Inauguration EYE2014 Parlement européen Strasbourg 9 mai 2014

European Union law is a system of rules operating within the member states of the European Union (EU). Since the founding of the

European Coal and Steel Community The European Coal and Steel Community (ECSC) was a European organization created after World War II to regulate the coal and steel industries. It was formally established in 1951 by the Treaty of Paris, signed by Belgium, France, Italy, Luxemb ...

following World War II, the EU has developed the aim to "promote peace, its values and the well-being of its peoples". The EU has political institutions, social and economic policies, which transcend

nation state A nation state is a political unit where the state and nation are congruent. It is a more precise concept than "country", since a country does not need to have a predominant ethnic group. A nation, in the sense of a common ethnicity, may ...

s for the purpose of cooperation and human development. According to its Court of Justice the EU represents "a new legal order of

international law International law (also known as public international law and the law of nations) is the set of rules, norms, and standards generally recognized as binding between states. It establishes normative guidelines and a common conceptual framework for ...

".''

Van Gend en Loos v Nederlandse Administratie der Belastingen ''Van Gend en Loos v Nederlandse Administratie der Belastingen'' (1963) Case 26/62 was a landmark case of the European Court of Justice which established that provisions of the '' Treaty Establishing the European Economic Community'' were cap ...

'' (1963
Case 26/62
/ref> The EU's legal foundations are the

Treaty on European Union The Treaty on European Union (2007) is one of the primary Treaties of the European Union, alongside the Treaty on the Functioning of the European Union (TFEU). The TEU form the basis of EU law, by setting out general principles of the EU's ...

and the

Treaty on the Functioning of the European Union The Treaty on the Functioning of the European Union (TFEU) is one of two treaties forming the constitutional basis of the European Union (EU), the other being the Treaty on European Union (TEU). It was previously known as the Treaty Establishi ...

, currently unanimously agreed on by the governments of 27 member states. New members may join if they agree to follow the rules of the union, and existing states may leave according to their "own constitutional requirements".TE
art 50
On the most sophisticated discussion of

constitutional law Constitutional law is a body of law which defines the role, powers, and structure of different entities within a state, namely, the executive, the parliament or legislature, and the judiciary; as well as the basic rights of citizens and, in fe ...

and human rights principles for secession, see ''

Reference Re Secession of Quebec ''Reference Re Secession of Quebec'', 9982 SCR 217 is a landmark judgment of the Supreme Court of Canada regarding the legality, under both Canadian and international law, of a unilateral secession of Quebec from Canada. Both the Quebec gove ...

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particularly [67"The consent of the governed is a value that is basic to our understanding of a free and democratic society. Yet democracy in any real sense of the word cannot exist without the rule of law". And [149] "Democracy, however, means more than simple majority rule". Citizens are entitled to participate through the Parliament, and their respective state governments through the Council in shaping the legislation the EU makes. The Commission has the right to propose new laws (the right of initiative), the

Council of the European Union The Council of the European Union, often referred to in the treaties and other official documents simply as the Council, and informally known as the Council of Ministers, is the third of the seven Institutions of the European Union (EU) as ...

represents the elected member-state governments, the Parliament is elected by European citizens, and the Court of Justice is meant to uphold the

rule of law The rule of law is the political philosophy that all citizens and institutions within a country, state, or community are accountable to the same laws, including lawmakers and leaders. The rule of law is defined in the ''Encyclopedia Britannic ...

and

human rights Human rights are moral principles or normsJames Nickel, with assistance from Thomas Pogge, M.B.E. Smith, and Leif Wenar, 13 December 2013, Stanford Encyclopedia of PhilosophyHuman Rights Retrieved 14 August 2014 for certain standards of hu ...

. As the Court of Justice has said, the EU is "not merely an economic union" but is intended to "ensure social progress and seek the constant improvement of the living and working conditions of their peoples".

History

Democratic ideals of integration for international and European nations are as old as the modern

. Ancient concepts of European unity were generally undemocratic, and founded on domination, like the Empire of

Alexander the Great Alexander III of Macedon ( grc, Ἀλέξανδρος, Alexandros; 20/21 July 356 BC – 10/11 June 323 BC), commonly known as Alexander the Great, was a king of the ancient Greek kingdom of Macedon. He succeeded his father Philip II to ...

, the

Roman Empire The Roman Empire ( la, Imperium Romanum ; grc-gre, Βασιλεία τῶν Ῥωμαίων, Basileía tôn Rhōmaíōn) was the post-Roman Republic, Republican period of ancient Rome. As a polity, it included large territorial holdings aro ...

, or the

Catholic Church The Catholic Church, also known as the Roman Catholic Church, is the List of Christian denominations by number of members, largest Christian church, with 1.3 billion baptized Catholics Catholic Church by country, worldwide . It is am ...

controlled by the

Pope The pope ( la, papa, from el, πάππας, translit=pappas, 'father'), also known as supreme pontiff ( or ), Roman pontiff () or sovereign pontiff, is the bishop of Rome (or historically the patriarch of Rome), head of the worldwide Cathol ...

in Rome. In the

Renaissance The Renaissance ( , ) , from , with the same meanings. is a period in European history marking the transition from the Middle Ages to modernity and covering the 15th and 16th centuries, characterized by an effort to revive and surpass ide ...

, medieval trade flourished in organisations like the

Hanseatic League The Hanseatic League (; gml, Hanse, , ; german: label= Modern German, Deutsche Hanse) was a medieval commercial and defensive confederation of merchant guilds and market towns in Central and Northern Europe. Growing from a few North German to ...

, stretching from English towns like

Boston Boston (), officially the City of Boston, is the state capital and most populous city of the Commonwealth of Massachusetts, as well as the cultural and financial center of the New England region of the United States. It is the 24th- mo ...

and

London London is the capital and List of urban areas in the United Kingdom, largest city of England and the United Kingdom, with a population of just under 9 million. It stands on the River Thames in south-east England at the head of a estuary dow ...

, to

Frankfurt Frankfurt, officially Frankfurt am Main (; Hessian: , " Frank ford on the Main"), is the most populous city in the German state of Hesse. Its 791,000 inhabitants as of 2022 make it the fifth-most populous city in Germany. Located on it ...

Stockholm Stockholm () is the capital and largest city of Sweden as well as the largest urban area in Scandinavia. Approximately 980,000 people live in the municipality, with 1.6 million in the urban area, and 2.4 million in the metropo ...

and

Riga Riga (; lv, Rīga , liv, Rīgõ) is the capital and largest city of Latvia and is home to 605,802 inhabitants which is a third of Latvia's population. The city lies on the Gulf of Riga at the mouth of the Daugava river where it meets the ...

. These traders developed the ''

lex mercatoria ''Lex mercatoria'' (from the Latin for "merchant law"), often referred to as "the Law Merchant" in English, is the body of commercial law used by merchants throughout Europe during the medieval period. It evolved similar to English common law as ...

'', spreading basic norms of

good faith In human interactions, good faith ( la, bona fides) is a sincere intention to be fair, open, and honest, regardless of the outcome of the interaction. Some Latin phrases have lost their literal meaning over centuries, but that is not the case ...

and fair dealing through their business. In 1517, the

Protestant Reformation The Reformation (alternatively named the Protestant Reformation or the European Reformation) was a major movement within Western Christianity in 16th-century Europe that posed a religious and political challenge to the Catholic Church and i ...

triggered a hundred years of crisis and instability.

Martin Luther Martin Luther (; ; 10 November 1483 – 18 February 1546) was a German priest, theologian, author, hymnwriter, and professor, and Augustinian friar. He is the seminal figure of the Protestant Reformation and the namesake of Lutherani ...

nailed a list of demands to the church door of

Wittenberg Wittenberg ( , ; Low Saxon: ''Wittenbarg''; meaning ''White Mountain''; officially Lutherstadt Wittenberg (''Luther City Wittenberg'')), is the fourth largest town in Saxony-Anhalt, Germany. Wittenberg is situated on the River Elbe, north of ...

King Henry VIII Henry VIII (28 June 149128 January 1547) was King of England from 22 April 1509 until his death in 1547. Henry is best known for his six marriages, and for his efforts to have his first marriage (to Catherine of Aragon) annulled. His disa ...

declared a unilateral split from Rome with the Act of Supremacy 1534, and conflicts flared across the

Holy Roman Empire The Holy Roman Empire was a political entity in Western, Central, and Southern Europe that developed during the Early Middle Ages and continued until its dissolution in 1806 during the Napoleonic Wars. From the accession of Otto I in 962 unt ...

until the Peace of Augsburg 1555 guaranteed each principality the right to its chosen religion (''

cuius regio, eius religio () is a Latin phrase which literally means "whose realm, their religion" – meaning that the religion of the ruler was to dictate the religion of those ruled. This legal principle marked a major development in the collective (if not individual ...

''). This unstable settlement unravelled in the

Thirty Years' War The Thirty Years' War was one of the longest and most destructive conflicts in European history, lasting from 1618 to 1648. Fought primarily in Central Europe, an estimated 4.5 to 8 million soldiers and civilians died as a result of batt ...

(1618–1648), killing around a quarter of the population in central Europe. The Treaty of Westphalia 1648, which brought peace according to a system of

inspired by

Hugo Grotius Hugo Grotius (; 10 April 1583 – 28 August 1645), also known as Huig de Groot () and Hugo de Groot (), was a Dutch humanist, diplomat, lawyer, theologian, jurist, poet and playwright. A teenage intellectual prodigy, he was born in Delft ...

, is generally acknowledged as the beginning of the nation-state system. Even then, the

English Civil War The English Civil War (1642–1651) was a series of civil wars and political machinations between Parliamentarians (" Roundheads") and Royalists led by Charles I (" Cavaliers"), mainly over the manner of England's governance and issues of r ...

broke out and only ended with the

Glorious Revolution The Glorious Revolution; gd, Rèabhlaid Ghlòrmhor; cy, Chwyldro Gogoneddus , also known as the ''Glorieuze Overtocht'' or ''Glorious Crossing'' in the Netherlands, is the sequence of events leading to the deposition of King James II and ...

of 1688, by Parliament inviting

William William is a male given name of Germanic origin.Hanks, Hardcastle and Hodges, ''Oxford Dictionary of First Names'', Oxford University Press, 2nd edition, , p. 276. It became very popular in the English language after the Norman conquest of Engl ...

and

Mary Mary may refer to: People * Mary (name), a feminine given name (includes a list of people with the name) Religious contexts * New Testament people named Mary, overview article linking to many of those below * Mary, mother of Jesus, also calle ...

from

Hannover Hanover (; german: Hannover ; nds, Hannober) is the capital and largest city of the German state of Lower Saxony. Its 535,932 (2021) inhabitants make it the 13th-largest city in Germany as well as the fourth-largest city in Northern Germany ...

to the throne, and passing the

Bill of Rights 1689 The Bill of Rights 1689 is an Act of the Parliament of England, which sets out certain basic civil rights and clarifies who would be next to inherit the Crown, and is seen as a crucial landmark in English constitutional law. It received Royal ...

. In 1693

William Penn William Penn ( – ) was an English writer and religious thinker belonging to the Religious Society of Friends (Quakers), and founder of the Province of Pennsylvania, a North American colony of England. He was an early advocate of democracy a ...

, a

Quaker Quakers are people who belong to a historically Protestant Christian set of denominations known formally as the Religious Society of Friends. Members of these movements ("theFriends") are generally united by a belief in each human's abili ...

from London who founded

Pennsylvania Pennsylvania (; ( Pennsylvania Dutch: )), officially the Commonwealth of Pennsylvania, is a state spanning the Mid-Atlantic, Northeastern, Appalachian, and Great Lakes regions of the United States. It borders Delaware to its southeast, ...

in North America, argued that to prevent ongoing wars in Europe a "European dyet, or parliament" was needed. The French diplomat,

Charles-Irénée Castel de Saint-Pierre Charles-Irénée Castel, abbé de Saint-Pierre (18 February 1658 – 29 April 1743) was a French author whose ideas were novel for his times. His proposal of an international organisation to maintain peace was perhaps the first in history, wi ...

, who worked negotiating the

Treaty of Utrecht The Peace of Utrecht was a series of peace treaties signed by the belligerents in the War of the Spanish Succession, in the Dutch city of Utrecht between April 1713 and February 1715. The war involved three contenders for the vacant throne ...

at the end of the War of Spanish Succession proposed, through " Perpetual Union", "an everlasting peace in Europe", a project taken up by

Jean-Jacques Rousseau Jean-Jacques Rousseau (, ; 28 June 1712 – 2 July 1778) was a Genevan philosopher, writer, and composer. His political philosophy influenced the progress of the Age of Enlightenment throughout Europe, as well as aspects of the French Revolu ...

, and

Immanuel Kant Immanuel Kant (, , ; 22 April 1724 – 12 February 1804) was a German philosopher and one of the central Enlightenment thinkers. Born in Königsberg, Kant's comprehensive and systematic works in epistemology, metaphysics, ethics, and ...

after him. After the

Napoleonic Wars The Napoleonic Wars (1803–1815) were a series of major global conflicts pitting the French Empire and its allies, led by Napoleon I, against a fluctuating array of European states formed into various coalitions. It produced a period of Fre ...

and the

Revolutions of 1848 The Revolutions of 1848, known in some countries as the Springtime of the Peoples or the Springtime of Nations, were a series of political upheavals throughout Europe starting in 1848. It remains the most widespread revolutionary wave in Europ ...

in the 19th century,

Victor Hugo Victor-Marie Hugo (; 26 February 1802 – 22 May 1885) was a French Romantic writer and politician. During a literary career that spanned more than sixty years, he wrote in a variety of genres and forms. He is considered to be one of the great ...

at the

International Peace Congress International Peace Congress, or International Congress of the Friends of Peace, was the name of a series of international meetings of representatives from peace societies from throughout the world held in various places in Europe from 1843 to 18 ...

in 1849 envisioned a day when there would be a "United States of America and the

United States of Europe The United States of Europe (USE), the European State, the European Federation and Federal Europe, is the hypothetical scenario of the European integration leading to formation of a sovereign superstate (similar to the United States of Ameri ...

face to face, reaching out for each other across the seas".

World War I World War I (28 July 1914 11 November 1918), often abbreviated as WWI, was List of wars and anthropogenic disasters by death toll, one of the deadliest global conflicts in history. Belligerents included much of Europe, the Russian Empire, ...

devastated Europe's society and economy, and the

Versailles Treaty The Treaty of Versailles (french: Traité de Versailles; german: Versailler Vertrag, ) was the most important of the peace treaties of World War I. It ended the state of war between Germany and the Allied Powers. It was signed on 28 June 19 ...

failed to establish a workable international system in the

League of Nations The League of Nations (french: link=no, Société des Nations ) was the first worldwide intergovernmental organisation whose principal mission was to maintain world peace. It was founded on 10 January 1920 by the Paris Peace Conference th ...

, any European integration, and imposed punishing terms of reparation payments for the losing countries. After another economic collapse and the rise of fascism led to a Second World War, European

civil society Civil society can be understood as the "third sector" of society, distinct from government and business, and including the family and the private sphere.world peace through economic, social and political integration. EU Roma Musei Capitolini hall

To "save succeeding generations from the scourge of war, which twice.. brought untold sorrow to mankind", the

United Nations Charter The Charter of the United Nations (UN) is the foundational treaty of the UN, an intergovernmental organization. It establishes the purposes, governing structure, and overall framework of the United Nations System, UN system, including its Organ ...

was passed in 1945, and the

Bretton Woods Conference The Bretton Woods Conference, formally known as the United Nations Monetary and Financial Conference, was the gathering of 730 delegates from all 44 Allied nations at the Mount Washington Hotel, situated in Bretton Woods, New Hampshire, Unite ...

set up a new system of integrated

World Bank The World Bank is an international financial institution that provides loans and grants to the governments of low- and middle-income countries for the purpose of pursuing capital projects. The World Bank is the collective name for the Inte ...

ing,

finance Finance is the study and discipline of money, currency and capital assets. It is related to, but not synonymous with economics, the study of production, distribution, and consumption of money, assets, goods and services (the discipline of f ...

and

trade Trade involves the transfer of goods and services from one person or entity to another, often in exchange for money. Economists refer to a system or network that allows trade as a market. An early form of trade, barter, saw the direct exc ...

. Also, the

Council of Europe The Council of Europe (CoE; french: Conseil de l'Europe, ) is an international organisation founded in the wake of World War II to uphold human rights, democracy and the rule of law in Europe. Founded in 1949, it has 46 member states, with a p ...

, formed by the Treaty of London 1949, adopted a

European Convention on Human Rights The European Convention on Human Rights (ECHR; formally the Convention for the Protection of Human Rights and Fundamental Freedoms) is an international convention to protect human rights and political freedoms in Europe. Drafted in 1950 by ...

, overseen by a new transnational

court A court is any person or institution, often as a government institution, with the authority to adjudicate legal disputes between parties and carry out the administration of justice in civil, criminal, and administrative matters in acco ...

Strasbourg Strasbourg (, , ; german: Straßburg ; gsw, label= Bas Rhin Alsatian, Strossburi , gsw, label= Haut Rhin Alsatian, Strossburig ) is the prefecture and largest city of the Grand Est region of eastern France and the official seat of the ...

in 1950. Already in 1946,

Winston Churchill Sir Winston Leonard Spencer Churchill (30 November 187424 January 1965) was a British statesman, soldier, and writer who served as Prime Minister of the United Kingdom twice, from 1940 to 1945 during the Second World War, and again from ...

, who had been defeated as UK Prime Minister in 1945, had called for a "

", though this did not mean the UK would sever its ties to the

Commonwealth A commonwealth is a traditional English term for a political community founded for the common good. Historically, it has been synonymous with "republic". The noun "commonwealth", meaning "public welfare, general good or advantage", dates from the ...

. In 1950, the French Foreign Minister

Robert Schuman Jean-Baptiste Nicolas Robert Schuman (; 29 June 18864 September 1963) was a Luxembourg-born French statesman. Schuman was a Christian Democrat ( Popular Republican Movement) political thinker and activist. Twice Prime Minister of France, a re ...

proposed that, beginning with integration of French and German coal and steel production, there should be "an organisation open to the participation of the other countries of Europe", where "solidarity in production" would make war "not merely unthinkable, but materially impossible". The Treaty of Paris 1951 created the first

(ECSC), signed by France, West Germany, Belgium, the Netherlands, Luxembourg and Italy, with

Jean Monnet Jean Omer Marie Gabriel Monnet (; 9 November 1888 – 16 March 1979) was a French civil servant, entrepreneur, diplomat, financier, administrator, and political visionary. An influential supporter of European unity, he is considered one of the ...

as its president. Its theory was simply that war would be impossibly costly if ownership and production of every country's economy was mixed together. It established an Assembly (now the

European Parliament The European Parliament (EP) is one of the Legislature, legislative bodies of the European Union and one of its seven Institutions of the European Union, institutions. Together with the Council of the European Union (known as the Council and in ...

) to represent the people, a

Council of Ministers A council is a group of people who come together to consult, deliberate, or make decisions. A council may function as a legislature, especially at a town, city or county/ shire level, but most legislative bodies at the state/provincial or ...

for the member states, a Commission as the executive, and a Court of Justice to interpret the law. In the East, the

Soviet Union The Soviet Union,. officially the Union of Soviet Socialist Republics. (USSR),. was a transcontinental country that spanned much of Eurasia from 1922 to 1991. A flagship communist state, it was nominally a federal union of fifteen nationa ...

had installed dictatorial governments, controlling East Germany, and the rest of Eastern Europe. Although

Stalin Joseph Vissarionovich Stalin (born Ioseb Besarionis dze Jughashvili; – 5 March 1953) was a Georgian revolutionary and Soviet political leader who led the Soviet Union from 1924 until his death in 1953. He held power as General Secretar ...

died in 1953 and the new

general secretary Secretary is a title often used in organizations to indicate a person having a certain amount of authority, power, or importance in the organization. Secretaries announce important events and communicate to the organization. The term is derived ...

