“Romagate”: Ali Baba and the Forty Thieves – Lessons by Chantal Brunel

The French “Romagate” affair tells us more about the state of the European Union than the speech of Commission president José Manuel Barroso ever did.



The shouted and whispered words open a treasure cave, as in Ali Baba and the Forty Thieves. They act as our “Open Sesame”, giving us access to most valuable insights.

Even if media attention has shifted to new subjects, it is worthwhile to recall the discussions and to assess their meaning for the EU, using “Romagate” as a learning experience.



Long before Grahnlaw showed president Nicolas Sarkozy a red card (or two), the Euroblog of Fabien l’Européen sent off the UMP spokesperson Chantal Brunel for the following remark:

« la France est une nation souveraine ; on n’a pas des leçons de morale à recevoir d’une commissaire qui représente un petit pays [le Luxembourg] de 350 000 habitants. Nous sommes un grand pays de 57 millions d’habitants ».

If we start from the end, Fabien Cazenave points out that France has 65 million inhabitants.



I find it fascinating that the spokesperson for the government party in an EU member state is unaware of the size of the population in her own country. According to Eurostat figures for 2010, the French population is 64,713,762, which we can round off to the 65 million Cazenave mentions.

Proportionately, the error concerning Luxembourg was even greater, since Eurostat reports a population of 502,066.

However, these misstated facts are just minor imperfections compared to the legal and political ignorance Brunel managed to show in two short sentences.

Commissioner Viviane Reding is from Luxembourg, admittedly a small member state, but she does not represent her country.



On 3 May the members of the European Commission, including commissioner Reding, made the following solemn declaration before the Court of Justice of the European Union, pursuant to Article 17 of the Treaty on European Union and Article 245 of the Treaty on the Functioning of the European Union:

Having been appointed as a Member of the European Commission by the European Council, following the vote of consent by the European Parliament

I solemnly undertake:

• to respect the Treaties and the Charter of Fundamental Rights of the European Union in the fulfilment of all my duties;

• to be completely independent in carrying out my responsibilities, in the general interest of the Union;

• in the performance of my tasks, neither to seek nor to take instructions from any Government or from any other institution, body, office or entity;

• to refrain from any action incompatible with my duties or the performance of my tasks.


I formally note the undertaking of each Member State to respect this principle and not to seek to influence Members of the Commission in the performance of their tasks.

I further undertake to respect, both during and after my term of office, the obligation arising therefrom, and in particular the duty to behave with integrity and discretion as regards the acceptance, after I have ceased to hold office, of certain appointments or benefits.

Even if the solemn oath can be seen as an arcane detail, known only to EU buffs, I would expect those with major responsibilities among members of national parliaments to be reasonably aware of basics concerning the European Union.

According to Article 17 TEU, the Commission shall promote the general interest of the European Union. It shall also ensure the application of the Treaties and EU law, under the control of the Court of Justice of the European Union.

Member states shall respect the independence of the members of the Commission and shall not seek to influence them in the performance of their tasks (Article 245 TFEU).

If a member state fails to fulfil an obligation under the Treaties, the Commission can initiate an infringement procedure (Article 258 TFEU).

When Chantal Brunel defends a government caught red-handed and its ministers misrepresenting the facts, she forgets that France has voluntarily pooled parts of its sovereignty in favour of the rules based system of the European Union.

When Brunel attacks commissioner Reding, she seems to be unaware of the fact that the Commission speaks for the general interest of 501 million EU citizens, not the particular interests of the country of origin of each member of the college.

The European Union shall respect the equality of member states before the Treaties (Article 4 TEU), so the population size of the country does not even enter into the equation of adherence to the rules. Morally, one could argue, a founding member could be expected to lead by example.

In just two sentences, Chantal Brunel has taught us many valuable lessons.



Among the several reactions from the UMP government majority, the Euroblog of Euros du Village was even ready to declare Brunel the “winner”, in: France : les ravages du déshonneur.




