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European Union law is a system of rules operating within the member states of the
European Union The European Union (EU) is a political and economic union of member states that are located primarily in Europe Europe is a which is also recognised as part of , located entirely in the and mostly in the . It comprises the wester ...

European Union
. Since the founding of the
European Coal and Steel Community The European Coal and Steel Community (ECSC) was a European organisation An organization, or organisation ( Commonwealth English; see spelling differences), is an entity – such as a company A company, abbreviated as co., is a Lega ...

European Coal and Steel Community
following
World War II World War II or the Second World War, often abbreviated as WWII or WW2, was a global war A world war is "a war War is an intense armed conflict between states State may refer to: Arts, entertainment, and media Literatur ...
, the EU has developed the aim to "promote peace, its values and the well-being of its peoples". The EU has political institutions, social and economic policies, which transcend
nation state A nation state is a political unit where the state State may refer to: Arts, entertainment, and media Literature * ''State Magazine'', a monthly magazine published by the U.S. Department of State * The State (newspaper), ''The State'' (news ...
s for the purpose of cooperation and
human developmentHuman development may refer to: * Development of the human body * Developmental psychology * Human development (economics) * Human Development Index, an index used to rank countries by level of human development * Human evolution, the prehistoric p ...
. According to its Court of Justice the EU represents "a new legal order of
international law International law, also known as public international law and law of nations, is the set of rules, norms, and standards generally recognized as binding between nation A nation is a community A community is a social unitThe term "level of anal ...
".''
Van Gend en Loos v Nederlandse Administratie der Belastingen ''Van Gend en Loos v Nederlandse Administratie der Belastingen'' (1963) Case 26/62 was a landmark case of the European Court of Justice The European Court of Justice (ECJ, french: Cour de Justice européenne), formally just the Court o ...
'' (1963
Case 26/62
/ref> The EU's legal foundations are the Treaty on European Union and the Treaty on the Functioning of the European Union, unanimously agreed by the governments of 27 member states. New members may join, if they agree to follow the rules of the union, and existing states may leave according to their "own constitutional requirements".TE
art 50
On the most sophisticated discussion of
constitutional law Constitutional law is a body of law which defines the role, powers, and structure of different entities within a , namely, the , the or , and the ; as well as the basic rights of citizens and, in federal countries and , the relationship between ...
and human rights principles for secession, see '' Reference Re Secession of Quebec'' 2_SCR_217
_particularly_[67.html" ;"title="998
2 SCR 217
particularly [67">998
2 SCR 217
particularly [67"The consent of the governed is a value that is basic to our understanding of a free and democratic society. Yet democracy in any real sense of the word cannot exist without the rule of law". And [149] "Democracy, however, means more than simple majority rule".
Citizens are entitled to participate through the Parliament, and their respective state governments through the Council in shaping the legislation the EU makes. The
Commission Commission or commissioning may refer to: Business and contracting * Commission (remuneration), a form of payment to an agent for services rendered ** Commission (art), the purchase or the creation of a piece of art most often on behalf of another ...

Commission
has the initiative for legislation, the
Council of the European Union A council is a group of people who come together to consult, deliberate, or make decisions. A council may function as a legislature A legislature is an assembly Assembly may refer to: Organisations and meetings * Deliberative assembly A ...

Council of the European Union
represents the elected member-state governments, the Parliament is elected by European citizens, and the Court of Justice is meant to uphold the
rule of law The rule of law is defined in the ''Oxford English Dictionary The ''Oxford English Dictionary'' (''OED'') is the principal of the , published by (OUP). It traces the historical development of the English language, providing a compreh ...

rule of law
and
human rights Human rights are moral A moral (from Latin Latin (, or , ) is a classical language belonging to the Italic languages, Italic branch of the Indo-European languages. Latin was originally spoken in the area around Rome, known as Latium. ...
. As the Court of Justice has said, the EU is "not merely an economic union" but is intended to "ensure social progress and seek the constant improvement of the living and working conditions of their peoples".


History


Until 1944

Democratic ideals of integration for international and European nations are as old as the modern
nation state A nation state is a political unit where the state State may refer to: Arts, entertainment, and media Literature * ''State Magazine'', a monthly magazine published by the U.S. Department of State * The State (newspaper), ''The State'' (news ...
. Ancient concepts of European unity were generally undemocratic, and founded on domination, like the Empire of
Alexander the Great Alexander III of Macedon ( grc-gre, Αλέξανδρος}, ; 20/21 July 356 BC – 10/11 June 323 BC), commonly known as Alexander the Great, was a king (''basileus ''Basileus'' ( el, βασιλεύς) is a Greek term and title A title ...

Alexander the Great
, the
Roman Empire The Roman Empire ( la, Imperium Rōmānum ; grc-gre, Βασιλεία τῶν Ῥωμαίων, Basileía tôn Rhōmaíōn) was the post-Republican Republican can refer to: Political ideology * An advocate of a republic, a type of governme ...

Roman Empire
, or the
Catholic Church The Catholic Church, also known as the Roman Catholic Church, is the largest Christian church, with 1.3 billion baptised Baptism (from the Greek language, Greek noun βάπτισμα ''báptisma'') is a Christians, Christian ...
controlled by the
Pope The pope ( la, papa, from el, πάππας, translit=pappas, "father"), also known as the supreme pontiff () or the Roman pontiff (), is the bishop of Diocese of Rome, Rome, chief pastor of the worldwide Catholic Church, and head of state o ...
in Rome. In the
Renaissance The Renaissance ( , ) , from , with the same meanings. is a period Period may refer to: Common uses * Era, a length or span of time * Full stop (or period), a punctuation mark Arts, entertainment, and media * Period (music), a concept in ...

Renaissance
, medieval trade flourished in organisations like the
Hanseatic League The Hanseatic League (; gml, Hanse, , ; german: label=Modern German New High German (NHG) is the term used for the most recent period in the history of the German language German (: , ) is a mainly spoken in . It is the most widely ...
, stretching from English towns like
Boston Boston (, ), officially the City of Boston, is the capital city, capital and List of municipalities in Massachusetts, most populous city of the Commonwealth (U.S. state), Commonwealth of Massachusetts in the United States and 21st List of Unit ...
and
London London is the capital Capital most commonly refers to: * Capital letter Letter case (or just case) is the distinction between the letters that are in larger uppercase or capitals (or more formally ''majuscule'') and smaller lowerc ...

London
, to
Frankfurt Frankfurt, officially Frankfurt am Main (; Hessian dialects, Hessian: , "Franks, Frank ford (crossing), ford on the Main (river), Main"; french: Francfort-sur-le-Main), is the most populous city in the States of Germany, German state of Hess ...

Frankfurt
,
Stockholm Stockholm (; ) is the capital Capital most commonly refers to: * Capital letter Letter case (or just case) is the distinction between the letters that are in larger uppercase or capitals (or more formally ''majuscule'') and smalle ...

Stockholm
and
Riga Riga (; lv, Rīga , liv, Rīgõ, ) is the capital of Latvia and is home to 614,618 inhabitants (2021), which is a third of Latvia's population. Being significantly larger than List of cities and towns in Latvia#Cities, other cities of Latvi ...

Riga
. These traders developed the ''
lex mercatoria ''Lex mercatoria'' (from the Latin Latin (, or , ) is a classical language belonging to the Italic languages, Italic branch of the Indo-European languages. Latin was originally spoken in the area around Rome, known as Latium. Through the power ...
'', spreading basic norms of
good faith Good faith ( la, bona fides), in human interactions, is a sincere intention to be fair, open, and honest, regardless of the outcome of the interaction. While some Latin phrases have lost their literal meaning over centuries, this is not the case ...
and fair dealing through their business. In 1517, the
Protestant Reformation The Reformation (alternatively named the Protestant Reformation or the European Reformation) was a major movement within Western Christianity File:Petersdom von Engelsburg gesehen.jpg, 250px, St. Peter's Basilica in Vatican City, the larges ...

Protestant Reformation
triggered a hundred years of crisis and instability.
Martin Luther Martin Luther (; ; 10 November 1483 – 18 February 1546) was a Germans, German professor of Christian theology, theology, priest, author, composer, former Order of Saint Augustine, Augustinian monk, and is best known as a seminal f ...

Martin Luther
nailed a list of demands to the church door of
Wittenberg Wittenberg ( , ; Low Saxon Low Saxon or Lower Saxon may refer to: Geography *Lower Saxony Lower Saxony (german: Niedersachsen ; nds, Neddersassen; stq, Läichsaksen) is a German state (''Land'') situated in Northern Germany, northwestern ...
,
King Henry VIII Henry VIII (28 June 149128 January 1547) was King of England This list of kings and queens of the Kingdom of England The Kingdom of England (Latin Latin (, or , ) is a classical language belonging to the Italic languages, Ital ...

King Henry VIII
declared a unilateral split from Rome with the
Act of Supremacy 1534 The Acts of Supremacy are two acts passed by the Parliament of England in the 16th century that established the English monarchs as the head of the Church of England. The 1534 Act declared Henry VIII of England, King Henry VIII and his successors ...
, and conflicts flared across the
Holy Roman Empire The Holy Roman Empire ( la, Sacrum Romanum Imperium; german: Heiliges Römisches Reich) was a multi-ethnic complex of territories in Western Western may refer to: Places *Western, Nebraska, a village in the US *Western, New York, a town i ...
until the Peace of Augsburg 1555 guaranteed each principality the right to its chosen religion (''
cuius regio, eius religio () is a Latin phrase __NOTOC__ This is a list of Wikipedia articles of Latin phrases and their translation into English. To view all phrases on a single, lengthy document, see: * List of Latin phrases (full) The list also is divided alphabetic ...
''). This unstable settlement unravelled in the
Thirty Years' War The Thirty Years' War was a conflict fought largely within the Holy Roman Empire The Holy Roman Empire ( la, Sacrum Romanum Imperium; german: Heiliges Römisches Reich) was a multi-ethnic complex of territories in Western Europe, Weste ...
(1618–1648), killing around a quarter of the population in central Europe. The Treaty of Westphalia 1648, which brought peace according to a system of
international law International law, also known as public international law and law of nations, is the set of rules, norms, and standards generally recognized as binding between nation A nation is a community A community is a social unitThe term "level of anal ...
inspired by
Hugo Grotius Hugo Grotius (; 10 April 1583 – 28 August 1645), also known as Huig de Groot () and in Dutch as Hugo de Groot (), was a Dutch humanist Humanism is a philosophical Philosophy (from , ) is the study of general and fundam ...

Hugo Grotius
, is generally acknowledged as the beginning of the nation-state system. Even then, the
English Civil War The English Civil War (1642–1651) was a series of civil wars A civil war, also known as an intrastate war in polemology, is a war War is an intense armed conflict between states State may refer to: Arts, entertainment, ...
broke out and only ended with the
Glorious Revolution The Glorious Revolution of November 1688 ( ga, An Réabhlóid Ghlórmhar; gd, Rèabhlaid Ghlòrmhor; cy, Chwyldro Gogoneddus), the invasion also known as the ''Glorieuze Overtocht'' or Glorious Crossing by the Dutch, was the deposition of ...
of 1688, by Parliament inviting
William William is a male Male (symbol: ♂) is the sex of an organism that produces the gamete (sex cell) known as sperm, which fuses with the larger female gamete, or ovum, in the process of fertilization. A male organism cannot sexual reproducti ...

William
and
Mary Mary may refer to: People * Mary (name) Mary is a feminine Femininity (also called womanliness or girlishness) is a set of attributes, behaviors, and roles generally associated with women and girls. Although femininity is socially constru ...

Mary
from
Hannover Hanover (; german: Hannover ; nds, Hannober) is the capital and largest city of the German States of Germany, state of Lower Saxony. Its 534,049 (2020) inhabitants make it the List of cities in Germany by population, 13th-largest city in Germa ...

Hannover
to the throne, and passing the
Bill of Rights 1689 The Bill of Rights 1689, also known as the Bill of Rights 1688, is a landmark Act in the constitutional law Constitutional law is a body of law which defines the role, powers, and structure of different entities within a , namely, the , the ...
. In 1693
William Penn William Penn (14 October 1644 – 30 July 1718) was an English writer A writer is a person who uses written words in different styles and techniques to communicate ideas. Writers produce different forms of literary art and creative wri ...

William Penn
, a
Quaker Quakers are people who belong to a historically Protestant Christian Protestantism is a form of that originated with the 16th-century , a movement against what its followers perceived to be in the . Protestants originating in the Ref ...

Quaker
from London who founded
Pennsylvania Pennsylvania ( , elsewhere ; pdc, Pennsilfaani), officially the Commonwealth of Pennsylvania, is a landlocked A landlocked country is a country that does not have territory connected to an ocean or whose coastlines lie on endorheic basi ...

Pennsylvania
in North America, argued that to prevent ongoing wars in Europe a "European dyet, or parliament" was needed. The French diplomat, Charles-Irénée Castel de Saint-Pierre, who worked negotiating the
Treaty of Utrecht The Peace of Utrecht was a series of peace treaties A peace treaty is an agreement between two or more hostile parties, usually countries or government A government is the system or group of people governing an organized commun ...
at the end of the
War of Spanish Succession The War of the Spanish Succession (1701–1714) was an early-18th-century European war, triggered by the death in November 1700 of the childless Charles II of Spain. It established the principle that dynastic rights were secondary to maintain ...
proposed, through "
Perpetual Union The Perpetual Union is a feature of the Articles of Confederation, Articles of Confederation and Perpetual Union, which established the United States, United States of America as a national entity. Under modern American constitutional law, this conc ...
", "an everlasting peace in Europe", a project taken up by
Jean-Jacques Rousseau Jean-Jacques Rousseau (, ; ; 28 June 1712 – 2 July 1778) was a Republic of Geneva, Genevan philosopher, writer, and composer. His political philosophy influenced the progress of the Age of Enlightenment, Enlightenment throughout Europe, as ...

Jean-Jacques Rousseau
, and
Immanuel Kant Immanuel Kant (, , ; 22 April 1724 – 12 February 1804) was a German philosopher A philosopher is someone who practices philosophy Philosophy (from , ) is the study of general and fundamental questions, such as those about r ...

Immanuel Kant
after him. After the
Napoleonic Wars The Napoleonic Wars (1803–1815) were a series of major World war, global conflicts pitting the First French Empire, French Empire and its allies, led by Napoleon, Napoleon I, against a fluctuating array of Coalition forces of the Napoleonic W ...
and the
Revolutions of 1848 The Revolutions of 1848, known in some countries as the Springtime of the Peoples or the Springtime of Nations, were a series of political upheaval A political revolution, in the Trotskyist Trotskyism is the political ideology and branch o ...
in the 19th century,
Victor Hugo Victor-Marie Hugo (; 26 February 1802 – 22 May 1885) was a French poet, novelist, essayist, playwright, and dramatist of the Romantic movement Romanticism (also known as the Romantic era) was an artistic, literary, musical, and intellect ...

Victor Hugo
at the
International Peace Congress International Peace Congress, or International Congress of the Friends of Peace, was the name of a series of international meetings of representatives from peace societies from throughout the world held in various places in Europe Europe is a ...
in 1849 envisioned a day when there would be a "United States of America and the
United States of Europe The United States of Europe (USE), the Federal States of Europe (FSE), the European State, the European Superstate, the European Federation and Federal Europe are similar hypothetical scenarios of a single sovereign state in Europe (hence supe ...
face to face, reaching out for each other across the seas".
World War I World War I, often abbreviated as WWI or WW1, also known as the First World War or the Great War, was a global war A world war is "a war engaged in by all or most of the principal nations of the world". The term is usually reserved for ...

World War I
devastated Europe's society and economy, and the
Versailles Treaty The Treaty of Versailles (french: Traité de Versailles; german: Versailler Vertrag, ) was the most important of the peace treaties A peace treaty is an agreement between two or more hostile parties, usually countries or government ...
failed to establish a workable international system in the
League of Nations The League of Nations (french: Société des Nations ), was the first worldwide intergovernmental organisation An intergovernmental organization (IGO) is an organization composed primarily of sovereign states (referred to as ''member state ...
, any European integration, and imposed punishing terms of reparation payments for the losing countries. After another economic collapse and the rise of fascism led to a Second World War, European
civil society Civil society can be understood as the "third sector" of society, distinct from government A government is the system or group of people governing an organized community, generally a state State may refer to: Arts, entertainment ...
was determined to create a lasting union to guarantee
world peace World peace, or peace on Earth, is the concept of an ideal Ideal may refer to: Philosophy * Ideal (ethics), values that one actively pursues as goals * Platonic ideal, a philosophical idea of trueness of form, associated with Plato Mathe ...
through economic, social and political integration.


From 1945


Post war context

To "save succeeding generations from the scourge of war, which twice.. brought untold sorrow to mankind", the
United Nations Charter The Charter of the United Nations (also known as the UN Charter) is the foundational treaty A treaty is a formal, legally binding written agreement between actors in international law International law, also known as public internation ...
was passed in 1945, and the
Bretton Woods Conference The Bretton Woods Conference, formally known as the United Nations Monetary and Financial Conference, was the gathering of 730 delegates from all 44 Allied nations at the Mount Washington Hotel The Mount Washington Hotel is a hotel in Bretton ...
set up a new system of integrated
World Bank The World Bank is an international financial institution An international financial institution (IFI) is a financial institution that has been established (or chartered) by more than one country, and hence is subject to international law. Its o ...
ing,
finance Finance is a term for the management, creation, and study of money In a 1786 James Gillray caricature, the plentiful money bags handed to King George III are contrasted with the beggar whose legs and arms were amputated, in the left corn ...

finance
and
trade Trade involves the transfer of goods from one person or entity to another, often in exchange for money. Economists refer to a system A system is a group of Interaction, interacting or interrelated elements that act according to a set of r ...
. Also, the
Council of Europe The Council of Europe (CoE; french: Conseil de l'Europe, ) is an international organisation ''International Organization'' is a quarterly peer-reviewed academic journal that covers the entire field of international relations, international aff ...

Council of Europe
, formed by the Treaty of London 1949, adopted a
European Convention on Human Rights The European Convention on Human Rights (ECHR; formally the Convention for the Protection of Human Rights and Fundamental Freedoms) is an international convention to protect human rights and political freedoms in Europe. Drafted in 1950 by t ...
, overseen by a new transnational
court A court is any person or institution, often as a government A government is the system or group of people governing an organized community, generally a state State may refer to: Arts, entertainment, and media Literature * ''Sta ...

court
in
Strasbourg Strasbourg (, , ; german: Straßburg ; gsw, label=Bas Rhin Bas-Rhin (; Alsatian: ''Unterelsàss'', ' or '; traditional german: links=no, Niederrhein; en, Lower Rhine) is a department Department may refer to: * Departmentalization, divi ...

