EU TFEU: Equality for investors

The EU Treaty of Lisbon accords capital investors from other member states equal treatment with nationals of the state of the company or firm. This declaratory or clarifying provision, Article 294 of the Treaty establishing the European Community, is moved into a more logical context within the Treaty of Lisbon, but without added substance.

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In the Treaty of Lisbon (ToL), point 55, the intergovernmental conference (IGC 2007) decided to shift the location of Article 294 of the Treaty establishing the European Community (TEC). See Official Journal, OJ, 17.12.2007 C 306/55:

55) An Article 48a shall be inserted, with the wording of Article 294.

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Our first task is to look up Article 294 TEC, in the latest consolidated version of the treaties, TEU and TEC, in OJ 29.12.2006 C 321 E/173. We notice that the Article is located in TEC Part Six ‘General and final provisions’, and the contents are the following:

Article 294 TEC

Member States shall accord nationals of the other Member States the same treatment as their own nationals as regards participation in the capital of companies or firms within the meaning of Article 48, without prejudice to the application of the other provisions of this Treaty.

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There is no express amendment of the wording and the only horizontal amendment is to replace ‘this Treaty’ by ‘the Treaties’ according to point 2(b)) in the Lisbon Treaty. We check the numbering in the original Lisbon Treaty and the renumbering for the coming consolidated versions of the provision and the referral, and we add the location of the provision within the treaty for ease of reading. The treaty itself is renamed the Treaty on the Functioning of the European Union (TFEU), and here is what the provision should look like:


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 48a TFEU (ToL), renumbered Article 55 TFEU

Member States shall accord nationals of the other Member States the same treatment as their own nationals as regards participation in the capital of companies or firms within the meaning of Article 48 [ToL, renumbered Article 54 TFEU], without prejudice to the application of the other provisions of the Treaties.

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The European Convention initiated the tidying up exercise by placing the provision at the end of Subsection 2 ‘Freedom of establishment’, as Article III-28. Naturally, the preceding Article of the draft Treaty establishing a Constitution for Europe referred to was numbered differently and it spoke of the other provisions of the Constitution, but the contents remained the same (OJ 18.7.2003 C 169/33).

***

The IGC 2004 followed the lead of the draft Constitution in every aspect save one. The Treaty establishing a Constitution for Europe limited its referral to the second paragraph of the preceding Article (OJ 16.12.2004 C 310/63):

Article III-143 Constitution

Member States shall accord nationals of the other Member States the same treatment as their own nationals as regards participation in the capital of companies or firms within the meaning of the second paragraph of Article III-142, without prejudice to the application of the other provisions of the Constitution.

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In other words, the IGC 2007 followed the lead of the European Convention in finding more amenable surroundings for the Article, but by taking over the wording of the present TEC it did not follow the Constitutional Treaty in referring only to the second paragraph of the preceding Article.

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We can easily agree with the conclusion in the ‘Comparative table of the current EC and EU Treaties as amended by the Treaty of Lisbon (Cm 7311; page 8) about Article 55 TFEU (Article 48a ToL): In substance the same as Article 294 TEC.

But we would like to offer a few hints to the readers who want to know what the present (and future) provision might mean in practice.

Not much, it seems. The principle of equal treatment for capital investors follows from other treaty provisions, so the Article is only declaratory. I quote Rudolf Streinz, EUV/EGV, Vertrag über die Europäische Union und Vertrag zur Gründung der Europäischen Gemeinschaft (Verlag C.H. Beck, München 2003; page 2434):

„Art. 294 EGV hat heute keine praktische Bedeutung mehr. Bestenfalls kann der Vorschrift klarstellende Bedeutung zukommen, dass nicht nur die Gründung und Leitung von Unternehmen (vgl. Art. 43 EGV), sondern auch das Halten einer Beteiligung unter die Freiheitsberechtigungen des Vertrages fallen. In seinem persönlichen und sachlichen Anwendungsbereich ist Art. 294 EGV aber subsidiär gegenüber den Grundfreiheiten. Die dem sachlichen Anwendungsbereich nach relevante Niederlassungsfreiheit und die Kapitalverkehrsfreiheit gehen zudem über den Gewährleistungsinhalt des Art. 294 EGV hinaus, weil sie nicht nur Diskriminierungen nach der Staatsangehörigkeit, sondern jegliche Beschränkung verbieten.“

In other words, other provisions on free movement cater for this and more. In due time, we are going to look at the provisions with relevance.


Ralf Grahn

Consolidated EU Lisbon Treaty Update April 2008

In a short while consolidated versions of the EU’s Treaty of Lisbon are going to be published, with web publication 15 April 2008 followed by book versions 9 May 2008 (Europe day), presumably in 23 treaty languages.

The Council has made a wise decision by relinquishing its absurd and counter-productive opposition to readable treaties, but its marketing of this new-found openness could have been more vigorous and transparent.

The Commission quietly updated its Questions and Answers section about the Lisbon Treaty in the following way:

“A consolidated version of the Treaty will be published on 15 April on the web and on 9 May on paper version.”

http://europa.eu/lisbon_treaty/faq/index_en.htm#20

Margot Wallström, at least, highlighted the importance of readable, consolidated versions of the Lisbon Treaty, both the IIEA’s and the coming ‘official’ version, when she spoke to the Irish Institute of European Affairs in Brussels, 7 April 2008:

http://europa.eu/rapid/pressReleasesAction.do?reference=SPEECH/08/180&format=HTML&aged=0&language=EN&guiLanguage=en

One small point where Wallström was a bit too selective, in my opinion, concerned the publication of consolidations:

The latest treaty to have entered into force is the Treaty of Nice, signed in 2001. Outside the Council web communications have advanced considerably since then.

And the draft Constitution and the Constitutional Treaty, which never entered into force, were quickly published (and they were already readable, ‘consolidated’ treaties).

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The Lisbon Treaty is arguably the most important European Union document since 2004

As a tribute to those individuals and organisations who have served the public by preparing and publishing consolidated versions in a considerable number of EU languages, I want to publish a list of the consolidations of the Lisbon Treaty I am aware of, often thanks to the help of kind readers.

***


The languages are mentioned in alphabetical order in English:


Danish

The EU information of the Danish parliament communicates actively. Some information is available in English, too. The consolidated Lisbon Treaty is an update.

Folketingets EU-Oplysning: Sammenskrevet udgave af udkastet til Lissabon-traktaten og det gaeldande traktatunderlag; Bind 1 Traktater, Bind 2 Protokoller og erklaeringer;
http://www.eu-oplysningen.dk/emner/reformtraktat/reform/sammenskrevet/


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Dutch

The DJ Nozem blog pointed me towards this new consolidation in Word format, compiled by René Barents and posted on the web site of the daily NRC Handelsblad.

René Barents: Geconsolideerde teksten van het Verdrag betreffende de Europese Unie en het Verdrag betreffende de werking van de Europese Unie zoals gewijzigd door het Verdrag van Lissabon

http://www.nrc.nl/redactie/Europa/verdraglissabon_barents.doc

I want to thank Anonymous who brought to our attention that the government of the Netherlands has published a complete Dutch version of the Treaty of Lisbon on the web pages of the Foreign Ministry,

www.minbuza.nl

The web pages offer us the TEU, TFEU, Euratom Treaty, the Protocols and the Final Act:

1. Verdrag betreffende de Europese Unie
2. Verdrag betreffende de werking van de Europese Unie (voorheen EG-Verdrag)
3. Verdrag tot oprichting van de Europese Gemeenschap voor Atoomenergie (Euratom)
4. Protocollen gehecht aan het Verdrag betreffende de Europese Unie, het Verdrag betreffende de werking van de Europese Unie en/of het Verdrag tot oprichting van de Europese Gemeenschap voor Atoomenergie
5. Slotakte bij het Verdrag van Lissabon, inclusief Verklaringen

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English

IIEA

Peadar ó Broin at the Institute of International and European Affairs (Dublin, Ireland) has produced a complete updated consolidation of the amended treaties, including the protocols and annexes, in a format easy to read (pdf).

