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European Economic and Social Constitutionalism after the Treaty of Lisbon Edited by Dagmar Schiek, Ulrike Liebert, Hildegard Schneider Book DOI: http://dx.doi.org/10.1017/CBO9780511835193 Online ISBN: 9780511835193 Hardback ISBN: 9781107006812

Chapter 1 - Re-embedding economic and social constitutionalism pp. 17-46 Chapter DOI: http://dx.doi.org/10.1017/CBO9780511835193.004 Cambridge University Press

1 Re-embedding economic and social constitutionalism: Normative perspectives for the EU

dagmar schiek

I Introduction
Tensions between the economic and the social dimensions of European integration are being perceived as increasing, and so is the potential for conict between national and European levels of policy-making. Both are well illustrated by a highly controversial line of Court of Justice of the European Union (ECJ) cases on industrial relations: Viking and Laval have become symbols for the continuing dominance of the economic over the social dimension of European integration and for an increasing tendency of the EU to diminish national autonomy.1 As one consequence, demands to protect Member States social policy choices from EU law pressures arise.2 For such demands to be tenable, isolation of

C-341/05 Laval [2007] ECR I-11767 and C-438/05 Viking [2007] ECR I-10779. See for a selection of reviews The Cambridge Yearbook of European Legal Studies 10 (20072008) (Oxford: Hart, 2009) (Introduction by Barnard (pp. 46392), followed by a number of articles) and the special issue Comparative Labor Law and Policy Journal 29 (2008) (editorial introduction and articles by Eklund and Orlandini). See also B. Bercusson The trade union movement and the European Union: judgment day, ELJ 13 (2007), 279. e.g. F. Scharpf, The double asymmetry of European integration, MPIfG Working Paper 12 (2009) (demanding an option for Member States to reject specic judgments); C. Joerges, Rethinking European laws supremacy: A plea for a supranational conict of laws in B. Kohler-Koch and B. Rittberger (eds.), Debating the Democratic Legitimacy of the European Union (Lanham, MD: Rowman & Littleeld Publishers, 2007), pp. 31127 (proposing to replace supranationality by a conicts of law approach). The German Constitutional Court, too, demands that the EU should not interfere with national social policies (Judgment of 30 June 2009 2 BvE 2/08 et al., www.bundesverfassungsgericht. de/entscheidungen/es20090630_2bve000208en.html, paras. 2569).

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national and EU policy-making and of economic and social dimensions of European integration would have to be possible. This is arguably not the case. Economic and social dimensions of integration will thus have to be reconciled across EU and national levels, if the EU and its Member States are to maintain the ability of enhancing social justice against the pulls of economic globalisation. Achieving such reconciliation will also require a re-embedding of EU constitutionalism. It is true that the Treaty of Lisbon (ToL) has abandoned all constitutional rhetoric after the demise of the Constitutional Treaty. However, EU constitutionalism does not require constitutional rhetoric or any written constitutional document. As a dynamic process for a post-national entity it is necessarily open-ended,3 beyond positive law.4 As tensions between social and economic interest tend to be reformulated as legal issues, their reconciliation can only be achieved through (re-conceptualised) constitutionalism. This chapter develops an EU Treaty-based normative perspective for this reconciliation. The concept of socially embedded constitutionalism rests on three normative assumptions: rst, the European integration project needs to be considered from a societal perspective rather than one transxed on state and post-state institutions; secondly, the legal framework for European integration should not (and does not) juxtapose economic and social dimensions of social and economic integration; thirdly, constitutionalism as a dynamic concept can sensibly contribute to reconcile the tensions between economic and social dimensions of European integration and thus to engendering a European society based on social justice. The chapter starts with a sketch of a societal as opposed to a statecentred notion of European integration, and highlights social and economic dimensions of European integration under normative perspectives. It then contextualises current debates on constitutionalism beyond states. Finally, it proposes further steps to pursue the concept of socially embedded EU constitutionalism with a view to offering new modes of reconciling economic and social dimensions of European integration.

3 4

J. Shaw, Process, responsibility and inclusion in EU constitutionalism, ELJ 9 (2003), 45. J. Wouters, L. Verhey and P. Kiiver, European Constitutionalism beyond Lisbon (Antwerp: Intersentia, 2009); M. Dani, Constitutionalism and dissonances: Has Europe paid off its debt to functionalism?, ELJ 15 (2009), 324.

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re-embedding economic and social constitutionalism 19

II Towards a societal perspective on European integration

Any concept of EU constitutionalism presupposes a perspective on European integration.5 Pursuing the project to establish a socially embedded EU constitutionalism, this chapter needs to approach European integration from a perspective that relates to socio-economic reality. After all, the European integration project has been most successful in integrating economies, and it is as a consequence of this that tensions between the social and the economic have been experienced with increasing intensity recently. The subsequent overview considers what European integration theory has to offer in this vein, distinguishing state-centred from society-centred approaches.

A
6

The notion of European integration

If taken literally, the word integration has two potential meanings: on the one hand, integration can capture a process from mere cooperation to . . . complete unication.7 This rst meaning of integration is frequently used in the state-centred perspective of the endeavour, which focuses on the activities of states aiming at converging towards a European Union or as maintaining their sovereignty and co-operating within an international organisation. The object of research in this regard consists of state institutions, and their replication at EU level. On the other hand, integration can refer to combining individual elements into smaller political units, such as cities, inner-state regions and states. In this perspective, integration may relate to integrating individuals into a coherent society which may nevertheless be diverse or to integrating different groups of individuals into a multi-levelled community interacting with each other. This second meaning of integration can support a societal perspective. From this perspective,
5

J. Shaw, Post-national constitutionalism in the European Union, JEPP 6 (1999), 579, 586; see also the contributions by Weiler and Maduro in J. Weiler and M. Wind (eds.), European Constitutionalism beyond the State (Cambridge: Cambridge University Press, 2003). The series Integration through Law actually commenced its deliberations with a reference to the Oxford English Dictionarys entry on to integrate: M. Cappelletti, M. Seccombe and J. Weiler (eds.), Integration through Law: Europe and the American federal experience, vol. I(1) (Berlin and New York: Walter de Gruyter, 1985), p. 12. D. Curtin, European legal integration: Paradise lost in D. Curtin (ed.), European Integration and Law (Antwerp and Oxford: Intersentia, 2006), p. 8.

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research would focus on actors within states and the EU, such as trade unions, consumer associations, churches and social policy initiatives.

State-centred perspectives on European integration

European integration has been approached as a state-centred endeavour from a number of disciplines. Liberal intergovernmentalism8 is a prominent example from political science. Perceiving the European integration process as a result of bargaining between nation states (represented by their governments), it analyses supranational institutions, such as the ECJ, or the European Commission in their role as functional agents of states. Often, such researchers conclude that governmental bargaining will result in entrusting European institutions with (less popular) powers to take measures to modernise the economy, while social policy will be defended as national terrain. Federalism, as another political science approach to European integration theory,9 too, is focused on states activities. The co-operation of states may, in the view of federalism, result in amalgamating states into larger federations. Scholars of international law have tended to analyse the legal framework of European integration from the perspective of inter-state cooperation. Early studies of European law have been characterised as being steeped in positivist doctrinarism of international lawyers paired with the excitement of the same international lawyers observing how international law could actually become adhered to and a viable instrument of governance.10 Introducing a more interdisciplinary approach to legal studies,11 the integration through law scholarship12 evolved
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A. Moravcsik and F. Schimmelfenning, Liberal intergovernmentalism in A. Wiener and T. Diez (eds.), European Integration Theory, 2nd edn (Oxford: Oxford University Press, 2009). D. Chryssochoou, Theorizing European Integration, 2nd edn (Abingdon: Routledge, 2008), p. 57 et seq. A. Arnull, The Americanization of EU law scholarship in A. Arnull, P. Eackhout and T. Tridimas (eds.), Continuity and Change in EU Law: Essays in honour of Sir Francis Jacobs (Oxford: Oxford University Press, 2008), pp. 41617. Legal studies are works by legal scholars who integrate methods and deliberations from other social sciences such as political science, sociology and political economy (see J. Shaw, Introduction in J. Shaw and G. More (eds.), New Legal Dynamics of European Union (Oxford: Clarendon Press, 1995) p. 4). For a summary beyond the founding volume see U. Haltern, Integration through law in A. Wiener and T. Diez (eds.), European Integration Theory, 1st edn (Oxford: Oxford

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around the question as to how the ECJ could through some pivotal judgments create the supranational nature of todays EU law and equip this new entity with the capacity to govern through law. These attempts are state-centred in that they explain why nation states have surrendered part of their sovereignty to the European Union.

