Wednesday, 29 March 2017

Judicial control of EU foreign policy: the ECJ judgment in Rosneft




Stian Øby Johansen, PhD fellow at the University of Oslo Faculty of Law*

Yesterday the Court of Justice of the European Union (the CJEU) delivered its judgment in the long-awaited Rosneft case (C-72/15, ECLI:EU:C:2017:236). The judgment clarifies some aspects of the CJEU's jurisdiction over the Common Foreign and Security Policy (CFSP). Moreover, it is an important precedent in the field of EU sanctions law generally, and also resolve some questions of interpretation that are particular to the Russian sanctions.

In this blog post I will focus on what the judgment in Rosneft adds to the existing case-law on the review of CFSP decisions. Thus, I will not be discussing any of the more specific questions of EU sanctions law nor summarize the full 197 paragraph judgment. For those looking for a quick summary of the case, I refer to the succinct post by Maya Lester QC at the Sanctions Law blog.

CFSP sanctions: decisions and implementing regulations

I have already sketched out the background of the case in considerable detail in a blog post I wrote here following the oral hearing, and I co-wrote a blog post (with Alexander Arnesen) on Verfassungsblog on the Opinion of Advocate General Wathelet.  I will not repeat all this background here. But there is a couple of details that are essential to understanding the issue at hand here and the Rosneft judgment more broadly.

Recall that EU law sanctions (also known as "restrictive measures") are enacted through a two-step process. First, the Council adopts a decision under TEU Title V, Chapter 2. This decision is then implemented in Union law (and thus domestically in the EU member states) by virtue of a regulation adopted under TFEU article 215. In the case of the Russia sanctions, as in most sanctions regimes, the wording of the respective decisions and regulations are virtually identical.

The use of two legal instruments with different legal bases -- one decision with a CFSP legal basis, and one regulation with a legal basis in the TFEU -- complicates matters when it comes to the jurisdiction of the CJEU. With regard to the regulation, the judgment in Rosneft confirms the obvious: any regulation adopted on the basis of the TFEU article 215 is within the jurisdiction of the CJEU (Rosneft paras 105-106). That is so irrespective of whether the regulation merely restates the decision.

On the other hand, the decision is a act adopted under the CFSP. The CFSP treaty provisions and acts adopted under them are carved out of the CJEU's otherwise general jurisdiction over Union law (see TEU article 24 and TFEU article 275). To this carve-out there are two exceptions, a.k.a  claw-backs: the CJEU has jurisdiction to monitor compliance with TEU article 40 and to decide on the legality of decisions concerning "restrictive measures against natural or legal persons" (emphasis added). As I will come back to, both claw-backs were at play in Rosneft.

The remainder of this blog post focuses on the CJEU's jurisdiction over such CFSP decisions, notably on the clarifications and contributions the Rosneft judgment offers to the ever-expanding case law in this field. (Key judgments in the previous years that have discussed these issues include Case C-155/14 P H v. Council et al  [2016], Case C‑439/13 P Elitaliana SpA v. EULEX Kosovo [2015], and Opinion 2/13 EU Accession to the ECHR [2014].)

The general scope of the CJEU's jurisdiction over CFSP decisions

With regard to the general scope of the CJEU's jurisdiction over CFSP decisions, the Rosneft judgment further cements the approach that has emerged in the case-law over the last couple of years.
First, the limitations on the CJEU's jurisdiction and the two claw-backs explicitly provided for in TEU article 24(1) and TFEU article 275(2) have to be taken seriously. In relation to CFSP acts, the CJEU only has jurisdiction to (1) monitor compliance with TEU article 40, and (2) decide on the legality of restrictive measures against natural or legal persons. (Rosneft para 60.)

Second, while recognizing the explicit limitations on its jurisdiction in the treaties, the CJEU reiterates that those limitations must be interpreted narrowly (Rosneft para 74-75). Or, put differently, the provisions clawing back jurisdiction must be interpreted expansively.

What is new in Rosneft is the application of these starting points to a new issue: do the claw-backs apply in the context of preliminary rulings? This question must be answered separately for the each claw-back provision (Rosneft para 61).

Preliminary rulings and the legality of CFSP decisions in light of TEU article 40

One of the easier questions before the CJEU in Rosneft was whether the validity of CFSP decisions in light of TEU Article 40 could be determined in a preliminary ruling. The identical claw-back provisions in TEU Article 24(1) and TFEU Article 275(2) simply provide that the CJEU has jurisdiction to "monitor compliance with Article 40 [TEU]".