Ralf Grahn

Eurobarometer: Separating the wheat from the chaff

Since the spring 2009 Eurobarometer, EU citizens see unemployment and the economic situation as the main worries facing their country. In May 2010 rising prices (inflation) are still the principal concern at a personal level (although with great differences between countries), followed by the economic situation and unemployment.

About four out of five respondents feel that the national, the EU and the world economy are in a bad shape, and more than a third experience the domestic employment situation as “very bad”.



It’s the economy, stupid


Now put yourself in the position of the European Commission, treaty bound to promote the general interest of the European Union.



Confronted with the First Results of the Spring 2010 Standard Eurobarometer 73, could you realistically contemplate ignoring or even downplaying the massive evidence of public opinion, what Europeans are worried about?

Writing your press release, could you disregard that these citizens expect more from the European Union than from their national governments or international financial institutions? (We are going to return to the expectations in a future blog post.)



It’s the economy, stupid, said a curious Yankee in Europe’s court: US and EU citizens share common priorities about economic woes.

Could you refuse to take notice, in good faith?

Hardly.



Back to square one

Discussion can improve our understanding, if we are willing to look at the evidence and test various claims in order to arrive at reasonable interpretations and conclusions.

Big ifs, it seems.

The hyperactive Swedish libertarian blogger Henrik Alexandersson works for the Pirate Party (Green Group) MEP Christian Engström in the European Parliament, and he produces a mass of blog entries on important issues, such as data retention, privacy, netizens’ rights and intellectual property rights.



To keep his libertarian juices flowing, he regularly takes swipes at the European Union. In a blog post yesterday he accused the Commission of cheating in a press release: EU fifflar med opinionen.

Henriksson does not mention the Eurobarometer poll. He does not even specify the ‘dishonest’press release or link to it.



He disregards the whole Eurobarometer controversy and the later discussion, uncritically using Open Europe’s blog post as his only source and link.

No hearing the other side - Audiatur et altera pars - for Henriksson.



Almost a week from the EU Commission’s press release (26 August 2010, IP/10/1071; available in 22 languages) and Open Europe’s vehement attack, Henriksson brings the discussion back to square one, having learnt nothing in the meantime.

Henriksson may have indulged his readers by feeding their prejudices, but he did nothing to make the discussion move forward.



The attitude of the French blog La lettre volée is as cavalier, dismissing the Commission’s interpretation as Orwellian, without caring to look at the facts and arguments.

Pretty useless, in fact.



Commission press release



I already opined that it would have been unbelievable if the European Commission had disregarded the massive worries of Europeans - economic ones - and ignored citizens’ expectations concerning EU level action, but the press release did actually mention sinking support for EU membership, even if discreetly and in context:

When asked about the benefits of EU membership, 49% of Europeans said in May that EU membership of their country was a “good thing” (-4 compared to autumn 2009). Public support for EU membership was still higher than in 2001, when following the downturn after the burst of the "Internet bubble", public support for EU membership stood at 48%.

The survey also found that in May 2010 trust in the EU institutions remained higher compared to national governments or national parliaments (42% vs. 29% and 31%, respectively), even though confidence in the EU fell at the height of the crisis (to 42% from 48% in autumn 2009). Trust was most pronounced in Estonia (68%), Slovakia (65%), Bulgaria and Denmark (61%), whilst it was lowest in the United Kingdom (20%).

In addition, confidence in the EU and national governments/parliaments from spring 2001 to spring 2010 was depicted in one of the few selected charts in the press release, which also contained a link to the first full results and country factsheets.




Having sorted out the chaff, let us move on to the wheat.




Ralf Grahn



P.S. Comments relevant to the topic discussed in each Grahnlaw blog post are most welcome. However, the number of spam comments has skyrocketed. This is the sad reason for comment moderation, so it may take a while before your valued comment appears.

It is easier to understand a language than to use it correctly. As Eurobloggers we could and should promote interaction among Europeans across borders and between linguistic communities. Grahnlaw has adopted a multilingual comment policy:

I do my best to read comments in Danish, Dutch, English, Finnish, French, German, Italian, Norwegian, Portuguese, Spanish or Swedish, even if the Grahnlaw blog and my possible replies are in English.