Treaty on European Union
Treaty on the Functioning of the European Union
Annexes to the EU and FEU Treaties
Protocols to the EU and FEU Treaties and, where appropriate, to the EAEC Treaty

Go to http://www.iiea.com


Statewatch

Professor Steve Peers has painstakingly compiled an annotated version consisting of several files for the Statewatch Observatory on the EU Constitution and the Reform Treaty, where similarities and differences between the different reform stages are highlighted. Informative, if you know what you are looking for.

Go to http://www.statewatch.org


FCO

The UK Foreign and Commonwealth Office published a complete consolidated version of the Treaty of Lisbon. The ratification debate in the House of Commons is ongoing.

The FCO web pages on Britain in the EU contain both general information on the Reform Treaty and answers on specific questions in addition to the consolidation I just mentioned. For the consolidated version of the Lisbon Treaty, see Command Paper 7310 ‘Consolidated texts of the EU Treaties as amended by the Treaty of Lisbon’:

http://www.fco.gov.uk/Files/kfile/FCO_PDF_CM7310_ConsolidatedTreaties.pdf

The FCO also published Command Paper 7311 ‘A comparative table of the current EC and EU Treaties as amended by the treaty of Lisbon’, which briefly sets out the similarities and differences between the Lisbon Treaty and the other relevant Treaties article by article. Available through the Official Documents web page (as is Cm 7310 mentioned above):

http://www.official-documents.gov.uk/


Markus Walther

Markus Walther, a German student from Leipzig, who produced and published a German consolidated version of the EU Treaty of Lisbon on his web site, posted an English readable consolidated version as well (a preliminary document without protocols and charter).

Go to http://www.mwalther.net/europa/eulaw-lisbon-mwalther.pdf


Open Europe

Open Europe produced a consolidated version with the Treaty of Lisbon and the Treaty establishing a Constitution for Europe presented side by side for convenient comparison.

Open Europe: The Lisbon Treaty and the European Constitution: A side-by-side comparison; January 2008;

http://www.openeurope.org.uk/research/comparative.pdf


Constitreaty.com

The web site and accompanying blog at Constitreaty.com is an ongoing work to present the Constitutional Treaty and the Lisbon Treaty side by side for easy comparison, with highlighting and tracked changes facilitating the task.

When I checked a few moments ago, Parts I to III of the Constitution were available (with Part IV and the Final Act under construction). Try it out at:

http://www.constitreaty.com/


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Finnish

The government and Europe Information, of the Ministry for Foreign Affairs, has promised a consolidated version of the Lisbon Reform Treaty, in Finnish and Swedish by mid April, which coincides with the publishing of all web versions by the Council.

I have not noticed if the Finnish government intends to do anything beyond the general Council plans.

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French

Europa-EU-Audience

The bilingual web site en.europa-eu-audience found two unofficial parallel versions, leaked from the European Parliament, of the amending treaties in French, side by side with the current ones:

http://europa-eu-audience.typepad.com/fr/files/EP_TCE_versus_TFU_Final.doc

http://europa-eu-audience.typepad.com/fr/files/EP_TUE_versus_TUE_final.doc

By the way, the site is worth following because of its keen interest on availability of EU sources and the evolution of web informatics.


Assemblée nationale

Assemblée nationale : Rapport d’information sur les modifications apportées par le traité de Lisbonne au traité sur l’Union européenne et au traité instituant la Communauté européenne, par M. Axel Poniatowski ; No 439, 28 novembre 2007 ;

http://www.assemblee-nationale.fr/13/pdf/rap-info/i0439.pdf


Later, the French National Assembly has presented a consolidated version of the Treaty of Lisbon side by side with the current treaties. Look for Assemblée Nationale: Rapport d’information déposé par la Délégation de l’Assemblée Nationale pour l’Union Européenne, sur le traité de Lisbonne ; No 562, Tome 2, 8 janvier 2008 :

http://www.assemblee-nationale.fr/13/dossiers/traite_lisbonne_due_information.asp


Jean-Luc Sauron

Jean-Luc Sauron: Comprendre le Traité de Lisbonne – Texte consolidé intégral des traités – Explications et commentaires ; Gualino éditeur, Paris 2008 ; 351 p. (Prix 20 €)

The book (pages 141 – 351) contains, in a handy format, consolidated versions of the amended Treaty on European Union, the Treaty on the Functioning of the European Union, the Charter of Fundamental Rights and the Explanations relating to it as well as a modest Index.

In principle, the Treaty texts are based on a version from 30 October 2007, but footnotes take later modifications into account.

Christine Kaddous and Fabrice Picod

Traité sur l’Union européenne / Traité sur le fonctionnement de l’Union européenneecueil de textes (Published 18 February 2008) Staempfli SA (Berne), Bruylant (Bruxelles), L.G.D.J. (Paris) 342 pages, CHF 59.-, 43 euros, ISBN 978-3-7272-9144-9

A complete consolidation in French.

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German

Markus Walther

Markus Walther: Das Primärrecht der Europäischen Union; Endfassung, Stand 18. Dezember 2007; (updated after signing)

http://www.mwalther.net/union.html


Klemens H. Fischer

The book “Der Vertrag von Lissabon – Text und Kommentar zum Europäischen Reformvertrag”, by Klemens H. Fischer (Nomos, Stämpfli Verlag and Verlag Österreich) describes the EU reform process and especially the IGC 2007 before it presents consolidated and annotated versions of the TEU and TFEU including protocols and declarations. The accompanying CD-Rom contains background material and three different consolidations of each treaty: with amendments highlighted and footnotes, with amendments highlighted and a neutral consolidated version.

Zukunft Europa

Just a short while ago Tünde commented on an old post that there is another German consolidated version of the Treaties on:

http://www.zukunfteuropa.at/site/5895/default.aspx

As far as I understand, Klemens H. Fischer has allowed Zukunft Europa to make his consolidation available to the public on the web.



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Hungarian

Two sources reported that the Hungarian government has published a consolidation of the Lisbon Treaty, although was not able to verify it. But I encourage anyone with the linguistic and technical skills to search (and to report back).


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Irish Gaelic

A consolidation in Irish Gaelic has been announced by the Institute of International and European Affairs, Dublin (but I have not been able to locate it).

Go to http://www.iiea.com

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Portuguese

Peadar ó Broin reported on a version in Portuguese also, prepared by the Portuguese Ministry of Foreign Affairs:

http://www.eu2007.pt/NR/rdonlyres/1D96311C-F90D-4E97-B355-DFEA0DD1ABEA/0/TLconsolidado.pdf

Alternatively, you can link to the text via the website for the Ministry of Foreign Affairs:

http://www.mne.gov.pt/

Or you can link via the website for the Portuguese Presidency of 2007:

http://www.eu2007.pt/UE/vPT/Presidencia_Conselho/TratadoLisboa.htm


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Spanish

Real Instituto Elcano offers a complete updated consolidation, with protocols and declarations, in Spanish, compiled by José Martín y Pérez de Nanclares and Mariola Urrea Corres. The former has written an introductory study worth reading.

http://www.realinstitutoelcano.org


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Swedish

Sieps – Svenska institutet för europapolitiska studier, the Swedish Institute for European Policy Studies, has published a complete consolidated Swedish language version of the Lisbon Treaty.

http://www.sieps.se

Go to the new Sieps web pages dedicated to the Lisbon Treaty:

http://www.lissabonfordraget.se/


Ladda ned Lissabonfördraget - Konsoliderad version av EU:s fördrag (pdf)
Ladda ned Lissabonfördraget – Protokoll mm (pdf)


The publisher SNS Förlag has published a handy pocket version of the Treaty of Lisbon in Swedish. Having received my own copy, I am happy to announce that it contains the Charter of Fundamental Rights, Protocols, a Table of equivalences and a five page Register in addition to the consolidated treaty texts.


http://www.sns.se


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I am most grateful, if you want to share your knowledge about the Treaty of Lisbon as well as EU law and politics generally with me and other EU citizens: books and resources, such as official documents from the member states’ governments and parliaments, scholarly assessments and popular literature, plus information on the ratification processes.


Ralf Grahn

EU TFEU: Right of establishment for companies and firms

It looks quite harmless: Companies and firms are offered the same freedom of establishment as natural persons within the European Community (European Union).