Nikita Khrushchev Nikita Sergeyevich Khrushchev (– 11 September 1971) was the First Secretary of the Communist Party of the Soviet Union from 1953 to 1964 and chairman of the country's Council of Ministers from 1958 to 1964. During his rule, Khrushchev s ...

had denounced him in 1956, Soviet tanks crushed a democratic

Hungarian Revolution of 1956 The Hungarian Revolution of 1956 (23 October – 10 November 1956; hu, 1956-os forradalom), also known as the Hungarian Uprising, was a countrywide revolution against the government of the Hungarian People's Republic (1949–1989) and the Hunga ...

, and repressed every other attempt of its people to win democracy and human rights. EC-EU-enlargement animation

In the West, the decision was made through Treaty of Rome 1957 to launch the first

European Economic Community The European Economic Community (EEC) was a regional organization created by the Treaty of Rome of 1957,Today the largely rewritten treaty continues in force as the ''Treaty on the functioning of the European Union'', as renamed by the Lis ...

. It shared the Assembly and Court with the Coal and Steel Community, but set up parallel bodies for the Council and Commission. Based on the Spaak Report of 1956, it sought to break down all barriers to trade in a common market for goods, services, labour and capital, and prevent distortion of competition and regulate areas of common interest like agriculture, energy and transport. A separate treaty was signed for a

European Atomic Energy Community The European Atomic Energy Community (EAEC or Euratom) is an international organisation established by the Euratom Treaty on 25 March 1957 with the original purpose of creating a specialist market for nuclear power in Europe, by developing nucl ...

to manage nuclear production. In 1961 the United Kingdom, Denmark, Ireland and Norway applied for membership only to be vetoed in 1963 by France's

Charles de Gaulle Charles André Joseph Marie de Gaulle (; ; (commonly abbreviated as CDG) 22 November 18909 November 1970) was a French army officer and statesman who led Free France against Nazi Germany in World War II and chaired the Provisional Governm ...

. Spain also applied and was rejected as it was still led by the

Franco dictatorship Francoist Spain ( es, España franquista), or the Francoist dictatorship (), was the period of Spanish history between 1939 and 1975, when Francisco Franco ruled Spain after the Spanish Civil War with the title . After his death in 1975, Spa ...

. The same year, the Court of Justice proclaimed that the Community constituted a "new legal order of international law". The

Merger Treaty The Merger Treaty, also known as the Treaty of Brussels, was a European treaty which unified the executive institutions of the European Coal and Steel Community (ECSC), European Atomic Energy Community (Euratom) and the European Economic Commu ...

finally placed the ECSC and

Euratom The European Atomic Energy Community (EAEC or Euratom) is an international organisation established by the Euratom Treaty on 25 March 1957 with the original purpose of creating a specialist market for nuclear power in Europe, by developing nucl ...

within the

EEC The European Economic Community (EEC) was a regional organization created by the Treaty of Rome of 1957,Today the largely rewritten treaty continues in force as the ''Treaty on the functioning of the European Union'', as renamed by the Lis ...

. Shortly after,

de Gaulle Charles André Joseph Marie de Gaulle (; ; (commonly abbreviated as CDG) 22 November 18909 November 1970) was a French army officer and statesman who led Free France against Nazi Germany in World War II and chaired the Provisional Governm ...

boycotted the commission, which he believed was pressing supranationalism too far. The

Luxembourg compromise The Luxembourg Compromise (or "Luxembourg Accord") was an agreement reached in January 1966 to resolve the " Empty Chair Crisis" which had caused a stalemate within European Economic Community (EEC). Charles de Gaulle Whereas the founding fath ...

in 1966 agreed that France (or other countries) could veto issues of "very important national interest", particularly relating to the

Common Agricultural Policy The Common Agricultural Policy (CAP) is the agricultural policy of the European Union. It implements a system of agricultural subsidies and other programmes. It was introduced in 1962 and has since then undergone several changes to reduce the ...

, instead of making decisions by "

qualified majority A supermajority, supra-majority, qualified majority, or special majority is a requirement for a proposal to gain a specified level of support which is greater than the threshold of more than one-half used for a simple majority. Supermajority ru ...

". But after the

May 1968 events in France Beginning in May 1968, a period of civil unrest occurred throughout France, lasting some seven weeks and punctuated by demonstrations, general strikes, as well as the occupation of universities and factories. At the height of events, which ...

and

's resignation, the way was free for the United Kingdom, Ireland, and Denmark to join in 1973.

Norway Norway, officially the Kingdom of Norway, is a Nordic countries, Nordic country in Northern Europe, the mainland territory of which comprises the western and northernmost portion of the Scandinavian Peninsula. The remote Arctic island of ...

had rejected joining in a 1972 referendum, while the UK confirmed its membership in a 1975 referendum. Aside from the

itself, the European continent underwent a profound transition towards democracy. The dictators of Greece and Portugal were deposed in 1974, and Spain's dictator died in 1975, enabling their accession in 1981 and 1986. In 1979, the

had its first direct elections, reflecting a growing consensus that the EEC should be less a union of member states, and more a union of peoples. The Single European Act 1986 increased the number of treaty issues in which

voting (rather than consensus) would be used to legislate, as a way to accelerate trade integration. The

Schengen Agreement The Schengen Agreement ( , ) is a treaty which led to the creation of Europe's Schengen Area, in which internal border checks have largely been abolished. It was signed on 14 June 1985, near the town of Schengen, Luxembourg, by five of the t ...

of 1985 (not initially signed by Italy, the UK, Ireland, Denmark or Greece) allowed movement of people without any border checks. Meanwhile, in 1987, the

Mikhail Gorbachev Mikhail Sergeyevich Gorbachev (2 March 1931 – 30 August 2022) was a Soviet politician who served as the 8th and final leader of the Soviet Union from 1985 to the country's dissolution in 1991. He served as General Secretary of the Com ...

announced policies of "transparency" and "restructuring" (''

glasnost ''Glasnost'' (; russian: link=no, гласность, ) has several general and specific meanings – a policy of maximum openness in the activities of state institutions and freedom of information, the inadmissibility of hushing up problems, ...

'' and ''

perestroika ''Perestroika'' (; russian: links=no, перестройка, p=pʲɪrʲɪˈstrojkə, a=ru-perestroika.ogg) was a political movement for reform within the Communist Party of the Soviet Union (CPSU) during the late 1980s widely associated wit ...

''). This revealed the depths of corruption and waste. In April 1989, the

People's Republic of Poland The Polish People's Republic ( pl, Polska Rzeczpospolita Ludowa, PRL) was a country in Central Europe that existed from 1947 to 1989 as the predecessor of the modern Republic of Poland. With a population of approximately 37.9 million ne ...

legalised the Solidarity organisation, which captured 99% of available parliamentary seats in June elections. These elections, in which anti-communist candidates won a striking victory, inaugurated a series of peaceful anti-communist revolutions in Central and Eastern Europe that eventually culminated in the fall of communism. In November 1989, protestors in

Berlin Berlin ( , ) is the capital and largest city of Germany by both area and population. Its 3.7 million inhabitants make it the European Union's most populous city, according to population within city limits. One of Germany's sixteen constitu ...

began taking down the

Berlin Wall The Berlin Wall (german: Berliner Mauer, ) was a guarded concrete barrier that encircled West Berlin from 1961 to 1989, separating it from East Berlin and East Germany (GDR). Construction of the Berlin Wall was commenced by the gover ...

, which became a symbol of the collapse of the

Iron Curtain The Iron Curtain was the political boundary dividing Europe into two separate areas from the end of World War II in 1945 until the end of the Cold War in 1991. The term symbolizes the efforts by the Soviet Union (USSR) to block itself and its ...

, with most of Eastern Europe declaring independence and moving to hold democratic elections by 1991. Anti-austerity protest (Athens) June 2015

The Treaty of Maastricht renamed the EEC as the "

European Union The European Union (EU) is a supranational union, supranational political union, political and economic union of Member state of the European Union, member states that are located primarily in Europe, Europe. The union has a total area of ...

", and expanded its powers to include a social chapter, set up a

European Exchange Rate Mechanism The European Exchange Rate Mechanism (ERM II) is a system introduced by the European Economic Community on 1 January 1999 alongside the introduction of a single currency, the euro (replacing ERM 1 and the euro's predecessor, the ECU) as ...

, and limit government spending. The UK initially opted out of the social provisions, and then monetary union after the 1992 sterling crisis ("Black Wednesday") where speculators bet against the

British currency Sterling (abbreviation: stg; Other spelling styles, such as STG and Stg, are also seen. ISO 4217, ISO code: GBP) is the currency of the United Kingdom and nine of #Crown Dependencies and British Overseas Territories, its associated territori ...

. Sweden, Finland and Austria joined in 1995, but Norway again chose not to do so after its 1994 referendum, instead remaining part of the European Free Trade Area (EFTA) and thus the

European Economic Area The European Economic Area (EEA) was established via the ''Agreement on the European Economic Area'', an international agreement which enables the extension of the European Union's single market to member states of the European Free Trade As ...

(EEA), abiding by most EU law but without any voting rights. At the

Treaty of Amsterdam The Treaty of Amsterdam, officially the Treaty of Amsterdam amending the Treaty on European Union, the Treaties establishing the European Communities and certain related acts, was signed on 2 October 1997, and entered into force on 1 May 1999; i ...

, with a new Labour government, the UK joined the social chapter. A newly confident EU then sought to expand. First, the

Treaty of Nice The Treaty of Nice was signed by European leaders on 26 February 2001 and came into force on 1 February 2003. It amended the Maastricht Treaty (or the Treaty on European Union) and the Treaty of Rome (or the Treaty establishing the European ...

made voting weight more proportionate to population. Second, the

Euro The euro ( symbol: €; code: EUR) is the official currency of 19 out of the member states of the European Union (EU). This group of states is known as the eurozone or, officially, the euro area, and includes about 340 million citizens . ...

currency went into circulation in 2002. Third came the accession of Malta, Cyprus, Slovenia, Poland, the Czech Republic, Slovakia, Hungary, Latvia, Estonia, and Lithuania. Fourth, in 2005 a

Treaty establishing a Constitution for Europe The Treaty establishing a Constitution for Europe (TCE; commonly referred to as the European Constitution or as the Constitutional Treaty) was an un ratified international treaty intended to create a consolidated constitution for the European ...

was proposed. This proposed "constitution" was largely symbolic, but was rejected by referendums in France and the Netherlands. Most of its technical provisions were inserted into the

Treaty of Lisbon The Treaty of Lisbon (initially known as the Reform Treaty) is an international agreement that amends the two treaties which form the constitutional basis of the European Union (EU). The Treaty of Lisbon, which was signed by the EU member s ...

, without the emotive symbols of federalism or the word "constitution". In the same year, Bulgaria and Romania joined. During the

subprime mortgage crisis The United States subprime mortgage crisis was a multinational financial crisis that occurred between 2007 and 2010 that contributed to the 2007–2008 global financial crisis. It was triggered by a large decline in US home prices after the col ...

and the

financial crisis of 2007–2008 Finance is the study and discipline of money, currency and capital assets. It is related to, but not synonymous with economics, the study of production, distribution, and consumption of money, assets, goods and services (the discipline of ...

, European banks that were invested in derivatives were put under severe pressure. British, French, German, and other governments were forced to turn some banks into partially or wholly state-owned banks. Some governments instead guaranteed their banks' debts. In turn, the

European debt crisis The European debt crisis, often also referred to as the eurozone crisis or the European sovereign debt crisis, is a multi-year debt crisis that took place in the European Union (EU) from 2009 until the mid to late 2010s. Several eurozone me ...

developed when international investment withdrew and Greece, Spain, Portugal, and Ireland saw international bond markets charge unsustainably high

interest rates An interest rate is the amount of interest due per period, as a proportion of the amount lent, deposited, or borrowed (called the principal sum). The total interest on an amount lent or borrowed depends on the principal sum, the interest rate, th ...

on government debt. Eurozone governments and staff of the

European Central Bank The European Central Bank (ECB) is the prime component of the monetary Eurosystem and the European System of Central Banks (ESCB) as well as one of seven institutions of the European Union. It is one of the world's most important centra ...

believed that it was necessary to save their banks by taking over Greek debt, and impose "

austerity Austerity is a set of political-economic policies that aim to reduce government budget deficits through spending cuts, tax increases, or a combination of both. There are three primary types of austerity measures: higher taxes to fund spend ...

" and "

structural adjustment Structural adjustment programs (SAPs) consist of loans (structural adjustment loans; SALs) provided by the International Monetary Fund (IMF) and the World Bank (WB) to countries that experience economic crises. Their purpose is to adjust the co ...

" measures on debtor states. This exacerbated further contraction in the economies. In 2011 two new treaties, the European Fiscal Compact and

European Stability Mechanism The European Stability Mechanism (ESM) is an intergovernmental organization located in Luxembourg City, which operates under public international law for all eurozone member states having ratified a special ESM intergovernmental treaty. It ...

were signed among the nineteen

Eurozone The euro area, commonly called eurozone (EZ), is a currency union of 19 member states of the European Union (EU) that have adopted the euro (€) as their primary currency and sole legal tender, and have thus fully implemented EMU pol ...

states. In 2013, Croatia entered the union. However a further crisis was triggered after the UK's

Conservative Conservatism is a cultural, social, and political philosophy that seeks to promote and to preserve traditional institutions, practices, and values. The central tenets of conservatism may vary in relation to the culture and civilization in ...

government chose to hold a

referendum A referendum (plural: referendums or less commonly referenda) is a Direct democracy, direct vote by the Constituency, electorate on a proposal, law, or political issue. This is in contrast to an issue being voted on by a Representative democr ...

in 2016, and campaigners for "leave" (or "Brexit") won 51.89 per cent of votes on a 72.2 per cent turnout. This referendum was politically inconclusive given the UK's system of

Parliamentary sovereignty Parliamentary sovereignty, also called parliamentary supremacy or legislative supremacy, is a concept in the constitutional law of some parliamentary democracies. It holds that the legislative body has absolute sovereignty and is supreme over ...

, with no agreement after the 2017 election, until the

2019 UK general election The 2019 United Kingdom general election was held on Thursday, 12 December 2019. It resulted in the Conservative Party receiving a landslide majority of 80 seats. The Conservatives made a net gain of 48 seats and won 43.6% of the popular vote ...

brought a Conservative majority with a manifesto commitment to drive through Brexit. The UK left EU membership in February 2020, with uncertain economic, territorial and social consequences.

Constitutional law

Hémycicle du Parlement européen (Bruxelles)

Although the European Union does not have a

codified constitution A constitution is the aggregate of fundamental principles or established precedents that constitute the legal basis of a polity, organisation or other type of entity and commonly determine how that entity is to be governed. When these pr ...

, like every political body it has laws which "constitute" its basic governance structure. The EU's primary constitutional sources are the

and the

, which have been agreed or adhered to among the governments of all 27 member states. The Treaties establish the EU's institutions, list their powers and responsibilities, and explain the areas in which the EU can legislate with Directives or

Regulations Regulation is the management of complex systems according to a set of rules and trends. In systems theory, these types of rules exist in various fields of biology and society, but the term has slightly different meanings according to context. Fo ...

. The

European Commission The European Commission (EC) is the executive of the European Union (EU). It operates as a cabinet government, with 27 members of the Commission (informally known as "Commissioners") headed by a President. It includes an administrative body ...

has the right to propose new laws, formally called the right of legislative initiative. During the ordinary legislative procedure, the

Council A council is a group of people who come together to consult, deliberate, or make decisions. A council may function as a legislature, especially at a town, city or county/ shire level, but most legislative bodies at the state/provincial or nati ...

(which are ministers from member state governments) and the

(elected by citizens) can make amendments and must give their consent for laws to pass. The Commission oversees departments and various agencies that execute or enforce EU law. The "

European Council The European Council (informally EUCO) is a collegiate body that defines the overall political direction and priorities of the European Union. It is composed of the heads of state or government of the EU member states, the President of the ...

" (rather than the

, made up of different government Ministers) is composed of the Prime Ministers or executive presidents of the member states. It appoints the Commissioners and the board of the

. The

European Court of Justice The European Court of Justice (ECJ, french: Cour de Justice européenne), formally just the Court of Justice, is the supreme court of the European Union in matters of European Union law. As a part of the Court of Justice of the European U ...

is the supreme judicial body which interprets EU law, and develops it through precedent. The Court can review the legality of the EU institutions' actions, in compliance with the Treaties. It can also decide upon claims for breach of EU laws from member states and citizens.

Treaties

The

(TEU) and the

(TFEU) are the two main sources of EU law. Representing agreements between all member states, the TEU focuses more on principles of democracy, human rights, and summarises the

institutions Institutions are humanly devised structures of rules and norms that shape and constrain individual behavior. All definitions of institutions generally entail that there is a level of persistence and continuity. Laws, rules, social conventions a ...

, while the

TFEU The Treaty on the Functioning of the European Union (TFEU) is one of two treaties forming the constitutional basis of the European Union (EU), the other being the Treaty on European Union (TEU). It was previously known as the Treaty Establishi ...

expands on all principles and fields of policy in which the EU can legislate. In principle, the EU treaties are like any other international agreement, which will usually be interpreted according to principles codified by the Vienna Convention 1969. It can be amended by unanimous agreement at any time, but TEU itself, in article 48, sets out an amendment procedure through proposals via the Council and a Convention of national Parliament representatives. Under TEU article 5(2), the "principle of conferral" says the EU can do nothing except the things which it has express authority to do. The limits of its competence are governed by the Court of Justice, and the courts and Parliaments of member states. As the European Union has grown from 6 to 27 member states, a clear procedure for accession of members is set out in TEU article 49. The European Union is only open to a "European" state which respects the principles of "

human dignity Dignity is the right of a person to be valued and respected for their own sake, and to be treated ethically. It is of significance in morality, ethics, law and politics as an extension of the Enlightenment-era concepts of inherent, inaliena ...

freedom Freedom is understood as either having the ability to act or change without constraint or to possess the power and resources to fulfill one's purposes unhindered. Freedom is often associated with liberty and autonomy in the sense of "giving one ...

, democracy, equality, the

, and respect for human rights, including the rights of persons belonging to minorities". Countries whose territory is wholly outside the European continent cannot therefore apply. Nor can any country without fully democratic political institutions which ensure standards of " pluralism, non-discrimination,

tolerance Tolerance or toleration is the state of tolerating, or putting up with, conditionally. Economics, business, and politics * Toleration Party, a historic political party active in Connecticut * Tolerant Systems, the former name of Veritas Software ...

, justice,

solidarity ''Solidarity'' is an awareness of shared interests, objectives, standards, and sympathies creating a psychological sense of unity of groups or classes. It is based on class collaboration.''Merriam Webster'', http://www.merriam-webster.com/dicti ...

and equality between women and men prevail". Article 50 says any member state can withdraw in accord "with its own constitutional requirements", by negotiated "arrangements for its withdrawal, taking account of the framework for its future relationship with the Union". This indicates that the EU is not entitled to demand a withdrawal, and that member states should follow constitutional procedures, for example, through Parliament or a codified constitutional document. Once article 50 is triggered, there is a two-year time limit to complete negotiations, a procedure which would leave a seceding member without any bargaining power in negotiations, because the costs of having no trade treaty would be proportionally greater to the individual state than the remaining EU bloc. Article 7 allows member states to be suspended for a "clear risk of a serious breach" of values in article 2 (for example, democracy, equality, human rights) with a four-fifths vote of the

, and the consent of the

Parliament In modern politics, and history, a parliament is a legislative body of government. Generally, a modern parliament has three functions: representing the electorate, making laws, and overseeing the government via hearings and inquiries. Th ...