EU procurement law: Exclusive rights

The European Community (European Union) Procurement Directive 2004/18/EC does not apply to public service contracts awarded by for instance the State Government to another government body based on an exclusive right.

These monopoly rights have to be compatible with the Treaty establishing the European Community. Therefore we look at some documents concerning public service obligations in the context of services of general economic interest (SGEI) and services of general interest (SGI).

Then we try to clarify other aspects related to exclusive rights.




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Article 18

When one public body awards a contract to another public body on the basis of a legal monopoly right, the Procurement Directive 2004/18/EC does not apply to this public service contract.

This exclusive right must fulfil three criteria:

1. The exclusive right is given by one contracting authority to another contracting authority
2. The monopoly has to be based on a legal act.
3. The exclusive right must be compatible with the EC Treaty.

This is the text of Article 18 of the Procurement Directive, officially Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts (originally published OJEU 30.4.2004 L 134/114, but as always my references are to the latest consolidated version, of 15 September 2008):


Article 18
Service contracts awarded on the basis of an exclusive right

This Directive shall not apply to public service contracts awarded by a contracting authority to another contracting authority or to an association of contracting authorities on the basis of an exclusive right which they enjoy pursuant to a published law, regulation or administrative provision which is compatible with the Treaty.



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Public service contract

What is meant by a public service contract?

Chapter III of the Procurement Directive provides for the procedure applicable to public service contracts. The services are set out in Annex II. The services listed in Annex II A are normally subject to the contract award procedures (Article 20). The application of the Directive is restricted with regard to services listed in Annex II B (Article 21).





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Compatible with the treaty

An exclusive right must be compatible with the Treaty establishing the European Community (TEC).

This brings us close to the fascinating discussion about services of general economic interest (SGEI), provided for in Article 16 TEC (in the Treaty of Lisbon Article 14 of the Treaty on the Functioning of the European Union; TFEU).

If we include services with a more non-economic character, we encounter services of general interst (SGI).

For a discussion of both economic and non-economic services of general interest (public services; public service obligations), you can turn to the Commission’s Communication of 20 November 2007 COM(2007) 725 final Accompanying the Communication on "A single market for 21st century Europe" Services of general interest, including social services of general interest: a new European commitment:

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2007:0725:FIN:EN:PDF


As the Commission points out (page 3 to 4):

Services of general interest cover a broad range of activities, from the large network industries such as energy, telecommunications, transport, audiovisual broadcasting and postal services, to education, water supply, waste management, health and social services. These services are essential for the daily life of citizens and enterprises, and reflect Europe's model of society. They play a major role in ensuring social, economic and territorial cohesion throughout the Union and are vital for the sustainable development of the EU in terms of higher levels of employment, social inclusion, economic growth and environmental quality.

Although their scope and organisation vary significantly according to histories and cultures of state intervention, they can be defined as the services, both economic and non-economic, which the public authorities classify as being of general interest and subject to specific public service obligations. This means that it is essentially the responsibility of public authorities, at the relevant level, to decide on the nature and scope of a service of general interest. Public authorities can decide to carry out the services themselves or they can decide to entrust them to other entities, which can be public or private, and can act either for-profit or not for-profit.

At the same time, providers of these services must respect the rules laid down in the EC Treaty and in secondary EU law where these are applicable. Moreover, given their EU dimension, a number of network industries which perform services of general economic interest are now subject to sector-specific EU directives. In partnership with national, regional and local authorities, the EU therefore has a role to play in framing the principles and conditions for the operation of a wide range of services. This shared responsibility is reflected in the Treaty and will be underlined in the Protocol on services of general interest to be annexed to the Treaty of Lisbon.



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Social services

In an accompanying Commission Staff Working Document procurement rules are discussed in relation to social services.