News and debate tend to focus on (unexpected) change, but the EU’s Treaty of Lisbon is as important for what it preserves, like the equal treatment of commercial companies.

First, we look at the treaty reform cycle from the current Treaty establishing the European Community, via the draft Constitution and the Constitutional Treaty to the Lisbon Treaty. Then, we give a few hints on further reading, which show that seemingly boring and inoffensive provisions are anything but that from the viewpoint of enterprises and tax authorities.


***

When we reach Article 48 of the Treaty establishing the European Community (TEC), we see that the intergovernmental conference (IGC 2007) makes no express amendment in the Treaty of Lisbon (ToL) to what is to become the Treaty on the Functioning of the European Union (TFEU). Cf. Official Journal, OJ 17.12.2007 C 306/55.

***

We find Article 48 TEC in force in the latest consolidated version of the treaties, TEU and TEC, OJ 29.12.2006 C 321 E/61:

Article 48 TEC

Companies or firms formed in accordance with the law of a Member State and having their registered office, central administration or principal place of business within the Community shall, for the purposes of this Chapter, be treated in the same way as natural persons who are nationals of Member States.

‘Companies or firms’ means companies or firms constituted under civil or commercial law, including cooperative societies, and other legal persons governed by public or private law, save for those which are non-profit-making.

***

There is no express amendment and only one horizontal one (‘Community’ replaced by ‘Union’ according to point 2(a)) in the Lisbon Treaty. We check the numbering in the original Lisbon Treaty and the renumbering for the coming consolidated versions, and we add the location of the provision within the treaty for ease of reading. Here is the ‘new’ Article:

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 48 TFEU (ToL), renumbered Article 54 TFEU

Companies or firms formed in accordance with the law of a Member State and having their registered office, central administration or principal place of business within the Union shall, for the purposes of this Chapter, be treated in the same way as natural persons who are nationals of Member States.

‘Companies or firms’ means companies or firms constituted under civil or commercial law, including cooperative societies, and other legal persons governed by public or private law, save for those which are non-profit-making.

***

The European Convention inserted the word ‘Union’ instead of ‘Community’, and ‘Chapter’ was called ‘Subsection’, but there was no material difference between Article III-27 of the draft Treaty establishing a Constitution for Europe and the current TEC provision, and even one formal difference less as regards the ToL TFEU (OJ 18.7.2003 C 169/32-33).

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Article III-142 of the Treaty establishing a Constitution for Europe took over the draft text word for word (OJ 16.12.2004 C 310/62).

***

After the anodyne statements above, one could easily believe that freedom of establishment for companies is an inoffensive continuation of the principles concerning humans (natural persons), so a few references to actual tensions may be in order.

For further reading available on the web concerning the freedom of establishment as regards companies and firms, you could turn to Nicole Rothe: Freedom of establishment of legal persons within the European Union: An analysis of the European Court of Justice decision in the Überseering case; Case C-208/00:

https://www.wcl.american.edu/journal/lawrev/53/rothe.pdf?rd=1

KPMG’s Euro Tax Flash Issuue 37, 12 September 2006, comments on ‘ECJ decision in Cadbury Schweppes Case (C-196/04):

http://kpmgbe.lcc.ch/dbfetch/52616e646f6d49561b7f558b02435e7dd48a4524c074812ef9097bad01a90f9f/euro_tax_flash_2006_09_12_2.pdf

Frank Muntendam, of Ernst & Young, commented on the Cadbury Schweppes case ‘The end of CFC legislation in Europe?’:

http://www.ey.com/global/content.nsf/Luxembourg_E/Question:_The_end_of_CFC_legislation_in_Europe

A fresh overview is offered by Federico M. Mucciarelli in ‘Companies’ Emigration and EC Freedom of Establishment (15 October 2007):

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1078407#PaperDownload


Ralf Grahn

Stubb continues blogging

Why abolish a winning formula? This seems to be the sentiment of blogger Alexander Stubb, Foreign Minister of Finland since Friday.

In his Finnish blog Stubb has an entry, dated 7 April 2008 to prove it. In addition he declares that he will continue blogging, “self-evidently”:

http://www.alexstubb.com/fi/index.php?trg=diary

Perhaps Jon Worth can take heart, and his potential clients take the plunge, as discussed in the post:

http://www.jonworth.eu/political-pr-and-the-age-of-the-web/


Ralf Grahn

EU TFEU: Mutual recognition of diplomas

The recognition of diplomas and professional qualifications is important for self-employed (and employed) persons to seize EU-wide opportunities to establish themselves outside their country of origin.

Overcoming obstacles to mobility leads to a better match between the supply and the demand for professional services, bringing gains to individuals as well as the receiving country.

We look at the current Treaty establishing the European Community, the following steps during the treaty reform process – the draft Constitution and the Constitutional Treaty – and the wording of the Treaty of Lisbon undergoing ratification.

Because the right of establishment and the recognition of diplomas potentially concern huge numbers of European Union citizens, there are a few hints on further reading for those who want to gain a basic understanding and an additional link for people with a concrete interest to find out where they stand (or where their education might lead).


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What does the Treaty of Lisbon (ToL) do to Article 47 of the Treaty establishing the European Community (TEC)? The intergovernmental conference (IGC 2007) decided on the following express amendments in what becomes the Treaty on the Functioning of the European Union (TFEU), as you can see in the Official Journal, OJ, 17.12.2007 C 306/55:

54) Article 47 shall be amended as follows:

(a) the following phrase shall be added at the end of paragraph 1: ‘and for the coordination of the provisions laid down by law, regulation or administrative action in Member States concerning the taking-up and pursuit of activities as self-employed persons.’;

(b) paragraph 2 shall be deleted and paragraph 3 shall be renumbered 2; a change shall be made to the French which does not concern the English version.

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Disconnected amendments like this serve two purposes of the student of EU law. First, they invite us to read the treaties still in force. Second, since attaining 27 national ratifications on any substantial treaty reform is less than certain, reading the current provisions may mean that we study the future ones as well.

Anyway, we look at the current Article 47 TEC by retrieving it from the latest consolidated version of the existing treaties, the TEU and the TEC, in OJ 29.12.2006 C 321 E/61:

Article 47 TEC

1. In order to make it easier for persons to take up and pursue activities as self-employed persons, the Council shall, acting in accordance with the procedure referred to in Article 251, issue directives for the mutual recognition of diplomas, certificates and other evidence of formal qualifications.

2. For the same purpose, the Council shall, acting in accordance with the procedure referred to in Article 251, issue directives for the coordination of the provisions laid down by law, regulation or administrative action in Member States concerning the taking-up and pursuit of activities as self‑employed persons. The Council, acting unanimously throughout the procedure referred to in Article 251, shall decide on directives the implementation of which involves in at least one Member State amendment of the existing principles laid down by law governing the professions with respect to training and conditions of access for natural persons. In other cases the Council shall act by qualified majority.

3. In the case of the medical and allied and pharmaceutical professions, the progressive abolition of restrictions shall be dependent upon coordination of the conditions for their exercise in the various Member States.

***

We have the basic text and the express amendments. In addition, possible horizontal amendments here, the ordinary legislative procedure), the renumbering of the Article (Tables of equivalences) and the renumbering of referrals, if any (but here none), offer us the opportunity to construct the wording of the provision according to the Lisbon Treaty. The location of the Article (Tables of equivalences) is added to make it easier to remember the context. We should end up with the following consolidated Lisbon Treaty provision:

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 47 TFEU (ToL), renumbered Article 53 TFEU

1. In order to make it easier for persons to take up and pursue activities as self-employed persons, the European Parliament and the Council shall, acting in accordance with the ordinary legislative procedure, issue directives for the mutual recognition of diplomas, certificates and other evidence of formal qualifications and for the coordination of the provisions laid down by law, regulation or administrative action in Member States concerning the taking-up and pursuit of activities as self-employed persons.

2. In the case of the medical and allied and pharmaceutical professions, the progressive abolition of restrictions shall be dependent upon coordination of the conditions for their exercise in the various Member States.

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The latest span of treaty reform, from Nice to Lisbon, would be incomplete without a look at the European Convention and the IGC 2004.

