Introduction
The Lisbon Treaty (LT), the longest in the Communities/Union treaties’ preparation history, reflects a complicated position of the basic legal act in the European Union legal order. Among previous “fundamental treaties”, e.g. European Coal and Steel Community Treaty, EEC, Merger Treaty, SEA, TEU, Amsterdam Treaty or Nice Treaty, to name a few, it took a little over two years for the Merger and Nice Treaties preparation. The rest of the treaties were adopted by the member states –and ready for use – in less than two year’s time. The Lisbon Treaty’s history stretches over about 10 years!
The long process of the LT’s preparation was mainly tarnished by the idea of “European constitutionalism”, and/or perspectives of making the Union a “mega-state” with more powers attached to Brussels. The deliberations circulated around two main poles: fully-fledged federal governance or/and a purported super-state, often regarded as directly threatening national sovereignty (1, p. 622).
The academic community has been rather slow so far in making analysis of the new LT, in particular concerning its implications on the existing acquis. Probably, the only exception is the small booklet written by the German professor Klaus-Dieter Borchardt. The brochure is really an ABC of the EU law in which Mr. Borchardt touches upon the new structure of the EU legal order (2, p.79-112).
The ultimate implications of the LT’s provisions are going to have far-reaching consequences. Therefore the paper attempts to clarify the main spheres of legal influence on European social and economic integration, so-called “images of law”, e.g. in politics and the member states’ economy, in the EU legal system (acquis) and in correlations between the EU and the member states’ legal systems. The LT’s new impetus into the EU law, the legal aspects of fundamental rights, the EU area of freedom, security and justice, new aspects of “sectoral economic law” and other issues of the present “EU integration law” are to be discussed.
1. Lisbon Treaty’s novelty in the EU acquis
It seems appropriate to highlight the key features of the new treaty. Not only because of the increasing volume and importance of legal aspects in the EU development, but rather taking into consideration the far-reaching consequences of the legal reforms on European integration.
For about last decade – until Berlin Summit in March 2005, the EU legal development was mainly concentrated on constitutional treaty. Then, since December 2007, the process of “reforming treaty” has successfully culminated in 1 December 2009, when the Lisbon Treaty finally entered into force.
Although some argue that the LT almost to 80% is repeating the “constitutional draft”, the LT as a reforming treaty doest not increase the Union’s competence. More than that, the LT introduces an important legal delimitation: “the limits of Union competences are governed by the principle of conferral; the use of Union competences is governed by the principles of subsidiarity and proportionality” (art. 5, TEU).
Besides, the LT has radically transformed the structure of Union activities, providing new definitions of Union competences and formulating some new principles and means of Union law. Suffice it to mention the new system of Union’s institutions, decision-making instruments and procedures, the Union judiciary, accession and withdrawal from the Union, etc.
Hence, the two treaties presently form the legal background of the European Union, i.e. Treaty on European Union (TEU) as a general-political guideline and the Treaty on the Functioning of the European Union (TFEU) as the follow-up implementation strategy. All citations are given according to the Treaty’s text in the Official Journal of the European Union, 2008/C-115/01-371.
The Treaty confirms the member states’ “attachment to the principles of liberty, democracy and respect for human rights and fundamental freedoms and of the rule of law” (TEU Preamble).
2. Fundamental rights within the domain of EU law
The Charter of Fundamental Rights of the European Union was initially solemnly proclaimed by the Presidents of the European Parliament, the Council and the Commission at the Nice European Council on 7 December 2000 (at that time, it did not have binding legal effect).
The LT provides that the Charter is legally binding and has the same legal value as the Treaties; this means in particular that the CoJ could annul the EU legislation if the latter is in violation of fundamental rights guaranteed by the Charter. In several cases, CoJ (during 2006-07) conferred an indirect legal status upon the Charter. Therefore, the Charter is not incorporated into the Treaty’s text; it works only by reference, i.e. to the Declaration concerning the Charter. Special protocols on the Charter’s application for the UK, Poland confuse to a certain degree the great potential effect of the Charter.
