EUROPEAN UNION WORLD

The Role of Law In The Economic Order of The European Community

To:

Professor Peter-Christian Muller-Graff

From:

Jorge César Campos Rodrigues Simão

1. Brief Description.

The European Union (EU) came into existence in November 1993 after the ratification of the Maastricht Treaty, but the EU has its origins in the aftermath of World War II. The ECSC Treaty, the EEC Treaty and the EURATOM treaty which created the constituent organizations of what we now call the European Union, were signed in the 1950's.

Original members were Belgium, France, Italy, Luxembourg, the Netherlands, and West Germany. Denmark, Ireland and the United Kingdom joined in 1973. Greece became a member in 1981, and Portugal and Spain joined in 1986. Austria, Finland, and Sweden became members on January 1, 1995.

2. Treaties

2. 1. Founding treaties

a. In 1951 the Treaty Establishing the European Coal and Steel Community (the ECSC Treaty or the Treaty of Paris) (261 U.N.T.S. 140) created the European Coal and Steel Community (ECSC) which set up the regional institutions for the governance of coal and steel. Parties to this treaty were France, West Germany, Italy, Belgium, Luxembourg and the Netherlands.

b. With the Treaty Establishing the European Economic Community (EEC Treaty or the Treaty of Rome) (298 U.N.T.S. 11) the same parties created the European Economic Community (EEC) in 1957.

c. The Treaty Establishing the European Atomic Energy Community (the EURATOM Treaty, also referred to as the Treaty of Rome) (298 U.N.T.S. 167) concluded the same day as the EEC Treaty, created the European Atomic Energy Community (EURATOM).

2. 2. Other important treaties

a. The Treaty Establishing a Single Council and a Single Commission of the European Communities (also known as the Merger Treaty of 1965) (4 ILM 776) merged ECSC, EURATOM and EEC to form the European Communities (or EC, commonly called the Common Market). On July 1, 1967, the major institutions of the EC became the European Commission, the Council of Ministers, the European Court of Justice and the European Parliament.

b. In 1987 the Single European Act (25 ILM 506) amended the three founding treaties; it established an "internal market" which became effective at the end of 1992. Its eventual goals include a single currency and an end to border regulations.

c. The Treaty on European Union (or the Maastricht Treaty) (31 ILM 247), which was concluded in February of 1992 and came into effect in November 1993, established the European Union, founded on the European Communities. This treaty established a "three pillar" structure consisting of: 1) The pre-existing European Communities (the EC, the ECSC and EURATOM); 2) Common Foreign and Security Policy (CFSP); 3) Cooperation in the fields of Home Affairs and Justice.

3. A Constitution for the Union – For Stenght and Subsidiarity

The European Union must receive a new founding document. While the treaty was the obvious instrument to establish the EEC in 1957, the shape of the European Union of today requires more than the arsenal of public international law. The Constitution is best suited to organise the political Union of the present century.

The Constitution must first and foremost include a list of competences of both the Union and the member states. It must finally become clear what is of exclusive competence of the Union, where competences concur and are exercised jointly by the Union and its members, and what will remain the exclusive competence of the member states. Such a list finally draw borders where until now, there have been floating lines: the Union will grow stronger in those areas that it has exclusive competence for, and the states will at the same time rediscover subsidiarity. While nowadays a treaty article (EC Treaty article 308 as amended in Amesterdam) makes it possible for the Council of Ministers to establish a new common policies that were not provided for by the treaties, such a practise would be unacceptable in a constitutional framework. However, exclusive competences for the Union in a limited number of areas will make Europe visible as a strong political actor, finally overcoming the weakness of the past and showing its presence and determination where action is called for. The european currency, foreign and security policy and foreign trade policy must become the exclusive the exclusive competences of the Union. In other areas, residual competence will remain on the level of the member state, while common policies may be defined, in accordance with the Constitution.

4. Institutions of the European Union

The European Commission, which is located in Brussels, is the permanent executive body responsible for implementing the treaties. It formulates policy and initiates legislation. The Commission also has the authority to bring breaches of the treaties before the Court of Justice.