. Within the treaties' framework, sub-groups of member states may make further rules that only apply to those member states who want them. For example, the Schengen Agreements of 1985 and 1990 allow people to move without any passport or ID checks anywhere in the EU, but did not apply to the UK or Ireland. During the

, the Treaty Establishing the European Stability Mechanism 2012 and the Treaty on Stability, Co-ordination and Governance 2012 (the "Fiscal Compact") were adopted only for member states who had the

(i.e. not Denmark, Sweden, the UK, Poland, Czech Republic, Hungary, Croatia, Romania or Bulgaria). This required, among other things, a pledge to balance the government budget and limit structural deficits to 0.5 per cent of GDP, with fines for non-compliance. The jurisdiction for these rules remains with the Court of Justice.

Executive institutions

The

is the main executive body of the

. Article 17(1) of the

states the commission should "promote the general interest of the Union" while Article 17(3) adds that Commissioners should be "completely independent" and not "take instructions from any Government". Under Article 17(2), "Union legislative acts may only be adopted on the basis of a Commission proposal, except where the Treaties provide otherwise". This means that the commission has a monopoly on initiating the legislative procedure, although the council or Parliament are the "''de facto'' catalysts of many legislative initiatives". The commission's President (

Ursula von der Leyen Ursula Gertrud von der Leyen (; Albrecht, born 8 October 1958) is a German politician who has been serving as the president of the European Commission since 2019. She served in the German federal government between 2005 and 2019, holding suc ...

) sets the agenda for its work. Decisions are taken by a simple majority vote, often through a "written procedure" of circulating the proposal and adopting it if there are no objections. In response to Ireland's initial rejection of the

, it was agreed to keep the system of one Commissioner from each of the member states, including the

President President most commonly refers to: *President (corporate title) * President (education), a leader of a college or university * President (government title) President may also refer to: Automobiles * Nissan President, a 1966–2010 Japanese ...

and the High Representative for Foreign and Security Policy (currently

Josep Borrell Josep Borrell Fontelles (; born 24 April 1947) is a Spanish politician serving as High Representative of the Union for Foreign Affairs and Security Policy since 1 December 2019. A member of the Spanish Socialist Workers' Party (PSOE), he served ...

) The Commissioner President is elected by the European Parliament by an absolute majority of its members, following the parliamentary elections every five years, on the basis of a proposal by the European Council. The latter must take account of the results of the European elections, in which European political parties announce the name of their candidate for this post. Hence, in 2014, Juncker, the candidate of the

European People's Party The European People's Party (EPP) is a European political party with Christian-democratic, conservative, and liberal-conservative member parties. A transnational organisation, it is composed of other political parties. Founded by primarily ...

which won the most seats in Parliament, was proposed and elected. The remaining commissioners are appointed by agreement between the president-elect and each national government, and are then, as a block, subject to a

qualified majority vote The procedures for voting in the Council of the European Union are described in the treaties of the European Union. The Council of the European Union (or simply "Council" or "Council of Ministers") has had its voting procedure amended by subseq ...

of the council to approve, and majority approval of the Parliament. The Parliament can only approve or reject the whole commission, not individual commissioners but conducts public hearings with each of them prior to its vote, which in practice often triggers changes to individual appointments or portfolios. TFEU art 248 says the president may reshuffle commissioners, though this is uncommon, without member state approval. A proposal that the commissioners be drawn from the elected Parliament, was not adopted in the

, though in practice several invariable are, relinquishing their seat in order to serve. Blockupy 2015 (16237761803)

Commissioners have various privileges, such as being exempt from member state taxes (but not EU taxes), and having immunity from prosecution for doing official acts. Commissioners have sometimes been found to have abused their offices, particularly since the Santer Commission was censured by Parliament in 1999, and it eventually resigned due to corruption allegations. This resulted in one main case, ''

Commission v Edith Cresson ''Commission v Edith Cresson'' (2006C-432/04is an EU law case, concerning the constitutional framework in the European Union. Facts Mrs Edith Cresson was brought to trial at the European Court of Justice by the European Commission for giving her ...

'' where the

held that a Commissioner giving her dentist a job, for which he was clearly unqualified, did in fact not break any law. By contrast to the ECJ's relaxed approach, a Committee of Independent Experts found that a culture had developed where few Commissioners had 'even the slightest sense of responsibility'. This led to the creation of the European Anti-fraud Office. In 2012 it investigated the Maltese Commissioner for Health, John Dalli, who quickly resigned after allegations that he received a €60m bribe in connection with a Tobacco Products Directive. Beyond the commission, the

has relative executive autonomy in its conduct of

monetary policy Monetary policy is the policy adopted by the monetary authority of a nation to control either the interest rate payable for federal funds, very short-term borrowing (borrowing by banks from each other to meet their short-term needs) or the money s ...

for the purpose of managing the

euro The euro ( symbol: €; code: EUR) is the official currency of 19 out of the member states of the European Union (EU). This group of states is known as the eurozone or, officially, the euro area, and includes about 340 million citizens . ...

. It has a six-person board appointed by the

, on the

's recommendation. The president of the council and a commissioner can sit in on ECB meetings, but do not have voting rights.

Legislature

While the Commission has a monopoly on initiating legislation, the

and the

have powers of amendment and veto during the legislative process. According to the

articles 9 and 10, the EU observes "the principle of equality of its citizens" and is meant to be founded on "representative democracy". In practice, equality and democracy are still in development because the elected representatives in the Parliament cannot initiate legislation against the commission's wishes, citizens of smallest countries have greater voting weight in Parliament than citizens of the largest countries, and "qualified majorities" or consensus of the council are required to legislate. This " democratic deficit" has encouraged numerous proposals for reform, and is usually perceived as a hangover from earlier days of integration led by member states. Over time, the Parliament gradually assumed more voice: from being an unelected assembly, to its first direct elections in 1979, to having increasingly more rights in the legislative process. Citizens' rights are therefore limited compared to the democratic polities within all European member states: under TEU article 11, citizens and associations have the right to publicise their views and the right to submit an initiative that must be considered by the Commission if it has received at least one million signatures.

article 227 contains a further right for citizens to petition the Parliament on issues which affect them. Parliament elections, take place every five years, and votes for

Members of the European Parliament A Member of the European Parliament (MEP) is a person who has been elected to serve as a popular representative in the European Parliament. When the European Parliament (then known as the Common Assembly of the ECSC) first met in 1952, its ...

(MEP) in member states must be organised by

proportional representation Proportional representation (PR) refers to a type of electoral system under which subgroups of an electorate are reflected proportionately in the elected body. The concept applies mainly to geographical (e.g. states, regions) and political divis ...

or a

single transferable vote Single transferable vote (STV) is a multi-winner electoral system in which voters cast a single vote in the form of a ranked-choice ballot. Voters have the option to rank candidates, and their vote may be transferred according to alternate p ...

. There are 750 MEPs and their numbers are "degressively proportional" according to member state size. This means – although the council is meant to be the body representing member states – in the Parliament citizens of smaller member states have more voice than citizens in larger member states. MEPs divide, as they do in national Parliaments, along political party lines: the conservative

is currently the largest, and the

Party of European Socialists The Party of European Socialists (PES) is a social democratic and progressive European political party. The PES comprises national-level political parties from all member states of the European Union (EU) plus Norway and the United Kingdom. ...

leads the opposition. Parties do not receive public funds from the EU, as the Court of Justice held in '' Parti écologiste "Les Verts" v European Parliament'' that this was entirely an issue to be regulated by the member states. The Parliament's powers include calling inquiries into maladministration or appoint an Ombudsman pending any court proceedings. It can require the Commission respond to questions and by a two-thirds majority can censure the whole Commission (as happened to the Santer Commission in 1999). In some cases, the Parliament has explicit consultation rights, which the Commission must genuinely follow. However its participation in the legislative process still remains limited because no member can actually or pass legislation without the Commission and

, meaning power ("kratia") is not in the hands of directly elected representatives of the people ("demos"): in the EU it is not yet true that "the administration is in the hands of the many and not of the few". The second main legislative body is the

, which is composed of different ministers of the member states. The heads of government of member states also convene a "

" (a distinct body) that the TEU article 15 defines as providing the 'necessary impetus for its development and shall define the general political directions and priorities'. It meets each six months and its President (currently former Belgian Prime Minister

Charles Michel Charles Michel (; born 21 December 1975) is a Belgian politician serving as the president of the European Council since 2019. He previously served as the prime minister of Belgium between 2014 and 2019. Michel became the minister of Developm ...

) is meant to 'drive forward its work', but it does not itself exercise 'legislative functions'. The

does this: in effect this is the governments of the member states, but there will be a different minister at each meeting, depending on the topic discussed (e.g. for environmental issues, the member states' environment ministers attend and vote; for foreign affairs, the foreign ministers, etc.). The minister must have the authority to represent and bind the member states in decisions. When voting takes place it is weighted inversely to member state size, so smaller member states are not dominated by larger member states. In total there are 352 votes, but for most acts there must be a

, if not consensus. TEU article 16(4) and

article 238(3) define this to mean at least 55 per cent of the Council members (not votes) representing 65 per cent of the population of the EU: currently this means around 74 per cent, or 260 of the 352 votes. This is critical during the legislative process. European Parliament Strasbourg Hemicycle - Diliff

European Parliament Strasbourg Hemicycle - Diliff

To make new legislation,

article 294 defines the " ordinary legislative procedure" that applies for most EU acts. The essence is there are three readings, starting with a Commission proposal, where the Parliament must vote by a majority of all MEPs (not just those present) to block or suggest changes, and the Council must vote by qualified majority to approve changes, but by unanimity to block Commission amendment. Where the different institutions cannot agree at any stage, a "

Conciliation Conciliation is an alternative dispute resolution (ADR) process whereby the parties to a dispute use a conciliator, who meets with the parties both separately and together in an attempt to resolve their differences. They do this by lowering te ...

Committee" is convened, representing MEPs, ministers and the commission to try to get agreement on a joint text: if this works, it will be sent back to the Parliament and Council to approve by absolute and qualified majority. This means, legislation can be blocked by a majority in Parliament, a minority in the council, and a majority in the commission: it is harder to change EU law than for it to stay the same. A different procedure exists for budgets. For "enhanced cooperation" among a sub-set of at least member states, authorisation must be given by the

. Member state governments should be informed by the Commission at the outset before any proposals start the legislative procedure. The EU as a whole can only act within its power set out in the Treaties. TEU articles 4 and 5 state that powers remain with the member states unless they have been conferred, although there is a debate about the '' Kompetenz-Kompetenz'' question: who ultimately has the "competence" to define the EU's "competence". Many member state courts believe they decide, other member state

Parliaments In modern politics, and history, a parliament is a legislative body of government. Generally, a modern parliament has three functions: representing the electorate, making laws, and overseeing the government via hearings and inquiries. Th ...

believe they decide, while within the EU, the Court of Justice believes it has the final say.

Judiciary

The judiciary of the EU has played an important role in the development of EU law. It interprets the

treaties A treaty is a formal, legally binding written agreement between actors in international law. It is usually made by and between sovereign states, but can include international organizations, individuals, business entities, and other legal pers ...

, and has accelerated economic and political integration. Today the

Court of Justice of the European Union The Court of Justice of the European Union (CJEU) (french: Cour de justice de l'Union européenne or "''CJUE''"; Latin: Curia) is the judicial branch of the European Union (EU). Seated in the Kirchberg quarter of Luxembourg City, Luxembour ...

(CJEU) is the main judicial body, within which there is a higher Court of Justice that deals with cases that contain more public importance, and a General Court that deals with issues of detail but without general importance, and then a separate

Court of Auditors The European Court of Auditors (ECA; French: ''Cour des comptes européenne'') is one of the seven institutions of the European Union (EU). It was established in 1975 in Luxembourg in order to improve EU financial management. It has 27 members ( ...

. Under the

article 19(2) there is one judge from each member state in the Court of Justice and General Court (27 on each at present). Judges should "possess the qualifications required for appointment to the highest judicial offices" (or for the General Court, the "ability required for appointment to high judicial office"). A president is elected by the judges for three years. While TEU article 19(3) says the Court of Justice is the ultimate court to interpret questions of EU law, in practice, most EU law is applied by member state courts (e.g. the English

Court of Appeal A court of appeals, also called a court of appeal, appellate court, appeal court, court of second instance or second instance court, is any court of law that is empowered to hear an appeal of a trial court or other lower tribunal. In much ...

, the German

Bundesgerichtshof The Federal Court of Justice (german: Bundesgerichtshof, BGH) is the highest court in the system of ordinary jurisdiction (''ordentliche Gerichtsbarkeit'') in Germany, founded in 1950. It has its seat in Karlsruhe with two panels being situ ...

, the Belgian Cour du travail, etc.). Member state courts can refer questions to the CJEU for a

preliminary ruling A preliminary ruling is a decision of the European Court of Justice (ECJ) on the interpretation of European Union law that is given in response to a request (preliminary reference) from a court or a tribunal of a member state. A preliminary rulin ...

. The CJEU's duty is to "ensure that in the interpretation and application of the Treaties the law is observed", although realistically it has the ability to expand and develop the law according to the principles it develops consistently with democratic values. Examples of landmark, and frequently controversial judgments, include ''

Van Gend en Loos Van Gend & Loos was a Dutch distribution company. It was established in 1809, and was purchased by DHL in 2003. History Van Gend & Loos was established by the Antwerp-based innkeeper and carriage driver Jan-Baptist van Gend. He had marrie ...

'' (holding EU law to created a new legal order, and citizens could sue for treaty rights),(1963) Case 26/62 ''

Mangold v Helm ''Mangold v Helm'' (2005C-144/04was a case before the European Court of Justice (ECJ) about age discrimination in employment.E McGaughey, ''A Casebook on Labour Law'' (Hart 2019) ch 15, 657 Facts Mangold was a 56-year-old German man employed ...

'' (establishing equality as a general principle of EU law), and '' Kadi v Commission'' (confirming

had to conform with basic principles of EU law). Until 2016, there was the European Union Civil Service Tribunal, which dealt with EU institutions' staff issues. Quartier Européen Nord, Kirchberg (2846812066)

Quartier Européen Nord, Kirchberg (2846812066)

The Statute of the Court and

require judges are appointed only if they have no political occupation, with independence "beyond doubt". They are selected for renewable six-year terms by "common accord" of governments, with the advice of seven EU or member state judges that the Council and Parliament selects. The Rules of Procedure of the Court of Justice, article 11, says the court is usually organised into chambers of 3 or 5 judges each. A "grand chamber" of 15 more senior judges sit on questions of "difficulty or importance", or those requested by member states. The court's president and vice-president are elected by other judges for renewable 3-year terms by secret ballot. Judges can only be dismissed if all other judges and Advocate Generals unanimously agree. Advocate Generals are appointed by the court to give reasoned submissions on cases, especially involving new points of law. Unlike judges on the Court, they write opinions as themselves, rather than collectively, and often with a command of prose and reason, and while not binding are often followed in practice. In addition, each judge has secretaries or ''referendaires'' who research and write. Unlike the UK where judges always write their own opinions, ''referendaires'' often assist drafting the judgments in the Court of Justice. The Court's Translation Directorate will translate every final judgment into the 24 official

languages of the European Union The European Union (EU) has 24 official languages, of which threeEnglish, French and Germanhave the higher status of "procedural" languages of the European Commission (whereas the European Parliament accepts all official languages as working l ...

. The three main kinds of judgments the Court of Justice gives following (1) preliminary rulings, requested by the courts of member states, (2) enforcement actions, brought by the commission or Member States, against the EU, a member state, or any other party that is alleged to violate EU law, and (3) other direct actions, where the EU or member state is involved as a party to the dispute, and gives final rulings. The Rules of Procedure of the Court of Justice, modelled on the

International Court of Justice The International Court of Justice (ICJ; french: Cour internationale de justice, links=no; ), sometimes known as the World Court, is one of the six principal organs of the United Nations (UN). It settles disputes between states in accordan ...

, begin with submission of written cases to the court, followed by a short oral hearing. In each case a judge is designated to actively manage the hearing (called a ''

rapporteur A rapporteur is a person who is appointed by an organization to report on the proceedings of its meetings. The term is a French-derived word. For example, Dick Marty was appointed ''rapporteur'' by the Parliamentary Assembly of the Council of Eur ...

'') and draft the judgment (probably with help from ''referendaires''). The court always deliberates and votes before the final opinion is written and published. Cases in the General Court can be appealed to the Court of Justice on points of law. While there is no formal appeal procedure from the Court of Justice, in practice its actions are subject to scrutiny by both the supreme courts of member states and the

European Court of Human Rights The European Court of Human Rights (ECHR or ECtHR), also known as the Strasbourg Court, is an international court of the Council of Europe which interprets the European Convention on Human Rights. The court hears applications alleging that ...

, even if the final balance of power is unresolved.

Conflict of laws

Since its founding, the EU has operated among an increasing plurality of member state and globalising legal systems. This has meant both the

and the supreme courts of the states have had to develop principles to resolve

conflicts of laws Conflict of laws (also called private international law) is the set of rules or laws a jurisdiction applies to a case, transaction, or other occurrence that has connections to more than one jurisdiction. This body of law deals with three broad t ...

between different systems. Within the EU itself, the Court of Justice's view is that if Union law conflicts with a provision of State law, then Union law has primacy. In the first major case in 1964, ''

Costa v ENEL ''Flaminio Costa v ENEL'' (1964) Case 6/64 was a landmark decision of the European Court of Justice which established the primacy of European Union law (then Community law) over the laws of its member states.Hilf, Meinhard (2012). Costa v. EN ...

'', a Milanese lawyer, and former shareholder of an energy company, named Mr Costa refused to pay his electricity bill to

Enel Enel S.p.A. is an Italian multinational manufacturer and distributor of electricity and gas. Enel, which originally stood for Ente nazionale per l'energia elettrica (National Electricity Board), was first established as a public body at the ...

, as a protest against the

Nationalization Nationalization (nationalisation in British English) is the process of transforming privately-owned assets into public assets by bringing them under the public ownership of a national government or state. Nationalization usually refers to p ...

of the Italian energy corporations. He claimed the Italian nationalisation law conflicted with the

Treaty of Rome The Treaty of Rome, or EEC Treaty (officially the Treaty establishing the European Economic Community), brought about the creation of the European Economic Community (EEC), the best known of the European Communities (EC). The treaty was sig ...

, and requested a reference be made to both the

Italian Constitutional Court The Constitutional Court of the Italian Republic ( it, Corte costituzionale della Repubblica Italiana) is the highest court of Italy in matters of constitutional law. Sometimes, the name ''Consulta'' is used as a metonym for it, because its sess ...

and the Court of Justice under

article 267. The Italian Constitutional Court gave an opinion that because the nationalisation law was from 1962, and the treaty was in force from 1958, Costa had no claim. By contrast, the Court of Justice held that ultimately the Treaty of Rome in no way prevented energy nationalisation, and in any case under the Treaty provisions only the commission could have brought a claim, not Mr Costa. However, in principle, Mr Costa was entitled to plead that the Treaty conflicted with national law, and the court would have a duty to consider his claim to make a reference if there would be no appeal against its decision. The Court of Justice, repeating its view in ''

'', said member states "have limited their sovereign rights, albeit within limited fields, and have thus created a body of law which binds both their nationals and themselves" on the "basis of reciprocity". EU law would not "be overridden by domestic legal provisions, however framed... without the legal basis of the community itself being called into question". This meant any "subsequent unilateral act" of the member state inapplicable. Similarly, in ''

Amministrazione delle Finanze dello Stato v Simmenthal SpA ''Amministrazione delle Finanze v Simmenthal SpA'' (1978) Case 106/77 is an EU law case, concerning the conflict of law between a national legal system and European Union law. Facts Simmenthal SpA imported beef from France into Italy. Italy i ...