Strasbourg
in 1950. Already in 1946,
Winston Churchill Sir Winston Leonard Spencer Churchill, (30 November 187424 January 1965) was a British statesman who served as Prime Minister of the United Kingdom The prime minister of the United Kingdom is the head of government The hea ...

Winston Churchill
, who had been defeated as
UK Prime Minister The prime minister of the United Kingdom is the head of government The head of government is either the highest or second highest official in the executive branch of a sovereign state, a federated state, or a self-governing colony, aut ...
in
1945 It marked the end of World War II and the fall of Nazi Germany. It is also the only year in which nuclear weapons have been used in combat. Events Below, the events of World War II have the "WWII" prefix. January * January – WWII: The ...
, had called for a "
United States of Europe The United States of Europe (USE), the Federal States of Europe (FSE), the European State, the European Superstate, the European Federation and Federal Europe are similar hypothetical scenarios of a single sovereign state in Europe (hence supe ...
", though this did not mean the UK would sever its ties to the
Commonwealth A commonwealth is a traditional English term for a political community founded for the common good In philosophy Philosophy (from , ) is the study of general and fundamental questions, such as those about reason, Metaphysics, existenc ...

Commonwealth
. In 1950, the French Foreign Minister
Robert Schuman Jean-Baptiste Nicolas Robert Schuman (; 29 June 18864 September 1963) was a Luxembourg Luxembourg ( ; lb, Lëtzebuerg ; french: link=no, Luxembourg; german: link=no, Luxemburg), officially the Grand Duchy of Luxembourg, ; french: link=n ...
proposed that, beginning with integration of French and German coal and steel production, there should be "an organisation open to the participation of the other countries of Europe", where "solidarity in production" would make war "not merely unthinkable, but materially impossible". The Treaty of Paris 1951 created the first
European Coal and Steel Community The European Coal and Steel Community (ECSC) was a European organisation An organization, or organisation ( Commonwealth English; see spelling differences), is an entity – such as a company A company, abbreviated as co., is a Lega ...

European Coal and Steel Community
(ECSC), signed by France, West Germany, Belgium, the Netherlands, Luxembourg and Italy, with
Jean Monnet Jean Omer Marie Gabriel Monnet (; 9 November 1888 – 16 March 1979) was a French French (french: français(e), link=no) may refer to: * Something of, from, or related to France France (), officially the French Republic (french: link=no, ...

Jean Monnet
as its president. Its theory was simply that war would be impossibly costly if ownership and production of every country's economy was mixed together. It established an Assembly (now the
European Parliament The European Parliament (EP) is one of three Legislature, legislative branches of the European Union and one of its seven Institutions of the European Union, institutions. Together with the Council of the European Union, it adopts European legi ...

European Parliament
) to represent the people, a
Council of MinistersThe Council of Ministers is a traditional name given to the supreme executive organ in some governments. The term is usually equivalent to the word " cabinet" ( Council of State is a similar term that also may refer to a Cabinet. However, the terms ...

Council of Ministers
for the member states, a
Commission Commission or commissioning may refer to: Business and contracting * Commission (remuneration), a form of payment to an agent for services rendered ** Commission (art), the purchase or the creation of a piece of art most often on behalf of another ...

Commission
as the executive, and a Court of Justice to interpret the law. In the East, the
Soviet Union The Soviet Union,. officially the Union of Soviet Socialist Republics. (USSR),. was a that spanned during its existence from 1922 to 1991. It was nominally a of multiple national ; in practice and were highly until its final years. The ...
had installed dictatorial governments, controlling East Germany, and the rest of Eastern Europe. Although
Stalin Joseph Vissarionovich Stalin * ka, link=no, იოსებ ბესარიონის ძე სტალინი. ( – 5 March 1953) was a Georgians, Georgian revolutionary and Soviet political leader who governed the Soviet Unio ...

Stalin
died in 1953 and the new
general secretary Secretary is a title often used in organizations to indicate a person having a certain amount of authority In the fields of sociology Sociology is the study of society, human social behaviour, patterns of social relationships, social inter ...
Nikita Khrushchev Nikita Sergeyevich Khrushchev (– 11 September 1971) served as the General Secretary of the Communist Party of the Soviet Union, First Secretary of the Communist Party of the Soviet Union from 1953 to 1964 and as Premier of the Soviet Unio ...
had denounced him in 1956, Soviet
tanks A tank is an armored fighting vehicle An armoured fighting vehicle (AFV) is an armed combat vehicle protected by armour, generally combining operational mobility with offensive and defensive capabilities. AFVs can be wheeled or tr ...

tanks
crushed a democratic
Hungarian Revolution of 1956 The Hungarian Revolution of 1956 (also the Hungarian Uprising, 23 October – 10 November 1956; hu, 1956-os forradalom), was a countrywide revolution against the Stalinist government of the (1949–1989) and the Hungarian domestic policies imp ...
, and repressed every other attempt of its people to win democracy and human rights.


1957; Treaty of Rome, the European Economic Community

In the West, the decision was made through Treaty of Rome 1957 to launch the first
European Economic Community The European Economic Community (EEC) was a regional organization and Turkey Turkey ( tr, Türkiye ), officially the Republic of Turkey, is a country straddling Southeastern Europe and Western Asia. It shares borders with Greece ...

European Economic Community
. It shared the Assembly and Court with the Coal and Steel Community, but set up parallel bodies for the Council and Commission. Based on the
Spaak Report The Spaak Report or ''Brussels Report on the General Common Market'' is the report drafted by the Spaak Committee in 1956. The Intergovernmental Committee, headed by Paul-Henri Spaak Paul-Henri Charles Spaak (25 January 1899 – 31 July 1972) wa ...
of 1956, it sought to break down all barriers to trade in a
common market A single market is a type of trade bloc A trade bloc is a type of intergovernmental agreement, often part of a regional intergovernmental organization An intergovernmental organization (IGO) is an organization composed primarily of soverei ...
for goods, services, labour and capital, and prevent distortion of competition and regulate areas of common interest like agriculture, energy and transport. A separate treaty was signed for a
European Atomic Energy Community The European Atomic Energy Community (EAEC or Euratom) is an international organisation ''International Organization'' is a quarterly peer-reviewed academic journal that covers the entire field of international relations, international affairs. ...

European Atomic Energy Community
to manage nuclear production. In 1961 the United Kingdom, Denmark, Ireland and Norway applied for membership only to be vetoed in 1963 by France's
Charles de Gaulle Charles André Joseph Marie de Gaulle (; ; 22 November 18909 November 1970) was a French army officer and statesman who led Free France against Nazi Germany in World War II and chaired the Provisional Government of the French Republic from 19 ...
. Spain also applied and was rejected as it was still led by the
Franco dictatorship Francoist Spain ( es, España franquista), known in Spain as the Francoist dictatorship ( es, dictadura franquista), was the period of Spanish history between 1936 and 1975, when Francisco Franco ruled Spain with the title '' Caudillo''. Afte ...
. The same year, the proclaimed that the Community constituted a "new legal order of international law". The
Merger Treaty The Merger Treaty, also known as the Treaty of Brussels, was a Treaties of the European Union, European treaty which unified the Executive (government), executive Institutions of the European Union, institutions of the European European Coal and Ste ...
finally placed the ECSC and
Euratom The European Atomic Energy Community (EAEC or Euratom) is an international organization, international organisation established by the Euratom Treaty on 25 March 1957 with the original purpose of creating a specialist market for nuclear power in ...

Euratom
within the
EEC The European Economic Community (EEC) was a regional organization and Turkey Turkey ( tr, Türkiye ), officially the Republic of Turkey, is a country straddling Southeastern Europe and Western Asia. It shares borders with Greece ...

EEC
. Shortly after, de Gaulle boycotted the Commission, which he believed was pressing supranationalism too far. The
Luxembourg compromise The Luxembourg Compromise (or "Luxembourg Accord") was an agreement reached in January 1966 to resolve the " Empty Chair Crisis" which had caused a stalemate within European Economic Community The European Economic Community (EEC) was a re ...
in 1966 agreed that France (or other countries) could veto issues of "very important national interest", particularly relating to the
Common Agricultural Policy The Common Agricultural Policy (CAP) is the agricultural policy of the European Union The European Union (EU) is a political and economic union of that are located primarily in . The union has a total area of and an estimated total ...
, instead of making decisions by "
qualified majority A supermajority, supra-majority, qualified majority or special majority, is a requirement for a proposal to gain a specified level of support which is greater than the threshold of more than one-half used for a majority A majority, also called ...
". But after the
May 1968 events in France Beginning in May 1968, a period of civil unrest Civil disorder, also known as civil disturbance or civil unrest, is an activity arising from a mass act of civil disobedience (such as a demonstration, riot, or strike) in which the particip ...
and de Gaulle's resignation, the way was free for the United Kingdom, Ireland and Denmark to join in 1973.
Norway Norway, officially the Kingdom of Norway,Names in the official and recognised languages: Bokmål Bokmål (, ; literally "book tongue") is an official written standard for the Norwegian language Norwegian (Norwegian: ''norsk'') is a Nort ...
had rejected joining in a 1972 referendum, while the UK confirmed its membership in a 1975 referendum.


1986, 1985; Single European Act and Schengen Agreement

Aside from the
European Economic Community The European Economic Community (EEC) was a regional organization and Turkey Turkey ( tr, Türkiye ), officially the Republic of Turkey, is a country straddling Southeastern Europe and Western Asia. It shares borders with Greece ...

European Economic Community
itself, the European continent underwent a profound transition towards democracy. The dictators of Greece and Portugal were deposed in 1974, and Spain's dictator died in 1975, enabling their accession in 1981 and 1986. In 1979, the
European Parliament The European Parliament (EP) is one of three Legislature, legislative branches of the European Union and one of its seven Institutions of the European Union, institutions. Together with the Council of the European Union, it adopts European legi ...

European Parliament
had its first direct elections, reflecting a growing consensus that the EEC should be less a union of member states, and more a union of peoples. The Single European Act 1986 increased the number of treaty issues in which
qualified majority A supermajority, supra-majority, qualified majority or special majority, is a requirement for a proposal to gain a specified level of support which is greater than the threshold of more than one-half used for a majority A majority, also called ...
voting (rather than consensus) would be used to legislate, as a way to accelerate trade integration. The
Schengen Agreement The Schengen Agreement ( , ) is a treaty which led to the creation of Europe's Schengen Area The Schengen Area ( , ) is an area comprising 26 European countries that have officially abolished all passport and all other types of border ...
of 1985 (not initially signed by Italy, the UK, Ireland, Denmark or Greece) allowed movement of people without any border checks. Meanwhile, in 1987, the
Soviet Union The Soviet Union,. officially the Union of Soviet Socialist Republics. (USSR),. was a that spanned during its existence from 1922 to 1991. It was nominally a of multiple national ; in practice and were highly until its final years. The ...
's
Mikhail Gorbachev Mikhail Sergeyevich Gorbachev (born 2 March 1931) is a Russian and former Soviet politician, lawyer, and statesman. The List of leaders of the Soviet Union, eighth and final leader of the Soviet Union, he was the General Secretary of the ...

Mikhail Gorbachev
announced policies of "transparency" and "restructuring" (''
glasnost In the Russian language Russian (, tr. ''russkiy yazyk'') is an East Slavic language The East Slavic languages constitute one of the three regional subgroups of Slavic languages The Slavic languages, also known as the Slavonic langu ...
'' and ''
perestroika Perestroika (; russian: links=no, перестройка, p=pʲɪrʲɪˈstrojkə, a=ru-perestroika.ogg) was a political movement for reformation within the Communist Party of the Soviet Union The Communist Party of the Soviet Union (CPSU) ...
''). This revealed the depths of corruption and waste. In April 1989, the
People's Republic of Poland The Polish People's Republic ( pl, Polska Rzeczpospolita Ludowa, PRL) was a country in Central Europe that existed from 1947 to 1989 as the predecessor of the modern Republic of Poland. With a population of approximately 37.9 million near ...
legalised the Solidarity organisation, which captured 99% of available parliamentary seats in June elections. These elections, in which anti-communist candidates won a striking victory, inaugurated a series of peaceful anti-communist revolutions in Central and Eastern Europe that eventually culminated in the fall of communism. In November 1989, protestors in
Berlin Berlin (; ) is the Capital city, capital and List of cities in Germany by population, largest city of Germany by both area and population. Its 3,769,495 inhabitants, as of 31 December 2019 makes it the List of cities in the European Union by ...

Berlin
began taking down the
Berlin Wall The Berlin Wall (german: Berliner Mauer, ) was a guarded concrete barrier A barrier or barricade is a physical structure which blocks or impedes something. Barrier may also refer to: Places * Barrier, Kentucky, a community in the Unite ...

Berlin Wall
, which became a symbol of the collapse of the
Iron Curtain The Iron Curtain was a political boundary dividing Europe Europe is a continent A continent is any of several large landmass A landmass, or land mass, is a large region In geography Geography (from Greek: , ''geo ...
, with most of Eastern Europe declaring independence and moving to hold democratic elections by 1991.


European Union (Maastricht Treaty, Treaty of Amsterdam, Treaty of Nice, Treaty of Lisbon)

The
Treaty of Maastricht The Treaty on European Union, commonly known as the Maastricht Treaty, is the foundation treaty of the European Union The European Union (EU) is a political and economic union of member states that are located primarily in Europe ...
renamed the EEC as the "
European Union The European Union (EU) is a political and economic union of member states that are located primarily in Europe Europe is a which is also recognised as part of , located entirely in the and mostly in the . It comprises the wester ...

European Union
", and expanded its powers to include a
social chapter Social organisms, including humans, live collectively in interacting populations. This interaction is considered social whether they are aware of it or not, and whether the exchange is Volition (psychology), voluntary/involuntary. Etymology The wo ...
, set up a
European Exchange Rate Mechanism The European Exchange Rate Mechanism (ERM) II is a system introduced by the European Economic Community The European Economic Community (EEC) was a regional organization and Turkey Turkey ( tr, Türkiye ), officially the Republi ...
, and limit government spending. The UK initially opted out of the social provisions, and then monetary union after the
Black Wednesday Black Wednesday occurred on 16 September 1992 when the British government was forced to withdraw the pound sterling from the European Exchange Rate Mechanism (ERM), after a failed attempt to keep the pound above the lower currency exchange ...
crisis where speculators bet against the
pound Pound or Pounds may refer to: Units * Pound (currency) A pound is any of various units of currency A currency, "in circulation", from la, currens, -entis, literally meaning "running" or "traversing" in the most specific sense is money Im ...
. Sweden, Finland and Austria joined in 1995, but Norway again chose not to after a 1994 referendum, instead remaining part of the
European Economic Area The European Economic Area (EEA) was established via the ''Agreement on the European Economic Area'', an international agreement which enables the extension of the European Union The European Union (EU) is a political and economic un ...

European Economic Area
, abiding by most EU law, but without any voting rights. At the
Treaty of Amsterdam The Treaty of Amsterdam, officially the Treaty of Amsterdam amending the Treaty on European Union, the Treaties establishing the European Communities and certain related acts, was signed on 2 October 1997, and entered into force on 1 May 1999; it ...
, with a new
Labour Labour or labor may refer to: * Childbirth Childbirth, also known as labour or delivery, is the ending of pregnancy where one or more babies leaves the uterus by passing through the vagina or by Caesarean section. In 2015, there were about 13 ...
government, the UK joined the social chapter. A newly confident EU then sought to expand. First, the
Treaty of Nice The Treaty of Nice was signed by European leaders on 26 February 2001 and came into force on 1 February 2003. It amended the Maastricht Treaty The Treaty on European Union, commonly known as the Maastricht Treaty, is the foundation treaty o ...
made voting weight more proportionate to population (two Irish referenda rejected, but then accepted this). Second, the
Euro The euro (currency symbol, symbol: euro sign, €; ISO 4217, code: EUR) is the official currency of 19 of the Member state of the European Union, member states of the European Union. This group of states is known as the eurozone or euro area ...

Euro
currency went into circulation in 2002. Third came the accession of Malta, Cyprus, Slovenia, Poland, the Czech Republic, Slovakia, Hungary, Latvia, Estonia, and Lithuania. Fourth, in 2005 a
Treaty establishing a Constitution for Europe The Treaty establishing a Constitution for Europe (TCE; commonly referred to as the European Constitution or as the Constitutional Treaty) was an unratified international treaty A treaty is a formal legally binding written agreement betw ...
was proposed. This proposed "Constitution" was largely symbolic, but was rejected by referenda in France and the Netherlands. Most of its technical provisions were inserted into the
Treaty of Lisbon The Treaty of Lisbon (initially known as the Reform Treaty) is an international agreement that amends the two treaties A treaty is a formal, legally binding written agreement between actors in international law International law, als ...
, without the emotive symbols of federalism or the word "constitution". In the same year, Bulgaria and Romania joined.


2011; European Fiscal Compact and European Stability Mechanism

During the
subprime mortgage crisis The United States subprime mortgage crisis was a multinational financial crisis that occurred between 2007 and 2010 that contributed to the Financial crisis of 2007–2008, 2007–2008 global financial crisis. It was triggered by a large decline ...
and the
financial crisis of 2007–2008 The financial crisis of 2007–2008, or global financial crisis (GFC), was a severe worldwide economic crisis An economy (from Greek οίκος – "household" and νέμoμαι – "manage") is an area of the production, distribution and t ...
, European banks that were invested in
derivatives Derivative may refer to: In mathematics and economics *Brzozowski derivative in the theory of formal languages *Derivative in calculus, a quantity indicating how a function changes when the values of its inputs change. *Formal derivative, an opera ...
were put under severe pressure. British, French, German, and other governments were forced to turn some banks into partially or wholly state-owned banks. Some governments instead guaranteed their banks' debts. In turn, the
European debt crisis The European debt crisis, often also referred to as the eurozone crisis or the European sovereign debt crisis, is a multi-year debt crisis Debt crisis is a situation in which a government (nation, state/province, county, or city etc.) loses th ...
developed when international investment withdrew and Greece, Spain, Portugal, and Ireland saw international bond markets charge unsustainably high
interest rates An interest rate is the amount of interest In finance Finance is the study of financial institutions, financial markets and how they operate within the financial system. It is concerned with the creation and management of money and inves ...
on government debt. Eurozone governments and staff of the
European Central Bank The European Central Bank (ECB) is the prime component of the Eurosystem The Eurosystem is the monetary authority In finance Finance is the study of financial institutions, financial markets and how they operate within the financia ...