First, Article III-26 of the draft Treaty establishing a Constitution for Europe (OJ 18.7.2003 C 169/32):

Article III-26 Draft Constitution

1. European framework laws shall make it easier for persons to take up and pursue activities as self-employed persons. It shall cover:

(a) the mutual recognition of diplomas, certificates and other evidence of formal qualifications;

(b) the coordination of the provisions laid down by law, regulation or administrative action in Member States concerning the taking-up and pursuit of activities as self-employed persons.

2. In the case of the medical and allied and pharmaceutical professions, the progressive abolition of restrictions shall be dependent upon coordination of the conditions for their exercise in the various Member States.

***

The IGC 2004 replaced ‘it’ by ‘they’ in the first paragraph and added ‘of such professions’ in the second paragraph. Cf. OJ 16.12.2004 C 310/62.

In other words, already the draft Constitution abolished the Article 47(2) TEC requirement of unanimity in the Council regarding directives where the implementation involves in at least one Member State amendment of the existing principles laid down by law governing the professions with respect to training and conditions of access for natural persons.

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Arguably, enhanced mobility is in the interest of EU citizens because it offers them new opportunities. In practice, fewer obstacles mean that it may be easier for a spouse to take up his or her profession if the family moves to another member state, and fewer cases of highly qualified people working as dishwashers. Added supply should work in favour of consumers, too.

Fifty years from the Treaty of Rome have shown that harmonisation requiring unanimity tends to turn into a bad joke, or at least quite cumbersome.

Abolishing the unanimity rule in a small but important question is a welcome step for individuals.

***

The Commission’s internal market directorate general presents a general background on the web page ‘Living and working in the Single Market’, with further links:

http://ec.europa.eu/internal_market/top_layer/index_15_en.htm

The Commission’s Scadplus pages offer a look more specifically aimed at ‘Recognition of qualifications: introduction’ (last update 7 March 2006):

http://europa.eu/scadplus/leg/en/cha/c00003d.htm

Introductory information is presented on the web page ‘Professional qualifications’, too:

http://ec.europa.eu/internal_market/top_layer/index_15_en.htm

***

Some readers may want more than an overview, for instance if they contemplate moving to another country within the European Economic Area (EEA).

The most important piece of secondary legislation is Directive 2005/36/EC of the European Parliament and of the Council of 7 September 2005 on the recognition of professional qualifications (Text with EEA relevance), OJ 30.9.2005 L 255/22.

Despite or by virtue of its 120 pages, including detailed annexes, the directive may be of interest to considerable numbers of Europeans. The directive replaces the bulk of earlier secondary legislation on professional qualifications, and the new framework is in force since 20 October 2007:

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2005:255:0022:0142:EN:PDF



Ralf Grahn

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.


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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).

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.

European Union Law Blog

With about 100 million German speaking EU citizens – about one in five, actually – I have wondered at the scarcity of German blogs on EU law and politics. Jon Worth’s Euroblog helped me find Nicole Meβmers blog on EU politics. See:

http://www.jonworth.eu/blog/euroblog/

http://www.nicole-messmer.de/

Earlier I had noticed the blog of Jan Seifert, Jan’s EUblog:

http://blog.jan-seifert.de/

But a blog on European law in general and especially the Treaty of Lisbon had eluded me. Now there is a cure, the European Union Law Blog, written by Michelle Potier in Leipzig, posting mainly in German (despite the English blog name). The latest posts have focused on the Lisbon Treaty and the ratification debate in an informative and timely manner. See this welcome blog on:

http://www.law-europe.eu/

Despite the likeness of the names, the European Union Law Blog should not be confused with the EU Law Blog:

http://eulaw.typepad.com/

There is one similarity between all the blogs mentioned here: Recommended reading for everyone interested in EU politics or law.


Ralf Grahn

P.S. 6 April 2008: I apologise for the mistake above. I realised that I exaggerated the number of German speakers within the European Union. Perhaps 90 million would be more like a correct number, still a considerable proportion of about 490 million EU citizens in all.

In addition to being the official language of Germany and Austria, German has official status in Belgium and Luxembourg plus the Province of Bolzano-Bozen within the EU, as well as official status outside the EU in neighbouring Liechtenstein and Switzerland.

For more information you can read the Wikipedia article 'German language'

http://en.wikipedia.org/wiki/German_language

P.S. II: Consolidated versions of the Lisbon Treaty are due 15 April 2008, and in book form 9 May 2008 (Europe day).

EU presidents: Quatremer and Who do I call?

Jean Quatremer has an interesting post about the EU presidencies on his blog Coulisses de Bruxelles, UE, where he takes up a rumour that José Manuel Barroso might become the first semi-permanent president of the European Council. But besides, the posting discusses different priorities among the member states and takes up the possibility of a merger of the top jobs as Commission and European Council president. In addition, he mentions the election procedure. The post is followed by a lively discussion. See:

http://bruxelles.blogs.liberation.fr/coulisses/2008/04/barroso-prsiden.html

After a slow start, there seems to be a growing awareness of the need to discuss the future roles of the top office holders of the European Union, as well as the transparency of the election and the democratic legitimacy of the ones who are going to represent the EU internally and externally during the first five years of the Lisbon Treaty.

These are at least first steps towards serious debate about the issues at stake, and may lead to real discussion about the qualifications needed. We can be grateful to Jan Seifert and Jon Worth have launched a debate by calling for a merger of the presidencies on their web site and blog Who do I Call?

http://www.whodoicall.eu/

Personally, I have offered my own view of the issues at stake and the selection criteria in my blog post Heavyweight president for European Council?

http://grahnlaw.blogspot.com/2008/03/heavyweight-president-for-european.html

In the long run a European Union, which teaches the world the virtues of democracy, can not continue to work in the footsteps of the Holy Alliance.


Ralf Grahn


P.S. Consolidated versions of the Lisbon Treaty are to be published 15 April 2008 and in book form on Europe day, 9 May 2008.

P.S. II: Can 'managed democracy' really be the way forward for the European Union?

EU TFEU: Legislating freedom of establishment

To make the freedom of establishment a living reality, more is needed than the prohibition of discrimination. Obstacles have to be removed by European Community (European Union) legislation.

The Treaty of Lisbon retains the ‘directives’ as legislative acts, and in this field.


***

The Treaty of Lisbon (ToL) briefly mentions Article 44 of the Treaty establishing the European Community (TEC). Here is what the intergovernmental conference (IGC 2007) wants changed in the Treaty on the Functioning of the European Union (TFEU), as it is to be called (OJ 17.12.2007 C 306/54):

FREEDOM OF ESTABLISHMENT

52) In Article 44(2), the words ‘The European Parliament,’ shall be inserted at the beginning of the paragraph.

***

Some of us think that readable legal acts are a cornerstone of openness and transparency. The IGC 2007 did not, so we have to turn to the latest consolidated version of the existing treaties to find the words meant to surround the insertion at the beginning of Article 44(2) TEC (OJ 29.12.2006 C 321 E/59-60):

Article 44 TEC

1. In order to attain freedom of establishment as regards a particular activity, the Council, acting in accordance with the procedure referred to in Article 251 and after consulting the Economic and Social Committee, shall act by means of directives.

2. The Council and the Commission shall carry out the duties devolving upon them under the
preceding provisions, in particular:

(a) by according, as a general rule, priority treatment to activities where freedom of establishment makes a particularly valuable contribution to the development of production and trade;

(b) by ensuring close cooperation between the competent authorities in the Member States in order to ascertain the particular situation within the Community of the various activities concerned;

(c) by abolishing those administrative procedures and practices, whether resulting from national legislation or from agreements previously concluded between Member States, the maintenance of which would form an obstacle to freedom of establishment;

(d) by ensuring that workers of one Member State employed in the territory of another Member State may remain in that territory for the purpose of taking up activities therein as self‑employed persons, where they satisfy the conditions which they would be required to satisfy if they were entering that State at the time when they intended to take up such activities;

(e) by enabling a national of one Member State to acquire and use land and buildings situated in the territory of another Member State, in so far as this does not conflict with the principles laid down in Article 33(2);

(f) by effecting the progressive abolition of restrictions on freedom of establishment in every branch of activity under consideration, both as regards the conditions for setting up agencies, branches or subsidiaries in the territory of a Member State and as regards the subsidiaries in the territory of a Member State and as regards the conditions governing the entry of personnel belonging to the main establishment into managerial or supervisory posts in such agencies, branches or subsidiaries;

(g) by coordinating to the necessary extent the safeguards which, for the protection of the interests of members and other, are required by Member States of companies or firms within the meaning of the second paragraph of Article 48 with a view to making such safeguards equivalent throughout the Community;

(h) by satisfying themselves that the conditions of establishment are not distorted by aids granted by Member States.