See SEC(2007) 1514 (Brussels, 20.11.2007) Frequently asked questions concerning the application of public procurement rules to social services of general interest Accompanying document to the Communication on "Services of general interest, including social services of general interest: a new European commitment", available here:

http://ec.europa.eu/services_general_interest/docs/sec_2007_1514_en.pdf


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State aid rules

Compatibility with the treaty (TEC) for exclusive rights raises questions about the economic conditions attached to these public service obligations.

From this viewpoint it may be useful to study the Commission Staff Working Document SEC(2007) 1516 (Brussels, 20.11.2007) Frequently asked questions in relation with Commission Decision of 28 November 2005 on the application of Article 86(2) of the EC Treaty to State aid in the form of public service compensation granted to certain undertakings entrusted with the operation of services of general economic interest, and of the Community Framework for State aid in the form of public service compensation, available here:

http://ec.europa.eu/services_general_interest/docs/sec_2007_1516_en.pdf






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Commission Guide on exclusive right

The Commission’s Guide to the Community rules on public procurement of services offered the following brief annotation based on the old Services Directive 92/50/EEC (page 61):


7. Public service contracts made with another government body by reason of an exclusive right held by the latter

The Services Directive does not apply to public service contracts awarded to an entity which is itself a contracting authority, on the basis of an exclusive right which the latter enjoys pursuant to a published law, regulation or administrative provision which is compatible with the Treaty.


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Indicative scope: Contracting authorities

Article 18 of the Procurement Directive is concerned with exclusive rights between two bodies governed by public law. Article 1(9) defines these bodies and refers to the indicative list of such contracting authorities notified by the member states and set out in the recently updated Annex III. Because all contracting authorities must be notified to the Commission, Annex III should include the ones operating on the basis of an exclusive right:

9. ‘Contracting authorities’ means the State, regional or local authorities, bodies governed by public law, associations formed by one or several of such authorities or one or several of such bodies governed by public law.

A ‘body governed by public law’ means any body:

(a) established for the specific purpose of meeting needs in the general interest, not having an industrial or commercial character;

(b) having legal personality; and

(c) financed, for the most part, by the State, regional or local authorities, or other bodies governed by public law; or subject to management supervision by those bodies; or having an administrative, managerial or supervisory board, more than half of whose members are appointed by the State, regional or local authorities, or by other bodies governed by public law.

Non-exhaustive lists of bodies and categories of bodies governed by public law which fulfil the criteria referred to in (a), (b) and (c) of the second subparagraph are set out in Annex III. Member States shall periodically notify the Commission of any changes to their lists of bodies and categories of bodies.


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Implementation and monitoring

Correct and timely implementation of European Community (European Union) law is one of the main obligation of member states. This includes an obligation to communicate to the Commission not only the legal act transposing the Directive, but the main provisions of national law which they adopt in the field covered by the Directive. Article 80 of the Procurement Directive 2004/18/EC sets out the requirements for implementation in the following way:


Article 80
Implementation

1. The Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive no later than 31 January 2006. They shall forthwith inform the Commission thereof.

When Member States adopt these measures, they shall contain a reference to this Directive or be accompanied by such reference on the occasion of their official publication. The methods of making such reference shall be laid down by Member States.

2. Member States shall communicate to the Commission the text of the main provisions of national law which they adopt in the field covered by this Directive.


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Monitoring

The provisions adopted in the field covered by the Procurement Directive logically extend to the provisions excluding public service contracts between contracting authorities based on an exclusive right. In addition, legal remedies have to be offered:



Article 81
Monitoring mechanisms

In conformity with Council Directive 89/665/EEC of 21 December 1989 on the coordination of the laws, regulations and administrative provisions relating to the application of review procedures to the award of public supply and public works contracts, Member States shall ensure implementation of this Directive by effective, available and transparent mechanisms.

For this purpose they may, among other things, appoint or establish an independent body.


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Private operator with exclusive rights

We can contrast the above granting of an exclusive by one public body to another body governed by public law with the award of an exclusive right to a private operator to carry out a public service activity, as set out in Article 3 of the Procurement Directive:


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.