European Central Bank
believed that it was necessary to save their banks by taking over Greek debt, and impose "
austerity Austerity is a set of political-economic policies that aim to reduce government budget deficits through spending cuts, tax increases, or a combination of both. There are three primary types of austerity measures: higher taxes to fund spending, ...

austerity
" and "
structural adjustment Structural adjustment programs (SAPs) consist of loans (structural adjustment loans; SALs) provided by the International Monetary Fund The International Monetary Fund (IMF) is an international financial institution, headquartered in Washing ...
" measures on debtor states. This exacerbated further contraction in the economies. In 2011 two new treaties, the
European Fiscal Compact The Treaty on Stability, Coordination and Governance in the Economic and Monetary Union; also referred to as TSCG, or more plainly the Fiscal Stability Treaty is an Enhanced cooperation#Related intergovernmental treaties, intergovernmental treaty ...

European Fiscal Compact
and
European Stability Mechanism The European Stability Mechanism (ESM) is an intergovernmental organization An intergovernmental organization (IGO) or international organization is an organization composed primarily of sovereign states (referred to as ''member states''), or of ...
were signed among the nineteen
Eurozone The eurozone, officially called the euro area, is a monetary union of 19 Member state of the European Union, member states of the European Union (EU) that have adopted the euro (euro sign, €) as their primary currency and sole legal tender. T ...

Eurozone
states. In 2013, Croatia entered the union. However a further crisis was triggered after the UK's
Conservative Conservatism is an aesthetic Aesthetics, or esthetics (), is a branch of philosophy that deals with the nature of beauty and taste (sociology), taste, as well as the philosophy of art (its own area of philosophy that comes out of aest ...

Conservative
government chose to hold a
referendum A referendum (plural: referendums or less commonly referenda) is a direct Direct may refer to: Mathematics * Directed set In mathematics Mathematics (from Ancient Greek, Greek: ) includes the study of such topics as quantity (number th ...
in 2016, and campaigners for "leave" (or "Brexit") won 51.89 per cent of votes on a 72.2 per cent turnout. This referendum was politically inconclusive given the UK's system of
Parliamentary sovereignty Parliamentary sovereignty (also called parliamentary supremacy or legislative supremacy) is a concept in the constitutional law Constitutional law is a body of law which defines the role, powers, and structure of different entities within a , n ...
, with no agreement after the 2017 election, until the
2019 UK general election The 2019 United Kingdom general election was held on Thursday, 12 December 2019. The Conservative Party (UK), Conservative Party, having failed to obtain a majority in the 2017 United Kingdom general election, 2017 general election, had faced Parl ...
brought a Conservative majority with a manifesto commitment to drive through Brexit. The UK left EU membership in February 2020, with uncertain economic, territorial and social consequences.


Constitutional law

Although the European Union does not have a
codified constitution A constitution is an aggregate of fundamental principles A principle is a proposition or value that is a guide for behavior or evaluation. In law, it is a rule Rule or ruling may refer to: Human activity * The exercise of political ...
, like every political body it has laws which "constitute" its basic governance structure. The EU's primary constitutional sources are the
Treaty on European Union The Treaty on European Union (2007) is one of the primary Treaties of the European Union, alongside the Treaty on the Functioning of the European Union The Treaty on the Functioning of the European Union (TFEU) is one of two treaties formi ...
and the
Treaty on the Functioning of the European Union A treaty is a formal, legally binding written agreement between actors in international law International law, also known as public international law and law of nations, is the set of rules, norms, and standards generally recognized as bi ...
, which have been agreed or adhered to among the governments of all 27 member states. The Treaties establish the EU's institutions, list their powers and responsibilities, and explain the areas in which the EU can legislate with
Directives Directive may refer to: * Directive (European Union), a legislative act of the European Union * Directive (programming), a computer language construct that specifies how a compiler should process input * Directive (poem), "Directive" (poem), a poem ...
or
Regulations Regulation is the management of complex systems according to a set of rules and trends. In systems theory Systems theory is the interdisciplinary study of system A system is a group of Interaction, interacting or interrelated elements that a ...
. The
European Commission The European Commission (EC) is the executive branch The executive is the branch of government exercising authority in and holding Moral responsibility, responsibility for the governance of a State (polity), state. The executive executes a ...

European Commission
has the initiative to propose legislation. During the
ordinary legislative procedure The European Union The European Union (EU) is a political and economic union of Member state of the European Union, member states that are located primarily in Europe. Its members have a combined area of and an estimated total popula ...
, the
Council A council is a group of people who come together to consult, deliberate, or make decisions. A council may function as a legislature A legislature is a deliberative assembly with the authority In the fields of sociology Sociology is t ...

Council
(which are ministers from member state governments) and the
European Parliament The European Parliament (EP) is one of three Legislature, legislative branches of the European Union and one of its seven Institutions of the European Union, institutions. Together with the Council of the European Union, it adopts European legi ...

European Parliament
(elected by citizens) can make amendments and must give their consent for laws to pass. The
Commission Commission or commissioning may refer to: Business and contracting * Commission (remuneration), a form of payment to an agent for services rendered ** Commission (art), the purchase or the creation of a piece of art most often on behalf of another ...

Commission
oversees departments and various agencies that execute or enforce EU law. The "
European Council The European Council (informally EUCO) is a collegiate body that defines the overall political directions and priorities of the European Union The European Union (EU) is a political and economic union of member states that are loc ...
" (rather than the
Council A council is a group of people who come together to consult, deliberate, or make decisions. A council may function as a legislature A legislature is a deliberative assembly with the authority In the fields of sociology Sociology is t ...

Council
, made up of different government Ministers) is composed of the Prime Ministers or executive presidents of the member states. It appoints the Commissioners and the board of the
European Central Bank The European Central Bank (ECB) is the prime component of the Eurosystem The Eurosystem is the monetary authority In finance Finance is the study of financial institutions, financial markets and how they operate within the financia ...

European Central Bank
. The
European Court of Justice European, or Europeans, may refer to: In general * ''European'', an adjective referring to something of, from, or related to Europe ** Ethnic groups in Europe ** Demographics of Europe ** European cuisine, the cuisines of Europe and other Western ...

European Court of Justice
is the supreme judicial body which interprets EU law, and develops it through precedent. The Court can review the legality of the EU institutions' actions, in compliance with the Treaties. It can also decide upon claims for breach of EU laws from member states and citizens.


Treaties

The
Treaty on European Union The Treaty on European Union (2007) is one of the primary Treaties of the European Union, alongside the Treaty on the Functioning of the European Union The Treaty on the Functioning of the European Union (TFEU) is one of two treaties formi ...
(TEU) and the
Treaty on the Functioning of the European Union A treaty is a formal, legally binding written agreement between actors in international law International law, also known as public international law and law of nations, is the set of rules, norms, and standards generally recognized as bi ...
(TFEU) are the two main sources of EU law. Representing agreements between all member states, the TEU focuses more on principles of democracy, human rights, and summarises the
institutions Institutions, according to Samuel P. Huntington, are "stable, valued, recurring patterns of behavior." Institutions can refer to social mechanism, mechanisms which govern the behavior of a set of individuals within a given community, and are id ...
, while the
TFEU The Treaty on the Functioning of the European Union (TFEU) is one of two treaties forming the Treaties of the European Union, constitutional basis of the European Union (EU), the other being the Treaty on European Union (TEU; also referred to as ...
expands on all principles and fields of policy in which the EU can legislate. In principle, the EU treaties are like any other international agreement, which will usually be interpreted according to principles codified by the . It can be amended by unanimous agreement at any time, but TEU itself, in article 48, sets out an amendment procedure through proposals via the Council and a Convention of national Parliament representatives. Under TEU article 5(2), the "principle of conferral" says the EU can do nothing except the things which it has express authority to do. The limits of its competence are governed by the Court of Justice, and the courts and Parliaments of member states. As the European Union has grown from 6 to 27 member states, a clear procedure for accession of members is set out in TEU article 49. The
European Union The European Union (EU) is a political and economic union of member states that are located primarily in Europe Europe is a which is also recognised as part of , located entirely in the and mostly in the . It comprises the wester ...

European Union
is only open to a "European" state which respects the principles of "
human dignity Dignity is the Rights, right of a person to be valued and respected for their own sake, and to be treated ethically. It is of significance in morality, ethics, law and politics as an extension of the Age of Enlightenment, Enlightenment-era concepts ...

human dignity
,
freedom Freedom, generally, is having the ability to act or change without constraint. Something is "free" if it can change easily and is not constrained in its present state. In philosophy and religion, it is associated with having free will and bein ...

freedom
, democracy, equality, the
rule of law The rule of law is defined in the ''Oxford English Dictionary The ''Oxford English Dictionary'' (''OED'') is the principal of the , published by (OUP). It traces the historical development of the English language, providing a compreh ...

rule of law
and respect for human rights, including the rights of persons belonging to minorities". Countries whose territory is wholly outside the European continent cannot therefore apply. Nor can any country without fully democratic political institutions which ensure standards of " pluralism, non-discrimination, tolerance, justice,
solidarity Solidarity is an awareness of shared interests, objectives, standards, and sympathies creating a psychological sense of unity of groups or classes, which rejects the class conflict Class conflict, also referred to as class struggle and clas ...

solidarity
and equality between women and men prevail". Article 50 says any member state can withdraw in accord "with its own constitutional requirements", by negotiated "arrangements for its withdrawal, taking account of the framework for its future relationship with the Union". This indicates that the EU is not entitled to demand a withdrawal, and that member states should follow constitutional procedures, for example, through Parliament or a codified constitutional document. Once article 50 is triggered, there is a two-year time limit to complete negotiations, a procedure which would leave a seceding member without any
bargaining power Bargaining power is the relative power of parties in a situation to exert influence over each other. If both parties are on an equal footing in a debate, then they will have equal bargaining power, such as in a perfectly competitive market In ec ...
in negotiations, because the costs of having no trade treaty would be proportionally greater to the individual state than the remaining EU bloc. Article 7 allows member states to be suspended for a "clear risk of a serious breach" of values in article 2 (for example, democracy, equality, human rights) with a four-fifths vote of the
Council of the European Union A council is a group of people who come together to consult, deliberate, or make decisions. A council may function as a legislature A legislature is an assembly Assembly may refer to: Organisations and meetings * Deliberative assembly A ...

Council of the European Union
, and the consent of the
Parliament In modern politics and history, a parliament is a legislative A legislature is an assembly Assembly may refer to: Organisations and meetings * Deliberative assembly A deliberative assembly is a gathering of members (of any kind of ...

Parliament
. Within the treaties' framework, sub-groups of member states may make further rules that only apply to those member states who want them. For example, the Schengen Agreements of 1985 and 1990 allow people to move without any passport or ID checks anywhere in the EU, but did not apply to the UK or Ireland. During the
European debt crisis The European debt crisis, often also referred to as the eurozone crisis or the European sovereign debt crisis, is a multi-year debt crisis Debt crisis is a situation in which a government (nation, state/province, county, or city etc.) loses th ...
, the Treaty Establishing the European Stability Mechanism 2012 and the Treaty on Stability, Co-ordination and Governance 2012 (the "Fiscal Compact") were adopted only for member states who had the
Euro The euro (currency symbol, symbol: euro sign, €; ISO 4217, code: EUR) is the official currency of 19 of the Member state of the European Union, member states of the European Union. This group of states is known as the eurozone or euro area ...

Euro
(i.e. not Denmark, Sweden, the UK, Poland, Czech Republic, Hungary, Croatia, Romania or Bulgaria). This required, among other things, a pledge to balance the government budget and limit structural deficits to 0.5 per cent of GDP, with fines for non-compliance. The jurisdiction for these rules remains with the Court of Justice.


Executive institutions

The
European Commission The European Commission (EC) is the executive branch The executive is the branch of government exercising authority in and holding Moral responsibility, responsibility for the governance of a State (polity), state. The executive executes a ...

European Commission
is the main executive body of the
European Union The European Union (EU) is a political and economic union of member states that are located primarily in Europe Europe is a which is also recognised as part of , located entirely in the and mostly in the . It comprises the wester ...

European Union
. Article 17(1) of the
Treaty on European Union The Treaty on European Union (2007) is one of the primary Treaties of the European Union, alongside the Treaty on the Functioning of the European Union The Treaty on the Functioning of the European Union (TFEU) is one of two treaties formi ...
states the Commission should "promote the general interest of the Union" while Article 17(3) adds that Commissioners should be "completely independent" and not "take instructions from any Government". Under Article 17(2), "Union legislative acts may only be adopted on the basis of a Commission proposal, except where the Treaties provide otherwise". This means that the Commission has a monopoly on initiating the legislative procedure, although the Council or Parliament are the "''de facto'' catalysts of many legislative initiatives". The Commission's President ( Ursula von der Leyen) sets the agenda for its work. Decisions are taken by a simple majority vote, often through a "written procedure" of circulating the proposal and adopting it if there are no objections. In response to Ireland's initial rejection of the
Treaty of Lisbon The Treaty of Lisbon (initially known as the Reform Treaty) is an international agreement that amends the two treaties A treaty is a formal, legally binding written agreement between actors in international law International law, als ...
, it was agreed to keep the system of one Commissioner from each of the member states, including the President of the European Commission, President and the High Representative of the Union for Foreign Affairs and Security Policy, High Representative for Foreign and Security Policy (currently Josep Borrell) The Commissioner President is elected by the European Parliament by an absolute majority of its members, following the parliamentary elections every five years, on the basis of a proposal by the European Council. The latter must take account of the results of the European elections, in which European political parties announce the name of their candidate for this post. Hence, in 2014, Juncker, the candidate of the European People's Party which won the most seats in Parliament, was proposed and elected. The remaining commissioners are appointed by agreement between the president-elect and each national government, and are then, as a block, subject to a qualified majority vote of the Council to approve, and majority approval of the Parliament. The Parliament can only approve or reject the whole commission, not individual commissioners but conducts public hearings with each of them prior to its vote, which in practice often triggers changes to individual appointments or portfolios. TFEU art 248 says the president may reshuffle commissioners, though this is uncommon, without member state approval. A proposal that the commissioners be drawn from the elected Parliament, was not adopted in the
Treaty of Lisbon The Treaty of Lisbon (initially known as the Reform Treaty) is an international agreement that amends the two treaties A treaty is a formal, legally binding written agreement between actors in international law International law, als ...
, though in practice several invariable are, relinquishing their seat in order to serve. Commissioners have various privileges, such as being exempt from member state taxes (but not EU taxes), and having immunity from prosecution for doing official acts. Commissioners have sometimes been found to have abused their offices, particularly since the Santer Commission was censured by Parliament in 1999, and it eventually resigned due to corruption allegations. This resulted in one main case, ''Commission v Edith Cresson'' where the
European Court of Justice European, or Europeans, may refer to: In general * ''European'', an adjective referring to something of, from, or related to Europe ** Ethnic groups in Europe ** Demographics of Europe ** European cuisine, the cuisines of Europe and other Western ...

European Court of Justice
held that a Commissioner giving her dentist a job, for which he was clearly unqualified, did in fact not break any law. By contrast to the ECJ's relaxed approach, a Committee of Independent Experts found that a culture had developed where few Commissioners had 'even the slightest sense of responsibility'. This led to the creation of the European Anti-fraud Office. In 2012 it investigated the Maltese Commissioner for Health, John Dalli, who quickly resigned after allegations that he received a €60m bribe in connection with a Tobacco Products Directive. Beyond the commission, the
European Central Bank The European Central Bank (ECB) is the prime component of the Eurosystem The Eurosystem is the monetary authority In finance Finance is the study of financial institutions, financial markets and how they operate within the financia ...

European Central Bank
has relative executive autonomy in its conduct of monetary policy for the purpose of managing the euro. It has a six-person board appointed by the
European Council The European Council (informally EUCO) is a collegiate body that defines the overall political directions and priorities of the European Union The European Union (EU) is a political and economic union of member states that are loc ...
, on the Council of Ministers, Council's recommendation. The president of the council and a commissioner can sit in on European Central Bank, ECB meetings, but do not have voting rights.


Legislature

While the
Commission Commission or commissioning may refer to: Business and contracting * Commission (remuneration), a form of payment to an agent for services rendered ** Commission (art), the purchase or the creation of a piece of art most often on behalf of another ...

Commission
has a monopoly on initiating legislation, the
European Parliament The European Parliament (EP) is one of three Legislature, legislative branches of the European Union and one of its seven Institutions of the European Union, institutions. Together with the Council of the European Union, it adopts European legi ...

European Parliament
and the
Council of the European Union A council is a group of people who come together to consult, deliberate, or make decisions. A council may function as a legislature A legislature is an assembly Assembly may refer to: Organisations and meetings * Deliberative assembly A ...

Council of the European Union
have powers of amendment and veto during the legislative process. According to the
Treaty on European Union The Treaty on European Union (2007) is one of the primary Treaties of the European Union, alongside the Treaty on the Functioning of the European Union The Treaty on the Functioning of the European Union (TFEU) is one of two treaties formi ...
articles 9 and 10, the EU observes "the principle of equality of its citizens" and is meant to be founded on "representative democracy". In practice, equality before the law, equality and democracy are still in development because the elected representatives in the Parliament cannot initiate legislation against the Commission's wishes, citizens of smallest countries have greater voting weight in Parliament than citizens of the largest countries, and "qualified majorities" or consensus of the Council are required to legislate. This "democratic deficit" has encouraged numerous proposals for reform, and is usually perceived as a hangover from earlier days of integration led by member states. Over time, the Parliament gradually assumed more voice: from being an unelected assembly, to its first direct elections in 1979, to having increasingly more rights in the legislative process. Citizens' rights are therefore limited compared to the democratic polities within all European member states: under TEU article 11 citizens and associations have the rights such as publicising their views and submit an initiative that must be considered by the
Commission Commission or commissioning may refer to: Business and contracting * Commission (remuneration), a form of payment to an agent for services rendered ** Commission (art), the purchase or the creation of a piece of art most often on behalf of another ...

