SCANDAL: COMMON MARKET SCRAPPED!
When the European leaders flew to Lisbon to sign the re-wrapped Constitution they had not read, they dumped the cherished Common Market on the scrap heap of History!
Confirmed by Constitutional experts!
Many unbelievable things have been said about the Treaty of Lisbon (ToL), but this is one point where tabloids and bloggers with a traditionalist and nostalgic agenda seem to have missed an opportunity, so I decided to give them a helping hand.
The facts are, in a way, correct, as they should be according to the Tabloids’ Style Guide.
Let me fill in the background:
In the Lisbon Treaty the intergovernmental conference (IGC 2007) made a number of horizontal amendments to the Treaty establishing the European Community (TEC), which was renamed the Treaty on the Functioning of the European Union (TFEU). Point 2(g) imparts that:
“Throughout the Treaty … the words ‘common market’ shall be replaced by ‘internal market’.“
Do not take my word for it. You can check yourself in the Official Journal (OJ 17.12.2007 C 306/41).
I admit that this was a scheming and devious way to bring a whole group of treaty changes to your attention: the horizontal amendments.
In the new order of things, certain terms and concepts have been substituted throughout. These terminological or editorial changes affect an awful lot of the TFEU provisions without altering the substance.
Let us now turn our attention to today’s sermon: shared competence.
Yesterday we looked at the areas where the member states have delegated exclusive powers to the European Community, to be merged into the European Union. Exclusive competence is wonderfully clear, as long as we are able to ascertain the boundaries of these powers.
Starting to think about competence shared by the European Union and the member states, we realise that there is a new element of complexity. ‘Who does what?’ becomes one of the defining questions in the relationship between the EU and each member.
The division of powers has to be settled somehow, over a range of areas and often in minute detail, as in all systems with different levels of responsibility.
Some mix of detailed provisions and jurisprudence is usually needed to settle the difficult questions. Perhaps one of the main reasons for the voluminous treaties (and much secondary legislation) is the anxiety with which the member states have approached delegating powers to the European Community, thus reducing the scope for litigation.
(On the other hand, laborious and muddled compromises may lead to the opposite result.)
Today, our aim is more modest than to settle esoteric issues of law. In true Civil Law style we turn to written legislation to find a systematic approach to the basic questions of law.
The IGC 2007 offers us the following fundamental rules on the ‘division of labour’ between the European Union and its member states (OJ 17.12.2007 C 306/46-47):
Article 2c TFEU (ToL), to be renumbered Article 4 TFEU
1. The Union shall share competence with the Member States where the Treaties confer on it a competence which does not relate to the areas referred to in Articles 2 B and 2 E.
2. Shared competence between the Union and the Member States applies in the following principal areas:
(a) internal market;
(b) social policy, for the aspects defined in this Treaty;
(c) economic, social and territorial cohesion;
(d) agriculture and fisheries, excluding the conservation of marine biological resources;
(f) consumer protection;
(h) trans-European networks;
(j) area of freedom, security and justice;
(k) common safety concerns in public health matters, for the aspects defined in this Treaty.
3. In the areas of research, technological development and space, the Union shall have competence to carry out activities, in particular to define and implement programmes; however, the exercise of that competence shall not result in Member States being prevented from exercising theirs.
4. In the areas of development cooperation and humanitarian aid, the Union shall have competence to carry out activities and conduct a common policy; however, the exercise of that competence shall not result in Member States being prevented from exercising theirs.
If you read the Article attentively, you will find that the wording is careful. Words like ‘principal areas’ indicate a need to look deeper, and paragraphs 3 and 4 single out a few areas for special treatment.
But on the whole we have a robust User’s Manual for the most frequently asked questions:
When confronted with the question ‘shared competence’, we can at least start by following our operating instructions:
1) Is this an area of exclusive EU competence? If the answer is ‘no’ (Article 2b), we turn to our following question.
2) Is it an area where the EU can carry out actions to support, coordinate or supplement the actions of the member states (Article 2e)? If the answer is in the negative, too, we have at least eliminated a lot of potential traps.
3) We can turn our attention to the areas mentioned in Article 2c TFEU. If we find the area mentioned, we have covered a lot of ground.
Actually, the few TFEU Articles on competences in general give us a fair indication of what the whole treaty is about, and the areas of shared competence in particular are the ones where “Brussels” pours out the vast bulk of its legislation and where the overwhelming part of the Union’s budget is spent (for the most part in and by the member states).
Note that the IGC 2007 inserted the combat against climate change under the ‘environment’ in the detailed provisions of the TFEU. In the same way ‘energy’ was strengthened.
Paragraph 3 covers areas which could just as well have been located under supporting actions, since they operate mainly through Union programmes intended to complement activities in fields where the member states operate freely, and the nation states operate their own bilateral programmes in the areas of development aid and humanitarian assistance alongside EU action as recognised in paragraph 4.
But what does it mean, when the competence is shared or concurrent?