Societal perspectives on European integration

There are also numerous societal perspectives on European integration. In political science, transaction-analytical approaches are an early example of this perspective. Its founder, E. Deutsch, dened the end-state of an integrated entity as attainment within a territory of a sense of community and of institutions and practices strong enough and widespread enough to assure for a long time dependable expectations of peaceful change among its population.13 Transactionalism re-focused international relations theory on societal (non-state) actors, and the community of human beings.14 Ernst Haas neo-functionalism, often considered the origin of European integration theory,15 also allows a societal perspective on European integration. Its original denition of integration envisages the end-state of European integration through the prism of political community, which clearly refers to societal actors.16
University Press, 2004), pp. 17796, discontinued in 2nd edn (n. 8 above). Some contributions from political science are said to overlook the richness of legal argument by D. Curtin (n. 7 above), p. 5. Approaches that integrate both disciplines include G. de Brca, Rethinking law in neofunctionalist theory, JEPP 12 (2005), 310, 31012; B. Rehder, What is political about jurisprudence? Courts, politics and political science in Europe and the United States, MPIfG Discussion Paper 5 (2007); and K. Alter, The European Courts Political Power: Selected essays (Oxford: Oxford University Press, 2009). Cited from F. Laursen, Comparative Regional Integration (Aldershot: Ashgate, 2003), p. 4, referring to K. W. Deutsch, The Analysis of International Relations (Englewood Cliffs, NJ: Prentice Hall, 1971). Transactionalism is partly deemed a dead theory (A. Wiener and T. Diez, Introducing the mosaic of integration theory in Wiener and Diez (n. 8 above), p. 13, partly as the root of more current approaches (Chryssochoou, n. 9 above, pp. 257). It is also a starting point for European sociology (N. Fligstein, Euroclash: The EU, European identity, and the future of Europe (Oxford: Oxford University Press, 2008); W. Outhwaite, European Society (Oxford: Oxford University Press, 2008)). E. B. Haas and D. Dinan (eds.), The Uniting of Europe: Political, social and economic forces 19501957 (Indiana: University of Notre Dame Press, 2004). Political community . . . is a condition in which specic groups and individuals show more loyalty to their central political institutions than to any other political authority in a specic period of time and in a denable geographic space (ibid. p. 5). See also Haas own introduction, p. xiv, where he also maintains that social actors are in the centre.

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Even after considerable reframing,17 the focus on social actors as partly autonomous from states and supranational institutions remained characteristic for neo-functionalism. Social constructivism,18 which has been hailed as the new school of European integration theory19 and as the logical route to update neo-functionalism,20 also focuses on human beings and their interactions i.e. it is based on a societal perspective.21 From a social constructivist view, social actors construct social reality with slight variations depending on whether this happens independently from or in interaction with the material base of social reality.22 Also, theories focusing on governance23 beyond the state display societal perspectives on European integration, when they analyse the interaction of public institutions beyond state borders and the involvement of nonstate actors at different levels of the polity. While often focused on analysing the interaction of public institutions across levels, they are bound to consider the relevance of actors beyond the public realm, such as undertakings, trade unions and other emanations of civil society. Analysing European integration as a societal phenomenon is also the aim of the recently emerged sociology of European integration.24 Asking the question whether and how far societal integration occurs at
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A. Niemann and P. Schmitter, Neo-functionalism in Wiener and Diez (n. 8 above), pp. 456. See the theory-founding T. Christiansen, K. Jorgensen and A. Wiener, The Social Construction of Europe (London et al.: Sage, 1999); and T. Risse, Social constructivism and European integration in A. Wiener and T. Diez (eds.), European Integration Theory (Oxford: Oxford University Press, 2004); Moravcsik and Schimmelfenning (n. 8 above), pp. 14461. See A. Wiener and T. Diez, Taking stock of integration theory in Wiener and Diez (n. 8 above), pp. 2456. Haas and Dinan (n. 15 above), p. xvii: Our job is to see how NF [neo-functionalism] as amended by these challengers, can become part of a respectable constructivism. Thus, it is also viewed as a sociological perspective on European integration (see J. Checkel, Social construction and integration, JEPP 6(4) (1999) 54560). See Chryssochoou (n. 9 above), pp. 11013. M. Jachtenfuss and B. Kohler-Koch, Multi-level governance in Wiener and Diez, 1st edn (n. 12 above), pp. 97115, discontinued in the 2nd edn (n. 8 above); Chryssochoou (n. 9 above), pp. 5964. See also A. Stone Sweet and W. Sandelholtz, Integration, supranational governance and institutionalization of the European polity in A. Stone Sweet and W. Sandelholtz (eds.), European Integration and Supranational Governance (Oxford: Oxford University Press, 1998), pp. 126. J. Delhey, European social integration: From convergence of countries to transnational relations between people, WZB Discussion Paper (Berlin, February 2004); R. Mnch, Constructing a European society by jurisdiction, ELJ 14 (2008), 51941; Fligstein (n. 14 above); Outhwaite (n. 14 above); H.-J. Trenz, Elements of a sociology of European integration, ARENA Working Paper 11 (2008).

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transnational and even EU levels25 presupposes a conception of the EU as a social space and not as a mere political (co-operation) project.26 Some have endeavoured to develop a special notion of societal integration in transnational spaces, whose indicators would include transactions between people at transnational levels.27 Others would dene the sociological perspective of European integration as one concerned with deeper structural changes in relation to solidarity and justice within national society and an emerging European society.28 Legal studies are also able to approach European integration from a societal angle. The need to integrate a diverse society also emerges at national level. Accordingly, national constitutions are being measured against their potential of contributing to social integration.29 As the European Union attains more and more competences that have traditionally been taken upon by national states, Grimm has proposed to extend such constitutional law approaches to the EU.30 In his view, the inuence of law upon (societal) integration is dependent on social preconditions, such as common values imbued by education, which are lacking at European level.

Focus on the interplay between societal actors of European integration

The above demonstrates that there exists a variety of approaches enabling us to consider European integration from a societal perspective. Theories from various disciplines allow a focus on the interaction between socio-economic actors engaged with economic and social integration at a European or national level. Such approaches, it is submitted, are pivotal to understanding European integration, because its success depends on socio-economic actors just as much (possibly more) than on state and supranational actors.
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Trenz (n. 24 above), p. 14 (EU as laboratory of new forms of social integration); Delhey (n. 24 above), pp. 1422. Delhey (n. 24 above), p. 6. Outhwaite refers rather unspecically to transborder interaction (p. 128) as well as very specically to increases in migration (p. 140), Delhey mentions marriages, travel, friendship and migration (p. 18) and Fligstein considers changed patterns of interaction that increase transnational social elds (pp. 121, 165) (all quoted in n. 24 above). Mnch (n. 24 above), p. 519. See on different perspectives G. Schaal, Integration durch Verfassung und Verfassungsrechtsprechung? (Berlin: Duncker & Humblot, 2000). D. Grimm, Integration by constitution, I-CON 3 (2005), pp. 193208.

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This derives from the initial focus of EU integration on market integration. In the EU Member States, markets are not public, but rather societal realms. Accordingly, EU integration affects societies, in that its economic dimension tends to liberate individual (economic) actors from restrictive public policies. Analysing such processes requires a societal perspective, that visualises the interplay of economic and social actors at different levels within the EU integration process instead of imagining all these as interplay between the European Union and its Member States.

III Economic and social dimensions of European integration

If we consider European integration from a societal perspective, its economic and social dimensions attain centre stage. Both dimensions have been constitutionalised, i.e. dened in legally enforceable terms, to different degrees.