Commission
with one million signatures.
TFEU The Treaty on the Functioning of the European Union (TFEU) is one of two treaties forming the Treaties of the European Union, constitutional basis of the European Union (EU), the other being the Treaty on European Union (TEU; also referred to as ...
article 227 contains a further right for citizens to petition the Parliament on issues which affect them. Elections to the European Parliament, Parliament elections, take place every five years, and votes for Member of the European Parliament, Members of the European Parliament (MEP) in member states must be organised by proportional representation or a single transferable vote. There are 750 MEPs and their numbers are "degressively proportional" according to member state size. This means – although the Council is meant to be the body representing member states – in the Parliament citizens of smaller member states have more voice than citizens in larger member states. MEPs divide, as they do in national Parliaments, along political party lines: the conservative European People's Party is currently the largest, and the Party of European Socialists leads the opposition. Parties do not receive public funds from the EU, as the ECJ, Court of Justice held in ''Parti écologiste "Les Verts" v European Parliament'' that this was entirely an issue to be regulated by the member states. The Parliament's powers include calling inquiries into maladministration or appoint an Ombudsman pending any court proceedings. It can require the
Commission Commission or commissioning may refer to: Business and contracting * Commission (remuneration), a form of payment to an agent for services rendered ** Commission (art), the purchase or the creation of a piece of art most often on behalf of another ...

Commission
respond to questions and by a two-thirds majority can censure the whole Commission (as happened to the Santer Commission in 1999). In some cases, the Parliament has explicit consultation rights, which the Commission must genuinely follow. However its participation in the legislative process still remains limited because no member can actually or pass legislation without the
Commission Commission or commissioning may refer to: Business and contracting * Commission (remuneration), a form of payment to an agent for services rendered ** Commission (art), the purchase or the creation of a piece of art most often on behalf of another ...

Commission
and Council, meaning power ("kratia") is not in the hands of directly elected representatives of the people ("demos"): in the EU it is not yet true that "the administration is in the hands of the many and not of the few". The second main legislative body is the
Council A council is a group of people who come together to consult, deliberate, or make decisions. A council may function as a legislature A legislature is a deliberative assembly with the authority In the fields of sociology Sociology is t ...

Council
, which is composed of different ministers of the member states. The heads of government of member states also convene a "
European Council The European Council (informally EUCO) is a collegiate body that defines the overall political directions and priorities of the European Union The European Union (EU) is a political and economic union of member states that are loc ...
" (a distinct body) that the TEU article 15 defines as providing the 'necessary impetus for its development and shall define the general political directions and priorities'. It meets each six months and its President (currently former Belgian Prime Minister Charles Michel) is meant to 'drive forward its work', but it does not itself exercise 'legislative functions'. The
Council A council is a group of people who come together to consult, deliberate, or make decisions. A council may function as a legislature A legislature is a deliberative assembly with the authority In the fields of sociology Sociology is t ...

Council
does this: in effect this is the governments of the member states, but there will be a different minister at each meeting, depending on the topic discussed (e.g. for environmental issues, the member states' environment ministers attend and vote; for foreign affairs, the foreign ministers, etc.). The minister must have the authority to represent and bind the member states in decisions. When voting takes place it is weighted inversely to member state size, so smaller member states are not dominated by larger member states. In total there are 352 votes, but for most acts there must be a qualified majority vote, if not consensus. TEU article 16(4) and TFEU article 238(3) define this to mean at least 55 per cent of the Council members (not votes) representing 65 per cent of the population of the EU: currently this means around 74 per cent, or 260 of the 352 votes. This is critical during the legislative process. To make new legislation, TFEU article 294 defines the "
ordinary legislative procedure The European Union The European Union (EU) is a political and economic union of Member state of the European Union, member states that are located primarily in Europe. Its members have a combined area of and an estimated total popula ...
" that applies for most EU acts. The essence is there are three readings, starting with a Commission proposal, where the Parliament must vote by a majority of all MEPs (not just those present) to block or suggest changes, and the Council must vote by qualified majority to approve changes, but by unanimity to block Commission amendment. Where the different institutions cannot agree at any stage, a "Conciliation Committee" is convened, representing MEPs, ministers and the Commission to try to get agreement on a joint text: if this works, it will be sent back to the Parliament and Council to approve by absolute and qualified majority. This means, legislation can be blocked by a majority in Parliament, a minority in the Council, and a majority in the Commission: it is harder to change EU law than for it to stay the same. A different procedure exists for budgets. For "enhanced cooperation" among a sub-set of at least member states, authorisation must be given by the Council. Member state governments should be informed by the Commission at the outset before any proposals start the legislative procedure. The EU as a whole can only act within its power set out in the Treaties. TEU articles 4 and 5 state that powers remain with the member states unless they have been conferred, although there is a debate about the ''Kompetenz-Kompetenz'' question: who ultimately has the "competence" to define the EU's "competence". Many member state courts believe they decide, other member state Parliaments believe they decide, while within the EU, the Court of Justice believes it has the final say.


Judiciary

The judiciary of the EU has played an important role in the development of EU law. It interprets the treaties, and has accelerated economic and political integration. Today the Court of Justice of the European Union (CJEU) is the main judicial body, within which there is a higher that deals with cases that contain more public importance, and a General Court (European Union), General Court that deals with issues of detail but without general importance, and then a separate Court of Auditors. Under the
Treaty on European Union The Treaty on European Union (2007) is one of the primary Treaties of the European Union, alongside the Treaty on the Functioning of the European Union The Treaty on the Functioning of the European Union (TFEU) is one of two treaties formi ...
article 19(2) there is one judge from each member state in the Court of Justice and General Court (27 on each at present). Judges should "possess the qualifications required for appointment to the highest judicial offices" (or for the General Court, the "ability required for appointment to high judicial office"). A president is elected by the judges for three years. While TEU article 19(3) says the Court of Justice is the ultimate court to interpret questions of EU law, in practice, most EU law is applied by member state courts (e.g. the English Court of Appeal, the German Bundesgerichtshof, the Belgian Cour du travail, etc.). Member state courts can refer questions to the CJEU for a preliminary ruling. The CJEU's duty is to "ensure that in the interpretation and application of the Treaties the law is observed", although realistically it has the ability to expand and develop the law according to the principles it develops consistently with democratic values. Examples of landmark, and frequently controversial judgments, include ''Van Gend en Loos v Nederlandse Administratie der Belastingen, Van Gend en Loos'' (holding EU law to created a new legal order, and citizens could sue for treaty rights),(1963) Case 26/62 ''Mangold v Helm'' (establishing equality as a general principle of EU law), and ''Kadi v Commission'' (confirming
international law International law, also known as public international law and law of nations, is the set of rules, norms, and standards generally recognized as binding between nation A nation is a community A community is a social unitThe term "level of anal ...
had to conform with basic principles of EU law). Until 2016, there was the European Union Civil Service Tribunal, which dealt with EU institutions' staff issues. The Statute of the Court and TFEU require judges are appointed only if they have no political occupation, with independence "beyond doubt". They are selected for renewable six-year terms by "common accord" of governments, with the advice of seven EU or member state judges that the Council and Parliament selects. The Rules of Procedure of the Court of Justice, article 11, says the court is usually organised into chambers of 3 or 5 judges each. A "grand chamber" of 15 more senior judges sit on questions of "difficulty or importance", or those requested by member states. The court's President and Vice-President are elected by other judges for renewable 3-year terms by secret ballot. Judges can only be dismissed if all other judges and Advocate Generals unanimously agree. Advocate Generals are appointed by the court to give reasoned submissions on cases, especially involving new points of law. Unlike judges on the Court, they write opinions as themselves, rather than collectively, and often with a command of prose and reason, and while not binding are often followed in practice. In addition, each judge has secretaries or ''referendaires'' who research and write. Unlike the UK where judges always write their own opinions, ''referendaires'' often assist drafting the judgments in the Court of Justice. The Court's Translation Directorate will translate every final judgment into the 24 official languages of the European Union. The three main kinds of judgments the Court of Justice gives following (1) preliminary rulings, requested by the courts of member states, (2) enforcement actions, brought by the Commission or Member States, against the EU, a member state, or any other party that is alleged to violate EU law, and (3) other direct actions, where the EU or member state is involved as a party to the dispute, and gives final rulings. The Rules of Procedure of the Court of Justice, modelled on the International Court of Justice, begin with submission of written cases to the court, followed by a short oral hearing. In each case a judge is designated to actively manage the hearing (called a ''rapporteur'') and draft the judgment (probably with help from ''referendaires''). The court always deliberates and votes before the final opinion is written and published. Cases in the General Court can be appealed to the Court of Justice on points of law. While there is no formal appeal procedure from the Court of Justice, in practice its actions are subject to scrutiny by both the supreme courts of member states and the European Court of Human Rights, even if the final balance of power is unresolved.


Conflict of laws

Since its founding, the EU has operated among an increasing Legal pluralism, plurality of member state and Globalization, globalising legal systems. This has meant both the
European Court of Justice European, or Europeans, may refer to: In general * ''European'', an adjective referring to something of, from, or related to Europe ** Ethnic groups in Europe ** Demographics of Europe ** European cuisine, the cuisines of Europe and other Western ...

European Court of Justice
and the supreme courts of the states have had to develop principles to resolve conflicts of laws between different systems. Within the EU itself, the Court of Justice's view is that if Union law conflicts with a provision of State law, then Union law has Primacy of European Union law, primacy. In the first major case in 1964, ''Costa v ENEL'', a Milanese dialect, Milanese lawyer, and former shareholder of an energy company, named Mr Costa refused to pay his electricity bill to Enel, as a protest against the Nationalization of the Italian energy corporations. He claimed the Italian nationalisation law conflicted with the Treaty of Rome, and requested a reference be made to both the Constitutional Court of Italy, Italian Constitutional Court and the Court of Justice under TFEU article 267. The Italian Constitutional Court gave an opinion that because the nationalisation law was from 1962, and the treaty was in force from 1958, Costa had no claim. By contrast, the International Court of Justice, Court of Justice held that ultimately the Treaty of Rome in no way prevented energy nationalisation, and in any case under the Treaty provisions only the Commission could have brought a claim, not Mr Costa. However, in principle, Mr Costa was entitled to plead that the Treaty conflicted with national law, and the court would have a duty to consider his claim to make a reference if there would be no appeal against its decision. The Court of Justice, repeating its view in ''Van Gend en Loos'', said member states "have limited their sovereign rights, albeit within limited fields, and have thus created a body of law which binds both their nationals and themselves" on the "basis of reciprocity". EU law would not "be overridden by domestic legal provisions, however framed... without the legal basis of the community itself being called into question". This meant any "subsequent unilateral act" of the member state inapplicable. Similarly, in ''Amministrazione delle Finanze dello Stato v Simmenthal SpA'', a company, Simmenthal SpA, claimed that a public health inspection fee under an Italian law of 1970 for importing beef from France to Italy was contrary to two
Regulations Regulation is the management of complex systems according to a set of rules and trends. In systems theory Systems theory is the interdisciplinary study of system A system is a group of Interaction, interacting or interrelated elements that a ...
from 1964 and 1968. In "accordance with the principle of the precedence of Community law", said the Court of Justice, the "directly applicable measures of the institutions" (such as the Regulations in the case) "render automatically inapplicable any conflicting provision of current national law". This was necessary to prevent a "corresponding denial" of Treaty "obligations undertaken unconditionally and irrevocably by member states", that could "imperil the very foundations of the" EU. But despite the views of the Court of Justice, the national courts of member states have not accepted the same analysis. Generally speaking, while all member states recognise that EU law takes primacy over national law where this agreed in the Treaties, they do not accept that the Court of Justice has the final say on foundational constitutional questions affecting democracy and human rights. In the United Kingdom, the basic principle is that Parliament, as the sovereign expression of democratic legitimacy, can decide whether it wishes to expressly legislate against EU law. This, however, would only happen in the case of an express wish of the people to withdraw from the EU. It was held in ''R (Factortame Ltd) v Secretary of State for Transport'' that "whatever limitation of its sovereignty Parliament accepted when it enacted the European Communities Act 1972 was entirely voluntary" and so "it has always been clear" that UK courts have a duty "to override any rule of national law found to be in conflict with any directly enforceable rule of Community law". In 2014, the Supreme Court of the United Kingdom noted that in ''R (HS2 Action Alliance Ltd) v Secretary of State for Transport'',[2014] UKSC 3 although the UK constitution is uncodified, there could be "fundamental principles" of common law, and Parliament "did not either contemplate or authorise the abrogation" of those principles when it enacted the European Communities Act 1972 (UK), European Communities Act 1972. The view of the German Constitutional Court from the ''Solange I'' and ''Solange II'' decisions is that if the EU does not comply with its basic constitutional rights and principles (particularly democracy, the
rule of law The rule of law is defined in the ''Oxford English Dictionary The ''Oxford English Dictionary'' (''OED'') is the principal of the , published by (OUP). It traces the historical development of the English language, providing a compreh ...

rule of law
and the social state principles) then it cannot override German law. However, as the nicknames of the judgments go, "so long as" the EU works towards the democratisation of its institutions, and has a framework that protects fundamental human rights, it would not review EU legislation for compatibility with German constitutional principles. Most other member states have expressed similar reservations. This suggests the EU's legitimacy rests on the ultimate authority of member states, its factual commitment to human rights, and the democratic will of the people. As opposed to the member states, the relation of EU law and
international law International law, also known as public international law and law of nations, is the set of rules, norms, and standards generally recognized as binding between nation A nation is a community A community is a social unitThe term "level of anal ...
is debated, particularly relating to the
European Convention on Human Rights The European Convention on Human Rights (ECHR; formally the Convention for the Protection of Human Rights and Fundamental Freedoms) is an international convention to protect human rights and political freedoms in Europe. Drafted in 1950 by t ...
and the United Nations. All individual EU member states are party to both organisations through international treaties. The
Treaty on European Union The Treaty on European Union (2007) is one of the primary Treaties of the European Union, alongside the Treaty on the Functioning of the European Union The Treaty on the Functioning of the European Union (TFEU) is one of two treaties formi ...
article 6(2) required the EU to accede to the European Convention on Human Rights, ECHR, but would "not affect the Union's competences as defined in the Treaties". This was thought necessary before the
Treaty of Lisbon The Treaty of Lisbon (initially known as the Reform Treaty) is an international agreement that amends the two treaties A treaty is a formal, legally binding written agreement between actors in international law International law, als ...
to ensure that the EU gave adequate protection to human rights, overseen by the external European Court of Human Rights in
Strasbourg Strasbourg (, , ; german: Straßburg ; gsw, label=Bas Rhin Bas-Rhin (; Alsatian: ''Unterelsàss'', ' or '; traditional german: links=no, Niederrhein; en, Lower Rhine) is a department Department may refer to: * Departmentalization, divi ...

Strasbourg
. However, in ''Opinion 2/13'', after a request by the Commission to review their plan to accede, the Court of Justice (in Luxembourg City, Luxembourg) produced a five main reasons why it felt that the accession agreement as it stood was incompatible with the treaties. The reasoning was regarded by a majority of commentators as thinly veiled attempt of the Court of Justice to clutch onto its own power, but it has meant the Commission is redrafting a new accession agreement. Under TEU articles 3(5), 21, 34 and 42, the EU must also respect the principles of the
United Nations Charter The Charter of the United Nations (also known as the UN Charter) is the foundational treaty A treaty is a formal, legally binding written agreement between actors in international law International law, also known as public internation ...
. After the September 11 attacks on the World Trade Center (1973–2001), World Trade Center in New York City, the United Nations Security Council resolution, UN Security Council adopted a resolution to freeze the assets of suspected terrorists, linked to Osama bin Laden. This included a Saudi people, Saudi national, Mr Kadi. Sweden froze his assets pursuant to an EU Regulation, which gave effect to the UN Security Council resolution. In ''Kadi v Commission'', Mr Kadi claimed there was no evidence that he was connected to terrorism, and he had not had a Right to a fair trial, fair trial: a fundamental human right. The opinion of Miguel Poiares Maduro, AG Maduro recalled Aharon Barak, of the Supreme Court of Israel, that it "is when the cannons roar that we especially need the laws". The Court of Justice held that even UN member cannot contravene "the principles that form part of the very community legal order". In effect the EU has developed a rule that within the boundaries of certain jus cogens principles, other courts may take primacy. The content of those core principles remains open to ongoing judicial dialogue among the senior courts in the Union.


Administrative law

While constitutional law concerns the
European Union The European Union (EU) is a political and economic union of member states that are located primarily in Europe Europe is a which is also recognised as part of , located entirely in the and mostly in the . It comprises the wester ...

European Union
's governance structure, administrative law binds EU institutions and member state governments to follow the law. Both member states and the
Commission Commission or commissioning may refer to: Business and contracting * Commission (remuneration), a form of payment to an agent for services rendered ** Commission (art), the purchase or the creation of a piece of art most often on behalf of another ...

Commission
have a general legal right or "standing" (''locus standi'') to bring claims against EU institutions and other member states for breach of the treaties. From the EU's foundation, the Court of Justice also held that the Treaties allowed citizens or corporations to bring claims against EU and member state institutions for violation of the Treaties and
Regulations Regulation is the management of complex systems according to a set of rules and trends. In systems theory Systems theory is the interdisciplinary study of system A system is a group of Interaction, interacting or interrelated elements that a ...
, if they were properly interpreted as creating rights and obligations. However, under
Directives Directive may refer to: * Directive (European Union), a legislative act of the European Union * Directive (programming), a computer language construct that specifies how a compiler should process input * Directive (poem), "Directive" (poem), a poem ...
, citizens or corporations were said in 1986 to not be allowed to bring claims against other non-state parties. This meant courts of member states were not bound to apply a Union law where a State law conflicted, even though the member state government could be sued, if it would impose an obligation on another citizen or corporation. These rules on "direct effect" limit the extent to which member state courts are bound to administer EU law. All actions by EU institutions can be subject to judicial review, and judged by standards of proportionality (law), proportionality, particularly where general principles of law, or fundamental rights are engaged. The remedy for a claimant where there has been a breach of the law is often monetary damages, but courts can also require specific performance or will grant an injunction, in order to ensure the law is effective as possible.