***

If the Lisbon programme has strived towards a knowledge society, the Lisbon Treaty was a step backwards to primitive and wasteful practices. Instead of one centrally made consolidation in each treaty language, we were offered the multiplication of work and effort of disparate attempts in every corner of Europe.

Not only that, but every provision has to be checked from about five different sources before its meaning is clear:

Express amendments
Horizontal amendments
Numbering and renumbering
Numbering and renumbering of referrals
Protocols and declarations

For good measure, we add the location of the Article in question in order to facilitate the reading of a post in isolation.

***

Do the member states’ governments still think that an unreadable treaty would be more welcome and cause less trouble than a readable one?

Anyway, a gestation period of about ten months from the IGC 2007 mandate was needed, before the Council finally publishes the consolidated versions of the Lisbon Treaty TEU and TFEU on 15 April 2008.

***

Back to DIY consolidation and Article 44 as it should look when the Treaty of Lisbon is in force:

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 44 TFEU (ToL), renumbered Article 50 TFEU

1. In order to attain freedom of establishment as regards a particular activity, the European Parliament and the Council, acting in accordance with the ordinary legislative procedure and after consulting the Economic and Social Committee, shall act by means of directives.

2. The European Parliament, the Council and the Commission shall carry out the duties devolving upon them under the preceding provisions, in particular:

(a) by according, as a general rule, priority treatment to activities where freedom of establishment makes a particularly valuable contribution to the development of production and trade;

(b) by ensuring close cooperation between the competent authorities in the Member States in order to ascertain the particular situation within the Union of the various activities concerned;

(c) by abolishing those administrative procedures and practices, whether resulting from national legislation or from agreements previously concluded between Member States, the maintenance of which would form an obstacle to freedom of establishment;

(d) by ensuring that workers of one Member State employed in the territory of another Member State may remain in that territory for the purpose of taking up activities therein as self‑employed persons, where they satisfy the conditions which they would be required to satisfy if they were entering that State at the time when they intended to take up such activities;

(e) by enabling a national of one Member State to acquire and use land and buildings situated in the territory of another Member State, in so far as this does not conflict with the principles laid down in Article 33(2) [ToL, renumbered Article 39(2) TFEU];

(f) by effecting the progressive abolition of restrictions on freedom of establishment in every branch of activity under consideration, both as regards the conditions for setting up agencies, branches or subsidiaries in the territory of a Member State and as regards the subsidiaries in the territory of a Member State and as regards the conditions governing the entry of personnel belonging to the main establishment into managerial or supervisory posts in such agencies, branches or subsidiaries;

(g) by coordinating to the necessary extent the safeguards which, for the protection of the interests of members and other, are required by Member States of companies or firms within the meaning of the second paragraph of Article 48 [ToL, renumbered Article 54 TFEU] with a view to making such safeguards equivalent throughout the Union;

(h) by satisfying themselves that the conditions of establishment are not distorted by aids granted by Member States.

***

The corresponding provision of the draft Treaty establishing a Constitution for Europe was Article III-23. The European Convention named them ‘European framework laws’, but now and still according to the Lisbon Treaty they are known as ‘directives’. The referrals were naturally different, but otherwise the minimal changes were already there (OJ 18.7.2003 C 169/32).


***

The difference between the draft and the Treaty establishing a Constitution for Europe Article III-138 is ‘microscopic’.

***

One suggestion for further reading is the European Parliament’s factsheet ‘Freedom of establishment, freedom to provide services and mutual recognition of diplomas (last update 27 October 2006):

http://www.europarl.europa.eu/facts/3_2_3_en.htm


Ralf Grahn

EU TFEU: Right of establishment

Are you interested in working as a self-employed person, setting up shop in another EU country? Do you manage an agency, a branch or a subsidiary in another member state of the European Union?

The right of establishment, also known as the freedom of establishment, is an expression of the principle of free movement within the internal market.

The EU’s Treaty of Lisbon preserves your right of establishment on equal grounds.

***

In the Treaty of Lisbon (ToL) the intergovernmental conference (IGC 2007) has nothing substantial to say about Article 43 of the Treaty establishing the European Community (TEC). Cf. OJ 17.12.2007 C 306/54.

***

Unchanged does not mean unimportant, so we turn to the latest consolidated version of the existing treaties, in 29.12.2006 C 321 E/59:

CHAPTER 2
RIGHT OF ESTABLISHMENT

Article 43 TEC

Within the framework of the provisions set out below, restrictions on the freedom of establishment of nationals of a Member State in the territory of another Member State shall be prohibited. Such prohibition shall also apply to restrictions on the setting-up of agencies, branches or subsidiaries by nationals of any Member State established in the territory of any Member State.

Freedom of establishment shall include the right to take up and pursue activities as self-employed persons and to set up and manage undertakings, in particular companies or firms within the meaning of the second paragraph of Article 48, under the conditions laid down for its own nationals by the law of the country where such establishment is effected, subject to the provisions of the Chapter relating to capital.

***

Although there are no specific amendments, there are still details to check before we now for sure how the corresponding Article of the Treaty on the Functioning of the European Union (TFEU) is going to look according to the Lisbon Treaty.

The annexed Tables of equivalences tell us that we have arrived at a new chapter: Chapter 2 ‘Right of establishment’. They also tell us that Article 43 TEC first becomes Article 43 ToL, and later will be known under the new number Article 49 TFEU (17.12.2007 C 306/208).

As always, we have to watch out for possible horizontal amendments, mentioned on OJ 17.12.2007 C 306/41 and the following pages. (Here, there seem to be none.)

We notice a referral to another Article, which means that we have to check the numbering and that the referral remains substantially correct.

In order to make it easier to read this post on a stand-alone basis, we start by indicating the location of the Article (using the Tables of equivalences, OJ 17.12.2007 C 306/207-208).

***

Here is what the Article should look like, 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 43 TFEU (ToL), renumbered Article 49 TFEU

Within the framework of the provisions set out below, restrictions on the freedom of establishment of nationals of a Member State in the territory of another Member State shall be prohibited. Such prohibition shall also apply to restrictions on the setting-up of agencies, branches or subsidiaries by nationals of any Member State established in the territory of any Member State.

Freedom of establishment shall include the right to take up and pursue activities as self-employed persons and to set up and manage undertakings, in particular companies or firms within the meaning of the second paragraph of Article 48 [ToL, renumbered Article 54 TFEU], under the conditions laid down for its own nationals by the law of the country where such establishment is effected, subject to the provisions of the Chapter relating to capital.

***

In Article III-22 of the draft Treaty establishing a Constitution for Europe, the European spoke more directly to the potential entrepreneurs in the second subparagraph, without altering the substance of the provision (OJ 18.7.2003 C 169/32):

Subsection 2
Freedom of establishment

Article III-22 Draft Constitution

Within the framework of this Subsection, restrictions on the freedom of establishment of nationals of a Member State in the territory of another Member State shall be prohibited. Such prohibition shall also apply to restrictions on the setting-up of agencies, branches or subsidiaries by nationals of any Member State established in the territory of any Member State.

Nationals of a Member State shall have the right, in the territory of another Member State, to take up and pursue activities as self-employed persons and to set up and manage undertakings, in particular companies or firms within the meaning of the second paragraph of Article III-27, under the conditions laid down for its own nationals by the law of the Member State where such establishment is effected, subject to the provisions of the Section relating to capital.

***

The IGC 2004 took over the draft text in Article III-137 of the Treaty establishing a Constitution for Europe, with only technical adjustments (OJ 16.12.2004 C 310/61).