Economic dimensions

If integration consists of combining formerly separate entities into a consistent whole, its economic dimensions aim at combining national markets into a larger market. The initially predominant economic impetus of the EEC aimed at amalgamating the national economies of the then six Member States into a Common Market. Going beyond a free trade area (in which goods and possibly services ow freely), it also provided for factor mobility (i.e. free movement of labour and capital). Only in 1993, with the Treaty of Maastricht, did the renamed EU proceed towards economic and monetary union. It remains restricted to co-ordination in the eld of economic union though (Articles 121 and 126 TFEU), and a full union is not yet accomplished.31
31

The implied picture of developing economic integration in necessarily successive stages from a free trade area, via a customs union, towards a Common Market (including factor mobility), to economic and monetary union, followed by a full union has been a recurrent theme in political economy (see initially J. Tinbergen, International Economic Integration (Amsterdam: Elsevier, 1954) and B. Balassa, The Theory of Economic Integration (Homewood, IL: R. D. Irwin, 1961); now W. Molle, The Economics of European Integration: Theory, practice, policy, 5th edn (Aldershot: Ashgate, 2006)). The quasi-natural consequence has been criticised because even the initial stages are ultimately dependent on political integration (S. Nello, The European Union: Economics, policies and history, 2 edn (London et al.: McGraw Hill, 2009), p. 6).

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The Treaty of Rome emphasised economic dimensions of European integration by enshrining the Common Market into a xed legal frame, consisting mainly of guarantees of four fundamental freedoms (free movement of goods, services, persons freedom of establishment and free movement of workers and capital). Free movement of goods was fortied by a prohibition to establish protective or discriminatory taxes. At the same time the Treaty of Rome established a European-level competition law regime which prohibited cartels between, and abuses of a dominant market position by, private economic actors and subjected any state aid to prior approval by the EU Commission. Mainly, these provisions have remained unchanged and are now part of the Treaty on the Functioning of the European Union (TFEU)32 as established by the ToL.33 It will never be known whether the founding states intended these provisions to become directly effective within their borders.34 In the 1960s, the ECJ held in two pivotal judgments on free movement of goods that the EEC Treaty was not just any international Treaty, but rather constituted a new form of (international) law in that it enjoyed primacy over national law35 and in that individuals could rely on its provisions before national courts (direct effect).36 Together, primacy and direct effect of Treaty Articles were the cornerstones of the
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With the coming into force of the ToL, the EC Treaty has mainly been superseded by the Treaty on the Functioning of the European Union (Art. 1(10) ToL). Under Art. 26 TFEU (ex Art. 14 EC), the internal market comprises an area without internal frontiers where the free movement of goods, persons, services and capital is ensured. Art. 30 prohibits internal custom duties; Arts. 345 (ex Arts. 289 EC) prohibit quantitative restrictions on imports and exports and measures having equivalent effect, with some exceptions in Arts. 367. Art. 45 (ex Art. 39 EC) guarantees free movement of workers, Art. 49 (ex Art. 43 EC) contains freedom of establishment for natural persons as well as for companies, and Art. 56 (ex Art. 49 EC) guarantees freedom to provide services. Free movement of capital and payments, which was only mentioned in outline in the original EEC Treaty, is now guaranteed in Art. 63 TFEU (ex Art. 56 EC). Art. 55 TFEU (ex Art. 294 EC), now contained in the chapter on freedom of establishment, claries that freedom of establishment for companies also entails freedom to invest in foreign companies. As regards competition law, prohibitions of cartels and abuse of dominant market powers (applying to undertakings) are now to be found in Arts. 1016 TFEU (ex Arts. 816 EC), and rules preventing Member States from granting state aid without the EU Commissions approval in Arts. 1079 (ex Arts. 879 EC). T. C. Hartley criticises the doctrine of primacy as blatant judicial lawmaking, as the natural meaning of these norms would not suggest direct effect (EU Law in a Global Context (Cambridge: Cambridge University Press, 2004), p. 150). For a more recent account see A. Vauchez, The transnational politics of judicialization: Van Gend en Loos and the making of EU polity, ELJ 16 (2010), 1. 6/64 Flaminio Costa v. ENEL [1964] ECR 585. 26/62 NV van Gend en Loos [1963] ECR 3.

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supranationality of todays EU law. While national courts have not wholeheartedly accepted the supranational character of EU law,37 in practice its demands are frequently complied with. These doctrines imply that any directly effective Treaty Article can be relied upon by any economic actor before national courts, with the potential of the ECJ acting as ultimate arbitrator.38 Over time, the ECJ has acknowledged direct effect39 for all four fundamental freedoms. All these, except free movement of goods, are considered as horizontally effective, i.e. they can be wielded against any state and any socioeconomic actor who is perceived as inhibiting transnational economic activity. The same applies to the prohibition of cartels and abuse of a dominant market position. All in all, this means that the cornerstones of economic integration have also been enshrined as legal norms, which has led to them being referred to as an Economic Constitution.40 Expansive judicial activity has added efciency to this legal framework. In relation to free movement of goods, the ECJ has read the prohibition of quantitative restrictions and measures of equivalent effects to capture any (i.e. also non-discriminatory) rules enacted by Member States which are capable of hindering, directly or indirectly, actually or potentially, intra-Community trade.41 In the seminal Cassis de Dijon case, the Court established a presumption that any good considered as tradable in any Member State is free to circulate throughout the Common Market,42 forcing Member States to justify any
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See K. Alter, The European Unions legal system and domestic policy: Spillover or backlash (2009) and Who are the masters of the Treaty? European governments and the European Court of Justice (1998), both repr. in Alter (n. 12 above). This derives from Art. 267 TFEU, according to which any court in the EU can refer a case to the ECJ, while courts of last instance can even be under an obligation to refer. Also, the Commission or another Member State can raise infringement procedures before the ECJ to review the legality of Member States legislation (Arts. 2589 TFEU). See on these D. Chalmers, G. Davies and G. Monti, European Union Law, 2nd edn (Cambridge: Cambridge University Press 2010), pp. 14967, 315 et seq. On the notion of direct effect see Chalmers, Davies and Monti, ibid. pp. 267 et seq. See for a summary in English (of this Germanised line of thought), M. Streit and W. Mussler, The economic constitution of the European Community, ELJ 1 (1995), 5; for a critique see J. Baquero Cruz, Between Competition and Free Movement (Oxford: Hart, 2002), ch. 3.2, pp. 269. 8/74 Dassonville [1974] ECR, para 5. 120/78 Rewe-Zentral AG (Cassis de Dijon) [1979] ECR 649. That case stated that there was no valid reason why, provided that they have been lawfully produced and marketed in one of the Member States, alcoholic beverages should not be introduced into any other Member State.

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incidental impact of their national legislation on cross-border trade before the Court. From 1991, the Court applied the same principles to the other market freedoms.43 Combined with their horizontal effect, this means that any piece of legislation or any rule or practice engendered by non-state actors liable to hinder or make less attractive the exercise of the fundamental freedoms guaranteed by the Treaty44 will be subject to ECJ scrutiny. This is the judicial mechanism which prompts social scientists to state that it is virtually impossible to justify exceptions to the four fundamental freedoms . . . for the sake of social policy objectives.45 Some far-sighted legal scholars criticised its potential effects on industrial relations from the late 1990s,46 while only the recent cases referred to above47 led to widespread discontent. It would be nave to assume that even seminal cases such as Cassis would shape EU economic policy in isolation.48 While the Commission initially purported that after this judgment the principle of mutual recognition had to be accepted as a principle of primary Community law,49 soon political action was taken, rst by a Council resolution on free movement of goods and services, a legally non-binding act (Article 288 TFEU = ex Article 249 EC).50 Today, the principle of mutual recognition of goods is laid down by regulation,51 while the Commissions attempt to achieve the same for the freedom to provide services failed.52
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Usually, the Sger case (C-76/90 Sger [1991] ECR I-4221) is quoted as the starting point (see C. Barnard, The Substantive Law of the EU, 2nd edn (Oxford: Oxford University Press, 2007), pp. 19, 2739. C-55/94 Gebhard [1995] I-4165. See A. Schfer and S. Leiber, The double voluntarism in EU social dialogue and employment policy, EIOP 13 (2009), Article 9, p. 3. e.g. G. Orlandini, The free movement of goods as a possible Community limitation on industrial conict, ELJ 6 (2000), 341; see also Introduction (in this volume), n. 5. See n. 1 above. Alter and Meunier-Atsahalia have shown that the Commissions efforts to capitalise on the ECJ Cassis jurisprudence triggered interest-group activity and more policy-making (Judicial politics in the European Community repr. in Alter (n. 12 above)). Communication from the Commission concerning the consequences of the judgment given by the Court of Justice on 20 February 1979 in Case 120/78 (Cassis de Dijon), 1980 OJ C256/2; Communication from the Commission on the mutual recognition in the context of the follow-up to the Action Plan for the Single Market, COM 1999 (299), which argues that the same principle must apply to goods and services alike. Council Resolution 2000 C-141/02 (2000) OJ C 141/5. Regulation (EC) No. 764/2008, OJ 2008 No. L218/21 (repealing Commission Decision No. 3052/95/EC). Directive 2006/123/EC is fundamentally different from the Commissions original proposal of the Services Directive (on this U. Neergard, R. Nielsen and L. M.

