EUROPEAN UNION LAW

Dr Intan Soeparna
Dr Rosa Ristawati

Faculty of Law, Universitas Airlangga

 Jean Monnet Module

EU LAW COURSE DESCRIPTION

1. Course Name European Union Law

2. Code
3. Credit 2 SKS / 100 Minutes
4. Teaching Period
5. Offered by Universitas Airlangga Faculty of Law/ Bachelor of
Laws Programme (Program Studi Ilmu Hukum)
6. Lecturer Dr Intan Soeparna
Dr Rosa Ristawati
7. Contact E-mail Intan@fh.unair.ac.id
8. Learning Outcome Upon completion of the subject, students are expected to
be able to:
1. to provide a foundational knowledge of the creation
and constitution of the European Union;
2. to provide understanding of EU Institutions
3. to provide a sufficient knowledge of the core areas
of EU substantive law (Law of the single market,
the individual and EU law)
9. Course Description The course is aimed to introduce the European
Union and its main institutions such as EU
Parliament, EU Council and EU Commission. This
course also identifies core element of EU legal
doctrine. It explores how EU Courts and national
court used legal tools to create a strong supra-
national order. The unique of EU law is its direct
effect to Member legal system. This course also
introduces direct effect of EU Law and its
applicability. It then correlates with the state
liability principle implied to the EU Members
States.

10. Requirement International Law/politics/international relations

11. Study Method 1. Lecture
2. Discussion
3. Assignment

12. Model Mid Exam weight 35% : written exam

Final Exam weight 50% paper and presentation
Assignment weight 15%: Class Discussion (soft skill)

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EU LAW SYLABY

No MEETING Course Subject

1 Unit 1 Introduction
2 Unit 2 The Evolving Process of EU Integration
3 Unit 3 The Law making and Political Institutions in EU
4 Unit 4 The Source of EU Law
5 Unit 5 The Judicial System of the EU and Enforcement
of EU Law
6 Unit 6 Direct Applicability and Direct Effect of EU Law
7 Unit 7 The Supremacy of EU Law and the interaction
between EU Law and National Law
8 Unit 8 The EU State Liability
9 Unit 9 Common Market and Internal Market
10 Unit 10 Protection of Human Rights in EU
11 Unit 11 Free movement of Good and Service
12 Unit 12 Free movement on Person and Citizen

EU LAW PAPER ASSIGNMENT

Theme: EU Law from Multidisciplinary approach

Form:
1. Background
2. Issues
3. Analysis
4. Finding
5. Conclusion
6. Reference (citation, Chicago style)
7. Min. 10 pages, maximum 25 pages
8. Times New Roman, 12
9. 1.5 space

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UNIT 1: Introduction

Learning Outcomes:
1. Student will understand the historical background of EU Law
2. Student is able to explain the fundamental value of EU
3. Student is able to explain the method of EU integration
Sources:
Klaus-Dieter Borchardt, The ABC of EU Law, December 2016,
Luxembourg: Publications Office of the European Union, 2017, pp. 15 - 38

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1. History
The European Union (EU) developed from the three European Communities which
were founded in the 1950s: European Coal and Steel Community (ECSC), European Economic
Community (EEC) and European Atomic Energy Community (Euratom). It became the
'European Union' under the Maastricht Treaty of 1992. The ECSC was wound up in 2002 and
the EC was subsumed into the European Union in December 2009, but Euratom continues to
exist. From the original six member states of the 1950s, the EU has grown to a total of twenty-
eight member states today. The UK joined in 1973. The EU has its own courts: the Court of
Justice, the General Court (formerly the 'Court of First Instance') and the Civil Service
Tribunal. Its main legislative and policy-making bodies are the Council of the European Union
(or Council of Ministers), the European Parliament and the European Commission.
The creation of the European Union by means of the Treaty of Maastricht marked a
further step along the path to the political unification of Europe. Although the treaty was signed
in Maastricht on 7 February 1992, a number of obstacles in the ratification process (approval
by the people of Denmark only after a second referendum; legal action in Germany to have
parliament’s approval of the treaty declared unconstitutional) meant that it did not enter into
force until 1 November 1993. The treaty referred to itself as ‘a new stage in the process of
creating an ever closer union among the peoples of Europe’. It contained the instrument
establishing the European Union, although it did not bring this process to completion. The
European Union did not replace the European Communities but instead placed it under the
same umbrella as the new policies and forms of cooperation. Hence the ‘three pillars’ upon
which the European Union is built. The first pillar consisted of the European Communities: the
EEC (renamed the EC), the ECSC (until 2002) and Euratom. The second pillar consisted of
cooperation between the Member States under the common foreign and security policy. The
third pillar covered cooperation between the Member States in the fields of justice and home
affairs.
Further development came in the form of the Treaties of Amsterdam and Nice, which
entered into force on 1 May 1999 and 1 February 2003, respectively. The aim of these reforms
was to preserve the EU’s capacity for effective action even in a Union enlarged by a sizeable
number of new members. The two treaties therefore focused on institutional reforms.
Compared with previous reforms, the political will to deepen European integration was
relatively weak.

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The subsequent criticism from several quarters resulted in the start of a debate on the
future of the EU and its institutional set-up. As a result, on 15 December 2001 in Laeken
(Belgium), the Heads of State or Government adopted a Declaration on the Future of the
European Union, in which the EU undertook to become more democratic, transparent and
effective and to open the road to a constitution. The first step to achieving this goal was taken
by setting up a European convention, chaired by the former President of France, Valéry Giscard
d’Estaing, with the remit of drafting a European constitution. The draft of the Treaty
establishing a Constitution for Europe drawn up by the convention was officially submitted to
the President of the European Council on 18 July 2003 and adopted, with various amendments,
by the Heads of State or Government on 17 and 18 July 2004 in Brussels.
The constitution was intended to turn the EU and the European Community as we knew
them into a new, single European Union that would be based on a single constitutional treaty.
Only the EAEC would continue to exist as a separate Community — although it would continue
to be closely associated with the new EU. However, this attempt at a constitution failed in the
ratification process carried out by the Member States. After the initial votes in 13 of the then
25 Member States were in favour, the treaty was rejected in referendums in France (54.68 %
against, from a turnout of 69.34 %) and the Netherlands (61.7 % against, from a turnout of 63
%).
Following a period of reflection of almost 2 years, a new package of reforms was
launched in the first half of 2007. This reform package represented a formal move away from
the idea of a European constitution under which all existing treaties would be revoked and
replaced by a single text called the Treaty establishing a Constitution for Europe. Instead, a
reform treaty was drawn up, which, like the Treaties of Maastricht, Amsterdam and Nice before
it, made fundamental changes to the existing EU treaties in order to strengthen the EU’s
capacity to act within and outside the Union, increase its democratic legitimacy and enhance
the efficiency of EU action overall. In line with tradition, this reform treaty was named after
the place where it was signed: the Treaty of Lisbon. The treaty was drafted unusually quickly,
chiefly due to the fact that the Heads of State or Government themselves set out in detail, in
the conclusions of the meeting of the European Council of 21 and 22 June 2007 in Brussels,
how and to what extent the changes negotiated for the reform treaty were to be incorporated
into the existing treaties. Their approach was unusual in that they did not limit themselves to
general directions to be implemented by an intergovernmental conference, but themselves drew
up the structure and content of the changes to be made, and indeed often set out the exact
wording of a provision.
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The main points of contention were the delimitation of competences between the Union
and the Member States, the future of the common foreign and security policy, the new role of
the national parliaments in the integration process, the incorporation of the Charter of
Fundamental Rights into Union law and possible progress in the area of police and judicial
cooperation in criminal matters. As a result, the intergovernmental conference convened in
2007 had little room for manoeuvre and was only empowered to implement the required
changes technically. The work of the intergovernmental conference was completed by 18 and
19 October 2007 and obtained the political approval of the European Council, which was
meeting informally in Lisbon at the same time.
Finally, the treaty was formally signed by the Heads of State or Government of the then
27 Member States of the EU (Croatia did not join the EU until 2013) on 13 December 2007 in
Lisbon. However, the ratification process for this treaty also proved extremely difficult.
Although the Treaty of Lisbon, unlike the Treaty establishing a Constitution for Europe, was
successfully ratified in France and the Netherlands, it initially fell at the hurdle of a first
referendum in Ireland on 12 June 2008 (53.4 % against, from a turnout of 53.1 %). Only after
a number of legal assurances on the (limited) scope of the new treaty were Irish citizens called
to vote in a second referendum on the treaty in October 2009. This time it received the broad
support of the Irish population (67.1 % for, from a turnout of 59 %). The success of the
referendum in Ireland also opened the way for ratification of the Treaty of Lisbon in Poland
and the Czech Republic. In Poland, President Kaczyński had made signature of the instrument
of ratification dependent on a favourable outcome in the Irish referendum. The Czech
President, Václav Klaus, also initially wanted to wait for the Irish referendum, but then made
his signature of the instrument of ratification additionally dependent on a guarantee that the
‘Beneš decrees’ of 1945, which disallowed claims to land in areas of the Czech Republic that
were formerly German, would remain unaffected by the treaty, and in particular by the Charter
of Fundamental Rights incorporated into the EU treaty. Once a solution had been found to this
demand, the Czech President signed the instrument of ratification on 3 November 2009. Thus,
the ratification process was successfully completed, and the Treaty of Lisbon could enter into
force on 1 December 2009.
The Treaty of Lisbon merges the EU and the European Community into a single
European Union. The word ‘Community’ is replaced throughout by the word ‘Union’. The
Union replaces and succeeds the European Community. However, Union law is still shaped by
the following three treaties.

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Every action taken by the EU is founded on the treaties. These binding agreements
between EU member countries set out EU objectives, rules for EU institutions, how decisions
are made and the relationship between the EU and its members. The treaty that is currently
enforced:
1) The Treaty on European Union (TEU) is divided into the following six titles: Common
provisions (I), Provisions on democratic principles (II), Provisions on institutions (III),
Provisions on enhanced cooperation (IV), General provisions on the Union’s external
action and specific provisions on the common foreign and security policy (V) and Final
provisions (VI).
2) The Treaty on the Functioning of the European Union (TFEU) was developed from the
Treaty establishing the European Community (EC Treaty). It has more or less the same
structure as the EC Treaty. The main changes concern the external action of the EU and
the introduction of new chapters, in particular on energy policy, police and judicial
cooperation in criminal matters, astronautics or sport and tourism.
3) The Treaty establishing the European Atomic Energy Community (EAEC Treaty) has
been amended at different stages. In each case, the specific amendments have been
made in protocols annexed to the Treaty of Lisbon.

2. Fundamental Values of European Union

The value of EU is underlined in Article 2 of TEU: “The Union is founded on the values
of respect for human dignity, freedom, democracy, equality, the rule of law and respect for
human rights, including the rights of persons belonging to minorities. These values are
common to all Member States in a society in which pluralism, non-discrimination, tolerance,
justice, solidarity and equality between women and men prevail.”
The aim of EU is underlined in Article 3 of TEU:
(1) The Union’s aim is to promote peace, its values and the well-being of its peoples.
(2) The Union shall offer its citizens an area of freedom, security and justice without
internal frontiers, in which the free movement of persons is ensured in conjunction with
appropriate measures with respect to external border controls, asylum, immigration and
the prevention and combating of crime.
(3) The Union shall establish an internal market. It shall work for the sustainable
development of Europe based on balanced economic growth and price stability, a highly
competitive social market economy, aiming at full employment and social progress,

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and a high level of protection and improvement of the quality of the environment. It
shall promote scientific and technological advance.
It shall combat social exclusion and discrimination, and promote social justice and
protection, equality between women and men, solidarity between generations and
protection of the rights of the child.
It shall promote economic, social and territorial cohesion, and solidarity among
Member States.
It shall respect its rich cultural and linguistic diversity, and shall ensure that Europe’s
cultural heritage is safeguarded and enhanced.
(4) The Union shall establish an economic and monetary union whose currency is the euro.
(5) In its relations with the wider world, the Union shall uphold and promote its values and
interests and contribute to the protection of its citizens. It shall contribute to peace,
security, the sustainable development of the Earth, solidarity and mutual respect among
peoples, free and fair trade, eradication of poverty and the protection of human rights,
in particular the rights of the child, as well as to the strict observance and the
development of international law, including respect for the principles of the United
Nations Charter.
The foundations of a united Europe were laid on fundamental ideas and values to which
the Member States have subscribed in Article 2 TEU and which are translated into practical
reality by the EU’s operational institutions. These fundamental values include respect for
human dignity, equality, freedom and solidarity. The EU’s avowed aims are to safeguard the
principles of liberty, democracy and the rule of law which are shared by all the Member States,
and to protect human rights.
These values not only set the standard for countries wishing to join the EU in the future;
serious and persistent breaches of these values and principles by a Member State can also be
penalised pursuant to Article 7 TEU. First of all, the Heads of State or Government in the
European Council must unanimously determine the existence of a serious and persistent breach
of the values and principles of the Union. This determination is made by the Heads of State or
Government on a proposal by one third of the Member States or by the European Commission,
and after obtaining the assent of the European Parliament. The Council may then, acting by a
qualified majority, suspend certain rights deriving from the application of the EU Treaty and
the TFEU to the Member State in question, including voting rights in the Council. On the other
hand, the obligations on the Member State in question under the treaties continue to be binding.

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Particular account is taken of the effects on the rights and obligations of citizens and
enterprises.
2.1. The EU as guarantor of peace
There is no greater motivation for European unification than the desire for peace (cf.
Article 3 TEU). In the last century, two world wars were waged in Europe between countries
that are now Member States of the European Union. Thus, a policy for Europe means at the
same time a policy for peace. The establishment of the EU created the centrepiece of a
framework for peace in Europe that renders a war between the Member States impossible.
Seventy years of peace in Europe are proof of this. The more European states that join the EU,
the stronger this framework of peace will become. The latest enlargements of the EU have
made a major contribution in this respect. In 2012, the EU received the Nobel Peace Prize for
advancing the causes of peace, reconciliation, democracy and human rights in Europe.
2.2. Unity and equality as the recurring theme
Unity is the recurring theme. The major problems of the present can be mastered only if the
European countries speak and act in unison, while preserving their diversity. Many people take
the view that without European integration, it would not be possible to secure peace (both in
Europe and worldwide), democracy, law and justice, economic prosperity and social security,
and to guarantee them for the future. Unemployment, inadequate growth, security of energy
supply and environmental pollution have long ceased to be merely national problems, and they
cannot be solved at national level. It is only in the context of the EU that a stable economic
order can be established and only through joint European efforts that we can secure an
international economic policy that improves the performance of the European economy and
contributes to social justice. Without internal cohesion, Europe cannot assert its political and
economic independence from the rest of the world, win back its influence on the international
stage and regain its role in world politics.
Unity can endure only where equality is the rule. No citizen of the Union may be placed
at a disadvantage or discriminated against because of his or her nationality. Discriminatory
treatment on the grounds of gender, race, ethnic origin, religion or beliefs, disability, age or
sexual orientation must be combated. The Charter of Fundamental Rights of the European
Union goes still further. Any discrimination based on any ground such as colour, genetic
features, language, political or any other opinion, membership of a national minority, property
or birth is prohibited. In addition, all Union citizens are equal before the law. As far as the
Member States are concerned, the principle of equality means that no state has precedence over

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another, and natural differences such as size, population and differing structures must be
considered only in accordance with the principle of equality.
2.3. The fundamental freedoms
Freedom results directly from peace, unity and equality. Creating a larger entity by
linking 28 states affords at the same time freedom of movement beyond national frontiers. This
means, in particular, freedom of movement for workers, freedom of establishment, freedom to
provide services, free movement of goods and free movement of capital. These fundamental
freedoms guarantee business people freedom of decision-making, workers freedom to choose
their place of work and consumers freedom of choice between the greatest possible variety of
products. Freedom of competition permits businesses to offer their goods and services to an
incomparably wider circle of potential customers. Workers can seek employment and change
job according to their own wishes and interests throughout the entire territory of the EU.
Consumers can select the cheapest and best products from the far greater range of goods on
offer that results from increased competition.

The accession treaty often lays down transition rules for a country’s accession to the EU,
however, particularly with regard to the free movement of workers, the freedom to provide
services and the freedom of establishment. These rules allow the ‘old’ EU Member States to
use national law or existing bilateral agreements to control the exercise of these fundamental
freedoms for nationals of new Member States for up to 7 years.
2.4. The principle of solidarity
Solidarity is the necessary corrective to freedom, for inconsiderate exercise of freedom
is always at the expense of others. For this reason, if a Community framework is to endure, it
must also always recognise the solidarity of its members as a fundamental principle, and share
both the advantages, i.e. prosperity, and the burdens equally and fairly among its members.
2.5. Respect for national identity
The national identities of the Member States are respected. The idea is not for the
Member States to be ‘dissolved’ into the EU, but rather for them to contribute their own
particular qualities. It is precisely this variety of national characteristics and identities that lends
the EU its moral authority, which in turn is used for the benefit of the EU as a whole.
2.6. The need for security
All of these fundamental values are ultimately dependent on security. Particularly since
the attack on the United States of 11 September 2001 and the growing number of increasingly
vicious terrorist attacks in Europe, the fight against terrorism and organised crime in Europe
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has also been in the spotlight again. Police and judicial cooperation continues to be
consolidated, and protection of the EU’s external borders intensified.
However, security in the European context also means the social security of all citizens
living in the EU, job security and secure general economic and business conditions. In this
respect, the EU institutions are called upon to make it possible for citizens and businesses to
work out their future by creating the conditions on which they depend.
2.7. The fundamental rights
The fundamental values and concepts at the heart of the EU also include the
fundamental rights of individual citizens of the Union. The history of Europe has for more than
200 years been characterised by continuing efforts to enhance the protection of fundamental
rights. Starting with the declarations of human and civil rights in the 18th century, fundamental
rights and civil liberties have now become firmly anchored in the constitutions of most civilised
states. This is especially true of the EU Member States, whose legal systems are constructed
on the basis of the rule of law and respect for the dignity, freedom and the right to self-
development of the individual. There are also numerous international conventions on the
protection of human rights, among which the ECHR is of very great significance for Europe.
It was not until 1969 that the CJEU established a body of case-law to serve as a
framework of fundamental rights. Prior to that, the Court had rejected all actions relating to
basic rights on the grounds that it need not concern itself with matters falling within the scope
of national constitutional law. The Court had to alter its position not least because it was itself
the embodiment of the primacy of Union law and its precedence over national law; this primacy
can only be firmly established if Union law is sufficient in itself to guarantee the protection of
basic rights with the same legal force as under the national constitutions.
The starting point in this case-law was the Stauder judgment, in which the point at issue
was the fact that a recipient of welfare benefits for war victims regarded the requirement that
they give their name when registering for the purchase of butter at reduced prices at Christmas
as a violation of their human dignity and the principle of equality. Although the Court of Justice
came to the conclusion, in interpreting the Union provision, that it was not necessary for
recipients to give their name so that, in fact, consideration of the question of a violation of a
fundamental right was superfluous, it finally declared that the general fundamental principles
of the Union legal order, which the CJEU had to safeguard, included respect for fundamental
rights. This was the first time that the Court of Justice recognised the existence of an EU
framework of fundamental rights of its own.