'', a company, Simmenthal SpA, claimed that a public health inspection fee under an Italian law of 1970 for importing beef from France to Italy was contrary to two

from 1964 and 1968. In "accordance with the principle of the precedence of Community law", said the Court of Justice, the "directly applicable measures of the institutions" (such as the Regulations in the case) "render automatically inapplicable any conflicting provision of current national law". This was necessary to prevent a "corresponding denial" of Treaty "obligations undertaken unconditionally and irrevocably by member states", that could "imperil the very foundations of the" EU. But despite the views of the Court of Justice, the national courts of member states have not accepted the same analysis. Generally speaking, while all member states recognise that EU law takes primacy over national law where this agreed in the Treaties, they do not accept that the Court of Justice has the final say on foundational constitutional questions affecting democracy and human rights. In the United Kingdom, the basic principle is that Parliament, as the sovereign expression of democratic legitimacy, can decide whether it wishes to expressly legislate against EU law. This, however, would only happen in the case of an express wish of the people to withdraw from the EU. It was held in '' R (Factortame Ltd) v Secretary of State for Transport'' that "whatever limitation of its sovereignty Parliament accepted when it enacted the European Communities Act 1972 was entirely voluntary" and so "it has always been clear" that UK courts have a duty "to override any rule of national law found to be in conflict with any directly enforceable rule of Community law". In 2014, the

Supreme Court of the United Kingdom The Supreme Court of the United Kingdom ( initialism: UKSC or the acronym: SCOTUK) is the final court of appeal in the United Kingdom for all civil cases, and for criminal cases originating in England, Wales and Northern Ireland. As the Unite ...

noted that in '' R (HS2 Action Alliance Ltd) v Secretary of State for Transport'', 014UKSC 3 although the UK constitution is uncodified, there could be "fundamental principles" of common law, and Parliament "did not either contemplate or authorise the abrogation" of those principles when it enacted the European Communities Act 1972. The view of the

German Constitutional Court The Federal Constitutional Court (german: link=no, Bundesverfassungsgericht ; abbreviated: ) is the supreme constitutional court for the Federal Republic of Germany, established by the constitution or Basic Law () of Germany. Since its inc ...

from the '' Solange I'' and '' Solange II'' decisions is that if the EU does not comply with its basic constitutional rights and principles (particularly democracy, the

and the

social state A welfare state is a form of government in which the state (or a well-established network of social institutions) protects and promotes the economic and social well-being of its citizens, based upon the principles of equal opportunity, equitabl ...

principles) then it cannot override German law. However, as the nicknames of the judgments go, "so long as" the EU works towards the democratisation of its institutions, and has a framework that protects fundamental human rights, it would not review EU legislation for compatibility with German constitutional principles. Most other member states have expressed similar reservations. This suggests the EU's legitimacy rests on the ultimate authority of member states, its factual commitment to human rights, and the democratic will of the people. UN Sécherheetsrot

As opposed to the member states, the relation of EU law and

is debated, particularly relating to the

and the United Nations. All individual EU member states are party to both organisations through international treaties. The

article 6(2) required the EU to accede to the ECHR, but would "not affect the Union's competences as defined in the Treaties". This was thought necessary before the

to ensure that the EU gave adequate protection to human rights, overseen by the external

. However, in ''

Opinion 2/13 ''Opinion 2/13'' (2014) is an EU law case determined by the European Court of Justice, concerning the accession of the European Union to the European Convention on Human Rights, and more generally the relationship between the European Court of J ...

'', after a request by the commission to review their plan to accede, the Court of Justice (in

Luxembourg Luxembourg ( ; lb, Lëtzebuerg ; french: link=no, Luxembourg; german: link=no, Luxemburg), officially the Grand Duchy of Luxembourg, ; french: link=no, Grand-Duché de Luxembourg ; german: link=no, Großherzogtum Luxemburg is a small lan ...

) produced a five main reasons why it felt that the accession agreement as it stood was incompatible with the treaties. The reasoning was regarded by a majority of commentators as thinly veiled attempt of the Court of Justice to clutch onto its own power, but it has meant the commission is redrafting a new accession agreement. Under TEU articles 3(5), 21, 34 and 42, the EU must also respect the principles of the

. After the

September 11 attacks The September 11 attacks, commonly known as 9/11, were four coordinated suicide terrorist attacks carried out by al-Qaeda against the United States on Tuesday, September 11, 2001. That morning, nineteen terrorists hijacked four commer ...

on the World Trade Center in New York City, the

UN Security Council The United Nations Security Council (UNSC) is one of the six principal organs of the United Nations (UN) and is charged with ensuring international peace and security, recommending the admission of new UN members to the General Assembly, an ...

adopted a resolution to freeze the assets of suspected terrorists, linked to

Osama bin Laden Osama bin Mohammed bin Awad bin Laden (10 March 1957 – 2 May 2011) was a Saudi-born extremist militant who founded al-Qaeda and served as its leader from 1988 until his death in 2011. Ideologically a pan-Islamist, his group is designated ...

. This included a Saudi national, Mr Kadi. Sweden froze his assets pursuant to an EU Regulation, which gave effect to the

UN Security Council resolution A United Nations Security Council resolution is a United Nations resolution adopted by the fifteen members of the Security Council (UNSC); the United Nations (UN) body charged with "primary responsibility for the maintenance of international peac ...

. In '' Kadi v Commission'', Mr Kadi claimed there was no evidence that he was connected to terrorism, and he had not had a

fair trial A fair (archaic: faire or fayre) is a gathering of people for a variety of entertainment or commercial activities. Fairs are typically temporary with scheduled times lasting from an afternoon to several weeks. Types Variations of fairs incl ...

: a fundamental human right. The opinion of AG Maduro recalled Aharon Barak, of the

Supreme Court of Israel ar, المحكمة العليا , image = Emblem of Israel dark blue full.svg , imagesize = 100px , caption = Emblem of Israel , motto = , established = , location = Givat Ram, Jerusalem , coordina ...

, that it "is when the cannons roar that we especially need the laws". The Court of Justice held that even UN member cannot contravene "the principles that form part of the very community legal order". In effect the EU has developed a rule that within the boundaries of certain jus cogens principles, other courts may take primacy. The content of those core principles remains open to ongoing judicial

dialogue Dialogue (sometimes spelled dialog in American and British English spelling differences, American English) is a written or spoken conversational exchange between two or more people, and a literature, literary and theatrical form that depicts suc ...

among the senior courts in the Union.

Administrative law

Courtroom European Court of Human Rights 04

While constitutional law concerns the

's governance structure, administrative law binds EU institutions and member state governments to follow the law. Both member states and the Commission have a general legal right or "standing" (''

locus standi Locus (plural loci) is Latin for "place". It may refer to: Entertainment * Locus (comics), a Marvel Comics mutant villainess, a member of the Mutant Liberation Front * ''Locus'' (magazine), science fiction and fantasy magazine ** ''Locus Award' ...

'') to bring claims against EU institutions and other member states for breach of the treaties. From the EU's foundation, the Court of Justice also held that the Treaties allowed citizens or corporations to bring claims against EU and member state institutions for violation of the Treaties and

, if they were properly interpreted as creating rights and obligations. However, under Directives, citizens or corporations were said in 1986 to not be allowed to bring claims against other non-state parties. This meant courts of member states were not bound to apply a Union law where a State law conflicted, even though the member state government could be sued, if it would impose an obligation on another citizen or corporation. These rules on " direct effect" limit the extent to which member state courts are bound to administer EU law. All actions by EU institutions can be subject to

judicial review Judicial review is a process under which executive, legislative and administrative actions are subject to review by the judiciary. A court with authority for judicial review may invalidate laws, acts and governmental actions that are incomp ...

, and judged by standards of proportionality, particularly where general principles of law, or fundamental rights are engaged. The remedy for a claimant where there has been a breach of the law is often monetary damages, but courts can also require

specific performance Specific performance is an equitable remedy in the law of contract, whereby a court issues an order requiring a party to perform a specific act, such as to complete performance of the contract. It is typically available in the sale of land law, ...

or will grant an injunction, in order to ensure the law is effective as possible.

Direct effect

Although it is generally accepted that EU law has primacy, not all EU laws give citizens standing to bring claims: that is, not all EU laws have " direct effect". In it was held that the provisions of the

Treaties A treaty is a formal, legally binding written agreement between actors in international law. It is usually made by and between sovereign states, but can include international organizations, individuals, business entities, and other legal pers ...

(and

EU Regulations A regulation is a legal act of the European Union that becomes immediately enforceable as law in all member states simultaneously. Regulations can be distinguished from directives which, at least in principle, need to be transposed into nation ...

) are directly effective, if they are (1) clear and unambiguous (2) unconditional, and (3) did not require EU or national authorities to take further action to implement them.

, a postal company, claimed that what is now

article 30 prevented the Dutch Customs Authorities charging tariffs, when it imported urea-formaldehyde plastics from Germany to the Netherlands. After a Dutch court made a reference, the Court of Justice held that even though the Treaties did not "expressly" confer a right on citizens or companies to bring claims, they could do so. Historically, international treaties had only allowed states to have legal claims for their enforcement, but the Court of Justice proclaimed "the Community constitutes a new legal order of international law". Because article 30 clearly, unconditionally and immediately stated that no quantitative restrictions could be placed on trade, without a good justification, Van Gend en Loos could recover the money it paid for the tariff. EU Regulations are the same as Treaty provisions in this sense, because as TFEU article 288 states, they are 'directly applicable in all Member States'. Member states come under a duty not to replicate Regulations in their own law, in order to prevent confusion. For instance, in '' Commission v Italy'' the Court of Justice held that Italy had breached a duty under the Treaties, both by failing to operate a scheme to pay farmers a premium to slaughter cows (to reduce dairy overproduction), and by reproducing the rules in a decree with various additions. "Regulations", held the Court of Justice, "come into force solely by virtue of their publication" and implementation could have the effect of "jeopardizing their simultaneous and uniform application in the whole of the Union". On the other hand, some Regulations may themselves expressly require implementing measures, in which case those specific rules should be followed. While the Treaties and Regulations will have direct effect (if clear, unconditional and immediate), Directives do not generally give citizens (as opposed to the member state) standing to sue other citizens. In theory, this is because TFEU article 288 says Directives are addressed to the member states and usually "leave to the national authorities the choice of form and methods" to implement. In part this reflects that directives often create minimum standards, leaving member states to apply higher standards. For example, the Working Time Directive requires that every worker has at least 4 weeks paid holidays each year, but most member states require more than 28 days in national law. However, on the current position adopted by the Court of Justice, citizens have standing to make claims based on national laws that implement Directives, but not from Directives themselves. Directives do not have so called "horizontal" direct effect (i.e. between non-state parties). This view was instantly controversial, and in the early 1990s three Advocate Generals persuasively argued that Directives should create rights and duties for all citizens. The Court of Justice refused, but there are five large exceptions. First, if a Directive's deadline for implementation is not met, the member state cannot enforce conflicting laws, and a citizen may rely on the Directive in such an action (so called "vertical" direct effect). So, in '' Pubblico Ministero v Ratti'' because the Italian government had failed to implement a Directive 73/173/EEC on packaging and labelling

solvents A solvent (s) (from the Latin '' solvō'', "loosen, untie, solve") is a substance that dissolves a solute, resulting in a solution. A solvent is usually a liquid but can also be a solid, a gas, or a supercritical fluid. Water is a solvent for ...

by the deadline, it was

estopped Estoppel is a judicial device in common law legal systems whereby a court may prevent or "estop" a person from making assertions or from going back on his or her word; the person being sanctioned is "estopped". Estoppel may prevent someone from ...

from enforcing a conflicting national law from 1963 against Mr Ratti's solvent and

varnish Varnish is a clear transparent hard protective coating or film. It is not a stain. It usually has a yellowish shade from the manufacturing process and materials used, but it may also be pigmented as desired, and is sold commercially in variou ...

business. A member state could "not rely, as against individuals, on its own failure to perform the obligations which the Directive entails". Second, a citizen or company can also invoke a Directive as a defence in a dispute with another citizen or company (not just a public authority) which is attempting to enforce a national law that conflicts with a Directive. So, in '' CIA Security v Signalson and Securitel'' the Court of Justice held that a business called CIA Security could defend itself from allegations by competitors that it had not complied with a Belgian decree from 1991 about

alarm An alarm device is a mechanism that gives an audible, visual or other kind of alarm signal to alert someone to a problem or condition that requires urgent attention. Alphabetical musical instruments Etymology The word ''alarm'' comes from t ...

systems, on the basis that it had not been notified to the commission as a Directive required. Third, if a Directive gives expression to a "general principle" of EU law, it can be invoked between private non-state parties before its deadline for implementation. This follows from '' Kücükdeveci v Swedex GmbH & Co KG'' where the German Civil Code §622 stated that the years people worked under the age of 25 would not count towards the increasing statutory notice before dismissal. Ms Kücükdeveci worked for 10 years, from age 18 to 28, for Swedex GmbH & Co KG before her dismissal. She claimed that the law not counting her years under age 25 was unlawful age discrimination under the Employment Equality Framework Directive. The Court of Justice held that the Directive could be relied on by her because equality was also a general principle of EU law. Fourth, if the defendant is an emanation of the state, even if not central government, it can still be bound by Directives. In '' Foster v British Gas plc'' the Court of Justice held that Mrs Foster was entitled to bring a

sex discrimination Sexism is prejudice or discrimination based on one's sex or gender. Sexism can affect anyone, but it primarily affects women and girls.There is a clear and broad consensus among academic scholars in multiple fields that sexism refers primari ...

claim against her employer,

British Gas plc British Gas plc was an energy and home services provider in the United Kingdom. It was formed when the British Gas Corporation was privatised as a result of the Gas Act 1986, instigated by the government of Margaret Thatcher and superseding the ...

, which made women retire at age 60 and men at 65, if (1) pursuant to a state measure, (2) it provided a public service, and (3) had special powers. This could also be true if the enterprise is privatised, as it was held with a water company that was responsible for basic water provision. Fifth, national courts have a duty to interpret domestic law "as far as possible in the light of the wording and purpose of the directive". Textbooks (though not the Court itself) often called this "

indirect effect Indirect effect is a principle of the European Union (EU) law, whereby national courts of the member states of the EU are required to interpret national law in line with provisions of EU law. The principle of indirect effect contrasts with the pri ...

". In '' Marleasing SA v La Comercial SA'' the Court of Justice held that a Spanish Court had to interpret its general

Civil Code A civil code is a codification of private law relating to property, family, and obligations. A jurisdiction that has a civil code generally also has a code of civil procedure. In some jurisdictions with a civil code, a number of the core ar ...

provisions, on contracts lacking cause or defrauding creditors, to conform with the First Company Law Directive article 11, that required incorporations would only be nullified for a fixed list of reasons. The Court of Justice quickly acknowledged that the duty of interpretation cannot contradict plain words in a national statute. But, if a member state has failed to implement a Directive, a citizen may not be able to bring claims against other non-state parties. It must instead sue the member state itself for failure to implement the law. In sum, the Court of Justice's position on direct effect means that governments and taxpayers must bear the cost of private parties, mostly corporations, for refusing to follow the law.

References and remedies

Litigation often begins and is resolved by member state courts. They interpret and apply EU law, and award remedies of compensation and

restitution The law of restitution is the law of gains-based recovery, in which a court orders the defendant to ''give up'' their gains to the claimant. It should be contrasted with the law of compensation, the law of loss-based recovery, in which a court ...

(remedying loss or stripping gains),

injunctions An injunction is a legal and equitable remedy in the form of a special court order that compels a party to do or refrain from specific acts. ("The court of appeals ... has exclusive jurisdiction to enjoin, set aside, suspend (in whole or in par ...

and

(making somebody stop or do something). If, however, the position in EU law appears unclear, member state courts can refer questions to the Court of Justice for a "

" on EU law's proper interpretation.

article 267 says court "may" refer "if it considers" this "is necessary to enable it to give judgment", and "shall bring the matter before the Court" if there is no possibility for further appeal and remedy. Any "court or tribunal of a Member State" can refer. This is widely interpreted. It obviously includes bodies like the

UK Supreme Court The Supreme Court of the United Kingdom (initialism: UKSC or the acronym: SCOTUK) is the final court of appeal in the United Kingdom for all civil cases, and for criminal cases originating in England, Wales and Northern Ireland. As the United ...

, a High Court, or an

Employment Tribunal Employment tribunals are tribunal public bodies in England and Wales and Scotland which have statutory jurisdiction to hear many kinds of disputes between employers and employees. The most common disputes are concerned with unfair dismissal, ...

. In ''

Vaassen v Beambtenfonds Mijnbedrijf ''Vaassen v Beambtenfonds Mijnbedrijf'' (1966Case 61/65is an EU law case, concerning preliminary references to the Court of Justice of the European Union. Facts The Netherlands had a ''scheidsgerecht'', a mining worker pension arbitration tribun ...

'' the Court of Justice also held that a mining worker pension

arbitration Arbitration is a form of alternative dispute resolution (ADR) that resolves disputes outside the judiciary courts. The dispute will be decided by one or more persons (the 'arbitrators', 'arbiters' or 'arbitral tribunal'), which renders the ...

tribunal could make a reference. By contrast, and oddly, in '' Miles v European Schools'' the Court of Justice held that a Complaints Board of European Schools, set up under the international agreement, the European Schools Convention, could not refer because though it was a court, it was not "of a member state" (even though all member states had signed that Convention). Reichsgerichtsgebäude (3452722046)

On the other side, courts and tribunals are theoretically under a duty to refer questions. In the UK, for example,

Lord Denning MR Alfred Thompson "Tom" Denning, Baron Denning (23 January 1899 – 5 March 1999) was an English lawyer and judge. He was called to the bar of England and Wales in 1923 and became a King's Counsel in 1938. Denning became a judge in 1944 when ...

considered it appropriate to refer if the outcome of a case depended on a correct answer, and the

Civil Procedure Rules The Civil Procedure Rules (CPR) were introduced in 1997 as per the Civil Procedure Act 1997 by the Civil Procedure Rule Committee and are the rules of civil procedure used by the Court of Appeal, High Court of Justice, and County Courts in civil ...

entitle the High Court to refer at any stage of proceedings. The view of the Court of Justice in the leading case, '' CILFIT v Ministry of Health'' is that a national court has no duty to refer if the law is an ''

acte clair ''Acte clair'' is a doctrine of European Union law, which states that if a judgment or rule of law is clear enough, then a member state has no duty to refer a question for preliminary ruling to the Court of Justice of the European Union Th ...

