Here is information for those who move to another EU member state. A new codified Directive has been published on tax exemptions for personal property:
Council Directive 2009/55/EC of 25 May 2009 on tax exemptions applicable to the permanent introduction from a Member State of the personal property of individuals (Codified version), published in the Official Journal of the European Union (OJEU) 10.6.2009 L 145/36.
However, the scope of Directive 2009/55 excludes some of the taxes and duties most interesting to individuals:
Article 1
Scope
1. Every Member State shall, subject to the conditions and in the cases hereinafter set out, exempt personal property introduced permanently from another Member State by private individuals from consumption taxes which normally apply to such property.
2. The following shall not be covered by this Directive:
(a) value added tax;
(b) excise duty;
(c) specific and/or periodical duties and taxes connected with the use within the country of property referred to in paragraph 1, such as for instance motor vehicle registration fees, road taxes and television licences.
***
Regulation 2009/55 is based on Article 93 of the Treaty establishing the European Community (TEC), on harmonisation of legislation concerning turnover taxes, excise duties and other forms of indirect taxation.
Ralf Grahn
Showing posts with label exemption. Show all posts
Showing posts with label exemption. Show all posts
Wednesday, 10 June 2009
Saturday, 14 February 2009
European Parliament: Privileges and immunities
The previous blog post painted the background of the privileges and immunities of the European Communities. Protocol (No 36) on the privileges and immunities of the European Communities, OJEU 29.12.2006 C 321 E/318, contains provisions relevant to the institutions, including the European Parliament.
Article 1 could be called the key-note provision:
Article 1
The premises and buildings of the Communities shall be inviolable. They shall be exempt from
search, requisition, confiscation or expropriation. The property and assets of the Communities shall not be the subject of any administrative or legal measure of constraint without the authorisation of the Court of Justice.
***
Article 2 extends the inviolability to the archives of the Communities.
Articles 3 and 4 exempts the Communities from all direct taxes as well as indirect taxes and customs duties for all articles intended for official use.
Communications and travel documents enjoy the same privileges as diplomatic communications and passports (Articles 6 and 7).
***
Government representatives
The European Union is the world’s largest international convention centre, so Article 11 concerns huge numbers of government representatives each year:
Article 11
Representatives of Member States taking part in the work of the institutions of the Communities, their advisers and technical experts shall, in the performance of their duties and during their travel to and from the place of meeting, enjoy the customary privileges, immunities and facilities.
This Article shall also apply to members of the advisory bodies of the Communities.
***
EU officials
Officials and other servants of the Communities are immune from national legal proceedings concerning their official acts, exempt with their families from immigration restrictions and formalities, enjoy the currency exchange rules applicable to their counterparts in international organisations, have a right to import their furniture and personal car duty-free and are exempted from national taxes, subject to more exact rules (Articles 12 to 16).
***
In short, the European Communities, including the institutions such as the European Parliament, are treated like international organisations and diplomatic missions.
Ralf Grahn
Article 1 could be called the key-note provision:
Article 1
The premises and buildings of the Communities shall be inviolable. They shall be exempt from
search, requisition, confiscation or expropriation. The property and assets of the Communities shall not be the subject of any administrative or legal measure of constraint without the authorisation of the Court of Justice.
***
Article 2 extends the inviolability to the archives of the Communities.
Articles 3 and 4 exempts the Communities from all direct taxes as well as indirect taxes and customs duties for all articles intended for official use.
Communications and travel documents enjoy the same privileges as diplomatic communications and passports (Articles 6 and 7).
***
Government representatives
The European Union is the world’s largest international convention centre, so Article 11 concerns huge numbers of government representatives each year:
Article 11
Representatives of Member States taking part in the work of the institutions of the Communities, their advisers and technical experts shall, in the performance of their duties and during their travel to and from the place of meeting, enjoy the customary privileges, immunities and facilities.
This Article shall also apply to members of the advisory bodies of the Communities.
***
EU officials
Officials and other servants of the Communities are immune from national legal proceedings concerning their official acts, exempt with their families from immigration restrictions and formalities, enjoy the currency exchange rules applicable to their counterparts in international organisations, have a right to import their furniture and personal car duty-free and are exempted from national taxes, subject to more exact rules (Articles 12 to 16).
***
In short, the European Communities, including the institutions such as the European Parliament, are treated like international organisations and diplomatic missions.
Ralf Grahn
Tuesday, 3 February 2009
Service concessions in EU procurement
Service concessions continue the long list of public contracts excluded from the application of the Procurement Directive 2004/18/EC.
But if concessions are exempted from the detailed procurement procedures, it does not mean that they are free from the general treaty principles governing the internal market.
As always, exceptions have to be justified and they are narrowly interpreted.
We start by looking at the seemingly simple exemption of service concessions before turning to the discussion on guiding principles.
***
Article 17
The European Community (European Union) Procurement Directive 2004/18/EC is not applied to service concessions:
Article 17
Service concessions
Without prejudice to the application of Article 3, this Directive shall not apply to service concessions as defined in Article 1(4).
***
Definition of service concession
Article 17 of the Procurement Directive, or Classic Directive, refers to the definition of service concession in Article 1(4):
4. ‘Service concession’ is a contract of the same type as a public service contract except for the fact that the consideration for the provision of services consists either solely in the right to exploit the service or in this right together with payment.
***
Service contract
Except for the consideration, a service concession fulfils the same criteria as a public service contract, defined in Article 1(2)(d):
(d) ‘Public service contracts’ are public contracts other than public works or supply contracts having as their object the provision of services referred to in Annex II.
A public contract having as its object both products and services within the meaning of Annex II shall be considered to be a ‘public service contract’ if the value of the services in question exceeds that of the products covered by the contract.
A public contract having as its object services within the meaning of Annex II and including activities within the meaning of Annex I that are only incidental to the principal object of the contract shall be considered to be a public service contract.
***
Article 3
Article 3 of the Procurement Directive 2004/18/EC tells us that the service concession must comply with the basic treaty obligation of non-discrimination on the basis of nationality when it awards contracts to third parties.
The principle of non-discrimination is set out in Article 12 of the Treaty establishing the European Community and given more precise meaning in the rich jurisprudence of the European Court of Justice.
(If the Lisbon Treaty enters into force, the same obligation would be found in Article 18 of the Treaty on the Functioning of the European Union.)
The contracting authority (public body) granting the special or exclusive right (service concession) must make sure that the principle of non-discrimination is adhered to by providing for it in the granting act:
Article 3
Granting of special or exclusive rights: non-discrimination clause
Where a contracting authority grants special or exclusive rights to carry out a public service activity to an entity other than such a contracting authority, the act by which that right is granted shall provide that, in respect of the supply contracts which it awards to third parties as part of its activities, the entity concerned must comply with the principle of non-discrimination on the basis of nationality.