The hard and fast rule is found by returning to Article 2a(2) TFEU (ToL), renumbered Article 2(2) TFEU:
“2. When the Treaties confer on the Union a competence shared with the Member States in a specific area, the Union and the Member States may legislate and adopt legally binding acts in that area. The Member States shall exercise their competence to the extent that the Union has not exercised its competence. The Member States shall again exercise their competence to the extent that the Union has decided to cease exercising its competence.”
We see that the EU has supranational competence, with two basic exceptions:
1) The Union has not exercised its competence.
2) The Union has decided to cease exercising its competence.
Yes, true to their promise the governments of the member states have provided for the option to decrease some of the powers of the Union by giving them back to the member states.
The attentive reader may notice a distinction. The exclusive competences are, exaggerating slightly, ‘gone forever’, meaning that a treaty amendment would be needed to re-nationalise these areas. Ordinary legislation is enough to ‘return to sender’ chunks or morsels of shared competence.
The diligent student may want to look at the drafting history of the provision on shared competence.
Here are some materials to start digging, but let us work backwards for a change:
The corresponding provision of the Treaty establishing a Constitution for Europe is Article I-14 Areas of shared competence (OJ 16.12.2004 C 310/16). Comparing the similarities and differences between the Treaty of Lisbon and the Constitution we find that the Articles are almost identical, with only editorial changes in the Reform Treaty.
Article I-13 Areas of shared competence proposed by the European Convention in the draft Treaty establishing a Constitution for Europe differed from the Constitution in a few stylistic choices, none of them with material consequences (OJ 18.7.2003 C 169/11).
The Convention was the innovator concerning the systematic approach, and substantially it added the area of energy, which had relied on the flexibility clause in Article 308 TEC. Therefore you would have to look at the detailed provisions of the existing TEC or turn to a textbook to find a general description of the present situation, but the material differences from TEC to ToL are not significant, perhaps with the exception of energy and climate change.
There are a few additional points to make before we leave the concurrent or shared competences.
The question of subsidiarity does not rise in the framework of exclusive Union competence, but when both the EU and the member states are active in the same area, catchwords like ‘added value’ enter the scene.
The latest version of the Protocol on the application of the principles of subsidiarity and proportionality forms part of the treaties, and it sets out a whole system of scrutiny involving the national parliaments (OJ 17.12.2007 C 306/148-150):
ON THE APPLICATION OF THE PRINCIPLES OF SUBSIDIARITY
THE HIGH CONTRACTING PARTIES,
WISHING to ensure that decisions are taken as closely as possible to the citizens of the Union,
RESOLVED to establish the conditions for the application of the principles of subsidiarity and proportionality, as laid down in Article 3b of the Treaty on European Union, and to establish a system for monitoring the application of those principles,
HAVE AGREED UPON the following provisions, which shall be annexed to the Treaty on European Union and to the Treaty on the Functioning of the European Union:
Each institution shall ensure constant respect for the principles of subsidiarity and proportionality, as laid down in Article 3b of the Treaty on European Union.
Before proposing legislative acts, the Commission shall consult widely. Such consultations shall, where appropriate, take into account the regional and local dimension of the action envisaged. In cases of exceptional urgency, the Commission shall not conduct such consultations. It shall give reasons for its decision in its proposal.
For the purposes of this Protocol, ‘draft legislative acts’ shall mean proposals from the Commission, initiatives from a group of Member States, initiatives from the European Parliament, requests from the Court of Justice, recommendations from the European Central Bank and requests from the European Investment Bank for the adoption of a legislative act.
The Commission shall forward its draft legislative acts and its amended drafts to national arliaments at the same time as to the Union legislator.
The European Parliament shall forward its draft legislative acts and its amended drafts to national Parliaments.
The Council shall forward draft legislative acts originating from a group of Member States, the Court of Justice, the European Central Bank or the European Investment Bank and amended drafts to national Parliaments.
Upon adoption, legislative resolutions of the European Parliament and positions of the Council shall be forwarded by them to national Parliaments.
Draft legislative acts shall be justified with regard to the principles of subsidiarity and proportionality. Any draft legislative act should contain a detailed statement making it possible to appraise compliance with the principles of subsidiarity and proportionality. This statement should contain some assessment of the proposal's financial impact and, in the case of a directive, of its implications for the rules to be put in place by Member States, including, where necessary, the regional legislation. The reasons for concluding that a Union objective can be better achieved at Union level shall be substantiated by qualitative and, wherever possible, quantitative indicators. Draft legislative acts shall take account of the need for any burden, whether financial or administrative, falling upon the Union, national governments, regional or local authorities, economic operators and citizens, to be minimised and commensurate with the objective to be achieved.
Any national Parliament or any chamber of a national Parliament may, within eight weeks from the date of transmission of a draft legislative act, in the official languages of the Union, send to the Presidents of the European Parliament, the Council and the Commission a reasoned opinion stating why it considers that the draft in question does not comply with the principle of subsidiarity. It will be for each national Parliament or each chamber of a national Parliament to consult, where appropriate, regional parliaments with legislative powers.
If the draft legislative act originates from a group of Member States, the President of the Council shall forward the opinion to the governments of those Member States.