'' (a clear rule), or "so obvious as to leave no scope for any reasonable doubt as to the manner in which the question raised is to be resolved". In '' Kenny Roland Lyckeskog'' the Court of Justice held that the duty to refer existed for the Swedish Court of Appeal, the ''hovrätt'', since Sweden's Supreme Court (''Högsta domstol'') had to give permission for appeals to continue. The practical difficulty is that judges differ on their views of whether or not the law is clear. In a significant case, '' Three Rivers DC v Governor of the Bank of England'' the UK House of Lords felt confident that it was clear under the First Banking Directive that depositors did not have direct rights to sue the Bank of England for alleged failure to carry out adequate prudential regulation. Their Lordships highlighted that while some uncertainty might exist, the costs of delay in making a reference outweighed the benefits from total certainty. By contrast, in '' ParkingEye Ltd v Beavis'', a majority of the Supreme Court apparently felt able to declare that the law under

Unfair Terms in Consumer Contracts Directive The Unfair Terms in Consumer Contracts Directive''93/13/EECis a European Union directive (then called European Economic Community directive) governing the use of surprising or onerous terms used by business in deals with consumers. National law I ...

was ''acte clair'', and decline to make a reference, even though a senior Law Lord delivered a powerfully reasoned dissent. However, in addition to a reluctance to make references, a general scepticism has grown among senior member state judiciaries of the mode of reasoning used by the Court of Justice. The

in '' R (HS2 Action Alliance Ltd) v Secretary of State for Transport'' devoted large parts of its judgment to criticism, in its view, an unpredictable 'teleological' mode of reasoning which, could decrease confidence in maintaining a dialogue within a plural and transnational judicial system. It added that it might not interpret the European Communities Act 1972 to abridge basic principles and understanding of constitutional functioning – in effect implying that it might decline to follow unreasonable Court of Justice judgments on important issues. Similarly, the

in the '' Outright Monetary Transactions case'' referred a question for preliminary ruling on whether the

's plan to buy Greek and other government bonds on secondary markets, despite the Treaty prohibition on buying them directly, was unlawful. In a highly unusual move, the two most senior judges dissented that the ECB's plan could be lawful, while the majority closely guided the Court of Justice on the appropriate mode of reasoning. If references are made, the Court of Justice will give a preliminary ruling, in order for the member state court to conclude the case and award a remedy. The

right to an effective remedy The Right to an effective remedy is the right of a person whose human rights have been violated to legal remedy. Such a remedy must be accessible, binding, capable of bringing perpetrators to justice, provide appropriate reparations, and prevent fur ...

is a general principle of EU law, enshrined in the

Charter of Fundamental Rights The Charter of Fundamental Rights of the European Union (CFR) enshrines certain political, social, and economic rights for European Union (EU) citizens and residents into EU law. It was drafted by the European Convention and solemnly proclai ...

article 47. Most of the time Regulations and Directives will set out the relevant remedies to be awarded, or they will be construed from the legislation according to the practices of the member state. It could also be that the government is responsible for failure to properly implement a Directive or Regulation, and must therefore pay damages. In '' Francovich v Italy'', the Italian government had failed to set up an insurance fund for employees to claim unpaid wages if their employers had gone insolvent, as the

Insolvency Protection Directive The Insolvency Protection Directive''2008/94/ECis an EU Directive concerning the protection of employees in the event of insolvency of an employer. It replaced Directive 80/987/EC and 2002/74/EC in turn. Contents The recitals of the Directive state ...

required. Francovich, the former employee of a bankrupt Venetian firm, was therefore allowed to claim 6 million Lira from the Italian government in damages for his loss. The Court of Justice held that if a Directive would confer identifiable rights on individuals, and there is a causal link between a member state's violation of EU and a claimant's loss, damages must be paid. The fact that the incompatible law is an Act of Parliament is no defence. So, in '' Factortame'' it was irrelevant that Parliament had legislated to require a quota of British ownership of fishing vessels in primary legislation. Similarly, in was '' Brasserie du Pêcheur v Germany'' the German government was liable to a French beer company for damages from prohibiting its imports, which did not comply with the fabled

beer purity law The ''Reinheitsgebot'' (, literally "purity order") is a series of regulations limiting the ingredients in beer in Germany and the states of the former Holy Roman Empire. The best known version of the law was adopted in Bavaria in 1516 (by Wil ...

. It was not decisive that the German Parliament had not acted willfully or negligently. It was merely necessary that there was (1) a rule intended to confer rights, (2) that a breach was sufficiently serious, and (3) there was a causal link between the breach and damage. The Court of Justice advised a breach is to be regarded as 'sufficiently serious' by weighing a range of factors, such as whether it was voluntary, or persistent. In '' Köbler v Republik Österreich'' the Court of Justice added that member state liability could also flow from judges failing to adequately implement the law. On the other hand, it is also clear that EU institutions, such as the commission, may be liable according to the same principles for failure to follow the law. The only institution whose decisions appear incapable of generating a damages claim is the Court of Justice itself.

Judicial review

As well as preliminary rulings on the proper interpretation of EU law, an essential function of the Court of Justice is

of the acts of the EU itself. Under

(TFEU) article 263(1) the Court can review the legality of any EU legislative of other "act" against the Treaties or general principles, such as those in the

Charter of Fundamental Rights of the European Union The Charter of Fundamental Rights of the European Union (CFR) enshrines certain political, social, and economic rights for European Union (EU) citizens and residents into EU law. It was drafted by the European Convention and solemnly proclai ...

. This includes legislation, and most other acts that have legal consequences for people. For example, in ''

Société anonyme Cimenteries CBR Cementsbedrijven NV v Commission ''Société anonyme Cimenteries CBR Cementsbedrijven NV v Commission'' (1967Case 8/66is an EU law case, concerning judicial review in the European Union. Facts Under (what is now) TFEU article 101, the Council adopted Regulation 17, imposing fine ...

'' the commission made a decision to withdraw an assurance to a Dutch cement company that it would be immune from

competition law Competition law is the field of law that promotes or seeks to maintain market competition by regulating anti-competitive conduct by companies. Competition law is implemented through public and private enforcement. It is also known as antitrust l ...

fines, for vertical agreements. The cement company challenged the decision, and the Commission argued this was not really an "act", and so could not be challenged. The Court of Justice held a challenge could be made, and it was an act, because it "deprived

he cement company He or HE may refer to: Language * He (pronoun), an English pronoun * He (kana), the romanization of the Japanese kana へ * He (letter), the fifth letter of many Semitic alphabets * He (Cyrillic), a letter of the Cyrillic script called ''He'' in ...

of the advantages of a legal situation... and exposed them to a grave financial risk". Similarly in '' Deutsche Post v Commission'' the Commission demanded information on

state aid State aid in the European Union is the name given to a subsidy or any other aid provided by a government that distorts competitions. Under European Union competition law the term has a legal meaning, being any measure that demonstrates any of t ...

given by Germany to

Deutsche Post The Deutsche Post AG, operating under the trade name Deutsche Post DHL Group, is a German multinational package delivery and supply chain management company headquartered in Bonn, Germany. It is one of the world's largest courier companies ...

within 20 days. When both challenged this, the Commission argued that the demand for information could not be an act as there was no sanction. The Court of Justice disagreed, and held judicial review could proceed because the request produced "binding legal effects" since the information supplied or not could be relied upon as evidence in a final decision. By contrast, in ''

IBM v Commission ''International Business Machines Corporation v. Commission'' (1981Case 60/81is an EU law case, concerning judicial review in the European Union. Facts The Commission sent a letter to IBM that it was bringing proceedings for abusing a dominant p ...

'' the Court of Justice held that a letter from the commission to IBM that it would sue IBM for abusing a dominant position contrary to competition was not a reviewable act, but just a preliminary statement of intent to act. In any case, if a reviewable act of an EU institution is not found compatible with the law, under article 264, it will be declared void. Haan - Friedrichstraße 03 ies

However, only a limited number of people can bring claims for judicial review. Under TFEU article 263(2), a member state, the Parliament, Council or Commission have automatic rights to seek judicial review. But under article 263(4) a "natural or legal person" must have a "direct and individual concern" about the regulatory act. "Direct" concern means that someone is affected by an EU act without "the interposition of an autonomous will between the decision and its effect", for instance by a national government body. In '' Piraiki-Patraiki v Commission'', a group of Greek textile businesses, who exported cotton products to France, challenged a Commission decision allow France to limit exports. The Commission argued that the exporters were not directly concerned, because France might decide not to limit exports, but the Court of Justice held this possibility was "entirely theoretical". A challenge could be brought. By contrast in '' Municipality of Differdange v Commission'' a municipality wanted to challenge the Commissions decision to aid steel firms which reduced production: this would probably reduce its tax collections. But the Court of Justice held that because Luxembourg had discretion, and its decision to reduce capacity was not inevitable, the municipality had no "direct" concern (its complaint was with the Luxembourg government instead). "Individual" concern requires that someone is affected specifically, not as a member of a group. In '' Plaumann & Co v Commission'' the Court of Justice held that a clementine importer was not individually concerned when the Commission refused permission to Germany to stop import custom duties. This kept it more expensive for Mr Plaumann to import clementines, but it was equally expensive for everyone else. This decision heavily restricted the number of people who could claim for judicial review. In ''

Unión de Pequeños Agricultores ''Unión de Pequeños Agricultores v Council of the European Union'' (2002) C-50/00 P is an EU law case, concerning a judicial review of a Regulation (European Union), regulation adopted by the European Union. In this case, the European Court of ...

'', Advocate General Jacobs propose a broader test of allowing anyone to claim if there was a "substantial adverse effect" on the claimant's interests. Here, a group of Spanish

olive oil Olive oil is a liquid fat obtained from olives (the fruit of ''Olea europaea''; family Oleaceae), a traditional tree crop of the Mediterranean Basin, produced by pressing whole olives and extracting the oil. It is commonly used in cooking: ...

producers challenged Council Regulation No 1638/98, which withdrew subsidies. Because Regulations are not implemented in national law, but have direct effect, they argued the requirement for individual concern would deny them effective judicial protection. The Court of Justice held that direct actions were still not allowed: if this was unsatisfactory the member states would have to change the treaties. Individual concern is not needed, however under article 263(4), if an act is not legislation, but just a "regulatory act". In '' Inuit Tapiriit Kanatami v Parliament and Council'' the Court of Justice affirmed that a Regulation does not count as a "regulatory act" within the Treaty's meaning: it is only meant for acts of lesser importance. Here, a Canadian group representing the

Inuit Inuit (; iu, ᐃᓄᐃᑦ 'the people', singular: Inuk, , dual: Inuuk, ) are a group of culturally similar indigenous peoples inhabiting the Arctic and subarctic regions of Greenland, Labrador, Quebec, Nunavut, the Northwest Territorie ...

wished to challenge a Regulation on

seal Seal may refer to any of the following: Common uses * Pinniped, a diverse group of semi-aquatic marine mammals, many of which are commonly called seals, particularly: ** Earless seal, or "true seal" ** Fur seal * Seal (emblem), a device to imp ...

products, but were not allowed. They would have to show both direct and individual concern as normal. Thus, without a treaty change, EU administrative law remains one of the most restrictive in Europe.

Human rights and principles

Although access to judicial review is restricted for ordinary questions of law, the Court of Justice has gradually developed a more open approach to standing for human rights. Human rights have also become essential in the proper interpretation and construction of all EU law. If there are two or more plausible interpretations of a rule, the one which is most consistent with human rights should be chosen. The

Treaty of Lisbon 2007 The Treaty of Lisbon (initially known as the Reform Treaty) is an international agreement that amends the two treaties which form the constitutional basis of the European Union (EU). The Treaty of Lisbon, which was signed by the EU member sta ...

made rights underpin the Court of Justice's competence, and required the EU's accession to the

, overseen by the external Strasbourg Court. Initially, reflecting its primitive economic nature, the treaties made no reference to rights. However, in 1969 particularly after concern from Germany, the Court of Justice declared in '' Stauder v City of Ulm'' that 'fundamental human rights' were 'enshrined in the general principles of Community law'. This meant that Mr Stauder, who received subsidised butter under an EU welfare scheme only by showing a coupon with his name and address, was entitled to claim that this violated his dignity: he was entitled not to have to go through the

humiliation Humiliation is the abasement of pride, which creates mortification or leads to a state of being humbled or reduced to lowliness or submission. It is an emotion felt by a person whose social status, either by force or willingly, has just dec ...

of proving his identity to get food. While those 'general principles' were not written down in EU law, and simply declared to exist by the court, it accords with a majority philosophical view that 'black letter' rules, or

positive law Positive laws ( la, links=no, ius positum) are human-made laws that oblige or specify an action. Positive law also describes the establishment of specific rights for an individual or group. Etymologically, the name derives from the verb ''to posit ...

, necessarily exist for reasons that the society which made them wants: these give rise to principles, which inform the law's purpose. Moreover, the Court of Justice has clarified that its recognition of rights was 'inspired' by member states' own 'constitutional traditions', and international treaties. These include rights found in member state constitutions, bills of rights, foundational Acts of Parliament, landmark court cases, the

, the

European Social Charter 1961 The European Social Charter is a Council of Europe treaty which was opened for signature on October 18, 1961 and initially became effective on February 26, 1965, after West Germany had become the fifth of the 13 signing nations to ratify it. B ...

, the Universal Declaration of Human Rights 1948, or the

International Labour Organization The International Labour Organization (ILO) is a United Nations agency whose mandate is to advance social and economic justice by setting international labour standards. Founded in October 1919 under the League of Nations, it is the first and o ...

's Conventions. The EU itself must accede to the ECHR, although in '’

'’ the Court of Justice delayed, because of perceived difficulties in retaining an appropriate balance of competences. Schweinebraten & Wein

Many of the most important rights were codified in the

in 2000. While the UK has opted out of direct application of the Charter, this has little practical relevance since the Charter merely reflected pre-existing principles and the Court of Justice uses the Charter to interpret all EU law. For example, in '' Test-Achats ASBL v Conseil des ministres'', the Court of Justice held that Equal Treatment in Goods and Services Directive 2004 article 5(2), which purported to allow a derogation from equal treatment, so men and women could be charged different car insurance rates, was unlawful. It contravened the principle of equality in

CFREU 2000 The Charter of Fundamental Rights of the European Union (CFR) enshrines certain political, social, and economic rights for European Union (EU) citizens and residents into EU law. It was drafted by the European Convention and solemnly proclai ...

articles 21 and 23, and had to be regarded as ineffective after a transition period. By contrast, in '' Deutsches Weintor eG v Land Rheinland-Pfalz'' wine producers claimed that a direction to stop marketing their brands as 'easily digestible' (''bekömmlich'') by the state food regulator (acting under EU law) contravened their right to occupational and business freedom under

articles 15 and 16. The Court of Justice held that in fact, the right to health for consumers in article 35 has also to be taken into account, and was to be given greater weight, particularly given the health effects of alcohol. Some rights in the

Charter A charter is the grant of authority or rights, stating that the granter formally recognizes the prerogative of the recipient to exercise the rights specified. It is implicit that the granter retains superiority (or sovereignty), and that the re ...

, however, are not expressed with sufficient clarity to be regarded as directly binding. In ''

AMS v Union locale des syndicats CGT AMS or Ams may refer to: Organizations Companies * Alenia Marconi Systems * American Management Systems * AMS (Advanced Music Systems) * ams AG, semiconductor manufacturer * AMS Pictures * Auxiliary Medical Services Educational institutions * ...

'' a French trade union claimed that the French Labour Code should not exclude casual workers from counting toward the right to set up a work council that an employing entity must inform and consult. They said this contravened the

Information and Consultation of Employees Directive Information and Consultation of Employees Directive''2002/14/ECis a European Labour Law that requires undertakings to inform and consult employees on significant changes to businesses in a standing procedure, typically called a work council. See al ...

and also CFREU article 27. The Court of Justice agreed that the French Labour Code was incompatible with the Directive, but held that article 27 was expressed too generally to create direct rights. On this view, legislation was necessary to make abstract human rights principles concrete, and legally enforceable. Beyond human rights, the Court of Justice has recognised at least five further 'general principles' of EU law. The categories of general principles are not closed, and may develop according to the social expectations of people living in Europe. #

Legal certainty Legal certainty is a principle in national and international law which holds that the law must provide those subject to it with the ability to regulate their conduct. The legal system needs to permit those subject to the law to regulate their condu ...

requires that judgments should be prospective, open and clear. # Decision-making must be " proportionate" toward a legitimate aim when reviewing any discretionary act of a government or powerful body,. For example, if a government wishes to change an employment law in a neutral way, yet this could have disproportionate negative impact on women rather than men, the government must show a legitimate aim, and that its measures are (1) appropriate or suitable for achieving it, (2) do no more than necessary, and (3) reasonable in balancing the conflicting rights of different parties. # Equality is regarded as a fundamental principle: this matters particularly for labour rights, political rights, and access to public or private services. # Right to a fair hearing. # Professional privilege between lawyers and clients.

Free movement and trade

While the "

social market economy The social market economy (SOME; german: soziale Marktwirtschaft), also called Rhine capitalism, Rhine-Alpine capitalism, the Rhenish model, and social capitalism, is a socioeconomic model combining a free-market capitalist economic system alon ...

" concept was only put into EU law in

2007 File:2007 Events Collage.png, From top left, clockwise: Steve Jobs unveils Apple Inc., Apple's first iPhone (1st generation), iPhone; TAM Airlines Flight 3054 overruns a runway and crashes into a gas station, killing almost 200 people; Former Pakis ...

, free movement and trade were central to European development since the Treaty of Rome 1957. The standard theory of

comparative advantage In an economic model, agents have a comparative advantage over others in producing a particular good if they can produce that good at a lower relative opportunity cost or autarky price, i.e. at a lower relative marginal cost prior to trade. C ...

says two countries can both benefit from trade even if one of them has a less productive economy in all respects. Like the

North American Free Trade Association The North American Free Trade Agreement (NAFTA ; es, Tratado de Libre Comercio de América del Norte, TLCAN; french: Accord de libre-échange nord-américain, ALÉNA) was an agreement signed by Canada, Mexico, and the United States that cre ...

, or the

World Trade Organization The World Trade Organization (WTO) is an intergovernmental organization that regulates and facilitates international trade. With effective cooperation in the United Nations System, governments use the organization to establish, revise, and ...

, EU law breaks down barriers to trade, by creating rights to free movement of goods, services, labour and

capital Capital may refer to: Common uses * Capital city, a municipality of primary status ** List of national capital cities * Capital letter, an upper-case letter Economics and social sciences * Capital (economics), the durable produced goods used fo ...

. This is meant to reduce consumer

prices A price is the (usually not negative) quantity of payment or compensation given by one party to another in return for goods or services. In some situations, the price of production has a different name. If the product is a "good" in t ...

and raise living standards. Early theorists argued a free trade area would give way to a

customs union A customs union is generally defined as a type of trade bloc which is composed of a free trade area with a common external tariff.GATTArticle 24 s. 8 (a) Customs unions are established through trade pacts where the participant countries set up ...

, which led to a common market, then monetary union, then union of monetary and fiscal policy, and eventually a full union characteristic of a

federal state A federation (also known as a federal state) is a political entity characterized by a union of partially self-governing provinces, states, or other regions under a central federal government ( federalism). In a federation, the self-gover ...

. But in Europe those stages were mixed, and it is unclear whether the " endgame" should be the same as a state.

Free trade Free trade is a trade policy that does not restrict imports or exports. It can also be understood as the free market idea applied to international trade. In government, free trade is predominantly advocated by political parties that hold econ ...

, without rights to ensure

fair trade Fair trade is an arrangement designed to help producers in developing countries achieve sustainable and equitable trade relationships. The fair trade movement combines the payment of higher prices to exporters with improved social and envir ...

, can benefit some groups within countries (particularly big business) more than others, and disadvantages people who lack bargaining power in an expanding market, particularly

workers The workforce or labour force is a concept referring to the pool of human beings either in employment or in unemployment. It is generally used to describe those working for a single company or industry, but can also apply to a geographic reg ...

, consumers,

small business Small businesses are types of corporations, partnerships, or sole proprietorships which have fewer employees and/or less annual revenue than a regular-sized business or corporation. Businesses are defined as "small" in terms of being able to ...

, developing industries, and communities. For this reason, the European has become "not merely an economic union", but creates binding social rights for people to "ensure social progress and seek the constant improvement of the living and working conditions of their peoples". The

articles 28 to 37 establish the principle of free movement of goods in the EU, while articles 45 to 66 require free movement of

persons A person ( : people) is a being that has certain capacities or attributes such as reason, morality, consciousness or self-consciousness, and being a part of a culturally established form of social relations such as kinship, ownership of prope ...