There is nothing to suggest that such monitoring may only happen e.g  in actions for annulment. In other fields of EU law, it has long been clear that the CJEU has jurisdiction to declare Union acts invalid in preliminary rulings (see e.g. Case 314/85 Foto-Frost [1987]). Thus, due to the lack of an express and specific limitation, the CJEU concluded that its jurisdiction extended also to monitoring compliance of CFSP decisions with TEU article 40 in preliminary rulings (Rosneft paras 62-63).

Preliminary rulings and the legality of CFSP decisions concerning restrictive measures

The key jurisdictional question that the Grand Chamber had to deal with in Rosneft was whether it had jurisdiction to decide on the validity of a CFSP targeted sanctions decision in a preliminary ruling procedure. Due to the CFSP carve-out and the peculiar wording of the claw-back provision for restrictive measures in TEU article 24(1) and TFEU article 275(2), there has been significant uncertainty as to the correct answer to this question.

The relevant part of TEU article 24(1) reads as follows (emphasis added):

"The [CJEU] shall not have jurisdiction [over the CFSP], with the exception of its jurisdiction [...] to review the legality of certain decisions as provided for by the second paragraph of Article 275 of the [TFEU]".

The relevant part of TFEU article 275(2) reads as follows (emphasis added):
"the Court shall have jurisdiction [...] to rule on proceedings, brought in accordance with the conditions laid down in the fourth paragraph of Article 263 of this Treaty, reviewing the legality of decisions providing for restrictive measures against natural or legal persons [adopted under the CFSP]"

In other words: TEU article 24(1) limits the jurisdiction to "certain decisions as provided for" by TFEU article 275(2), which in turn refers to "proceedings" that are "brought in accordance with the conditions laid down" in TFEU article 263(4). The latter provision provides that actions for annulment can be brought against acts of the EU institutions before the CJEU:

"Any natural or legal person may [...] institute proceedings against an act addressed to that person or which is of direct and individual concern to them and does not entail implementing measures."

The combined text of these provisions arguably suggests that the jurisdiction to determine the validity of CFSP targeted sanctions decisions only extends to actions for annulment brought by individuals. TFEU Article 263(4) ostensibly provides for the institution of proceedings for annulment; the types of acts that may be annulled are listed in TFEU Article 263(1)-(2). Conversely, then, the CJEU would lack jurisdiction to determine the validity of such a decision in a preliminary ruling. Against this, one may argue that jurisdiction to rule on the validity of Union acts is inherent to the complete system of legal remedies that the Union treaties establish.

How to solve this conundrum? AG Wathelet essentially suggested that the Court should interpret TFEU article 275(2) in the context of TEU article 24(1). In particular, he emphasized the use of the term "certain decisions" in TEU article 24(1), which suggest that the reference in TFEU article 275(2) to TFEU article 263(4) concerns the type of act (“restrictive measures”), and not the type of proceedings (i.e. actions for annulment). See AG Wathelet in Rosneft, para 61 et seq. Consequently, the validity of CFSP decisions can be determined in any kind of proceedings -- also in preliminary rulings.

A further point is that the French language version of TFEU article 275(2) differs from the English in a crucial respect. It provides that the CJEU has jurisdiction "pour controller la légalité de certaines decisions visées à l’article 275, second alinéa  [TFUE]". This seems to suggest an interpretation in line with that of AG Wathelet. Although  AG Wathelet does not discuss the language discrepancy directly, French is the "langue de travail" at the CJEU, and one may speculate that AG Wathelet relied more heavily on the French version of the treaty text than the English.

In Rosneft the CJEU reaches the same conclusion as AG Wathelet; the CJEU has jurisdiction to determine the validity of CFSP decisions in preliminary rulings. In doing so, the CJEU recognizes the textual discrepancy between the otherwise identical claw-back provisions in TFEU article 275(2) and TEU article 24(1), but not (explicitly) the linguistic discrepancy  However, it is slightly more careful than AG Wathelet in grounding its argument in other sources than (con)text -- perhaps because the Court is indeed aware of the discrepancy between the language versions.

There are in particular two supporting arguments that the CJEU relies on. First, it puts forward a systemic argument. According to the CJEU, it is "inherent" in the Union's "complete system of legal remedies or procedures that persons bringing proceedings must, when an action is brought before a national court or tribunal, have the right to challenge the legality of provisions contained in European Union acts" (Rosneft paras 67-68).