Negotiated procedure

We take note of Article 31(1)(b) of the Procurement Directive 2004/18/EC, which allows the use of the negotiated procedure when awarding contracts in certain circumstances:

Article 31
Cases justifying use of the negotiated procedure without publication of a contract notice

Contracting authorities may award public contracts by a negotiated procedure without prior publication of a contract notice in the following cases:

(1) for public works contracts, public supply contracts and public service contracts:

-----
(b) when, for technical or artistic reasons, or for reasons connected with the protection of exclusive rights, the contract may be awarded only to a particular economic operator;
-----


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Commission Guide on negotiated procedure

The Commission’s Guide to the Community rules on public procurement of services offered the following explanation of the exception allowing the negotiated procedure without issuing a contract notice, based on the old Services Directive 92/50/EEC (page 22 to 23):

3.3.2.2 When, for technical or artistic reasons, or for reasons connected with the protection of exclusive rights, the services may be provided only by a particular service provider

This is a very narrow exception and applies only in those cases where it can be said that to invite tenders or expressions of interest would be abusive because there is only one service provider who can provide the particular service. The safest cases where the exception can be used are those where a particular service provider has the exclusive right to carry out a particular service. However, the exception does not apply if the exclusive right is licensed to other parties or can reasonably be obtained on licence. Thus, for example, a sculptor would have the exclusive right to repair or remake a work of art sculpted by himself, but he would not have the exclusive right to produce photographs of the work if he had already licensed other parties to produce such photographs.

The cases where, in the absence of exclusive rights, technical or artistic reasons justify recourse to a negotiated procedure are very narrow indeed. An example might be found where a local authority had already commissioned a work of art and later decided to commission a second work of art to make a "pair". In such circumstances it would be necessary to show for objective reasons that it could not be envisaged that the second work of art be provided by a different artist.



Ralf Grahn

EU Treaty of Lisbon: European Commission

The European Union has become a victim of its own success. Institutional arrangements designed for the original Communities with six Member States have had to accommodate 27 members and the prospect of more entrants. Successive Treaty reforms, including the Lisbon Treaty, have tried to address the needs of an enlarged Union.

The Member States have, reluctantly, agreed to limit the future size of the Commission, but they have not been able to renounce the principle of national representation. Consequently, the Treaty of Lisbon introduces a system of equal rotation from 2014, which means that the next Commission, from 2009, is going to have one representative from each Member State.

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Articles 211 to 219 of the existing Treaty establishing the European Community (TEC; latest consolidated version OJ 29.12.2006, C 321 E) deal with the Commission.

The Convention proposed two Articles on the Commission, I-25 on the European Commission and I-26 on its President.

In the Treaty establishing a Constitution for Europe (OJ 16.12.2004, C 310) the Member States signed on to Article I-26 The European Commission and Article I-27 The President of the European Commission.

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I decided not to compare the various stages from the existing Treaties to the Lisbon Treaty. A few general comments from an EU citizen:

The European Commission shall promote the general interest of the Union. Subject to democratic scrutiny by the European Parliament, the Commission’s mission is, or should be, near the interests of the citizens of the Union.

On the whole, the Commission’s powers to propose legislation and to act as guardian of the Treaties, is in the interests of the citizens of the EU.

The June 2009 elections to the European Parliament are going to become more interesting if the European political parties nominate their candidates for the office of President of the Commission. But the rest of the Commission is still going to consist of Member State appointees.

A long term view would be to create a democratically accountable executive based on the election results. This would call for further reforms making clearer distinctions between political leadership (norms, resources, objectives) and more apolitical regulatory and management functions (delegated to various bodies).

But would politically responsible members of the Commission be less conscious of the general interest or less independent than the present ones, who are more or less directly appointed by the Member States?

The new ‘Commission’ would shoulder the executive powers of the Union, including foreign, security and defence policy. Democratic scrutiny would be exercised by a European Parliament with a directly elected first chamber representing the citizens and a second chamber representing the Member States.