, services and

. These "four freedoms" were thought to be inhibited by physical barriers (e.g. customs), technical barriers (e.g. differing laws on safety, consumer or environmental standards) and fiscal barriers (e.g. different

Value Added Tax A value-added tax (VAT), known in some countries as a goods and services tax (GST), is a type of tax that is assessed incrementally. It is levied on the price of a product or service at each stage of production, distribution, or sale to the en ...

rates). Free movement and trade is not meant to be a licence for unrestricted commercial profit. Increasingly, the Treaties and the Court of Justice aim to ensure free trade serves higher values such as public health, consumer protection,

labour rights Labor rights or workers' rights are both legal rights and human rights relating to labor relations between workers and employers. These rights are codified in national and international labor and employment law. In general, these rights influe ...

, fair competition, and environmental improvement.

Goods

Free movement of goods within the

is achieved by a

, and the principle of non-discrimination. The EU manages imports from non-member states, duties between member states are prohibited, and imports circulate freely. In addition under the

article 34, 'Quantitative restrictions on imports and all measures having equivalent effect shall be prohibited between Member States'. In '' Procureur du Roi v Dassonville'' the Court of Justice held that this rule meant all "trading rules" that are "enacted by Member States" which could hinder trade "directly or indirectly, actually or potentially" would be caught by article 34. This meant that a Belgian law requiring

Scotch whisky Scotch whisky (; sco, Scots whisky/whiskie, whusk(e)y; often simply called whisky or Scotch) is malt whisky or grain whisky (or a blend of the two), made in Scotland. All Scotch whisky was originally made from malted barley. Commercial disti ...

imports to have a certificate of origin was unlikely to be lawful. It discriminated against parallel importers like Mr Dassonville, who could not get certificates from authorities in France, where they bought the Scotch. This "wide test", to determine what could potentially be an unlawful restriction on trade, applies equally to actions by quasi-government bodies, such as the former "

Buy Irish Vivian Murray (22 July 1932 – 6 March 2009) was an Irish businessman. Murray served as the chief executive of the Irish Goods Council during the 1970s and 1980s, when it launched the "Buy Irish" and "Guaranteed Irish" marketing campaigns. M ...

" company that had government appointees. It also means states can be responsible for private actors. For instance, in '' Commission v France'' French farmer vigilantes were continually sabotaging shipments of Spanish

strawberries The garden strawberry (or simply strawberry; ''Fragaria × ananassa'') is a widely grown hybrid species of the genus '' Fragaria'', collectively known as the strawberries, which are cultivated worldwide for their fruit. The fruit is widely ap ...

, and even Belgian tomato imports. France was liable for these hindrances to trade because the authorities 'manifestly and persistently abstained' from preventing the sabotage. Generally speaking, if a member state has laws or practices that directly discriminate against imports (or exports under

article 35) then it must be justified under article 36. The justifications include public

morality Morality () is the differentiation of intentions, decisions and actions between those that are distinguished as proper (right) and those that are improper (wrong). Morality can be a body of standards or principles derived from a code of co ...

, policy or security, "protection of health and life of

humans" \n\n\n\n\nThe robots exclusion standard, also known as the robots exclusion protocol or simply robots.txt, is a standard used by websites to indicate to visiting web crawlers and other web robots which portions of the site they are allowed to visi ...

, animals or plants", "national treasures" of "artistic, historic or archaeological value" and "industrial and commercial property". In addition, although not clearly listed, environmental protection can justify restrictions on trade as an overriding requirement derived from

article 11. More generally, it has been increasingly acknowledged that fundamental human rights should take priority over all trade rules. So, in '' Schmidberger v Austria'' the Court of Justice held that Austria did not infringe article 34 by failing to ban a protest that blocked heavy traffic passing over the A13,

Brenner Autobahn The Brenner Autobahn ( it, Autostrada del Brennero or it, AutoBrennero, en, Brenner motorway) refers to a major European truck route that connects Innsbruck in Austria to Verona in northern Italy. Numbered as the A13 in the Austrian section, ...

, en route to Italy. Although many companies, including Mr Schmidberger's German undertaking, were prevented from trading, the Court of Justice reasoned that

freedom of association Freedom of association encompasses both an individual's right to join or leave groups voluntarily, the right of the group to take collective action to pursue the interests of its members, and the right of an association to accept or decline mem ...

is one of the 'fundamental pillars of a democratic society', against which the free movement of goods had to be balanced, and was probably subordinate. If a member state does appeal to the article 36 justification, the measures it takes have to be applied proportionately. This means the rule must be pursue a legitimate aim and (1) be suitable to achieve the aim, (2) be necessary, so that a less restrictive measure could not achieve the same result, and (3) be reasonable in balancing the interests of free trade with interests in article 36. Europabrücke-a

Often rules apply to all goods neutrally, but may have a greater practical effect on imports than domestic products. For such "indirect" discriminatory (or "indistinctly applicable") measures the Court of Justice has developed more justifications: either those in article 36, or additional "mandatory" or "overriding" requirements such as

consumer protection Consumer protection is the practice of safeguarding buyers of goods and services, and the public, against unfair practices in the marketplace. Consumer protection measures are often established by law. Such laws are intended to prevent business ...

, improving labour standards, protecting the environment, press diversity, fairness in commerce, and more: the categories are not closed. In the noted case '' Rewe-Zentral AG v Bundesmonopol für Branntwein'', the Court of Justice found that a German law requiring all spirits and liqueurs (not just imported ones) to have a minimum alcohol content of 25 per cent was contrary to

article 34, because it had a greater negative effect on imports. German liqueurs were over 25 per cent alcohol, but Cassis de Dijon, which Rewe-Zentrale AG wished to import from France, only had 15 to 20 per cent alcohol. The Court of Justice rejected the German government's arguments that the measure proportionately protected public health under

article 36, because stronger beverages were available and adequate labelling would be enough for consumers to understand what they bought. This rule primarily applies to requirements about a product's content or packaging. In ''

Walter Rau Lebensmittelwerke v De Smedt PVBA ''Walter Rau Lebensmittelwerke v De Smedt PVBA'' (1983Case 261/81is an EU law case, concerning the free movement of goods in the European Union. Facts A Belgian law required margarine to be marketed in cube shaped packages, to avoid confusio ...

'' the Court of Justice found that a Belgian law requiring all

margarine Margarine (, also , ) is a spread used for flavoring, baking, and cooking. It is most often used as a substitute for butter. Although originally made from animal fats, most margarine consumed today is made from vegetable oil. The spread was or ...

to be in

cube In geometry, a cube is a three-dimensional solid object bounded by six square faces, facets or sides, with three meeting at each vertex. Viewed from a corner it is a hexagon and its net is usually depicted as a cross. The cube is the only ...

shaped packages infringed article 34, and was not justified by the pursuit of consumer protection. The argument that Belgians would believe it was butter if it was not cube shaped was disproportionate: it would "considerably exceed the requirements of the object in view" and labelling would protect consumers "just as effectively". In a 2003 case, '' Commission v Italy'' Italian law required that cocoa products that included other

vegetable fat Vegetable oils, or vegetable fats, are oils extracted from seeds or from other parts of fruits. Like animal fats, vegetable fats are ''mixtures'' of triglycerides. Soybean oil, grape seed oil, and cocoa butter are examples of seed oils, or fa ...

s could not be labelled as "chocolate". It had to be "chocolate substitute". All Italian chocolate was made from

cocoa butter Cocoa butter, also called theobroma oil, is a pale-yellow, edible fat extracted from the cocoa bean. It is used to make chocolate, as well as some ointments, toiletries, and pharmaceuticals. Cocoa butter has a cocoa flavor and aroma. Its melt ...

alone, but British, Danish and Irish manufacturers used other vegetable fats. They claimed the law infringed article 34. The Court of Justice held that a low content of vegetable fat did not justify a "chocolate substitute" label. This was derogatory in the consumers' eyes. A 'neutral and objective statement' was enough to protect consumers. If member states place considerable obstacles on the use of a product, this can also infringe article 34. So, in a 2009 case, '' Commission v Italy'', the Court of Justice held that an Italian law prohibiting motorcycles or mopeds pulling trailers infringed article 34. Again, the law applied neutrally to everyone, but disproportionately affected importers, because Italian companies did not make trailers. This was not a product requirement, but the Court reasoned that the prohibition would deter people from buying it: it would have "a considerable influence on the behaviour of consumers" that "affects the access of that product to the market". It would require justification under article 36, or as a mandatory requirement. Union-europea segun rem-koolhaas

In contrast to product requirements or other laws that hinder

market access In international trade, market access is a company's ability to enter a foreign market by selling its goods and services in another country. Market access is not the same as free trade, because market access is normally subject to conditions or re ...

, the Court of Justice developed a presumption that "selling arrangements" would be presumed to not fall into

article 34, if they applied equally to all sellers, and affected them in the same manner in fact. In '' Keck and Mithouard'' two importers claimed that their prosecution under a French

, which prevented them selling

Picon beer Picon may refer to: * Avatar (computing), used in the Apple Computer instant messaging program iChat * Picón, Spain * Picon (apéritif), an apéritif * Picon Punch, a drink popularized by Basque-Americans * One of the Twelve Colonies of Kobol in ...

under wholesale price, was unlawful. The aim of the law was to prevent cut throat competition, not to hinder trade. The Court of Justice held, as "in law and in fact" it was an equally applicable "selling arrangement" (not something that alters a product's content) it was outside the scope of article 34, and so did not need to be justified. Selling arrangements can be held to have an unequal effect "in fact" particularly where traders from another member state are seeking to break into the market, but there are restrictions on advertising and marketing. In '' Konsumentombudsmannen v De Agostini'' the Court of Justice reviewed Swedish bans on advertising to children under age 12, and misleading commercials for skin care products. While the bans have remained (justifiable under article 36 or as a mandatory requirement) the Court emphasised that complete marketing bans could be disproportionate if advertising were "the only effective form of promotion enabling traderto penetrate" the market. In ''

Konsumentombudsmannen v Gourmet AB ''Konsumentombudsmannen v Gourmet AB'' (2001) C-405/98 is an EU law case, concerning the free movement of goods in the European Union. Facts Sweden banned advertisements for alcohol on the radio, TV and in magazines totally (with a few limited ...

'' the Court suggested that a total ban for advertising alcohol on the radio, TV and in magazines could fall within article 34 where advertising was the only way for sellers to overcome consumers' "traditional social practices and to local habits and customs" to buy their products, but again the national courts would decide whether it was justified under article 36 to protect public health. Under the Unfair Commercial Practices Directive, the EU harmonised restrictions on restrictions on marketing and advertising, to forbid conduct that distorts average consumer behaviour, is misleading or aggressive, and sets out a list of examples that count as unfair. Increasingly, states have to give mutual recognition to each other's standards of regulation, while the EU has attempted to harmonise minimum ideals of best practice. The attempt to raise standards is hoped to avoid a regulatory "

race to the bottom Race to the bottom is a socio-economic phrase to describe either government deregulation of the business environment or reduction in corporate tax rates, in order to attract or retain usually foreign economic activity in their jurisdictions. While ...

", while allowing consumers access to goods from around the continent.

Workers

Since its foundation, the Treaties sought to enable people to pursue their life goals in any country through free movement. Reflecting the economic nature of the project, the

European Community The European Economic Community (EEC) was a regional organization created by the Treaty of Rome of 1957,Today the largely rewritten treaty continues in force as the ''Treaty on the functioning of the European Union'', as renamed by the Lis ...

originally focused upon free movement of

: as a "

factor of production In economics, factors of production, resources, or inputs are what is used in the production process to produce output—that is, goods and services. The utilized amounts of the various inputs determine the quantity of output according to the rel ...

". However, from the 1970s, this focus shifted towards developing a more "social" Europe.''

Defrenne v Sabena ''Defrenne v Sabena (No 2)'' (1976Case 43/75is a foundational European Union law case, concerning direct effect and the European Social Charter in the European Union. It held that the EU: The case was championed by the Belgian lawyer Éliane V ...

'' (1976
Case 43/75
0/ref> Free movement was increasingly based on "

citizenship Citizenship is a "relationship between an individual and a state to which the individual owes allegiance and in turn is entitled to its protection". Each state determines the conditions under which it will recognize persons as its citizens, and ...

", so that people had rights to empower them to become economically and socially active, rather than economic activity being a precondition for rights. This means the basic "worker" rights in

article 45 function as a specific expression of the general rights of citizens in

articles 18 to 21. According to the Court of Justice, a "worker" is anybody who is economically active, which includes everyone in an employment relationship, "under the direction of another person" for "remuneration". A job, however, need not be paid in money for someone to be protected as a worker. For example, in ''

Steymann v Staatssecretaris van Justitie ''Udo Steymann v Staatssecretaris van Justitie '' (1988Case 196/87is a European Union law case, concerning the free movement of workers in the European Union. Facts Udo Steymann was a German plumber working in the Netherlands. He joined the Bhag ...

'', a German man claimed the right to residence in the Netherlands, while he volunteered plumbing and household duties in the

Bhagwan Bhagavan ( sa, भगवान्, Bhagavān; pi, Bhagavā, italics=yes), also spelt Bhagwan (sometimes translated in English as "Lord"), is an epithet within Indian religions used to denote figures of religious worship. In Hinduism it is us ...

community, which provided for everyone's material needs irrespective of their contributions. The Court of Justice held that Mr Steymann was entitled to stay, so long as there was at least an "indirect quid pro quo" for the work he did. Having "worker" status means protection against all forms of discrimination by governments, and employers, in access to employment, tax, and

social security Welfare, or commonly social welfare, is a type of government support intended to ensure that members of a society can meet basic human needs such as food and shelter. Social security may either be synonymous with welfare, or refer specifical ...

rights. By contrast a citizen, who is "any person having the nationality of a Member State" (

article 20(1)), has rights to seek work, vote in local and European elections, but more restricted rights to claim

. In practice, free movement has become politically contentious as nationalist political parties have manipulated fears about immigrants taking away people's jobs and benefits (paradoxically at the same time). Nevertheless, practically "all available research finds little impact" of "labour mobility on wages and employment of local workers". Bozen Waltherplatz

The Free Movement of Workers Regulation articles 1 to 7 set out the main provisions on equal treatment of workers. First, articles 1 to 4 generally require that workers can take up employment, conclude contracts, and not suffer discrimination compared to nationals of the member state. In a famous case, the '' Belgian Football Association v Bosman'', a Belgian footballer named

Jean-Marc Bosman Jean-Marc Bosman (; born 30 October 1964) is a Belgian former professional footballer who played as a midfielder. His judicial challenge of the football transfer rules led to the Bosman ruling in 1995. This landmark judgement, which was handed ...

claimed that he should be able to transfer from

R.F.C. de Liège "Through Adversity to the Stars" , colors = , colours_label = , march = , mascot = , anniversaries = , decorations ...

USL Dunkerque Union Sportive du Littoral de Dunkerque is a French football club based in the commune of Dunkirk. It will compete in the Championnat National in the 2022–23 season. Their kit colours are white and blue, and they play their home matches at th ...

when his contract finished, regardless of whether Dunkerque could afford to pay Liège the habitual transfer fees. The Court of Justice held "the transfer rules constitute an obstacle to free movement" and were unlawful unless they could be justified in the public interest, but this was unlikely. In '' Groener v Minister for Education'' the Court of Justice accepted that a requirement to speak

Gaelic Gaelic is an adjective that means "pertaining to the Gaels". As a noun it refers to the group of languages spoken by the Gaels, or to any one of the languages individually. Gaelic languages are spoken in Ireland, Scotland, the Isle of Man, an ...

to teach in a

Dublin Dublin (; , or ) is the capital and largest city of Ireland. On a bay at the mouth of the River Liffey, it is in the province of Leinster, bordered on the south by the Dublin Mountains, a part of the Wicklow Mountains range. At the 2016 ...

design college could be justified as part of the public policy of promoting the Irish language, but only if the measure was not disproportionate. By contrast in '' Angonese v Cassa di Risparmio di Bolzano SpA'' a bank in

Bolzano Bolzano ( or ; german: Bozen, (formerly ); bar, Bozn; lld, Balsan or ) is the capital city of the province of South Tyrol in northern Italy. With a population of 108,245, Bolzano is also by far the largest city in South Tyrol and the third ...

, Italy, was not allowed to require Mr Angonese to have a bilingual certificate that could only be obtained in

. The Court of Justice, giving "horizontal" direct effect to

article 45, reasoned that people from other countries would have little chance of acquiring the certificate, and because it was "impossible to submit proof of the required linguistic knowledge by any other means", the measure was disproportionate. Second, article 7(2) requires equal treatment in respect of tax. In ''

Finanzamt Köln Altstadt v Schumacker ''Finanzamt Köln Altstadt v Schumacker'' (1995C-279/93is an EU law case, concerning the free movement of workers in the European Union. Facts Roland Schumacker argued that he should get extra tax benefits in Germany. He was Belgian, lived in Bel ...

'' the Court of Justice held that it contravened

art 45 to deny tax benefits (e.g. for married couples, and social insurance expense deductions) to a man who worked in Germany, but was resident in Belgium when other German residents got the benefits. By contrast in '' Weigel v Finanzlandesdirektion für Vorarlberg'' the Court of Justice rejected Mr Weigel's claim that a re-registration charge upon bringing his car to Austria violated his right to free movement. Although the tax was "likely to have a negative bearing on the decision of migrant workers to exercise their right to freedom of movement", because the charge applied equally to Austrians, in absence of EU legislation on the matter it had to be regarded as justified. Third, people must receive equal treatment regarding "social advantages", although the Court has approved residential qualifying periods. In '' Hendrix v Employee Insurance Institute'' the Court of Justice held that a Dutch national was not entitled to continue receiving incapacity benefits when he moved to Belgium, because the benefit was "closely linked to the socio-economic situation" of the Netherlands. Conversely, in ''

Geven v Land Nordrhein-Westfalen ''Geven v Land Nordrhein-Westfalen'' (2007) C-213/05 is an EU law case, concerning the free movement of workers in the European Union. Facts A Dutch woman, Ms Geven, residing in the Netherlands, doing minor employment in Germany, claimed German c ...

'' the Court of Justice held that a Dutch woman living in the Netherlands, but working between 3 and 14 hours a week in Germany, did not have a right to receive German child benefits, even though the wife of a man who worked full-time in Germany but was resident in Austria could. The general justifications for limiting free movement in

article 45(3) are "public policy, public security or public health", and there is also a general exception in article 45(4) for "employment in the public service".

Citizens

Beyond the right of free movement to work, the EU has increasingly sought to guarantee rights of citizens, and rights simply be being a

human being Humans (''Homo sapiens'') are the most abundant and widespread species of primate, characterized by bipedality, bipedalism and exceptional cognitive skills due to a large and complex Human brain, brain. This has enabled the development of ad ...

. But although the Court of Justice stated that 'Citizenship is destined to be the fundamental status of nationals of the Member States', political debate remains on who should have access to public services and welfare systems funded by taxation. In 2008, just 8 million people from 500 million EU citizens (1.7 per cent) had in fact exercised rights of free movement, the vast majority workers. According to

article 20, citizenship of the EU derives from nationality of a member state. Article 21 confers general rights to free movement in the EU and to reside freely within limits set by legislation. This applies for citizens and their immediate family members. This triggers four main groups of rights: (1) to enter, depart and return, without undue restrictions, (2) to reside, without becoming an unreasonable burden on social assistance, (3) to vote in local and European elections, and (4) the right to equal treatment with nationals of the host state, but for social assistance only after 3 months of residence. Sanctuary - Berlin Wall

First, the Citizens Rights Directive 2004 article 4 says every citizen has the right to depart a member state with a valid passport. This has historical importance for central and eastern Europe, when the

and the

denied its citizens the freedom to leave. Article 5 gives every citizen a right of entry, subject to national border controls.