Second, the CJEU  emphasizes the fundamental rights dimension of judicial protection (Rosneft paras 69-75). As usual in cases on jurisdiction on CFSP acts, it refers in passing to the concept of the "rule of law" (Rosneft para 72). But it also refers extensively to article 47 of the Charter of Fundamental Rights (Rosneft paras 73-74). While the Charter has been mentioned in passing before in cases concerning CFSP decisions (notably in Case C-455/14 P H v. Council et al. [2016]), the emphasis has usually been on the nebulous concept of the rule of law. In Rosneft we see the reverse: an emphasis on the fundamental right of effective judicial protection, which is laid down in positive primary law in CFR article 47.

The conclusion that the CJEU draws is thus built on a principled and even more solid ground than that of AG Wathelet. The question of whether the validity of CFSP decisions can be determined in preliminary ruling proceedings must therefore be regarded as settled following the Rosneft judgment.


Graham Butler, Assistant Professor of Law, Aarhus University, Denmark


Can the Court of Justice of European Union (‘the Court’) assert jurisdiction and provide a national court with an interpretation of Union law in a case referred to it from a national court under an Article 267 TFEU preliminary reference, when the subject matter is in regard to the Common Foreign and Security Policy (CFSP)? This was one of a number of questions referred to the Court of Justice from the High Court of England and Wales in Rosneft (C-72/15). This week, the Court meeting in a Grand Chamber formation, answered this jurisdictional question in the affirmative. Given the significance of this judgment for the law of the Common Foreign and Security Policy (CFSP), and previous discussion of the Opinion of the Advocate General in 2016, yesterday’s judgment was hotly anticipated given its implications for the ‘specific rules and procedures’ that are applicable to the law of CFSP. As the Court continues in a line of case law to clarify its jurisdiction in CFSP, it is ultimately a question of constitutional importance for the Union’s external relations.


Rosneft concerns the EU’s restrictive measure regime, more popularly known as sanctions. The governance scheme surrounding sanctions is a developed body of case law, in which individuals subject to them have the possibility to challenge them directly before the EU’s General Court, the administrative court of the Union. Given that the locus standi (standing) of taking actions to the Court is a narrow right, the use of preliminary references, otherwise known as referrals from national courts, also functions as an indirect means for legal entities to access the Court for adjudication on matters of Union law. What makes the Rosneft case noteworthy, in comparison to other aspects of CFSP and sanctions case law, is that it is the first case on the Court’s jurisdiction to rule on sanctions not taken directly to the EU General Court. Rather, the Rosneft case arrived at the Court of Justice through the preliminary reference procedure from a national court, in this case, the High Court of Justice (England and Wales) in the United Kingdom, upon the basis of Article 267 TFEU.

Sanctions have a peculiarity in their procedural sense. Firstly, it requires a CFSP Decision, done on an Article 29 TEU legal basis. Secondly, a subsequent Regulation is decided upon an Article 215 TFEU legal basis, which allows sanctions to be implemented throughout the Union. Accordingly, in Rosneft, on the table was Council Decision 2014/512/CFSP, Council Decision 2014/659/CFSP, and Council Decision 2014/872/CFSP (collectively, ‘the Decision’). Furthermore, there was Regulation 833/2014, Regulation 960/2014, and Regulation 129/2014 (collectively, ‘the Regulation’). The Decision taken by the Council, where Member States as a general rule act unanimously, were directly in response to the alleged actions of Russia in Ukraine. Substantively, the applicant contested the implementation measures by way of Regulation taken by the British Government as a result of the CFSP Decision, of which it too was part of, on the grounds that it contained ambiguities. Accordingly, the substantive question was whether the CFSP Decision was one the one hand sufficiently clear, or on the other, imprecise?

In Rosneft, both the Decision and accompanying Regulation were challenged. Yet, it is unclear whether the Court has the jurisdiction to fully answer the questions asked of it, given the first legal act is adopted on a CFSP legal basis (the Decision), and the second legal act on a non-CFSP legal basis (the Regulation). The Court’s jurisdiction in the latter is undisputed given its adoption on Article 215 TFEU, however, much more speculative and up for question is the Court’s jurisdiction on the Decision, given its adoption on a CFSP legal basis. Prior to recent treaty revision, questions surrounding the Court’s jurisdiction rumbled for decades. However, the Treaty of Lisbon, saw a flipping effect, in that jurisdiction of the Court was to be assumed, unless specifically derogated from by the Treaties. One of these derogations was acts adopted upon a CFSP legal basis, which is elaborated in Article 24(1) TEU and Article 275 TFEU.