The Lisbon Treaty is a halfway house between democratic accountability and Member States’ representation concerning the European Commission.

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The Treaty of Lisbon (OJ 17.12.2007, C 306) inserts an Article 9d into the Treaty on European Union (TEU).


Article 9d
1. The Commission shall promote the general interest of the Union and take appropriate initiatives to that end. It shall ensure the application of the Treaties, and of measures adopted by the institutions pursuant to them. It shall oversee the application of Union law under the control of the Court of Justice of the European Union. It shall execute the budget and manage programmes. It shall exercise coordinating, executive and management functions, as laid down in the Treaties. With the exception of the common foreign and security policy, and other cases provided for in the Treaties, it shall ensure the Union's external representation. It shall initiate the Union's annual and multiannual programming with a view to achieving interinstitutional agreements.

2. Union legislative acts may only be adopted on the basis of a Commission proposal, except where the Treaties provide otherwise. Other acts shall be adopted on the basis of a Commission proposal where the Treaties so provide.

3. The Commission's term of office shall be five years.

The members of the Commission shall be chosen on the ground of their general competence and European commitment from persons whose independence is beyond doubt.

In carrying out its responsibilities, the Commission shall be completely independent. Without prejudice to Article 9 E(2), the members of the Commission shall neither seek nor take instructions from any Government or other institution, body, office or entity. They shall refrain from any action incompatible with their duties or the performance of their tasks.

4. The Commission appointed between the date of entry into force of the Treaty of Lisbon and 31 October 2014 shall consist of one national of each Member State, including its President and the High Representative of the Union for Foreign Affairs and Security Policy who shall be one of its Vice-Presidents.

5. As from 1 November 2014, the Commission shall consist of a number of members, including its President and the High Representative of the Union for Foreign Affairs and Security Policy, corresponding to two thirds of the number of Member States, unless the European Council, acting unanimously, decides to alter this number.

The members of the Commission shall be chosen from among the nationals of the Member States on the basis of a system of strictly equal rotation between the Member States, reflecting the demographic and geographical range of all the Member States. This system shall be established unanimously by the European Council in accordance with Article 211a of the Treaty on the Functioning of the European Union.

6. The President of the Commission shall:

(a) lay down guidelines within which the Commission is to work;

(b) decide on the internal organisation of the Commission, ensuring that it acts consistently, efficiently and as a collegiate body;

(c) appoint Vice-Presidents, other than the High Representative of the Union for Foreign Affairs and Security Policy, from among the members of the Commission.

A member of the Commission shall resign if the President so requests. The High Representative of the Union for Foreign Affairs and Security Policy shall resign, in accordance with the procedure set out in Article 9 E(1), if the President so requests.

7. Taking into account the elections to the European Parliament and after having held the appropriate consultations, the European Council, acting by a qualified majority, shall propose to the European Parliament a candidate for President of the Commission. This candidate shall be elected by the European Parliament by a majority of its component members. If he does not obtain the required majority, the European Council, acting by a qualified majority, shall within one month propose a new candidate who shall be elected by the European Parliament following the same procedure.

The Council, by common accord with the President-elect, shall adopt the list of the other persons whom it proposes for appointment as members of the Commission. They shall be selected, on the basis of the suggestions made by Member States, in accordance with the criteria set out in paragraph 3, second subparagraph, and paragraph 5, second subparagraph.

The President, the High Representative of the Union for Foreign Affairs and Security Policy and the other members of the Commission shall be subject as a body to a vote of consent by the European Parliament. On the basis of this consent the Commission shall be appointed by the European Council, acting by a qualified majority.

8. The Commission, as a body, shall be responsible to the European Parliament. In accordance with Article 201 of the Treaty on the Functioning of the European Union, the European Parliament may vote on a motion of censure of the Commission. If such a motion is carried, the members of the Commission shall resign as a body and the High Representative of the Union for Foreign Affairs and Security Policy shall resign from the duties that he carries out in the Commission.

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The High Representative of the Union for Foreign Affairs and Security Policy is next.


Ralf Grahn