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Legal studies view the principle of mutual recognition as encouraging competitive federalism53 as a method of governing the internal market: regulators from public and private realms generate competing sets of norms. In political science, this has been seen as new governance,54 because it may render EU-level rules protecting values such as consumer health, workplace safety or sustainable wages as superuous. National regulators and non-state rule-makers were free to establish whatever regime they saw t. Only if this was a potential hindrance to cross-border movement of products and factors55 would the need to justify the policy choice arise. The Commission and the Council used the Cassis doctrine to justify a new approach to harmonisation from 1987.56 Under this approach, EU legislation will only set loosely specied standards with which goods must comply, delegating the setting of technical rules to expert committees.57 While encouraging a certain degree of expertocracy, this regulatory technique also empowered economic actors to autonomously develop procedures to achieve the legislative standards, which is certainly one of its innovative facets.58 Embarking on active economic policy-making from 1993, the EU developed new forms of governance beyond traditional models of hierarchical rule. According to Article 121(1) and (2) TFEU (ex Article 99 EC), the Council develops broad economic guidelines in order to achieve co-ordination of national economic policies, rather than binding legislation. This can be regarded as the prototype of co-ordinating policies without binding legislation, which is at the same time characteristic of
Roseberry (eds.), The Services Directive: Consequences for the welfare state and the European Social Model (Copenhagen: DJF, 2008). On the notion Barnard (n. 43 above), pp. 1723 with references from different disciplines. See S. Schmidt, Mutual recognition as a new mode of governance, JEPP 14 (2007), 667. On the debate of new governance see e.g. G. de Brca and J. Scott (eds.), Law and new Governance in the EU and the US (Oxford et al.: Hart Publishing, 2006). See, however, the analysis of ECJ case law relating to free movement of workers on the one hand and free movement of services on the other hand by S. Deakin, which exposes that the ECJ leans towards regime portability in favour of enterprises, but not in favour of workers (Regulatory competition after Laval in Cambridge Yearbook (n. 1 above), pp. 581609). Initiated by Council Resolution of 7 May 1985 on a new approach to technical harmonisation and standards, OJ 1985 No. C136/1. It is impossible here to recount all publications on this. See Ch. Joerges and E. Vos (eds.), EU Committees: Social regulation, law and politics (Oxford: Hart, 1999) for an initial appraisal. On this see H. Schepel, The Constitution of Private Governance: Product standards in the regulation of integrating markets (Oxford: Hart, 2005).

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the open method of co-ordination (OMC). Thus, alongside traditional forms of legislation, soft-law mechanisms are at work in the eld of economic integration. Changes instigated by the ToL in the eld of economic integration are minimal; in particular fundamental freedoms and competition law remain unchanged substantively. Though the explicit connection between establishing the internal market and free and undistorted competition was excluded from the TEU, Article 3 TFEU claries that competition rules are necessary for the functioning of the internal market. Protocol No. 27 on internal market and competition was thus arguably superuous.59 Provisions relating to economic and monetary union and in particular regarding the Eurozone have been streamlined: the Council can now strengthen co-ordination and surveillance of budgets in Member States whose currency is the Euro, and also set out specic economic guidelines for them. In these decisions, only Council members representing states whose currency is the Euro can vote (Articles 133, 136 TFEU). Beyond the Eurozone, co-ordination of national policies remains the main mode of governance, and the Council will in most cases continue to act only on recommendation by the Commission. Such a recommendation can be rejected by a majority in the Council. There is an exception in cases of excessive budgetary decit, where the Council acts on a proposal by the Commission (Article 126 TFEU). Such a proposal can only be rejected unanimously by the Council (Article 293(1) TFEU).

Social dimensions

If integration consists of combining formerly separate entities into a consistent whole, its social dimensions would relate to combining national policies and societal activities referred to under the notion of welfare or social state into a European endeavour. If successful, this would engender European dimensions of solidarity and social justice. The social dimension of European integration is generally approached with more caution than its economic counterpart. Social integration as pursued on national levels is widely considered as being based on ideals of social justice.60 Social justice will encompass the goals of enhancing
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J.-C. Piris, The Lisbon Treaty: A legal and political analysis (Cambridge: Cambridge University Press, 2010), p. 308. United Nations Research Institute for Social Development, Social Integration: Approaches and Issues, March 1994.

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social equality and enabling individuals to participate actively in society and to full their personal potential (micro-level integration) as well as balancing social tensions at the macro level of society.61 Classical elds of national welfarism comprise solidarity regimes for those (temporarily) threatened by social exclusion, due to an inability to market their labour (old age pensions, healthcare, specic services for the elderly, persons with disabilities and the very young).62 These systems are being modernised since the 1980s by enhancing individual responsibility and capability and reducing patronising welfarism.63 From a wider perspective, social policy encompasses any activity by states or social actors, including civil society aimed at enabling persons to become at least a co-agent of their destiny rather than being the object of decisions made by economic actors such as employers, landlords or nancial managers.64 From this perspective, national welfarism encompasses rules enhancing industrial democracy and social justice in the work place65 as well as consumer law,66 alongside the classical solidarity regimes.67 The modernisation of social policy from this wider perspective demands a focus on capabilities to cope with increasing insecurities.68
61

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67 68

D. Schiek, Artikel 20 Abs. 13 V: Sozialstaat in E. Denninger et al. (eds.), Alternativkommentar zum Grundgesetz, vol. II (Neuwied et al.: Luchterhand, 2001), paras. 75 et seq. with examples from the German national background. For an example of this conception of EU social policy see B. V. Maydell et al., Enabling Social Europe (Vienna: Springer, 2006). Ibid. propagating the enabling welfare state (pp. 7389). Modernising the welfare state is also a theme of A. Giddens programmatic writings (The Third Way and its Critics (Cambridge: Polity, 2000)); for a condensed version adapted to the EU level see A. Giddens, Social model for Europe? in A. Giddens, P. Diamond and R. Liddle (eds.), Global Europe Social Europe (Cambridge: Polity, 2006), p. 14. Also termed as de-commodication as main aim of welfare states (G. Esping-Andersen, Social Foundations of Post-Industrial Economies (Oxford: Oxford University Press, 1999)). See C. Barnard, EC Employment Law, 2nd edn (Oxford: Oxford University Press, 2007), p. 1; contributions to J. Shaw (ed.), Social Law and Policy in an Evolving European Union (Oxford: Hart, 2000); and S. Guibboni, Social Rights and Market Freedom in the European Constitution (Cambridge: Cambridge University Press, 2006) all referring mainly to employment law, workplace democracy and social protection in discussing EU social policy. On the impact on consumer law see A. Maurer, Consumer protection and social models of Continental and Anglo-American contract law and the transnational outlook, IJGLS 14 (2007), 353. For a more elaborate development of this see Schiek (n. 61 above). J. Browne, S. Deakin and F. Wilkinson, Social Rights and European Market Integration (University of Cambridge, CBR WP 253 December 2002) inaugurated a research design on the capabilities approach. S. Deakin (The capability concept and the evolution of the European Social Model in M. Dougan and E. Spaventa (eds.), Social Welfare and EU Law (Oxford: Hart, 2005), p. 3) elaborates the concept in relation to EU social policy,

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re-embedding economic and social constitutionalism 31