Firstly, Article 24(1) TEU, inter alia, states that, ‘The Court of Justice of the European Union shall not have jurisdiction with respect to these provisions [CFSP], with the exception of its jurisdiction to monitor compliance with Article 40 of this Treaty and to review the legality of certain decisions as provided for by the second paragraph of Article 275 of the Treaty on the Functioning of the European Union.’ Secondly, Article 275 TFEU states that the Court has the jurisdiction to, ‘...rule on proceedings, brought in accordance with the conditions laid down in the fourth paragraph of Article 263 of this Treaty, reviewing the legality of decisions providing for restrictive measures against natural or legal persons adopted by the Council on the basis of Chapter 2 of Title V of the Treaty on European Union.’

This consequently points to Article 263 TFEU and its fourth paragraph stating, ‘Any natural or legal person may, under the conditions laid down in the first and second paragraphs, institute proceedings against an act addressed to that person or which is of direct and individual concern to them, and against a regulatory act which is of direct concern to them and does not entail implementing measures.’ The first and second paragraphs in Article 263 TFEU do not appear to envisage the possibility for the Court to have the ability to answer questions on preliminary references from national courts. The leading academic material of EU procedural law previously acknowledged that the Court ‘may afford possibilities’ in this area (Lenaerts et al. 2014:458), recognising that it is by no means a settled question. This is, until the right opportunity arose to address it, which was Rosneft.
So what did the Advocate-General say firstly? AG Wathelet said the Court did have the jurisdiction to answer the substantive questions of it by the national court. Yet how did he reach this view in light of the treaties, and their apparent formulation to exclude the Court in such matters? Whilst acknowledging the Court’s jurisdiction in CFSP matters appears to be limited by Article 24(1) TEU and Article 275 TFEU ‘at first sight’ (para. 39), he skirted a narrow interpretation of Article 263 TFEU and its apparent lack of foresight for seeing preliminary references in the equation. For the aforementioned Article 24(1) TEU and Article 275 TFEU, it can be assumed there was there a need for them to have the intended same effect. However, they are worded differently, and thus, the Advocate-General said, might put out the ‘false impression’, that the Court had no jurisdiction. Thus, he said, the two articles enable the Court ‘to review the compliance with Article 40 TEU of all CFSP acts’, (para. 65), regardless of what way the question ends up at the Court, that is, through a direct action, or a preliminary reference.

The Opinion of the Advocate-General is a demonstrative example of how the restatement of certain constitutional provisions within primary law have the ability to be read differently, despite the intentions of the drafters may have been for such restatements to have the same meaning. Given this part of the Opinion of the Advocate-General on jurisdiction, which was non-binding, what did the Court say, and did it reach the same conclusion?

Judgment

In the judgment issued on 28 March 2017, the Grand Chamber, before going onto matters of substance, had to handle the important question of jurisdiction, and furthermore grapple with the admissibility of the question of jurisdiction. The Council had queried whether the questions referred by the national court could have been answered in respected of the Regulation alone (non-CFSP), rather than contesting the validity of Decision (CFSP) (para. 48). Thus, along this line of thinking, the Court would then not have to assert any jurisdiction on the CFSP legal basis, for which the Council has always viciously defended against any judicial incursion by the Court (Cases C-455/14 P, H v. Council; C-439/13 P Eulex Kosovo; C-263/13 TanzaniaOpinion 2/13; and C-658/11, Mauritius). The Court rejected this Council viewpoint, stating that it is up to national courts alone to ask questions of the Court on the interpretation of Union law (para. 49). The Court was therefore only in a position to not answer a reference when it fails to have a legal question in need of answering, or is only a hypothetical question (para. 50).

The Court furthermore in its judgment stated that only focusing on reviewing the legality of the Regulation (non-CFSP), and not the questions asked of it as a whole by the national court, which would not be adequately answering questions asked of it (para. 53). Moreover, despite the sharp distinction between a CFSP act and a non-CFSP act, in order to impose a sanction within the EU legal order, the Court noted that they are inextricably tied. Given how sanctions are imposed in the EU legal order, it is a perfect demonstration of the possibility of close-knit relations between CFSP and non-CFSP legal bases, given the Court in Kadi I said the link occurs when it has been made ‘explicitly’ (Joined Cases C-402/05 P and C-415/05 P, para. 202). The Court in Rosneft however hypothesized that even if the latter Regulation implementing a CFSP Decision was to be declared invalid, that would still mean that a Member State was to conform to a CFSP Decision. Thus, in order to invalidate a Regulation following a CFSP Decision, the Court would have to have jurisdiction to examine that CFSP Decision (para. 56).