***
Commission Guide
The Commission’s Guide to the Community Rules on Public Procurement of Services explains the background of the old Directive 92/50/EEC, but since the new Procurement Directive 2004/18/EC has taken over the exclusion the text is still relevant for our understanding (page 5):
The Commission's original proposal12 contained provisions on public service concessions analogous to those existing in the Works Directive for public works concessions. However, the Member States in Council decided not to include this type of contract because of wide divergence of national practices in matters of public service concessions. Thus the Services Directive does not apply to public service concessions, which broadly means that the Directive does not apply to contracts whereby a public authority transfers the execution of a service to the public lying within its responsibility to an undertaking of its choice and the latter agrees to execute the activity in return for the right to exploit the service, or this right together with payment. Nevertheless, the award of such contracts is, of course, subject to the Treaty rules concerning the freedom to provide services and to the general principles of Community law such as non-discrimination, equality of treatment, transparency and mutual recognition.
***
Advertising exempted contracts
The national laws and regulations vary within the 30 states of the European Economic Area, but the treaty standards, the Procurement Directives and the problems facing officials and firms are shared.
Let us therefore mention a guide on the advertisement of contracts exempted from the scope of the detailed Directive rules.
Scottish Procurement Directorate: Scottish Procurement Policy Note SPPN 3/2006 (3 March 2006) is available here:
http://www.scotland.gov.uk/Resource/Doc/1265/0023351.pdf
Readers interested in procurement policy generally may want to peruse the new Scottish Procurement Policy Handbook (published 23 December 2008):
http://www.scotland.gov.uk/Resource/Doc/256155/0076031.pdf
The Scottish Government’s Procurement web pages offer well organised and timely information on procurement issues, many of them of interest outside Scotland as well:
http://www.scotland.gov.uk/Topics/Government/Procurement
***
Institutionalised Public-Private Partnerships (IPPP)
One area where concessions are granted is in the context of Public-Private Partnerships (PPP), for the long term in the form of Institutionalised Public-Private Partnerships (IPPP).
After consultation, the Commission published its interpretation of the principles applicable to these partnerships, in Commission Interpretative Communication on the application of Community law on Public Procurement and Concessions to Institutionalised Public-Private Partnerships (IPPP), Brussels 5.2.2008 C(2007)6661.
This guidance may be of some assistance to readers faced with questions relating to service concessions and it offers a picture of how the Commission as guardian of the treaties views the treaty obligations in the light of ECJ jurisprudence.
Here are the introductory remarks by the Commission on the context of the Communication (page 2):
In recent years, Public-Private Partnerships (PPP) have developed in many fields. The hallmark of this form of cooperation, which is generally geared to the longer term, is the role of the private partner, who is involved in the various phases of the project (planning, implementation and operation), who is intended to bear risks that are traditionally borne by the public sector and who often contributes to financing the project.
Under Community law, public authorities are free to pursue economic activities themselves or to assign them to third parties, such as mixed capital entities founded in the context of a PPP. However, if public bodies decide to involve third parties in economic activities and if this involvement qualifies as a public contract or a concession, the Community provisions for public procurement and concessions must be complied with. The aim of these provisions is to enable all interested economic operators to tender for public contracts and concessions on a fair and transparent basis in the spirit of the European internal market, thereby enhancing the quality of such projects and cutting their costs by means of increased competition.
***
Future service concessions
What does the future hold in store with regard to service concessions?
Charlie McCreevy, the European Commissioner for Internal Market and Services, outlined future activities in a speech on 11 December 2008 for the Business Services Association (BSA), in London:
By concessions, we mean procurements in which the consideration from contracting authorities consists in the award to the contractor of the right to exploit a work or service, or where this right is accompanied by some sort of payment. A well-known example of these is toll roads, where the contractor builds and operates a motorway and charges tolls on users. Another example is contracts for the management of public services, where contractors set up and/or operate the service and receive fees from users. Concessions are very prominent in the field of PPPs. A study carried out by Price Waterhouse Coopers concluded that approximately 60% of all PPPs take the legal form of concessions.
Following a broad public consultation with the Green Paper on PPP in 2004, we realised that we needed further data on how this worked in practice before considering any further action. This is what we are currently doing. We are studying carefully the concessions market in the EU. After consultations with Member States and stakeholders on this initiative, we are working, therefore, to gather more practical data on the award of concessions in the EU, including in strategic sectors. I also personally see the benefits of service concessions for expanding markets to many new EU Member States where service concessions and other forms of PPPs are infrequently used. Whether or not EU action is needed to facilitate this opening up of new markets is still a more open question.
Ralf Grahn
But if concessions are exempted from the detailed procurement procedures, it does not mean that they are free from the general treaty principles governing the internal market.
As always, exceptions have to be justified and they are narrowly interpreted.
We start by looking at the seemingly simple exemption of service concessions before turning to the discussion on guiding principles.
***
Article 17
The European Community (European Union) Procurement Directive 2004/18/EC is not applied to service concessions:
Article 17
Service concessions
Without prejudice to the application of Article 3, this Directive shall not apply to service concessions as defined in Article 1(4).
***
Definition of service concession
Article 17 of the Procurement Directive, or Classic Directive, refers to the definition of service concession in Article 1(4):
4. ‘Service concession’ is a contract of the same type as a public service contract except for the fact that the consideration for the provision of services consists either solely in the right to exploit the service or in this right together with payment.
***
Service contract
Except for the consideration, a service concession fulfils the same criteria as a public service contract, defined in Article 1(2)(d):
(d) ‘Public service contracts’ are public contracts other than public works or supply contracts having as their object the provision of services referred to in Annex II.
A public contract having as its object both products and services within the meaning of Annex II shall be considered to be a ‘public service contract’ if the value of the services in question exceeds that of the products covered by the contract.
A public contract having as its object services within the meaning of Annex II and including activities within the meaning of Annex I that are only incidental to the principal object of the contract shall be considered to be a public service contract.
***
Article 3
Article 3 of the Procurement Directive 2004/18/EC tells us that the service concession must comply with the basic treaty obligation of non-discrimination on the basis of nationality when it awards contracts to third parties.
The principle of non-discrimination is set out in Article 12 of the Treaty establishing the European Community and given more precise meaning in the rich jurisprudence of the European Court of Justice.