Schengen Area The Schengen Area ( , ) is an area comprising 27 European countries that have officially abolished all passport and all other types of border control at their mutual borders. Being an element within the wider area of freedom, security and ...

countries (not the UK and Ireland) abolished the need to show documents, and police searches at borders, altogether. These reflect the general principle of free movement in

article 21. Second, article 6 allows every citizen to stay three months in another member state, whether economically active or not. Article 7 allows stays over three months with evidence of "sufficient resources... not to become a burden on the social assistance system". Articles 16 and 17 give a right to permanent residence after 5 years without conditions. Third, TEU article 10(3) requires the right to vote in the local constituencies for the

wherever a citizen lives. Children in a Primary Education School

Fourth, and more debated, article 24 requires that the longer an EU citizen stays in a host state, the more rights they have to access public and welfare services, on the basis of equal treatment. This reflects general principles of equal treatment and citizenship in

articles 18 and 20. In a simple case, in '' Sala v Freistaat Bayern'' the Court of Justice held that a Spanish lady who had lived in Germany for 25 years and had a baby was entitled to

child support Child support (or child maintenance) is an ongoing, periodic payment made by a parent for the financial benefit of a child (or parent, caregiver, guardian) following the end of a marriage or other similar relationship. Child maintenance is paid d ...

, without the need for a residence permit, because Germans did not need one. In '' Trojani v Centre public d'aide sociale de Bruxelles'', a French man who lived in Belgium for two years was entitled to the "minimex" allowance from the state for a minimum living wage. In '' Grzelczyk v Centre Public d'Aide Sociale d'Ottignes-Louvain-la-Neuve'' a French student, who had lived in Belgium for three years, was entitled to receive the "minimex" income support for his fourth year of study. Similarly, in '' R (Bidar) v London Borough of Ealing'' the Court of Justice held that it was lawful to require a French UCL economics student lived in the UK for three years before receiving a student loan, but not that he had to have additional "settled status". Similarly, in '' Commission v Austria'', Austria was not entitled to restrict its university places to Austrian students to avoid "structural, staffing and financial problems" if (mainly German) foreign students applied, unless it proved there was an actual problem. However, in '' Dano v Jobcenter Leipzig'', the Court of Justice held that the German government was entitled to deny

to a Romanian mother who had lived in Germany for 3 years, but had never worked. Because she lived in Germany for over 3 months, but under 5 years, she had to show evidence of "sufficient resources", since the Court reasoned the right to equal treatment in article 24 within that time depended on lawful residence under article 7.

Establishment and services

As well as creating rights for "workers" who generally lack bargaining power in the market, the

also protects the "freedom of establishment" in article 49, and "freedom to provide services" in article 56. In the Court of Justice held that to be "established" means to participate in economic life "on a stable and continuous basis", while providing "services" meant pursuing activity more "on a temporary basis". This meant that a lawyer from

Stuttgart Stuttgart (; Swabian: ; ) is the capital and largest city of the German state of Baden-Württemberg. It is located on the Neckar river in a fertile valley known as the ''Stuttgarter Kessel'' (Stuttgart Cauldron) and lies an hour from the Sw ...

, who had set up chambers in

Milan Milan ( , , Lombard: ; it, Milano ) is a city in northern Italy, capital of Lombardy, and the second-most populous city proper in Italy after Rome. The city proper has a population of about 1.4 million, while its metropolitan city ...

and was censured by the Milan Bar Council for not having registered, should claim for breach of establishment freedom, rather than service freedom. However, the requirements to be registered in Milan before being able to practice would be allowed if they were non-discriminatory, "justified by imperative requirements in the general interest" and proportionately applied. All people or entities that engage in economic activity, particularly the self-employed, or "undertakings" such as companies or firms, have a right to set up an enterprise without unjustified restrictions. The Court of Justice has held that both a member state government and a private party can hinder freedom of establishment, so article 49 has both "vertical" and "horizontal" direct effect. In '' Reyners v Belgium'' the Court of Justice held that a refusal to admit a lawyer to the Belgian bar because he lacked Belgian nationality was unjustified.

article 49 says states are exempt from infringing others' freedom of establishment when they exercise "official authority". But regulation of an advocate's work (as opposed to a court's) was not official. By contrast in '' Commission v Italy'' the Court of Justice held that a requirement for lawyers in Italy to comply with maximum tariffs unless there was an agreement with a client was not a restriction. The Grand Chamber of the Court of Justice held the commission had not proven that this had any object or effect of limiting practitioners from entering the market. Therefore, there was no ''prima facie'' infringement freedom of establishment that needed to be justified. London MMB »2M0 City of London

In regard to companies, the Court of Justice held in '' R (Daily Mail and General Trust plc) v HM Treasury'' that member states could restrict a company moving its seat of business, without infringing

article 49. This meant the ''

Daily Mail The ''Daily Mail'' is a British daily middle-market tabloid newspaper and news websitePeter Wilb"Paul Dacre of the Daily Mail: The man who hates liberal Britain", ''New Statesman'', 19 December 2013 (online version: 2 January 2014) publish ...

'' newspaper's

parent company A holding company is a company whose primary business is holding a controlling interest in the securities of other companies. A holding company usually does not produce goods or services itself. Its purpose is to own shares of other companies ...

could not evade tax by shifting its residence to the Netherlands without first settling its tax bills in the UK. The UK did not need to justify its action, as rules on company seats were not yet harmonised. By contrast, in '' Centros Ltd v Erhversus-og Selkabssyrelsen'' the Court of Justice found that a UK

limited company In a limited company, the liability of members or subscribers of the company is limited to what they have invested or guaranteed to the company. Limited companies may be limited by shares or by guarantee. In a company limited by shares, the li ...

operating in Denmark could not be required to comply with Denmark's minimum share capital rules. UK law only required £1 of capital to start a company, while Denmark's legislature took the view companies should only be started up if they had 200,000 Danish krone (around €27,000) to protect

creditor A creditor or lender is a party (e.g., person, organization, company, or government) that has a claim on the services of a second party. It is a person or institution to whom money is owed. The first party, in general, has provided some property ...

s if the company failed and went

insolvent In accounting, insolvency is the state of being unable to pay the debts, by a person or company ( debtor), at maturity; those in a state of insolvency are said to be ''insolvent''. There are two forms: cash-flow insolvency and balance-sheet in ...

. The Court of Justice held that Denmark's minimum capital law infringed Centros Ltd's freedom of establishment and could not be justified, because a company in the UK could admittedly provide services in Denmark without being established there, and there were less restrictive means of achieving the aim of creditor protection. This approach was criticised as potentially opening the EU to unjustified

regulatory competition Regulatory competition, also called competitive governance or policy competition, is a phenomenon in law, economics and politics concerning the desire of lawmakers to compete with one another in the kinds of law offered in order to attract business ...

, and a

in legal standards, like the US state of

Delaware Delaware ( ) is a state in the Mid-Atlantic region of the United States, bordering Maryland to its south and west; Pennsylvania to its north; and New Jersey and the Atlantic Ocean to its east. The state takes its name from the adjacent ...

, which is argued to attract companies with the worst standards of accountability, and unreasonably low corporate tax. Appearing to meet the concern, in '' Überseering BV v Nordic Construction GmbH'' the Court of Justice held that a German court could not deny a Dutch building company the right to enforce a contract in Germany, simply because it was not validly incorporated in Germany. Restrictions on freedom of establishment could be justified by creditor protection, labour rights to participate in work, or the public interest in collecting taxes. But in this case denial of capacity went too far: it was an "outright negation" of the right of establishment. Setting a further limit, in '' Cartesio Oktató és Szolgáltató bt'' the Court of Justice held that because corporations are created by law, they must be subject to any rules for formation that a state of incorporation wishes to impose. This meant the Hungarian authorities could prevent a company from shifting its central administration to Italy, while it still operated and was incorporated in Hungary. Thus, the court draws a distinction between the right of establishment for foreign companies (where restrictions must be justified), and the right of the state to determine conditions for companies incorporated in its territory, although it is not entirely clear why. The "freedom to provide services" under

article 56 applies to people who give services "for remuneration", especially commercial or professional activity. For example, in '' Van Binsbergen v Bestuur van de Bedrijfvereniging voor de Metaalnijverheid'' a Dutch lawyer moved to Belgium while advising a client in a

case, and was told he could not continue because Dutch law said only people established in the Netherlands could give legal advice. The Court of Justice held that the freedom to provide services applied, it was directly effective, and the rule was probably unjustified: having an address in the member state would be enough to pursue the legitimate aim of good administration of justice. The Court of Justice has held that secondary education falls outside the scope of article 56 because usually the state funds it, but higher education does not. Health care generally counts as a service. In '' Geraets-Smits v Stichting Ziekenfonds'' Mrs Geraets-Smits claimed she should be reimbursed by Dutch social insurance for costs of receiving treatment in Germany. The Dutch health authorities regarded the treatment unnecessary, so she argued this restricted the freedom (of the German health clinic) to provide services. Several governments submitted that hospital services should not be regarded as economic, and should not fall within article 56. But the Court of Justice held health was a "service" even though the government (rather than the service recipient) paid for the service. National authorities could be justified in refusing to reimburse patients for medical services abroad if the health care received at home was without undue delay, and it followed "international medical science" on which treatments counted as normal and necessary. The Court requires that the individual circumstances of a patient justify waiting lists, and this is also true in the context of the UK's

National Health Service The National Health Service (NHS) is the umbrella term for the publicly funded healthcare systems of the United Kingdom (UK). Since 1948, they have been funded out of general taxation. There are three systems which are referred to using the " ...

. Aside from public services, another sensitive field of services are those classified as illegal. '' Josemans v Burgemeester van Maastricht'' held that the Netherlands' regulation of

cannabis ''Cannabis'' () is a genus of flowering plants in the family Cannabaceae. The number of species within the genus is disputed. Three species may be recognized: '' Cannabis sativa'', '' C. indica'', and '' C. ruderalis''. Alternative ...

consumption, including the prohibitions by some municipalities on tourists (but not Dutch nationals) going to coffee shops, fell outside article 56 altogether. The Court of Justice reasoned that narcotic drugs were controlled in all member states, and so this differed from other cases where prostitution or other quasi-legal activity was subject to restriction. If an activity does fall within article 56, a restriction can be justified under article 52, or by overriding requirements developed by the Court of Justice. In ''

Alpine Investments BV v Minister van Financiën ''Alpine Investments BV v Minister van Financiën'' (1995) C-384/93 is an EU law case, concerning the free movement of services in the European Union. Facts Alpine Investments BV claimed that the Dutch Ministry of Finance should not have prohi ...

'' a business that sold

commodities In economics, a commodity is an economic good, usually a resource, that has full or substantial fungibility: that is, the market treats instances of the good as equivalent or nearly so with no regard to who produced them. The price of a co ...

futures Futures may mean: Finance *Futures contract, a tradable financial derivatives contract *Futures exchange, a financial market where futures contracts are traded * ''Futures'' (magazine), an American finance magazine Music * ''Futures'' (album), a ...

(with

Merrill Lynch Merrill (officially Merrill Lynch, Pierce, Fenner & Smith Incorporated), previously branded Merrill Lynch, is an American investment management and wealth management division of Bank of America. Along with BofA Securities, the investment ba ...

and another banking firms) attempted to challenge a Dutch law that prohibiting

cold calling Cold calling is the solicitation of business from potential customers who have had no prior contact with the salesperson conducting the call. It is an attempt to convince potential customers to purchase either the salesperson's product or servic ...

customers. The Court of Justice held the Dutch prohibition pursued a legitimate aim to prevent "undesirable developments in securities trading" including protecting the consumer from aggressive sales tactics, thus maintaining confidence in the Dutch markets. In '' Omega Spielhallen GmbH v Bonn'' a "laserdrome" business was banned by the

Bonn The federal city of Bonn ( lat, Bonna) is a city on the banks of the Rhine in the German state of North Rhine-Westphalia, with a population of over 300,000. About south-southeast of Cologne, Bonn is in the southernmost part of the Rhine-Ru ...

council. It bought fake laser gun services from a UK firm called Pulsar Ltd, but residents had protested against "playing at killing" entertainment. The Court of Justice held that the German constitutional value of

, which underpinned the ban, did count as a justified restriction on freedom to provide services. In '' Liga Portuguesa de Futebol v Santa Casa da Misericórdia de Lisboa'' the Court of Justice also held that the state monopoly on gambling, and a penalty for a

Gibraltar ) , anthem = " God Save the King" , song = "Gibraltar Anthem" , image_map = Gibraltar location in Europe.svg , map_alt = Location of Gibraltar in Europe , map_caption = United Kingdom shown in pale green , mapsize = , image_map2 = Gibr ...

firm that had sold internet gambling services, was justified to prevent fraud and gambling where people's views were highly divergent. The ban was proportionate as this was an appropriate and necessary way to tackle the serious problems of fraud that arise over the internet. In the Services Directive a group of justifications were codified in article 16, which the case law has developed.

Capital

Free movement of

was traditionally seen as the fourth freedom, after goods, workers and persons, services and establishment. The original

required that restrictions on free capital flows only be removed to the extent necessary for the common market. From the Treaty of Maastricht, now in

article 63, "all restrictions on the movement of capital between Member States and between Member States and third countries shall be prohibited". This means

capital controls Capital controls are residency-based measures such as transaction taxes, other limits, or outright prohibitions that a nation's government can use to regulate flows from capital markets into and out of the country's capital account. These measures ...

of various kinds are prohibited, including limits on buying currency, limits on buying company shares or financial assets, or government approval requirements for foreign investment. By contrast, taxation of capital, including

corporate tax A corporate tax, also called corporation tax or company tax, is a direct tax imposed on the income or capital of corporations or analogous legal entities. Many countries impose such taxes at the national level, and a similar tax may be imposed a ...

capital gains tax A capital gains tax (CGT) is the tax on profits realized on the sale of a non-inventory asset. The most common capital gains are realized from the sale of stocks, bonds, precious metals, real estate, and property. Not all countries impose a c ...

and

Financial transaction tax A financial transaction tax (FTT) is a levy on a specific type of financial transaction for a particular purpose. The tax has been most commonly associated with the financial sector for transactions involving intangible property rather than re ...

are not affected so long as they do not discriminate by nationality. According to the Capital Movement Directive 1988, Annex I, 13 categories of capital which must move free are covered. In '' Baars v Inspecteur der Belastingen Particulieren'' the Court of Justice held that for investments in companies, the capital rules, rather than freedom of establishment rules, were engaged if an investment did not enable a "definite influence" through shareholder voting or other rights by the investor. That case held a Dutch Wealth Tax Act 1964 unjustifiably exempted Dutch investments, but not Mr Baars' investments in an Irish company, from the tax: the wealth tax, or exemptions, had to be applied equally. On the other hand,

article 65(1) does not prevent taxes that distinguish taxpayers based on their residence or the location of an investment (as taxes commonly focus on a person's actual source of profit) or any measures to prevent

tax evasion Tax evasion is an illegal attempt to defeat the imposition of taxes by individuals, corporations, trusts, and others. Tax evasion often entails the deliberate misrepresentation of the taxpayer's affairs to the tax authorities to reduce the tax ...

. Apart from tax cases, largely following from cases originating in the UK, a series of cases held that government owned golden shares were unlawful. In ''Commission v Germany (2007), Commission v Germany'' the Commission claimed the German Volkswagen Act 1960 violated article 63, in that §2(1) restricted any party having voting rights exceeding 20% of the company, and §4(3) allowed a minority of 20% of shares held by the Lower Saxony government to block any decisions. Although this was not an impediment to actual purchase of shares, or receipt of dividends by any shareholder, the Court of Justice's Grand Chamber agreed that it was disproportionate for the government's stated aim of protecting workers or minority shareholders. Similarly, in ''Commission v Portugal'' the Court of Justice held that Portugal infringed free movement of capital by retaining golden shares in Portugal Telecom that enabled disproportionate voting rights, by creating a "deterrent effect on portfolio investments" and reducing "the attractiveness of an investment". This suggested the Court's preference that a government, if it sought public ownership or control, should nationalise in full the desired proportion of a company in line with

article 345.TFEU]
art 345
/ref> The final stage of completely free movement of capital was thought to require a single currency and

, eliminating the transaction costs and fluctuations of currency exchange. Following a Report of the Delors Commission in 1988, the Treaty of Maastricht made Economic and Monetary Union of the EU, economic and monetary union an objective, first by completing the internal market, second by creating a European System of Central Banks to coordinate common monetary policy, and third by locking exchange rates and introducing a single currency, the

. Today, 19 member states have adopted the

, while 9 member states have either determined to opt-out or their accession has been delayed, particularly since the

. According to

articles 119 and 127, the objective of the

and other central banks ought to be price stability. This has been criticised for apparently being superior to the objective of full employment in the

article 3.

Social and market regulations

Crowds shopping at Borough market, south London - geograph

While the

originally focused on freedom of movement, free movement, and dismantling barriers to trade, more EU law today concerns regulation of the "social market economy". In 1976 the Court of Justice said in ''

'' the goal was "not merely an economic union", but to "ensure social progress and seek the constant improvement of the living and working conditions of their peoples". On this view, stakeholder (corporate), stakeholders in each member state might not have the capacity to take advantage of expanding trade in a Globalization, globalising economy. Groups with Inequality of bargaining power, greater bargaining power can exploit weaker legal rights in other member states. For example, a corporation could shift production to member states with a lower minimum wage, to increase shareholder profit, even if production costs more and workers are paid less. This would mean an aggregate loss of social wealth, and a "

" in human development (humanity), human development. To make globalisation fair, the EU establishes a minimum floor of rights for the stakeholders in enterprise: for European consumer law, consumers, European labour law, workers, investors, European company law, shareholders,

s, and the public. Each field of law is vast, so EU law is designed to be Subsidiarity, subsidiary to comprehensive rules in each member state. Member states may go beyond the harmonised minimum, acting as "laboratories of democracy". EU law makes basic standards of "exit" (where markets operate), rights (enforceable in court), and "voice" (especially through votes) in enterprise. Rules of European competition law, competition law balance the interests of different groups, generally to favour consumers, for the larger purpose in the

article 3(3) of a "highly competitive

". The EU is bound by the

article 345 to "in no way prejudice the rules in Member States governing the system of property ownership". This means the EU is bound to be neutral to member state's choice to take enterprises into public ownership, or to Privatisation, privatise them. While there have been academic proposals for a European Civil Code, and projects to frame non-binding principles of Principles of European Contract Law, contract and Principles of European Tort Law, tort, harmonisation has only occurred for conflict of laws and intellectual property.