Whether, and if so in which elds, EU-level policy-making should contribute remains disputed, partly corresponding to the width of the notion adopted. Those focusing on the classical elds tend to see no legitimate scope for autonomous EU social policy,69 while those ascribing to wider notions tend to concede that the EU has a legitimate role in regulation of employment and consumer law, for example. Both camps agree that traditional redistributive policies are not suitable candidates for hard European legislation70 and that EU social policy-making needs to develop beyond command and control governance and enhance capability and exibility.71 The legal frames for social dimensions of EU integration are weaker than for its economic dimension. From the founding of the EEC, the principle of equal pay for equal work for women and men (Article 157 TFEU = ex Article 141 EC) was the exception to the rule that there were no binding commitments in the social policy eld. This provision has been the source of a wealth of case law, mainly initiated by a limited number of strategic litigators.72 The expansion of the European integration project beyond economic dimensions post 1993 was partly achieved by introducing rights for EU citizens independently of their market activities (now Articles 205 TFEU = ex Articles 1722 EC; see also Article 911 EU, these last provisions are unprecedented). While the provisions on citizenship were deemed to be merely symbolic initially, ECJ case law developed these, taken together with
and the contributions in S. Deakin and A. Supiot (eds.), Capacitas (Oxford: Oxford University Press, 2009) apply it to contract law. T. Atkinson et al., The EU and Social Inclusion (Oxford: Oxford University Press, 2002), p. 5 (while conceding the evolution of the European Union will . . . lead us . . . to ask about the social cohesion of the European Union as a whole: p. 186). See similarly Maydell et al. (n. 63 above), p. 140 (stating that social policy currently remains a national matter) and executive summary pp. xxvi and 1928 (explaining that diversity of national welfare state expectations is too pronounced to provide a single European Social Model). D. Damjanovic and B. de Witte, Welfare integration through EU law: The overall picture in the light of the Lisbon Treaty in U. Neergard, R. Nielsen and L. Roseberry (eds.), Integrating Welfare Functions into EU Law: From Rome to Lisbon (Copenhagen: DJF, 2009). See also M. Ferrera, The Boundaries of Welfare (Oxford: Oxford University Press, 2005). See those cited in nn. 66 and 69 above; see also M. Maduro, European constitutionalism and three models of Social Europe in M. Hesselink (ed.), The Politics of a European Civil Code (Kluwer International, 2006), p. 125. See K. Alter and J. Vargas, Explaining variation in the use of European litigation strategies: European Community Law and British gender equality policy in Alter (n. 12 above), pp. 15982; see also U. Liebert, with S. Sifft (eds.), Gendering Europeanization (Public Discourses on EC Equal Treatment and Equal Opportunity Norms in Six Member States) (Brussels: Peter Lang, 2003).

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the non-discrimination principle (Article 18 TFEU = ex Article 12 EC), into constitutionalised social rights.73 Social policy-making at EU level too remains restricted. The EEC had very limited competences in this eld, comprising of providing a European social fund and some legislative competences relating to free movement of workers. Still, European social policy also took legal forms from the late 1970s, when altogether eight directives on protecting interests of workers in cases of economic concentration processes and on equal treatment of women and men in the labour market were passed. Subsequent Treaty reforms led to the inclusion of a comprehensive social chapter into the EC Treaty in 1998, with regulatory competences in employment law. However, core welfare state policies remained safely within national competence. Co-ordination rather than harmonisation was used where necessary to facilitate free movement of workers and self-employed persons. The Treaty of Amsterdam (1997) introduced a special title on employment policy into the then EC Treaty (now: Articles 14550 TFEU), meant to counterbalance the title on economic and monetary policy inserted by the Treaty of Maastricht (1993). This chapter introduced the OMC in the eld of employment. This mode of governance leaves the primary responsibility with the Member States, but introduces processes of benchmarking and comparative policy development that have proven surprisingly effective.74 With the Treaty of Nice, this policy method was elevated to the main instrument not only in the eld of employment policy, but also of social policy at large.75 The ToL elevates social policy, social cohesion, consumer protection and public health to shared competences, and expands the EUs competences regarding services of general interest and public health (Articles 4, 14 and 168(4) TFEU). Directly binding EU Treaty law and secondary legislation are considerably scarcer in the social than in the economic eld. Accordingly, new governance modes beyond binding law seem of heightened practical relevance here. The OMC, while originating in the economic policy chapter, is widely used to integrate civil society actors into transnational governance
73

74

75

For a concise overview see D. Kostakopoulou, The evolution of European Union citizenship, EPS 7 (2008), 285, 293. See also E. Spaventa, Seeing the wood despite the trees? On the scope of Union citizenship and its constitutional effectiveness, CMLRev 45 (2008), 13; and the articles in S. Besson (ed.), Special issue on citizenship, ELJ 13 (2007), 573. See for an overview of these S Krger, What we have learnt: Advances, pitfalls and remaining questions in OMC research, EIOP 13 (2009), Special Issue 1. See the critical rsum in Barnard (n. 65 above), p. 71.

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re-embedding economic and social constitutionalism 33

processes.76 Despite all justied criticism on how exactly this is done,77 this also demonstrates the chance to further the transnationalisation of society through non-legally binding policies. However, as long as no binding law supports the social dimension of European integration, economic elites have more opportunities for developing a European identity than the economically less fortunate through direct legal action.78

Interrelation of economic and social dimensions of European integration

So far economic and social dimensions of European integration have been described as separate spheres. Such separation has long been characterised as not sustainable.79 This is also mirrored in the Treaties as a normative framework of EU integration. From the founding of the European Economic Community, social and economic dimensions of European integration were meant to interrelate normatively. The original version of Article 2 EEC reads:
The Community shall have as its task, by establishing a Common Market and progressively approximating the economic policies of Member States, to promote throughout the Community . . . an accelerated raising of the standard of living . . .

Market integration appears as merely a secondary measure, meant to serve social policy aims such as the raising of the standard of living. Steps enhancing the economic liberal thrust of the Treaties have often been taken in parallel with endeavours to enhance social regulation. The Treaty of Maastricht introduced the market economy clause (ex Article 4 EC), requiring:
the adoption of an economic policy which is based on the close co-ordination of Member States economic policies, on the Internal Market and on the denition of common objectives, and conducted in accordance with the principle of an open market economy with free competition.
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78 79

See C. Kilpatrick, New EU employment governance and constitutionalism in G. de Brca and J. Scott (eds.), Law and Governance in the EU and the US (Oxford: Hart Publishing, 2006), pp. 13441. D. Ashiagbor, The European Employment Strategy (Oxford: Oxford University Press, 2005) esp. pp. 22633. Fligstein (n. 14 above), esp. ch. 6 (Conclusions, pp. 2067). See already B. de Sousa Santos, Towards a New Legal Common Sense, 2nd edn (Reed: Elsevier, 2002), pp. 204 et seq.

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The same Treaty also introduced a sea change in ex Article 2 EC, hidden between two commas in the beginning of the sentence. The Community was now to achieve its aims by establishing a Common Market and an economic and monetary union and by implementing the common policies and activities referred to in Article 3 (authors emphasis). Instead of relying on effects of economic integration, regulatory activity at EU level was now seen as essential. This change has legal implications. Earlier, the Court had conrmed that social aims stated in ex Article 2 EEC would be furthered by establishing the Common Market, while regulatory social policy remained the sole competence of the Member States.80 The new Article 2 EC rendered this case law obsolete. The instrumental character of the internal market remained in place until the Treaty of Nice. Also, aims contained in Article 2 EC were increased with each Treaty reform. These aims are not merely moral imperatives, but have been acknowledged as legally binding. For example, in the Viking and Laval judgments, the Court relied on Articles 2 and 3 EC in concluding that free movement of services and freedom of establishment respectively must be balanced against objectives pursued by social policy.81 Under the ToL, the values of the European Union are specied in Article 2 TEU. In addition to values already contained in Article 6 EU (before Lisbon),82 this provision lists human dignity, equality and the rights of persons belonging to a minority. These are then qualied as being common to Member States in a society in which pluralism, nondiscrimination, tolerance, justice, solidarity and equality between women and men prevail (Article 2 EU). This seems to imply that social policy values such as justice and solidarity are left for Member States to pursue. Article 3 TEU paragraph 3, however, states further aims of the EU which include work[ing] for sustainable development . . . based on balanced economic growth, a highly competitive social market economy, aiming at full employment and social progress, and a high level of protection and improvement of the environment and combat[ing] social exclusion and discrimination as well as promot[ing] social justice. In addition, the gender mainstreaming clause (Article 8 TFEU = ex Article 3(2) EC) and environmental sustainability clause (Article 11
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126/86 Zaera [1987] ECR 3697, paras. 1011; C-339/89 Alsthom Atlantique [1991] ECR I-17, para. 8. ECJ Viking, paras. 789; and ECJ Laval, paras. 1045 (both n. 1 above). Liberty, democracy, respect for human rights and fundamental freedoms and the rule of law.