(If the Lisbon Treaty enters into force, the same obligation would be found in Article 18 of the Treaty on the Functioning of the European Union.)
The contracting authority (public body) granting the special or exclusive right (service concession) must make sure that the principle of non-discrimination is adhered to by providing for it in the granting act:
Article 3
Granting of special or exclusive rights: non-discrimination clause
Where a contracting authority grants special or exclusive rights to carry out a public service activity to an entity other than such a contracting authority, the act by which that right is granted shall provide that, in respect of the supply contracts which it awards to third parties as part of its activities, the entity concerned must comply with the principle of non-discrimination on the basis of nationality.
***
Commission Guide
The Commission’s Guide to the Community Rules on Public Procurement of Services explains the background of the old Directive 92/50/EEC, but since the new Procurement Directive 2004/18/EC has taken over the exclusion the text is still relevant for our understanding (page 5):
The Commission's original proposal12 contained provisions on public service concessions analogous to those existing in the Works Directive for public works concessions. However, the Member States in Council decided not to include this type of contract because of wide divergence of national practices in matters of public service concessions. Thus the Services Directive does not apply to public service concessions, which broadly means that the Directive does not apply to contracts whereby a public authority transfers the execution of a service to the public lying within its responsibility to an undertaking of its choice and the latter agrees to execute the activity in return for the right to exploit the service, or this right together with payment. Nevertheless, the award of such contracts is, of course, subject to the Treaty rules concerning the freedom to provide services and to the general principles of Community law such as non-discrimination, equality of treatment, transparency and mutual recognition.
***
Advertising exempted contracts
The national laws and regulations vary within the 30 states of the European Economic Area, but the treaty standards, the Procurement Directives and the problems facing officials and firms are shared.
Let us therefore mention a guide on the advertisement of contracts exempted from the scope of the detailed Directive rules.
Scottish Procurement Directorate: Scottish Procurement Policy Note SPPN 3/2006 (3 March 2006) is available here:
http://www.scotland.gov.uk/Resource/Doc/1265/0023351.pdf
Readers interested in procurement policy generally may want to peruse the new Scottish Procurement Policy Handbook (published 23 December 2008):
http://www.scotland.gov.uk/Resource/Doc/256155/0076031.pdf
The Scottish Government’s Procurement web pages offer well organised and timely information on procurement issues, many of them of interest outside Scotland as well:
http://www.scotland.gov.uk/Topics/Government/Procurement
***
Institutionalised Public-Private Partnerships (IPPP)
One area where concessions are granted is in the context of Public-Private Partnerships (PPP), for the long term in the form of Institutionalised Public-Private Partnerships (IPPP).
After consultation, the Commission published its interpretation of the principles applicable to these partnerships, in Commission Interpretative Communication on the application of Community law on Public Procurement and Concessions to Institutionalised Public-Private Partnerships (IPPP), Brussels 5.2.2008 C(2007)6661.
This guidance may be of some assistance to readers faced with questions relating to service concessions and it offers a picture of how the Commission as guardian of the treaties views the treaty obligations in the light of ECJ jurisprudence.
Here are the introductory remarks by the Commission on the context of the Communication (page 2):
In recent years, Public-Private Partnerships (PPP) have developed in many fields. The hallmark of this form of cooperation, which is generally geared to the longer term, is the role of the private partner, who is involved in the various phases of the project (planning, implementation and operation), who is intended to bear risks that are traditionally borne by the public sector and who often contributes to financing the project.
Under Community law, public authorities are free to pursue economic activities themselves or to assign them to third parties, such as mixed capital entities founded in the context of a PPP. However, if public bodies decide to involve third parties in economic activities and if this involvement qualifies as a public contract or a concession, the Community provisions for public procurement and concessions must be complied with. The aim of these provisions is to enable all interested economic operators to tender for public contracts and concessions on a fair and transparent basis in the spirit of the European internal market, thereby enhancing the quality of such projects and cutting their costs by means of increased competition.
***
Future service concessions
What does the future hold in store with regard to service concessions?
Charlie McCreevy, the European Commissioner for Internal Market and Services, outlined future activities in a speech on 11 December 2008 for the Business Services Association (BSA), in London:
By concessions, we mean procurements in which the consideration from contracting authorities consists in the award to the contractor of the right to exploit a work or service, or where this right is accompanied by some sort of payment. A well-known example of these is toll roads, where the contractor builds and operates a motorway and charges tolls on users. Another example is contracts for the management of public services, where contractors set up and/or operate the service and receive fees from users. Concessions are very prominent in the field of PPPs. A study carried out by Price Waterhouse Coopers concluded that approximately 60% of all PPPs take the legal form of concessions.
Following a broad public consultation with the Green Paper on PPP in 2004, we realised that we needed further data on how this worked in practice before considering any further action. This is what we are currently doing. We are studying carefully the concessions market in the EU. After consultations with Member States and stakeholders on this initiative, we are working, therefore, to gather more practical data on the award of concessions in the EU, including in strategic sectors. I also personally see the benefits of service concessions for expanding markets to many new EU Member States where service concessions and other forms of PPPs are infrequently used. Whether or not EU action is needed to facilitate this opening up of new markets is still a more open question.
Ralf Grahn
Monday, 7 April 2008
EU TFEU: Public policy, public security and public health exceptions
‘Public policy, public security or public health’ form a potent formula for exceptions concerning the fundamental principles of free movement, citizenship rights, freedom to provide services and freedom of establishment within the European Community (European Union).
Here we look at the exemptions in the light of the present Treaty establishing the European Community and the coming Treaty on the Functioning of the European Union (Treaty of Lisbon), with a glance towards the draft Constitution and the Constitutional Treaty along the route.
The concrete provision we deal with concerns these exceptions in the context of the freedom of establishment, but often more than one of the rights and freedoms occur in the same case.
A few hints on further reading follow, meant to facilitate understanding of the system and strict interpretation of derogations.
***
In the Treaty of Lisbon (ToL) the intergovernmental conference (IGC 2007) made no specific amendments to Article 46 of the Treaty establishing the European Community (TEC). Cf. Official Journal, OJ, 17.12.2007 C 306/54-55.
***
The latest consolidated version of the existing treaties, TEU and TEC, presents Article 46 TEC as it now stands (OJ 29.12.2006 C 321 E/61):
Article 46 TEC
1. The provisions of this Chapter and measures taken in pursuance thereof shall not prejudice the applicability of provisions laid down by law, regulation or administrative action providing for special treatment for foreign nationals on grounds of public policy, public security or public health.
2. The Council shall, acting in accordance with the procedure referred to in Article 251, issue directives for the coordination of the abovementioned provisions.