The Commission transmits proposals to the Council of the European Union, which is also in Brussels. The Council, which is made up of the foreign ministers of the member countries, is the most powerful institution in the EU and the major decision making body. As such it decides on important community policies and has the power to adopt rules. The official acts of the Council include regulations, directives, decisions, recommendations and opinions.

The European Council is a special semi-annual meeting of the Council of Ministers in which the representatives of the member states are the political heads of government themselves (i.e. presidents and prime ministers). (Do not confuse this group with the Council of Europe, which is a separate organization.)

During the legislative process the Council may consult the Economic and Social Committee (ESC) whose 222 members are selected from the private sector to represent industry, labor, consumers and the public at large.

The Court of Justice of the European Communities (ECJ), which sits in Luxembourg, supervises uniform interpretation and application of EU law (treaties and secondary legislation). The court adjudicates actions against Union institutions as well as issuing advisory opinions interpreting the law of the EU to national courts. The court's rulings are final and not subject to appeal.

The Court of First Instance (CFI) was established by the Council in 1988 under the Single European Act to lessen the ECJ's caseload by hearing certain types of cases (e.g. employment disputes). Its decisions are appealable to the ECJ on points of law only.

The European Court of Justice has until now fulfilled the role of both “ Treaty Court” and European High Court, ruling on the implementation of both primary and secondary European law throughout the European Union. When the Treaties will have been replaced by a European Constitution, the Court should function in two branches, with different judjes sitting on those branches. There will still, and forever, be the need for a European Court to safeguard the application of the founding documents. When a Constitution is adopted, a European Constituional Court can be establish, to ensure respect of the Constitution by institutions of both Europe and the nations, as well as to safeguard the rights conferred to individuals by the European Constitution. This Court would also, and especially, monitor the full compliance, by both the Union and the states, with distribution of competences set out in the Constitution. A Constitutional Court therefore becomes the steward of subsidiarity in Europe.

The European High Court, on the other hand, would be in charge of all legal disputes involving material European law. It would play the role of a supreme instance in regular litigation not involving any constitutional aspects. This Court would have a special importance in matters of economic law in Europe, where standards, competion and other aspects of the single market are concerned. If constitutional questions arose in the frame of High Court material litigation, those questions would be referred to the Constitutional Court for clarification on this point, and then the case would be settled by the High Court applying the constitutional Court for clarification on this point, and then the case would be settled by the High Court appying the constitutional ruling of the Constitutional Court.

The European Parliament is an elected body which originally had mostly advisory, rather than decision-making powers. The Maastricht Treaty has increased the powers of the Parliament and enlarged its legislative role. There are currently 626 members.

They are directly elected every five years by general elections in each state. The Parliament meets in Strasbourg, France.

The Court of Auditors, which was established in 1975, examines and monitors revenue and expenditures of the EU institutions to make sure that both revenues received and spending are lawful and based on sound financial management.

5. Principle of Integration

Community law is important as a unifying factor, especially because not only the Member States, but also individuals, have been recognised as directly subject to that law.

The special nature of the Community, which must be regarded, not as an association of States subject to international law, but as a community sui generis orientated to the future and designed with a view to the alteration of economic and social relationships and progressive integration, rules out a static and requires a dynamic and evolutionary interpretation of Community law. The Community judge must never forget that the Treaties establishing the European Communities have laid the foundations of an ever closer union among the peoples of Europe and that the High Contracting Parties were anxious to strengthen the unity of their economies and to ensure their harmonious development (Preamble to the EEC Treaty).

The principle of the progressive integration of the Member States in order to attain the objective of the Treaty does not only comprise a political requirement; it amounts rather to a Community legal principle, which the Court of Justice has to bear in mind when interpreting Community law, if it is to discharge in a proper manner its allotted task of upholding the law when it interprets and applies the Treaties.

Professor Barav presents the Community as a juristic idea; the written constitution as a sacred text; the professional commentary as a legal truth; the case law as the inevitable working out of the correct implications of the constitutional text; and the constitutional court as the disembodied voice of right reason and constitutional teleology.

The key role of the European Court of Justice as the "motor of integration" is hardly denied by law community, or indeed by many political scientists, although some of the latter appear to have viewed the Court as a deviant and only partially explicable force in an intergovernmental structure in which Member States only cooperate because it in fact increases their control over the domestic policy agenda.