***

Even more focused on institutional questions and economical concerning amendments without substantial impact, the IGC 2007 reverted to the current TEC text.

From a reader’s point of view it was not a ‘failed Constitution’. Only ratification failed, and as a result we lost a host of small improvements, too, ending up with two slightly less well adapted treaties than the whole one on offer a few years ago.

***

This time, instead of suggesting further reading from the web, I would like to recommend turning to a textbook on the subject of freedom of establishment. An alternative in English is:

Josephine Steiner, Lorna Woods and Christian Twigg-Flesner: EU Law (Oxford University Press, Ninth Edition, 2006), pages 446 to 467.


Ralf Grahn

EU TFEU: Social security for migrant workers

Free movement for workers is one of the most important freedoms for ordinary citizens of the European Union, but if they lose their earned benefits this freedom becomes an empty shell. Only by adding (or more precisely, aggregating) these benefits can migrant workers really grab the opportunities offered by the common job market offered by the European Economic Area (EEA).

Social security benefits have to be calculated and paid across national borders to millions of workers and self-employed persons.

The EU Treaty of Lisbon lays the foundations for swifter and more comprehensive legislation on migrant workers’ rights by abolishing the requirement for unanimous Council acts, but qualified majority voting (QMV) is dampened by the installation of a so called emergency brake, which offers an obstructing member state the opportunity to postpone and ultimately scrap a proposal.


***

In the Treaty of Lisbon (ToL), under Free movement of workers, the intergovernmental conference (IGC 2007) made the following amendments to Article 42 of the Treaty establishing the European Community (TEC). See OJ 17.12.2007 C 306/54:

51) Article 42 shall be amended as follows:

(a) in the first paragraph, the words ‘migrant workers and their dependants:’ shall be replaced by ‘employed and self-employed migrant workers and their dependants:’;

(b) the last paragraph shall be replaced by the following:

‘Where a member of the Council declares that a draft legislative act referred to in the first subparagraph would affect important aspects of its social security system, including its scope, cost or financial structure, or would affect the financial balance of that system, it may request that the matter be referred to the European Council. In that case, the ordinary legislative procedure shall be suspended. After discussion, the European Council shall, within four months of this suspension, either:

(a) refer the draft back to the Council, which shall terminate the suspension of the ordinary legislative procedure; or

(b) take no action or request the Commission to submit a new proposal; in that case, the act originally proposed shall be deemed not to have been adopted.’.

***

Luckily, the Council has at least seen to that there is a consolidation of the current treaties, the TEU and the TEC, the latest one in OJ 29.12.2006 C 321 E/58-59, where we find Article 42 TEC as it is today:

Article 42 TEC

The Council shall, acting in accordance with the procedure referred to in Article 251, adopt such measures in the field of social security as are necessary to provide freedom of movement for workers; to this end, it shall make arrangements to secure for migrant workers and their dependants:

(a) aggregation, for the purpose of acquiring and retaining the right to benefit and of calculating the amount of benefit, of all periods taken into account under the laws of the several countries;

(b) payment of benefits to persons resident in the territories of Member States.

The Council shall act unanimously throughout the procedure referred to in Article 251.

***

Whilst looking forward to the belated consolidated versions of the Lisbon Treaty to be published by the Council in all the treaty languages 15 April 2008, we piece together the provision according to the instructions given.

The express amendments are straightforward, the horizontal amendments to be kept in mind (ordinary legislative procedure) and the new numbering inserted. Additionally, it is helpful to see the context of each Article.

We should end up with a provision looking like this:

Part Three ‘Policies and internal actions of the Union’

Title III (renumbered Title IV) ‘Free movement of persons, services and capital’

Chapter 1 ‘Workers’

Article 42 TFEU (ToL), renumbered Article 48 TFEU

The European Parliament and the Council shall, acting in accordance with the ordinary legislative procedure, adopt such measures in the field of social security as are necessary to provide freedom of movement for workers; to this end, it shall make arrangements to secure for employed and self-employed migrant workers and their dependants:

(a) aggregation, for the purpose of acquiring and retaining the right to benefit and of calculating the amount of benefit, of all periods taken into account under the laws of the several countries;

(b) payment of benefits to persons resident in the territories of Member States.

Where a member of the Council declares that a draft legislative act referred to in the first subparagraph would affect important aspects of its social security system, including its scope, cost or financial structure, or would affect the financial balance of that system, it may request that the matter be referred to the European Council. In that case, the ordinary legislative procedure shall be suspended. After discussion, the European Council shall, within four months of this suspension, either:

(a) refer the draft back to the Council, which shall terminate the suspension of the ordinary legislative procedure; or

(b) take no action or request the Commission to submit a new proposal; in that case, the act originally proposed shall be deemed not to have been adopted.

***

I then check my result against four of those who already have offered the public readable consolidated versions, namely the almost perfect consolidated Lisbon Treaties of the IIEA (Peadar ó Broin), the FCO (Anonymous), Statewatch (Steve Peers) and ‘Der Vertrag von Lissabon’ (in German; Klemens H. Fischer).

Naturally, most people need only an accurate, readable text. They are advised to turn to one of the consolidations directly.

Since there is a daily demand for consolidated versions, there is a steady stream of visitors to this blog as a result of web searches. Sadly, many seem to stumble upon earlier and (even) less complete posts.

Therefore, I take the opportunity to refer the interested readers to my latest post on existing consolidated language versions ‘Consolidated EU Lisbon Treaty Update 29 March 2008’, and to the links presented in that post.

If kind readers bring other consolidations, official documents or secondary literature on the Lisbon Treaty to my attention, there may be cause for coming updates.

***

The objective of this blog is to offer the reader the tools to compare the current treaties Article by Article with the Lisbon Treaty, including the preceding steps, the draft Constitution and the Constitutional Treaty. (Depending on the situation, some suggestions for further reading may be offered about the politics and secondary legislation in question.)

***

Thus, our following stop is the European Convention and its draft Treaty establishing a Constitution for Europe. The proposed Article III-21 looked like this (OJ 18.7.2003 C 169/31):

Article III-21 Draft Constitution

In the field of social security, European laws or framework laws shall establish such measures as are necessary to bring about freedom of movement for workers by introducing a system to secure for employed and self-employed migrant workers and their dependants:

(a) aggregation, for the purpose of acquiring and retaining the right to benefit and of calculating the amount of benefit, of all periods taken into account under the laws of the several countries;

(b) payment of benefits to persons resident in the territories of Member States.

***

This is one instance where the IGC 2004 did not content itself with giving the work of the European Convention its blessing. Article III-136 of the Treaty establishing a Constitution for Europe introduced new elements (OJ 16.12.2004 C 310/60):

Article III-136 Constitution

1. In the field of social security, European laws or framework laws shall establish such measures as are necessary to bring about freedom of movement for workers by making arrangements to secure for employed and self-employed migrant workers and their dependants:

(a) aggregation, for the purpose of acquiring and retaining the right to benefit and of calculating the amount of benefit, of all periods taken into account under the laws of the different countries;

(b) payment of benefits to persons resident in the territories of Member States.

2. Where a member of the Council considers that a draft European law or framework law referred to in paragraph 1 would affect fundamental aspects of its social security system, including its scope, cost or financial structure, or would affect the financial balance of that system, it may request that the matter be referred to the European Council. In that case, the procedure referred to in Article III-396 shall be suspended. After discussion, the European Council shall, within four months of this suspension, either:

(a) refer the draft back to the Council, which shall terminate the suspension of the procedure referred to in Article III-396, or

(b) request the Commission to submit a new proposal; in that case, the act originally proposed shall be deemed not to have been adopted.

***

You now have the materials at your disposal for your comparison of the different stages of the treaty reform process.

Here are a few comments on the similarities and differences to get you going:

The draft Constitution used clearer and more expressive terms for legislative acts, so ‘European laws or framework laws’ made their appearance here, too, instead of the less elegant ‘procedure referred to in Article 251’ standing for co-decision.

The beef of the European Conventions proposal was, however, dropping the text of Article 42(2) TEC with the required unanimity in the Council ‘throughout’. This paved the way for qualified majority voting (QMV) in the Council in order to better safeguard the interests of migrant workers.