If the draft legislative act originates from the Court of Justice, the European Central Bank or the European Investment Bank, the President of the Council shall forward the opinion to the institution or body concerned.
1. The European Parliament, the Council and the Commission, and, where appropriate, the group of Member States, the Court of Justice, the European Central Bank or the European Investment Bank, if the draft legislative act originates from them, shall take account of the reasoned opinions issued by national Parliaments or by a chamber of a national Parliament.
Each national Parliament shall have two votes, shared out on the basis of the national Parliamentary system. In the case of a bicameral Parliamentary system, each of the two chambers shall have one vote.
2. Where reasoned opinions on a draft legislative act's non-compliance with the principle of subsidiarity represent at least one third of all the votes allocated to the national Parliaments in accordance with the second subparagraph of paragraph 1, the draft must be reviewed. This threshold shall be a quarter in the case of a draft legislative act submitted on the basis of Article 61 I of the Treaty on the Functioning of the European Union on the area of freedom, security and justice.
After such review, the Commission or, where appropriate, the group of Member States, the European Parliament, the Court of Justice, the European Central Bank or the European Investment Bank, if the draft legislative act originates from them, may decide to maintain, amend or withdraw the draft. Reasons must be given for this decision.
3. Furthermore, under the ordinary legislative procedure, where reasoned opinions on the non-compliance of a proposal for a legislative act with the principle of subsidiarity represent at least a simple majority of the votes allocated to the national Parliaments in accordance with the second subparagraph of paragraph 1, the proposal must be reviewed. After such review, the Commission may decide to maintain, amend or withdraw the proposal.
If it chooses to maintain the proposal, the Commission will have, in a reasoned opinion, to justify why it considers that the proposal complies with the principle of subsidiarity. This reasoned opinion, as well as the reasoned opinions of the national Parliaments, will have to be submitted to the Union legislator, for consideration in the procedure:
(a) before concluding the first reading, the legislator (the European Parliament and the Council) shall consider whether the legislative proposal is compatible with the principle of subsidiarity, taking particular account of the reasons expressed and shared by the majority of national Parliaments as well as the reasoned opinion of the Commission;
(b) if, by a majority of 55 % of the members of the Council or a majority of the votes cast in the European Parliament, the legislator is of the opinion that the proposal is not compatible with the principle of subsidiarity, the legislative proposal shall not be given further consideration.
The Court of Justice of the European Union shall have jurisdiction in actions on grounds of infringement of the principle of subsidiarity by a legislative act, brought in accordance with the rules laid down in Article 230 of the Treaty on the Functioning of the European Union by Member States, or notified by them in accordance with their legal order on behalf of their national Parliament or a chamber thereof.
In accordance with the rules laid down in the said Article, the Committee of the Regions may also bring such actions against legislative acts for the adoption of which the Treaty on the Functioning of the European Union provides that it be consulted.
The Commission shall submit each year to the European Council, the European Parliament, the Council and national Parliaments a report on the application of Article 3b of the Treaty on European Union. This annual report shall also be forwarded to the Economic and Social Committee and the Committee of the Regions.
Then we have the Protocol on the exercise of shared competence (OJ 17.12.2007 C 306/156), even if I admit to difficulties placing it in the correct category: self-evident and redundant or profound. Perhaps it is just an indication of political atmospherics:
ON THE EXERCISE OF SHARED COMPETENCE
THE HIGH CONTRACTING PARTIES
HAVE AGREED UPON the following provisions, which shall be annexed to the Treaty on European Union and to the Treaty on the Functioning of the European Union:
With reference to Article 2 A of the Treaty on the Functioning of the European Union on shared competence, when the Union has taken action in a certain area, the scope of this exercise of competence only covers those elements governed by the Union act in question and therefore does not cover the whole area.
Finally, there is no way I could leave your thirst for Declaration 18 in relation to the delimitation of competences unslaked (OJ 17.12.2007 C 306/254-255):
18. Declaration in relation to the delimitation of competences
The Conference underlines that, in accordance with the system of division of competences between the Union and the Member States as provided for in the Treaty on European Union and the Treaty on the Functioning of the European Union, competences not conferred upon the Union in the Treaties remain with the Member States.
When the Treaties confer on the Union a competence shared with the Member States in a specific area, the Member States shall exercise their competence to the extent that the Union has not exercised, or has decided to cease exercising, its competence. The latter situation arises when the relevant EU institutions decide to repeal a legislative act, in particular better to ensure constant respect for the principles of subsidiarity and proportionality. The Council may, at the initiative of one or several of its members (representatives of Member States) and in accordance with Article 208 of the Treaty on the Functioning of the European Union, request the Commission to submit proposals for repealing a legislative act. The Conference welcomes the Commission's declaration that it will devote particular attention to these requests.
Equally, the representatives of the governments of the Member States, meeting in an Intergovernmental Conference, in accordance with the ordinary revision procedure provided for in Article 48(2) to (5) of the Treaty on European Union, may decide to amend the Treaties upon which the Union is founded, including either to increase or to reduce the competences conferred on the Union in the said Treaties.
If you, dear reader, managed to get this far, you have my respect and sympathy.