Direct effect

Although it is generally accepted that EU law has primacy, not all EU laws give citizens standing to bring claims: that is, not all EU laws have "direct effect". In it was held that the provisions of the Treaties of the European Union, Treaties (and Regulation (European Union), EU Regulations) are directly effective, if they are (1) clear and unambiguous (2) unconditional, and (3) did not require EU or national authorities to take further action to implement them. Van Gend en Loos, a postal company, claimed that what is now
TFEU The Treaty on the Functioning of the European Union (TFEU) is one of two treaties forming the Treaties of the European Union, constitutional basis of the European Union (EU), the other being the Treaty on European Union (TEU; also referred to as ...
article 30 prevented the Dutch Customs Authorities charging tariffs, when it imported urea-formaldehyde plastics from Germany to the Netherlands. After a Dutch court made a reference, the held that even though the Treaties did not "expressly" confer a right on citizens or companies to bring claims, they could do so. Historically, international treaties had only allowed states to have legal claims for their enforcement, but the Court of Justice proclaimed "the Community constitutes a new legal order of international law". Because article 30 clearly, unconditionally and immediately stated that no quantitative restrictions could be placed on trade, without a good justification, Van Gend en Loos could recover the money it paid for the tariff. EU Regulations are the same as Treaty provisions in this sense, because as TFEU article 288 states, they are 'directly applicable in all Member States'. Member states come under a duty not to replicate Regulations in their own law, in order to prevent confusion. For instance, in ''Commission v Italy (1972), Commission v Italy'' the Court of Justice held that Italy had breached a duty under the Treaties, both by failing to operate a scheme to pay farmers a premium to slaughter cows (to reduce dairy overproduction), and by reproducing the rules in a decree with various additions. "Regulations", held the Court of Justice, "come into force solely by virtue of their publication" and implementation could have the effect of "jeopardizing their simultaneous and uniform application in the whole of the Union". On the other hand, some Regulations may themselves expressly require implementing measures, in which case those specific rules should be followed. While the Treaties and Regulations will have direct effect (if clear, unconditional and immediate), Directive (European Union), Directives do not generally give citizens (as opposed to the member state) standing to sue other citizens. In theory, this is because TFEU article 288 says Directives are addressed to the member states and usually "leave to the national authorities the choice of form and methods" to implement. In part this reflects that directives often create minimum standards, leaving member states to apply higher standards. For example, the Working Time Directive requires that every worker has at least 4 weeks paid holidays each year, but most member states require more than 28 days in national law. However, on the current position adopted by the Court of Justice, citizens have standing to make claims based on national laws that implement Directives, but not from Directives themselves. Directives do not have so called "horizontal" direct effect (i.e. between non-state parties). This view was instantly controversial, and in the early 1990s three Advocate Generals persuasively argued that Directives should create rights and duties for all citizens. The Court of Justice refused, but there are five large exceptions. First, if a Directive's deadline for implementation is not met, the member state cannot enforce conflicting laws, and a citizen may rely on the Directive in such an action (so called "vertical" direct effect). So, in ''Pubblico Ministero v Ratti'' because the Italian government had failed to implement a Directive 73/173/EEC on packaging and labelling solvents by the deadline, it was estopped from enforcing a conflicting national law from 1963 against Mr Ratti's solvent and varnish business. A member state could "not rely, as against individuals, on its own failure to perform the obligations which the Directive entails". Second, a citizen or company can also invoke a Directive as a defence in a dispute with another citizen or company (not just a public authority) which is attempting to enforce a national law that conflicts with a Directive. So, in ''CIA Security v Signalson and Securitel'' the ECJ, Court of Justice held that a business called CIA Security could defend itself from allegations by competitors that it had not complied with a Belgian decree from 1991 about alarm systems, on the basis that it had not been notified to the Commission as a Directive required. Third, if a Directive gives expression to a "general principle" of EU law, it can be invoked between private non-state parties before its deadline for implementation. This follows from ''Kücükdeveci v Swedex GmbH & Co KG'' where the German Civil Code §622 stated that the years people worked under the age of 25 would not count towards the increasing statutory notice before dismissal. Ms Kücükdeveci worked for 10 years, from age 18 to 28, for Swedex GmbH & Co KG before her dismissal. She claimed that the law not counting her years under age 25 was unlawful age discrimination under the Employment Equality Framework Directive. The Court of Justice held that the Directive could be relied on by her because equality before the law, equality was also a General principles of European Union law, general principle of EU law. Fourth, if the defendant is an emanation of the state, even if not central government, it can still be bound by Directives. In ''Foster v British Gas plc'' the Court of Justice held that Mrs Foster was entitled to bring a sex discrimination claim against her employer, British Gas plc, which made women retire at age 60 and men at 65, if (1) pursuant to a state measure, (2) it provided a public service, and (3) had special powers. This could also be true if the enterprise is privatised, as it was held with a water company that was responsible for basic water provision. Fifth, national courts have a duty to interpret domestic law "as far as possible in the light of the wording and purpose of the directive". Textbooks (though not the Court itself) often called this "indirect effect". In ''Marleasing SA v La Comercial SA'' the Court of Justice held that a Spanish Court had to interpret its general Civil Code provisions, on contracts lacking cause or defrauding creditors, to conform with the European corporate law, First Company Law Directive article 11, that required incorporations would only be nullified for a fixed list of reasons. The Court of Justice quickly acknowledged that the duty of interpretation cannot contradict plain words in a national statute. But, if a member state has failed to implement a Directive, a citizen may not be able to bring claims against other non-state parties. It must instead sue the member state itself for failure to implement the law. In sum, the Court of Justice's position on direct effect means that governments and taxpayers must bear the cost of private parties, mostly corporations, for refusing to follow the law.


References and remedies

Litigation often begins and is resolved by member state courts. They interpret and apply EU law, and award remedies of damages, compensation and restitution (remedying loss or stripping gains), injunctions and specific performance (making somebody stop or do something). If, however, the position in EU law appears unclear, member state courts can refer questions to the Court of Justice for a "preliminary ruling" on EU law's proper interpretation. TFEU article 267 says court "may" refer "if it considers" this "is necessary to enable it to give judgment", and "shall bring the matter before the Court" if there is no possibility for further appeal and remedy. Any "court or tribunal of a Member State" can refer. This is widely interpreted. It obviously includes bodies like the UK Supreme Court, a High Court, or an Employment Tribunal. In ''Vaassen v Beambtenfonds Mijnbedrijf'' the Court of Justice also held that a mining worker pension arbitration tribunal could make a reference. By contrast, and oddly, in ''Miles v European Schools'' the Court of Justice held that a Complaints Board of European Schools, set up under the international agreement, the European Schools Convention, could not refer because though it was a court, it was not "of a member state" (even though all member states had signed that Convention). On the other side, courts and tribunals are theoretically under a duty to refer questions. In the UK, for example, Lord Denning MR considered it appropriate to refer if the outcome of a case depended on a correct answer, and the Civil Procedure Rules entitle the High Court to refer at any stage of proceedings. The view of the Court of Justice in the leading case, ''CILFIT v Ministry of Health'' is that a national court has no duty to refer if the law is an ''acte clair'' (a clear rule), or "so obvious as to leave no scope for any reasonable doubt as to the manner in which the question raised is to be resolved". In ''Kenny Roland Lyckeskog'' the Court of Justice held that the duty to refer existed for the Swedish Court of Appeal, the ''hovrätt'', since Sweden's Supreme Court (''Högsta domstol'') had to give permission for appeals to continue. The practical difficulty is that judges differ on their views of whether or not the law is clear. In a significant case, ''Three Rivers DC v Governor of the Bank of England'' the UK House of Lords felt confident that it was clear under the First Banking Directive that depositors did not have direct rights to sue the Bank of England for alleged failure to carry out adequate prudential regulation. Their Lordships highlighted that while some uncertainty might exist, the costs of delay in making a reference outweighed the benefits from total certainty. By contrast, in ''ParkingEye Ltd v Beavis'', a majority of the Supreme Court apparently felt able to declare that the law under Unfair Terms in Consumer Contracts Directive was ''acte clair'', and decline to make a reference, even though a senior Law Lord delivered a powerfully reasoned dissent. However, in addition to a reluctance to make references, a general scepticism has grown among senior member state judiciaries of the mode of reasoning used by the Court of Justice. The UK Supreme Court in ''R (HS2 Action Alliance Ltd) v Secretary of State for Transport'' devoted large parts of its judgment to criticism, in its view, an unpredictable 'teleological' mode of reasoning which, could decrease confidence in maintaining a dialogue within a plural and transnational judicial system. It added that it might not interpret the European Communities Act 1972 (UK), European Communities Act 1972 to abridge basic principles and understanding of constitutional functioning – in effect implying that it might decline to follow unreasonable Court of Justice judgments on important issues. Similarly, the German Constitutional Court in the ''Outright Monetary Transactions case'' referred a question for preliminary ruling on whether the
European Central Bank The European Central Bank (ECB) is the prime component of the Eurosystem The Eurosystem is the monetary authority In finance Finance is the study of financial institutions, financial markets and how they operate within the financia ...

European Central Bank
's plan to buy Greek and other government bonds on secondary markets, despite the Treaty prohibition on buying them directly, was unlawful. In a highly unusual move, the two most senior judges dissented that the ECB's plan could be lawful, while the majority closely guided the Court of Justice on the appropriate mode of reasoning. If references are made, the Court of Justice will give a preliminary ruling, in order for the member state court to conclude the case and award a remedy. The right to an effective remedy is a general principle of EU law, enshrined in the Charter of Fundamental Rights article 47. Most of the time Regulations and Directives will set out the relevant remedies to be awarded, or they will be construed from the legislation according to the practices of the member state. It could also be that the government is responsible for failure to properly implement a Directive or Regulation, and must therefore pay damages. In ''Francovich v Italy'', the Italian government had failed to set up an insurance fund for employees to claim unpaid wages if their employers had gone insolvent, as the Insolvency Protection Directive required. Francovich, the former employee of a bankrupt Venetian firm, was therefore allowed to claim 6 million Lira from the Italian government in damages for his loss. The ECJ, Court of Justice held that if a Directive would confer identifiable rights on individuals, and there is a causal link between a member state's violation of EU and a claimant's loss, damages must be paid. The fact that the incompatible law is an Act of Parliament is no defence. So, in ''Factortame (No 3), Factortame'' it was irrelevant that Parliament had legislated to require a quota of British ownership of fishing vessels in primary legislation. Similarly, in was ''Brasserie du Pêcheur v Germany'' the German government was liable to a French beer company for damages from prohibiting its imports, which did not comply with the fabled beer purity law. It was not decisive that the German Parliament had not acted willfully or negligently. It was merely necessary that there was (1) a rule intended to confer rights, (2) that a breach was sufficiently serious, and (3) there was a causal link between the breach and damage. The Court of Justice advised a breach is to be regarded as 'sufficiently serious' by weighing a range of factors, such as whether it was voluntary, or persistent. In ''Köbler v Republik Österreich'' the Court of Justice added that member state liability could also flow from judges failing to adequately implement the law. On the other hand, it is also clear that EU institutions, such as the Commission, may be liable according to the same principles for failure to follow the law. The only institution whose decisions appear incapable of generating a damages claim is the Court of Justice itself.


Judicial review

As well as preliminary rulings on the proper interpretation of EU law, an essential function of the Court of Justice is judicial review of the acts of the EU itself. Under
Treaty on the Functioning of the European Union A treaty is a formal, legally binding written agreement between actors in international law International law, also known as public international law and law of nations, is the set of rules, norms, and standards generally recognized as bi ...
(TFEU) article 263(1) the Court can review the legality of any EU legislative of other "act" against the Treaties or general principles, such as those in the Charter of Fundamental Rights of the European Union. This includes legislation, and most other acts that have legal consequences for people. For example, in ''Société anonyme Cimenteries CBR Cementsbedrijven NV v Commission'' the Commission made a decision to withdraw an assurance to a Dutch cement company that it would be immune from competition law fines, for vertical agreements. The cement company challenged the decision, and the Commission argued this was not really an "act", and so could not be challenged. The Court of Justice held a challenge could be made, and it was an act, because it "deprived [the cement company] of the advantages of a legal situation... and exposed them to a grave financial risk". Similarly in ''Deutsche Post v Commission'' the Commission demanded information on state aid given by Germany to Deutsche Post within 20 days. When both challenged this, the Commission argued that the demand for information could not be an act as there was no sanction. The Court of Justice disagreed, and held judicial review could proceed because the request produced "binding legal effects" since the information supplied or not could be relied upon as evidence in a final decision. By contrast, in ''IBM v Commission'' the Court of Justice held that a letter from the Commission to IBM that it would sue IBM for abusing a dominant position contrary to competition was not a reviewable act, but just a preliminary statement of intent to act. In any case, if a reviewable act of an EU institution is not found compatible with the law, under article 264, it will be declared void. However, only a limited number of people can bring claims for judicial review. Under TFEU article 263(2), a member state, the Parliament, Council or Commission have automatic rights to seek judicial review. But under article 263(4) a "natural or legal person" must have a "direct and individual concern" about the regulatory act. "Direct" concern means that someone is affected by an EU act without "the interposition of an autonomous will between the decision and its effect", for instance by a national government body. In ''Piraiki-Patraiki v Commission'', a group of Greek textile businesses, who exported cotton products to France, challenged a Commission decision allow France to limit exports. The Commission argued that the exporters were not directly concerned, because France might decide not to limit exports, but the Court of Justice held this possibility was "entirely theoretical". A challenge could be brought. By contrast in ''Municipality of Differdange v Commission'' a municipality wanted to challenge the Commissions decision to aid steel firms which reduced production: this would probably reduce its tax collections. But the Court of Justice held that because Luxembourg had discretion, and its decision to reduce capacity was not inevitable, the municipality had no "direct" concern (its complaint was with the Luxembourg government instead). "Individual" concern requires that someone is affected specifically, not as a member of a group. In ''Plaumann & Co v Commission'' the Court of Justice held that a clementine importer was not individually concerned when the
Commission Commission or commissioning may refer to: Business and contracting * Commission (remuneration), a form of payment to an agent for services rendered ** Commission (art), the purchase or the creation of a piece of art most often on behalf of another ...

Commission
refused permission to Germany to stop import custom duties. This kept it more expensive for Mr Plaumann to import clementines, but it was equally expensive for everyone else. This decision heavily restricted the number of people who could claim for judicial review. In ''Unión de Pequeños Agricultores'', Advocate General Jacobs propose a broader test of allowing anyone to claim if there was a "substantial adverse effect" on the claimant's interests. Here, a group of Spanish olive oil producers challenged Council Regulation No 1638/98, which withdrew subsidies. Because Regulations are not implemented in national law, but have direct effect, they argued the requirement for individual concern would deny them effective judicial protection. The Court of Justice held that direct actions were still not allowed: if this was unsatisfactory the member states would have to change the treaties. Individual concern is not needed, however under article 263(4), if an act is not legislation, but just a "regulatory act". In ''Inuit Tapiriit Kanatami v Parliament and Council'' the Court of Justice affirmed that a Regulation does not count as a "regulatory act" within the Treaty's meaning: it is only meant for acts of lesser importance. Here, a Canadian group representing the Inuit people wished to challenge a Regulation on Pinniped, seal products, but were not allowed. They would have to show both direct and individual concern as normal. Thus, without a treaty change, EU administrative law remains one of the most restrictive in Europe.


Human rights and principles

Although access to judicial review is restricted for ordinary questions of law, the Court of Justice has gradually developed a more open approach to standing for human rights. Human rights have also become essential in the proper interpretation and construction of all EU law. If there are two or more plausible interpretations of a rule, the one which is most consistent with human rights should be chosen. The Treaty of Lisbon 2007 made rights underpin the Court of Justice's competence, and required the EU's accession to the
European Convention on Human Rights The European Convention on Human Rights (ECHR; formally the Convention for the Protection of Human Rights and Fundamental Freedoms) is an international convention to protect human rights and political freedoms in Europe. Drafted in 1950 by t ...
, overseen by the external Strasbourg Court. Initially, reflecting its primitive economic nature, the treaties made no reference to rights. However, in 1969 particularly after concern from Germany, the Court of Justice declared in ''Stauder v City of Ulm'' that 'fundamental human rights' were 'enshrined in the general principles of Community law'. This meant that Mr Stauder, who received subsidised butter under an EU welfare scheme only by showing a coupon with his name and address, was entitled to claim that this violated his dignity: he was entitled not to have to go through the humiliation of proving his identity to get food. While those 'general principles' were not written down in EU law, and simply declared to exist by the court, it accords with a majority philosophical view that 'black letter' rules, or positive law, necessarily exist for reasons that the society which made them wants: these give rise to principles, which inform the law's purpose. Moreover, the Court of Justice has clarified that its recognition of rights was 'inspired' by member states' own 'constitutional traditions', and international treaties. These include rights found in member state constitutions, bills of rights, foundational Acts of Parliament, landmark court cases, the
European Convention on Human Rights The European Convention on Human Rights (ECHR; formally the Convention for the Protection of Human Rights and Fundamental Freedoms) is an international convention to protect human rights and political freedoms in Europe. Drafted in 1950 by t ...
, the European Social Charter 1961, the Universal Declaration of Human Rights 1948, or the International Labour Organization's Conventions. The EU itself must accede to the ECHR, although in '’Opinion 2/13'’ the Court of Justice delayed, because of perceived difficulties in retaining an appropriate balance of competences. Many of the most important rights were codified in the Charter of Fundamental Rights of the European Union in 2000. While the UK has opted out of direct application of the Charter, this has little practical relevance since the Charter merely reflected pre-existing principles and the Court of Justice uses the Charter to interpret all EU law. For example, in ''Test-Achats ASBL v Conseil des ministres'', the Court of Justice held that Equal Treatment in Goods and Services Directive 2004 article 5(2), which purported to allow a derogation from equal treatment, so men and women could be charged different car insurance rates, was unlawful. It contravened the principle of equality in CFREU 2000 articles 21 and 23, and had to be regarded as ineffective after a transition period. By contrast, in ''Deutsches Weintor eG v Land Rheinland-Pfalz'' wine producers claimed that a direction to stop marketing their brands as 'easily digestible' (''bekömmlich'') by the state food regulator (acting under EU law) contravened their right to occupational and business freedom under CFREU 2000 articles 15 and 16. The Court of Justice held that in fact, the right to health for consumers in article 35 has also to be taken into account, and was to be given greater weight, particularly given the health effects of alcohol. Some rights in the CFREU, Charter, however, are not expressed with sufficient clarity to be regarded as directly binding. In ''AMS v Union locale des syndicats CGT'' a French trade union claimed that the French Labour Code should not exclude casual workers from counting toward the right to set up a work council that an employing entity must inform and consult. They said this contravened the Information and Consultation of Employees Directive and also CFREU article 27. The Court of Justice agreed that the French Labour Code was incompatible with the Directive, but held that article 27 was expressed too generally to create direct rights. On this view, legislation was necessary to make abstract human rights principles concrete, and legally enforceable. Beyond human rights, the Court of Justice has recognised at least five further 'general principles' of EU law. First, legal certainty requires that judgments should be prospective, open and clear. Second, when reviewing any discretionary act of a government or powerful body, decision-making must be "proportionality (law), proportionate" toward a legitimate aim. For example, if a government wishes to change an employment law in a neutral way, yet this could have disproportionate negative impact on women rather than men, the government must show a legitimate aim, and that its measures are (1) appropriate or suitable for achieving it, (2) do no more than necessary, and (3) reasonable in balancing the conflicting rights of different parties. Third, equality is regarded as a fundamental principle: this matters particularly for labour rights, political rights, and access to public or private services. Fourth, the right to a fair hearing was declared a general principle, though admittedly this is amply reflected in most human rights instruments. Fifth, there is a general principle of professional privilege between lawyers and clients. The categories of general principle are not closed, and may develop according to the social expectations of people living in Europe.