***
To arrive at a consolidated Lisbon Treaty version of an Article requires that we check if one or more of the following apply: express amendments (here none), horizontal amendments (here one), renumbering of the provision (yes) and renumbering of possible referrals (here none).
The location of the Article is thrown in as a matter of reading convenience in a post read in isolation.
Thus, we should end up with the following Article, consolidated according to the Treaty of Lisbon:
Part Three ‘Policies and internal actions of the Union’
Title III (renumbered Title IV) ‘Free movement of persons, services and capital’
Chapter 2 ‘Right of establishment’
Article 46 TFEU (ToL), renumbered Article 52 TFEU
1. The provisions of this Chapter and measures taken in pursuance thereof shall not prejudice the applicability of provisions laid down by law, regulation or administrative action providing for special treatment for foreign nationals on grounds of public policy, public security or public health.
2. The European Parliament and the Council shall, acting in accordance with the ordinary legislative procedure, issue directives for the coordination of the abovementioned provisions.
***
The European Convention changed just enough of the wording in Article III-25 of the draft Treaty establishing a Constitution for Europe to merit repeating, but without changing anything of substance (OJ 18.7.2003 C 169/32):
Article III-25 Draft Constitution
1. This Subsection and measures adopted in pursuance thereof shall not prejudice the applicability of provisions laid down by law, regulation or administrative action in Member States providing for special treatment for foreign nationals on grounds of public policy, public security or public health.
2. European framework laws shall coordinate the national provisions referred to in paragraph 1.
***
The IGC 2004 adopted the draft text unchanged in Article III-140 of the Treaty establishing a Constitution for Europe (OJ 16.12.2004 C 310/62).
***
The IGC 2007 followed the adage ‘If it ain’t broke, don’t fix it’, thus preserving the current wording (with the one technical or horizontal amendment concerning the ordinary legislative procedure).
***
The Commission’s internal market web pages on services offer an introductory page ‘General principles: Freedom to provide services / Freedom of establishment’ (last update 28 January 2008):
http://ec.europa.eu/internal_market/services/principles_en.htm
There is a link to a 112 page ‘Guide to the Case Law of the European Court of Justice on Articles 43 et seq. EC Treaty: Freedom of Establishment’, from 1 January 2001, but with an update promised shortly:
http://ec.europa.eu/internal_market/services/docs/infringements/art43_en.pdf
Available on the web you can find the following:
J.H.H. Weiler and Martina Kocjan: The Law of the European Union, Teaching Material, The Internal Market: Freedom to Provide Services, Freedom of Establishment (NYU School of Law 2004/2005; 72 pages):
http://ec.europa.eu/internal_market/services/docs/infringements/art43_en.pdf
A detailed study is:
Markku Kiikeri: The Freedom of Establishment in the European Union, Report to the Finnish Ministry of Trade and Industry, 2002 (133 pages + Annexes XIX pages):
http://www.helsinki.fi/publaw/opiskelu/Eurooppaoikeus/Sijoittautumistutkimus.englanti.Kiikeri.pdf
These materials offer a fair grounding in the fundamental questions regarding the freedom of establishment, leaving only the latest developments of secondary legislation and case law to be unearthed by the reader.
Ralf Grahn
P.S. Both the draft Constitution and the Constitutional Treaty were published quickly, and they were already 'consolidated versions'. We have to go back to the ill-fated Treaty of Nice to find a treaty published in a consolidated version only after entering into force.
Some would argue that a few things have happened in net publishing since 2001.
Anyway, a long wait seems to draw to a close, when the consolidated Lisbon Treaty is published 15 April 2008, and in book form 9 May 2008 (Europe day).
Here we look at the exemptions in the light of the present Treaty establishing the European Community and the coming Treaty on the Functioning of the European Union (Treaty of Lisbon), with a glance towards the draft Constitution and the Constitutional Treaty along the route.
The concrete provision we deal with concerns these exceptions in the context of the freedom of establishment, but often more than one of the rights and freedoms occur in the same case.
A few hints on further reading follow, meant to facilitate understanding of the system and strict interpretation of derogations.
***
In the Treaty of Lisbon (ToL) the intergovernmental conference (IGC 2007) made no specific amendments to Article 46 of the Treaty establishing the European Community (TEC). Cf. Official Journal, OJ, 17.12.2007 C 306/54-55.
***
The latest consolidated version of the existing treaties, TEU and TEC, presents Article 46 TEC as it now stands (OJ 29.12.2006 C 321 E/61):
Article 46 TEC
1. The provisions of this Chapter and measures taken in pursuance thereof shall not prejudice the applicability of provisions laid down by law, regulation or administrative action providing for special treatment for foreign nationals on grounds of public policy, public security or public health.
2. The Council shall, acting in accordance with the procedure referred to in Article 251, issue directives for the coordination of the abovementioned provisions.
***
To arrive at a consolidated Lisbon Treaty version of an Article requires that we check if one or more of the following apply: express amendments (here none), horizontal amendments (here one), renumbering of the provision (yes) and renumbering of possible referrals (here none).
The location of the Article is thrown in as a matter of reading convenience in a post read in isolation.
Thus, we should end up with the following Article, consolidated according to the Treaty of Lisbon:
Part Three ‘Policies and internal actions of the Union’
Title III (renumbered Title IV) ‘Free movement of persons, services and capital’
Chapter 2 ‘Right of establishment’
Article 46 TFEU (ToL), renumbered Article 52 TFEU
1. The provisions of this Chapter and measures taken in pursuance thereof shall not prejudice the applicability of provisions laid down by law, regulation or administrative action providing for special treatment for foreign nationals on grounds of public policy, public security or public health.
2. The European Parliament and the Council shall, acting in accordance with the ordinary legislative procedure, issue directives for the coordination of the abovementioned provisions.
***
The European Convention changed just enough of the wording in Article III-25 of the draft Treaty establishing a Constitution for Europe to merit repeating, but without changing anything of substance (OJ 18.7.2003 C 169/32):
Article III-25 Draft Constitution
1. This Subsection and measures adopted in pursuance thereof shall not prejudice the applicability of provisions laid down by law, regulation or administrative action in Member States providing for special treatment for foreign nationals on grounds of public policy, public security or public health.
2. European framework laws shall coordinate the national provisions referred to in paragraph 1.
***
The IGC 2004 adopted the draft text unchanged in Article III-140 of the Treaty establishing a Constitution for Europe (OJ 16.12.2004 C 310/62).
***
The IGC 2007 followed the adage ‘If it ain’t broke, don’t fix it’, thus preserving the current wording (with the one technical or horizontal amendment concerning the ordinary legislative procedure).