 Once the admissibility of the question of jurisdiction was answered, the Court progressed onto answering the jurisdictional questions raised, in which it concluded that, ‘Articles 19, 24 and 40 TEU, Article 275 TFEU, and Article 47 of the Charter of Fundamental Rights of the European Union must be interpreted as meaning that the Court of Justice of the European Union has jurisdiction to give preliminary rulings, under Article 267 TFEU, on the validity of an act adopted on the basis of provisions relating to the Common Foreign and Security Policy (CFSP)...’ (Ruling 1 of 3). Yet, Court’s assertion of its jurisdiction was not completely unqualified. Rather, it must be meet one of two conditions. The first condition that it may meet, is that it must relate to Article 40 TEU on the Court having the jurisdiction to determine the boundary between CFSP and non-CFSP in its border-policing role. The second condition that the Court’s allows for the assertion of its jurisdiction, is when it involves the legality of restrictive measures against natural or legal persons.

 The remark on Article 40 TEU is significant from the Court (paras. 60-63). From some corners, the Court has been subject for some remarks for not properly utilising this Article for elucidating what the precise boundaries for a CFSP and non-CFSP. To date, it has shunned such possibilities provided to it to determine the fine lines of this providing, underling the fact that CFSP is an obscure area of the treaties, legally speaking. Rosneft perhaps elucidates some reasons why Article 40 TEU has not been used by the Court to date, namely that it does ‘not make provision for any particular means by which such judicial monitoring is to be carried out’ (para. 62). Thus, given this lack of guidance, the Court finds itself falling back on Article 19 TEU to, ‘ensure that in the interpretation and application of the Treaties the law is observed.’ (paras. 62 and 75).

It was advocated nearly a decade ago that rule of law concerns could be used to provide justification for the Court’s jurisdiction in CFSP cases upon a preliminary reference (De Baere 2008:186). Whilst this can be a common phrase with large recourse in a number of situations to justify Court actions, the Court instead of utilising this argument alone here (para. 72), went one-step further. alluded to the EU’s Charter on Fundamental Rights (CFR), selected Article 47 CFR, the right to an effective remedy and a fair trial, ensuring who has ‘rights and freedoms guaranteed by the law of the Union…the right to an effective remedy’. (para. 73), as a basis for clarifying this position on its jurisdiction.

From the Court’s perspective in CFSP-related cases, it certainly does not want the possibility for national courts to test the possibility for them to attempt and try invalidate Union legal acts in whatever form (paras. 78 and 79). It it long-standing jurisprudence of the Court stemming from Foto-Frost (314/85), that it alone has the ability to invalidate Union law, which the national courts cannot do. Thus, national courts only have the possibility to invalidate implementing national measures subject to their own constitutional requirements, and not the Union legal acts themselves. The most recent example of the Court clarifying (ie. extending) its jurisdiction into the CFSP arena was H v. Council (C-455/14 P). Unlike H v. Council however (Butler 2016:677 and on this blog), in which the Court asserted jurisdiction, it then proceeded to fling the substantive matter back to the General Court for adjudication. The Court here in Rosneft had to proceed and answer the substantive questions itself, which conclusively, upheld the sanctions in question.

Analysis

The Court and the Opinion of Advocate-General on its jurisdictional points can be commended for not allowing a legal lacuna to be created by further disenfranchising CFSP as a particular sub-set of Union law, and ensuring it was kept as close of the normal rules surround preliminary references as possible. Such a situation, where jurisdiction were not asserted, could have lead national courts to not send preliminary references to the Court in further questions seeking clarification on points of Union law. This potential chilling effect would most certainly hamper not just the nature of sanctions, but also the coherent interpretation of Union law as a whole, for which the Court is the ultimate adjudicator. By coming to the conclusion that the Court did have the jurisdiction, empowering itself with the ability to answer the substantive questions, AG Wathelet acknowledged he was breaking with the view of his colleague, AG Kokott, from her view provided in Opinion 2/13 on the EU’s accession to the ECHR. AG Wathelet said that without the Court having jurisdiction, it would undermine under Articles in the Treaties, namely, Article 23 TEU, which guarantees access to a Court and effective legal protection (para. 66), which albeit by an alternative method, the Court broadly arrived at the same conclusion.

Jurisdictional questions are not just inconsequential matters in the exercise of EU foreign policy, but have ramifications for EU procedural law, and the constitutional framework in which Union law operates. The Court’s judgment, clarifying jurisdiction for itself, when it was in doubt, further widens the potential for its scope for a role in EU foreign policy. Hence, how broad a deference is there at the Court to questions that ultimately hinge upon ‘sensitive’ areas of policy? Do Member States want the Court to have jurisdiction in CFSP? The Treaties do their best to prevent it, and five of the intervening six Member States and the Council in Rosneft pleaded that the Court did not have the ability to rule on the validity of CFSP acts. Yet the Court is no stranger to such questions, as it has dealt with jurisdictional questions on sensitive areas before, albeit in a slightly different context. The Area of Freedom, Security, and Justice (‘AFSJ’ or ‘Justice and Home Affairs’)). The Gestoras (C-354/04 P) and Segi(C-355/04 P) cases here provide us with suitable examples. In a pre-Lisbon context, the Court said to interpret the cases as falling outside the scope of the then Article 35(1) TEU because they were preliminary references would not be in ‘observance of the law’. Thus, the Court ruled in both Gestoras and Segi that jurisdiction for the Court in that field was permissible.