In principle, adding ‘employed and self-employed’ to migrant workers and their dependants broadened the scope of the draft Constitution provision.

***

The IGC 2004 was more cautious in its approach. ‘Making arrangements’ can be seen as less ambitious than ‘introducing a system’ to secure migrant workers’ benefits, in the first paragraph. ‘Several’ or ‘different’ countries should not make any material difference.

But the real indication of some member states’ apprehension was the added second paragraph. The IGC 2004 introduced the so called emergency brake, which meant that any member state could refer a proposed legislative act to the European Council if it felt that it would ‘affect fundamental aspects of its social security system, including its scope, cost or financial structure, or would affect the financial balance of that system’ or ‘the financial balance of that system’.

This would, in effect, remove a question referred from QMV to the unanimous decision making of the European Council, although such a question would plausibly have to ‘affect fundamental aspects’ of the social security system of the referring member state.

In four months, the European Council unanimously was to give a green light for the Council to go ahead or scrap the proposal (and request a new and neutered one).

***

The Lisbon Treaty retains the scope of both employed and self-employed (and their dependants) as well as the ordinary legislative procedure of the Constitution as the main procedural rule. But the IGC 2007 lowered the bar for referral compared to the Constitution by replacing ‘fundamental aspects’ by ‘important’ ones, making it less burdensome for an obstructing member state to argue its case for referral politically, although all it really would have taken and takes is the determination of a member state to issue a declaration.

***

One detail, of minor importance, is the the position of the word ‘shall’ in the sentences about acting in accordance with the ordinary legislative procedure. With no firm indications (point 2(c)) the consolidations (and I) have reached different conclusions along the way, but when the official unofficial consolidated versions appear (for illustrative purposes) we will follow their wording.

In the IIEA consolidation I have noticed a small, recurring omission. In essence, it is no problem, since the ordinary legislative procedure entails the participation of the European Parliament and the Council, but in some instances among the insidious horizontal amendments the words ‘the European Parliament and’ have not been inserted.

As I said earlier, as far as I have advanced, I have found the consolidated versions I have used to be highly reliable, ‘almost perfect’.

People may have different opinions about the blessings or dangers of the Lisbon Treaty, but these sources are dependable.

***

Just in case someone believes that the governments of the member states (IGC 2007) take matters concerning their coffers lightly, or that the European Council could escape the strictures of unanimity in case of referral (the emergency brake), two joint declarations have been attached to the Lisbon Treaty (Final Act, OJ 17.12.2007 C 306/256):

22. Declaration on Articles 42 and 63a of the Treaty on the Functioning of the European Union

The Conference considers that in the event that a draft legislative act based on Article 69 A(2) would affect important aspects of the social security system of a Member State, including its scope, cost or financial structure, or would affect the financial balance of that system as set out in the second paragraph of Article 42, the interests of that Member State will be duly taken into account.

23. Declaration on the second paragraph of Article 42 of the Treaty on the Functioning of the European Union

The Conference recalls that in that case, in accordance with Article 9 B(4) of the Treaty on European Union, the European Council acts by consensus.

***

A brief history of social security benefits is presented on the European Parliament’s web page ‘Social security for migrant workers’ (last update 22 February 2001):

http://www.europarl.europa.eu/factsheets/4_8_4_en.htm

The Commission’s Scadplus pages, with summaries of legislation, offer later information on the page ‘Social security schemes and free movement of persons: Basic Regulation’, last updated 25 June 2007:

http://europa.eu/scadplus/leg/en/cha/c10516.htm


Ralf Grahn

Alex Stubb: From MEP to Foreign Minister

When Ilkka Kanerva was forced to quit as Minister for Foreign Affairs of Finland, the (Conservative) Coalition Party quickly called in a representative of a younger generation, Alexander Stubb, who is known as an active member of the EPP group in the European Parliament.

Annamari Sipilä, who works as Brussels correspondent for the biggest Finnish daily newspaper, Helsingin Sanomat, has written a profile of Stubb, officially to take office on Friday.

The story can be found in Helsingin Sanomat’s International Edition under the heading ‘Profile: Alex Stubb is too smart to make trouble’ (Updated 2 April 2008):

http://www.hs.fi/english/article/-/1135235241884

Stubb’s rapid career and thorough grounding – both practical and academic – in European Union politics may be of interest to a wider readership outside Finland.


Ralf Grahn

EU TFEU: Exchange of young workers

Free movement of workers within the European Community (European Union) includes the idea to promote the mobility of young workers. We look at how this idea is expressed in the EU Treaty of Lisbon.

With 23 different treaty languages, we look at some questions concerning translation of both treaties and other texts within the context of the European Union.

Finally, we are left wondering if the provision we are about to discuss has been left hanging in the air, because the actions seem to be carried out in another context.


***

Article 41 of the Treaty establishing the European Community (TEC) is one of the provisions bypassed silently by the intergovernmental conference in the Treaty of Lisbon (ToL). Cf. OJ 17.12.2007 C 306/54.

We turn to the latest consolidated version of the treaties, TEU and TEC, in OJ 29.12.2006 C 321 E/58 for the current Article:

Article 41 TEC

Member States shall, within the framework of a joint programme, encourage the exchange of young workers.

***

There are no express amendments, and there seem to be no horizontal amendments to take into account either (cf. OJ 17.12.2007 C 306/41-44). We add the location of the provision and the future renumbering with the help of the annexed Tables of equivalences referred to in Article 5 of the Treaty of Lisbon (OJ 17.12.2007 C 306/207-208) to arrive at the Article according to the Treaty on the Functioning of the European Union (TFEU):

Part Three ‘Policies and internal actions of the Union’

Title III (renumbered Title IV) ‘Free movement of persons, services and capital’

Chapter 1 ‘Workers’

Article 41 TFEU (ToL), renumbered Article 47 TFEU

Member States shall, within the framework of a joint programme, encourage the exchange of young workers.

***

There was no change of wording in the English language version of Article III-20 of the draft Treaty establishing a Constitution for Europe (OJ 18.7.2003 C 169/31).

In English, Article III-135 of the Treaty establishing a Constitution for Europe was unchanged, too (OJ 16.12.2004 C 310/60).

***

Translation

Translating is a necessary activity within the European Community (European Union), and dealing with translated texts is unavoidable if Community legislation and other written information is part of your work or studies.

Just as an illustration of the complexity with several treaty languages (now 23), I offer you two examples I stumbled upon while looking at this provision, as well as an added comparison.

***

Spanish


Article 41 “TEC”

Artículo 41

Los Estados miembros facilitarán, en el marco de un programa común, el intercambio de trabajadores jóvenes.


Article III-20 “Draft Treaty”

Artículo III-20

Los Estados miembros facilitarán, en el marco de un programa común, el intercambio de trabajadores jóvenes.


Article III-135 “Constitution”

Artículo III-135

Los Estados miembros propiciarán, en el marco de un programa común, el intercambio de trabajadores jóvenes.


“ToL TFEU”

Silence


We notice that nothing is said in the Lisbon Treaty, so its wording is the same as the current TEC. Still, between the draft Constitution and the Constitutional Treaty ‘facilitarán’ became ‘propiciarán’ before reverting to the existing wording. In other words, during the IGC 2004 someone made a decision to express the meaning by a different word.

***

German


Article 41 “TEC”

Artikel 41

Die Mitgliedstaaten fördern den Austausch junger Arbeitskräfte im Rahmen eines gemeinsamen Programms.


Article III-20 ”Draft Treaty”

Artikel III-20

Die Mitgliedstaaten fördern den Austausch junger Arbeitnehmer im Rahmen eines gemeinsamen Programms.


Article III-135 “Constitution”

Artikel III-135

Die Mitgliedstaaten fördern den Austausch junger Arbeitnehmer im Rahmen eines gemeinsamen Programms.


“ToL TFEU”

Silence


‘Of young workers’ is rendered as ‘junger Arbeitskräfte’ in the current TEC and the coming Lisbon Treaty, but both the draft Constitution and the Constitutional Treaty used the expression ‘junger Arbeitnehmer’, which could have a more restrictive meaning.