***
The Commission’s internal market web pages on services offer an introductory page ‘General principles: Freedom to provide services / Freedom of establishment’ (last update 28 January 2008):
http://ec.europa.eu/internal_market/services/principles_en.htm
There is a link to a 112 page ‘Guide to the Case Law of the European Court of Justice on Articles 43 et seq. EC Treaty: Freedom of Establishment’, from 1 January 2001, but with an update promised shortly:
http://ec.europa.eu/internal_market/services/docs/infringements/art43_en.pdf
Available on the web you can find the following:
J.H.H. Weiler and Martina Kocjan: The Law of the European Union, Teaching Material, The Internal Market: Freedom to Provide Services, Freedom of Establishment (NYU School of Law 2004/2005; 72 pages):
http://ec.europa.eu/internal_market/services/docs/infringements/art43_en.pdf
A detailed study is:
Markku Kiikeri: The Freedom of Establishment in the European Union, Report to the Finnish Ministry of Trade and Industry, 2002 (133 pages + Annexes XIX pages):
http://www.helsinki.fi/publaw/opiskelu/Eurooppaoikeus/Sijoittautumistutkimus.englanti.Kiikeri.pdf
These materials offer a fair grounding in the fundamental questions regarding the freedom of establishment, leaving only the latest developments of secondary legislation and case law to be unearthed by the reader.
Ralf Grahn
P.S. Both the draft Constitution and the Constitutional Treaty were published quickly, and they were already 'consolidated versions'. We have to go back to the ill-fated Treaty of Nice to find a treaty published in a consolidated version only after entering into force.
Some would argue that a few things have happened in net publishing since 2001.
Anyway, a long wait seems to draw to a close, when the consolidated Lisbon Treaty is published 15 April 2008, and in book form 9 May 2008 (Europe day).
Sunday, 6 April 2008
EU TFEU: Freedom of establishment derogation: Exercise of official authority
The freedom of establishment within the European Community (European Union) is not limitless. There are legitimate derogations or exemptions, of which the exercise of official authority is one.
We look at what, if anything, the EU’s Treaty of Lisbon changes compared to the current Treaty establishing the European Community, and if the draft Constitution and the Constitutional Treaty would have made any difference.
A case note offers an example of practical considerations.
***
In the Treaty of Lisbon (ToL) the intergovernmental conference briefly mentions Article 45 of the Treaty establishing the European Community (TEC), renamed the Treaty on the Functioning of the European Union (TFEU). See Official Journal, OJ, 17.12.2007 C 306/54:
53) In Article 45, second paragraph, the words ‘The Council may, acting by a qualified majority on a proposal from the Commission,’ shall be replaced by ‘The European Parliament and the Council, acting in accordance with the ordinary legislative procedure, may’.
***
For contents and meaning we turn to the latest consolidated version of the current treaties, the TEU and the TEC, in OJ 29.12.2006 C 321 E/60:
Article 45 TEC
The provisions of this Chapter shall not apply, so far as any given Member State is concerned, to activities which in that State are connected, even occasionally, with the exercise of official authority.
The Council may, acting by a qualified majority on a proposal from the Commission, rule that the provisions of this Chapter shall not apply to certain activities.
***
To arrive at a consolidated Lisbon Treaty version of an Article requires that we check if one or more of the following apply: express amendments, horizontal amendments, renumbering of the provision and renumbering of possible referrals.
The location of the Article is thrown in as a matter of reading convenience in a post read in isolation.
Thus, we should end up with the following Article, consolidated according to the Treaty of Lisbon:
Part Three ‘Policies and internal actions of the Union’
Title III (renumbered Title IV) ‘Free movement of persons, services and capital’
Chapter 2 ‘Right of establishment’
Article 45 TFEU (ToL), renumbered Article 51 TFEU
The provisions of this Chapter shall not apply, so far as any given Member State is concerned, to activities which in that State are connected, even occasionally, with the exercise of official authority.
The European Parliament and the Council, acting in accordance with the ordinary legislative procedure, may rule that the provisions of this Chapter shall not apply to certain activities.
***
Article III-24 of the draft Treaty establishing a Constitution for Europe introduced ‘European laws or framework laws’ (co-decision, ordinary legislative procedure) into the second paragraph, arguably in plainer language (OJ 18.7.2003 C 169/32):
Article III-24 Draft Treaty
This Subsection shall not apply, so far as any given Member State is concerned, to activities which in that State are connected, even occasionally, with the exercise of official authority.
European laws or framework laws may exempt certain activities from application of this Subsection.
***
Article III-139 of the Treaty establishing a Constitution for Europe replaced the word ‘exempt’ by ‘exclude’, but made no other changes (OJ 16.12.2004 C 310/62).
***
We see that the IGC 2007, by-passing such ‘cosmetic’ changes in such cases, manages to keep the number and volume of Lisbon Treaty amendments down, by reverting to the TEC text.
***
Suitable further reading is offered by Peer Zumbansen in a note on the case C-283/99 ‘No Need To Be Italian: ECJ Hands Down Third Case Related To Nationality Requirements For Private Security Guards’, published in the German Law Journal Vol. 2 No. 10 – 15 June 2001, and available on the web:
http://www.germanlawjournal.com/print.php?id=29
Freedom of movement of workers, freedom of establishment and the limits of derogations are discussed.
Ralf Grahn
P.S. Finally the consolidated Lisbon Treaties are due to arrive, 15 April 2008. On Europe day, 9 May 2008 they are published in book form.
We look at what, if anything, the EU’s Treaty of Lisbon changes compared to the current Treaty establishing the European Community, and if the draft Constitution and the Constitutional Treaty would have made any difference.
A case note offers an example of practical considerations.
***
In the Treaty of Lisbon (ToL) the intergovernmental conference briefly mentions Article 45 of the Treaty establishing the European Community (TEC), renamed the Treaty on the Functioning of the European Union (TFEU). See Official Journal, OJ, 17.12.2007 C 306/54:
53) In Article 45, second paragraph, the words ‘The Council may, acting by a qualified majority on a proposal from the Commission,’ shall be replaced by ‘The European Parliament and the Council, acting in accordance with the ordinary legislative procedure, may’.
***
For contents and meaning we turn to the latest consolidated version of the current treaties, the TEU and the TEC, in OJ 29.12.2006 C 321 E/60:
Article 45 TEC
The provisions of this Chapter shall not apply, so far as any given Member State is concerned, to activities which in that State are connected, even occasionally, with the exercise of official authority.