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Initially, the Court developed its safeguards for fundamental rights from a number of
provisions in the treaties. This is especially the case for the numerous bans on discrimination
which, in specific circumstances, address particular aspects of the general principle of equality.
Examples are the prohibition of any discrimination on grounds of nationality (Article 18
TFEU), preventing people being treated differently on the grounds of gender, race, ethnic
origin, religion or beliefs, disability, age or sexual orientation (Article 10 TFEU), the equal
treatment of goods or persons in relation to the four basic freedoms (freedom of movement of
goods — Article 34 TFEU; freedom of movement of persons — Article 45 TFEU; the right of
establishment — Article 49 TFEU; and freedom to provide services — Article 57 TFEU),
freedom of competition (Article 101 et seq. TFEU) and equal pay for men and women (Article
157 TFEU). The four fundamental freedoms of the Union, which guarantee the basic freedoms
of professional life, can also be regarded as a Union fundamental right to freedom of movement
and freedom to choose and practise a profession. Explicit guarantees are also provided for the
right of association (Article 153 TFEU), the right to petition (Article 24 TFEU) and the
protection of business and professional secrecy (Article 339 TFEU).
The Court of Justice has steadily developed and added to these initial attempts at
protecting fundamental rights through Union law. It has done this by recognising and applying
general legal principles, drawing on the concepts that are common to the constitutions of the
Member States and on the international conventions on the protection of human rights to whose
conclusion the Member States have been party. Prominent among the latter is the ECHR, which
helped to shape the substance of fundamental rights in the Union and the mechanisms for their
protection. On this basis, the Court has recognised a number of freedoms as basic rights secured
by Union law: right of ownership, freedom to engage in an occupation, the inviolability of the
home, freedom of opinion, general rights of personality, the protection of the family (e.g.
family members’ rights to join a migrant worker), economic freedom and freedom of religion
or faith, along with a number of fundamental procedural rights such as the right to due legal
process, the principle of confidentiality of correspondence between lawyer and client (known
as ‘privileged communications’ in the common law countries), the ban on being punished twice
for the same offence or the requirement to provide justification for an EU legal act.
One particularly important principle regularly invoked in legal disputes is the principle
of equal treatment. Put simply, this means that like cases must be treated alike, unless there is
some objectively justifiable ground for distinguishing them. According to the case-law of the
CJEU, however, this principle does not preclude nationals and home-produced goods from
being subjected to stricter requirements than citizens or products from other Member States
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(this is known as ‘reverse discrimination’ in legal parlance). This outcome is attributed to the
limited scope of the Union’s powers, which, in principle, apply only to cross-border trade.
Rules regulating the production and marketing of home-produced goods or the legal status of
nationals in their own Member State are affected by Union law only if the Union has introduced
harmonisation measures.
The jurisprudence of the CJEU has also given the Union an extensive body of quasi-
constitutional law. In practical terms, the principle of proportionality is foremost among these.
What this means is that the objectives pursued and the means deployed must be weighed up
and an attempt made to keep them in proper balance so that the citizen is not subjected to
excessive burdens. Among the other fundamental principles underlying Union law are the
general principles of administrative law and the concept of due process: legitimate expectations
must be protected, retroactive provisions imposing burdens or withdrawing legitimately
acquired advantages are precluded and the right to due legal process — natural justice is the
traditional term for this — must be secured in the administrative procedures of the Commission
and the judicial procedures of the Court of Justice. Particular value is also attached to greater
transparency, which means that decisions should be taken as openly as possible, and as closely
as possible to the citizen. An important aspect of this transparency is that any EU citizen or
legal person registered in a Member State may have access to Council or Commission
documents. All grants and subsidies from the EU budget must also be disclosed to natural or
legal persons by means of databases accessible to every Union citizen.
With all due respect to the achievements of the CJEU in the development of unwritten
fundamental rights, this process of deriving ‘European fundamental rights’ had a serious
disadvantage: the Court of Justice was confined to the particular case in point. It was therefore
unable to develop fundamental rights from the general legal principles for all areas in which
this appeared necessary or desirable. Nor was it able to elaborate the scope of and the limits to
the protection of fundamental rights as generally and distinctively as was necessary. As a result,
the EU institutions could not assess with enough precision whether they were in danger of
violating a fundamental right or not. Nor could any Union citizen who was affected judge
without further effort in every case whether one of his or her fundamental rights had been
infringed.
For a long time, EU accession to the ECHR was regarded as a way out of this situation.
In its Opinion 2/94, however, the Court had held that, as Union law stood at that time, the EU
had no competence to accede to the convention. The Court stated that respect for human rights
was a condition for the lawfulness of EU acts. However, accession to the convention would
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entail a substantial change in the present Union system for the protection of human rights in
that it would involve the EU entering into a distinct international institutional system as well
as integration of all the provisions of the convention into the Union legal order. The Court took
the view that such a modification of the system for the protection of human rights in the EU,
with equally fundamental institutional implications for the Union and for the Member States,
would be of constitutional significance and would therefore go beyond the scope of the
dispositive powers provided for in Article 352 TFEU. This deficiency was remedied by the
Treaty of Lisbon. The EU’s accession to the convention is now specifically provided for in
Article 6(2) TEU. Accession negotiations were then promptly reopened in 2010. In the spring
of 2013, agreement was reached on the draft accession agreement. The Commission sent this
draft to the Court of Justice and requested an opinion on its compatibility with EU law. In its
Opinion 2/13, the Court concluded that, in the form proposed, the draft agreement on the
accession of the EU to the ECHR was not compatible with EU law. A significant point of
criticism was that, if the EU were to accede to the ECHR, the CJEU would have to submit to
the decisions of the ECHR. The Union’s common foreign and security policy would also be
subject to the human rights supervision of the European Court of Human Rights. The judges
took the view that this was contrary to important structural principles of the EU. Although, in
theory, accession of the European Union to the ECHR remains possible after this decision, in
practice it is out of the question for the time being, as a number of technical details in the
accession draft need to be amended beforehand.
The Eugen Schmidberger case related to a demonstration on the Brenner motorway
which resulted in the complete closure of the motorway to road traffic for 30 hours. The
transport company Schmidberger asked the Republic of Austria — the authorities of which had
not prohibited the demonstration — to pay damages for the loss it incurred as a result of the
closure. The Court of Justice found that the failure to prohibit the demonstration did restrict the
free movement of goods but could be objectively justified. It stated that the decision respected
the fundamental rights of the demonstrators to freedom of expression and freedom of assembly,
which are guaranteed by the Austrian constitution and the European Convention on Human
Rights. The Court found that the Austrian authorities could therefore not be said to have
committed a breach of law such as to give rise to liability.
The Eugen Schmidberger case related to a demonstration on the Brenner motorway which
resulted in the complete closure of the motorway to road traffic for 30 hours. The transport
company Schmidberger asked the Republic of Austria — the authorities of which had not
prohibited the demonstration — to pay damages for the loss it incurred as a result of the closure.
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The Court of Justice found that the failure to prohibit the demonstration did restrict the free
movement of goods but could be objectively justified. It stated that the decision respected the
fundamental rights of the demonstrators to freedom of expression and freedom of assembly,
which are guaranteed by the Austrian constitution and the European Convention on Human
Rights. The Court found that the Austrian authorities could therefore not be said to have
committed a breach of law such as to give rise to liability.
Irrespective of the EU’s accession to the ECHR, the Treaty of Lisbon made a further,
decisive step towards the creation of a common constitutional law for the EU and put the
protection of fundamental rights in the EU on a new footing. A new article on fundamental
rights (Article 6 TEU) subjects the actions of the EU institutions and the Member States, insofar
as they apply and implement Union law, to the Charter of Fundamental Rights of the European
Union, which is made legally binding at EU level by a reference in that article. This Charter of
Fundamental Rights is based on a draft previously drawn up by a convention of 16
representatives of the Heads of State or Government of the Member States and of the President
of the European Commission, 16 Members of the European Parliament and 30 members of
national parliaments (two from each of the then 15 Member States) under the chairmanship of
Prof. Roman Herzog. This draft was solemnly proclaimed to be the ‘Charter of Fundamental
Rights of the European Union’ by the Presidents of the European Parliament, the Council and
the European Commission at the beginning of the Nice European Council on 7 December 2000.
During the negotiations on an EU constitution, this Charter of Fundamental Rights was revised
and made an integral part of the Treaty establishing a Constitution for Europe of 29 October
2004. Following the failure of the treaty, the Charter of Fundamental Rights was again
solemnly proclaimed as the ‘European Union’s Charter of Fundamental Rights’, this time as a
separate instrument, by the Presidents of the European Parliament, the Council and the
European Commission on 12 December 2007 in Strasbourg. The EU Treaty refers to this
version of the charter in binding form. This makes the Charter of Fundamental Rights legally
binding and also establishes the applicability of fundamental rights in Union law. However,
this does not apply to Poland and the United Kingdom. These two Member States were unable,
or did not wish, to adopt the system of fundamental rights of the charter, as they were concerned
that they would be obliged to surrender or at least change certain national positions concerning,
for example, religious issues or the treatment of minorities. They are therefore not bound by
the fundamental rights of the charter, but by the case-law of the CJEU, as previously.

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 Jean Monnet Module

3. The Methods of Unifying the EU

European unification is characterised by two different concepts for defining the way in
which the countries of Europe work together: cooperation and integration. ‘Enhanced
cooperation’ has emerged as a further method
3.1. Cooperation between the Member States
The essence of cooperation is that, although Member States are prepared to go beyond
their national frontiers in order to work together with other Member States, they will only do
so if their national sovereignty is preserved as a matter of principle. Therefore, unification
efforts based on cooperation do not aim to create a new, single state, but are instead confined
to connecting sovereign states to form a federation of states in which national structures are
preserved (confederation). The working methods of the Council of Europe and the OECD are
consistent with the principle of cooperation.
3.2. The concept of integration
The concept of integration transcends the traditional parallel existence of nation states.
The traditional view that the sovereignty of states is inviolable and indivisible gives way to the
conviction that the imperfect order of human and national coexistence, the inherent inadequacy
of the national system and the many instances in European history of one state asserting its
power over another (‘hegemony’) can only be overcome if the individual national sovereignties
are pooled to create a common sovereignty and, at a higher level, are amalgamated into a
supranational community (federation).
The EU is a creation of this concept of integration, without national sovereignty having
been amalgamated. The Member States were not prepared to relinquish the structure of their
nation state — which they had only just recovered and then consolidated after the Second
World War — for the benefit of a European confederation. Thus, once again, a compromise
had to be found, which, without having to create a European confederation, ensured more than
mere cooperation between the states. The solution consisted in incrementally bridging the gaps
between the preservation of national independence and a European confederation. The Member
States were not asked to relinquish their sovereignty altogether, but merely to let go of the
belief that it is indivisible. Thus, it was initially only a case of identifying areas in which the
Member States were prepared to forego some of their sovereignty voluntarily for the benefit of
a community that was superior to all of them. The three founding treaties — the ECSC, the
E(E)C and Euratom — reflect the outcome of these efforts.
These treaties and the Union treaties of the present day specify the areas in which
sovereign rights have been transferred to the EU. In this context, the EU and its institutions are
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 Jean Monnet Module

not granted any general power to take the measures necessary to pursue the objectives of the
treaties, but rather the nature and extent of the powers to act are laid down in the respective
treaty provisions (principle of specific conferment of powers). In this way, the Member States
are able to monitor and control the surrender of their own powers.
3.3. Enhanced cooperation
The instrument of enhanced cooperation forms the basis for implementing the idea of
multi-speed integration. The idea is that even relatively small groups of Member States are
given the opportunity to increase their integration in a particular area that falls within the
competence of the EU, without being hindered by the Member States that are reluctant or
unwilling to do so.
As the conditions and procedures for using this instrument were originally (Treaty of
Amsterdam) very strict, they were relaxed somewhat in view of the enlargement of the EU
(Treaty of Nice). The Treaty of Lisbon combines the previous provisions on enhanced
cooperation in Article 20 TEU (framework conditions) and in Articles 326 to 334 TFEU
(supplementary conditions, participation, procedures and voting rules).
3.4. The rules for enhanced cooperation can be summarised as follows.
Such cooperation may be used only within the framework of the EU’s existing
competences and must serve to further the objectives of the Union and reinforce the European
integration process (Article 20 TEU). It is therefore incapable of mitigating the shortcomings
of economic and monetary union that are embedded in the architecture of the EU treaties.
Enhanced cooperation must not undermine the internal market or the economic and social
cohesion of the EU. Moreover, it must not constitute a barrier to or discrimination in trade
between Member States nor distort competition (Article 326 TFEU). The competences, rights,
obligations and interests of those Member States which do not participate in the cooperation
must be respected (Article 327 TFEU).
Enhanced cooperation must be open to all Member States. In addition, the Member
States must also be allowed to participate in the cooperation at any time, provided that the
Member States concerned comply with the decisions made within the framework of the
enhanced cooperation. The Commission and the Member States must ensure that as many
Member States as possible participate in the enhanced cooperation (Article 328 TFEU).
Enhanced cooperation may be undertaken only as a last resort, when it has been
established within the Council that the objectives of such cooperation cannot be attained within
a reasonable period by applying the relevant provisions of the treaties. The minimum threshold
for establishing enhanced cooperation is nine Member States (Article 20(2) TEU). Acts
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 Jean Monnet Module

adopted in the framework of enhanced cooperation are not regarded as part of the EU acquis.
These acts have direct applicability only in the Member States that participate in the decision-
making process (Article 20(4) TEU). The Member States that do not participate in it must not
impede its implementation, however. Expenditure resulting from enhanced cooperation, other
than administrative costs, are to be financed by the participating Member States unless all
members of the Council, acting unanimously after consulting the European Parliament, decide
otherwise (Article 332 TFEU).
The Council and the Commission must ensure the consistency of activities undertaken
within the framework of enhanced cooperation with the other policies and activities of the
Union (Article 334 TFEU).
In practice, this instrument has only been used in two cases up to now. For the first time
in the history of the EU, the Member States availed themselves of the enhanced cooperation
procedure to create a regulation that allows spouses of different nationalities to choose the
applicable law for a divorce. After a Commission proposal to that effect in 2006 failed to
achieve the required unanimity in the Council, the latter granted authorisation to proceed with
enhanced cooperation by decision of 12 July 2010. On the basis of a new Commission proposal,
14 Member States (Belgium, Bulgaria, Germany, France, Italy, Latvia, Luxembourg, Malta,
Austria, Portugal, Romania, Slovenia, Spain and Hungary) agreed on such provisions for the
divorce or separation of spouses of different nationalities. The outcome is laid down in Council
Regulation (EU) No 1259/2010 of 20 December 2010 implementing enhanced cooperation in
the area of the law applicable to divorce and legal separation.
A second case in which enhanced cooperation was implemented relates to patent
protection in Europe. Without Croatia and Spain, and with the subsequent participation of Italy,
a total of 26 EU Member States agreed on enhanced cooperation to create unitary patent
protection. The regulation implementing enhanced cooperation regarding unitary patent
protection and the regulation regarding the applicable translation arrangements entered into
force on 20 January 2013. However, the regulations will only apply once the Agreement on a
Unified Patent Court has entered into force. For this to happen, the agreement must be ratified
by at least 13 Member States; 11 have ratified it so far.

CLASS DISCUSSION:

1. Please discuss the most important point in EU fundamental values

2. What is your opinion regarding those values in terms to support the EU
integration
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 Jean Monnet Module

UNIT 2: The Evolving Process of EU Integration

Learning Outcomes:
Students are able to explain the process of EU Integration briefly
Sources:
1. The history of the European Union, https://europa.eu/european-
union/about-eu/history_en
2. José M. de Areilza, “The History and Foundations of European
Integration: A Contribution to the Debate on the Future of the
Union,” in C. Arvanitopoulos (ed.), Reforming Europe: The
Role of the Centre-Right, The Constantinos Karamanlis Institute
for Democracy Series on European and International Affairs,
Constantinos Karamanlis Institute for Democracy, Athens 2009 .

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 Jean Monnet Module

1. A peaceful Europe – the beginnings of cooperation (1945 - 19590

The European Union is set up with the aim of ending the frequent and bloody wars
between neighbours, which culminated in the Second World War. As of 1950, the European
Coal and Steel Community begins to unite European countries economically and politically in
order to secure lasting peace. The six founding countries are Belgium, France, Germany, Italy,
Luxembourg and the Netherlands. The 1950s are dominated by a cold war between east and
west. Protests in Hungary against the Communist regime are put down by Soviet tanks in 1956.
In 1957, the Treaty of Rome creates the European Economic Community (EEC), or ‘Common
Market’.
2. A period of economic growth (1960 – 1969)
The 1960s is a good period for the economy, helped by the fact that EU countries stop
charging custom duties when they trade with each other. They also agree joint control over
food production, so that everybody now has enough to eat - and soon there is even surplus
agricultural produce. May 1968 becomes famous for student riots in Paris, and many changes
in society and behaviour become associated with the so-called ‘68 generation’.
3. A growing Community – the first enlargement (1970 – 1979)
Denmark, Ireland and the United Kingdom join the European Union on 1 January 1973,
raising the number of Member States to nine. The short, yet brutal, Arab-Israeli war of October
1973 results in an energy crisis and economic problems in Europe. The last right-wing
dictatorships in Europe come to an end with the overthrow of the Salazar regime in Portugal in
1974 and the death of General Franco of Spain in 1975. The EU regional policy starts to transfer
huge sums of money to create jobs and infrastructure in poorer areas. The European Parliament
increases its influence in EU affairs and in 1979 all citizens can, for the first time, elect their
members directly. The fight against pollution intensifies in the 1970s. The EU adopts laws to
protect the environment, introducing the notion of ‘the polluter pays’ for the first time.
4. The changing face of Europe - the fall of the Berlin Wall (1980 – 1989)
The Polish trade union, Solidarność, and its leader Lech Walesa, become household
names across Europe and the world following the Gdansk shipyard strikes in the summer of
1980. In 1981, Greece becomes the 10th member of the EU, and Spain and Portugal follow
five years later. In 1986 the Single European Act is signed. This is a treaty which provides the
basis for a vast six-year programme aimed at sorting out the problems with the free flow of
trade across EU borders and thus creates the ‘Single Market’. There is major political upheaval
when, on 9 November 1989, the Berlin Wall is pulled down and the border between East and
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 Jean Monnet Module

West Germany is opened for the first time in 28 years. This leads to the reunification of
Germany, when both East and West Germany are united in October 1990.
5. A Europe without frontiers (1990 – 1999)
With the collapse of communism across central and eastern Europe, Europeans become
closer neighbours. In 1993 the Single Market is completed with the 'four freedoms' of:
movement of goods, services, people and money. The 1990s is also the decade of two treaties:
the ‘Maastricht’ Treaty on European Union in 1993 and the Treaty of Amsterdam in 1999.
People are concerned about how to protect the environment and also how Europeans can act
together when it comes to security and defence matters. In 1995 the EU gains three more new
members: Austria, Finland and Sweden. A small village in Luxembourg gives its name to the
‘Schengen’ agreements that gradually allow people to travel without having their passports
checked at the borders. Millions of young people study in other countries with EU support.
Communication is made easier as more and more people start using mobile phones and the
internet.
6. Further expansion (2000 – 2009)
The euro is now the new currency for many Europeans. During the decade more and
more countries adopt the euro. 11 September 2001 becomes synonymous with the 'War on
Terror' after hijacked airliners are flown into buildings in New York and Washington. EU
countries begin to work much more closely together to fight crime. The political divisions
between east and west Europe are finally declared healed when no fewer than 10 new countries
join the EU in 2004, followed by Bulgaria and Romania in 2007. A financial crisis hits the
global economy in September 2008. The Treaty of Lisbon is ratified by all EU countries before
entering into force in 2009. It provides the EU with modern institutions and more efficient
working methods.
7. A challenging decade (2010 – 2019)
The global economic crisis strikes hard in Europe. The EU helps several countries to
confront their difficulties and establishes the 'Banking Union' to ensure safer and more reliable
banks. In 2012, the European Union is awarded the Nobel Peace Prize. Croatia becomes the
28th member of the EU in 2013. Climate change is still high on the agenda and leaders agree
to reduce harmful emissions. European elections are held in 2014 and more Eurosceptics are
elected into the European Parliament. A new security policy is established in the wake of the
annexation of Crimea by Russia. Religious extremism increases in the Middle East and various
countries and regions around the world, leading to unrest and wars which result in many people

22
 Jean Monnet Module

fleeing their homes and seeking refuge in Europe. The EU is not only faced with the dilemma
of how to take care of them, but also finds itself the target of several terrorist attacks.

CLASS DISCUSSION

1. What is the biggest influence in the EU integration process

2. Please explain the development of EU from early period of it

23
 Jean Monnet Module

UNIT 3: The Law making and Political Institutions

in EU

Learning Outcomes
1. Students understand the political institutions in the EU
2. Students understand the law making in the EU
3. Students can explain the function of EU Institution and the
law making in the EU

Source: Josep M Colomer, Political Institution in EU, Second

Edition, Routledge New York

24
 Jean Monnet Module

1. EU Institutions
There are seven main institutions mentioned in Article 13 TEU – the European
Parliament, the European Council, the Council, the European Commission, the Court of
Justice of the European Union (CJEU), the European Central Bank and the CoA – form
the basic structure of the institutional system of the EU. The Treaty of Lisbon (ToL)
conferred the status of EU institutions on the European Council and the European Central Bank.
The European Council which arose from the summit meetings of heads of state or government
of the Member States was, until the entry into force of the ToL, a body of uncertain institutional
status. Under the ToL the European Central Bank became an EU institution although its
independence and special status continues.
1.1. The European Parliament
The European Parliament is the EU's law-making body. It is directly elected by EU
voters every 5 years. The last elections were in May 2019.
Based on Article 14 TEU The European Parliament represents the peoples of the EU Member
States. It is an amalgamation of the ECSC Joint Assembly, the EEC Assembly and the Euratom
Assembly, which were combined to form an ‘assembly’ under the 1957 Convention on Certain
Institutions Common to the European Communities (‘first merger treaty’). The name was not
officially changed to ‘European Parliament’ until the EC Treaty was amended by the TEU
(Maastricht Treaty), although this step merely reflected what was already common usage dating
back to the assembly’s own change of its name to ‘European Parliament’ in 1958.
The European Parliament (EP) is the only directly-elected EU body and one of the
largest democratic assemblies in the world. Its 751 Members represent the EU's 500 million
citizens. They are elected once every 5 years by voters from across the 28 EU countries (1). Its
representatives are called Members of the European Parliament - MEPs.
Following the 2014 elections to the European Parliament (EP), with a turnout of only
42.54%, the seats are distributed between 8 different Parliamentary groups the EPP - Group of
the European People's Party, the S&D - Group of the Progressive Alliance of Socialists and
Democrats in the European Parliament, the ECR - European Conservatives and Reformists, the
ALDE - Alliance of Liberals and Democrats for Europe, the Greens/EFA - Group of
Greens/European Free Alliance, the GUE/NGL - European United Left/Nordic Green Left, the
EFDD - Europe of Freedom and Direct Democracy Group and the NI - Non-attached Members
- Members not belonging to any political group.

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 Jean Monnet Module

The number of MEPs per country is set by a European Council decision adopted
unanimously on the EP proposal. No country has fewer than 6 or more than 96 MEPs: Austria:
18, Belgium: 21, Bulgaria: 17, Croatia: 11, Cyprus: 6, Czech Republic: 21, Denmark: 13,
Estonia: 6, Finland: 13, France: 74, Germany: 96, Greece: 21, Hungary: 21, Ireland: 11, Italy:
73, Latvia: 8, Lithuania: 11, Luxembourg: 6, Malta: 6, Netherlands: 26, Poland: 51, Portugal:
21, Romania: 32, Slovakia: 13, Slovenia: 8, Spain: 54, Sweden: 20, United Kingdom (1): 73.
The EP's main functions are as follows:
1) legislative power: the EP is now a co-legislator. For most legal acts, the legislative
power is shared with the Council, through the ordinary legislative procedure.
2) budgetary power: the EP shares budgetary powers with the Council in voting on the
annual budget, rendering it enforceable through the President of Parliament's
signature, and overseeing its implementation
3) power of control over the EU's institutions, in particular the Commission.
The EP can give or withhold approval for the designation of Commissioners and
has the power to dismiss the Commission as a body by passing a motion of censure.
It also exercises a power of control over the EU's activities through written and oral
questions, put to the Commission and the Council. It sets up temporary committees
and committees of inquiry, whose remit is not necessarily confined to the activities
of EU institutions but can extend to action taken by EU countries in implementing
EU policies.
The Lisbon Treaty has strengthened the EP's role by placing it on an equal footing with the
Council of Ministers. It has:
1) extended the ordinary legislative procedure (ordinary legislative procedure) to 40 new
fields including agriculture, energy security, immigration, justice and home affairs,
health and structural funds;
2) reinforced the EP's role in the adoption of the EU budget. The EP is responsible for the
adoption of the entire budget together with the Council;
3) enabled MEPs to give their consent on a wide range of international agreements
negotiated by the EU such as international trade agreements;
4) introduced new rights to be informed on the activities of the European Council, the
rotating Council presidency and the EU's external action;
5) given the EP the right to propose changes to the Treaty;

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 Jean Monnet Module

6) improved EP's power of scrutiny by electing the President of the European

Commission, and by approving European Commission's members by a vote of consent.

