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European Integration and the Single Market: The Role of the European Court of Justice

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Friday, 06 February
 00:00 - 00:00
Registration from: 00:00
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Sir David Edward, recently retired as a judge at the European Court of Justice, addressed an EPC Breakfast Policy Briefing on “European integration and the single market: The role of the European Court of Justice.” The event was chaired by EPC Director and Founding Chairman, Stanley Crossick. A question and answer session followed. This is not an official record of the proceedings, and specific remarks are not necessarily attributable.

The European Court of Justice (ECJ) meant different things to different people, said Sir David. For some it was a motor for European integration; for others, a political court interfering in national sovereignty. A British Prime Minister once demanded that the ECJ should "have its wings clipped." Sir David had a different view - the ECJ's constantly-evolving job was to faithfully interpret the treaties.

But he warned that the judiciary would move into a more prominent role if the EU's priorities were not clearly established by political leaders: what was needed now was a clear constitution, setting out those priorities, not merely laying down a range of desirable policies. It should not be left to judges to decide the priorities, but “if the political masters don't take these decisions, the only way they will be taken is by the judges.”

Sir David said the ECJ's role had come under attack particularly in the 1990s, with Germany seriously questioning the court's established primacy over national law for the first time. There was talk of the court retreating from its activist role and becoming "more respectful" of the Member States. Sir David said it was true that the importance of the ECJ's role had been exaggerated. Some judges had made it “vainglorious.”

It was also true that some of the ECJ's more recent judgments had pulled back from some of the more “categorical” early legal decisions it delivered.

It was true, too, that the court was political – but only in the sense that it dealt with politically-sensitive issues: “It would be irresponsible if judges were swayed by political pressures, but it would also be irresponsible if they were not aware of the political consequences of what they do.”

The ECJ's work and role had to be understood in the context of the evolution of the Treaties and the way the world had changed. The original Treaties were deliberately integrationist, with their declared aim of achieving “an ever-closer union,” and these were the texts with which the court had had to deal at the start.

The Evolution of the European Court of Justice

The ECJ’s evolution could be divided into five phases, he noted.

The First Phase

The court initially had to define basic constitutional ideas about what the EU was and its relationship with the other institutions and the Member States. The first appointed ECJ judges had to consider whether the Treaties were just international texts along classic lines, or amounted to an embryonic constitutional charter. Did they confer rights wider beyond the EU and the Member States?

What emerged in this early period was the "doctrine of primacy" – the notion that the Member States were legally bound by the laws of the institutions they themselves set up, and that EU law took precedence over national law.

The Second Phase

This was the ECJ's "heroic phase", from the ‘Luxembourg compromise’ in 1965-66 to the mid-1980s when the Single European Act was signed. It was a period characterised by political acceptance of some of the ideas in the original Treaties, as well as by the external influences of the oil shocks of 1970s. It also became obvious that completing the single market in just 12 years, as originally envisaged, was unrealistic.

For the ECJ judges of the day, facing a series of cases about free movement, this posed a problem: what was the legal position if the single market transition period had expired (it did at the end of 1969) and the single market was not in place? The judges decided the Member States must apply basic rights of free movement unless there was a clear, specified, restriction in the treaty of those rights.

It was in this second phase too, that new issues emerged which were unthought of when the Treaties were first written: the consumer and environmental lobbies had not existed in the 1950s, but now they were in play, and the judges had to decide whether these new factors should be ignored because they were not in the Treaties, or taken into account in legal rulings. They took the latter course.

What drove the ECJ in this “heroic” period was the need to deal with cases raised by “real people in real courts” which exposed problems that the Treaties either had not recognised or had simply failed to legislate for.

The Third Phase

From the mid 1980s to the 1992 single market, the ECJ's political will was restored. The Single European Act signed in 1986 embodied many of the ideas the ECJ had put in place in case law in the previous 20 years.

The resulting single market in 1992 involved the enactment of 530 pieces of legislation – essentially founded on the 1979 ECJ ruling in the famous "Cassis de Dijon" case, which laid the cornerstone for the single market programme by establishing the principle of mutual recognition of national standards across EU borders.

Towards the end of this phase, the Maastricht Treaty not only paved the way for Economic and Monetary Union, but also drove political integration amid a rising tide of euroscepticism. Maastricht also established subsidiarity in the Treaty, conferral (only powers conferred on the Union should be exercised by the Union), and the fact that the Member States themselves were “masters of the Treaties” – and therefore the masters of the European Union.

Crucially, said Sir David, Maastricht deleted an original treaty title of “Foundations of the Community,” which had enshrined the principle of free movement of people, goods, capital and services: from Maastricht, those fundamental freedoms became “just policies, like everything else.” Sir David said.

The ECJ could not ignore this change, because even though the “ever closer union” clause was left in place, the revised treaty's focus had undeniably changed.

The Fourth Phase

This involved the ECJ rethinking the latest evolving sets of policies into a “hierarchy,” and included an internal ECJ debate on how to respond to the redefined status of free movement as a policy rather than a “foundation.”

The ECJ also had to decide the impact of the new “masters of the Treaties” role for the Member States, and assess to what extent the EU retained powers to act beyond the Treaties if treaty powers had not been conferred. It all amounted to a revisiting of case law – not a retreat, as some insinuated, but a reassessment to reflect the fact that the world had changed.

One result of change was an exponential increase in the ECJ's workload, with an enormous increase in the technicalities of judgments. Suddenly, said Sir David, judges had to be experts in every field from social security to patents, tackling issues involving 15 Member States with 15 different legal systems and eleven different languages.

Meanwhile the refining of EU law went on, because not only had Maastricht changed the treaty status of free movement; it had also introduced the notion of European citizenship.

The judges decided that this declaration had legal effect - against the wishes of at least one Member State which said the citizenship clause was “just a comfort blanket” for the public and not intended as legally-binding.

The ECJ proceeded to defend the rights of professionals to move freely across borders, of contractors to take up contracts abroad without complying with all the national rules, and of companies to act in other Member States.

The judges even intervened in taxation to stop direct taxation being used as a form of cross-border discrimination. They did find unjustified discrimination where national rules favoured domestic companies, and if, as was claimed, the ECJ was becoming too respectful of the Member States “we would not have gone down that road at all,” said Sir David.

The EU's judicial evolution at this point reflected recognition that the constitutional settlement aspects of Maastricht, Amsterdam and Nice were different from those of Paris and Rome.

The Fifth Phase

The Nice Treaty brought fundamental changes to the court. No longer would it act as a single group with all judges present for all cases. There would still be one judge per Member State – 25 after May 1, 2004– but only be 11, 13 or 15 sitting on a particular case. This removed the guaranteed presence of a judge from the Member State concerned – it was now perfectly possible that a judgment would “severely impinge” on the interests of a particular nation.

This was a “rather surprising” move, ending the notion of the ECJ as “a comprehensive representation of the Member States,” said Sir David. But it was an almost necessary consequence of enlargement.

The ECJ had changed dramatically, along with its perceptions. It was becoming “a new type of entity.” All but three of the current judges had been appointed since 1997: “History continues, and it will be interesting to see what happens.”

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