The Council may, acting by a qualified majority on a proposal from the Commission, rule that the provisions of this Chapter shall not apply to certain activities.
***
To arrive at a consolidated Lisbon Treaty version of an Article requires that we check if one or more of the following apply: express amendments, horizontal amendments, renumbering of the provision and renumbering of possible referrals.
The location of the Article is thrown in as a matter of reading convenience in a post read in isolation.
Thus, we should end up with the following Article, consolidated according to the Treaty of Lisbon:
Part Three ‘Policies and internal actions of the Union’
Title III (renumbered Title IV) ‘Free movement of persons, services and capital’
Chapter 2 ‘Right of establishment’
Article 45 TFEU (ToL), renumbered Article 51 TFEU
The provisions of this Chapter shall not apply, so far as any given Member State is concerned, to activities which in that State are connected, even occasionally, with the exercise of official authority.
The European Parliament and the Council, acting in accordance with the ordinary legislative procedure, may rule that the provisions of this Chapter shall not apply to certain activities.
***
Article III-24 of the draft Treaty establishing a Constitution for Europe introduced ‘European laws or framework laws’ (co-decision, ordinary legislative procedure) into the second paragraph, arguably in plainer language (OJ 18.7.2003 C 169/32):
Article III-24 Draft Treaty
This Subsection shall not apply, so far as any given Member State is concerned, to activities which in that State are connected, even occasionally, with the exercise of official authority.
European laws or framework laws may exempt certain activities from application of this Subsection.
***
Article III-139 of the Treaty establishing a Constitution for Europe replaced the word ‘exempt’ by ‘exclude’, but made no other changes (OJ 16.12.2004 C 310/62).
***
We see that the IGC 2007, by-passing such ‘cosmetic’ changes in such cases, manages to keep the number and volume of Lisbon Treaty amendments down, by reverting to the TEC text.
***
Suitable further reading is offered by Peer Zumbansen in a note on the case C-283/99 ‘No Need To Be Italian: ECJ Hands Down Third Case Related To Nationality Requirements For Private Security Guards’, published in the German Law Journal Vol. 2 No. 10 – 15 June 2001, and available on the web:
http://www.germanlawjournal.com/print.php?id=29
Freedom of movement of workers, freedom of establishment and the limits of derogations are discussed.
Ralf Grahn
P.S. Finally the consolidated Lisbon Treaties are due to arrive, 15 April 2008. On Europe day, 9 May 2008 they are published in book form.
Thursday, 13 March 2008
EU TFEU: Internal market softeners and derogations
The competitiveness of member states’ economies varies hugely, and efforts enhance competition within the European Union may affect them differently. The Commission has the responsibility to take these differences into account, when it draws up its proposals for the internal market. This can happen through the standards set, or by transitory periods, or they can accommodate certain members by temporary derogations (exemptions).
These softeners, or ‘safety valve’ principles form an integral part of rule making for the single market.
In addition, we get a bird’s eye view of the whole treaty reform process, leading up to the Union policies and internal actions as agreed in the Treaty of Lisbon.
***
In the Treaty of Lisbon (ToL) the intergovernmental conference amended Article 15 of the Treaty establishing the European Community (TEC), which was adopted as Article 22b of the Treaty on the Functioning of the European Union (TFEU). Here is the text of the IGC 2007 (OJ 17.12.2007 C 306/52):
42) An Article 22b shall be inserted, with the wording of Article 15. In the first paragraph, the words ‘during the period of establishment’ shall be replaced by ‘for the establishment’.
***
Even minimal amendments, indeed, especially these, require recourse to the current TEC to make sense (so we turn to the latest consolidated version of the TEU and the TEC in OJ 29.12.2006 C 321 E/49):
Article 15 TEC
When drawing up its proposals with a view to achieving the objectives set out in Article 14, the Commission shall take into account the extent of the effort that certain economies showing differences in development will have to sustain during the period of establishment of the internal market and it may propose appropriate provisions.
If these provisions take the form of derogations, they must be of a temporary nature and must cause the least possible disturbance to the functioning of the common market.
***
We keep in mind that we study Part Three Union policies and internal actions, Title I The internal market, of the TFEU.
Our following task is to consolidate the Article, merging existing contents with amendments, and taking into account that the ToL uses one set of numbering, but indicates a new numbering for future consolidated versions of the treaties (in the tables of eqivalences). The end result should look like this:
Article 22b TFEU (ToL), after renumbering Article 27 TFEU
When drawing up its proposals with a view to achieving the objectives set out in Article 22a [TFEU (ToL), after renumbering Article 26 TFEU], the Commission shall take into account the extent of the effort that certain economies showing differences in development will have to sustain for the establishment of the internal market and it may propose appropriate provisions.
If these provisions take the form of derogations, they must be of a temporary nature and must cause the least possible disturbance to the functioning of the internal market.
***
After spanning the whole distance from the current TEC to the new TFEU, we take a look at two of the individual arches in between, the draft Constitution and the Constitution.
Perhaps a few preliminary general comments are in order. The treaty reform process can be seen as continuous. You can choose to look at the Treaty of Maastricht (Treaty on European Union, TEU) as a first, remarkable stage, which however left unfinished business to which were later added the fact and the prospect of enlargement. These questions were only in part remedied by the Treaty of Amsterdam and the Treaty of Nice, attested to by the fact that the same European Council which agreed on the Nice Treaty felt the need to declare the need for continued reform. With this interpretation we have a more or less continuing reform process from about 1990 until today (2008).
The other point of view would be to see the unsatisfactory Treaty of Nice (signed 2001) as the starting point for a new reform process, with the Declaration of Laeken, the European Convention and its draft Constitution, the IGC 2004 and the Constitutional Treaty, and the retrenchment after failed ratification and the partial relaunch by the IGC 2007 leading to the Lisbon Treaty as the principal stages. Even this shorter history of treaty reform, from December 2000 (Nice) until today (early 2008), presents the picture of seven lean years since no substantial changes have been harvested, namely entered into force (although the accession treaties of 2003 and 2005 should be remembered).
The common denominator has been institutional all along, with decision making structures of the European Union in focus.
The two high points were, in my opinion:
1) The convention method and the work of the first Convention leading to the Charter of Fundamental Rights, and the European Convention (the second one), which produced the draft Constitution. Without being perfect, they embodied more democratic legitimacy than any attempt since the Spinelli draft (1984).
2) The Treaty establishing a Constitution for Europe (2004), where the IGC 2004 achieved some technical improvements and subtracted a few substantial ones, was still remarkable in that it promised substantial reform and a fairly well organised and readable text (although overly long).