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TFEU= ex Article 6 EC) are complemented by new mainstreaming clauses, among others obliging the EU to take into account the guarantee of adequate social protection and the ght against social exclusion (Article 9 TFEU). Although possibly a little imprecise,83 the addition signals the enhanced relevance of social policy. As regards economic integration, the ToL upgrades the internal market from a secondary to a primary aim (Article 3 EU). At the same time, the open market economy with free competition (ex Article 4 EC) is transformed towards a highly competitive social market economy (Article 3 TEU, Article 119 TFEU). While this has been read as a step backwards,84 overall the market economy is now connected to social policy, while open markets are no longer endorsed. The development of Treaty aims, and the consistent expansion of social policy aims, seems to imply a normative case for reconciling the social and the economic in the endeavour of EU integration. This normative case illustrates that the dominant views at the time of founding the European Economic Community85 are no longer the basis of the Treaties. In the 1950s, it was seriously believed that market integration would lead to increased stability, enhanced living standards86 and accelerated development of production methods, which would in turn lead to lower consumer prices, higher wages, currency stability, expansion of production and social progress.87 In 1993, the makers of the Treaty of Maastricht acknowledged that this was not realistic and introduced the principle of a regulatory European integration process. This resonates with more recent critical voices from the eld of political economy, according to whom the present crisis of European integration could be counteracted by deepening political integration and substantive solidarity.88 Moreover, the interrelation of the rather efcient implementation of constitutionalised fundamental freedoms and competition law rules with national social policies and institutions may have
83 84

85

86 87

88

See B. Bercusson, The Lisbon Treaty and Social Europe, ERA Forum 10 (2009), 87, 101. C. Joerges, The social market economy as Europes social model? in L. Magnusson and B. Strath (eds.), A European Social Citizenship? Pre-conditions for future policies in historical light (Brussels: Peter Lang, 2005), p. 125. As expressed in the Spaak report, drafted in support of founding the Community (Rapport des chefs de delegation aux ministres des affaires etrangres, Brussels: 21 April 1956). Ibid., p. 13. Ibid., p. 14; R. Baldwin and C. Wyplosz, The Economics of European Integration (Maidenhead: McGraw Hill, 2009), still maintain this view. A. Cafruny and J. Ryner, Critical political economy in Wiener and Diez (eds.) (n. 8 above), quotes from pp. 233 and 238.

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devastating effects. Economic and monetary union is said to support neoliberal welfare politics89 while implementation of legally enshrined market integration has been shown to deconstruct traditional pillars of national welfare states.90 Even from more moderate positions European redistribution and regulatory policies are deemed a necessary complement to enhanced efciency of competitive markets.91 Pressures towards neoliberal welfare politics and dismantling of social security at national level are also a consequence of globalisation of markets.92 This would suggest that nation states are increasingly unable individually to develop social policy counterbalancing poverty, unemployment and social disintegration. Accordingly, a European dimension of efforts to enhance social justice is necessary, if social justice should be a realistic option.93

IV

EU constitutionalism socially embedded rights?

Enhancing justice is not merely a political programme, but also a normative aim. This part considers how far EU constitutionalism can contribute to achieving it. It is submitted that constitutionalism for a supranational polity with increasing social, economic and cultural competences and diversity, but without a strong symbolic constitution for the foreseeable future,94 should be socially embedded. Obviously, this is not meant to close the wide debate about EU constitutionalism,95 but rather to open it for a different argument.
89

90

91 92

93

94

95

T. Bolukbasi, On consensus, constraint and choice: Economic and monetary integration and Europes welfare states, JEPP 16 (2009), 527. For employment law see P. Syrpis, EU Intervention in Domestic Labour Law (Oxford: Oxford University Press, 2007), esp. pp. 10344; for welfarist solidarity regimes see Ferrera (n. 70 above). Molle (n. 31 above), p. 290311; see also Nello (n. 31 above), p. 123. J. Habermas, The postnational constellation and the future of democracy in J. Habermas (ed.), The Postnational Constellation: Political essays (Cambridge, MA and London: MIT Press, 2001), pp. 99103. On the EUs active involvement in establishing these external forces, A. Antoniadis, Social Europe and/or global Europe? Globalisation and exicurity as debates on the future of Europe, Cambridge Review of International Affairs 21 (2008), 327. See J. Habermas, Learning from catastrophe? A look back at the short twentieth century in Habermas (n. 92 above), pp. 529. C. Reh, The Convention on the Future of Europe and the Development of Integration Theory: A lasting impact?, JEPP 15 (2008), 781. Legal studies contributions to this include Weiler and Wind (n. 5 above); Wouters, Verhey and Kiiver (n. 4 above); Shaw (nn. 3 and 5 above); N. Tsagourias, Transnational

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Constitutions within states

Constitutionalism as a legal or political theory obviously has its origin within nation states.96

Conventional constitutionalism: liberal rights and market freedoms While pre-modern constitutions were content with xing a set of rules capable of formally justifying territorial sovereignty, constitutions of modern states nd the legitimacy of public rule in democracy as a principle. Democratic constitutions tend to follow two different models. In majoritarian democracies, constitutions are mainly procedural and justify rule through parliamentary majority. Constitutional democracies use a set of legal endowments protected by independent courts as a complementary justication of majority rule.97 Beyond the differences between these traditions, democratic constitutionalism aims to constrain arbitrary rule. Traditionally, national constitutions were based on the assumption that such arbitrariness emanates from public actors. Early democracy constrained arbitrary power of the monarch and/or other traditional rulers, and modern democracy has constrained arbitrary power emanating from the state. This has happened through rights endowments, procedural rules, checks and balances of public powers or a combination of all three. The conventional departure for constitutionalism has thus been sketched:
Constitutionalism (Cambridge: Cambridge University Press, 2007). Political science approaches include Reh (n. 94 above); A. Wiener, Contested meanings of norms, CompEurPolit 5 (2007), 1; U. Liebert, J. Falke and A. Maurer (eds.), Postnational Constitutionalism in the New Europe (Baden-Baden: Nomos, 2006). See Tsagourias, Introduction in Transnational Constitutionalism (n. 95 above), p. 4. On these different traditions R. Dworkin, Freedoms Law: The moral reading of the American Constitution (Oxford: Oxford University Press, 1996) (developing the dichotomy of majoritarian democracy and his moral reading, consisting of constitutional democracy in the introduction, pp. 138); T. Ginsburg, Judicial Review in New Democracies (Cambridge: Cambridge University Press, 2003), pp. 119 (juxtaposing the British majoritarian principle of parliamentary supremacy to the US idea of constitutional democracy). For European voices, see E. U. Petersmann, Multilevel trade requires multilevel constitutionalism in C. Joerges and E. U. Petersmann (eds.), Constitutionalism, Multilevel Trade Governance and Social Regulation (Oxford et al.: Hart, 2006), p. 7 (portraying the dichotomy as between rights-based constitutions examples being Germany, South Africa and India processbased or popular democracies examples being the UK and the US) and p. 28. There is also a perceived rift between the Nordic states and the EU (J. Nergelius, Between collectivism and constitutionalism: The Nordic countries and constitutionalism in J. Nergelius (ed.), Constitutionalism: New challenges (Leiden/Boston: Martinus Nijhoff, 2008), pp. 11954).