Free movement and trade

While the "social market economy" concept was only put into EU law in Treaty of Lisbon, 2007, free movement and trade were central to European development since the Treaty of Rome 1957. The standard theory of comparative advantage says two countries can both benefit from trade even if one of them has a less productive economy in all respects. Like the North American Free Trade Association, or the World Trade Organization, EU law breaks down barriers to trade, by creating rights to free movement of goods, services, Manual labour, labour and capital (economics), capital. This is meant to reduce consumer prices and raise living standards. Early theorists argued a free trade area would give way to a customs union, which led to a common market, then monetary union, then union of monetary and fiscal policy, and eventually a full union characteristic of a federal state. But in Europe those stages were mixed, and it is unclear whether the "Chess endgame, endgame" should be the same as a state. Free trade, without rights to ensure fair trade, can benefit some groups within countries (particularly big business) more than others, and disadvantages people who Inequality of bargaining power, lack bargaining power in an expanding market, particularly workers, consumers, small business, developing industries, and communities. For this reason, the European has become "not merely an economic union", but creates binding social rights for people to "ensure social progress and seek the constant improvement of the living and working conditions of their peoples". The
Treaty on the Functioning of the European Union A treaty is a formal, legally binding written agreement between actors in international law International law, also known as public international law and law of nations, is the set of rules, norms, and standards generally recognized as bi ...
articles 28 to 37 establish the principle of free movement of goods in the EU, while articles 45 to 66 require free movement of persons, services and capital (economics), capital. These "four freedoms" were thought to be inhibited by physical barriers (e.g. customs), technical barriers (e.g. differing laws on safety, consumer or environmental standards) and fiscal barriers (e.g. different Value Added Tax rates). Free movement and trade is not meant to be a licence for unrestricted commercial profit. Increasingly, the Treaties and the Court of Justice aim to ensure free trade serves higher values such as public health, consumer protection, labour rights, fair competition, and environmental improvement.


Goods

Free movement of goods within the
European Union The European Union (EU) is a political and economic union of member states that are located primarily in Europe Europe is a which is also recognised as part of , located entirely in the and mostly in the . It comprises the wester ...

European Union
is achieved by a customs union, and the principle of non-discrimination. The EU manages imports from non-member states, duties between member states are prohibited, and imports circulate freely. In addition under the
Treaty on the Functioning of the European Union A treaty is a formal, legally binding written agreement between actors in international law International law, also known as public international law and law of nations, is the set of rules, norms, and standards generally recognized as bi ...
article 34, 'Quantitative restrictions on imports and all measures having equivalent effect shall be prohibited between Member States'. In ''Procureur du Roi v Dassonville'' the ECJ, Court of Justice held that this rule meant all "trading rules" that are "enacted by Member States" which could hinder trade "directly or indirectly, actually or potentially" would be caught by article 34. This meant that a Belgium, Belgian law requiring Scotch whisky imports to have a certificate of origin was unlikely to be lawful. It discriminated against parallel importers like Mr Dassonville, who could not get certificates from authorities in France, where they bought the Scotch whisky, Scotch. This "wide test", to determine what could potentially be an unlawful restriction on trade, applies equally to actions by quasi-government bodies, such as the former "Buy Irish" company that had government appointees. It also means states can be responsible for private actors. For instance, in ''Commission v France (1997), Commission v France'' French farmer vigilantes were continually sabotaging shipments of Spanish strawberries, and even Belgian tomato imports. France was liable for these hindrances to trade because the authorities 'manifestly and persistently abstained' from preventing the sabotage. Generally speaking, if a member state has laws or practices that directly discriminate against imports (or exports under TFEU article 35) then it must be justified under article 36. The justifications include public morality, policy or security, "protection of health and life of humans, animals or plants", "national treasures" of "artistic, historic or archaeological value" and "industrial and commercial property". In addition, although not clearly listed, environmental protection can justify restrictions on trade as an overriding requirement derived from TFEU article 11. More generally, it has been increasingly acknowledged that fundamental human rights should take priority over all trade rules. So, in ''Schmidberger v Austria'' the Court of Justice held that Austria did not infringe article 34 by failing to ban a protest that blocked heavy traffic passing over the A13, Brenner Autobahn, en route to Italy. Although many companies, including Mr Schmidberger's German undertaking, were prevented from trading, the ECJ, Court of Justice reasoned that freedom of association is one of the 'fundamental pillars of a democratic society', against which the free movement of goods had to be balanced, and was probably subordinate. If a member state does appeal to the article 36 justification, the measures it takes have to be applied Proportionality (law), proportionately. This means the rule must be pursue a legitimate aim and (1) be suitable to achieve the aim, (2) be necessary, so that a less restrictive measure could not achieve the same result, and (3) be Reasonableness, reasonable in balancing the interests of free trade with interests in article 36. Often rules apply to all goods neutrally, but may have a greater practical effect on imports than domestic products. For such "indirect" discriminatory (or "indistinctly applicable") measures the Court of Justice has developed more justifications: either those in article 36, or additional "mandatory" or "overriding" requirements such as consumer protection, improving labour standards, protecting the environment, press diversity, fairness in commerce, and more: the categories are not closed. In the noted case ''Rewe-Zentral AG v Bundesmonopol für Branntwein'', the ECJ, Court of Justice found that a German law requiring all spirits and liqueurs (not just imported ones) to have a minimum alcohol content of 25 per cent was contrary to TFEU article 34, because it had a greater negative effect on imports. German liqueurs were over 25 per cent alcohol, but Cassis de Dijon, which Rewe-Zentrale AG wished to import from France, only had 15 to 20 per cent alcohol. The Court of Justice rejected the German government's arguments that the measure proportionately protected public health under TFEU article 36, because stronger beverages were available and adequate labelling would be enough for consumers to understand what they bought. This rule primarily applies to requirements about a product's content or packaging. In ''Walter Rau Lebensmittelwerke v De Smedt PVBA'' the ECJ, Court of Justice found that a Belgian law requiring all margarine to be in cube shaped packages infringed article 34, and was not justified by the pursuit of consumer protection. The argument that Belgians I Can't Believe It's Not Butter!, would believe it was butter if it was not cube shaped was disproportionate: it would "considerably exceed the requirements of the object in view" and labelling would protect consumers "just as effectively". In a 2003 case, ''Commission v Italy (2003), Commission v Italy'' Italian law required that cocoa products that included other vegetable fats could not be labelled as "chocolate". It had to be "chocolate substitute". All Italian chocolate was made from cocoa butter alone, but British, Danish and Irish manufacturers used other vegetable fats. They claimed the law infringed article 34. The ECJ, Court of Justice held that a low content of vegetable fat did not justify a "chocolate substitute" label. This was derogatory in the consumers' eyes. A 'neutral and objective statement' was enough to protect consumers. If member states place considerable obstacles on the use of a product, this can also infringe article 34. So, in a 2009 case, ''Commission v Italy (2009), Commission v Italy'', the ECJ, Court of Justice held that an Italian law prohibiting motorcycles or mopeds pulling trailers infringed article 34. Again, the law applied neutrally to everyone, but disproportionately affected importers, because Italian companies did not make trailers. This was not a product requirement, but the Court reasoned that the prohibition would deter people from buying it: it would have "a considerable influence on the behaviour of consumers" that "affects the Market access, access of that product to the market". It would require justification under article 36, or as a mandatory requirement. In contrast to product requirements or other laws that hinder market access, the Court of Justice developed a presumption that "selling arrangements" would be presumed to not fall into TFEU article 34, if they applied equally to all sellers, and affected them in the same manner in fact. In ''Keck and Mithouard'' two importers claimed that their prosecution under a French competition law, which prevented them selling Picon beer under wholesale price, was unlawful. The aim of the law was to prevent cut throat competition, not to hinder trade. The ECJ, Court of Justice held, as "in law and in fact" it was an equally applicable "selling arrangement" (not something that alters a product's content) it was outside the scope of article 34, and so did not need to be justified. Selling arrangements can be held to have an unequal effect "in fact" particularly where traders from another member state are seeking to break into the market, but there are restrictions on advertising and marketing. In ''Konsumentombudsmannen v De Agostini'' the Court of Justice reviewed Swedish bans on advertising to children under age 12, and misleading commercials for skin care products. While the bans have remained (justifiable under article 36 or as a mandatory requirement) the Court emphasised that complete marketing bans could be disproportionate if advertising were "the only effective form of promotion enabling [a trader] to penetrate" the market. In ''Konsumentombudsmannen v Gourmet AB'' the Court suggested that a total ban for advertising alcohol on the radio, TV and in magazines could fall within article 34 where advertising was the only way for sellers to overcome consumers' "traditional social practices and to local habits and customs" to buy their products, but again the national courts would decide whether it was justified under article 36 to protect public health. Under the Unfair Commercial Practices Directive, the EU harmonised restrictions on restrictions on marketing and advertising, to forbid conduct that distorts average consumer behaviour, is misleading or aggressive, and sets out a list of examples that count as unfair. Increasingly, states have to give mutual recognition to each other's standards of regulation, while the EU has attempted to harmonise minimum ideals of best practice. The attempt to raise standards is hoped to avoid a regulatory "race to the bottom", while allowing consumers access to goods from around the continent.


Workers

Since its foundation, the Treaties sought to enable people to pursue their life goals in any country through free movement. Reflecting the economic nature of the project, the European Community originally focused upon free movement of workers: as a "factor of production". However, from the 1970s, this focus shifted towards developing a more "social" Europe.''Defrenne v Sabena (No 2), Defrenne v Sabena'' (1976
Case 43/75
[10]
Free movement was increasingly based on "Citizenship of the European Union, citizenship", so that people had rights to empower them to become economically and socially active, rather than economic activity being a precondition for rights. This means the basic "worker" rights in TFEU article 45 function as a specific expression of the general rights of citizens in TFEU articles 18 to 21. According to the ECJ, Court of Justice, a "worker" is anybody who is economically active, which includes everyone in an employment relationship, "under the direction of another person" for "remuneration". A job, however, need not be paid in money for someone to be protected as a worker. For example, in ''Steymann v Staatssecretaris van Justitie'', a German man claimed the right to residence in the Netherlands, while he volunteered plumbing and household duties in the Bhagwan community, which provided for everyone's material needs irrespective of their contributions. The held that Mr Steymann was entitled to stay, so long as there was at least an "indirect quid pro quo" for the work he did. Having "worker" status means protection against all forms of discrimination by governments, and employers, in access to employment, tax, and social security rights. By contrast a citizen, who is "any person having the nationality of a Member State" (TFEU article 20(1)), has rights to seek work, vote in local and European elections, but more restricted rights to claim social security. In practice, free movement has become politically contentious as nationalist political parties have manipulated fears about immigrants taking away people's jobs and benefits (paradoxically at the same time). Nevertheless, practically "all available research finds little impact" of "labour mobility on wages and employment of local workers". The Free Movement of Workers Regulation articles 1 to 7 set out the main provisions on equal treatment of workers. First, articles 1 to 4 generally require that workers can take up employment, conclude contracts, and not suffer discrimination compared to nationals of the member state. In a famous case, the ''Belgian Football Association v Bosman'', a Belgian footballer named Jean-Marc Bosman claimed that he should be able to transfer from R.F.C. de Liège to USL Dunkerque when his contract finished, regardless of whether Dunkerque could afford to pay Liège the habitual transfer fees. The Court of Justice held "the transfer rules constitute[d] an obstacle to free movement" and were unlawful unless they could be justified in the public interest, but this was unlikely. In ''Groener v Minister for Education'' the Court of Justice accepted that a requirement to speak Goidelic languages, Gaelic to teach in a Dublin design college could be justified as part of the public policy of promoting the Irish language, but only if the measure was not disproportionate. By contrast in ''Angonese v Cassa di Risparmio di Bolzano SpA'' a bank in Bolzano, Italy, was not allowed to require Mr Angonese to have a bilingual certificate that could only be obtained in Bolzano. The Court of Justice, giving "horizontal" direct effect to TFEU article 45, reasoned that people from other countries would have little chance of acquiring the certificate, and because it was "impossible to submit proof of the required linguistic knowledge by any other means", the measure was disproportionate. Second, article 7(2) requires equal treatment in respect of tax. In ''Finanzamt Köln Altstadt v Schumacker'' the Court of Justice held that it contravened TFEU art 45 to deny tax benefits (e.g. for married couples, and social insurance expense deductions) to a man who worked in Germany, but was resident in Belgium when other German residents got the benefits. By contrast in ''Weigel v Finanzlandesdirektion für Vorarlberg'' the Court of Justice rejected Mr Weigel's claim that a re-registration charge upon bringing his car to Austria violated his right to free movement. Although the tax was "likely to have a negative bearing on the decision of migrant workers to exercise their right to freedom of movement", because the charge applied equally to Austrians, in absence of EU legislation on the matter it had to be regarded as justified. Third, people must receive equal treatment regarding "social advantages", although the Court has approved residential qualifying periods. In ''Hendrix v Employee Insurance Institute'' the Court of Justice held that a Dutch national was not entitled to continue receiving incapacity benefits when he moved to Belgium, because the benefit was "closely linked to the socio-economic situation" of the Netherlands. Conversely, in ''Geven v Land Nordrhein-Westfalen'' the Court of Justice held that a Dutch woman living in the Netherlands, but working between 3 and 14 hours a week in Germany, did not have a right to receive German child benefits, even though the wife of a man who worked full-time in Germany but was resident in Austria could. The general justifications for limiting free movement in TFEU article 45(3) are "public policy, public security or public health", and there is also a general exception in article 45(4) for "employment in the public service".


Citizens

Beyond the right of free movement to work, the EU has increasingly sought to guarantee rights of citizens, and rights simply be being a Human rights, human being. But although the Court of Justice stated that 'Citizenship is destined to be the fundamental status of nationals of the Member States', political debate remains on who should have access to public services and welfare systems funded by taxation. In 2008, just 8 million people from 500 million EU citizens (1.7 per cent) had in fact exercised rights of free movement, the vast majority workers. According to TFEU article 20, citizenship of the EU derives from nationality of a member state. Article 21 confers general rights to free movement in the EU and to reside freely within limits set by legislation. This applies for citizens and their immediate family members. This triggers four main groups of rights: (1) to enter, depart and return, without undue restrictions, (2) to reside, without becoming an unreasonable burden on social assistance, (3) to vote in local and European elections, and (4) the right to equal treatment with nationals of the host state, but for social assistance only after 3 months of residence. First, the Citizens Rights Directive 2004 article 4 says every citizen has the right to depart a member state with a valid passport. This has historical importance for central and eastern Europe, when the
Soviet Union The Soviet Union,. officially the Union of Soviet Socialist Republics. (USSR),. was a that spanned during its existence from 1922 to 1991. It was nominally a of multiple national ; in practice and were highly until its final years. The ...
and the
Berlin Wall The Berlin Wall (german: Berliner Mauer, ) was a guarded concrete barrier A barrier or barricade is a physical structure which blocks or impedes something. Barrier may also refer to: Places * Barrier, Kentucky, a community in the Unite ...

Berlin Wall
denied its citizens the freedom to leave. Article 5 gives every citizen a right of entry, subject to national border controls. Schengen Area countries (not the UK and Ireland) abolished the need to show documents, and police searches at borders, altogether. These reflect the general principle of free movement in TFEU article 21. Second, article 6 allows every citizen to stay three months in another member state, whether economically active or not. Article 7 allows stays over three months with evidence of "sufficient resources... not to become a burden on the social assistance system". Articles 16 and 17 give a right to permanent residence after 5 years without conditions. Third, TEU article 10(3) requires the right to vote in the local constituencies for the
European Parliament The European Parliament (EP) is one of three Legislature, legislative branches of the European Union and one of its seven Institutions of the European Union, institutions. Together with the Council of the European Union, it adopts European legi ...

European Parliament
wherever a citizen lives. Fourth, and more debated, article 24 requires that the longer an EU citizen stays in a host state, the more rights they have to access public and welfare services, on the basis of equal treatment. This reflects general principles of equal treatment and citizenship in TFEU articles 18 and 20. In a simple case, in ''Sala v Freistaat Bayern'' the ECJ, Court of Justice held that a Spanish lady who had lived in Germany for 25 years and had a baby was entitled to child support, without the need for a residence permit, because Germans did not need one. In ''Trojani v Centre public d'aide sociale de Bruxelles'', a French man who lived in Belgium for two years was entitled to the "minimex" allowance from the state for a minimum living wage. In ''Grzelczyk v Centre Public d'Aide Sociale d'Ottignes-Louvain-la-Neuve'' a French student, who had lived in Belgium for three years, was entitled to receive the "minimex" income support for his fourth year of study. Similarly, in ''R (Bidar) v London Borough of Ealing'' the Court of Justice held that it was lawful to require a French University College London, UCL economics student lived in the UK for three years before receiving a student loan, but not that he had to have additional "settled status". Similarly, in ''Commission v Austria'', Austria was not entitled to restrict its university places to Austrian students to avoid "structural, staffing and financial problems" if (mainly German) foreign students applied, unless it proved there was an actual problem. However, in ''Dano v Jobcenter Leipzig'', the Court of Justice held that the German government was entitled to deny child support to a Romanian mother who had lived in Germany for 3 years, but had never worked. Because she lived in Germany for over 3 months, but under 5 years, she had to show evidence of "sufficient resources", since the Court reasoned the right to equal treatment in article 24 within that time depended on lawful residence under article 7.


