 and 4/3]

b) The trade association is a non-privileged applicant. As such, it can only challenge an act addressed to it (which is not the case here), an act which is of direct and individual concern to it or a regulatory act which is of direct concern to it and does not entail implementing measures. Again, the term “regulatory act” includes all acts of general application apart from legislative acts within the meaning of Art. 289(3) TFEU (see question 4). Here, we do not know about the nature, legislative or non-legislative, of the Directive, of the Directive.

“Direct concern” means that the measure directly affects the legal position of the applicant and that it leaves no discretion to its addressees (Regione Siciliana).

“Individual concern” means that the applicant must be singled out by the measure as if he, she or it were addressed by it (Plaumann). In certain areas, this condition is relatively easily met (e.g. competition law, including state aid, and anti-dumping law). Outside these areas, positive examples in the Court’s case law are rare (e.g. Codorniu, Vischim).

With respect to the specific situation of interest groups, it should be added that standing requirements are generally as restrictive as for claimants acting individually. Sometimes, however, trade associations and other groups get access to the Court by virtue of express procedural rights in the relevant EU legislation.

[Relevant Charts: Chapter 12, in particular Charts 12/6-12/9]

c) If by then the directive has not been implemented, then the City Council cannot do anything, based on the principle established by the Court in Ratti, according to which the State cannot rely on its own failure against an individual. If the directive has been implemented, the City Council can take action based on national law. However, EU law takes primacy over national law (Costa). If there is a conflict between national law and EU law, the conflicting national law cannot be applied (Simmenthal).

[Relevant Charts: Charts 6/1]

d) Under EU law, there is a general right to an effective, proportionate and dissuasive remedy (Greek Maize). However, in the specific case at hand this is not relevant as there is specific harmonising law (the Directive) that contains an explicit provision on this issue. However, Heike will not be able to rely on this provision against Karl, as there is no horizontal direct effect of provisions of directives (Faccini Dori; besides, the provision in question does not appear to be sufficiently precise). She may consider an action for damages against Germany for not implementing the remedies article in the Directive (Francovich). According to the Court’s case law, non-implementation of a directive is by itself a sufficiently serious breach of EU law (Dillenkofer). In the case of deficient implementation, it will depend on the gravity of the infringement (Evans). Here, damages of one euro only are merely symbolic and as such will not be sufficient.

[Relevant Charts: Chapter 12, in particular Charts 12/32-33, further Chart 6/6]

[V.1.2]

Suggested solution:

No, the plea of illegality is a mere argument that can be used in a procedure before the Court of Justice (Wöhrmann). According to the wording of Art. 277 TFEU, any act of general application can be challenged by any party. However, in principle, this is possible only if the act could not have been challenged under Art. 263 TFEU (annulment procedure), though with the exception of privileged applicants in relation to a regulation (Spain v Council).

[Relevant Charts: Chapter 12, in particular Chart 12/26]

[V.1.2]

Suggested solution:

For the reader’s information: the substance of the case has to be seen against the background of the fact that Member States used to have prohibitions on night work for women, based on an ILO (International Labour Organisation) Convention that predated E(E)C law. According to Art. 351 TFEU, the rights and obligations arising from such agreements shall not be affected by the provisions of the Treaties. However, to the extent that such agreements are not compatible with the Treaties, the Member States must take all appropriate steps to eliminate the incompatibilities.

The procedural context of the exercise question is the enforcement procedure under Art. 258 TFEU et seq., which concerns (possible) breaches of EU law by a Member State. There may be two rounds of the procedure, with a pre-litigation phase (dialogue between the Commission and the Member State in question) and a judicial phase (action before the Court of Justice) in each round. In the case under discussion, the Commission has won its case in the first round. Since the Member State did not comply with the Court’s judgment, the Commission has started the second round. In this round, the pre-litigation phase has not led to a solution, whereupon the Commission has brought another action to the Court. In this second action, the Commission is entitled to suggest a financial sanction, here a daily fine.

Alternatively, it is possible that the case concerns the special situation of Art. 260(3) TFEU: where the alleged breach consists of non-notification of national measures transposing a directive adopted under the ordinary legislative procedure, the Commission may suggest a financial sanction immediately. This is a new element introduced by the Lisbon Treaty.

[Relevant Charts: Chapter 12, in particular Charts 12/15-12/18]

[V.1.1]

Suggested solution:

The case involves an action for damages against the Commission, i.e. the issue of EU liability under Art. 340 TFEU. The considerations leading the Court to find in favour of the company relate to both procedural and substantive issues.

On the procedural level, the Court must have found that the action had been brought within the time-limit of five years set up in Art. 46 of the Statute of the Court and that the action was brought by the right applicant (namely the party who suffered a damage) and against the right defendant (namely the EU institution whose failure is at issue).

On the substantive level, the Court must have found that the company suffered an actual damage, which was caused by an illegal act of an EU institution. More specifically, the Court must have found that the careless reading of the reports by the Commission infringed the obligation of the Commission to act carefully and diligently. It is difficult to judge from the little facts that we have whether this concerned a situation where the Commission enjoyed discretion (which means that the breach must have consisted of a manifest and grave disregard of the limits of its discretion) or whether there was no or only considerably reduced discretion (which means that a mere breach of EU law is sufficient to make the act illegal).

Note: this exercise question is modelled after the real Fresh Marine case (Case T-178/98 and C-472/00 P), where a mere breach of EU law was found to be sufficient.

[Relevant Charts: Chapter 12, in particular Charts 12/27-12/30]

[V.1.2]