Having read countless stories on the ‘failed Constitution’, I think it is time to make a distinction. The Constitutional Treaty was not a failure. Actually, it was as good as it gets at this stage of development, given the strictures of unanimous decision making in a large forum of disparate member states.
Only the ratification process failed, falling victim to the almost impossible requirement to get any meaningful reform approved constitutionally in 27 member states.
The end result is, after the relaunch, the Lisbon Treaty, a sort of ‘Zombie Constitution’, with most of the material contents of the Constitutional Treaty, but without its soul. In addition, the vestments are tattered, riven into a myriad of separate amendments. Only when consolidated versions of the Treaty of Lisbon appear, can a citizen of the EU read and begin to understand the most important document of the European Union since 2004.
The last leg of this ‘scenic route’ takes us back to the policies and internal actions of the European Union.
Because the focus during the whole reform process has been on decision making and institutional issues, the policy areas and internal actions of the EU, including the internal market, have mainly been reorganised and tidied up, without much substantial reform (with the area of freedom, security and justice the most notable exception).
Therefore, the study of the new EU policies ‘de lege ferenda’ is very much the study of existing Community policies ‘de lege lata’, with some new terminology and a few nuances thrown in for good measure. (Calls for a reform of the substantial areas of action have been heard, but the European leaders have been silent lately. A number of member states signalled the need to reform the Euratom Treaty, treated even more like a stepchild or afterthought by various reform conclaves.)
In other words, do not be surprised if you find few surprises, but still there is cause to study the internal EU actions as they are meant to be, and the preceding stages.
***
The European Convention proposed the following in the draft Treaty establishing a Constitution for Europe (OJ 18.7.2003 C 169/30):
Article III-15 Draft Constitution
When drawing up its proposals with a view to achieving the objectives set out in Article III-14, the Commission shall take into account the extent of the effort that certain economies showing differences in development will have to sustain for the establishment of the internal market and it may propose appropriate measures.
If these measures take the form of derogations, they must be of a temporary nature and must cause the least possible disturbance to the functioning of the internal market.
***
The Treaty establishing a Constitution for Europe merged two Articles of the draft, so technically we compare the text of its fourth paragraph with draft Article III-15, but reading the whole Article III-130 of the Constitutional Treaty reminds us of the context (OJ 16.12.2004 C 310/58):
Article III-130 Constitution
1. The Union shall adopt measures with the aim of establishing or ensuring the functioning of the internal market, in accordance with the relevant provisions of the Constitution.
2. The internal market shall comprise an area without internal frontiers in which the free movement of persons, services, goods and capital is ensured in accordance with the Constitution.
3. The Council, on a proposal from the Commission, shall adopt European regulations and decisions determining the guidelines and conditions necessary to ensure balanced progress in all the sectors concerned.
4. When drawing up its proposals for achieving the objectives set out in paragraphs 1 and 2, the Commission shall take into account the extent of the effort that certain economies showing differences in development will have to sustain for the establishment of the internal market and it may propose appropriate measures.
If these measures take the form of derogations, they must be of a temporary nature and must cause the least possible disturbance to the functioning of the internal market.
***
You are now free to make your own comparison. If you find that the changes from the present TEC to the Lisbon Treaty are of less than mind-boggling proportions, you may be right.
***
For those who want to compare the Treaty of Lisbon with its immediate predecessor, the Constitutional Treaty, there is now a technically advanced alternative available, with differences highlighted.
The bulky Part III of the Constitution, The policies and functioning of the Union, largely corresponding to the TFEU we are studying, has just been launched side by side with the Lisbon Treaty provisions.
This commendable work of an Anonymous compiler is of great service for everyone interested in the latest EU treaty developments. Instead of anonymity he or she should get public recognition. Go to Constitreaty:
http://www.constitreaty.com
***
Article 22b TFEU (ToL), after renumbering Article 27 TFEU, like its predecessors, offers a ‘safety valve’, when proposals to achieve the internal market leading to fiercer competition put too much strain on some (lesser developed) economies. The Commission is given the responsibility to take the effects of its proposals into account.
Basically, the general standards to achieve may be set sufficiently low to allow the less competitive economies to pass muster, or offer transitory periods to achieve higher norms (for instance safety or environmental requirements).
On the other hand, individual derogations (exemptions) are possible according to paragraph 2. These are meant to give one or more member states a grace period to catch up with the others, but they have to fulfil two criteria:
1) They must be temporary.
2) They must cause the internal market the least possible disturbance, namely distort competition as little as possible under the circumstances. In other words, the derogations must pass the test of proportionality.
Within these parameters the Commission and the legislators, the Council and the European Parliament, have wide powers to judge the (political) expediency of the measures.
Ralf Grahn
These softeners, or ‘safety valve’ principles form an integral part of rule making for the single market.
In addition, we get a bird’s eye view of the whole treaty reform process, leading up to the Union policies and internal actions as agreed in the Treaty of Lisbon.
***
In the Treaty of Lisbon (ToL) the intergovernmental conference amended Article 15 of the Treaty establishing the European Community (TEC), which was adopted as Article 22b of the Treaty on the Functioning of the European Union (TFEU). Here is the text of the IGC 2007 (OJ 17.12.2007 C 306/52):
42) An Article 22b shall be inserted, with the wording of Article 15. In the first paragraph, the words ‘during the period of establishment’ shall be replaced by ‘for the establishment’.
***
Even minimal amendments, indeed, especially these, require recourse to the current TEC to make sense (so we turn to the latest consolidated version of the TEU and the TEC in OJ 29.12.2006 C 321 E/49):
Article 15 TEC
When drawing up its proposals with a view to achieving the objectives set out in Article 14, the Commission shall take into account the extent of the effort that certain economies showing differences in development will have to sustain during the period of establishment of the internal market and it may propose appropriate provisions.
If these provisions take the form of derogations, they must be of a temporary nature and must cause the least possible disturbance to the functioning of the common market.
***
We keep in mind that we study Part Three Union policies and internal actions, Title I The internal market, of the TFEU.
Our following task is to consolidate the Article, merging existing contents with amendments, and taking into account that the ToL uses one set of numbering, but indicates a new numbering for future consolidated versions of the treaties (in the tables of eqivalences). The end result should look like this:
Article 22b TFEU (ToL), after renumbering Article 27 TFEU
When drawing up its proposals with a view to achieving the objectives set out in Article 22a [TFEU (ToL), after renumbering Article 26 TFEU], the Commission shall take into account the extent of the effort that certain economies showing differences in development will have to sustain for the establishment of the internal market and it may propose appropriate provisions.