1.2. European Council

Under the Treaty of Lisbon, the European Council became an EU institution. The treaty
also created the new position of the President of the European Council. In late 2014, Donald
Tusk was elected its president for a period of two and a half years. Comprising the Heads of
State or Government of the EU countries, it meets at least 4 times a year and includes the
President of the European Commission as a full member. The European Council's role is to
provide the impetus, general political guidelines and priorities for the EU's development
(Article 15 of the Treaty on European Union - TEU). It does not exercise any legislative
function. However, it may be consulted on criminal matters (Articles 82-83 of the Treaty on
the Functioning of the European Union - TFEU) or on social security matters (Article 48 of the
TFEU) where an EU country opposes a legislative proposal in these areas. Its decisions are
taken by consensus or, where so provided by the treaties by unanimity, qualified majority or
simple majority. The conclusions of European Council proceedings are published after each
meeting.

1.3. The European Union Commission

The Commission represents the interests of the EU. As a “revolutionary” body within
the institutional system of the EU, it is also the most controversial institution. It exercises many
functions, the most important is to “promote the general interest of the Union and take
appropriate initiatives to that end” (Article 17 TEU). The Commission is:
a) The guardian of the Treaties;
b) The initiator of EU legislation;
c) The executive arm of the EU;
d) The representative of the EU in the international arena, except with regard to the CFSP
and in other cases provided for in the Treaties.
The Commission employs about 25,000 European civil servants and is divided into
departments called Directorates General (DGs). Each DG is responsible for a particular policy
area and is headed by a Director General who is accountable to one of the commissioners.
Overall co-ordination is provided by the Secretariat General, which also manages the weekly
Commission meetings. The Secretariat General is headed by the Secretary General, who is
answerable directly to the president. The Commission divides its tasks among its members, and
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 Jean Monnet Module

each commissioner is allocated one or more policy areas. Each commissioner has personal
advisers who form his or her so-called Cabinet, which acts as a liaison between the
commissioner and his or her Directorate(s) General. The chief of the Cabinet is usually the
same nationality as the commissioner and deputises for him or her as necessary. The chief also
meets weekly with other chefs de Cabinet in order to prepare the agenda for the Commission.
a) The European Commission as the “guardian of the Treaty”
The most important function of the Commission is to ensure that the provisions of the
Treaties and the acts of the institutions are complied with by the Member States, any natural or
legal person under the jurisdiction of a Member State and all EU institutions, bodies, offices
and agencies. In order to fulfil this task the Commission has at its disposal important powers:
• The Commission is empowered to obtain any necessary information from Member
States, individuals and undertakings. Member States have a duty to forward information
required by the Commission, notify measures and projections of measures they intend
to adopt, and provide explanations concerning any question of law or fact which the
Commission considers important. This obligation derives either from specific
provisions of the Treaties or from measures adopted by the EU institutions, or from
Article 4(3) TEU which requires Member States to co-operate with the Commission in
order to facilitate the achievement of the EU’s tasks. The Commission may ask
individuals and undertakings to forward information and, under its investigative
powers, to verify it. A request for information is often the first step in the Commission’s
investigation of an alleged infringement of EU law by an undertaking in competition
matters.
• The Commission may take preventative actions. The Commission formulates
recommendations and delivers opinions intended to ensure effective application of EU
law in the future.
• The Commission is empowered to enforce compliance with EU law. The obligation to
observe EU law binds Member States, natural and legal persons, and the EU
institutions, bodies and agencies. In respect of natural and legal persons, the
Commission may impose pecuniary and/or administrative sanctions upon them in
matters concerning the control of security under the EA Treaty and in competition
issues under the TFEU. With regards to the Member States, under Article 258 TFEU
the Commission may bring an action before the ECJ against a Member State in breach
of EU law. If any EU institution, body or agency violates EU law, the Commission may

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 Jean Monnet Module

bring an action under Articles 263 or 265 TFEU; this is mostly applied in respect of the
Council.
• The Commission may authorise, in certain circumstances, derogations from the
provisions of the Treaties. Under the Acts of Accession and in respect of measures
adopted by EU institutions in relation to international agreements the Commission is
authorised to grant derogations. Under Articles 346 and 347 TFEU or Article 114(6)
TFEU the Commission is empowered to authorise measures incompatible with the
internal market. Such derogations may be authorised in cases where a Member State is
faced with serious economic difficulties, internal disturbances and serious international
tension, or if its essential interest of national security is in jeopardy.
• In the context of EMU, the Commission monitors budgetary discipline in Member
States in order to avoid excessive governmental deficits and is empowered to supervise
their balance of payments.
b) The European Commission as the initiator of legislative measures
The general interest of the EU requires that the Commission’s main objective is to foster
European integration. Consequently, its right to initiate legislative measures in order to further
develop the EU is well justified. Article 17(2) TEU confirms the Commission’s virtual
monopoly on the right to initiate proposals for both legislative and non-legislative acts.
However, the Commission’s right to initiate legislation and other acts is not exercised lightly
and is subject to many safeguards.
c) Executive powers of the Commission
Article 17 TEU states that the Commission shall exercise co-ordinating, executive and
management functions, as laid down in the Treaties. The administration of EU policies
necessitates the adoption of numerous binding measures. In addition, the Commission
implements the EU budget and administers four special funds: the European Social Fund, the
European Development Fund, the European Agricultural Guidance and Guarantee Fund, and
the European Regional Development Fund. By virtue of Article 290 TFEU the Commission
exercises delegated powers and under Article 291 implementing powers.

d) International functions of the Commission

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 Jean Monnet Module

The international functions of the Commission have been limited as a result of the
establishment of the post of the HR and the post of the President of the European Council. In
foreign affairs, with the exception of the CFSP, the Commission shares its tasks with the HR.
EU Law Making Process
Under Article 14(1) TEU: ‘The European Parliament shall, jointly with the Council, exercise
legislative (via the ‘ordinary legislative procedure’) and budgetary (via a special legislative
procedure under Article 314 TFEU) functions’. Parliament is seeking to simplify the legislative
process, improve the drafting quality of legal texts and ensure that more effective penalties are
imposed on Member States that fail to comply with Union law. The Commission’s Annual
Working and Legislative Programme presents the major political priorities of the Commission
and identifies concrete actions, either legislative or non-legislative, that translate these
priorities into operational terms. Parliament plays a genuine role in creating new laws, since it
examines the Commission’s Annual Programme of Work and says which laws it would like to
see introduced. Having gained legal personality, the Union can now conclude international
agreements (Article 218 TFEU). Any agreements concluded in the field of the common
commercial policy and all fields whose policies fall under the ordinary legislative procedure
require the consent of the European Parliament (Article 218(6)(a) TFEU).

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 Jean Monnet Module

UNIT 4: The Source of EU Law

Learning Outcomes:
Students are able to explain primary sources of EU law, General principles of EU law, and
secondary sources of EU Law.

Sources:
Klaus-Dieter Borchardt, The ABC of European Union law, Publications Office of the
European Union, Luxemburg, 2010

Alina Kaczorowska, European Union Law, Second Edition, Routledge, 2011

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 Jean Monnet Module

The European Union legal order consists of primary legislation (the Treaties and general legal
principles), secondary legislation (based on the Treaties) and supplementary law.1
The Sources of EU Law are including the following hierarchy:
- The Treaty on European Union (TEU); Treaty on the Functioning of the European
Union (TFEU); and their protocols (there are 37 protocols, 2 annexes and 65
declarations, which are attached to the treaties to fill in details, without being
incorporated into the full legal text)
- Charter of Fundamental Rights of the European Union
- The Treaty Establishing the European Atomic Energy Community (Euratom) is still in
force as a separate treaty.
- International agreements
- General principles of Union law;
- Secondary legislation.
The Treaties and the general principles are at the highest of the hierarchy, and are known as
primary legislation.2 Following the entry into force of the Lisbon Treaty on 1 December 2009,
the Charter of Fundamental Rights is the same. International agreements concluded by the
European Union are subordinate to primary legislation. Secondary legislation of EU Law is the
sub-ordinary in the hierarchy and is valid only if it is consistent with the acts and agreements
which have precedence over it.3
The legal sources of the European Union are listed in Article 288 TFEU. They are regulations,
directives, decisions, recommendations and opinions. EU institutions may adopt legal acts of
these kinds only if they are empowered to do so by the Treaties. The limits of European Union
competences are governed by the principle of conferral, which is according to Article 5(1)
TEU. The TFEU determines the scope of European Union competences into three categories:
exclusive competences (Article 3), shared competences (Article 4) and supporting
competences (Article 6), whereby the EU adopts measures to support or complement the
policies of Member States. Articles 3, 4 and 6 TFEU defines the areas under each of the
category of European Union competences. Article of 352 TFEU may be applied by the
institutions when there is no necessary powers attaining the objectives set out in the Treaties.

1
Klaus-Dieter Borchardt, The ABC of European Union law, Publications Office of the European Union,
Luxemburg, 2010, p. 80

2
Id, p. 81
3
Id, p. 81

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 Jean Monnet Module

It may adopt the appropriate measures. The institutions adopt only those legal instruments
listed in Article 288 TFEU. The only exceptions are the common foreign, security and defence
policies, to which the intergovernmental method still applies. In this area, common strategies,
common actions and common positions have been replaced by ‘general guidelines’ and
‘decisions defining’ actions to be undertaken and positions to be adopted by the Union, and the
arrangements for the implementation of those decisions (Article 25 TEU). There are, in
addition, various forms of action, such as recommendations, communications and acts on the
organisation and running of the institutions (including inter- institutional agreements), the
designation, structure and legal effects of which stem from various provisions in the Treaties
or the rules adopted pursuant to the Treaties.
1. Primary sources of EU Law
a. Treaties. The EU has been developed through the adoption and ratification of Treaties.
They provide the basic principles on which European law is founded, Treaties set out a
broad framework and establish fundamental legal concepts. Treaties create, give
authority to and impose restrictions on the power of the institutions. The main Treaties
are: Treaty of Lisbon, Treaty of Nice, Treaty of Amsterdam, Treaty on European Union,
Single European Act (SEA), Merger Treaty, Treaty of Rome, and Treaty establishing
the European Coal and Steel Community.
b. General principles of EU law. It refers to the unwritten principles which underpin the
EU legal order. However, exceptionally some principles are expressly mentioned in the
Treaties and are therefore clearly primary sources. The EU Court has recourse to
general principles in order to supplement other sources of EU law. They are sub-
ordinary of the primary sources but above all other sources, unless they are already
included in the primary sources.4
2. Supplementary and external sources of EU Law. It is the external sources of EU
Law that are from international agreements concluded between the EU and third states
or international organisations. The EU has legal personality and as such is empowered
to enter into international agreements. By virtue of Article 216(2) TFEU such
international agreements are binding on the EU and the Member States and form an
integral part of EU law. In the hierarchy of sources they rank below primary sources
and general principles of EU law but above secondary sources.5
3. Secondary sources of EU Law

4
Alina Kaczorowska, European Union Law, Second Edition, Routledge, 2011, p. 205
5
Id, p. 212

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 Jean Monnet Module

a. Regulations are of general application, binding and apply directly. They shall be
complied with fully by those to whom they apply (private individuals, Member States,
EU institutions). Regulations are directly applicable in all the Member States as soon
as they enter into force (on the date stipulated or, failing this, on the twentieth day
following their publication in the Official Journal of the European Union) and do not
need to be transformed into national law. They are designed to ensure the uniform
application of Union law in all the Member States. Regulations supersede national laws
incompatible with their substantive provisions.
b. Directives are binding upon any or all of the Member States, but the choice of form
and methods are left to the national authorities. National legislators must adopt a
transformation act or ‘national implementing measure’ to transform directives and
bring national law into line with their objectives. Individual are given rights and bound
by the legal act only once the transformed act has been adopted. Member States are
given some discretion, in transforming directives, to take account of specific national
circumstances. Transformation must be effective within the period laid down in the
directive. In the transformation directives, Member States guarantee the effectiveness
of EU law, in accordance with the principle of sincere cooperation established in Article
4(3) TEU. In principle, directives are not apply directly. The EU Court of Justice,
however, has ruled that certain provisions of a directive may, exceptionally, have direct
effects in a Member State even if the latter has not yet adopted a transforming act in
cases where: (a) the directive has not been transformed into national law or has been
transformed incorrectly; (b) the provisions of the directive are imperative and
sufficiently clear and precise; and (c) the provisions of the directive confer rights on
individuals. If these conditions have been met, individuals may invoke the provision in
question in their dealings with the public authorities. Even when the provision does not
confer any rights on the individual, and only the first and second conditions have been
met, Member State authorities are required to take account of the untransformed
directive. This ruling is based chiefly on the principles of effectiveness, the prevention
of Treaty violations and legal protection. On the other hand, an individual may not rely
on the direct effect of an untransformed directive in dealings with other individuals (the
horizontal direct effect). Individual may seek compensation from a Member State
which is not complying with Union law where:
(a) Directive is intended to confer rights on individuals; (b) the content of the rights can
be identified on the basis of the provisions of the directive; and (c) there is a causal link
between the breach of the obligation to transpose the directive and the loss and damage
suffered by the injured parties. Fault on the part of the Member State does not then have
to be demonstrated in order to establish liability.
c. Decisions, recommendations and opinions. Decisions are binding. Where those to
whom they are addressed are stipulated (Member States, natural or legal persons), they
are binding only on them, and address situations specific to those Member States or
persons. An individual may invoke the rights conferred by a decision addressed to a
Member State only if that Member State has adopted a transposing act. Decisions may
be directly applicable on the same basis as directives. These are addressed to individuals
or member states and are binding to those addressed. They do not normally create
generally applicable EU law. Recommendations and opinions do not confer any rights

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or obligations on those to whom they are addressed, but may provide guidance as to the
interpretation and content of Union law

Class Discussion
1. What are the EU Law sources?
2. Discuss about the primary sources of EU Law and how the enforcement of
the primary sources of EU Law!
3. What are the secondary sources of EU Law?

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 Jean Monnet Module

UNIT 5: The Judicial System of the EU and

Enforcement of EU Law

Learning Outcomes:
Students are able to explain the history, development, legal basis, and the judicial system
of the EU Court.
Sources:
Alina Kaczorowska, European Union Law, Second Edition, Routledge, 2011

Franklin Dehousse, The need for a new strategy for the EU judicial institution, Egmont
Institute (2017), : https://www.jstor.org/stable/resrep06696.8 ,

Klaus-Dieter Borchardt, The ABC of European Union law, Publications Office of the
European Union, Luxemburg, 2010

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 Jean Monnet Module

The EU Court
The court of justice of the European communities was set up in 1952 as part of the European
Coal and Steel Community (ECSC). In 1957 established as the common court for: ECSC, the
European Economic Community (EEC) and the European Atomic Energy Community
(EAEC). In 1993, the TEU gave the ECJ power to impose a lump-sump or penalty payment if
member state fails to comply with a judgment. The first power were used in July 2000
(Commission v. Greece), the Court ordered Greece to pay €24,600 for each day it delayed
implementing an earlier judgment concerning waste disposal in Chania, Crete. At this context,
the TEU extended the right of the ECJ to review the legality of acts to include those adopted
by the EU parliament, and brought the EU central bank under the court’s jurisdiction.
In the development, the Treaty of Amsterdam gave new jurisdictions to the ECJ on the issue of
fundamental rights, asylum, immigration, free movement of persons, judicial co-operation in
civil matter, police and judicial cooperation in criminal matters (with restrictions).
Furthermore, the Treaty of Lisbon has even more extended the Court’s jurisdiction in a number
of areas of the area of freedom, security and justice, police and judicial cooperation in criminal
matter, visas, asylum, immigration and other policies linked to movement of persons, the
common foreign and security policy.
Legal basis, structure, and role of the Court

The legal basis for the EU Court is on Article 13 the TEU which stipulates that the Court of
Justice of the EU as one of the Union’s institutions. Meanwhile, Article 19 of the TEU
articulates the overview of the Court. The Court of Justice of the EU shall, in accordance with
the Treaties:
a. Rule on actions brought by a MS, an institution or a natural or legal person
b. give preliminary rulings, at the request of courts or tribunals of the MS, on the
interpretation of Union Law or the validity of acts adopted by the institutions;
c. rule in other cases provided for in the Treaties

Article 251 – 281 TFEU stipulates the Court of Justice, general court and the provision on
specialized courts which may be attached to the general court. The remaining Articles address
opinions, actions, penalties, jurisdiction, and similar matters. The Court comprises 28 judges
(one per Member State and eight Advocates General) appointed by agreement between the

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 Jean Monnet Module

Member States for 6 years, renewable term, in common with the General Court. The
membership of the Court of Justice is partially renewed every three years

The European Community is based on the rule of law. It has unique character, which
distinguishes the Court from other international organizations. The unique character is that it
creates legislation with which members are bound to comply. In the words of the ECJ judgment
in the case of Van Gend en Loos:
“The community constitutes a new legal order of international law for the benefit of
which the MS have limited their sovereign rights”.

With regards to the role of the Court, Article 19 the TEU stipulates that the role of the Court
is to ensure that in the interpretation and application of the Treaties the law is observed.
In clarifying and expounding EU legal rights, the Court has often adopted a more liberal and
much wider interpretation of EU legislation than a mere literal reading would merit.
Proceeding and System

Request for a preliminary ruling. Preliminary rulings helps ensure that Community Law is
interpreted in a standard way throughout the MS. A preliminary ruling reference is made by a
national court or tribunal which needs a decision on a question of Community law before it
itself can give a judgment. The ECJ’s decision is then applied to the national case. The ECJ is
responsible for ensuring uniform application of EU LAW within the EU and under the Treaty
of Nice in principle retains competence for investigating questions referred for a preliminary
ruling; however, pursuant to Article 256 the TFEU, the Statute may entrust to the General Court
the responsibility for preliminary rulings in certain specific matters.
Proceeding for failure to fulfill an obligation. The Commission can initiate these proceeding
if it has reason to believe that a MS is failing to fulfill its obligations under EU Law. These
proceeding may also be initiated by another MS. In either case, the Court investigates the
allegations and gives its judgment. The accused MS, if it is found to be at fault, must set things
right at once.
Proceeding for annulment. If any of the MS, the council, Commission or (under certain
conditions) Parliament believes that a particular EU Law is illegal, they may ask the Court to
annul it. These proceedings for annulment can also be used private individuals who want the
Court to cancel a particular law because it directly and adversely affects them as individuals.

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 Jean Monnet Module

If the Court finds that the law in question was not correctly adopted or is not correctly based
on the treaties, it may declare the law null and void.
Proceedings for failure to act. The treaty requires the European Parliament the Council and
the Commission to make certain decisions under certain circumstances. If they fail to do so,
the MS, the other institutions and (under certain condition) individuals or companies can lodge
a complaint with the Court so as to have this violation officially recorded.
In general, the Court of Justice can only decide matters of EU Law, it is not a count of appeal
against decisions of national courts.

The Court system of the EU ensures that the interpretation and application of the EU Law is
observed. The EU Court system is including the Court of Justice, the General Court, and the
specialized courts in specific area. The EU Court is the highest judicial authority of the EU
ensuring the cooperation with the courts and tribunals of the MS, the application and uniform
interpretation of the EU Law. The General Court hears cases in the first instance, which are not
referred to the specialized courts or directly to the Court of Justice and also deal with appeals
against decisions (of first instance) by the specialized courts. The General Court is composed
of at least one judge per Member State. Specialized courts can be set up for specific areas. They
determine cases at first instance with the possibility of an appeal to the General Court. The EU
Court and the courts and tribunal of the MS have to work together for uniform application and
interpretation. For dispute between the EU and its civil servants (for their recruitment, career
or social security), a civil service tribunal composed of 7 judges has been created. The ECJ and
the General Court are assisted by Advocates-General, who deliver an impartial opinion on
certain cases before they are decided. The ECJ should not be confused with the ECHR (the
ECHR is not the court of the EU but was created in the framework of the Council of Europe
by the European Convention on Human Rights to ensure and respect for the rights and freedoms
guaranteed in the convention. however, case law developed by the ECHR can have an
important influence on the EU Law, since the fundamental rights guaranteed in the European
Convention also constitute general principles of the EU Law

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 Jean Monnet Module

In the development, the ECJ is best known as the most innovative features of the EC Treaties
and has contributed to the development of the rule of law in Europe.6 In today development,
the Court raised many proposal of improvement for its institutional judicial system.