Establishment and services

As well as creating rights for "workers" who generally Inequality of bargaining power, lack bargaining power in the market, the
Treaty on the Functioning of the European Union A treaty is a formal, legally binding written agreement between actors in international law International law, also known as public international law and law of nations, is the set of rules, norms, and standards generally recognized as bi ...
also protects the "freedom of establishment" in article 49, and "freedom to provide services" in article 56. In the Court of Justice held that to be "established" means to participate in economic life "on a stable and continuous basis", while providing "services" meant pursuing activity more "on a temporary basis". This meant that a lawyer from Stuttgart, who had set up chambers in Milan and was censured by the Milan Bar Council for not having registered, should claim for breach of establishment freedom, rather than service freedom. However, the requirements to be registered in Milan before being able to practice would be allowed if they were non-discriminatory, "justified by imperative requirements in the general interest" and proportionately applied. All people or entities that engage in economic activity, particularly the self-employed, or "undertakings" such as companies or firms, have a right to set up an enterprise without unjustified restrictions. The ECJ, Court of Justice has held that both a member state government and a private party can hinder freedom of establishment, so article 49 has both "vertical" and "horizontal" direct effect. In ''Reyners v Belgium'' the Court of Justice held that a refusal to admit a lawyer to the Belgian bar because he lacked Belgian nationality law, Belgian nationality was unjustified. TFEU article 49 says states are exempt from infringing others' freedom of establishment when they exercise "official authority". But regulation of an advocate's work (as opposed to a court's) was not official. By contrast in ''Commission v Italy (2011), Commission v Italy'' the Court of Justice held that a requirement for lawyers in Italy to comply with maximum tariffs unless there was an agreement with a client was not a restriction. The European Court of Justice, Grand Chamber of the Court of Justice held the Commission had not proven that this had any object or effect of limiting practitioners from entering the market. Therefore, there was no ''prima facie'' infringement freedom of establishment that needed to be justified. In regard to companies, the ECJ, Court of Justice held in ''R (Daily Mail and General Trust plc) v HM Treasury'' that member states could restrict a company moving its seat of business, without infringing TFEU article 49. This meant the ''Daily Mail'' newspaper's Daily Mail and General Trust, parent company could not evade tax by shifting its residence to the Netherlands without first settling its tax bills in the UK. The UK did not need to justify its action, as rules on company seats were not yet harmonised. By contrast, in ''Centros Ltd v Erhversus-og Selkabssyrelsen'' the Court of Justice found that a UK limited company operating in Denmark could not be required to comply with Denmark's Minimum capital, minimum share capital rules. UK law only required £1 of capital to start a company, while Denmark's legislature took the view companies should only be started up if they had 200,000 Danish krone (around €27,000) to protect creditors if the company failed and went Insolvency (law), insolvent. The Court of Justice held that Denmark's minimum capital law infringed Centros Ltd's freedom of establishment and could not be justified, because a company in the UK could admittedly provide services in Denmark without being established there, and there were less restrictive means of achieving the aim of creditor protection. This approach was criticised as potentially opening the EU to unjustified regulatory competition, and a race to the bottom in legal standards, like the US state of Delaware, which is argued to attract companies with the worst standards of accountability, and unreasonably low corporate tax. Appearing to meet the concern, in ''Überseering BV v Nordic Construction GmbH'' the Court of Justice held that a German court could not deny a Dutch building company the right to enforce a contract in Germany, simply because it was not validly incorporated in Germany. Restrictions on freedom of establishment could be justified by creditor protection, labour rights to participate in work, or the public interest in collecting taxes. But in this case denial of capacity went too far: it was an "outright negation" of the right of establishment. Setting a further limit, in ''Cartesio Oktató és Szolgáltató bt'' the Court of Justice held that because corporations are created by law, they must be subject to any rules for formation that a state of incorporation wishes to impose. This meant the Hungarian authorities could prevent a company from shifting its central administration to Italy, while it still operated and was incorporated in Hungary. Thus, the court draws a distinction between the right of establishment for foreign companies (where restrictions must be justified), and the right of the state to determine conditions for companies incorporated in its territory, although it is not entirely clear why. The "freedom to provide services" under TFEU article 56 applies to people who give services "for remuneration", especially commercial or professional activity. For example, in ''Van Binsbergen v Bestuur van de Bedrijfvereniging voor de Metaalnijverheid'' a Dutch lawyer moved to Belgium while advising a client in a social security case, and was told he could not continue because Dutch law said only people established in the Netherlands could give legal advice. The Court of Justice held that the freedom to provide services applied, it was directly effective, and the rule was probably unjustified: having an address in the member state would be enough to pursue the legitimate aim of good administration of justice. The Court of Justice has held that secondary education falls outside the scope of article 56 because usually the state funds it, but higher education does not. Health care generally counts as a service. In ''Geraets-Smits v Stichting Ziekenfonds'' Mrs Geraets-Smits claimed she should be reimbursed by Dutch social insurance for costs of receiving treatment in Germany. The Dutch health authorities regarded the treatment unnecessary, so she argued this restricted the freedom (of the German health clinic) to provide services. Several governments submitted that hospital services should not be regarded as economic, and should not fall within article 56. But the ECJ, Court of Justice held health was a "service" even though the government (rather than the service recipient) paid for the service. National authorities could be justified in refusing to reimburse patients for medical services abroad if the health care received at home was without undue delay, and it followed "international medical science" on which treatments counted as normal and necessary. The Court requires that the individual circumstances of a patient justify waiting lists, and this is also true in the context of the UK's National Health Service. Aside from public services, another sensitive field of services are those classified as illegal. ''Josemans v Burgemeester van Maastricht'' held that the Netherlands' regulation of cannabis consumption, including the prohibitions by some municipalities on tourists (but not Dutch nationals) going to Coffeehouse, coffee shops, fell outside article 56 altogether. The Court of Justice reasoned that narcotic drugs were controlled in all member states, and so this differed from other cases where prostitution or other quasi-legal activity was subject to restriction. If an activity does fall within article 56, a restriction can be justified under article 52, or by overriding requirements developed by the Court of Justice. In ''Alpine Investments BV v Minister van Financiën'' a business that sold commodities futures contract, futures (with Merrill Lynch and another banking firms) attempted to challenge a Dutch law that prohibiting cold calling customers. The Court of Justice held the Dutch prohibition pursued a legitimate aim to prevent "undesirable developments in securities trading" including protecting the consumer from aggressive sales tactics, thus maintaining confidence in the Dutch markets. In ''Omega Spielhallen GmbH v Bonn'' a "laserdrome" business was banned by the Bonn council. It bought fake laser gun services from a UK firm called Pulsar Ltd, but residents had protested against "playing at killing" entertainment. The Court of Justice held that the German constitutional value of human dignity, which underpinned the ban, did count as a justified restriction on freedom to provide services. In ''Liga Portuguesa de Futebol v Santa Casa da Misericórdia de Lisboa'' the Court of Justice also held that the state monopoly on gambling, and a penalty for a Gibraltar firm that had sold internet gambling services, was justified to prevent fraud and gambling where people's views were highly divergent. The ban was proportionate as this was an appropriate and necessary way to tackle the serious problems of fraud that arise over the internet. In the Services Directive a group of justifications were codified in article 16, which the case law has developed.


Capital

Free movement of capital (economics), capital was traditionally seen as the fourth freedom, after goods, workers and persons, services and establishment. The original Treaty of Rome required that restrictions on free capital flows only be removed to the extent necessary for the common market. From the Treaty of Maastricht, now in TFEU article 63, "all restrictions on the movement of capital between Member States and between Member States and third countries shall be prohibited". This means capital controls of various kinds are prohibited, including limits on buying currency, limits on buying company shares or financial assets, or government approval requirements for foreign direct investment, foreign investment. By contrast, taxation of capital, including corporate tax, capital gains tax and Financial transaction tax are not affected so long as they do not discriminate by nationality. According to the Capital Movement Directive 1988, Annex I, 13 categories of capital which must move free are covered. In ''Baars v Inspecteur der Belastingen Particulieren'' the Court of Justice held that for investments in companies, the capital rules, rather than freedom of establishment rules, were engaged if an investment did not enable a "definite influence" through shareholder voting or other rights by the investor. That case held a Dutch Wealth Tax Act 1964 unjustifiably exempted Dutch investments, but not Mr Baars' investments in an Irish company, from the tax: the wealth tax, or exemptions, had to be applied equally. On the other hand, TFEU article 65(1) does not prevent taxes that distinguish taxpayers based on their residence or the location of an investment (as taxes commonly focus on a person's actual source of profit) or any measures to prevent tax evasion. Apart from tax cases, largely following from cases originating in the UK, a series of cases held that government owned golden shares were unlawful. In ''Commission v Germany (2007), Commission v Germany'' the Commission claimed the German Volkswagen Act 1960 violated article 63, in that §2(1) restricted any party having voting rights exceeding 20% of the company, and §4(3) allowed a minority of 20% of shares held by the Lower Saxony government to block any decisions. Although this was not an impediment to actual purchase of shares, or receipt of dividends by any shareholder, the ECJ, Court of Justice's Grand Chamber agreed that it was disproportionate for the government's stated aim of protecting workers or minority shareholders. Similarly, in ''Commission v Portugal'' the Court of Justice held that Portugal infringed free movement of capital by retaining golden shares in Portugal Telecom that enabled disproportionate voting rights, by creating a "deterrent effect on portfolio investments" and reducing "the attractiveness of an investment". This suggested the Court's preference that a government, if it sought public ownership or control, should nationalise in full the desired proportion of a company in line with TFEU article 345.TFEU]
art 345
/ref> The final stage of completely free movement of capital was thought to require a single currency and monetary policy, eliminating the transaction costs and fluctuations of currency exchange. Following a Report of the Delors Commission in 1988, the Treaty of Maastricht made Economic and Monetary Union of the EU, economic and monetary union an objective, first by completing the internal market, second by creating a European System of Central Banks to coordinate common monetary policy, and third by locking exchange rates and introducing a single currency, the euro. Today, 19 member states have adopted the euro, while 9 member states have either determined to opt-out or their accession has been delayed, particularly since the
European debt crisis The European debt crisis, often also referred to as the eurozone crisis or the European sovereign debt crisis, is a multi-year debt crisis Debt crisis is a situation in which a government (nation, state/province, county, or city etc.) loses th ...
. According to TFEU articles 119 and 127, the objective of the
European Central Bank The European Central Bank (ECB) is the prime component of the Eurosystem The Eurosystem is the monetary authority In finance Finance is the study of financial institutions, financial markets and how they operate within the financia ...

European Central Bank
and other central banks ought to be price stability. This has been criticised for apparently being superior to the objective of full employment in the
Treaty on European Union The Treaty on European Union (2007) is one of the primary Treaties of the European Union, alongside the Treaty on the Functioning of the European Union The Treaty on the Functioning of the European Union (TFEU) is one of two treaties formi ...
article 3.


Social and market regulations

While the
European Economic Community The European Economic Community (EEC) was a regional organization and Turkey Turkey ( tr, Türkiye ), officially the Republic of Turkey, is a country straddling Southeastern Europe and Western Asia. It shares borders with Greece ...

European Economic Community
originally focused on freedom of movement, free movement, and dismantling barriers to trade, more EU law today concerns regulation of the "social market economy". In 1976 the ECJ, Court of Justice said in ''Defrenne v Sabena (No 2), Defrenne v Sabena'' the goal was "not merely an economic union", but to "ensure social progress and seek the constant improvement of the living and working conditions of their peoples". On this view, stakeholder (corporate), stakeholders in each member state might not have the capacity to take advantage of expanding trade in a Globalization, globalising economy. Groups with Inequality of bargaining power, greater bargaining power can exploit weaker legal rights in other member states. For example, a corporation could shift production to member states with a lower minimum wage, to increase shareholder profit, even if production costs more and workers are paid less. This would mean an aggregate loss of social wealth, and a "race to the bottom" in human development (humanity), human development. To make globalisation fair, the EU establishes a minimum floor of rights for the stakeholders in enterprise: for European consumer law, consumers, European labour law, workers, investors, European company law, shareholders, creditors, and the public. Each field of law is vast, so EU law is designed to be Subsidiarity, subsidiary to comprehensive rules in each member state. Member states go beyond the harmonised minimum, acting as "laboratories of democracy". EU law makes basic standards of "exit" (where markets operate), rights (enforceable in court), and "voice" (especially through votes) in enterprise. Rules of European competition law, competition law balance the interests of different groups, generally to favour consumers, for the larger purpose in the
Treaty on European Union The Treaty on European Union (2007) is one of the primary Treaties of the European Union, alongside the Treaty on the Functioning of the European Union The Treaty on the Functioning of the European Union (TFEU) is one of two treaties formi ...
article 3(3) of a "highly competitive social market economy". The EU is bound by the
Treaty on the Functioning of the European Union A treaty is a formal, legally binding written agreement between actors in international law International law, also known as public international law and law of nations, is the set of rules, norms, and standards generally recognized as bi ...
article 345 to "in no way prejudice the rules in Member States governing the system of property ownership". This means the EU is bound to be neutral to member state's choice to take enterprises into public ownership, or to Privatisation, privatise them. While there have been academic proposals for a European Civil Code, and projects to frame non-binding principles of Principles of European Contract Law, contract and Principles of European Tort Law, tort, harmonisation has only occurred for conflict of laws and intellectual property.


Consumer protection

Protection of European consumers has been a central part of developing the EU internal market. The
Treaty on the Functioning of the European Union A treaty is a formal, legally binding written agreement between actors in international law International law, also known as public international law and law of nations, is the set of rules, norms, and standards generally recognized as bi ...
article 169 enables the EU to follow the ordinary legislative procedure to protect consumers "health, safety and economic interests" and promote rights to "information, education and to organise themselves in order to safeguard their interests". All member states may grant higher protection, and a "high level of consumer protection" is regarded as a fundamental right. Beyond these general principles, and outside specific sectors, there are four main Directives: the Product Liability Directive 1985, Unfair Terms in Consumer Contracts Directive 1993, Unfair Commercial Practices Directive 2005 and the Consumer Rights Directive 2011, requiring information and cancellation rights for consumers. As a whole, the law is designed to ensure that consumers in the EU are entitled to the same minimum rights wherever they shop, and largely follows inspiration from theories of consumer protection developed in California and the Consumer Bill of Rights proclaimed by John F. Kennedy in 1962. The ECJ, Court of Justice has continually affirmed that the need for more consumer rights (than in commercial contracts) both because consumers tend to information asymmetry, lack information, and they have Inequality of bargaining power, less bargaining power.See ''Banco Español de Crédito SA v Camino'' (2012
Case C-618/10
[39] and ''Océano Grupo Editorial and Salvat Editores'' (2000) C-240/98 to C-244/98 and [2000] ECR I-4941, [25]
The Product Liability Directive 1985 was the first consumer protection measure. It creates Strict liability, strict enterprise liability for all producers and retailers for any harm to consumers from products, as a way to promote basic standards of health and safety. Any producer, or supplier if the ultimate producer is insolvent, of a product is strictly liable to compensate a consumer for any damage caused by a defective product. A "defect" is anything which falls below what a consumer is entitled to expect, and this essentially means that products should be safe for their purpose. A narrow defensive is available if a producer can show that a defect could not be known by any scientific method, thought this has never been successfully invoked, because it is generally thought a profit making enterprise should not be able to Externality, externalise the risks of its activities. The Unfair Terms in Consumer Contracts Directive 1993 was the second main measure. Under article 3(1) a term is unfair, and not binding, if it is not "individually negotiated, and "if, contrary to the requirement of
good faith Good faith ( la, bona fides), in human interactions, is a sincere intention to be fair, open, and honest, regardless of the outcome of the interaction. While some Latin phrases have lost their literal meaning over centuries, this is not the case ...
, it causes a Just price, significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer". The Court of Justice has continually affirmed that the Directive, as recital 16 states, "is based on the idea that the consumer is in a weak position vis-à-vis the seller or supplier, as regards both his bargaining power and his Information asymmetry, level of knowledge". Terms which are very skewed, are to be conclusively regarded as contrary to "
good faith Good faith ( la, bona fides), in human interactions, is a sincere intention to be fair, open, and honest, regardless of the outcome of the interaction. While some Latin phrases have lost their literal meaning over centuries, this is not the case ...
" and therefore unfair. For example, in ''RWE AG v Verbraucherzentrale NRW eV'' clauses in gas supply contracts enabling corporation, RWE, to unilaterally vary prices were advised by the ECJ, Court of Justice to be not sufficiently transparent, and therefore unfair. In ''Brusse v Jahani BV'' the Court of Justice advised that clauses in a tenancy contract requiring tenants pay €25 per day were likely unfair, and would have to be entirely void without replacement, if they were not substituted with more precise mandatory terms in national legislation. In ''Aziz v Caixa d'Estalvis de Catalunya'', following the
financial crisis of 2007–2008 The financial crisis of 2007–2008, or global financial crisis (GFC), was a severe worldwide economic crisis An economy (from Greek οίκος – "household" and νέμoμαι – "manage") is an area of the production, distribution and t ...
, the
European Court of Justice European, or Europeans, may refer to: In general * ''European'', an adjective referring to something of, from, or related to Europe ** Ethnic groups in Europe ** Demographics of Europe ** European cuisine, the cuisines of Europe and other Western ...

European Court of Justice
advised that even terms regarding repossession of homes in Spain had to be assessed for fairness by national courts. In ''Kušionová v SMART Capital a.s.'', the Court of Justice held that consumer law was to be interpreted in the light of fundamental rights, including the right to housing, if a home could be repossessed. Because consumer law operates through Directives, national courts have the final say on applying the general principles set out by the ECJ, Court of Justice's case law. *Unfair Commercial Practices Directive]
2005/29/EC
*Consumer Rights Directive]
2011/83/EU
*Payment Services Directive]
2007/64/EC
*Late Payments Directive 2011/7/EU


Labour rights

While free movement of workers was central to the first
European Economic Community The European Economic Community (EEC) was a regional organization and Turkey Turkey ( tr, Türkiye ), officially the Republic of Turkey, is a country straddling Southeastern Europe and Western Asia. It shares borders with Greece ...