With the entry into force of the Lisbon Treaty (1 December 2009), the EU Charter of Fundamental Rights became legally binding on the EU’s institutions and on the member states when they are implementing EU law. The Charter entrenches all the rights found in the European Convention on Human Rights as well as other rights and principles resulting from the common constitutional traditions of the EU Member States, the case law of the European Court of Justice and other international instruments. The Charter is a very modern codification and includes «third generation» fundamental rights, such as data protection, guarantees on bioethics and transparent administration.
The European Commission adopted recently a strategy (19 October 2010) to ensure that the EU Charter of Fundamental Rights – legally binding since the entry into force of the Lisbon Treaty – is effectively implemented. The Commission will verify that all EU laws are in compliance with the Charter at each stage of the legislative process – from the early preparatory work in the Commission to the adoption of draft laws by the European Parliament and the Council, and then in their application by the member states. The Commission will provide information to citizens on when it can intervene in fundamental rights issues and will publish an annual report on the Charter’s application to monitor the progress achieved (3).
The Treaty also states that the Charter’s provisions shall not extend the EU’s competences as defined in the Treaties. For example, the Charter states that «The provisions of this Charter are addressed to the institutions, bodies and organs of the Union with due regard for the principle of subsidiarity and to the Member States only when they are implementing Union law» (art. 51). For the first time, members of the College of the present Commission swore a solemn declaration to uphold the Charter as well as the Treaties in May 2010.
«The Charter is a reflection of our common values and constitutional heritage,» said Vice-President Viviane Reding, EU Commissioner for Justice, Fundamental Rights and Citizenship. “The Charter must be the compass for all EU policies. The European Commission, and notably its Justice Department, will be very vigilant in ensuring that the Charter is upheld in all proposals for EU legislation, in all amendments introduced by the Council and by the European Parliament, as well as by member states when they implement EU laws. The strategy adopted by the Commission today is an important step in creating a European fundamental rights culture» (4).
In the strategy, the Commission intends to explain the steps it can take to ensure that the EU has an exemplary fundamental rights record and to improve the public’s understanding of fundamental rights protection in Europe. The following steps are envisaged:
• Guaranteeing that the EU is beyond reproach in upholding fundamental rights. That means that all proposals for EU legislation must respect the Charter. The Commission will therefore reinforce its assessment of the impact of new legislative proposals on fundamental rights. On the basis of a fundamental rights «check list,» the Commission legal service will identify which fundamental rights could be affected by a proposal and assess systematically the impact on these rights of each envisaged policy option. During the legislative process, including final compromises in the European Parliament and the Council, the Commission will work with the co-legislators to ensure that EU law is in line with the Charter. The Commission will launch an inter-institutional dialogue to determine methods for dealing with amendments that raise questions of compatibility with fundamental rights.
• Improving information for citizens. Citizens should know where they can turn for assistance in cases of violations of fundamental rights. They will have access to information about legal remedies in all Member States through the Commission’s new e-Justice portal in 2011 . The Commission will provide explanation as to when it can intervene on fundamental rights complaints (or where it cannot, if these are outside the scope of the EU competence). The Charter does not establish a general power for the Commission to intervene in the area of fundamental rights. It can intervene only when EU law comes into play (for example, when EU legislation is adopted or when a national measure applies an EU law in a manner incompatible with the Charter). Member States have their own systems for protecting fundamental rights through national constitutions and courts; the Charter is not a replacement for them. It is therefore in the first place up to national courts to ensure respect for fundamental rights.
• Monitoring progress. The Commission will publish an annual report on the application of the Charter. The report will monitor progress in the areas where the EU has powers to act: showing how the Charter took into account in concrete cases (e.g., when a new legislation is proposed). It will provide an opportunity for an annual exchange of views with the European Parliament and the Council and act as a vehicle for improving the information for the public.