Class Discussion
1. How the EU judicial system has been developed

2. What are the main issues that a new judicial system for EU is proposed?

3. How the EU Law enforcement would be according to the current development?

6
Franklin Dehousse, The need for a new strategy for the EU judicial institution, Egmont Institute (2017), :
https://www.jstor.org/stable/resrep06696.8 , p. 30

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 Jean Monnet Module

UNIT 6: Direct Applicability and Direct Effect of

EU Law
Learning Outcomes:
Students are able to explain the history, development, legal basis, and the judicial system
of the EU Court.
Sources:
Alina Kaczorowska, European Union Law, Second Edition, Routledge, 2011

Aistė Samuilytė-Mamontovė, Principle Of Legal Certainty And (In)Direct Effect Of

Directives, ‘‘Social Transformations in Contemporary Society’’, 2014 (2)

Klaus-Dieter Borchardt, The ABC of European Union law, Publications Office of the
European Union, Luxemburg, 2010

Sophie Robin-Olivier, The evolution of direct effect in the EU: Stocktaking, problems,
projections, I•CON (2014), Vol. 12 No. 1, pp. 165–188

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 Jean Monnet Module

Direct Applicability of EU Law

Direct applicability of EU Law has the meaning that all the EU Law source shall have to be
fully applied by the EU Member States since the EU Law sources entry into force. The principle
of direct applicability has the consequence that the EU Law is merged into the national law of
the EU Member State without any particular procedures. With regards to the three founding
treaties, direct applicability principle is applied for the EU Member States as according to
national constitutional procedures. The ECJ has already clarified the principle of direct
applicability to EU Member States beyond any doubt. On the EU Regulation, Article 288
TFEU stipulates about the direct applicability that may apply to the EU Regulation.
Furthermore, Article 288 TFEU also states that the EU Member States shall have to implement
the objective of the EU Directive where the mechanism and procedures to implement are based
on the discretion of EU Member States. However, the direct applicability of the EU Directive
has raised debates over the case of Wallonie (Commission v Belgium). The Court made it clear
that a directive is legally enforced and has the consequence of the legal obligation for the EU
Member States. The doctrine of direct applicability also applies to the decisions. According to
Article 216(2) TFEU, international agreements concluded between the EU and any third
countries, or international organisations, are binding on EU institutions, and on Member States.
Therefore, for the international agreements which do not need any requirement for adoption,
direct applicability applies. For others which require adoption, it will be depend on its
implementation measures.
Direct effect of EU Law
EU Treaties do not contain any general rule on the effect of the EU law provisions. The
principle of Direct Effect introduced by Court of Justice in landmark case of Van Gend en
Loos. The Costa v. E.N.E.L. and the principle of primacy, the case of Van Gend en Loos
allowed a considerable expansion of EU law effects, in national courts.7
Van Gend & Loos (case 26/62):
Facts:

7
Klaus-Dieter Borchardt, The ABC of European Union law, Publications Office of the European Union,
Luxemburg, 2010, p. 296

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 Jean Monnet Module

Appeal by individual before Dutch administrative tribunal against payment of a newly-

increased import duty charged by the Netherlands contrary to Art. 12 of the EEC Treaty (now
Art. 30 TFEU)
Issue:
Clearly an infringement of Article 12 TEEC, which specifically prohibits the introduction of
new customs duties in the common market, but could individuals rely on this before national
courts?
Judgment:
- Treaty more than an agreement which merely creates mutual obligations between
contracting states
- Also confers rights on individuals, which arise not only where they are expressly
granted by the Treaty, but also by reason of obligations which the Treaty imposes in a
clearly defined way on individuals as well as on Member States and EU institutions
- Therefore, Article 12 TEEC interpreted as being directly effective, as this was a means
of ensuring uniform application in all MS
In Case 26/62 Van Gend en Loos, the ECJ held that Community law (EU law) is directly
effective and creates rights and obligations for EU nationals enforceable before national courts.
According to Article 234 EC (Article 267 TFEU), the conditions that a provision of EU law
becomes directly effective must be sufficiently clear and precise and unconditional in that it is
capable of judicial application without any need for adoption of further implementing
measures, either at national or EU level. The Court made it specify the conditions that when a
provision is lack of clarity or precision, it does not mean that a provision is not having direct
effect if that provision may be clarified or defined in more precise terms by the Court or
national judges through interpretation. A provision which suspends its application does not
nullify its direct effect but merely delays it, until the realisation of the condition or the expiry
of the time limit. Furthermore, a provision is considered as unconditional, despite the
requirement for adoption of some implementing measures on the part of a Member State or an
EU institution, if neither a Member State nor an EU institution has discretion to adopt those
measures. In addition, a provision shall create rights for individuals so that, the individual may
claim right conferred upon him/her by EU Law and the direct interest of the individual as in
the relevant directive was self-evident.
The principle of direct effect may have different implication between vertical direct effect and
horizontal direct effect. Vertical direct effect make it possible to an individual (a person or legal
person) adheres to the EU Law provision for national proceedings against a Member State.
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 Jean Monnet Module

Whereas, horizontal direct effect may have consequence for individual (a person or legal
person) vis a vis individual referring a provision of EU law in national proceedings.
1. Treaties direct effect
EU Treaties have direct effect of both vertical direct effect and horizontal direct effect.
2. EU Regulation direct effect
Article 288 TFEU: A regulation is of “general application...binding in its entirety and directly
applicable in all Member States”. There is a different between direct applicability and direct
effect. For example, Regulations to take immediate effect in domestic law of MS without need
for further transposition (direct applicability), so as long as provision in regulation satisfies
other criteria for direct effect (i.e. sufficiently precise/ unconditional), can be enforced before
national courts. The principle of direct applicability is confirmed by ECJ in C-39/72,
Commission v. Italy.
3. EU Directive direct effect
Based on Article 288 of the Treaty on the Functioning of the European Union, a directive is an
act of indirect effect the addressees of which are the Member States. National authorities enjoy
the discretion to choose the form and methods to implement a directive. In accordance to the
implementation of EU law in the Member States, the Court of Justice established the doctrines
of direct and indirect effect of EU directives. This is in relevance to the effet utile principle.
According to the classical model, an EU directive can have a direct effect if the conditions of
direct effect are satisfied and the relation is vertical such as between a private person and the
state.8
After the Court established direct effect of Treaty provisions in the landmark case of Van Gend
en Loos, the Court in the case of Van Duyn laid down the prerequisite for direct effect of
directive provisions. Art 288(2) TFEU emphasizes the fact that regulations are directly
applicable to the Member State. However, directives are only binding as to the result to be
achieved, and implementation is required until the end of the time period set by the directive.
It meant that directives are not directly applicable until the implementation period expires.
Moreover, in Art 288 TFEU, the term direct applicability is mentioned and the EU legal acts
that have direct applicability are enumerated. On the other hand, neither the term direct effect
is mentioned in the Treaty, nor is direct effect of the EU legal acts touched upon in any Treaty
article.
The limitation of direct effect of EU Directive:

8
Id, p. 298

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 Jean Monnet Module

a. The provisions of EU Directives cannot be pleaded directly by individuals before the

implementation date has expired and only if the Member State has not properly
implemented them (Case 148/78, Pubblico Ministero v. Tullio Ratti). However, before
the period of implementation of a directive has expired MS must refrain from adopting
any measures liable to seriously compromise the result prescribed by the directive (C-
129/96, InterEnvironnement Wallonie ASBL v. Région Wallone) – ‘Standstill
obligation’.
b. Direct Effect of the EU Directives is solely vertical and not horizontal. For example,
the unimplemented directives can only be invoked against the Member States to which
they are addressed and not against private individuals Reason: “...according to article
249 (now art. 288), the binding nature of a directive...exists only in relation to the each
MS to which it is addressed.” However, Notion of ‘State’ has been interpreted very
broadly: “…a body, whatever its legal form, which has been made responsible, pursuant
to a measure adopted by the State, for providing a public service under the control of
the State and has for that purpose special powers beyond those which result from the
normal rules applicable in relations between individuals…”.
4. The EU Decisions direct effect
Article 288 TFEU: “A decision shall be binding in its entirety. A decision which specifies those
to whom it is addressed shall be binding only on them”. Decisions usually specific rather than
general measures addressed to particular MS or individuals, and not described as being directly
applicable. However, decisions can also be directly effective, provided they meet
aforementioned conditions. It is because decision could only ever be relied on against particular
addressee to whom it is addressed, therefore if no implementation on the part of the addressee,
which may be private individuals, it should be possible to invoke it against them.
5. International agreements concluded between the EU and third countries, and the EU
and international organisations Direct Effect
According to the ECJ, on the International agreements concluded between the EU and third
countries applies monist system. The ECJ refers to the Case 12/86 Demirel which empasised
that a provision of an agreement concluded between the Community (the EU) and third
countries may be considered as producing direct effect when, in relation to its terms, object and
nature, it contains a clear and precise obligation which is not subordinated to the intervention
of any subsequent act. To this extent, a provision of an international agreement, which may be
drafted in terms identical to a provision of EU law and was recognised as capable of producing
direct effect, may not be regarded as directly effective since the object and nature of the
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 Jean Monnet Module

agreement will determine whether the relevant provision of the agreement can produce direct
effect. Consequently, the test for direct effect of international agreements to which the EU is a
party is stricter than the normal test of direct effect for EU law in general, in that, for such
international agreements, the alleged direct effect must be consistent with the system and
context of the treaty, as well as satisfying the other standard conditions for direct effect. This
principle of direct effect of international agreements was established in Cases 21–24/72
International Fruit Company N.V. and Others v Produktschap voor Groenten en Fruit.

Class Discussion
1. What is direct applicability of EU Law meant? And how the principle of direct
applicability give significant consequence to the EU Member States?
2. Discuss what direct effect of EU Law meant and in what conditions direct effect
of EU Law applied!
3. Discuss the different practices between horizontal direct effect of EU Law and
vertical direct effect of EU Law!

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 Jean Monnet Module

UNIT 7: The Supremacy of EU Law and the

Interaction between EU Law and National Law
Learning Outcomes:
Students are able to the principle of EU Law Supremacy and the interaction between EU
Law and National Law
Sources:
The Bruges Group, Failing To Hold Back The Incoming Tide: Why EU law has supremacy over
national law and why attempts at reform will never succeed, The Bruges Group, London, 2018

Klaus-Dieter Borchardt, The ABC of European Union law, Publications Office of the European
Union, Luxemburg, 2010

Alina Kaczorowska, European Union Law, Second Edition, Routledge, 2011

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 Jean Monnet Module

The EU Legal Order

The European legal order has at least four elements of Primacy, in which the European Union
law must take precedence over the law of Member States, autonomy, in which the European
Union law determines the issues over which it applies, Pre-emption, in which the European
Union law decides where there is a conflict between EU and Member State law and which law
must win-out, and fidelity, in which to be supremacy, Member States must not implement
measures which are counter to the requirements of EU law.9
The EU legal order give significant consequences to member state as supreme against its
Member States. It limits the independent action of Member State governments, parliaments
and courts; put the obligation for the governments of the Member States to take policy
measures, requires Member State courts to enforce the EU legal doctrines and their judgments
to conform to EU law, and ensures that Member States adhere to the limits and obligations
created by EU law.10
The principle of supremacy of EU Law is mostly because of the nature of EU Law and because
of EU Law has character as supranational law. EU law supremacy was built by judgment, not
only one or two judgments of the EU Court, but a series of judgements which mostly described
as phenomenon of establishing constitutionalization.11 The EU Court put the supremacy of EU
Law in place 1963 (the first wave of constitutionalization), with the two cases: Van Gend en
Loos of 1963 and COSTA v ENEL of 1964.12
EU Treaties did not (and still do not) address the issue doctrine of primacy of EU law. The
principle is developed by CJEU case Costa v. E.N.E.L. (Case 6/64). However, in the Treaty of
Lisbon - Declaration No. 17 (not the same value as the Treaty itself, but has a political value)
“(...) in accordance with well settled case law of the CJEU, the Treaties and the law adopted
by the Union on the basis of the Treaties have primacy over the law of MS, under the conditions
laid down by the said case law.”
Costa v. ENEL (case 6/64)
Facts:

9
The Bruges Group, Failing To Hold Back The Incoming Tide: Why EU law has supremacy over national law
and why attempts at reform will never succeed, The Bruges Group, London, 2018, p. 8
10
Id, p. 9
11
Id, p. 12
12
Id, p. 13

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 Jean Monnet Module

Apparent incompatibility between various Treaty provisions and a subsequent Italian law
which, by reason of the rule of lex posterior, should have taken priority over the previous Italian
Ratification Act which incorporated the then EC Treaty into Italian law Issue
Could EU law be overridden by the subsequent Italian law?
Judgment:
“…The law stemming from the Treaty cannot, because of its special and original nature, be
overridden by domestic legal provisions, however framed, without being deprived of its
character as Community law and without the legal basis of the Community itself being called
into question.” i.e. Primacy = precondition for very existence of EU law, as objective of
establishing common market between MS would be defeated if EU law could be subordinated
to the different laws of the Member States. Therefore, any “…subsequent unilateral act
incompatible with the concept of the Community cannot prevail.”
Thus, any EU norm is superior in value to any national norm, even where the latter postdates
the former. If national legislation is drafted in such a way that it does not appear possible to
interpret it in a manner that complies with binding EU law, the primacy enjoyed by the latter
compels the national judge to refuse to apply it or to ‘disapply’ it. The national court however,
is not obliged to invalidate, annul or declare non-existent an incompatible national law. This
primacy applies whatever may be the nature or status, respectively, of the national legislation
(constitution, act, decree or order) and the EU legislation (treaty, regulation, directive or
decision) in question (Case 11/70, Internationale Handelsgesellschaft).
If the national court has no domestic jurisdiction to question or to set aside national legislative
acts, National judge with task of ensuring full effect of particular EU provisions cannot be
obliged to ask or wait for their prior repeal through legislation or any other constitutional
procedure (such as a declaration of incompatibility by a constitutional court, as was the case
here). It is also according to the necessary because otherwise aim of uniform application and
effectiveness of EU law would be undermined.
National courts often accept the requirements of the supremacy of EU law in practice but not
unconditionally.
The EU exclusive competence
Article 3 of the Treaty on the Functioning of the European Union (TFEU) sets out areas where
only the EU is the competent legislative institution and can adopt legally binding laws and
regulations. These policy areas are customs union; the establishing of competition rules
necessary for the functioning of the internal market; monetary policy for euro area countries;
conservation of marine biological resources under the common fisheries policy; common
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 Jean Monnet Module

commercial policy; conclusion of international agreements under certain conditions. The

shared competences between the EU and Member States is on the basis of Article 4 of the
TFEU describes the policy areas where the EU and Member States have so-called ‘shared
competence’. In these policy ‘shared competency’ areas both the EU and the Member States
can legislate. However, for Member States this is a residual competence as they can only ‘act’
where the EU chooses not to or allows the Member States to do so. The areas covered by
‘shared competence’ are internal market (most EU legislation is introduced under the internal
market articles of the Treaties, even where there is a tenuous link to ‘facilitating’ cross-border
trade), social policy, but only for aspects specifically defined in the Treaty; Economic, social
and territorial cohesion (regional policy); Agriculture and fisheries (except conservation of
marine biological resources); Environment; Consumer protection; Transport; Trans-European
networks; Energy; Area of freedom, security and justice (i.e. criminal and civil law and so-
called police and judicial ‘co-operation’); Shared safety concerns in public health matters,
limited to the aspects defined in the TFEU; Research, technological development, space; and
Development co-operation and humanitarian aid.
Furthermore, the supporting competence is on the basis of Article 6 of the TFEU sets out the
‘supporting competences’, where by the EU only has a role in supporting and helping co-
ordinate the action of Member States. Legal acts in these areas must not require the
harmonization of EU countries’ laws or regulations. The areas that fall into the category of
‘supporting competency’ are:
• Protection and improvement of human health;
• Industry;
• Culture;
• Tourism;
• Education, vocational training, youth and sport;
• Civil protection;
• Administrative cooperation.
The EU is also able to ensure that Member States coordinates their economic, social and
employment policies at EU level. In addition to economic, social and employment policies,
also falling under the heading of exclusive competences is the Common Foreign and Security
Policy. This policy area has its own special features. It is not subject to co-decision with the
Parliament and the Commission can only jointly propose initiatives, whereas in other areas it
is the Commission that has the sole right of initiative. This is as according to Article 22 (1) of
the TEU which sets out that “Any Member State, the High Representative of the Union for
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 Jean Monnet Module

Foreign Affairs and Security Policy, or the High Representative with the Commission’s
support, may refer any question relating to the common foreign and security policy to the
Council and may submit to it, respectively, initiatives or proposals:
The Flexibility Clause
Finally, the EU Treaties contain an open-ended Article which allows the EU to take measures
and make new laws on issues which are not specifically set out (albeit vaguely) in the Treaties
but where such measures will further the aims of the EU. The Article is often referred to as the
‘Flexibility clause’. It is Article 352 of the TFEU. It was widened considerably by the Lisbon
Treaty. The Article can now be applied to any objective of the EU rather than just the economic
objectives, which was the previous case
EU Law and domestic Constitutions
The EU supremacy has a consequence that the Law need to be accepted and internalised. The
supremacy of the EU Law has also to be incorporated into the policy and activity of Member
State governments, regulators and courts to be effectively applied so that it is relied on the
organisations, groups and individuals within the Member States. The internalisation by the
Member States may find issues as it could make it possible for tensions between the EU Court
and the constitutional courts of Member States.13 Here several Member States experience on
the view of the EU Law Supremacy.
France
France has a patchwork of senior courts. The court of appeal in France accepted supremacy in
the mid-70s in a case called: Von Kempis v Geldof (Cour de Cassation) [1976] 2 CMLR
462.164 In contrast after some resistance by the Administrative Court (the Conseil d’Etat) in a
case called Minister for the Interior v Cohn-Bendit [1980] 1 CMLR 543 the Conseil d’Etat has
accepted supremacy.
Belgium
In Belgium, the constitution is ‘monist’. International treaties automatically become part of
the national law. Treaties do not require implementing legislation in Belgium. With this as the
starting position the issue of supremacy was confirmed in a case called: Ministere des Affairs
Economiques v SA Fromagerie Franco-Suisse (Le Ski) [1972] CLMR 330. This case
established that EU was superior to other Belgium law
Italy

13
Id, p. 15

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 Jean Monnet Module

In Italy there was an initial reluctance to accept the supremacy of EU law. It refused to accept
the decision in Costa v ENAL [1964] which established the primacy of EU law principle.
However, in a case called Frontini [1974] 3 CMLR 381, the Italian Constitutional Court did a
vault face and accepted the supremacy of EU law
Germany
Germany has provisions in its Basic Law, which gives EU and international law dominance
over German law. The starting point in German law then is one of a high degree of
permissiveness towards accepting EU law and its supremacy. Evidence of the embrace of EU
law by the German courts (and litigants) can be found in the prolific referencing of cases to the
CJEU for decisions, which the German courts have made. Notably it has been the lower courts
that have made the overwhelming number of references and not the Constitutional Court.
Despite this highly permissive legal position, the German Constitutional Court has argued that
it possesses, what might be described for short-hand purposes as a: ‘back-stop’ power or ‘right
of review and reservation’ with regards to the scope and authority of EU law. The German
Constitutional Court argues that it has this ‘right of review and reservation’ because EU law
has authority in Germany only as a result of German law permitting it to. EU law has no innate
primacy over German law due to the mere fact of its existence. Therefore, the German
Constitutional Court believes that it remains the ultimate arbiter over the extent of EU authority
in Germany

Class Discussion
1. What does the supremacy of EU law meant?
2. Discuss how the national law and the EU law may have relationship and how
they could be conflicted?
3. Discuss the limit of the Supremacy of EU Law!

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 Jean Monnet Module

UNIT 8: EU State Liability

Learning Outcomes:
1. Students can understand state liability in EU
2. Students can explain principles of state liability and institution
liability in EU
Sources:
1. Horspool, Margot and Lumphreys, Matthew, (2012), European Union
Law (Seventh Edition), Oxford University Press – Oxford/UK, p. 266
2. Chalmers, Damian, Davis, Gareth and Monti, Giorgio, (2010),
European Union Law: Second Edition, Cambridge University Press-
Cambridge/UK, pp. 431
3. Rebhahn, Robert, (2008), ‘Non Contractual Liability in Damages of
Member States for Breach of Community Law’, in Tort Law of the
European Community, Tort and Insurance Law, Vol. 23, eds. Koziol,
Helmut, and Schulze, Reiner, SpringerWien – New York/USA, pp.
182.
4. Hartley, Trevor C., (2010), the Foundation of European Union Law
(Seventh Edition), Oxford University Press-Oxford/UK, pp. 123
5. Thies, Anne, (2013), International Trade Dispute and EU Liability,
Cambridge University Press-Cambridge/UK, (Kindle Cloud Reader),
Location 2159-2160.

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 Jean Monnet Module

1. State Liability Principle in the European Union

The European Union recognizes Member State liability and liability of EU Institutions
(EU Liability). The Member State liability is implying for damages arising against Member
States for breaches of EU Law, meanwhile EU Liability claims is arising against the EU
Institutions.14Liability principle in EU may be contractual or non-contractual. Contractual
liability arises from the breach of contract for any reason whatsoever.15 On the other hand, non-
contractual liability arises out of damage caused to another. In the case of non-contractual
liability, the applicant will not be seeking the annulment of measures but only for compensation
from the damage.16Article 340 TFEU concern to liability based on fault,17 which theoretically
encompass systematically list of substantive condition for the liability of Member States and
the EU Institutions. Prior to discuss about liability of EU Institutions, a brief explanation about
Member State liability will be discussed below in order to elaborate the distinction between
Member State liability and EU Institution liability.