Given the Court’s judgment here in Rosneft, there is no doubt that it had to be slightly inventive to overall what was clearly a shortcoming in the drafting of the Treaties. For the Court to have not asserted jurisdiction in Rosneft would have seemed contrary to the overall premise upon which the Union is a ‘complete system of legal remedies’, which again it cited in Rosneft (para. 66), stemming from Les Verts (294/93). Do the Treaties allow vacuums to be created where judicial review is excluded, or does it by reasonable means provide for judicial review? The latter was not only an easy choice, but also the more logical one. Article 19(1) TEU states that the Court, ‘ensure that in the interpretation and application of the Treaties the law is observed’, and that, ‘Member States shall provide remedies sufficient to ensure effective legal protection in the fields covered by Union law.’

This, coupled with the Court’s own ‘Declaration by the Court…on the occasion of the Judges’ Forum organised to celebrate the 60th anniversary of the signing of the Treaties of Rome’ made the day before the Rosneft judgment was published, commenced with restating the premise that the EU is, ‘is a union governed by the rule of law’. Yet such spirited measures are always dampened by other events, and it is hardly in fitting with recent developments at the General Court. The NF and Others v. European Council cases, and the Orders by the General Court on 28 February 2017 (T-192/16, T-193/16, and T-257/16), stated that it did not have jurisdiction on the question of the legal basis upon which an ‘EU-Turkey statement’ was reached. The likelihood is therefore that such questions about the scope of the Court’s jurisdiction in non-CFSP matters will rumble on.

Whilst this Rosneft judgment has clarified the scope of the Court’s jurisdiction on preliminary reference cases dealing with CFSP-related matters, one has to ask why the litigant did not instead seek to go straight to the EU’s General Court with an action for annulment claim, seeking the annulment of the sanctions applying Union-wide. The Court said that the basis for actions for annulment through direct actions from the treaties do not constitute the only means for which sanctions are challengeable (para. 70). Thus, from this, we can deduce that Rosneft opens the basis for future forum shopping when legal entities are subjected to the Union’s comprehensive sanctions regime under the auspices of CFSP in the future.

Remaining questions on the legal limits of CFSP as a special area of area are yet to be fully answered in a categorical way. One example of such is the doctrine of primacy, with lingering questions on its applicability to CFSP. Even with this, jurisdictional questions in CFSP remain. In a recent Order of the General Court in Jenkinson v. Council (T-602/15), it found it did have the jurisdiction to deal with a staffing case stemming from a CSDP, under the wing of CFSP. This demonstrates the caution of the General Court on leading the way on jurisdictional matters, preferring to let the Court of Justice lead the way.

Nonetheless, Rosneft clarifies that CFSP is one (small) step towards wider integration with the rest of the EU legal order. Former Judge at the Court, Federico Mancini said once in a speech at the Danish Supreme Court (Højesteret) in Copenhagen that without the system of preliminary references, that the ‘roof would collapse’ (Mancini and Keeling 1991:2). Indeed, this week’s Rosneft judgment, ensuring that Article 267 TFEU preliminary references in cases involving CFSP can be heard, upholds this notion rather tightly.

Barnard & Peers: chapter 10, chapter 24
Photo credit: The Hill 


Tuesday, 28 March 2017

Reunifying Ireland: An EU law perspective




Nikos Skoutaris, Lecturer in EU law in the University of East Anglia; website on Secessions, Constitutions and EU law.

On 23 June 2016, Northern Ireland was one of the two UK constituent nations that voted to remain in the EU. Following that, Sinn Féin has called for a referendum for the unification of Ireland and thus for Northern Ireland to remain in the EU. This discussion has intensified after the most recent Northern Ireland Assembly election where the Unionist vote was significantly reduced.