The legal voices of caution about the role of the Court have generally been denounced as unhelpful, unjustified in their attacks and largely unsupported in their arguments, or worse (Weiler). Few have been able to sustain the critique implicitly called for by Martin Shapiro. Oppositional voices amongst politicians have also been remarkably few, although perhaps more noticeable of late (for example, the attack by Chancellor Kohl in 1992). However, it is not intention of this written assignmentin to discuss existing politico-legal theories of the Court's role in the integration process. The my aim is address the assumption that law and integration are somehow naturally compatible-comfortable European bedfellows as it were.

There is an irony in the fact that the early missionaries have unwittingly created a monster which now dominates its own environment. By stressing the dynamic, difficult and unusual nature of community law, the pioneers effectively warned off most of the rest of the academic community from confronting or addressing the new entrant. Community law was the province, almost exclusively, of the "specialist" Community lawyer, untouchable by outsiders not initiated into its special techniques. This created a mystique about the nature of Community law, as well as generating a certain hostility amongst those who did not acknowledge the reasons for ascribing a special status to this new field of study.

The sameness aspect was also stressed by the development of a body of commentary which was almost exclusively doctrinal, descriptive and uncritical in its approach to the texts. Community law has to a large extent been insulated from the influences which have been felt in most other fields of legal study, for example, from critical legal studies, feminist theory, marxism, postmodernism, socio-legal; even conventional positivist jurisprudence has barely touched upon the supranational legal phenomenon. The result has been a body of work in which Community law is represented as an arid and rather unlovely framework of technical rules, disconnected from social life, while at the same time tied to a principle of integration which is never fully explained, but merely hinted at as a self-evident truth.

Within this doctrinal paradigm, the development of Community law, in its constitutional, legislative and judicial forms, has generally been narrated as a forward march towards the holy grail of an "ever closer union". This left little scope for criticism of the Court, except for being too timid in the pursuit of the logic of integration. The Court is feted for creating a new order of international law, for establishing new principles of judicial enforceability to enhance the legal position of citizens, for articulating and defending the primary principles of free movement and economic integration, for nudging the institutions inexorably onwards towards the goal of political integration, and for rigorously controlling the discretionary powers of the Member States.

The truth of these assertions can hardly be denied. The evolution of the Community has been a sui generis piece of constitution-building in which the Court has played an unprecedented role. And yet the time has now come to throw open the doors of the darkened chamber of Community legal studies and to subject the now established body of doctrine to more rigorous critical examination. It is time to abandon the naïve triumphalism of the early years in which lawyers were able to tell a simple story of how the ECSC was established simply and solely as a bulwark against future wars in Europe as the core piece of historical context against which the nascent Community legal order of the early 1960s should be set. If Community lawyers wish to use historical perspectives, then they must be prepared to re-examine the sacred shibboleths of the Community's history in the light of new evidence which may question, for example, the quasi-Messianistic (and largely self-created) image of Jean Monnet and his role in the founding of the ECSC.

Above all, there is an urgent need to question what it is that holds the Community legal order together. In conventional wisdom, it is the process of integration which gives the Community legal order a purpose and Community law which structures, disciplines and pushes forward the process of integration. Law and integration - structural and socio-economic - exist in a cosy, intimate and entirely positive relation. Law is a useful form of glue for the supranational enterprise, as it brings with an ideology of obedience. The Member States adhere to the rule of law within the Community sphere, the dominant narrative runs, because they adhere to it largely within the domestic sphere. They are, quite simply, liberal democratic states, whose basic instinct in relation to legal authority is one of compliance and obedience. In doing so, Member States also implicitly sign up for more integration, because - in Community rhetoric - law means integration. In this way, two circles are squared through integration and through the rule of law. Integration is what is natural for the Community and equally what is natural for the law.