The fundamental rights guaranteed under the national constitutions already bind EU member states; however, when they implement EU law, they must also respect fundamental rights. The Commission will use all tools available, including infringement proceedings if necessary, to ensure compliance with the Charter in the implementation of EU law. However, the lack of a “unifying aspect” in the Charter is seen in the lack of its universal character. Thus, according to its art. 51(1), the Charter is valid in the member states only when they implement the EU law. This deficiency will be eliminated by the recent Commission’s proposal, mentioned above (5).
• Family law in the EU. Intensive people movement in the EU-27 raises essential issues of citizens’ family life. To that end, the Commission revealed in May 2010 a proposal to make fast and concrete progress on the so-called Rome-III proposal. The end is simple and clear: to provide comfort and improve legal certainty for all those international marriages that end in divorce – and there are around 170,000 of these every year in Europe.
Divorce proceedings are a time when people feel very alone, being in a foreign country and not having a clear idea of the applicable rules. The EU law cannot leave people in the EU to face and manage complicated international divorces alone; they need to have clear rules so that they always know where they stand. Thousands of couples find themselves in difficult personal situations because the EU has so far failed to provide clear laws for their cases.
The previous attempt made in 2006 failed due to unanimity clause in the Council’s decision. Having exhausted all possibilities of compromise in the Council, the Commission turned to the option of referring to procedures concerning enhanced cooperation (Title III, TFEU, art. 326-334).
Civil law and citizenship issues in the EU (being generally reserved for lawyers and public officials in justice ministries) should – at the same time – put the citizens first and serve them in settling disputes and legal issues that arise between private parties. Getting married, having children, getting divorced, resolving contractual disputes, dealing with the consequences of an accident, these are all basic life experiences and urgent fields in EU civil law.
In the EU, presently, these basic life experiences increasingly have a cross-border dimension. Citizens confronted with such basic concerns need to see the tangible differences arising from the existing approaches to these issues in other member states’ systems of civil justice.
The Commission’s aim is therefore to ensure that differences between national judicial systems no longer constitute barriers to citizens’ access to justice; and that mutual recognition and mutual trust are enhanced across the EU-27 and combined with appropriate harmonisation measures.
3. The EU area of freedom, security and justice
Among the important novelties in the LT is the new Title on the EU area of freedom, security and justice (AFSJ) , Title V, TFEU. The LT clearly states, “the Union shall constitute an area of freedom, security and justice with respect for fundamental rights and the different legal systems and traditions of the member states” (art. 67, TFEU). Thus, the “area of justice” becomes subordinate to legal systems and traditions of the 27 member states, the notion highly important for assessment of the Union law. This is why the “area of justice” was restricted in the Treaty to cooperation in four main areas: a) border checks, asylum and immigration; b) judicial cooperation in civil matters; c) judicial cooperation in criminal matters, and d) police cooperation.
It is interesting to mention that presently the notions “jurisprudence and legislation” in the EU legal jargon (e.g. that of the Academy of European Law, ERA) refers t o a number of sources in legal development. For example, in such fields as the EU industrial property law and in legislation on designs it includes the “material EU law”, cases adopted by the EU Courts, as well as relevant decisions from the OHIM Boards of Appeal.
The EU justice “image” was not an easy aspect in the EU administrative mechanisms either. Thus, the administration of EU law in the Commission is subject to two “legal directions”: one, for justice, fundamental rights and citizenship (with vice-president Viviane Reding in charge) and home affairs (with the “regular” Commissioner, Cecilia Malmstrom in charge).
4. EU law on economics and business
For the first time in the EU history, a legislative framework was created oriented towards strict division of economic competences, which has led to consequential sectoral “economic law” structures. Competence division produced, at the same time, a “unified liaison” between sectoral policies and law among the existing development models in Europe.