14
Horspool, Margot and Lumphreys, Matthew, (2012), European Union Law (Seventh Edition), Oxford
University Press – Oxford/UK, p. 266
15
EU recognizes action for contractual liability, namely liability arising out of contracts concluded between the
EU and a third party or/and individual, who are subject to particular rules, and the European Court of Justice
intervenes only if provision is made for this by a specific clause of the contract. The conditions and methods
of action for liability are derived from the applicable law. This law is defined by the contract, and is in principle
a national law. According to Article 340 (1) TFEU, the contractual liability of the EU shall be governed by
the law applicable to the contract in question. See Berry, Elspeth, Homewood, Matthew J, and Bogusz,
Barbara, (2013), EU Law: Case, Text and Materials, Oxford University Press – Oxford/UK, pp. 264. See also
Heukels, Ton, (1997), ‘The Contractual Liability of the European Community Revisited’, in The Action for
Damages in Community Law, Eds. Heukels, Ton and McDonnel, Allison, Kluwer Law International – The
Hague/ Netherlands, pp. 89 – 107.
16
Chalmers, Damian, Davis, Gareth and Monti, Giorgio, (2010), European Union Law: Second Edition,
Cambridge University Press- Cambridge/UK, pp. 431. See also Von Bar, Christian, (2009), Principle of
European Law: Study Group on a European Civil Code, Non-Contractual Liability Arising out of Damage
Caused to Another, European Law Publisher GmBh – Munich/German, p. 229. However, Von Bar posited
that non contractual liability in EU similar to the concept of tort law or law of tort in the Common Law system.
17
Jacobs, Francis G, (2001), ‘Some Remarks on Community and Member State Liability’, in Principles of Proper
Conduct for Supranational, States and Private Actors in the European Union: Towards a Ius Commune, Eds.
Wouters, J., Stujck, J. and Kruger, T, Intersentia Publisher – Antwerp/Belgium, pp. 130-132.In terms of
definition of fault, Francis G Jacob remarked that “the degree of fault is required at a broad level of
generalization. French law seems more ready to give compensation even under some circumstances in the
absence of fault. German law seems more restrictive, English law extremely so, requiring a very high degree
of fault. On the other hand, French law has perhaps been more restrictive that English law when it comes to
the amount of damages awarded. Then there are great differences between national systems on such basic
questions as the existence of liability for legislation. All of these differences are unsurprising when it is borne
in mind that in some system liability of the public authority has been modelled on private law, while in other
systems such liability has been fashioned as an independent body of law. Moreover the private law systems
themselves differ radically between the member states.”

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 Jean Monnet Module

2. Member State Liability in the EU

Member State liability for wrongful act or culpability may comprise conducted by
primary legislation, enacted by parliament, or secondary legislation in the forms of executive
acts.18This is relevant with the obligations of all branches of a state whether it is legislative,
judicative or executive. They have an important role to play in the application and execution
of EU Law within a Member State. Accordingly, a Member State is liable for damage caused
to individuals by a manifest infringement of EU law attributable to a supreme court of that
Member State.19There are four types of sources of EU law that could be breached by a Member
State, namely: Treaties, Regulations, Decisions and Directive.

First are treaties. They are the highest source of European law which creates some rights
and obligations. Treaty provisions which are merely statements of intent or policy, rather than
establishing clear rights or duties, require detailed legislation to be made before they can be
enforced in the Member States. Second are Regulations which are the most important form of
EU acts. They ensure uniformity of solutions on a specific point of law throughout the EU.
Regulations apply ergaomnes (in relation to everyone) and simultaneously in all Member
States.20 Third are Decisions. Unlike regulations, Decisions have no general scope of
application unless addressed to a particular Member State or to any legal or natural person or
they may have no addressees.21 Fourth is Directive. In contrary to treaty provisions, regulations
and decisions, a Member states can breach EU law in legal implementation issues by failing to
transpose an EU Directive timely or correctly into national law.22 Although a Directive is used
to harmonize national legislation, regulation and administrative provisions, but it depends on
the national authorities to choose the form and method to imply it. It concerns the autonomy of
national institutional and procedural systems while imposing upon a Member States the

18
Rebhahn, Robert, (2008), ‘Non Contractual Liability in Damages of Member States for Breach of Community
Law’, in Tort Law of the European Community, Tort and Insurance Law, Vol. 23, eds. Koziol, Helmut, and
Schulze, Reiner, SpringerWien – New York/USA, pp. 182.
19
Kaczorowska, Kalina, (2011), European Union Law (Second Edition), Routledge Publisher – London/UK, pp.
112
20
Article 288 TFEU defines regulations in following terms: “A regulation shall have general application. It shall
be binding in its entirety and directly applicable in all Member States.”
21
Article 288 TFEU defines the effect of Decision, which states that “A decision shall be binding in its entirety.
A decision which specifies those to whom it is addressed shall be binding only on them.”
22
Roosebeke, Bert Van, (2007), State Liability for Breaches of European Law: An Economic Analysis, Gabler
edition Wissenschaft- Wiesbaden/Germany, pp. 15-16.

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 Jean Monnet Module

obligation to achieve a necessary result. It thus establishes the same legal regime in all Member
States with regard to the relevant matter.23
The following sub section discusses the condition for Member State Liability which is
clarified by the decision of ECJ.
1) Illegality or violation/breach of rule of EU law.
The principle of liability is implied when a member state infringed the EU Law whether
a member state does not implement the rules or negligence of them. Francovich case is dealing
with the damages caused to an individual by the non-implementation of a directive that
basically lack of direct effect. In this case, Italy failed to implement the directive 80/987
relating to the protection granted to employees in the event of the insolvency of their
employment. Italy considered negligence since it did not implement the directive during the
required period of time. Although the provisions of the directive were sufficiently precise and
unconditional, the Directive did not define the persons obliged to pay the guaranteed sums,
thus the employees could not rely on the direct effect of the directive against the defaulting
state. In this case, there was not vertical direct effect due to insufficiently precise provision of
the directive. The Court in Francovich case more generally established the principle of liability
of the state for negligence or non-implementation of EU Law, although the court regardless the
conditions under which the state could be held liable other than in the specific case of the non-
implementation of a directive.24

2) The relevant rule of EU law breached is one which is intended to confer rights on
individuals.
A certain measure leads to liability principle is when a state is infringing the individual
rights that lays down in the EU rules. In Francovich case, the judgment of it acknowledged
that the full effectiveness of EU rules would be impaired and weakened the protection of
individuals’ right if the redress for protecting rights is unavailable by the member states. The
court has interpreted the principle of state being liable for loss and damage caused to
individuals that was in fact, “the principle whereby a State must be liable for loss and damage
caused to individuals as a result of breaches of EU law for which the State can be held

23
Article 288 TFEU defines that “A directive shall be binding, as to the result to be achieved, upon each Member
State to which it is addressed, but shall leave to the national authorities the choice of form and methods.”
24
Francovich Case Supra Note 15. See also Weatherill, Stephen, (2012), Cases and Materials on EU Law, Oxford
University Press – Oxford/UK, pp. 143. The judgment in Francovich created a remedy defined by criteria
under EU law which must be absorbed into the national legal order.

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 Jean Monnet Module

responsible is inherent in the system of the Treaty”.25In this context, the European Judge shall
prescribe for the national judge the implementation in its domestic law of a general principle
of liability of the Member States for all kinds of breaches of EU law.

The principle of state liability is applied whichever organ of the state by its act or
omission was responsible for the breach, as a consequence from the fundamental requirement
of uniformity that EU law is applied. All state authorities, including the legislature and
judicature were bound to comply with the EU law which directly governed the legal position
of individuals.26In some other cases such as FacciniDorivsRecreb27 and El Corte
InglésvsBlàzquezRivero28, court stated, “EU law requires the Member States to make good
damage caused to individuals through failure to transpose a directive, provided that three
conditions are fulfilled. First, the purpose of the directive must be to grant rights to individuals.
Second, it must be possible to identify the content of those rights on the basis of the provisions
of the directive. Finally, there must be a causal link between the breach of the State’s obligation
and the damage suffered.” Thus, the purpose of the directive is also well-examined to conclude
whether it is granting rights to individuals, and whether it is possible to identify the contents of
those rights on the basis of the provisions of the directive.29 In terms of relationship between a
directive and individual rights, directive may produce direct effect in vertical effect against
state.30 In other way, the horizontal direct effect which a directive might also define rights, in
the case when individuals were able to assert against other individuals.31

Another case identify as breach individual’s right is paramount in the Brasserie du

Pêcheurcase, when the plaintiff was obliged at the end of 1981, to stop its exports of beer to

25
Nassimpian, Dimitra, (2007), ‘... And We Keep On Meeting: (De) Fragmenting State Liability’, European Law
Review, Vol. 32, pp. 821
26
Emiliou, Nicholas, (1996), ‘State Liability Under Community Law: Shedding More Light on the
FrancovichPrinciple?’,European Law Review Vol. 21 No.5, pp. 10.
27
Case C-91/92 FacciniDorivsRecreb (1994) ECR I-3325, (1995) & C.M.L.R. 665.
28
Case C-192/94 El Corte Inglés v. BlàzquezRivero (1996) ECR I-1281; (1996) 2 C.M.LR. 507.
29
FrancovichCase, Supra Note 15
30
Case C-271/91 Marshall v Southampton and South West Area Health Authority II, (1993), ECR I-04367. Case
regarding right to compensation in the event of discrimination.
31
Ibid, in Marshall Case, the Court has ruled that according to Art. 189 EEC Treaty, the binding nature of a
directive constitutes the basic possibility in relying on the directive before a national court. It could exist only
in relation to each Member State to which is addressed. It follows that a directive may not of itself impose
obligations on an individual and that a provision of a directive may not be relied upon another individual.

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 Jean Monnet Module

Germany, as the German authorities had considered that the exported beer did not comply with
the German legal requirements on beer purity (due to additives) and that it could not be
marketed under the same name of “bier”.32According to ECJ’s judgment, the German law
composed measures having an effect equivalent to quantitative restrictions on imports as it is
required in Article 30 TEC.33 Furtherance, the Brasserie du PêcheurCompany continued to
bring an action in the Bundesgerichtshof (German Federal Court of Justice), to seek
compensation over the damage suffered between 1981 until 1987 because of the prohibition of
importation.34Nevertheless, the German Government claimed that a right to damages could
only be created by legislation. The ECJ responded that the Court has classification of the extent
of the member state liability to judicial interpretation, rather than a brand new creation of rights.
And state liability supposed to be developed widely by the national court.35

3) The breach is sufficiently serious

The ECJ has commented regarding the criterion of sufficiently serious breach in the
Brasserie du PêcheurandFactortame case36 when the national court must take account of all
the factors that is characterizing the situation placed before it. As in the Brasserie du
Pêcheur/Factortamejudgment, the Court mentioned that “the clarity and precision of the rule
breached, the measure of discretion left by that rule to the national or EU authorities, whether
the infringement and the damage caused was intentional or involuntary, whether any error of
law was excusable or inexcusable, the fact that the position taken by a EU institution may have
contributed towards the omission and the adoption and retention of national measures or
practices contrary to EU Law.” In sum, ECJ conclude that if the breach took place in an area
where the Member State enjoys considerable freedom of action, the liability then will only arise
when the circumstances under the national authorities acted. The implication of their conduct

32
Case 148/84, Deutsche Genossenschaftsbank v. SA Brasserie du Pêcheur, (1985), ECR 1981at 897.
33
Case 178/84, RE Purity Requirements for Beer: EC Commission v. Germany, (1987) E.C.R. 1227, 1 C.M.L.R.
780 (1988)
34
Ibid
35
Arnull, Anthony, (1999), the European Union and its Court of Justice, Oxford University Press-Oxford/UK, pp.
172.
36
Joined Case C-46/93 and C-48/93 Brasserie du Pêcheur SA, 1 C.M.L.R. v. FederalRepublic of Germany and the
Queen v. Secretary of State for Transport ex parte Factortame Ltd and others, (1996), ECR II31, paragraph
55; and Joined Cases C-178/94, C-179/94, C-188/94, C-189/94, C-190/94 Dillenkofer and Others v Germany
[1996] ECR I-4845, paragraph 25.

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 Jean Monnet Module

was intentional and inexcusable due to the degree of clarity and precision of the provision
infringed.

4) Causal link between the breach and the damage suffered by individuals
The last condition of EU member state liability is causal link between the breach and
the damage suffered by individuals. The lack of implementation or fault or even negligence of
the EU rules of law is not definitive criteria for establishing causality in Member State liability.
In Brasserie du Pêcheur and FactortamaCase, the court remarked that “it is up to national
court to determine whether there is a direct causal connection between the breach of EU law
and the damage”.37 National courts usually deny the causal link between the damage and the
breach of its public authority to EU Law, such as when a connection is not direct, immediate
and exclusive, with the concurrence of any circumstances, it is thus resulting the state is not
liable.38In Rechberger case, the Court held that there was a direct causal link between the
breach conducted by Austria and the damage. The breach was incorrect implementation of the
Directive 90/314 on package travels, concerning the protection of consumers in the event of
insolvency of the travel company. The consumer was suffering from the insolvency of the
travel company, thus, the Court held that the protection of consumer is a direct causal link
between the breach and the damage suffered by individual, and if a direct causal link has been
established, a member state’s liability cannot be precluded.39 However, it should be noted that
direct causal link must be examined by national courts according to national legal norms by
taking in reference to the principle of effectiveness and equivalence. The principle of
equivalence requires that under national procedural rules, claims based on EU law must not be
treated less favorably than similar domestic claims, and the principle of effectiveness requires
that the applicant of domestic rules and procedures must not render the protection of
individuals’ EU rights practically impossible or excessively difficult.40

37
ibid
38
Eritja, Mar Campins, (2006), ‘Review the Challenging Task Faced by Member States in Implementing the
Emissions Trading Directive: Issues of Member State Liability’, in EU Climate Change Policy: the Challenge
of New Regulatory Initiatives, Eds. Peeters, Marjan and Deketelaere, Kurt, Edwar Elgar Publishing –
Gloss/UK, pp. 77.
39
Case C-140/97, Rechberger v. Republic of Austria [1999] ECR I-3499.
40
Kaczorowska, Kalina, Supra Note 351

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 Jean Monnet Module

3. EU Institutions Liability
In the case of violation conducted by the EU Institutions, the situation is a little bit more
complicated, since the institutions themselves create the EU law. In terms to determine the
violation, the ECJ requires a condition for liability that the EU Institution has violated a
superior rule of law for the protection of the individual rights. In example, many provision in
the Treaty direct relate to individual interest (e.g. Article 63 TFEU regarding of movement of
capital); a hierarchically superior regulation (a regulation may relate to a prior network of
regulations on the same topic); and general principles of EU law, such as principle of
proportionality, legal certainty or legitimate expectations and principle non-discrimination.41
The essence of superior rule of law mostly derives from the principles that are common to the
laws of the Member States, issues of liability and causation may not be common, but the ECJ
has drawn on principles of tortuous liability within the Member States to formulate its own
principles governing liability in EU law.

3.1.Condition for EU Non-contractual Liability

Non-contractual liability exists inherently relate to three basic elements. First, the
illegality or a wrongful act or omission conducted by institution, second, the claimant has
suffered damage, and third, there is a causative link between the act of omission and the damage
suffered. These three basic elements are supposed to link to each other in order to achieve the
formalism of compensation due to the damage according to Article 340 (2) Treaty of Function
of European Union (ex-Article 288 (2)of TEC), states that:
“In the case of non-contractual liability, the Union shall, in accordance with the
general principles common to the laws of the Member States, make good any damage caused
by its institutions or by its servants in the performance of their duties.”
The liability of EU Institutions can be determined in two different measures in question,
namely administrative and legislative acts. Administrative acts may be defined as those acts
by which the administration applies general rules in individual cases, or otherwise exercises its
executive powers in individual manner. Liability can also be incurred as a result of failures of
administration or the negligence of employees of the EU Institutions in terms of performance

41
Rebhahn, Robert, Supra Note 350, pp. 189. In this context, the ECJ does not mention the background of law
constitutes as superior rules of law. Superior sometimes seems to be equated with ‘important, and sometimes
with a more formalistic conception of one rule being higher than another. According to Rebhahn, this
uncertainty certainly reflects a lacuna in the systematic order of Community law. See Case 24/82Martin Peters
Bauunternehmung GmbH v Zuid Nederlandse Aannemers Vereniging (1983) ECR 0987.

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 Jean Monnet Module

their duties.42 Legislative measures are mostly dealing with broad policy areas, such economic
policy. It requires the institutions to make choices as to the way in which issue should be
resolved. The majority of legislative measures involve choices of economic policy, since the
institutions enjoy wide discretionary powers in all areas of activity. It is also possible for them
to construe many measures in the context of TFEU.43
Both administrative and legislative acts are distinct by the court when court attempts to
identify those situations where compensating individual applicants for the loss they have to
suffered outweighs on general aims of the measure in question. The court however recognizes
in certain conditions, even when dealing with the measures of general and legislative
application, an individual may have the right to compensation. In order to be entitled to such
compensation, the applicant still needs to prove to the court the higher fault threshold and that
the EU institutions have committed either illegality or a wrongful act or even lawful act but
resulting a ‘sufficiently serious breach’ of their duties. However after the Bergaderm case
occurred, the court made two important changes based on Bergaderm formula. First, the court
abandoned the distinction between administrative and legislative acts, because the formula
would apply to all EU Institutions regardless their nature. Second, the court dismissed the idea
that a superior rule had to be infringed because according to the formula it was only necessary
to show that the EU Institutions had breached a rule intended to confer individual rights.44

3.2.The Illegality or a Wrongful Act or Omission Conducted by the EU Institution

The concept of illegality or a wrongful act or omission conducted by institution is
profoundly remarked in several EU Court decisions. The major judgment is in the case of
Schöppenstedt. This case becomes a concept to test whether a sufficiently flagrant or serious
violation of a superior rule of law for the protection of the individual right has occurred.45 The

42
Foster, Nigel, (2013), Foster on EU Law (Fourth Edition), Oxford University Press – Oxford/UK, pp. 224. See
also Grabitz, E., (1988), ‘Liability for Legislative Acts’, in Non -Contractual Liability of the European
Communities, eds. Schermers, H., Heukels, T., and Mead, P., Kluwer Law International- Hague/ Netherland,
pp. 1-11.
43
Woods, Lorna and Watson, Philippa, (2013), Steiner & Woods EU Law, Oxford University Press – Oxford/UK,
pp. 306.
44
Case C-352/98P, Bergaderm et.al. v. Commission, (2000) ECR I-5291. See also Schutze, Robert, (2012),
European Constitutional Law, Cambridge University Press – UK, pp. 280-281
45
Case 5/71 ZuckerfabrikSchöppenstedt v. Council (1971), ECR 975. See also Kapteyn, P.J.G., (2008),
‘Administration of Justice’, in The Law of the European Union and the European Communities, eds. Van
Themaat, Peter Verloren, and Kapteyn, P.J.G., Kluwer Law International – The Hague/ Netherlands, pp.476

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 Jean Monnet Module

Schöppenstedtcase established formula in regard to the requirement of unlawful act. These

requirements related to legislative measures where is generally relating to regulations, and
practically any legislative measure that could be construed as economic in the context of the
TFEU. The other requirement concerns of the general principle of EU law as superior rule of
law. Hence, the Schöppenstedt test also required proof of breach of superior of law which is
protecting individual rights, and the breach must be sufficiently serious, besides, there must be
causation and damage.46
There are two important elements in the Schöppenstedttest, first the rule breached by EU
Institutions must be superior rule, and second, the rule of law constitute as protection of the
individual rights.