Independently of whether such development is politically prudent and/or feasible, one has to note that, legally speaking, ‘Westminster has formally conceded that Northern Ireland can secede from the United Kingdom to join a united Ireland, if its people, and the people of the Irish Republic, voting separately, agree to this.’ Section 1 of the Northern Ireland Act 1998 is a rare example of a provision of a constitutional statute that explicitly recognises the right of secession of a region (see also the Good Friday Agreement). According to Schedule 1 of the Northern Ireland Act, however, such a referendum can only be organised if ‘it appears likely to [the UK Secretary of State] that a majority of those voting would express a wish that Northern Ireland should cease to be part of the United Kingdom and form part of a united Ireland.’ Theresa Villiers, the former Northern Ireland Secretary has made clear that, according to her, ‘there is nothing to indicate that there is majority support for a poll.

Still, if in the future, the majority of the people in Northern Ireland democratically decide to secede from the UK and join the Republic of Ireland, the EU legal order is able to accommodate such political development. The secession of Northern Ireland will not mean the creation of a new (Member-)State. Instead, it will trigger the territorial expansion of an EU Member State to which EU law already applies in accordance with Article 52 TEU. In a way, the reunification of Ireland could follow the precedent of the German reunification where the application of the acquis was extended to East Germany without an amendment of the primary legislation. The difference is that, in the case of Germany, the EU acquis did not apply at all in the East before the reunification, something that is very different with the situation in Northern Ireland.

However, Taoiseach Enda Kenny has asked recently for a special provision in any Brexit deal to allow Northern Ireland to rejoin the EU should it be united with the Republic. He did so, notwithstanding the fact that a special deal for Northern Ireland is the declared goal of the UK government.

So, the question is how could such a provision look like?

Obviously, there are not many EU law provisions that regulate the (re)unification of (Member-)States. The closest example is Article 4 of Protocol No 10 on Cyprus of the Act of Accession 2003. Protocol No 10 provides the terms for the application of EU law in Cyprus given that the island had not been unified at the moment it joined the EU. In particular, it provides for the suspension of the application of the acquis in northern Cyprus, a suspension which shall be lifted in the event of a solution.

If such solution occurs in the future, Article 4 provides for a simplified procedure that enables the Union to accommodate the terms of the reunification plan. In particular, Article 4 allows the EU, by a unanimous Council Decision at a future date and in the event of reunification, to alter the terms of Cyprus’ EU accession that are contained in the Act of Accession 2003. In other words, it allows the Council to amend primary law (ie Act of Accession 2003) with a unanimous decision.

This might sound like a heresy. However, the Treaties foresee special procedures for their amendment in some cases. The best example, for the purposes of this post, is the Council decision on the basis of Article 2(2) of the 1994 Accession Treaty which adjusted the instruments of accession after Norway’s failure to ratify. Several Articles of this Accession Treaty and of the Act of Accession were amended by a Council decision while other provisions were declared to have lapsed. Thus, in that case, the Council, itself, amended primary law in a simplified procedure without any ratification of the Member States.

To the extent that the ‘Brexit’ Agreement will be considered as part of primary law, a similar provision regulating the reunification of Ireland could be included and could assist the smooth transitioning of Northern Ireland back to the EU. Of course, the question of the reunification of Ireland –as many other questions related to Brexit- is first and foremost political. It is important to point out, however, that EU law is flexible enough to accommodate such political developments.

Barnard & Peers: chapter 27

Photo credit: Wikipedia

Tuesday, 21 March 2017

What is the point of minimum harmonization of fundamental rights? Some further reflections on the Achbita case.



Eleanor Spaventa, Director of the Durham European Law Institute and Professor of European Law, Law School, Durham University

Ronan McCrea has already provided a very thoughtful analysis of the headscarf cases; this contribution seeks to complement that analysis by focusing on two issues arising from the Achbita case: first of all, the structural problems with the ruling of the Court, both in terms of reasoning and for the lack of information provided; secondly, the more general implications of the ruling for fundamental rights protections and the notion of minimum harmonization in the EU context.

It might be recalled that in the Achbita case a Muslim woman was dismissed from her employer for refusing to remove her headscarf, contrary to the employer’s policy of neutrality, which included a ban on wearing religious symbols. The case then centred on the interpretation of the framework discrimination Directive (2000/78) which prohibits, inter alia, discrimination on grounds of religion. The Belgian and French Government (which had a direct interest because of the Bougnaoui case) intervened in favour of the employee, believing that the discrimination at issue was not justified (Achbita opinion, para 63). The Court, following the Opinion of AG Kokott, found that the rules at issue might constitute indirect discrimination; that the employer’s aim to allegedly maintain neutrality was a legitimate aim as it related to its freedom to conduct a business as protected by Article 16 Charter. It then indicated that the policy was proportionate, if applied with some caveats.