Member states’ economic decisions have significant impact on other countries; hence, the need for jointly agreed policies. Therefore, the EU needs new economic discipline based on law. As the EU economic and monetary affairs’ Commissioner, Olli Rehn put it in October 2010, the EU is not a federation, it is a unique political entity where the member states quite often have a final word. Although the Commission has acquired increasing powers in the present LT, the EU competences can be overturned by a qualified majority voting in the Council.
Since 2008, the EU started concerted moves towards universal coordination of business, initially, the SMEs activity; Small Business Act was one of these measures. The results were quick and extremely positive.
Thus, in the latest, the eighth in the series of annual reports published by IFC and the World Bank, 183 countries of the world are covered, where the EU states have a good stand; they are well placed in the world, e.g. the UK, Denmark and Ireland are among the first ten states where it is easy to do business. In the three Baltic States, Estonia has ranked 17 th, Lithuania – 23 rd, and Latvia – 24 th. The rankings, which are part of a project by the International Finance Corporation, IFC and the World Bank, take into account areas such as the ease of registering business, getting credits, paying taxes, trading across borders, enforcing contracts and closing business.
While Singapore, Hong-Kong and China ranked first three, among the countries in the “tenth group” are New Zealand, the UK, USA, Denmark, Canada, Norway, Ireland and Australia.
Within 25 best in the world countries in “doing business”, there are about 10 EU member states (6). Globally, doing business remains easiest in the high-income economies of the OECD-states; developing economies are increasingly active, e.g. in 2009, 66 percent reformed business regulation, up from 34% six years earlier.
5. Legal aspects in EU-member states correlation
The autonomy of the EU law and its legal order has become most conflicting areas in EU-member states’ correlation. The EU “self-created legal essence” becomes the major problem in Union’s legal development being managed from within the EU institutions rather than by the member states’ legislative drive. The EU legal substance depends on credibility and efficiency of such correlation.
According to the Union sources, the present EU legislation in force totals about 17,500 legal acts (May 2010). Out of 20 sectors, the main 6 sectors account for more than one thousand acts each: agriculture, competition; industrial and internal market; environment, consumers and health protection; external relations; general financial and institutional matters . Only these “six priority sectors” account for about 12 thousand “European acts”.
EU law provides “inspiration” for national legal activity, e.g. just in services sector Latvia adopted about 25 legal acts in the last 5 years, including a couple of laws on Directive 123/2006 implementation this year. Yearly legislative activity in the member states is high, e.g. about 1.500 legal acts in Denmark; and not all of them are inspired by the EU directives or decisions.
The conferral principle underlines that harmonisation through law in the EU single market has been most appropriate when economic sectors allow for a limited interaction between the EU rules and national laws. Therefore, the so-called 28 th legal regime could be used, which means a feasible alternative to the EU legislative framework based on national rules. This regime is not to replace neither the EU nor the member states legislation: business and companies operating in the single market can opt for a legal framework valid across the EU. This model provides incentive for convergence of national legal regimes. So far, the model received little attention except for the SE rules, i.e. European Company Statute.
5.1. EU law enforcement
The EU single market construction is based on law; therefore it is of crucial importance that the member states take their legal obligations seriously and transpose – timely and correctly – the EU rules. The latest Commission review (end of 2009), showed that transposition deficit averaged 0,7 – 1,0 per cent. Keeping in mind that there are thousands of directives and decisions for the member states to be implemented, the consequential figures are alarming. About 75 directives in the EU “single market” sphere (without other economy sectors) were not transposed at all; generally, about 55 per cent of EU directives are not implemented in time. At the end of 2009, there were 1206 infringement cases against the member states, which makes about 45 cases per a member state.
6. EU law: present state-of-art
Access to files of the European law has become open to the public only recently; it needed scholars’ sufficient efforts to find a legislative act of particular interest (7). Presently, there are four main reference instruments for the EU law:
• Monitoring EU legislation through national implementation and infringement of EU laws;
• Data-base of the EU law, so-called EUR-Lex, with new documents and thematic files;
• Summaries of the EU legislation, so-called SCAD+, with about 3.000 summaries of EU law in 32 subject areas in EU activities, and
• Following legislative process, with “decisions and laws”, through so-called Pre-Lex, with monitoring decision-making and inter-institutional proceedings.