1) Superior rule of law

In terms of construction the superior rules of law, at the top of the hierarchy are the
Treaties and the Acts of Accession which constitutes the basic constitutional charter of the
European Union. Beyond the Treaties, there is a series of quasi constitutional decision, such
as the Decision on Own Resources or the Decision on the Direct Election of the European
Parliament. Further, and on the same hierarchical footing as the Treaties and quasi-
constitutional decisions, are the general principles of law, including fundamental rights, which
constitute unwritten constitutional norms. The second level of the hierarchy contains rules of
international law which permeate the legal order of the EU, including agreements and
customary international law. The third level is acts of the EU institutions based directly on
Treaty provisions. Finally, there are acts of EU institutions which seek to implement previous
acts of the institutions.47
The EU liability principle emphasizes that both the Member State and EU Institutions are
liable to compensate any damage for breach of a superior rule of law for the protection of
individual right. Although in practice, there is no specific definition of what makes a rule of
law ‘superior’ for this purpose, but it is implicit in the court case law that such rules tend to be

46
Hargreaves, Sylvia and Homewood, Matthew J., (2013), EU Law (Third Edition), Oxford University Press –
Oxford/UK, pp. 80-81.
47
Case 294/83 PartiEcologiste ‘Les Verts’ vs. European Parliament (1986), ECR 1339, para.23. See also Craig,
Paul, and Burca, Grainné de, (2011), EU Law, Text, Cases and Materials (Fifth Edition), Oxford University
Press- Oxford/UK, pp.103 - 118

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 Jean Monnet Module

a general principle such as fundamental rights or fundamental freedom.48For example, pursuant

to The Charter of Fundamental Rights of the European Union (hereinafter EU Charter), EU
recognizes economic right in Article 15 (Freedom to choose an occupation and right to engage
in work), Article 16 (Freedom to conduct a business) and Article 17 (Right to property).49 It is
therefore interesting to note that breach any of these articles may entail liability for economic
loss. Generally, since the EU law is primarily concern with economic matters, breaches of any
EU law will typically result in economic losses, and compensability of these losses when
caused by EU Institutions has been clearly set forth in Article 340 (2) TFEU.50
The relation between superior rule of law and protection of individual rights is vividly
found in the context that the superior rule of law exists coherently with individual rights, when
most of the law is created to protect rights. It lies down in the case of Schöppenstedt.51 The
court declared that “where legislative action involving measures of economic concern, the EU
does not incur non-contractual liability for damage suffered by individuals as consequence of
that action, by virtue of the provisions contains in Article 215 Treaty of European
Community(hereinafter TEC) second paragraph (today is Art. 340 (2) of TFEU), unless a
sufficiently flagrant violation of a superior rule of law for the protection of individual has
occurred”.52 In the case of Kampffmeyer53 when the court decided that is sufficient to show
under general law of German Law (based on the German Schutznormtheorie54), the protection
of individual right is more to wide interpretation. According to the Court, in order for an
individual to be able to claim damages, the legal norm in question must be intended to protect

48
Scott, Supra Note 181, pp. 83. The compensation derives from principle of state liability for violating superior
EU law is not about increase wealth of individual but more to help superior European law succeed and to
eliminate unlawful nation laws.
49
The Charter came into force with the Lisbon Treaty, which reformed the European Union. However, the Charter
will not apply in full in the UK, Poland, or the Czech Republic.
50
Case C-104/89 and C-37/90, Mulder vs. Council of the European Communities (1992), ECR 1-3061. See also
Van Dam, Cees, (2013), European Tort Law (second edition), Oxford University Press – Oxford/UK, pp. 42-
44
51
Case 5/71 ZuckerfabrikSchöppenstedt v. Council (1971) ECR 975.
52
Ibid,
53
Joined Case 5,7, 13-24/66 Kampffmeyer and others v. Commission (1967) ECR 317.
54
According to this theory, the state is liable only when, in addition to causing an injury, breaches a schutznorm,
which is a legal norm protecting a subjective public right of injury party and which is intended not to protect
individuals in general, but also to protect a specific circle of individuals which the party belongs to. The
requirement of protection of specific individuals has often liberally interpreted. Scott, Sionaidh Douglas,
Supra Note181, pp. 395

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 Jean Monnet Module

not only individuals in general, but also the group of individuals to which the injury party
belongs.55 Thus, interpretation of Article 340 (2) TFEU, requires that liability of damage for
the alleged breach of legislative acts by the EU is only available where the measure in question
breaches a legal norms that protects the individual in general or group of individuals
(corporation).
Regarding the type of EU legislation which is liable to give rise to a claim for damages is
concerned with economy policy and involves the exercise by the political institutions of
discretionary powers.56The Economy policy is including the regulations and decisions
promulgated by the institutions which are considered breach the right of individual. For
example in Schneider v. Commission Case, Schneider and Legrand were two companies
specializing in electrical distribution and low voltage who merged into a single company. The
Commission declared the merger is incompatible with the common market and ordered a break
up for the company. In 2002, the General Court (hereinafter GC, prior to the coming into force
of the Lisbon Treaty on 1 December 2009, it was known as the Court First Instance)found the
Commission decision to be illegal on two grounds. First, there were errors in its economic
analysis of all the national markets other than the French market. Second, the Commission had
failed to tell Schneider in sufficiently clear terms what measures it needed to take avoid the
merger being declared illegal. The Court went on to find that there was liability according to
Article 340 of TFEU. It was because the Commission had violated rights of these companies
by not telling it what corrective action needed to take.57
In order to establish the non-contractual liability of the EU for damage caused by its
institutions, the applicants must show that the economic loss they claims to have suffered is
attributable to an act adopted by the defendant in its capacity as a EU institution.58Another

55
Ibid.
56
Schermers, Henry G. and Vaelbroek, Denis F., (2001), Judicial Protection in the European Union (Sixth
Edition), Kluwer Law International – Alphen/Netherlands, pp. 1052. The article 288 (340 TFEU) requires that
the action should always be brought against the relevant EU Institution or Institutions against the matter giving
rise to liability is alleged. However, in practice, the Court has accepted actions brought not against the Union
itself, but against the relevant Institutions.
57
Case T-310/01, Schneider Electric SA v. Commission, (2002) ECR II-4071. The right confer to this case is the
right is one of the fundamental rights guaranteed by the EU legal order in administrative procedures, is of
particular importance for the control of concentrations between undertakings. See also Chalmers, Damian,
Davies, Gareth, and Monti, Giorgio, Supra Note 348, pp. 434 – 436.
58
Biavati, Paolo, (2011), European Civil Procedure, Kluwer Law International – the Hague/Netherland, pp. 53.
The ground for the non-contractual liability of the EU based on legislative measures in that a sufficiently
serious and manifest breach of a superior rule of law for the protection of individuals may be found. When EU
institutions have no discretionary power, the mere transgression of the rule of law may be sufficient to found
the liability.

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example is the HNL case. In this settle case, the court was concern with an action for
compensation concerning a Council regulation which provide for the compulsory purchase of
skimmed milk held by the intervention agencies for use in feeding stuffs. The Court declared
that, “to accept within reasonable limits certain harmful effects on their economic interest as a
result of a legislative measure without being able to obtain compensation from public fund
even if that measure has been declared null and void. In a legislative field such as the one in
questions, in which one of the chief features is the exercise of a wide discretion essential for
the implementation of the Common Agricultural Policy, the EU does not, therefore, incur
liability unless the institution concerned has manifestly and gravely disregard the limit on the
exercise of its power.”59
There is authority for the proposition that the most general principles of law, and in
particular all fundamental human rights should be considered as superior rules of law protecting
individuals. For example in Case Nold v. Commission, in this particular case, a new
Commission decision required that the German national coal producer, Ruhrkohle, would sell
only to large wholesalers on two year contracts. Nold, (a small wholesaler, who under the
previous system purchased directly from Ruhrkohle) considered this to be violation of his right
to property and his freedom to pursue economic activities. However, the Court reaffirmed its
position that ‘fundamental rights form an integral part of the general principles of law’, the
observance of which it ensures that it found no violation of such right in this particular case. It
justified this by holding that rights of ownership do not protect mere commercial opportunities.
In this case, the ECJ broadened the sources of inspiration when it came to ascertaining specific
fundamental rights as forming general principles of law.60
General principles of law are more to the production of a rule of law and a rule not to be
found expressly in the Treaty. Once the EU Courts have determined what the common heritage
is, a general principle of EU Law may emerge. General principles must be detected, understood
and recognized. They are not to be found in the statutory provisions. They are rather created
and pronounced by the judge. In general, the Court will search for identify principles inspired
by national law or international treaties ratified by all members states – with particular
significance given to the European Convention on Human Rights. In an almost generic way,

59
Join Case 83 & 94 /76, 4 and 15 & 40/77, HNL vs. Council and Commission (1978), ECR 1209, para 6.
60
Case 4/73, Nold v. Commission (1974) ECR 491. See also Reinisch, August, (2012), Essentials of EU Law
(Second Edition), Cambridge University Press – UK, pp. 101-102.

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general principle of law constitutes principle of proportionality, legal expectations, equal

treatment and good administration.61
Furtherance, it needs to explain, what is the superior of law for the protection of individual
rights according to EU law? In this context, some cases are leading to reveal the concept of it.

2) The protection of individual rights

The ECJ recruited the meaning of ‘rights’ as protection of individual if the EU
Institution has failed to observe certain standards inherent in the EU legal system, as it comes
from superior rule of law.62 In addition, the protection of individual rights was laid down in
several general principles of the Law of European Union.63The following are among grand
principles that have been fall with the category protection of individuals’ rights. Although the
ECJ in some cases also recognized some other principles in the context of actions for damages,
including the principle of the protection of acquired rights64, the principle of non-
retroactivity65, the principle of care and of sound administration66, and the principle of equal
treatment in the award of public contracts67, but the major principles are focusing on the
principle of non-discrimination and the principle of equality, the principle of proportional, and
the principle of legitimate expectation.

61
Groussot, Xavier, and Lidgard, Hans Henrik, (2008), ‘Are There General Principles of Community Law
Affecting Private Law?’, in General Principles of EC Law in a Process of Development, eds. Bernitz, Ulf,
Nergelius, Joacin, and Cardner, Cecilia, Kluwer Law International – The Hague/ Netherlands, pp. 60 -61.
62
Biondi, Andrea, and Farley, Martin, (2009), the Right to Damages in European Law, Kluwer Law International
– the Hague/Netherlands, pp. 392.
63
The European Union was established by the Treaty on European Union (Maastricht Treaty), Maastricht, Feb.
7, 1992, 12 U.K.T.S. Cm. 2485 (1994). It comprises three “pillars”. The first pillar consists of the three
European Communities: The Coal and Steel Community (ECSC Treaty) Paris,Apr.18, 1951, 261 U.N.T.S.
140; the Atomic Energy Community (EURATOM Treaty) Rome, Mar. 25, 1957, 298 U.N.T.S. 167 and the
European Economic Community (EEC Treaty), Rome, Mar. 25, 1957, 298 U.N.T.S 11. The Treaty of Lisbon,
Dec, 13, 2007, amends the EU’s two core treaties, the Treaty on European Union and the Treaty establishing
the European Community. The latter is renamed the Treaty on the Functioning of the European Union (TFEU).
See, Mathijsen, P.S.R.F., (2004), A Guide to European Union Law (Eight Edition), Sweet & Maxwell –
London/UK, pp.12-23.
64
Joined Cases 95 to 98/74, 15 and 100/75 Union NationaledesCoopérativesAgricoles de Céréales and Others v.
Commission and Council [1975] ECR 1615.
65
Case 71/74 Nederlandse Vereniging voor de Fruit- en Groentenimporthandel v Commission [1975] ECR 1095.
66
Case T-231/97 New Europe Consulting and Brown v Commission [1999] ECR II-2401; Case T13/99 Pfizer
Animal Health v Council [2002] ECR II-3305; Case T-285/03 Agraz[2005] ECR II-1063.
67
Case T-145/98 ADT Projekt[2000] ECR II-387; Case T-160/03 AF Con Management Consultants and Others v
Commission [2005] ECR II-981.

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2.1) the principle of non-discrimination and principle of equality

Application to this principle was remarked by the ECJ in the case of Sermide v.
CassaConguaglioZuccheroand others, when the Court noted that under the principle of non-
discrimination between EU producers or consumers, the Article 40 TEC (now Article 46
TFEU) includes the prohibition of discrimination on grounds of nationality according to the
Treaty.68 In other cases, such W. Ferrario and Others v. Commission of EC, the Court stated
the general principle of equality is one of the fundamental principles of the law of the EU civil
service. The principle requires that comparable situation shall not be treated differently unless
such differentiation is objectively justified.69 Thus, the linkage between the violation of
individual rights and the liability of EU can be seen in the way the Court produced the ultimate
statement in order to compensate the damage caused by the transgression of general principle
of EU law. As it can be traced back to some cases, such as Bayerische NHL70 and
QuellmehlCases that were recognized as case when the Court implied the requirement of
infringement superior rule of law for protecting individual rights. The Court found that the
Council had infringed the general principle of equality stated in Article 40 (3) TEC (Art. 46
TFEU).71

2.2) Principle of proportionality

It can be traced back to the previous cases based on old Article 215 of TEC (Article
340 TFEU), when ECJ held decision arise from the elaboration of this article in which relating
to the requirement of Schutznormtheorie. In the first judgment of Kampffmeyer case, the Court
elaborates upon the Schutznormrequirement in connection with Article 215 TEC. The Court

68
Case 106/83, Sermide v. CassaConguaglioZucchero and Others, 1984 E.C.R. 4209. See also Case 139/77,
DenkavitFuttermittel GmbH v. FinanzamtWarendorf, 1978E.C.R.para. 1317 1333; Case 106/81, Julius Kind
v. European Economic Community, (1982) E.C.R. 2885, 291. In Sermide Case, the court also mentioned that
comparable situation must not be treated differently and different situations must not be treated in the same
way unless such treatment is objectively justified.
69
Joined Cases 152, 158, 162, 166, 170, 173, 175, 177 to 179, 182 & 186/81, W. Ferrario and Others v.
Commission of the European Communities, (1983) E.C.R. at 2367
70
Joined cases 83 and 94/76, 4, 15 and 40/77,Bayerische HNL and others v Council and Commission of the
European Communities, (1978), ECR 1209
71
Case 262/78, Diamalt AG v. European Economic Community, (Quellmehl-Liability), (1982), ECR 3293.In the
Quellmehl case, the ECJ held that the Council of the EU had infringed the general principle of equality by
abolishing production refunds on maize used to make quellmehl and gritz while continuing to pay refunds on
maize used in the manufacture of starch.

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found that the regulation of prices and aids in relation to durum wheat for the 1974/75 cereal
marketing year constitute an infringement of the objective of stabilizing markets provided for
in Article 39 (1) of the TEC which is assuring the availability of supplies (Art. 39 (1) (d) and
ensuring that supplies reach consumers at reasonable prices (Art. 39 (1) (e)). On the other
word, the principle that was violated was EU fair trade principle and the principle of
proportionality.72
The principle of proportionality is not only for a limitation on exercise of EU
competence, but it also considers being a valuable tool to protect interest of individual or
Member States against excessive EU acts. According to this principle, the EU is not only
entitled to exercise a competence but also to limit its scope and intensity irrespective of the
nature of the competence itself.73 Principle of proportionality can be invoked not only as an
interpretative tool, but also as a ground of judicial review.74For example in the case of
Artegodan GmbH75, the ECJ decided that the review of principle of proportionally and in
accordance with the principle of sound administration must be balanced against the legally
protected interests of the holders of marketing authorizations by taking account of all the
circumstances of the case.

2.3) the principle of legitimate expectation

EU recognizes general principle of legal certainty which is a principle underpinning
any legal system. This principle can be related to the demand that the application of the law to
a specific situation must be predictable.76Legal certainty principle is intertwined with principle
non retroactive and principle of legitimate expectation.77Principle non retroactive is a principle

72
Kampfmeyer Case, Supra Note 385. The superior of rule of law that was infringed is non-discrimination and
proportional principles.
73
Hartley, Trevor C., (2010), the Foundation of European Union Law (Seventh Edition), Oxford University Press-
Oxford/UK, pp. 123. See also Tridimas, Takis, (2006), The General Principle of EU Law, Oxford University
Press – Oxford/UK, pp. 175-176.
74
See Case C-170/08, Nijemeisland, (2009), ECR I-5127, para. 40. See also Hofmann, Herwig C.H., Rowe,
Gerard C. and Turk, Alexander H., (2011), Administrative Law and Policy of the European Union, Oxford
University Press – Oxford/UK, pp. 129-132.
75
See case T-429/05, Artegodan GmbH v. Commission of the EU, (2010), ECR II-494.
76
Ratio, Juha, (2008), ‘The Principle of Legal Certainty as a General Principle of EU Law’, in General Principles
of EC Law in A Process of Development, eds. Bernitz, Ulf, Nergelius, Joakim, and Cardner, Cecilia, Kluwer
Law International – Alphen/Netherland, pp. 53-55.
77
Ratio, Juha, (2003), the Principle of Legal Certainty in EC Law, Kluwer Academic Publisher –
Dordrecht/Netherland, pp. 256.

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that prevents EU secondary legislation from taking effect before publication.78 It thus governs
the presumption that legislation should not be retroactive. However, retroactive is prohibited
unless the measure may not otherwise be achieved. It provides a relation with principle of
legitimate expectation.79Legitimate expectation is the principle that its root lays in the concept
of good faith, and the administration should not fail to keep promise that is caused to individual
suffers loss. It emphasizes that when administrative decision is cancelled or revoked, the EU
Institutions must concern regarding they act which influence individual rights or benefits in
economic activity. They also must be able to respond to changes underlying economic
situation, when the economic actors do not have a vested right on the maintenance forever of
the existing common organization of the market.80
General nature of legitimate expectations has been declared by the court. The courts
have been prepared to hold that a clear representation by EU institutions is how they will act
in the future or consistent practice in the past. It then shows whether they are capable in
generating a duty to act in a particular way in relation to the recipient of the representation or
the beneficiary of the practice. Legitimate expectation principle may arise when EU
Institutions have discretionary power and it represents that it will exercise the power in a
particular way. The Institutions may express this principle in the form of an explicit promise
or statement, or they may be implicit in the form of a consistent practice from the past. This
principle could also give rise to an enforceable legal right on the part of the individual who
held such an expectation that EU Institutions will be required to give effect to it unless
circumstances is entitled them to draw it back.81
Under the principle of legitimate expectation, EU measures must not violate the
protection of legitimate confidence of those concerned, especially in the absence of overriding
public interest. This principle is a foundation of a rule of interpretation as well as a ground for

78
See Case 88/76, Société pour l’Exportation des Sucres v. Commission, (1977), ECR 709. Commission had
passed a regulation on 30 June 1976 removing the right of exporters to cancel their export licences. The
regulation was dated 1 July, the expected date of publication of the Official Journal. The journal did not appear
until 2 July. The application applied for cancelation on 1 July but it was refused on the basis of the regulation.
The ECJ ruled that the regulation did not come into force until 2 July as the date of actual publication.
79
See Kent, Penelope, (2008), Law of the European Union (Fourth Edition), Pearson Education Limited –
Essex/UK, pp. 80-81
80
See Larragan, Javier De Cendra de, (2011), Distributional Choices in EU Climate Change Law and Policy:
Towards a Principle Approach?, Kluwer Law International – Alphen/Netherlands, pp. 153.
81
Auburn, Jonathan, Moffet, Jonathan and Sharland, Andrew, (2013), Judicial Review: Principles and
Procedures, Oxford University Press – Oxford/UK, pp. 20-24.

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annulment of EU measure, but basically it is used more often for an action damages for non-
contractual liability.82 In the previous CNTA vs. Commission case83, the court based on old
Article 215 of TEC (Article 340 TFEU), decided that Commission had found guilty of wrongful
act resulting ability to compensate damage. The Court as well decided that Commission has
been proved to infringe the principle of legitimate expectation. This case becomes a milestone
for any cases regarding to the infringement of principle of legitimate expectation which is
resulting the non-contractual liability for EU institutions.84
There are two categories of legitimate expectation, namely substantive and procedural
legitimate expectation.85 First is substantive legitimate expectation. Issues of substantive
legitimate expectations typically arise when EU Institutions have led an individual to expect
certain consequences either through the formulation of a particular policy or through sustained
practice, but furtherance they change its policy or practice which is subsequently prevent
individuals to obtain those expectations.86 In Mulder case87, Mulder a farmer undertook to
cease producing milk for five years in return to premium. When he subsequently sought to
resume production on the expiry of the 5 years period, he was refused a quota on the grounds
that he had to have produced milk the preceding year in order to be eligible for a quota for the
forthcoming year. This provision had, however, been introduced during the 5 years period and
Mulder argued that it frustrated his expectation of re-entering the milk market. The ECJ
proceeded to balance the general policy objective the EU was pursuing against Mulder’s stated

82
Hartley, Trevor C.,(2007), The Foundation of European Community Law (sixth edition), Oxford University
Press – Oxford/UK., pp. 149
83
Case 74/74, Comptoir National Technique Agricole (CNTA) SA vs. Commission of EU, (1976), ECR 0797.
84
Ibid.This case arose out of the system of monetary compensatory amounts (MCAs), which were intended to
compensate for fluctuations of exchange rates. These payments had originally been granted on exports of
colza seed from France, but on 26 January 1972, the Commission passed a regulation which abolished the
system as 1 February. The applicant was a French firm which had entered into a number of contracts before
the regulation was passed, and these were to be performed after the ending of the scheme. It claimed that it
had entered into the contracts on the assumption that MCAs would be payable and had calculated it price on
that basis. It argued that it had suffered loss by reason of the sudden ending of the scheme without warning
and without any provision being made for transactions which were in the process of completion when it came
into force.
85
Craig, P.P. (1999), ‘Substantive Legitimate Expectations in Domestic and Community Law’, Cambridge Law
of Journal No. 55, pp. 306. Craig argued that since legitimate expectation principle is well established in EU
Law, thus this principle does not to be classified as either procedural or substantive.
86
Anthony, Gordon, (2002), UK Public Law & European Law: The Dynamics of Legal Integration, Hart
Publishing – Oregon/USA, pp. 118
87
See Case 120/86 Mulder v. Minister van Landbouw en Visserij (1988) ECR 2321

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interest. While nothing that Mulder could not expect to re-enter the market under exactly the
same previous conditions. The Court wrote that “the producer who has voluntarily ceased
production for a certain period cannot legitimately expect to be able to resume production under
the same conditions as those which previously applied and not be subject to any rules of market
or structural policy adopted in the meantime. The fact remains that where such a producer, as
in the present case, has been encouraged by the EU measure to suspend marketing for a limited
period in the general interest and against payment of a premium he may legitimately expect not
to be subject, upon the expiry of his undertaking, to restrictions which specifically affect him
precisely because he availed himself of the possibilities offered by the EU provisions.” 88
Second is procedural legitimate expectation. A procedural legitimate expectation
relates to the procedure that will be followed by EU Institutions before they take a decision or
acts. A legitimate expectation may give a procedural benefit when a decision will be taken and
there is an opportunity to comment, a hearing before a decision is taken or consultation will be
made before a decision is actually taken.89In the France and France Télécom Case90, the GC
found that, “it is settled law that, even in the absence of legislation, the right to rely on the
principle of the protection of legitimate expectations extends to any individual where by giving
him precise assurances, an institution has led him to entertain reasonable expectations. In
whatever form they are given, precise, unconditional and consistent information from
authorized and reliable source constitute such assurances. However, a person may not plead
breach of the principle unless the administration has given him precise assurances. It follows
from that principle which is especially applicable in relation to the review of State aid pursuant
to Art 14 of Regulation No 659/1999 that the protection of the legitimate expectations of the
recipient of the aid can be relied upon provided that the recipient has sufficiently precise
assurance arising from positive action taken by the commission which leads him to believe that
a measure does not constitute state aid for the purpose of article 87 TEC. If the Commission
does not give an express opinion on a measure which has been notified to it, on the other hand,
its silence cannot on the basis of the principle of the protection of the legitimate expectations
of the recipient undertaking, preclude recovery of that aid.”91In conclusion, the core of

88
Ibid, para 22-23
89
Auburn, Jonathan, Moffet, Jonathan and Sharland, Andrew, Supra Note 413
90
Joined Cases T-427/04 and T-17/05, France and France Télécom v. Commission, (2009), ECR II-4322.
91
Ibid, Para 259-261

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legitimate expectation is that the law should not be different from what could be expected. The
EU Institutions are bound by a promise to act in a special way as a part of EU Law.92

3) The existence of sufficiently serious of breach

In order to define what constitute sufficiently serious of breach, the Court normally
required evidence from the applicants of whether there having been a manifest and grave
disregard by the institution for the limits on the exercise of its power.To some extent the court
implies criteria regarding to the concept sufficiently serious of breach. The criteria are the
clarity and the precision of the EU rule breached, whether the infringement was intentional or
accidental, whether any error was excusable, the degree of discretion enjoyed by EU institution
concerned, the complexity of the situations to be regulated, and the difficulties in the
application or interpretation of the relevant text.93In the P Holcim (Deutschland) case94, the
ECJ stated that, “the system of rules which the court has worked out in relation to the non-
contractual liability of EU takes into account, inter alia, the complexity of the situations to be
regulated, difficulties in the application or interpretation of the legislation and, more
particularly, the margin of discretion available to the author of the act in question. The CFI
(GC) took into account not only the defendant discretion but also the complexity of the facts
and the difficulties on applying EU law in order to establish whether there had been a
sufficiently serious breach of EU law. The criteria to which it had recourse to establish the
existence of such a breach of EU law are therefore not vitiated by an error of the law.”95
In summarizing the factors that contribute to the Court’s finding of a sufficiently serious
breach, it could be identified three clear elements, whether the institution exercised its power
in the way it did because of a higher public interest which justified the harm caused to
individual interest, whether the harm caused by the exercise of discretionary power concerned
a clearly defined group of individuals, and whether the individuals who have been harmed are
expected to support the harm they suffered within reasonable limits.96

92
Chalmers, et al, Supra Note 348, pp. 412
93
See joined case 116 and 124/77 amylum v. Council and Commission (1979) ECR 3497, Joined Cases 103 and
145/77 Royal Scholten-Honig v. Intervention Board for Agricultural Produce (1978) ECR 2037.
94
Case C-282/05, P Holcim (Deutschlan) AG v. Commission of the EU, (2007), ECR I-02941.
95
Ibid, para 50-51
96
Van Geven, Walter, (1994), ‘Non Contractual Liability of Member States, Community Institutions and
Individuals for Breaches of Community Law with a View to a Common Law for Europe’, Maastricht Journal
of European and Comparative Law, No. 1 Vol. 6, pp. 6-40.