If these provisions take the form of derogations, they must be of a temporary nature and must cause the least possible disturbance to the functioning of the internal market.
***
After spanning the whole distance from the current TEC to the new TFEU, we take a look at two of the individual arches in between, the draft Constitution and the Constitution.
Perhaps a few preliminary general comments are in order. The treaty reform process can be seen as continuous. You can choose to look at the Treaty of Maastricht (Treaty on European Union, TEU) as a first, remarkable stage, which however left unfinished business to which were later added the fact and the prospect of enlargement. These questions were only in part remedied by the Treaty of Amsterdam and the Treaty of Nice, attested to by the fact that the same European Council which agreed on the Nice Treaty felt the need to declare the need for continued reform. With this interpretation we have a more or less continuing reform process from about 1990 until today (2008).
The other point of view would be to see the unsatisfactory Treaty of Nice (signed 2001) as the starting point for a new reform process, with the Declaration of Laeken, the European Convention and its draft Constitution, the IGC 2004 and the Constitutional Treaty, and the retrenchment after failed ratification and the partial relaunch by the IGC 2007 leading to the Lisbon Treaty as the principal stages. Even this shorter history of treaty reform, from December 2000 (Nice) until today (early 2008), presents the picture of seven lean years since no substantial changes have been harvested, namely entered into force (although the accession treaties of 2003 and 2005 should be remembered).
The common denominator has been institutional all along, with decision making structures of the European Union in focus.
The two high points were, in my opinion:
1) The convention method and the work of the first Convention leading to the Charter of Fundamental Rights, and the European Convention (the second one), which produced the draft Constitution. Without being perfect, they embodied more democratic legitimacy than any attempt since the Spinelli draft (1984).
2) The Treaty establishing a Constitution for Europe (2004), where the IGC 2004 achieved some technical improvements and subtracted a few substantial ones, was still remarkable in that it promised substantial reform and a fairly well organised and readable text (although overly long).
Having read countless stories on the ‘failed Constitution’, I think it is time to make a distinction. The Constitutional Treaty was not a failure. Actually, it was as good as it gets at this stage of development, given the strictures of unanimous decision making in a large forum of disparate member states.
Only the ratification process failed, falling victim to the almost impossible requirement to get any meaningful reform approved constitutionally in 27 member states.
The end result is, after the relaunch, the Lisbon Treaty, a sort of ‘Zombie Constitution’, with most of the material contents of the Constitutional Treaty, but without its soul. In addition, the vestments are tattered, riven into a myriad of separate amendments. Only when consolidated versions of the Treaty of Lisbon appear, can a citizen of the EU read and begin to understand the most important document of the European Union since 2004.
The last leg of this ‘scenic route’ takes us back to the policies and internal actions of the European Union.
Because the focus during the whole reform process has been on decision making and institutional issues, the policy areas and internal actions of the EU, including the internal market, have mainly been reorganised and tidied up, without much substantial reform (with the area of freedom, security and justice the most notable exception).
Therefore, the study of the new EU policies ‘de lege ferenda’ is very much the study of existing Community policies ‘de lege lata’, with some new terminology and a few nuances thrown in for good measure. (Calls for a reform of the substantial areas of action have been heard, but the European leaders have been silent lately. A number of member states signalled the need to reform the Euratom Treaty, treated even more like a stepchild or afterthought by various reform conclaves.)
In other words, do not be surprised if you find few surprises, but still there is cause to study the internal EU actions as they are meant to be, and the preceding stages.
***
The European Convention proposed the following in the draft Treaty establishing a Constitution for Europe (OJ 18.7.2003 C 169/30):
Article III-15 Draft Constitution
When drawing up its proposals with a view to achieving the objectives set out in Article III-14, the Commission shall take into account the extent of the effort that certain economies showing differences in development will have to sustain for the establishment of the internal market and it may propose appropriate measures.
If these measures take the form of derogations, they must be of a temporary nature and must cause the least possible disturbance to the functioning of the internal market.
***
The Treaty establishing a Constitution for Europe merged two Articles of the draft, so technically we compare the text of its fourth paragraph with draft Article III-15, but reading the whole Article III-130 of the Constitutional Treaty reminds us of the context (OJ 16.12.2004 C 310/58):
Article III-130 Constitution
1. The Union shall adopt measures with the aim of establishing or ensuring the functioning of the internal market, in accordance with the relevant provisions of the Constitution.
2. The internal market shall comprise an area without internal frontiers in which the free movement of persons, services, goods and capital is ensured in accordance with the Constitution.
3. The Council, on a proposal from the Commission, shall adopt European regulations and decisions determining the guidelines and conditions necessary to ensure balanced progress in all the sectors concerned.
4. When drawing up its proposals for achieving the objectives set out in paragraphs 1 and 2, the Commission shall take into account the extent of the effort that certain economies showing differences in development will have to sustain for the establishment of the internal market and it may propose appropriate measures.
If these measures take the form of derogations, they must be of a temporary nature and must cause the least possible disturbance to the functioning of the internal market.
***
You are now free to make your own comparison. If you find that the changes from the present TEC to the Lisbon Treaty are of less than mind-boggling proportions, you may be right.
***
For those who want to compare the Treaty of Lisbon with its immediate predecessor, the Constitutional Treaty, there is now a technically advanced alternative available, with differences highlighted.
The bulky Part III of the Constitution, The policies and functioning of the Union, largely corresponding to the TFEU we are studying, has just been launched side by side with the Lisbon Treaty provisions.
This commendable work of an Anonymous compiler is of great service for everyone interested in the latest EU treaty developments. Instead of anonymity he or she should get public recognition. Go to Constitreaty:
http://www.constitreaty.com
***
Article 22b TFEU (ToL), after renumbering Article 27 TFEU, like its predecessors, offers a ‘safety valve’, when proposals to achieve the internal market leading to fiercer competition put too much strain on some (lesser developed) economies. The Commission is given the responsibility to take the effects of its proposals into account.
Basically, the general standards to achieve may be set sufficiently low to allow the less competitive economies to pass muster, or offer transitory periods to achieve higher norms (for instance safety or environmental requirements).
On the other hand, individual derogations (exemptions) are possible according to paragraph 2. These are meant to give one or more member states a grace period to catch up with the others, but they have to fulfil two criteria:
1) They must be temporary.
2) They must cause the internal market the least possible disturbance, namely distort competition as little as possible under the circumstances. In other words, the derogations must pass the test of proportionality.
Within these parameters the Commission and the legislators, the Council and the European Parliament, have wide powers to judge the (political) expediency of the measures.
Ralf Grahn
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