Legal advice on the EU legislation issues can be obtained through the following EU consulting centers: European Direct Network, Your Europe Portal, Citizens Signpost Service, Enterprise Europe Network, Consumer Cooperation Network, etc. Besides, the web-system SOLVIT has developed significantly recently its information supply in handling about 1600 cases per year, i.e. each national center handles about a case per week.
EU Legislation in force is classified according to the directory of Community legislation and may be accessed from the EU web page. The analytical structure of the Directory includes 20 chapters with the further divisions into further legal sub-sections. Selecting one of the sections will produce a list of all titles of legal acts in force classified in this section. The Directory covers agreements, directives, regulations and decisions; the Directory also gives access to consolidated texts of the existing treaties.
Important to mention is that the chapters of the Directory have been already producing so-called “policy-economy-law” triangle. Thus, such chapters have appeared as agricultural law and environmental law, etc.
In the start of 2010, the EU acquis comprised about 1.500 directives and about 1.000 regulations, with several thousand decisions. In some economy sectors, the legal effect is exercised through regulations, in others through directives: for example, about 80 per cent of laws functioning in the single market are those of directives.
Interesting to mention is the number of EU legislation in specific economic sectors, i.e. the number of legal acts in force (mid-2010) in most voluminous sectors are the following: agriculture – 3.113 ; fisheries – 842; competition policy – 1.706 ; transport policy – 642; external relations – 3.191 ; industrial policy and internal market – 1.449 ; environment, consumers and health protection – 1.271 ; area of freedom, security and justice -574.
The EU portal on “summaries of EU legislation” provides approximately 3.000 summaries of the EU legislation in force divided into 32 subject areas corresponding to the activities of the European Union.
In view of legislative complexity, the Commission has recently introduced new web-tutorial portal, which showed how to find the needed legal information on Union legislation. The tutorial is divided into two modules:
• Module 1 explains how to navigate around the website, as well as finding further information and showing different functionalities;
• Module 2 presents all kind of information one can find on the website.
The modules can be viewed from different chapters of the EU sectoral law.
7. EU perspectives in legal simplification
Too many legal acts in the EU’s acquis do not make social-economic development easier. The Union institutions already during last three decades made extensive efforts to ease the burden. Thus, since 1984, the Commission has been issuing annual reports on monitoring the EU laws’ application, e.g. the latest one, 27 th covers 2009. The “new priorities” in simplification have been announced in 2009: to tackle late transposition, streamline “regulatory cycle”, control legal enforcement and correct application. Legal simplification and efficiency have been put under president Barroso’s personal control (8).
Some Commission efforts must be particularly mentioned:
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an explicit and thorough «competitiveness proofing» of new legislation will be undertaken. The impact on competitiveness of all policy proposals will be properly analysed and taken into account.
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«Fitness checks» of existing legislation will identify the potential for reducing the cumulative effects of legislation so as to cut the costs for businesses in Europe. The “legislative” Impact Assessment Board was created in September 2010.
The Council of Europe’s Commission for the Efficiency of Justice published its fourth assessment report on 25 th October 2010 with regard to European judicial systems. The report observes the budgetary pressure that weighs at present on European judicial systems – emerging in the West by a reduction in the number of courts. The report notes however that the number of judges remains stable and that the number of lawyers increased between 2004 and 2008. This number remains highest in the States in the European south, which have a more extensive judicial system than the States in the north. Europe, in addition, is divided over the use of popular juries – with Western Europe being in favour and the East being more reticent.
