Monday, 18 February 2008

EU: TFEU Exclusive competence

In which areas does the European Community (EC) wield the greatest powers? In a nutshell we can say that we return to the establishment of the European Economic Community (EEC) more than fifty years ago. The principal aims of the Treaty of Rome were twofold, external and internal:

External: The six founding members set out to become more than a free trade area, namely a customs union with unified tariffs concerning the rest of the world (third countries). A common commercial policy for the trading bloc can be seen as a logical consequence of the customs union, giving the members considerable bargaining powers in the GATT and later WTO world trade rounds, as well as in other trade related negotiations with the outside world, groups of states or individual countries.

Internal: The other objective was to progress towards unhindered “interstate commerce” through what was called the ‘common market’, in order to raise competitiveness, enhance prosperity, create jobs and raise living standards. Later the more ambitious term ‘internal market’ was introduced, and both concepts have been used in parallel until the Treaty of Lisbon (ToL), which opts for the sole use of ‘internal market’. Exclusive competence is given concerning one important aspect of the internal market: the competition rules.

Economic and monetary union (EMU) with the currency unit ‘ecu’ and the adoption of the ‘euro’ currency with real banknotes and coins requires a unified monetary policy, a later development of European economic integration.


The interdependence between internal and external powers explains the competence to make international treaties. ‘Mirror image’ might be a helpful figure of speech.

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The IGC 2007 agreed to insert a new Article 2b into the Treaty establishing the European Community (TEC), renamed the Treaty on the Functioning of the European Union (TFEU) by the Treaty of Lisbon (OJ 17.12.2007 C 306/44-45):

Article 2b TFEU (ToL), renumbered Article 3 TFEU

1. The Union shall have exclusive competence in the following areas:

(a) customs union;

(b) the establishing of the competition rules necessary for the functioning of the internal
market;

(c) monetary policy for the Member States whose currency is the euro;

(d) the conservation of marine biological resources under the common fisheries policy;

(e) common commercial policy.

2. The Union shall also have exclusive competence for the conclusion of an international
agreement when its conclusion is provided for in a legislative act of the Union or is necessary
to enable the Union to exercise its internal competence, or insofar as its conclusion may affect
common rules or alter their scope.

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The European Convention decided to clarify the scattered competences in the TEC and to codify the principles established by the jurisprudence of the ECJ. In the group of exclusive competence, the competition rules of the internal market were mentioned first, followed by the other areas.

The scope was widened to encompass the common commercial policy as a whole at this level of the draft Constitution, but the “French cultural exception” rebounded concerning “trade in cultural and audiovisual services, where these risk prejudicing the Union’s cultural and linguistic diversity” in Article III-217(4).

The common fisheries policy is a special branch of economic activity, and following ECJ precedent one aspect, the conservation of marine biological resources, was visibly placed under supranational tutelage.

The Convention introduced the following Article I-12 in the draft Treaty establishing a Constitution for Europe (OJ 18.7.2007 C 169/10):

Article I-12
Exclusive competence

1. The Union shall have exclusive competence to establish the competition rules necessary for the functioning of the internal market, and in the following areas:
— monetary policy, for the Member States which have adopted the euro,
— common commercial policy,
— customs union,
— the conservation of marine biological resources under the common fisheries policy.

2. The Union shall have exclusive competence for the conclusion of an international agreement when its conclusion is provided for in a legislative act of the Union, is necessary to enable it to exercise its internal competence, or affects an internal Union act.

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Redrafting but without altering the substance, the IGC 2004 agreed on the following Article I-13 of the Treaty establishing a Constitution for Europe (OJ 16.12.2004 C 310/15-16):

Article I-13
Areas of exclusive competence

1. The Union shall have exclusive competence in the following areas:

(a) customs union;

(b) the establishing of the competition rules necessary for the functioning of the internal market;

(c) monetary policy for the Member States whose currency is the euro;

(d) the conservation of marine biological resources under the common fisheries policy;

(e) common commercial policy.

2. The Union shall also have exclusive competence for the conclusion of an international
agreement when its conclusion is provided for in a legislative act of the Union or is necessary to
enable the Union to exercise its internal competence, or insofar as its conclusion may affect common rules or alter their scope.

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To summarise: The systematic, codifying approach to the competences originates with the Convention. We can see that the Constitution only reordered the areas mentioned in the draft without altering the substance, and that the Lisbon Treaty takes over the text of the Constitution.

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Having looked at the areas of exclusive competence, we take a step back to remind ourselves of what that exclusiveness means. The preceding Article gives the answer:

Article 2a(1) TFEU (ToL), after renumbering Article 2(1) TFEU

1. When the Treaties confer on the Union exclusive competence in a specific area, only the Union may legislate and adopt legally binding acts, the Member States being able to do so themselves only if so empowered by the Union or for the implementation of Union acts.

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Finally, we glance in the other direction. When confronted with a concrete problem to delimitate competences, the provisions presented above give us a mental framework, but we have to look for the boundaries and arrangements in the treaty provisions and jurisprudence concerning each area.


Ralf Grahn