96 97

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parliamentary rule is complemented by inalienable rights bestowed on individuals, who are also enabled to enforce these rights judicially. In debates about national citizenship, different layers of constitutional rights have been distinguished, following T. H. Marshall. The rst layer is described as the protection of personal liberties (e.g. property, free movement and economic activity). The second layer provides the institutional base for democracy, again also endowing individuals with rights such as the right to participate in elections, publicly declare their opinion and to organise themselves in political parties. The third layer provides for a minimum level of social equality and the practical opportunity for all citizens to participate in democratic and socio-economic life. It comprises nancial endowments from state sources and proceeds to rights of workers to combine in trade unions and to participate in corporate governance through codetermination in enterprises.98 Conventional constitutionalism tends to focus on the rst two layers of rights. Widespread scepticism towards the juridication of social rights99 frequently leads to a narrow conception of constitutional rights as individual and negative, under which any constitutionalisation of the third layer seems unattainable. In this traditional vision, the rule of law is constructed as an instrument to safeguard individual liberties, strengthening citizens who are sufciently autonomous in relying on their personal wealth to be able to fend for their own wellbeing. Unsurprisingly, this conventional constitutionalism is closely related to market-based societies.

2 Socially embedded constitutionalism However, constitutionalism is capable of embracing social rights. If a constitution aims at integrating a society,100 and the constitution is at the same time rights-based, rights must be interpreted in ways that hold out their promise to the majority of the population. Accordingly, the endeavour to guarantee rights beyond hollow formulas is a common
98

99

100

See M. Everson, The legacy of the market citizen in Shaw and More (n. 11 above), pp. 7390 (at 82), with ample reference to T. H. Marshall (Citizenship and social class (Oxford: Oxford University Press, 1950) repr. in T. H. Marshall and T. Bottomore, Citizenship and Social Class (London et al.: Pluto Press, 1992), pp. 147). For a criticism of such narrow perspectives see D. Bilchitz, Poverty and Fundamental Rights: The justication and enforcement of socio-economic rights (Oxford: Oxford University Press, 2007), using the term socio-economic as used in UN Convention on Social, Economic and Cultural Rights for what is referred to as social rights in constitutional (national) theory. See above text accompanying n. 29.

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endeavour of constitutional courts. Guaranteeing socio-economic rights explicitly,101 embracing a social state principle which informs the content of rights102 or interpreting rights as enabling rather than liberating103 are ways of making human rights meaningful for all factions of society. Making human rights signicant in the reality of many (rather than protecting the privileges of a few) ultimately aims at creating conditions where all human beings are capable of governing their own lives, if necessary collectively or co-operatively. Such self governance can be endangered by states and their conglomerates, and accordingly protection of rights and liberties against public appropriation remains important. However, self-governance is increasingly threatened by economically powerful actors outside public realms. This results inter alia from the tendency of markets to reinforce existing social stratication and to work to the advantage of frequent players. A substantive rather than a merely formal notion of rights thus is traditionally safeguarded by state action (or state intervention in markets). For example, rights to protect personal data are increasingly protected against impositions by employers as well as against the states insatiable hunger for information. Socially embedded constitutionalism as proposed here should not merely rely on substantive rights enforced by states. Transgressing the boundaries of the statecitizen relationship, it has extended its reach towards relations that are predominantly perceived as belonging to societal realms beyond state governance. Examples include markets, families and other realms of non-state community. In order to imbue these spheres with substantive human rights, rights become relational, opening adequate procedures to pursue self-governance in horizontal relationships. These include rights to develop counter-powers by collectivisation in order to overcome ingrained imbalances of market participants. Constitutionalised labour relations104 certainly have the longest practical tradition among such rights. However,
101

102

103

104

The South African constitution is one of the most prominent examples; see D. Davis, Socioeconomic rights: Do they deliver the goods?, ICON 6 (2008), 687711; S. Koutnatzis, Social rights as a constitutional compromise: Lessons from comparative experience, Columbia JTL 44 (2005), 74. See for an English-language overview on such effects of the German constitutional social state principle, Koutnatzis (n. 101 above); see also Schiek (n. 61 above). K. Moeller, Two conceptions of positive liberty: Towards an autonomy-based theory of constitutional rights, OJLS 29 (2009), 75786. On the concept of constitutionalising labour relations through guaranteeing procedural fundamental rights see M. Kittner and D. Schiek, Artikel 9 Abs. 3 Koalitionsfreiheit in Denninger et al. (n. 61 above) and R. Dukes, Constitutionalising employment relations: Sinzheimer, Kahn-Freund, and the role of labour law, J Law&Soc 35 (2008), 341.

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the employment relationship is certainly not the only sphere where private power needs to be contained. Also, practices developed in the late nineteenth century may well be in need of refurbishment if they are to meet challenges of a post-national age. The ongoing relevance of these early forms of societal constitutionalism lies in their capacity to create an alternative to competitive markets as well as to paternalistic state rule. This alternative lies in co-operative forms of governance, in other words through collective action. Collective action can be realised through self-organisation in a number of ways, be it through housing associations, the economic sociale, or self-organised care for old people. It is nearly commonplace to state that the age of national constitutions has come to an end. The powers that threaten individual liberties that have been the traditional focus of these constitutions no longer emanate from state actors alone. States are vastly dependent on each other if they are to maintain any order at all. Furthermore, private ordering has increased immensely. This may render state legislation as dysfunctional, and the same may be true for legislation issued by a conglomerate of states. Accordingly, constitutionalism is now being developed beyond national borders. European constitutionalism is only one example for this, on which the following will focus.

B 1

EU constitutionalism beyond states

Conventional constitutionalism: liberal rights and market freedoms While the forerunners of the EU, and especially the EEC, have not been overly concerned with establishing procedural preconditions for democratic rule, its early constitutionalism has been successful in guaranteeing judicially enforceable rights. This form of constitutionalism is well suited to be employed beyond the nation state. Individual rights, such as those protected by the fundamental freedoms, and any protection of traditional liberties connected to property, exercising ones economic preferences and free trade can easily be guaranteed beyond states. Beyond the EU, such new constitutionalism has been criticised as institutionalising neo-liberal reforms105 and removing key aspects of economic life from the inuence of domestic politics within states.106
105

106

S. Gill, New constitutionalism, democratisation and global political economy, Pacica Review: Peace, Security & Global Change 10 (1998), 23. D. Schneidermann, Investment rules and the new constitutionalism, LSI (2000) 757, 762.

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The critique resonates with the ndings of legal sociologists that rightsbased constitutionalism tends to empower pro-constitutionalisation elites.107 This critique also resonates with the negative voices on the practical functioning of the EU market freedoms. Clearly, there is still a good measure of conventional constitutionalism in the EU. The ToL continues to stress economic liberties. The TFEU guarantees the old fundamental freedoms and competition norms, which remain individually enforceable. Accordingly, the EU Treaties, as currently interpreted by the Courts case law, may well appear as imposing new constitutionalism on the EU based on market-liberal values.

2 Socially embedded EU constitutionalism? Doubts whether the successes of socially embedding constitutionalism can be expanded beyond the nation states abound. A recent analysis of the ToL concludes that the imbalance between the internal market at EU level and the powers to rein in any overbearing market forces remaining at national level is not easy to correct.108 The underlying asymmetry is said to make an EU social market economy eternally untenable.109 If the fundamental freedoms rudimentary form of liberal rights constitutionalism was to prevail in the EU, permanent decoupling of social and economic dimensions of integration would seem inevitable. We have also seen, that the normative base of EU economic and social constitutionalism would contradict such a result. Ever since 1957, and even more so since the ToL, the Founding Treaties embrace policy aims going beyond the economic sphere. These include social inclusion, combating inequality and poverty, diminishing unemployment, and environmental and economic sustainability, to name only a few cornerstones for a truly EU-level social policy. The TFEU after Lisbon now sports a new horizontal social clause. According to its Article 9 the EU must take into account in the denition and implementation of all its policies the requirements linked to the promotion of a high level of employment, the guarantee of adequate social protection, the ght against social exclusion, and a high level of education, training and
107

108 109

R. Hirschl, Towards Juristocracy (Cambridge, MA: Harvard University Press, 2004), p. 44; see for the EU, Mnch (n. 24 above). Piris (n. 59 above), p. 334. F. Scharpf, The asymmetry of European integration, or why the EU cannot be a social market economy, Socio-Economic Review 8 (2010), 211.