8. EU ways to legal efficiency: some perspectives
Two trends are in collision in the EU, one in favour of cutting bureaucratic red tape and regulatory burden for business, the other one, – almost completely opposite – which accelerates and make more complicated regulatory backlog for all EU activities, both shared and exclusive. Present EU “legislative file” encompass about 16 thousand pages of directives and regulations, so called acquis communautaire.
Presently, in each of the EU member states there are three main sources of regulations that impinge business and citizens: the EU Institutions, national parliaments and national regulatory agencies, for example trade and financial authorities, competition authorities, etc. In order to reduce regulatory burden, efforts shall be imposed that fewer new regulations are adopted; and the existing ones (and their enforcement) are made simple.
In most “old EU members”, over half of all new legislation, for example in financial field, is derived from the EU headquarters. As it concerns regulatory simplification, some serious and radical steps are definitely required.
First, the EU legislation shall be applied without further interpretation by the member states. The transposition of these laws into nation legislation has become both difficult and mostly different, according to specifics in national approaches. Present internal market state-of-the-art suggests clear and unanimous application of its rules. In all otherwise circumstances, regulatory effects would be minimal if not adverse.
Second, it is important to introduce regulatory impact assessments for all EU-effective business laws. Such procedure, is aimed at establishing reasonable balance between the benefits from a new regulation and the costs of compliance. The former EU trade commissioner Peter Mandelson once said that the cost of the EU-generated red tape was roughly double the economic benefits generated by the internal market.
Third, the deadline shall be installed in the EU laws’ implementation procedures that would specify whether the goals have been achieved after three years of laws implementation.
Fourth, the Commission must be obliged to report annually to the European Parliament on the total EU legislation’s costs and benefits.
Fifth, evaluation procedure for all significant legislative proposals shall be established in the EU Commission in order to assess the total costs and benefits of the EU legislation.
Sixth , most of the EU laws, in particularly in financial sphere shall be simplified and re-drafted, such as first investment directive, the capital adequacy directive, the money laundering directive, to name a few.
Among the EU Commission’s Initiatives, the priority is aimed to single out non-effective Union laws and abolish damaging business regulations. These actions would generate savings of € 38 bln for the EU companies, whereby reducing administrative burden by about 30 per cent.
Conclusion
The EU law is penetrating almost all spheres of European life; it has become already a sphere of importance for member states’ governance. Efficient Union law has become, by definition, a strong unifying factor in European social-economic development and further integration.
However, better understanding of the revolutionary role the EU law is becoming vital. Additional comprehensive and professional training in the EU law formation and implementation is needed at all society’s levels. Present system of the EU legislation studies in the European education facilities is quite varied: the EU law is the subject of studies at law faculties in universities (fulltime 5-6 years), at European studies faculties (special courses at bachelor and master level), and at various business schools with in-depth analysis of “sectoral laws”.
Common European values can play a decisive role in streamlining Union legislation.
Bibliography:
1. Dougan, M. The Treaty of Lisbon 2007: winning minds, not hearts // Common Market Law Review, 2009, vol. 47. P. 617 – 774.
2. Borchardt, Klaus-Dieter. The ABC of European law. – Luxembourg: Publication Office of the European Union, 2010, 131 pages. ISBN 978-92-78-40525-0.
3. For more information, see: Communication at the Justice Directorate-General Newsroom –
http://ec.europa.eu/justice/news/intro/news_intro_en.htm.
4. See: homepage of Vice-President Viviane Reding, EU Commissioner for Justice, Fundamental Rights and Citizenship at:
http://ec.europa.eu/commission_2010-2014/reding/index_en.htm.
5. More on these initiatives: http://ec.europa.eu/dgs/justice/index_en.htm.
6. Doing Business 2011: making a difference for entrepreneurs, 8 th Report.- IFC and the World Bank, 2010 (www.doingbusiness.org).
7. See e.g. the most popular site: http://eur-lex.europa.eu/en/index.htm.
8. See: http://ec.europa/governance/batter_regulation/index_en.htm.
Prof. Eugene ETERIS, European Correspondent
№12(50), 2010