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4) Actual link between the damage and the conduct of the EU institutions
The concept of actual link between the damage and the conduct of the EU Institutions
seem to be important requirement. It must be shown sufficiently that the act of Institution
caused the damage when the damage must be ascertainable.97 The damage caused by the EU
institutions will be covering, inter alia, loss of interest98, pure economic loss99, lost profit on
foreseeable contracts100, penalties paid for repudiation of contracts101, and non- financial loss
such as physical incapacity102.The damage suffered by the applicant must be actual and certain,
regardless whether it is present or future. The court ruled that uncertainty regarding the exact
quantification of damage would not preclude a finding that the damage alleged by the applicant
was sufficiently certain. Thus, in a situation where the damage alleged is real and actual there
is uncertainty as to the extent of damage, the condition relating to certainty of damage is
satisfied.103According to the interpretation of Article 340 (2) TFEU, the damage must be a
sufficiently direct consequence of the wrongful act of the institution, and the causality of the
damage may often be ‘direct, immediate and exclusive’. However, the losses suffered are
normally of an economic nature and such losses are recoverable, so according to the court in
the Dumortier Frères vs. Council case104, that the losses should be certain and specific but not
speculative. In Ireks-Arkady case, Advocate General Capotorti stated that damage should

97
See Van Roosebeke, Bert, (2007), State Liability for Breaches of European Law: An Economic Analysis,
DeutscherUniversitäts-Verlag | GWV Fachverlage GmbH, (DUV) – Wiesbaden/Germany, pp.117. The
concept of non-contractual liability is that the action of the EU Institutions is not based upon contractual
obligation, but upon its democratic legitimacy. The democratic state is thought of as a representative of all,
and acting for all. But almost all legislation or acts by the state in general will inevitably harm at least some
individual’s interests.
98
See case 238/78, Ireks-Arkady v. Council and Commission (1979) ECR 2955.
99
See C-37/90, Mulder II (1992) ECR I-3061.
100
See Joined Cases 5/66, 7/66, Kampfmeyer v. Commission (1967) ECR 245; Case 74/74 CNTA v Commission
(1975) ECR 533.
101
Kampfmeyer v Commission, ibid
102
Case 308/87, Grifoni v Commission (1990) ECR 1203.
103
Case C-243/05 P, Agraz, SA and others vs. Commission of European Community, see Kaczorowska, Alina,
(2011), European Union Law (Second Edition), Routledge – NY/USA, pp. 479
104
Joined Cases 64 and 113/76, 167 and 239/78, 27, 28 and 45/79 P.,Dumortier Frères SA and Others v. Council
of EC (Maize gritz – Exchange rate applicable to damages).

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cover both a material loss, a reduction in a person’s assets, and also the loss of an increase in
those assets which would have occurred if the harmful act had not taken place. These three
conditions governing the EU institution liability must be satisfied, but if one of conditions is
not fulfilled, the applications is dismissed in it is entirety without the necessity for the court to
examine the remaining conditions for such liability.105

3.3.Liability for the absence of unlawfulness act

Liability for the absence of unlawfulness act is a new plea in EU law which must be
raised in the application. Unlike the application for unlawful act, the EU Institution is liable
for damages caused by a lawful act. It does not require the applicant to show fault on the part
of the EU, and it does not necessary for the Court in its ruling to investigate whether the
institution has breached its duty. The applicant requires demonstrating the special or unusual
damages due to the act of institution. With regard to the substantive elements of a claim based
on lawful acts, the Advocate General Mayras in the case of Compagnied’Approvisionement v.
Commission106addressed the special damage that must be particular to one or more persons,
and it must be so serious as to exceed the duties imposed on each citizen by the requirements
of life in the EU.107 The foundation of claim of EU Institution liability for the absence of
unlawfulness, refer to the principle of public burdens (principle d’egalitédevant les charges
publiques), and thereby amounts to the imposition of the concept of strict liability.108
There are some requirements for the liability of the absence of unlawfulness act such
an actual damage which must also be special and unusual. The special damage normally is
disproportionate impact on a particular circle of economic operators and the unusual damage
is usually going beyond the limits of the normal (entrepreneurial) economic risks inherent in
operating in the sector concerned.109Similar to liability for unlawful act, the EU Institution is

105
See case Ireks-Arkady v. Council and Commission, Supra Note 430
106
Joined Cases 9 and 11/71, Compagnied’Approvisionment v. Commission (1972) ECR 391.
107
Ibid, this case arose out of the devaluation of the French franc in 1969, which caused the Council to decree that
the France should grant subsidies for imports of cereal products from the Member states and third countries.
The devaluation of the French franc meant that the subsidy did not precisely compensate for the resulting price
increase, therefore, the French traders and producers of cereals, brought an action for damages due to the
treatment less favorably than importers from other member states. They claimed that the Community should
incur the liability, even though the amount of the subsidies had been legally fixed, but they had suffered
unusual losses due to lack of compensation of devaluation of price.
108
See the case 59/83 Biovilac v. EEC [1984] ECR 4057.
109
See case Case C-237/98 P Dorsch Consult v Council and Commission[2000] ECR I-4549; [2002] 1 CMLR 41

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liable if all the conditions, such as breach superior of law for protection individual rights, the
existence of serious of breach and actual link between damage and the conduct of EU
Institution are fulfilled. Thus, as the cumulative nature of those conditions means that if one
of them is not satisfied, the EU cannot incur non-contractual liability in respect of a lawful act
of its institutions.
In the context of condition for non-contractual liability, the EU courts establish the
same conditions both for EU Institutions and the Member State. However, there are two
distinctions between liability of member states and liability of EU Institutions. First is liability
for wrongful or negligent that is implemented by national authorities. In the case of
Granaria,110 the ECJ held that the question of compensation for loss incurred by individuals
caused by a national body or by agents of the Member States that is resulting from either the
infringement of EU measures or an act and omission contrary to national law while applying
EU law, is not covered by Article 340 (2) TFEU. It has to be assessed by national courts
according to the national administrative law. However the requirements of the principle of
non-contractual liability must be respected. Second is liability of national authorities in the case
of correct application or implementation of EU measures, but damage occurs. In this case, the
EU Institution who issues the measure is liable for damage, exceptionally in respect of actions
concerning monetary compensation, for example in Haegeman v. Commission111, the ECJ held
that for the applicant the proper forum was in a national court, as the payment were collected
by national authorities and thus the applicant was in a direct relationship with them, not with
the council. If a measure is declared void by the ECJ, a national court will award compensation
for the total damage suffered by individuals. The sum awarded will be paid from national funds
but national authority can obtain reimbursement from EU funds.
EU Liability focuses on the infringement of individual’s right when the court
significantly refers to the violation of superior of law accorded to protection of individual
rights. The European Courts in their decision mostly emphasize the infringement of provision
that is meant to protect rights, position or interest of the individual, such as fundamental rights
and general principles.112

110
Case 101/78 Granaria [1979] ECR 623.
111
Case 96/71 Haegeman v. Commission (1972) ECR 1005.
112
Thies, Anne, (2013), International Trade Dispute and EU Liability, Cambridge University Press-
Cambridge/UK, (Kindle Cloud Reader), Location 2159-2160. See also Case T-193/04, Hans Martin Tillack
v. Commission, para. 121. The GC in this case referred to the protection of family life, the freedom of the
press, the principle of the presumption of innocence and the right to a fair trial as fundamental rights conferring
enforceable rights.

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From the explanation above, it can be concluded that the protection of individual right
become a prominent condition in order for EU Courts to hold a decision in regard with
application of non-contractual liability in EU. Significantly for liability of EU institution,
economic right is enshrined in EU liability principle where the EU Institutions are liable to
rehabilitate and to rebalance the right that is violated by their acts. The liability in this context
refer to the duty of government in order to protect the right of individual derives from superior
of law. Henceforth, the EU Institutions have obligations to protect, to rehabilitate and to
rebalance again the right that is violated by their legislative acts.

Class Discussion
1. What is the different between state liability and institution liability?
2. How is non-contractual liability is applied?
3. Discuss the impact of state liability in EU!

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UNIT 9: Common Market and Internal Market

LEARNING OUTCOMES
1. Students understand the purpose of Common Market and
Internal Market
2. Students can explain the EU Common Market and Internal
Market

Source: Catherine Barnard, Joanne Scott, The Law of the

Single European Market: Unpacking the Premises, ,Hart
Publishing, 2002.

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1. Legal basis and principles

Legal foundation of EU internal market is Articles 4(2)(a), 26, 27, 114 and 115 of the
Treaty on the Functioning of the European Union (TFEU). The common market created by the
Treaty of Rome in 1958 was intended to eliminate trade barriers between Member States with
the aim of increasing economic prosperity and contributing to ‘an ever closer union among the
peoples of Europe’. The Single European Act of 1986 included the objective of establishing
the internal market in the European Economic Community (EEC) Treaty, defining it as ‘an
area without internal frontiers in which the free movement of goods, persons, services and
capital is ensured’.
The core principles of the Single Market rest on four fundamental freedoms. In greater
detail, these are:
• Freedom of movement of goods: no restrictions on the trade of goods between Member States,
such as state subsidies, discriminatory taxes on imported goods, or preferential tax treatment
for exports.
• Freedom of movement of people: all EU citizens have the right to work and live in another
Member State without discrimination due to nationality and with a mutual recognition of
educational and vocational qualifications.
• Freedom of movement of services: service providers can conduct their business in all
Member States without having to be domiciled there and EU consumers can select service
providers from any Member State.
• Freedom of movement of capital: no capital controls or restrictions on the amount of currency
that may be imported or exported and greater ease of utilising the offers of foreign financial
service providers.
2. History of EU internal market
2.1. The common market of 1958
The Treaty of Rome’s main objective was achieved through the 1968 customs union,
the abolition of quotas, the free movement of citizens and workers, and a degree of tax
harmonisation with the general introduction of Value-Added Tax (VAT) in 1970. However,
the freedom of trade in goods and services and the freedom of establishment were still limited
due to continuing anti-competitive practices imposed by public authorities.

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2.2. The launch of the internal market in the 1980s and the Single European Act
The lack of progress in the achievement of the common market was largely attributed
to the choice of an overly detailed method of legislative harmonisation and to the rule that
required unanimity for decisions taken in the Council. In the mid-1980s, the political debate
on this issue led the EEC to consider a more thorough approach to the objective of removing
trade barriers: the internal market.
The Single European Act entered into force on 1 July 1987, setting a precise deadline
of 31 December 1992 for the completion of the internal market. It also strengthened the
decision-making mechanisms for the internal market by introducing qualified majority voting
for common customs tariffs, free provision of services, free movement of capital and
approximation of national legislation. By the time the deadline had passed, over 90% of the
legislative acts listed in the 1985 White Paper had been adopted, largely under the qualified
majority rule.
2.3. Towards a shared responsibility to complete the internal market
The internal market has made a significant contribution to the prosperity and integration
of the EU economy. A new internal market strategy running from 2003 to 2010 focused on the
need to facilitate the free movement of goods, integrate the services markets, reduce the impact
of tax obstacles and simplify the regulatory environment. Substantial progress was made in
opening up transport, telecommunications, electricity, gas and postal services.
In its communication entitled ‘Better governance for the Single Market’ (COM(2012)
0259), the Commission proposed horizontal measures such as an emphasis on clear, easily
implementable new regulations, better use of existing IT tools to facilitate the exercise of single
market rights, and the setting up of national centres to oversee the operation of the single
market. Monitoring is an integral part of the annual reports on single market integration in the
context of the European Semester process.

2.4. The relaunch of the internal market in 2010

In order to boost the European single market once again and put the public, consumers
and SMEs at the centre of the single market policy, the Commission published in October 2010
a communication entitled ‘Towards a Single Market Act’ (COM(2010) 0608). A series of
measures were presented to boost the EU economy and create jobs, resulting in a more
ambitious single market policy.

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In October 2012, the Commission presented the Single Market Act II (COM(2012)
0573) to further develop the single market and exploit its untapped potential as an engine for
growth. The act sets out 12 key actions to be rapidly adopted by the EU institutions. These
actions are concentrated on the four main drivers of growth, employment and confidence: (1)
integrated networks, (2) cross-border mobility of citizens and businesses, (3) the digital
economy, and (4) actions that reinforce cohesion and consumer benefits.
The Single Market Act II follows in the footsteps of an initial set of measures presented
by the Commission — the Single Market Act I — and includes the following actions aimed at
a more thoroughgoing, better-integrated single market:
• Business mobility (e.g. introducing provisions to mobilise long-term investment,
modernising insolvency proceedings and helping to create an environment that offers
second chances to failing entrepreneurs);
• The digital economy (as a move towards the completion of the digital single market by
2015, the Commission proposed that e-commerce should be promoted in the EU by
making payment services easier to use, more trustworthy and more competitive. The
need to address the key causes of the lack of investment in high-speed broadband
connections and to make electronic invoicing standard in public procurement
procedures was also highlighted);
• Consumer confidence (e.g. introducing measures to ensure widespread access to bank
accounts, as well as transparent and comparable account fees and easier bank account
switching).
The Commission was due to present all of the key legislative proposals connected with
the Single Market Act II by spring 2013 and the non-legislative proposals by the end of 2013.
Parliament and the Council were called upon to adopt legislative proposals as a matter of
priority. The progress was presented in the study entitled ‘Single Market Act: State of Play‘.
On 28 October 2015, the Commission published a communication entitled ‘Upgrading
the Single Market: more opportunities for people and business’ (COM(2015) 0550), which
focused on ensuring practical benefits for people in their daily lives and creating additional
opportunities for consumers, professionals and businesses. It complemented the Commission’s
efforts to boost investment, reap the opportunities of the digital single market and improve
competitiveness and access to finance. The strategy also aimed to ensure a well-functioning
internal market for energy and promote and facilitate labour mobility while preventing abuse
of the rules. To further improve trading practices in the internal market, Directive (EU)

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2019/633 banning certain unfair trading practices was adopted on 30 April 2019. These unfair
trading practices include late payments for perishable food and last-minute order cancellations.
Currently, one of the most challenging issues in developing the internal market is the
implementation of its digital component. In May 2015, the Commission adopted a Digital
Single Market Strategy (COM(2015) 0192), which set an intense legislative programme for
building a European digital economy, continued in the Agenda for Europe.
2.5. Current Single Market in EU
The principles of single market in EU are:
1. Freedom of movement of goods: no restrictions on the trade of goods between Member
States, such as state subsidies, discriminatory taxes on imported goods, or preferential
tax treatment for exports.
2. Freedom of movement of people: all EU citizens have the right to work and live in
another Member State without discrimination due to nationality and with a mutual
recognition of educational and vocational qualifications.
3. Freedom of movement of services: service providers can conduct their business in all
Member States without having to be domiciled there and EU consumers can select
service providers from any Member State.
4. Freedom of movement of capital: no capital controls or restrictions on the amount of
currency that may be imported or exported and greater ease of utilising the offers of
foreign financial service providers.

Class Discussion
1. Discuss concept of internal market in EU
2. Discuss history of internal market in EU

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UNIT 10: Protection of Human Rights in EU

LEARNING OUTCOMES
1. Students understand protection of human rights in
EU
2. Student can explain the protection of Human Rights
in EU
Sources:
Klaus-Dieter Borchardt, The ABC of European Union law, Publications
Office of the European Union, Luxemburg, 2010

Alina Kaczorowska, European Union Law, Second Edition, Routledge, 2011

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 Jean Monnet Module

EU Fundamental Law
The main innovation of the EU Fundamental Law is the installation of an economic
government of the fiscal union. The fundamental law provides for the European Stability
Mechanism to operate in primary and secondary markets. Fundamental law codifies in primary
law the key elements of the recent six pack and two pack legislation which strengthened EU
surveillance and supervision of the individual state economies.
As the merging of the current Treaty on European Union (TEU), Treaty of Maastricht and the
Treaty on the Functioning of the European Union (TFEU), Treaty of Rome, two treaties are the
Constitutional Basis. Both are set out the scope of the EU’s authority to legislate and the
principles of law in those areas where EU law operates. Not only the two, there is the Charter
of Fundamental rights. The three treaties have equal legal value and combined constitute the
European Union legal basis and as the EU fundamental law.

TFEU (Treaty on the Functioning of the European Union): Treaty of Rome (the EEC
Treaty)

TFEU is the founding treaty signed in March 25, 1957, enforced January, 1958. It is established
the European Economic Community (EEC), which is best known as the European
Communities (EC). The treaty is more on progressive reduction customs duties and the
establishment of a customs union, create single market for goods, labor, services, and capital
across the EEC member states. It is the creation of a common agriculture policy, common
transport policy, and a European social fund, and the establishment of European Commission
(EC). The EEC Treaty then renamed as Treaty establishing the European Community (TEC).
In 2009, TEC became TFEU (Treaty of Lisbon signed in Dec 2007).
TEU (Treaty on European Union): Maastricht Treaty
TEU was sign on February 7, 1992. The treaty was as a result of the further European
integration and greatly expended the competences of the EU as well as the creation of the single
European currency. The TEU was establishing the first EU pillar, namely the European
Community (expansion competences beyond economic): the EU’s supra-national institutions:
the Commission, the EU parliament, and the ECJ. Two other pillars of the EU are Common
Foreign and Security Policy and Cooperation in the fields of Justice and Home Affairs–
intergovernmental in nature with decisions being made by committees composed of member
states representatives and officials. TEU was amended by Treaty of Amsterdam (1997), Nice
(2001), and Lisbon (2007).
Treaty of Lisbon (Reform Treaty)
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The treaty was reforming the two treaties which form the constitutional basis of the EU. It was
signed in Dec 13, 2007, entered into force in Dec 1, 2009. There were amendment on the treaty
on the particular issues of qualified majority voting of at least 45 policy areas in the Council of
Ministers, a change of calculation a majority to a new double majority, a more powerful of
European Parliament (bicameral legislature alongside the Council of Ministers under the
ordinary legislative procedure, a consolidated legal personality for the EU, the creation of a
long term President of the European Council, High Representative of the Union for Foreign
Affairs and Security Policy. The treaty made the Charter of Fundamental Rights legally
binding. The legal rights and the procedure for member states to leave the EU.
CFR
Article 6 TEU indicates three sources for EU Human rights law. There are:
1) EU Charter of Fundamental Rights, which was proclaimed in Nice in 2000 and was
incorporated in the treaties in 2009 (entry into force of the Lisbon treaty)
2) The ECHR (1950), which is now not legally binding the EU, but it will when the EU will
decide to adhere to it
3) The general principles of EU law: a body of legal principles, including human rights, which
have been articulated and developed by the ECJ over the years (applied by ECJ and the national
courts of the member states, such as fundamental rights, proportionality, legal certainty,
equality before the law, and subsidiarity)
These sources of law overlap, since the Nice Charter has been written taking inspiration from
the European convention of human rights and from the general principles of EU law.113
Generally, there is no Human rights provisions in the EEC treaty. It is originally that the EEC
was focused on the creation of a common market, rather than on the protection of human rights
(no human rights catalogue in the treaties). In 1950s and 1960s, the Court of justice resisted to
the attempts of litigants to invoke rights and principles recognized by domestic law (e.g.
legitimate expectations, proportionality, and natural justice).114
The relevant cases on the protection of human rights in EU
The supremacy of EU Law is established by the landmark decisions of the ECJ. Under Article
267 of the TFEU, a court has an obligation to refer cases that have reached the highest point of

113
Alina Kaczorowska, European Union Law, Second Edition, Routledge, 2011, p. 242

114
Id, p. 250

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appeal in their respective country if there is a question of the application of EU Law. In 1969,
the first case in which ECJ recognized a fundamental right (Stauder v City of Ulm).115
Flaminio Costa v Enel (1964) Case 6/64: the supremacy of the EC Laws over the national
laws of member states
Facts: Costa submitted that nationalization was in violation of the Treaty of Rome. The Italian
Constitutional Court viewed that the traditional rules of statutory interpretation, lex posterior
derogate legi anteriori/priori ought apply, whereby in the event of statutory incompatibilities,
the newer law prevails, meaning the more recent Italian nationalization statute would prevail
over the earlier Treaty of Rome.116
Issues:
Should EC Law, specifically the Treaty of Rome, be considered dominant over national
statues?
Judgment:
The ECJ held the verdict of the Italian Constitutional Court, finding that the Treaty of Rome’s
provision regarding the single market did not have direct effect and subsequently was one that
only the EC could bring a charge against a member state for violating.
However, Costa was entitled to avail himself of the national Courts system in Italy, and attempt
to contend that a national statute was not compatible with EC law, which the national Courts
were thus entitled to decide. It can subsequently be found that Courts are obligated to hear and
refer cases until they reach the furthest domestic appeal level where such cases concern EU
law
Erich Stauder v City of Ulm
Fact: an EU scheme provided cheap butter for welfare benefits, but required to show a coupon
with a person’s name and address. Stauder claimed this violated his dignity
Issue: the protection of fundamental rights as human rights in the EU
Judgment:
The Court of Justice held that properly interpreted, the measure did not require a name to be
shown on the coupon. In doing so, it acknowledged that human rights formed part of unwritten
general principles of EU law.