***

French


Article 41 “TEC”

Article 41

Les États membres favorisent, dans le cadre d’un programme commun, l’échange de jeunes travailleurs.


Article III-20 “Draft Treaty”

Article III-20

Les États membres favorisent, dans le cadre d'un programme commun, l'échange de jeunes travailleurs.


Article III-135 “Constitution”

Article III-135

Les États membres favorisent, dans le cadre d'un programme commun, l'échange de jeunes travailleurs.


“ToL TFEU”

Silence


In the French version neither the verb ‘favorisent’ nor the ‘jeunes travailleurs’ have changed along the way. Earlier we saw that the English version remained the same throughout.

***

There are certainly people more competent than I am to discuss the difficulties of presenting the intended meaning in different languages, but I mention a few questions for thought and comment:

We have noted that the French and English language versions have remained unchanged, but how well do ‘favorisent’ and ‘encourage’ express the same meaning?

How much should be read into a change of expression, like ‘propiciarán’ instead of ‘facilitarán’ or ‘junger Arbeitnehmer’ instead of ‘junger Arbeitskräfte’, in isolation from other (unchanged) language versions?

If in doubt, should other language versions be consulted?

If each treaty language is equally authentic, which of them should be compared if you want to get the exact meaning?

If the treaties – arguably the most important documents of the European Union – are given meticulous care, how much more differences are there in day to day texts, say press releases from the European Parliament?

***

The discussion above was academic in the sense that the current and the coming treaty provisions remain the same in the four languages mentioned. Insofar as they express the same meaning now, they will continue to do so.

***

Back to the contents of the Article.

Article 41 TFEU (ToL), renumbered Article 47 TFEU, is interesting in that it does not clearly address the question who should carry on the joint programme. Is it intended to be an activity of the European Community (European Union), or does it invite the governments of the member states to agree on and administer such a programme separately?

The second observation is that currently there seems to be no specific programme based on this Article, especially if by ‘young workers’ one means people employed (‘Arbeitnehmer’).

Within the context of vocational training there have been Leonardo da Vinci programmes, with the current one as one of four sectoral programmes under the heading of the Lifelong Learning Programme 2007 – 2013:

http://ec.europa.eu/education/programmes/newprog/index_en.html

Decision No. 1720/2006/EC of the European Parliament and the Council of 15 November 2006, establishing an action programme in the field of lifelong learning (OJ 24.11.2006 L 327/45) does not mention Article 41 TEC as a legal basis.

Article 3 of the Decision mentions the sectoral sub-programmes, including the Leonardo da Vinci programme:

Article 3
Sub-programmes

1. The sectoral sub-programmes shall be the following:
---
(c) the Leonardo da Vinci programme, which shall address the teaching and learning needs of all those in vocational education and training, other than at tertiary level, as well as the institutions and organisations providing or facilitating such education and training;
---

Chapter III of the Decision (Articles 24 to 27) deals with access to, objectives and actions of as well as amounts allocated to the Leonardo da Vinci programme. The programme is aimed at, among others, people learning in all forms of vocational training and training (except at tertiary level) and people in the labour market. One of the objectives is to enhance the attractiveness of vocational education and training and mobility for employers and individuals and to facilitate the mobility of working trainees. An operational objective is to increase placements in enterprises to at least 80000 per year by the end of the Lifelong Learning Programme.


Ralf Grahn

EU TFEU: Legislating free movement for workers

With about 500 million people the European Economic Area (EEA) offers opportunities for employees and employers, if the conditions are right for labour mobility.

According to the Lisbon Treaty the European Parliament and the Council can legislate to facilitate the free movement for migrant workers, abolishing restrictions and improving job-search.


***

Article 40 of the Treaty establishing the European Community (TEC) is one of those without specific amendments in the Treaty on the Functioning of the European Union (TFEU), brought about by the intergovernmental conference (IGC 2007) in the Treaty of Lisbon (ToL). Cf. OJ 17.12.2007 C 306/54.

***

This leads us to believe that there is cause to look up the current provision, presented in the latest consolidated version of the TEU and the TEC in OJ 29.12.2006 C 321 E/58:

Article 40 TEC

The Council shall, acting in accordance with the procedure referred to in Article 251 and after consulting the Economic and Social Committee, issue directives or make regulations setting out the measures required to bring about freedom of movement for workers, as defined in Article 39, in particular:

(a) by ensuring close cooperation between national employment services;

(b) by abolishing those administrative procedures and practices and those qualifying periods in respect of eligibility for available employment, whether resulting from national legislation or from agreements previously concluded between Member States, the maintenance of which would form an obstacle to liberalisation of the movement of workers;

(c) by abolishing all such qualifying periods and other restrictions provided for either under national legislation or under agreements previously concluded between Member States as imposed on workers of other Member States conditions regarding the free choice of employment other than those imposed on workers of the State concerned;

(d) by setting up appropriate machinery to bring offers of employment into touch with applications for employment and to facilitate the achievement of a balance between supply and demand in the employment market in such a way as to avoid serious threats to the standard of living and level of employment in the various regions and industries.

***

If there are no express amendments, we still have to look out for possible horizontal amendments (here 2(c), OJ 17.12.2007 C 306/41) and the renumbering of Articles in question as well as those referred to (OJ 17.12.2007 C 306/208). In addition, to get a sense of the framework, it is helpful to check the location of the provision (Tables of equivalences, OJ 17.12.2007 C 306/207-208). These exercises lead us to what should be the treaty basis when the Lisbon Treaty has entered into force:

Part Three ‘Policies and internal actions of the Union’

Title III (renumbered Title IV) ‘Free movement of persons, services and capital’

Chapter 1 ‘Workers’

Article 40 TFEU (ToL), renumbered Article 46 TFEU

The European Parliament and the Council shall, acting in accordance with the ordinary legislative procedure and after consulting the Economic and Social Committee, issue directives or make regulations setting out the measures required to bring about freedom of movement for workers, as defined in Article 39 [ToL, renumbered Article 45 TFEU], in particular:

(a) by ensuring close cooperation between national employment services;

(b) by abolishing those administrative procedures and practices and those qualifying periods in respect of eligibility for available employment, whether resulting from national legislation or from agreements previously concluded between Member States, the maintenance of which would form an obstacle to liberalisation of the movement of workers;

(c) by abolishing all such qualifying periods and other restrictions provided for either under national legislation or under agreements previously concluded between Member States as imposed on workers of other Member States conditions regarding the free choice of employment other than those imposed on workers of the State concerned;

(d) by setting up appropriate machinery to bring offers of employment into touch with applications for employment and to facilitate the achievement of a balance between supply and demand in the employment market in such a way as to avoid serious threats to the standard of living and level of employment in the various regions and industries.

***

The European Convention to change the substance in Article III-19 of the draft Treaty establishing a Constitution for Europe, but its wording was more straightforward and the legislative instruments were clearer (OJ 18.7.2007 C 169/31).

***

Article III-134 of the Treaty establishing a Constitution for Europe took over the draft text (OJ 16.12.2004 C 310/59-60), but the IGC 2007 opting for ‘Constitution light’ chose not to burden the Lisbon Treaty with such minimal amendments without material bearing.

***

Article 39 TFEU (ToL), renumbered Article 45 TFEU, carries much of its own weight, because the principles of free movement and non-discrimination lend themselves to direct application. Therefore there is less need for the legal base in Article 40 TFEU (ToL), renumbered Article 46 TFEU, than might appear at a first glance.

Another ground for the diminishing importance of specific rules on workers’ free movement is the growing importance of EU citizenship as the basis for individuals’ rights in the European Community (European Union) as a whole.

Because the free movement for workers is the one of the four freedoms potentially concerning the largest group of European citizens, it is somewhat disconcerting that many of the old member states raised barriers against migrant workers from ten new Central European member states in the Accession Treaties for fairly long transitional periods.

If illegal immigration from outside the European Union is seen by many as a potential source of difficulties, surely offering both employees and employers within the European Union improved legal possibilities to match offer and demand should be preferred?

One of the measures to strive for balance between supply and demand is EURES, the European Job Mobility Portal:

http://europa.eu.int/eures/home.jsp?lang=en


Ralf Grahn