Consumer protection

Protection of European consumers has been a central part of developing the EU internal market. The

article 169 enables the EU to follow the ordinary legislative procedure to protect consumers "health, safety and economic interests" and promote rights to "information, education and to organise themselves in order to safeguard their interests". All member states may grant higher protection, and a "high level of consumer protection" is regarded as a fundamental right. Beyond these general principles, and outside specific sectors, there are four main Directives: the Product Liability Directive 1985, Unfair Terms in Consumer Contracts Directive 1993, Unfair Commercial Practices Directive 2005 and the Consumer Rights Directive 2011, requiring information and cancellation rights for consumers. As a whole, the law is designed to ensure that consumers in the EU are entitled to the same minimum rights wherever they shop, and largely follows inspiration from theories of consumer protection developed in California and the Consumer Bill of Rights proclaimed by John F. Kennedy in 1962. The Court of Justice has continually affirmed that the need for more consumer rights (than in commercial contracts) both because consumers tend to information asymmetry, lack information, and they have Inequality of bargaining power, less bargaining power.See ''Banco Español de Crédito SA v Camino'' (2012
Case C-618/10
[39] and ''Océano Grupo Editorial and Salvat Editores'' (2000) C-240/98 to C-244/98 and [2000] ECR I-4941, [25] Ehrwald - SPAR interior

The Product Liability Directive 1985 was the first consumer protection measure. It creates Strict liability, strict enterprise liability for all producers and retailers for any harm to consumers from products, as a way to promote basic standards of health and safety. Any producer, or supplier if the ultimate producer is insolvent, of a product is strictly liable to compensate a consumer for any damage caused by a defective product. A "defect" is anything which falls below what a consumer is entitled to expect, and this essentially means that products should be safe for their purpose. A narrow defensive is available if a producer can show that a defect could not be known by any scientific method, thought this has never been successfully invoked, because it is generally thought a profit making enterprise should not be able to Externality, externalise the risks of its activities. The Unfair Terms in Consumer Contracts Directive 1993 was the second main measure. Under article 3(1) a term is unfair, and not binding, if it is not "individually negotiated, and "if, contrary to the requirement of

, it causes a Just price, significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer". The Court of Justice has continually affirmed that the Directive, as recital 16 states, "is based on the idea that the consumer is in a weak position vis-à-vis the seller or supplier, as regards both his bargaining power and his Information asymmetry, level of knowledge". Terms which are very skewed, are to be conclusively regarded as contrary to "

" and therefore unfair. For example, in ''RWE AG v Verbraucherzentrale NRW eV'' clauses in gas supply contracts enabling corporation, RWE, to unilaterally vary prices were advised by the Court of Justice to be not sufficiently transparent, and therefore unfair. In ''Brusse v Jahani BV'' the Court of Justice advised that clauses in a tenancy contract requiring tenants pay €25 per day were likely unfair, and would have to be entirely void without replacement, if they were not substituted with more precise mandatory terms in national legislation. In ''Aziz v Caixa d'Estalvis de Catalunya'', following the

, the

advised that even terms regarding repossession of homes in Spain had to be assessed for fairness by national courts. In ''Kušionová v SMART Capital a.s.'', the Court of Justice held that consumer law was to be interpreted in the light of fundamental rights, including the right to housing, if a home could be repossessed. Because consumer law operates through Directives, national courts have the final say on applying the general principles set out by the Court of Justice's case law. *Unfair Commercial Practices Directive]
2005/29/EC
*Consumer Rights Directive]
2011/83/EU
*Payment Services Directive]
2007/64/EC
*Late Payments Directive 2011/7/EU

Labour rights

While free movement of workers was central to the first

agreement, the development of European labour law has been a gradual process. Originally, the Ohlin Report of 1956 recommended that labour standards did not need to be harmonised, although a general principle of anti-discrimination between men and women was included in the early Treaties. Increasingly, the absence of labour rights was seen as inadequate given the capacity for a "

" in international trade if corporations can shift jobs and production to countries with low wages. Today, the EU is required under

article 147 to contribute to a "high level of employment by encouraging cooperation between Member States". This has not resulted in legislation, which usually requires taxation and fiscal stimulus for significant change, while the

has been acutely controversial during the

. Under article 153(1), the EU is able to use the ordinary legislation procedure on a list of labour law fields. This notably excludes wage regulation and collective bargaining. Generally, four main fields of EU regulation of labour rights touch (1) individual labour rights, (2) anti-discrimination regulations, (3) rights to information, consultation, and participation at work, and (4) rights to job security. In virtually all cases, the EU follows the principle that member states can always create rights more beneficial to workers. This is because the fundamental principle of labour law is that employees' unequal bargaining power justifies substitution of rules in property and contract with positive social rights so that people may earn a living to fully participate in a democratic society. The EU's competences generally follow principles codified in the Community Charter of the Fundamental Social Rights of Workers 1989, introduced in the "social chapter" of the Treaty of Maastricht. Initially the UK had opted-out, because of opposition by the Conservative Party (UK), Conservative Party, but was acceded to when the Labour Party (UK), Labour Party won the 1997 United Kingdom general election, 1997 general election in the

The first group of Directives create a range of individual rights in EU employment relationships. The Employment Information Directive 1991 requires that every employee (however defined by member state law) has the right to a written statement of their employment contract. While there is no wage regulation, the Institutions for Occupational Retirement Provision Directive 2003 requires that pension benefits are protected through a national insurance fund, that information is provided to beneficiaries, and minimum standards of governance are observed. Most member states go far beyond these requirements, particularly by requiring a vote for employees in who manages their money. Reflecting basic standards in the Universal Declaration of Human Rights and ILO Conventions, the Working Time Directive 2003 requires a minimum of 4 weeks (totalling 28 days) paid holidays each year, a minimum of 20-minute paid rest breaks for 6-hour work shifts, limits on night work or time spent on dangerous work, and a maximum 48-hour working week unless a worker individually consents. The Parental Leave Directive 2010 creates a bare minimum of 4 months of unpaid leave for parents (mothers, fathers, or legal guardians) to care for children before they turn 8 years old, and the Pregnant Workers Directive 1992 creates a right for mothers to a minimum of 14 weeks' paid leave to care for children. Finally, the Safety and Health at Work Directive 1989 requires basic requirements to prevent and insure against workplace risks, with employee consultation and participation, and this is complemented by specialised Directives, ranging from work equipment to dangerous industries. In almost all cases, all member states go significantly beyond this minimum. The objective of transnational regulation is therefore to progressively raise the minimum floor in line with economic development. Second, equality was affirmed by the Court of Justice in '' Kücükdeveci v Swedex GmbH & Co KG'' to be a general principle of EU law. Further to this, the Part-time Work Directive 1997, Fixed-term Work Directive 1999 and Temporary Agency Work Directive 2008 generally require that people who do not have ordinary full-time, permanent contracts are treated no less favourably than their colleagues. However, the scope of the protected worker is left to member state law, and the TAWD 2008 only applies to "basic working conditions" (mostly pay, working hours and participation rights) and enabled member states to have a qualifying period. The Race Equality Directive 2000, Equality Framework Directive 2000 and Equal Treatment Directive 2006 prohibit discrimination based on sexual orientation, disability, religion or belief, age, race and gender. As well as "direct discrimination", there is a prohibition on "indirect discrimination" where employers apply a neutral rule to everybody, but this has a disproportionate impact on the protected group. The rules are not consolidated, and on gender pay potentially limited in not enabling a hypothetical comparator, or comparators in outsourced business. Equality rules do not yet apply to child care rights, which only give women substantial time off, and consequently hinder equality in men and women caring for children after birth, and pursuing their careers. Third, the EU is formally not enabled to legislate on collective bargaining, although the EU, with all member states, is bound by the jurisprudence of the

. In ''Wilson and Palmer v United Kingdom'' the European Court of Human Rights, Court held that any detriment for membership of a trade union was incompatible with article 11, and in ''Demir and Baykara v Turkey'' the European Court of Human Rights, Court held "the right to bargain collectively with the employer has, in principle, become one of the essential elements" of article 11. This approach, which includes affirmation of the fundamental right to strike in all democratic member states, has been seen as lying in tension with some of the Court of Justice's previous case law, notably ''ITWF v Viking Line ABP'' and ''Laval Un Partneri Ltd v Svenska Byggnadsarbetareforbundet''. These controversial decisions, quickly disapproved by legislative measures, suggested the fundamental right of workers to take collective action was subordinate to business freedom to establish and provide services. More positively, the Information and Consultation Directive 2002 requires that workplaces with over 20 or 50 staff have the right to set up elected work councils with a range of binding rights, the European Works Council Directive 2009 enables work councils transnationally, and the Employee Involvement Directive 2001 requires representation of workers on company boards in some European Companies. If a company transforms from a member state corporation to incorporate under the European Company Regulation 2001, employees are entitled to no less favourable representation than under the member state's existing Codetermination, board participation laws. This is practically important as a majority of EU member states require employee representation on company boards. Fourth, minimum job security rights are provided by three Directives. The Collective Redundancies Directive 1998 specifies that minimum periods of notice and consultation occur if more than a set number of jobs in a workplace are at risk. The Transfers of Undertakings Directive 2001 require that staff retain all contractual rights, unless there is an independent economic, technical or organisational reason, if their workplace is sold from one company to another. Last, the Insolvency Protection Directive 2008 requires that employees' wage claims are protected in case their employer falls insolvent. This last Directive gave rise to '' Francovich v Italy'', where the Court of Justice affirmed that member states which fail to implement the minimum standards in EU Directives are liable to pay compensation to employees who should have rights under them.

Companies and investment

Like labour regulation, European company law is not a complete system and there is no such thing as a self-standing European corporation. Instead, a series of Directives require minimum standards, usually protecting investors, to be implemented in national corporate laws. The largest in Europe remain member state incorporations, such as the UK company law, UK "Public limited company, plc", the German "Aktiengesellschaft, AG" or the French "S.A. (corporation), SA". There is however, a "European Company" (or ''Societas Europaea'', abbreviated to "Societas Europaea, SE") created by the Statute for a European Company Regulation 2001. This sets out basic provisions on the method of registration (e.g. by merger or reincorporation of an existing company) but then states that wherever the SE has its registered office, the law of that member state supplements the rules of the Statute. The Employee Involvement Directive 2001 also adds that, when an Societas Europaea, SE is incorporated, employees have the default right to retain all existing representation on the board of directors that they have, unless the negotiate by collective agreement a different or better plan than is provided for in existing member state law. Other than this, most important standards in a typical company law are left to member state law, so long as they comply with further minimum requirements in the company law directives. Duties owed by the board of directors to the company and its stakeholders, or the right to bring derivative claims to vindicate constitutional rights, are not generally regulated by EU law. Nor are rights of pre-emption pre-emption to buy shares, nor rights of any party regarding claims by tort, contract or piercing the corporate veil to hold directors and shareholders accountable. However, Directives do require minimum rights on company formation, capital maintenance, accounting and audit, market regulation, board neutrality in a takeover bid, rules on mergers, and management of cross-border insolvency. The omission of minimum standards is important since the Court of Justice held in ''Centros Ltd v Erhversus-og Selkabssyrelsen, Centros'' that freedom of establishment requires companies operate in any member state they choose. This has been argued to risk a "

" in standards, although the Court of Justice soon affirmed in ''Kamer van Koophandel en Fabrieken voor Amsterdam v Inspire Art Ltd, Inspire Art'' that companies must still comply with proportionate requirements that are in the "public interest". Deutsche Bank, Sydney

Among the most important governance standards are rights vote for who is on the board of directors for investors of labour and capital. A Draft Fifth Company Law Directive proposed in 1972, which would have required EU-wide rights for employees to vote for boards stalled mainly because it attempted to require Supervisory board, two-tier board structures, although most EU member states have codetermination today with unified boards. The Shareholder Rights Directive 2007 requires shareholders be able to make proposals, ask questions at meetings, vote by proxy and vote through intermediaries. This has become increasingly important as most company shares are held by institutional investors (primarily asset managers or banks, depending on the member state) who are holding "other people's money". A large proportion of this money comes from employees and other people saving for retirement, but who do not have an effective voice. Unlike Switzerland after a Swiss executive pay initiative, 2013, 2013 people's initiative, or the U.S. Dodd-Frank Act 2010 in relation to brokers, the EU has not yet prevented intermediaries casting votes without express instructions of beneficiaries. This concentrates power into a small number of financial institutions, and creates the potential for Conflict of interest, conflicts of interest where financial institutions sell retirement, banking or products to companies in which they cast votes with Other People's Money And How the Bankers Use It, other people's money. A series of rights for ultimate investors exist in the Institutions for Occupational Retirement Provision Directive 2003. This requires duties of disclosure in how a retirement fund is run, funding and insurance to guard against insolvency, but not yet that voting rights are only cast on the instructions of investors. By contrast, the Undertakings for Collective Investment in Transferable Securities Directive 2009 does suggest that investors in a mutual fund or ("collective investment scheme") should control the voting rights. The UCITS Directive 2009 is primarily concerned with creating a "passport". If a firm complies with rules on authorisation, and governance of the management and investment companies in an overall fund structure, it can sell its shares in a collective investment scheme across the EU. This forms a broader package of Directives on securities and financial market regulation, much of which has been shaped by experience in the

. Additional rules on remuneration practices, separating depositary bodies in firms from management and investment companies, and more penalties for violations were inserted in 2014. These measures are meant to decrease the risk to investors that an investment goes insolvent. The Markets in Financial Instruments Directive 2004 applies to other businesses selling financial instruments. It requires similar authorisation procedures to have a "passport" to sell in any EU country, and transparency of financial contracts through duties to disclose material information about products being sold, including disclosure of potential Conflict of interest, conflicts of interest with clients. The Alternative Investment Fund Managers Directive 2011 applies to firms with massive quantities of capital, over €100 million, essentially hedge funds and private equity firms. Similarly, it requires authorisation to sell products EU wide, and then basic transparency requirements on products being sold, requirements in remuneration policies for fund managers that are perceived to reduce "risk" or make pay "performance" related. They do not, however, require limits to pay. There are general prohibitions on Conflict of interest, conflicts of interest, and specialised prohibitions on asset stripping. The Solvency II Directive 2009 is directed particularly at insurance firms, requiring minimum capital and best practices in valuation of assets, again to avoid insolvency. The Capital Requirements Directives contain analogous rules, with a similar goals, for banks. To administer the new rules, the European System of Financial Supervision was established in 2011, and consists of three main branches: the European Securities and Markets Authority in Paris, the European Banking Authority in London and the European Insurance and Occupational Pensions Authority in Frankfurt.

Competition law

Competition law has been perceived as an essential part of the "social market economy" since the

. Its main aims are to prevent monopolies abusing a dominant position, by prohibiting exploitative practices and potentially by breaking them up, to prevent anti-competitive mergers and takeovers occurring, and to criminalise cartels or collusive practices by independent firms. According to the Court of Justice, and the dominant view, the law aims to protect "an effective competition structure" to enhance consumer and social welfare, "aiming at full employment and social progress, and a high level of protection and improvement of the quality of the environment". The scope of European competition law is limited in three main ways: first, by ensuring that only "undertakings" are regulated. This will include any profit-making business, but the Court of Justice suggests it is limited to entities "engaged in an economic activity". The "economic" criterion suggests that, in general, organisations based on a principle of solidarity and not for profit will be exempt from competition law. Employees and trade unions are completely outside the scope of competition law, on a long-standing consensus view, because labour is not a commodity and the sellers of labour have inherently unequal bargaining power compared to business and employers. Second, trade between member states must be affected to at least an "appreciable" degree. Third, the law promotes fair competition, rather than unfair "cut-throat" competition. For example, in ''Meca Medina and Majcen v Commission'' the Court of Justice held that rules of the International Olympic Committee and the International Swimming Federation which prohibited drugs were outside the scope of competition law altogether. Although drugs could increase competitiveness, the "integrity and objectivity of competitive sport" was more important. In this way, the central task of competition law is to regulate the Inequality of bargaining power, unequal bargaining power of private, profit-making businesses, rather than to affect the delivery of public services, collective action by social groups, or sound regulation of the economy. Microsoft buildings EU

The Treaty on the Functioning of the European Union article 102 contains the prohibition on monopolies abusing a dominant position. As well as a general ban, it prohibits specific practices including price discrimination and exclusive dealing. It enables legislation to be adopted on mergers between firms (the current regulation is the European Union merger law, Regulation 139/2004/EC). The general test is whether a concentration (i.e. merger or acquisition) with a community dimension (i.e. affects a number of EU member states) might significantly impede effective competition. The

prohibits anti-competitive agreements in Article 101(1), including price fixing. According to Article 101(2) any such agreements are automatically void. Article 101(3) establishes exemptions, if the collusion is for distributional or technological innovation, gives consumers a "fair share" of the benefit and does not include unreasonable restraints that risk eliminating competition anywhere (or compliant with the general principle of European Union law of proportionality). *

article 106(1) no special or exclusive rights for undertakings that distort competition (2) competition law applies to services of general economic interest, unless it obstructs their tasks in law or fact (e.g. in providing public services). *Procurement Directive 2014/24/EU, on government procurement in the EU *

art 107(1) no

that distorts competition, but (2) aid allowed for individual consumers, without discrimination, and (3) for economic development, particularly to tackle underemployment

Obligations and property

Generally, there is no EU regulation of private law, rather than a collection of various initiatives. The main exception is in intellectual property rights. *Rome I Regulation *Rome II Regulation *Principles of European Contract Law *Principles of European Tort Law *Copyright Directive *Copyright Duration Directive *Copyright Term directive *European Union patent *Trade Marks Directive

Public regulation

article 345, on neutrality of members states' systems of property ownership.

Education and health

*Education, affected by free movement *Bologna Process and Bologna Declaration, European Higher Education Area *Health, affected by freedom to provide services

Banking and monetary policy

*Treaty Establishing the European Stability Mechanism *

art Wikisource:Consolidated version of the Treaty on the Functioning of the European Union/Title VIII: Economic and Monetary Policy, 119–133 *''Pringle v Government of Ireland'' (2012
C‑370/12
*''Gauweiler and Others v Deutscher Bundestag'' (2015
C-62/14
*Capital Requirements Directives

Electricity and energy

*Energy policy of the European Union *Renewable Energy Directive 2009/28/EC *Electricity Market Directive 2003/54/EC *Environmental policy of the European Union *Environmental Liability Directive 2004

Agriculture, forestry and fishing

*Common Fisheries Policy

Transport and communications

*First Railway Directive 91/440/EC, Second Railway Package 2004, Third railway package, proposed Fourth Railway Package *Postal Services Directive 97/67/EC *Telecoms Package and Universal Service Directive 2002/22/EC

Media and data

*Digital Markets Act *Digital Services Act *Data Retention Directive *Database Directive *Directive on Privacy and Electronic Communications *Directive on the re-use of public sector information *Electronic Commerce Directive

Foreign and security policy

*Common Foreign and Security Policy *Common Security and Defence Policy *European Defence Fund In 2006, a 2006 Côte d'Ivoire toxic waste spill, toxic waste spill off the coast of Côte d'Ivoire, from a European ship, prompted the commission to look into legislation against toxic waste. European Commissioner for the Environment, Environment Commissioner Stavros Dimas stated that "Such highly toxic waste should never have left the European Union". With countries such as Spain not even having a crime against shipping toxic waste, Franco Frattini, the Commissioner for Justice, Freedom and Security, Justice, Freedom and Security Commissioner, proposed with Dimas to create criminal sentences for "ecological crimes". The competence for the Union to do this was contested in 2005 at the Court of Justice resulting in a victory for the commission. That ruling set a precedent that the commission, on a supranational basis, may legislate in criminal law – something never done before. So far, the only other proposal has been the draft Proposed directive on criminal measures aimed at ensuring the enforcement of intellectual property rights, intellectual property rights directive. Motions were tabled in the European Parliament against that legislation on the basis that criminal law should not be an EU competence, but was rejected at vote. However, in October 2007, the Court of Justice ruled that the commission could not propose what the criminal sanctions could be, only that there must be some.
Case C-440/05 ''Commission v Council''
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Fiscal policy and taxation

*European Union value added tax *European Union withholding tax *European Union financial transaction tax (proposal)

References

Sources

* (later editions are available) * (later editions are available) * (later editions are available) *

External links

EUR-Lex
– online access to existing and proposed European Union legislation
Evolution of European Union legislation''The Principle of Loyalty in EU Law'', 2014, by Marcus Klamert, Legal Officer, European Commission
{{DEFAULTSORT:European Union Law European Union law Court of Justice of the European Union case law

History

Constitutional law

Treaties

Executive institutions

Legislature

Judiciary

Conflict of laws

Administrative law

Direct effect

References and remedies

Judicial review

Human rights and principles

Free movement and trade

Goods

Workers

Citizens

Establishment and services

Capital

Social and market regulations

Consumer protection

Labour rights

Companies and investment

Competition law

Obligations and property

Public regulation

Education and health

Banking and monetary policy

Electricity and energy

Agriculture, forestry and fishing

Transport and communications

Media and data

Foreign and security policy

Fiscal policy and taxation

See also

References

Sources

Further reading

External links