115
Id, p. 260
116
Id, p. 269

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Further development of Fundamental rights

On the relevant case of the protection of human rights in EU:
International Handelsgesellschaft v Einfuhr-und Vorratsstelle Getreide (1970) ECR 1125
Case 11/70 (Solange I: conflict between national and EU Law)).
“respect for fundamental rights form an integral part of general principles of law protected by
the Court of Justice. The protection of fundamental rights is inspired by the constitutional
traditions common to the member states, must be ensured within the framework of the structure
and objectives of the community”.
J. Nold v Commission Case 4/73: the ECJ reiterated that human rights are an integral part of
the general principles of EU Law and that as such the ECJ was bound to draw inspiration from
the constitutional traditions common to the member states.117 Therefore, the ECJ cannot uphold
measures which are incompatible with fundamental rights recognized and protected in the
constitution of member states.
The ECJ also found that international treaties for the protection of human rights on which the
member states have collaborated or of which they are signatories, can supply guidelines which
should be followed within the framework of community law.
Three Systems of Protection of Fundamental Rights in the EU
Three levels of jurisdiction: the Court of Justice of the European Union, the European Court of
Human Rights and the National Courts. Three main sources: the Charter, the Convention, and
the Constitutional traditions common to the member states. General principles of European
Union law may be inferred both by the EU laws and regulations and by the national
constitutional common traditions of the Member States.
The source of a fundamental right (human dignity) is found in the general principles of EU law,
built up by the common constitutional traditions.
Second phase: the European Charter of Fundamental rights
There was a development of the European Charter of Fundamental Rights from Nice (2000) to
Lisbon (2008).118 The Charter was proclaimed in Nice as a political document that could be
used as an interpretative tool be the ECJ in order to reconstruct the European fundamental
rights. With the Lisbon treaty, the Charter acquires the same legal value of the EU treaties (art.
6, par. 1 TEU).

117
Id, 287
118
Id, p. 238

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Third phase: the Lisbon treaty and the new art. 6 TEU
The Union recognizes the rights, freedoms and principles set out in the Charter of Fundamental
Rights of the European Union of 7 December 2000, as adapted at Strasbourg, on 12 December
2007, which shall have the same legal value as the Treaties. The provision of the Charter shall
not extend in any way the competences of the Union as defined in the treaties. The rights,
freedoms and principles in the Charter shall be interpreted in accordance with the general
provisions in Title VII of the Charter governing its interpretation and application and with due
regard to the explanations referred to in the Charter, that set out the sources of those provisions.
Article 6 of TEU & ECHR
The Union shall accede to the European Convention for the protection of Human Rights and
Fundamental freedoms. Such accession shall non-affect the Union’s competences as defined in
the treaties. Fundamental rights, as guaranteed by the European Convention for the protection
of Human rights and fundamental freedoms and as they result from the constitutional traditions
common to the Member states, shall constitute general principles of the Union’s law.
The Constitutional Traditions of the States after Lisbon
Art. 6 TEU still provides the common constitutional traditions as an instrument of the
protection of human rights in EU. The common constitutional traditions may in fact provide
for a higher protection than the one of the charter that provides only for a minimum standard
protection.
Compatibility clause
The relation between the Nice Charter and the ECHR is on Article 52, par. 3 e 53 of the Charter.
The Article provides the compatibility clause and the correspondence clause. Compatibility
clause, according to Art. 52 par. 3 is intended to ensure harmony between the ECHR and the
Nice Charter, promoting deference of the ECJ towards the case law of ECtHR. Art. 52. par. 3
affirms that “in so far as this charter contains rights which correspond to rights guaranteed by
the Convention for the protection of Human rights and Fundamental freedoms, the meaning
and scope of those rights shall be the same as those laid down by the said Convention. This
provision shall not prevent Union law providing more extensive protection. Whereas,
Correspondence clause, according on Art. 53 provides for a general “non-regression” clause.
The Nice Charter is conceived as a minimum standard of human rights protection tool that
cannot lower the protection provided by National Constitutions, EU law, European Convention
of Human Rights and other international treaties.
Furthermore, Article 53 Nice Charter stipulates that “Nothing in this Charter shall be
interpreted as restricting or adversely affecting human rights and fundamental freedoms are
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recognized, in their respective fields of applications, by Union law and international

agreements to which the Union, the Community or all the Member States are party, including
the European Convention for the protection of Human rights and Fundamental freedoms, and
by the member States’ constitutions.
Scope and applicability of the Charter (art. 51 (1) Nice Charter)
The Charter has the function:
1. as an interpretative tool to enlighten the meaning of other sources of law in EU law.
2. as a parameter of legitimacy of the EU Acts.
3. as a parameter of legitimacy of some State Acts, in case that the national Act has been
adopted in order to put into effect a treaty rule or a EU act., for example the implementation of
a EU directive.
Therefore, individuals, legal persons and states may invoke the infringement of a fundamental
right, protected by the charter, by a state only in the third hypothesis
Scope and applicability of the Charter (art. 51 Nice Charter)
It is necessary for the National Act to be linked to EU law. The national Act shall have
implement EU treaty rule, EU Act (e.g. a directive), or the national Act in the scope of the
treaties. If there is no connection between the EU law and the National Act, the ECJ cannot
affirm its competence on national acts.
The CFR consist of the following values:
1. Dignity : right to life and prohibits torture, slavery, the death penalty, eugenic
practices and human cloning (mostly based on the ECHR and reflects Article 1
German Basic Law)
2. Freedom: liberty, personal integrity, privacy, protection of personal data,
marriage, thought, religion, expression, assembly, education, work, property and
asylum
3. Equality: equality before the law, prohibition of all discrimination including on
basis of disability, age and sexual orientation, cultural, religious, and linguistic
diversity, the rights of children and the elderly
4. Solidarity: social and worker rights including the right to fair working conditions,
protection against unjustified dismissal, and access to health care, social and
housing assistance
5. Citizen rights: rights of the EU citizens such as the right to vote in election to the
EU Parliament and to move freely within the EU, administrative rights such as

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right to good administration, rights to access documents and to petition the

European Parliament
6. Justice: justice issues such as the right to an effective remedy, fair trial, rights of
presumption of innocence, the principle of legality, and double jeopardy
7. General Provisions: the interpretation and application of the Charter

Class Discussion
1. Discuss the three system of protection for fundamental rights in the EU Law!
2. Discuss the further development of fundamental rights in EU Law!

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UNIT 11: Free movement of Good and Service

LEARNING OUTCOMES
1. Students understand free movement of good and
services in EU
2. Students can explain the free movement of Good and
Services
Sources:
https://www.europarl.europa.eu/factsheets/en/sheet/38/f
ree-movement-of-goods

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1. Legal basis
Article 26 and Articles 28-37 of the Treaty on the Functioning of the European Union
(TFEU).
2. Objectives
The right to the free movement of goods originating in Member States, and of goods
from third countries which are in free circulation in the Member States, is one of the
fundamental principles of the Treaty (Article 28 of the TFEU). Originally, the free movement
of goods was seen as part of a customs union between the Member States, involving the
abolition of customs duties, quantitative restrictions on trade and equivalent measures, and the
establishment of a common external tariff for the Union. Later on, the emphasis was placed on
eliminating all remaining obstacles to the free movement of goods, with a view to creating the
internal market.
3. Achievements
The elimination of customs duties and quantitative restrictions (quotas) between
Member States was accomplished by 1 July 1968. This deadline was not met in the case of the
supplementary objectives — the prohibition of measures having an equivalent effect, and the
harmonisation of relevant national laws. These objectives became central in the ongoing effort
to achieve free movement of goods.

A. Prohibition of charges having an effect equivalent to that of customs duties: Article

28(1) and Article 30 of the TFEU
Since there is no definition of the aforementioned concept in the Treaty, the case law
has had to provide one. The Court of Justice of the European Union considers that any charge,
whatever it is called or however it is applied, ‘which, if imposed upon a product imported from
a Member State to the exclusion of a similar domestic product has, by altering its price, the
same effect upon the free movement of products as a customs duty’, may be regarded as a
charge having equivalent effect, regardless of its nature or form (Joined cases 2/62 and 3/62,
and Case 232/78).
B. Prohibition of measures having an effect equivalent to quantitative restrictions: Article
34 and Article 35 of the TFEU
In its Dassonville judgment, the Court of Justice took the view that all trading rules
enacted by Member States which are capable of hindering, directly or indirectly, actually or
potentially, intra-Community trade were to be considered as measures having an effect
equivalent to quantitative restrictions (see Case 8/74 of 11 July 1974 and paragraphs 63 to 67
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of Case C-320/03 of 15 November 2015). The Court’s reasoning was developed further in the
Cassis de Dijon judgment, which laid down the principle that any product legally manufactured
and marketed in a Member State in accordance with its fair and traditional rules, and with the
manufacturing processes of that country, must be allowed onto the market of any other Member
State. This was the basic reasoning underlying the debate on defining the principle of mutual
recognition, operating in the absence of harmonisation. As a consequence, even in the absence
of European harmonisation measures (secondary EU legislation), Member States are obliged
to allow goods that are legally produced and marketed in other Member States to circulate and
to be placed on their markets.
Importantly, the field of application of Article 34 of the TFEU is limited by the Keck
judgment, which states that certain selling arrangements fall outside the scope of that article,
provided that they are non-discriminatory (i.e. they apply to all relevant traders operating
within the national territory, and affect in the same manner, in law and in fact, the marketing
of domestic products and products from other Member States).
C. Exceptions to the prohibition of measures having an effect equivalent to that of
quantitative restrictions
Article 36 of the TFEU allows Member States to take measures having an effect
equivalent to quantitative restrictions when these are justified by general, non-economic
considerations (e.g. public morality, public policy or public security). Such exceptions to the
general principle must be interpreted strictly and national measures cannot constitute a means
of arbitrary discrimination or disguised restriction on trade between Member States. Finally,
the measures must have a direct effect on the public interest to be protected, and must not go
beyond the necessary level (principle of proportionality).
Furthermore, the Court of Justice recognised in its Cassis de Dijon judgment that
Member States may make exceptions to the prohibition of measures having an equivalent effect
on the basis of mandatory requirements (relating, among other things, to the effectiveness of
fiscal supervision, the protection of public health, the fairness of commercial transactions and
the defence of the consumer). Member States have to notify national exemption measures to
the Commission. Procedures for the exchange of information and a monitoring mechanism
were introduced in order to facilitate supervision of such national exemption measures (as
provided for in Article 114 and Article 117 of the TFEU, Decision 3052/95/EC of the European
Parliament and of the Council and Council Regulation (EC) No 2679/98). This was further
formalised in Regulation (EC) No 764/2008 on mutual recognition, which was adopted in 2008
as part of the New Legislative Framework (NLF).
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D. Harmonisation of national legislation

The adoption of harmonisation laws has made it possible to remove obstacles (such as
by making national provisions inapplicable) and to establish common rules aimed at
guaranteeing the free circulation of goods and products, and respect for other EU Treaty
objectives, such as protection of the environment and of consumers, or competition.
Harmonisation has been further facilitated by the introduction of the qualified majority
rule, required for most directives relating to the completion of the single market (Article 95 of
the EC Treaty, as modified by the Maastricht Treaty), and by the adoption of a new approach,
proposed in a Commission White Paper (1985), aimed at avoiding onerous and detailed
harmonisation. In the new approach based on the Council resolution of 7 May 1985 (confirmed
in the Council resolution of 21 December 1989 and Council Decision 93/465/EEC), the guiding
principle is the mutual recognition of national rules. Harmonisation must be restricted to
essential requirements, and is justified when national rules cannot be considered equivalent and
create restrictions. Directives adopted under this new approach have the dual purpose of
ensuring free movement of goods through the technical harmonisation of entire sectors, and
guaranteeing a high level of protection of the public interest objectives referred to in Article
114(3) of the TFEU (e.g. toys, building materials, machines, gas appliances and
telecommunications terminal equipment).

E. Completion of the internal market

The creation of the single market necessitated the elimination of all remaining obstacles
to the free movement of goods. The Commission White Paper (1985) set out the physical and
technical obstacles to be removed and the measures to be taken by the Community to this end.
Most of these measures have now been adopted. However, the single market still requires
substantial reforms if it is to meet the challenges of technological progress.

Class Discussion
3. Discuss implementation of legal basis of Free movement of goods
4. Discuss benefit of free movement of goods according to you

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UNIT 12: Free movement on Person and Citizen

LEARNING OUTCOMES
1. Students understand free movement on Person and
Citizen in EU
2. Students can explain the free movement on Person and
Citizen in EU

Sources:
https://www.europarl.europa.eu/factsheets/en/sheet/147/f
ree-movement-of-persons

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1. Legal basis
Article 3(2) of the Treaty on European Union (TEU); Article 21 of the Treaty on the
Functioning of the European Union (TFEU); Titles IV and V TFEU; Article 45 of the Charter
of Fundamental Rights of the European Union.
2. Objectives
The concept of the free movement of persons has changed in meaning since its
inception. The first provisions on the subject, in the 1957 Treaty establishing the European
Economic Community, covered the free movement of workers and freedom of establishment,
and thus individuals as employees or service providers. The Treaty of Maastricht introduced
the notion of EU citizenship to be enjoyed automatically by every national of a Member State.
It is this EU citizenship that underpins the right of persons to move and reside freely within the
territory of the Member States. The Lisbon Treaty confirmed this right, which is also included
in the general provisions on the Area of Freedom, Security and Justice.
3. Achievements
A. The Schengen area
The key milestone in establishing an internal market with free movement of persons
was the conclusion of the two Schengen agreements, i.e. the Agreement proper of 14 June
1985, and the Convention implementing the Schengen Agreement, which was signed on 19
June 1990 and entered into force on 26 March 1995. Initially, the Schengen implementing
Convention (signed only by Belgium, France, Germany, Luxembourg and the Netherlands)
was based on intergovernmental cooperation in the field of justice and home affairs. A protocol
to the Amsterdam Treaty provided for the transfer of the ‘Schengen acquis’ into the Treaties.
Today, under the Lisbon Treaty, it is subject to parliamentary and judicial scrutiny. As most
Schengen rules are now part of the EU acquis, it has no longer been possible, since the EU
enlargement of 1 May 2004, for accession countries to ‘opt out’ (Article 7 of the Schengen
Protocol).
1. Participating countries
There are currently 26 full Schengen members: 22 EU Member States plus Norway,
Iceland, Switzerland and Liechtenstein (which have associate status). Ireland and the United
Kingdom are not parties to the Convention but can ‘opt in’ to selected parts of the Schengen
body of law. Denmark, while part of Schengen, enjoys an opt-out for any new justice and home
affairs measures, including on Schengen, although it is bound by certain measures under the
common visa policy. Bulgaria, Romania and Cyprus are due to join, though there are delays

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for differing reasons. Croatia began the application process to accede to the Schengen area on
1 July 2015.
2. Scope
The Schengen area’s achievements include:
a. The abolition of internal border controls for all persons;
b. Measures to strengthen and harmonise external border controls: all EU citizens need only
show an identity card or passport to enter the Schengen area;
c. A common visa policy for short stays: nationals of third countries included in the common
list of non-member countries whose nationals need an entry visa (see Annex II to Council
Regulation (EC) No 539/2001) may obtain a single visa, valid for the entire Schengen area;
d. Police and judicial cooperation: police forces assist each other in detecting and preventing
crime and have the right to pursue fugitive criminals into the territory of a neighbouring
Schengen state; there is also a faster extradition system and mutual recognition of criminal
judgments;
e. The establishment and development of the Schengen Information System (SIS);
3. Challenges
While the Schengen area is widely regarded as one of the primary achievements of the
European Union, it has recently been placed under considerable strain by the unprecedented
influx of refugees and migrants into the EU. From September 2015, the sheer number of new
arrivals prompted several Member States to temporarily reintroduce checks at the internal
Schengen borders. While all the temporary border checks have been in line with the rules in
the Schengen Borders Code, this marks the first time in the history of Schengen that temporary
border checks have been instituted on such a scale. A further challenge comes in the form of
terrorist attacks, revealing the difficulty of detecting terrorists entering and travelling through
the Schengen area. The ongoing challenges have served to underline the inextricable link
between robust external border management and free movement inside those external borders
and have led to a series of new measures, both to enhance security checks on persons entering
the Schengen area and to improve external border management
B. Free movement of EU citizens and their family members
1. First steps
In a bid to transform the Community into an area of genuine freedom and mobility for
all its citizens, directives were adopted in 1990 in order to grant residence rights to persons
other than workers: Council Directive 90/365/EEC on the right of residence for employees and
self-employed persons who have ceased their occupational activity; Council Directive
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90/366/EEC on the right of residence for students; and Council Directive 90/364/EEC on the
right of residence (for nationals of Member States who do not enjoy this right under other
provisions of Community law and for members of their families).
2. Directive 2004/38/EC
In order to consolidate different pieces of legislation (including those mentioned above)
and take account of the large body of case-law linked to the free movement of persons, a new
comprehensive directive was adopted in 2004 — Directive 2004/38/EC of the European
Parliament and of the Council of 29 April 2004 on the right of citizens of the Union and their
family members to move and reside freely within the territory of the Member States. The
Directive is designed to encourage Union citizens to exercise their right to move and reside
freely within the Member States, to cut back administrative formalities to the bare essentials,
to provide a better definition of the status of family members, and to limit the scope for refusing
entry or terminating the right of residence. Under Directive 2004/38/EC, family members
include: the spouse (also of the same sex, as clarified by the Court of Justice of the European
Union (CJEU) in its judgment Coman, C-673/16); the registered partner, if the legislation of
the host Member State treats registered partnerships as equivalent to marriage; direct
descendants who are under the age of 21 or are dependants and those of the spouse or registered
partner; and dependent direct relatives in the ascending line and those of the spouse or
registered partner.
a. Rights and obligations:
For stays of under three months: the only requirement for Union citizens is that they
possess a valid identity document or passport. The host Member State may require the persons
concerned to register their presence in the country.
For stays of over three months: EU citizens and their family members — if not working
— must have sufficient resources and sickness insurance to ensure that they do not become a
burden on the social services of the host Member State during their stay. Union citizens do not
need residence permits, although Member States may require them to register with the
authorities. Family members of Union citizens who are not nationals of a Member State must
apply for a residence permit, valid for the duration of their stay or a five-year period.
Right of permanent residence: Union citizens acquire this right after a five-year period of
uninterrupted legal residence, provided that an expulsion decision has not been enforced
against them. This right is no longer subject to any conditions. The same rule applies to family
members who are not nationals of a Member State and who have lived with a Union citizen for

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five years. The right of permanent residence is lost only in the event of more than two
successive years’ absence from the host Member State.
Restrictions on the right of entry and the right of residence: Union citizens or members
of their family may be expelled from the host Member State on grounds of public policy, public
security or public health. Guarantees are provided to ensure that such decisions are not taken
on economic grounds, comply with the proportionality principle and are based on personal
conduct, among others.
Finally, the directive enables Member States to adopt the necessary measures to refuse,
terminate or withdraw any right conferred in the event of abuse of rights or fraud, such as
marriages of convenience.
b. The implementation of Directive 2004/38/EC
The directive has been beset by problems and controversy, with evidence emerging of
serious shortcomings in implementation and continuing obstacles to free movement, as
highlighted by Commission reports and Parliament studies on the application of the directive,
infringement proceedings against Member States for incorrect or incomplete transposition, the
large volume of petitions submitted to Parliament and the considerable caseload before the
CJEU. The criticism raised by some Member States in 2013-2014 on the alleged abuse of free
movement rules by EU citizens for the purposes of ‘benefit tourism’ led to discussions at EU
level on possible reforms, in the meantime set aside after the decision of the UK to leave the
EU.
c. Third-country nationals
For provisions applying to third-country nationals who are not family members of an
EU citizen based on Articles 79 and 80 of the Treaty on the Functioning of the European Union
(TFEU).

Class Discussion
1. Discuss the implementation of free movement of people policy in EU
2. Discuss benefit of free movement of person according to you

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