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protection of human health. The Treaties thus presuppose an interrelation of economic and social integration, within which the ToL strengthens the social element by adding considerably to the list of social Treaty aims. However, the Treaties also provide a xed legal framework mainly for establishing the internal market and protecting competition from distortions and national protectionism. As regards social dimensions of European integration, they are content with rather open norms and procedural provisions. Their normative impetus thus appears as unattainable, if we only regard positive Treaty law. This would constitute an inherent contradiction in EU (constitutional) law. (a) EU constitutionalism as social practice However, EU constitutionalism is not necessarily restricted to such a positivistic approach. If we consider law as a social practice,110 it consists of an open-ended process of actions and interactions between social actors who are abiding by the law, calculating the costs of violating the law and generally exhibiting and subjecting themselves to normative expectations. Positive law is only a written expression of a web of social practices ultimately resisting complete articulation,111 and is thus necessarily less than law as a social practice. The limited degree to which social dimensions of European integration are constitutionalised in positive Treaty law does not thus unavoidably limit socially embedded EU constitutionalism. Indeed, the ECJ has hardly been held back by positive law when developing EU market constitutionalism.112 Moreover, constitutional law must be considered as even less positivistic than other law. It is characterised by a heightened degree of durability. It is higher law, on which all other law rests, after all. At the same time, it encompasses the most important substantive and procedural values of a given polity, or in the case of post-national law, of webbed cells of polities. Accordingly, constitutional law is in even more need of being exible and adaptable to changes in reality.113 This applies

110 111

112

113

See for this concept de Brca and Haltern (both n. 12 above) and Wiener (n. 95 above). Even from a positivist perspective on law, this concept of the open texture of law is acknowledged (see H. L. A. Hart, The Concept of Law, 2nd edn (Oxford: Clarendon Press, 1994), pp. 12436). See text accompanying n. 34 above for the limited degree of textual base for the supranational character of EU law. See from national perspectives E. Stein, Einleitung II in E. Denninger et al. (n. 61 above), paras. 289.

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re-embedding economic and social constitutionalism 43

even more to EU constitutionalism, which is post-national and based on processes and procedures open to contestation, change and development.114 EU constitutionalism will have to offer modes of adapting open norms to ever changing and developing societal realities within and beyond the EU. Their complexity is beyond the grasp of positive legislation. The inertia imbued upon the EU legislative process by the necessity to achieve agreement between twenty-seven Member States, the diversity between which has increased considerably since 1957, has been lamented by authors from vastly different angles. Intergovernmentalists have proposed relying on authoritative institutions or expertocracy instead of cumbersome democratic institutions in order to produce outcome legitimacy;115 pro-Europeans have proposed leaving complex social policy decisions to nation states rather than to the EU.116 New governance within the EU has been assessed as leading to the inclusion of civil society actors in lawmaking processes beyond traditional structures of representative democracy.117 Accordingly, European constitutionalism, if it is to be relevant not only for enhancing economic liberalism but also in social terms of increasing citizens self-governance irrespective of personal wealth, must encompass a variety of realms.118 (b) EU constitutionalism in societal realms If we consider constitutionalism as a mode of guaranteeing a realistic opportunity to selfgovern for all, its concepts cannot be meant to protect against being ruled by states or any other actors emanating from the public sphere. This would be inadequate in any post-national constellation, where power and domination does not necessarily emanate from states or the public sphere. Indeed, with the diminishing relevance of the Westphalian state, private actors and networks are said to attain ever more substantive power to govern.119 An adequate conceptualisation of
114 115

116 117

118 119

Shaw (nn. 3 and 5 above). G. Majone, Dilemmas of European Integration: The ambiguities and pitfalls of integration by stealth (Oxford: Oxford University Press, 2005). See those quoted above in n. 2 above. Schepel (n. 58 above); D. Schiek, Private rule-making and European governance: Issues of legitimacy, ELRev 32 (2007), 443. This resonates with G. Bronzinis suggestion to combine OMC methodology with effective administrative control (The social dilemma of European integration, Law and Critique 19 (2008), 255). On the notion see N. Walker, The idea of constitutional pluralism, MLR 65 (2002), 317. e.g. C. Cutler, Private Power and Public Authority (Cambridge: Cambridge University Press, 2003).

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constitutionalism beyond the state would thus also include domination and rule by private actors such as multinational corporations. In the realm of individual rights against states and supranational entities, such constitutionalism leads to demands for constitutionalisation of private law.120 In the realm of procedural guarantees, democratic procedures for public institutions must be complemented by democratic rights in presumably private realms.121 EU constitutionalism, as shaped through ECJ case law, has in the past already enhanced the agency of civil actors mainly of economic undertakings122 driving a market integration project beyond national borders. It has failed to develop aspects of constitutionalising agency of those who are subject to being governed by those owning these undertakings. Trade unionism is obviously only one possibly dated strategy to overcome such heteronomous structuring of social reality. Any evolution of transnational trade unionism in action within the EU internal market would, however, be a further step towards developing the transnational society so dearly needed to make EU integration a reality. Other socio-political elds where social agency is threatened without constitutionalising societal spheres include economic relations between professionals and their clients, for example in banking, healthcare and legal advice. In addition, the eld of obtaining housing shelter can be named. Though functionally tied to the soil of states, access to living space is dependent on a web of contractual relations granting access to credit or rented accommodation, which are capable of being constitutionalised beyond the state. If it is to attain its normative goals, EU constitutionalism should be able to embrace the development of transnational interest coalitions of the weaker parts in these relations rather than defeat them, as happened in Viking and Laval. For EU constitutionalism to embrace civic realms more comprehensively, individual and collective rights conferred by the EU polity must go beyond rights guaranteed against intrusion by states and the EU itself. As human rights in their substantive dimension are mainly threatened

120

121

122

See T. Barkhuysen and S. Lindenbergh (eds.), Constitutionalisation of Private Law (Leiden, Boston: Martinus Nijhoff, 2006); and C. Joerges, European challenges to private law: On false dichotomies, true conicts and the need for a constitutional perspective, LS 18 (2006), 146. D. Schiek, Autonomous collective agreements as a regulatory device in European Labour Law: How to read Article 139 EC, ILJ 34 (2005), 23. See again the results achieved by Fligstein (n. 14 above), pp. 121, 165.

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by non-state actors,123 EU constitutionalism must also include socially embedded rights furthering capability for self-governance of all.

Conclusion: European economic and social constitutionalism after the Treaty of Lisbon

Having outlined a potential further development for European constitutionalism, a logical next step would be to develop a mode of reasoning which could bring such constitutionalism to life within the EU. This next step lies beyond this chapter though, which has only pursued the aim of outlining a framework for undertaking these next steps. As we have seen above, the Founding Treaties after the ToL do not support an alleged dominance of economic dimensions of European integration over its social dimensions, although they constitutionalise economic dimensions of integration more efciently than their social counterparts. Re-conceptualising EU constitutionalism on the base of its open-textured norms and with regard to empowering transnational civil society will enable European scholars to contribute to reconciling perceived tensions between the social and economic dimensions of European integration. The next steps for legal studies lying beyond this book, though will encompass offering new ways of interpreting rights vested in individuals and at the same time suggesting modes of governance suitable to engender European societal integration. Those constitutional rights of a new quality must also bar any reading of the directly effective economic freedoms and competition law rules in such a way as to inhibit national124 and transnational solutions to deprivation from self-governance. These steps towards creating a constitutional realignment of economic and social dimensions of European integration will have to consider interactions between the European and the national level, as well as different effects of different modes of governance. While it may very well
123

124

B. de Witte, The past and future role of the European Court of Justice in the protection of human rights in P. Alston (ed.), The EU and Human Rights (Oxford: Oxford University Press, 1999), p. 874. For responses in international human rights law, see the contributions in P. Alston (ed.), Non-State Actors and Human Rights (Oxford: Oxford University Press, 2005). For more detailed arguments to protect the national status quo in elds where no social dimension of EU integration at European level can be offered yet see D. Schiek, The European Social Model and the Services Directive in Neergard, Nielsen and Roseberry (n. 52 above), pp. 4551.

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be the case that enforcing EU hard economic law will unduly impinge on national social state arrangements, hard law may not always be the most efcient method to establish new forms of interaction. Socially and economically embedded constitutionalism for the European multilevel polity will have a pivotal role in supporting the social agency of those unable to avail themselves of individual rights to wealth.

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