To leave behind this narrow conception of the relationship between law and integration, Community law need first to abandon a vision of the Community's legal development as comprised of, at the most, small deviations from a straight line directed towards, an integrationist outcome. They must accept that Community law does not have a simple linear relationship with contemporary events. But by abandoning the fervent zeal of the newly converted proselyte, not only will Community lawyers find their field of study accepted more readily as a mature component of legal studies, but they can also begin to open their eyes to the richness of the legal terrain which lies in front of them. As a dynamic and unstable force, driven as much by context as by content, Community law deserves more than the static and sterile body of commentary which it has largely attracted so far and needs, urgently, the attention of a diversity of influences, both theoretical and methodological.

A dominant integration principle which has four key strands : consensus; unity and cohesion; centrality; legimacy and authority. We must shall examine these strands and then move on to consider a counterprinciple of disintegration comprising once again four opposing strands: diversity and difference; fragmentation; disruption; illegitimacy and weakness. Principle and counterprinciple are strongly sustained by a combination of textual authority and praxis. Yet by dealing with the disintegrationist aspects of the Community not as exceptions to an integrationist norm, but as autonomous facets of the whole. Integration and disintegration forces could be possible using the mechanism of subsidiarity.

Underlying the tensions between the principle and the counterprinciple, and indeed marking out the new frontiers of work on the EC/EU constitution for the coming decade, is the principle of subsidiarity which needs to be absorbed into current thinking and given a meaningful role. Talking about "disintegration" does not imply a value judgment associated with anarchy, chaos, strife and forgetting the lessons of history which preach cooperation not onflict. On the contrary, disintegration is just as "natural" a force within the Community as integration. That being so, then subsidiarity could be used as a sensitive balancing tool to settle disputes between the integrationist and disintegrationist tendencies within the Community legal system and within the wider arena of the Community policy as a whole. To put it another way, disintegration does not have to be seen, necessarily, as a negative and malign influence. Subsidiarity can be used as a means for reconciling what has always been a focus of conflict within the Community between centrifugal and centripetal tendencies.

1. Consensus

In the legal domain, it is to a large extent possible to paint the Community as a picture of (relative) compliance and consent - by the Member States who generally comply with their Community obligations, for whatever reason; by national courts, whose ever increasing recourse to Article 177 and references to the Court of Justice is a source of difficulty of its own; by individuals, in fields where direct compliance is required such as Articles 85 and 86 EC, where significant economic incentives in the form of sizeable fines encourage obedience. In the political domain, the final ratification and coming into force of the Treaty of Maastricht, when all had earlier appeared lost, is a marked triumph of consent, which comes hard upon the heels of the consensual completion of most aspects of the single internal market.

2. Unity and cohesion :

The simplicity of the Community legal order, based on a picture of "unity", emerges almost as a thing of beauty in the eloquent phrasing of Kutscher. It well portrays the reverential attitude of many Community law, one sustained, rather surprisingly, right up to the present day in a significant body of academic commentary "close to the Court". Another way of portraying the relationship between national courts and academia on the one hand and the European Court on the other hand is to use the language of love (Weiler).

Any Community law who has not entirely abandoned his or her critical faculties will now be able

to see that, although relationship is now slowly changing, it still possible to find much recent material coming from the Court to support the thesis that the dominant theme within the legal order is still unity and cohesion. For example, there is the continued development of the so-called "effectiveness principle" (Francis Snyder). The constitutional foundation of this is now clearly identified as Article 5 EC -the duty of Community loyalty.

Continued jurisprudential support for an increasingly cohesive remedial system for the protection of individual rights can be drawn from the case of Marshall (N° .2) and the Court has given serious consideration to extending the contours of the direct effect of directives in the Dori case.In Opinion 1/91 on the Draft Agreement Creating a European Economic Area the Court asserted the strength of its dominion over the so-called acquis communautaire, indicating that (at least without an explicit Treaty amendment) the Community is not capable of dismantling what, in legal terms, has been achieved.

Furthermore, the Court asserted the competence of the Community to regulate social and economic affairs "in ever wider fields", a noticeable shift from the language of the early 1960s, when it referred to a limitation of national sovereign powers occurring "albeit in limited fields". Finally, in the Treaty on European Union reference is made to the protection of the acquis communautaire, notwithstanding the introduction of the principle of subsidiarity (Article B TEU). Toth has argued strongly that the preservation of the acquis means that subsidiarity is almost meaningless in legal terms.

(continues)

Jorge Rodrigues Simão