European Economic Community
agreement, the development of European labour law has been a gradual process. Originally, the Ohlin Report of 1956 recommended that labour standards did not need to be harmonised, although a general principle of anti-discrimination between men and women was included in the early Treaties. Increasingly, the absence of labour rights was seen as inadequate given the capacity for a "race to the bottom" in international trade if corporations can shift jobs and production to countries with low wages. Today, the EU is required under TFEU article 147 to contribute to a "high level of employment by encouraging cooperation between Member States". This has not resulted in legislation, which usually requires taxation and fiscal stimulus for significant change, while the
European Central Bank The European Central Bank (ECB) is the prime component of the Eurosystem The Eurosystem is the monetary authority In finance Finance is the study of financial institutions, financial markets and how they operate within the financia ...

European Central Bank
's monetary policy has been acutely controversial during the
European debt crisis The European debt crisis, often also referred to as the eurozone crisis or the European sovereign debt crisis, is a multi-year debt crisis Debt crisis is a situation in which a government (nation, state/province, county, or city etc.) loses th ...
. Under article 153(1), the EU is able to use the ordinary legislation procedure on a list of labour law fields. This notably excludes wage regulation and collective bargaining. Generally, four main fields of EU regulation of labour rights touch (1) individual labour rights, (2) anti-discrimination regulations, (3) rights to information, consultation, and participation at work, and (4) rights to job security. In virtually all cases, the EU follows the principle that member states can always create rights more beneficial to workers. This is because the fundamental principle of labour law is that employees' unequal bargaining power justifies substitution of rules in property and contract with positive social rights so that people may earn a living to fully participate in a democratic society. The EU's competences generally follow principles codified in the Community Charter of the Fundamental Social Rights of Workers 1989, introduced in the "social chapter" of the Treaty of Maastricht. Initially the UK had opted-out, because of opposition by the Conservative Party (UK), Conservative Party, but was acceded to when the Labour Party (UK), Labour Party won the 1997 United Kingdom general election, 1997 general election in the
Treaty of Amsterdam The Treaty of Amsterdam, officially the Treaty of Amsterdam amending the Treaty on European Union, the Treaties establishing the European Communities and certain related acts, was signed on 2 October 1997, and entered into force on 1 May 1999; it ...
. The first group of Directives create a range of individual rights in EU employment relationships. The Employment Information Directive 1991 requires that every employee (however defined by member state law) has the right to a written statement of their employment contract. While there is no wage regulation, the Institutions for Occupational Retirement Provision Directive 2003 requires that pension benefits are protected through a national insurance fund, that information is provided to beneficiaries, and minimum standards of governance are observed. Most member states go far beyond these requirements, particularly by requiring a vote for employees in who manages their money. Reflecting basic standards in the Universal Declaration of Human Rights and ILO Conventions, the Working Time Directive 2003 requires a minimum of 4 weeks (totalling 28 days) paid holidays each year, a minimum of 20-minute paid rest breaks for 6-hour work shifts, limits on night work or time spent on dangerous work, and a maximum 48-hour working week unless a worker individually consents. The Parental Leave Directive 2010 creates a bare minimum of 4 months of unpaid leave for parents (mothers, fathers, or legal guardians) to care for children before they turn 8 years old, and the Pregnant Workers Directive 1992 creates a right for mothers to a minimum of 14 weeks' paid leave to care for children. Finally, the Safety and Health at Work Directive 1989 requires basic requirements to prevent and insure against workplace risks, with employee consultation and participation, and this is complemented by specialised Directives, ranging from work equipment to dangerous industries. In almost all cases, all member states go significantly beyond this minimum. The objective of transnational regulation is therefore to progressively raise the minimum floor in line with economic development. Second, equality was affirmed by the Court of Justice in ''Kücükdeveci v Swedex GmbH & Co KG'' to be a general principle of EU law. Further to this, the Part-time Work Directive 1997, Fixed-term Work Directive 1999 and Temporary Agency Work Directive 2008 generally require that people who do not have ordinary full-time, permanent contracts are treated no less favourably than their colleagues. However, the scope of the protected worker is left to member state law, and the TAWD 2008 only applies to "basic working conditions" (mostly pay, working hours and participation rights) and enabled member states to have a qualifying period. The Race Equality Directive 2000, Equality Framework Directive 2000 and Equal Treatment Directive 2006 prohibit discrimination based on sexual orientation, disability, religion or belief, age, race and gender. As well as "direct discrimination", there is a prohibition on "indirect discrimination" where employers apply a neutral rule to everybody, but this has a disproportionate impact on the protected group. The rules are not consolidated, and on gender pay potentially limited in not enabling a hypothetical comparator, or comparators in outsourced business. Equality rules do not yet apply to child care rights, which only give women substantial time off, and consequently hinder equality in men and women caring for children after birth, and pursuing their careers. Third, the EU is formally not enabled to legislate on collective bargaining, although the EU, with all member states, is bound by the jurisprudence of the European Court of Human Rights on freedom of association. In ''Wilson and Palmer v United Kingdom'' the ECHR, Court held that any detriment for membership of a trade union was incompatible with article 11, and in ''Demir and Baykara v Turkey'' the ECHR, Court held "the right to bargain collectively with the employer has, in principle, become one of the essential elements" of article 11. This approach, which includes affirmation of the fundamental right to strike in all democratic member states, has been seen as lying in tension with some of the ECJ, Court of Justice's previous case law, notably ''ITWF v Viking Line ABP'' and ''Laval Un Partneri Ltd v Svenska Byggnadsarbetareforbundet''. These controversial decisions, quickly disapproved by legislative measures, suggested the fundamental right of workers to take collective action was subordinate to business freedom to establish and provide services. More positively, the Information and Consultation Directive 2002 requires that workplaces with over 20 or 50 staff have the right to set up elected work councils with a range of binding rights, the European Works Council Directive 2009 enables work councils transnationally, and the Employee Involvement Directive 2001 requires representation of workers on company boards in some European Companies. If a company transforms from a member state corporation to incorporate under the European Company Regulation 2001, employees are entitled to no less favourable representation than under the member state's existing Codetermination, board participation laws. This is practically important as a majority of EU member states require employee representation on company boards. Fourth, minimum job security rights are provided by three Directives. The Collective Redundancies Directive 1998 specifies that minimum periods of notice and consultation occur if more than a set number of jobs in a workplace are at risk. The Transfers of Undertakings Directive 2001 require that staff retain all contractual rights, unless there is an independent economic, technical or organisational reason, if their workplace is sold from one company to another. Last, the Insolvency Protection Directive 2008 requires that employees' wage claims are protected in case their employer falls insolvent. This last Directive gave rise to ''Francovich v Italy'', where the Court of Justice affirmed that member states which fail to implement the minimum standards in EU Directives are liable to pay compensation to employees who should have rights under them.


Companies and investment

Like labour regulation, European corporate law is not a complete system and there is no such thing as a self-standing European corporation. Instead, a series of Directives require minimum standards, usually protecting investors, to be implemented in national corporate laws. The largest in Europe remain member state incorporations, such as the UK company law, UK "Public limited company, plc", the German "Aktiengesellschaft, AG" or the French "S.A. (corporation), SA". There is however, a "European Company" (or ''Societas Europaea'', abbreviated to "Societas Europaea, SE") created by the Statute for a European Company Regulation 2001. This sets out basic provisions on the method of registration (e.g. by merger or reincorporation of an existing company) but then states that wherever the SE has its registered office, the law of that member state supplements the rules of the Statute. The Employee Involvement Directive 2001 also adds that, when an Societas Europaea, SE is incorporated, employees have the default right to retain all existing representation on the board of directors that they have, unless the negotiate by collective agreement a different or better plan than is provided for in existing member state law. Other than this, most important standards in a typical company law are left to member state law, so long as they comply with further minimum requirements in the company law directives. Duties owed by the board of directors to the company and its stakeholders, or the right to bring derivative claims to vindicate constitutional rights, are not generally regulated by EU law. Nor are rights of pre-emption pre-emption to buy shares, nor rights of any party regarding claims by tort, contract or piercing the corporate veil to hold directors and shareholders accountable. However, Directives do require minimum rights on company formation, capital maintenance, accounting and audit, market regulation, board neutrality in a takeover bid, rules on mergers, and management of cross-border insolvency. The omission of minimum standards is important since the ECJ, Court of Justice held in ''Centros Ltd v Erhversus-og Selkabssyrelsen, Centros'' that freedom of establishment requires companies operate in any member state they choose. This has been argued to risk a "race to the bottom" in standards, although the Court of Justice soon affirmed in ''Kamer van Koophandel en Fabrieken voor Amsterdam v Inspire Art Ltd, Inspire Art'' that companies must still comply with proportionate requirements that are in the "public interest". Among the most important governance standards are rights vote for who is on the board of directors for investors of labour and capital. A Draft Fifth Company Law Directive proposed in 1972, which would have required EU-wide rights for employees to vote for boards stalled mainly because it attempted to require Supervisory board, two-tier board structures, although most EU member states have codetermination today with unified boards. The Shareholder Rights Directive 2007 requires shareholders be able to make proposals, ask questions at meetings, vote by proxy and vote through intermediaries. This has become increasingly important as most company shares are held by institutional investors (primarily asset managers or banks, depending on the member state) who are holding "other people's money". A large proportion of this money comes from employees and other people saving for retirement, but who do not have an effective voice. Unlike Switzerland after a Swiss executive pay initiative, 2013, 2013 people's initiative, or the U.S. Dodd-Frank Act 2010 in relation to brokers, the EU has not yet prevented intermediaries casting votes without express instructions of beneficiaries. This concentrates power into a small number of financial institutions, and creates the potential for Conflict of interest, conflicts of interest where financial institutions sell retirement, banking or products to companies in which they cast votes with Other People's Money And How the Bankers Use It, other people's money. A series of rights for ultimate investors exist in the Institutions for Occupational Retirement Provision Directive 2003. This requires duties of disclosure in how a retirement fund is run, funding and insurance to guard against insolvency, but not yet that voting rights are only cast on the instructions of investors. By contrast, the Undertakings for Collective Investment in Transferable Securities Directive 2009 does suggest that investors in a mutual fund or ("collective investment scheme") should control the voting rights. The UCITS Directive 2009 is primarily concerned with creating a "passport". If a firm complies with rules on authorisation, and governance of the management and investment companies in an overall fund structure, it can sell its shares in a collective investment scheme across the EU. This forms a broader package of Directives on securities and financial market regulation, much of which has been shaped by experience in the
financial crisis of 2007–2008 The financial crisis of 2007–2008, or global financial crisis (GFC), was a severe worldwide economic crisis An economy (from Greek οίκος – "household" and νέμoμαι – "manage") is an area of the production, distribution and t ...
. Additional rules on remuneration practices, separating depositary bodies in firms from management and investment companies, and more penalties for violations were inserted in 2014. These measures are meant to decrease the risk to investors that an investment goes insolvent. The Markets in Financial Instruments Directive 2004 applies to other businesses selling financial instruments. It requires similar authorisation procedures to have a "passport" to sell in any EU country, and transparency of financial contracts through duties to disclose material information about products being sold, including disclosure of potential Conflict of interest, conflicts of interest with clients. The Alternative Investment Fund Managers Directive 2011 applies to firms with massive quantities of capital, over €100 million, essentially hedge funds and private equity firms. Similarly, it requires authorisation to sell products EU wide, and then basic transparency requirements on products being sold, requirements in remuneration policies for fund managers that are perceived to reduce "risk" or make pay "performance" related. They do not, however, require limits to pay. There are general prohibitions on Conflict of interest, conflicts of interest, and specialised prohibitions on asset stripping. The Solvency II Directive 2009 is directed particularly at insurance firms, requiring minimum capital and best practices in valuation of assets, again to avoid insolvency. The Capital Requirements Directives contain analogous rules, with a similar goals, for banks. To administer the new rules, the European System of Financial Supervision was established in 2011, and consists of three main branches: the European Securities and Markets Authority in Paris, the European Banking Authority in London and the European Insurance and Occupational Pensions Authority in Frankfurt.


Competition law

Competition law has been perceived as an essential part of the "social market economy" since the Treaty of Rome. Its main aims are to prevent monopolies abusing a dominant position, by prohibiting exploitative practices and potentially by breaking them up, to prevent anti-competitive mergers and takeovers occurring, and to criminalise cartels or collusive practices by independent firms. According to the ECJ, Court of Justice, and the dominant view, the law aims to protect "an effective competition structure" to enhance consumer and social welfare, "aiming at full employment and social progress, and a high level of protection and improvement of the quality of the environment". The scope of European competition law is limited in three main ways: first, by ensuring that only "undertakings" are regulated. This will include any profit-making business, but the Court of Justice suggests it is limited to entities "engaged in an economic activity". The "economic" criterion suggests that, in general, organisations based on a principle of solidarity and not for profit will be exempt from competition law. Employees and trade unions are completely outside the scope of competition law, on a long-standing consensus view, because labour is not a commodity and the sellers of labour have inherently unequal bargaining power compared to business and employers. Second, trade between member states must be affected to at least an "appreciable" degree. Third, the law promotes fair competition, rather than unfair "cut-throat" competition. For example, in ''Meca Medina and Majcen v Commission'' the ECJ, Court of Justice held that rules of the International Olympic Committee and the International Swimming Federation which prohibited drugs were outside the scope of competition law altogether. Although drugs could increase competitiveness, the "integrity and objectivity of competitive sport" was more important. In this way, the central task of competition law is to regulate the Inequality of bargaining power, unequal bargaining power of private, profit-making businesses, rather than to affect the delivery of public services, collective action by social groups, or sound regulation of the economy. The Treaty on the Functioning of the European Union article 102 contains the prohibition on monopolies abusing a dominant position. As well as a general ban, it prohibits specific practices including price discrimination and exclusive dealing. It enables legislation to be adopted on mergers between firms (the current regulation is the European Union merger law, Regulation 139/2004/EC). The general test is whether a concentration (i.e. merger or acquisition) with a community dimension (i.e. affects a number of EU member states) might significantly impede effective competition. The
Treaty of Lisbon The Treaty of Lisbon (initially known as the Reform Treaty) is an international agreement that amends the two treaties A treaty is a formal, legally binding written agreement between actors in international law International law, als ...
prohibits anti-competitive agreements in Article 101(1), including price fixing. According to Article 101(2) any such agreements are automatically void. Article 101(3) establishes exemptions, if the collusion is for distributional or technological innovation, gives consumers a "fair share" of the benefit and does not include unreasonable restraints that risk eliminating competition anywhere (or compliant with the general principle of European Union law of proportionality (law), proportionality). Articles 106 and 107 provide that member state's right to deliver public services may not be obstructed, but that otherwise public enterprises must adhere to the same competition principles as companies. Article 107 lays down a general rule that the state may not aid or subsidise private parties in distortion of free competition and provides exemptions for charities, regional development objectives and in the event of a natural disaster.


Public services

*TFEU article 106(1) no special or exclusive rights for undertakings that distort competition (2) competition law applies to services of general economic interest, unless it obstructs their tasks in law or fact (e.g. in providing public services). *Procurement Directive 2014/24/EU, on government procurement in the EU *TFEU art 107(1) no state aid that distorts competition, but (2) aid allowed for individual consumers, without discrimination, and (3) for economic development, particularly to tackle underemployment *Specific sector regulation: **(1) Health, affected by freedom to provide services **(2) Education, affected by free movement **(3) Banks, Capital Requirements Directives **(4) Renewable Energy Directive 2009/28/EC **(5) Electricity Market Directive 2003/54/EC **(6) First Railway Directive 91/440/EC, Second Railway Package 2004, Third railway package, proposed Fourth Railway Package **(7) Telecoms Package and Universal Service Directive 2002/22/EC **(8) Postal Services Directive 97/67/EC


Obligations and property

Generally, there is no EU regulation of private law, rather than a collection of various initiatives. The main exception is in intellectual property rights. *Rome I Regulation *Rome II Regulation *Principles of European Contract Law *Principles of European Tort Law *Copyright Directive *Copyright Duration Directive *Copyright Term directive *European Union patent *Trade Marks Directive


Public regulation


Fiscal and monetary policy

*Treaty Establishing the European Stability Mechanism *TFEU art Wikisource:Consolidated version of the Treaty on the Functioning of the European Union/Title VIII: Economic and Monetary Policy, 119–133 *''Pringle v Government of Ireland'' (2012
C‑370/12
*''Gauweiler and Others v Deutscher Bundestag'' (2015
C-62/14


Taxation

*European Union value added tax *European Union withholding tax *European Union financial transaction tax (proposal)


Environmental law

*Energy policy of the European Union *Environmental policy of the European Union *Environmental Liability Directive 2004


Natural resource management

*
Common Agricultural Policy The Common Agricultural Policy (CAP) is the agricultural policy of the European Union The European Union (EU) is a political and economic union of that are located primarily in . The union has a total area of and an estimated total ...
*Common Fisheries Policy


Data and information

*Data Retention Directive *Database Directive *Directive on Privacy and Electronic Communications *Directive on the re-use of public sector information *Electronic Commerce Directive


Foreign policy


Criminal law

In 2006, a 2006 Côte d'Ivoire toxic waste spill, toxic waste spill off the coast of Côte d'Ivoire, from a European ship, prompted the Commission to look into legislation against toxic waste. European Commissioner for the Environment, Environment Commissioner Stavros Dimas stated that "Such highly toxic waste should never have left the European Union". With countries such as Spain not even having a crime against shipping toxic waste, Franco Frattini, the Commissioner for Justice, Freedom and Security, Justice, Freedom and Security Commissioner, proposed with Dimas to create criminal sentences for "ecological crimes". The competence for the Union to do this was contested in 2005 at the Court of Justice resulting in a victory for the Commission. That ruling set a precedent that the Commission, on a supranational basis, may legislate in criminal law – something never done before. So far, the only other proposal has been the draft Proposed directive on criminal measures aimed at ensuring the enforcement of intellectual property rights, intellectual property rights directive. Motions were tabled in the European Parliament against that legislation on the basis that criminal law should not be an EU competence, but was rejected at vote. However, in October 2007, the Court of Justice ruled that the Commission could not propose what the criminal sanctions could be, only that there must be some.
Case C-440/05 ''Commission v Council''
/ref>


See also

* * * * * * * * * * * * * * * * * --- * List of European Court of Justice rulings * List of European Union directives


References


Sources

* (later editions are available) * (later editions are available) * (later editions are available) *


Further reading

* * *


External links


EUR-Lex
– online access to existing and proposed European Union legislation
Evolution of European Union legislation''The Principle of Loyalty in EU Law'', 2014, by Marcus Klamert, Legal Officer, European Commission
{{DEFAULTSORT:European Union Law European Union law, Court of Justice of the European Union case law,