The reasoning of the Court – some structural deficiencies

The headscarf cases are of fundamental importance to the European Union and to all of its citizens, not only those who practice a non-dominant religion, and as such have been widely reported even outside of the EU. One might have expected the Court to engage with a more thorough analysis of the parties’ submissions and of the issues at stake. Instead, we have two very short rulings with very little detail. Just to give an important example – in both cases the French and the Belgian governments sided with the claimants, hence drawing a very important conceptual limit to the principle of laïcité which is justified, in this view, because of the very nature of the State and its duty of neutrality, a duty which cannot be extended to private parties (or if so only exceptionally). This important distinction is not discussed in the ruling, not are the views of the governments who would be directly affected by the rulings.

More importantly though, the fact that the arguments of the parties are not recalled has also more general consequences: as it has been noted by Bruno De Witte elsewhere, the fact that no hermeneutic alternative is provided might give the impression that no hermeneutic alternative is in fact possible, as if legal interpretation is simply a matter of discovering the true hidden meaning of a written text. This approach, not uncommon in civil law jurisdiction but more nuanced in constitutional cases, hides the fact that, especially in cases of constitutional significance, there is more than one legitimate interpretative path that could be chosen, which also reflect different policy alternatives. Interpretation then is also a choice between those different paths: a choice which is, of course, constrained by the relevant legal system and one that might be more or less persuasive.  The failure to acknowledge counter-arguments then results in rulings, like the ones here at issue and many others in sensitive areas, which are not only potentially unhelpful, but also close the door to more effective scrutiny of the reasons that lead the Court to follow a given interpretation.

In the same vein, the analysis of the discriminatory nature of these provisions is rather superficial. In particular, there is no thought given to the fact that contractual clauses allegedly protecting a principle of neutrality, might not only have a discriminatory effect against certain individuals, but might have important inter-sectional (or multiple) discriminatory effects. In other words, a rule banning religious symbols might in fact also have a more pronounced effect on people from a certain ethnic background or a certain gender. Equally disappointing, and in this writer’s opinion legally flawed, is the approach taken in relation to the finding of the potentially indirectly discriminatory effects of the rules at issue. Here, the Court requires the national courts to determine whether the ‘apparently neutral obligation [(not to wear religious symbols)] (…) results in fact in persons adhering to a particular religion or belief being put at a particular disadvantage.” (para 34, emphasis added).

There are two issues to be noted here: first of all, the Court remains silent as to what type of evidence of indirect discrimination is required, and by whom. In discrimination cases, burden of proof is crucial. This is recognised by the discrimination directives at EU level, including Directive 2000/78 which provides that if the claimant shows direct or indirect discrimination, then it is for the ‘respondent to prove that there has been no breach of the principle of non-discrimination’ (Article 10(1)). One would have expected then the Court of Justice to instruct the national court to require the defendants to discharge this duty with a certain rigour, also by means of statistical analysis of the effect of such policies on religious minorities. Yet, the Court does not even engage with this question.

Secondly, and not less important, the Court seems to imply that a rule that discriminates all religious people would not be problematic. For instance if, say, Muslims and Orthodox Jews were equally discriminated against, whilst non-religious persons were unaffected, then, based on the dicta of the Court, there would be no discrimination. This interpretation seems restrictive and not supported by the text of the directive (or the Charter) that refers to discrimination on grounds of religion in general. In any event, in discrimination cases it is crucial to identify the comparator, and the Court fails to do so clearly and to support its choice with sound legal arguments. But, beside these very important structural issues, the Achbita ruling raises other more technical as well as general issues, as to the extent to which the Court’s interpretation might affect the Member States’ discretion to provide more extensive protection that that provided for in the Directive.

Minimum harmonization and fundamental rights

Directive 2000/78 is intended only to set minimum standards, so that Member States can, if they so wish, provide for a more extensive protection. Indeed many Member States have done so by extending either the protected categories of people, or the field of application of the legislation, or both. In theory then, the Achbita ruling should not be seen as the last word in relation to the treatment of religious people at work. After all, if Belgium or France or any other country finds the ruling problematic, it can simply pass legislation prohibiting private employers from requiring religious neutrality from its employees, unless of course a specific dress code is necessary to ensure the health and safety of the worker or the public. Viewed in this way, and notwithstanding the structural problems identified above, the ruling seems very sensible: it is agnostic, in that it does not impose either model on Member States, allowing therefore a degree of variation in a very sensitive area, something which, as eloquently discussed in McCrea’s post, might not be a bad thing. After all, this is the same path that has been taken by the European Court of Human Rights.

However, things are slightly more complicated in the European Union context. In particular there is nothing in the ruling to indicate that the Directive sets only minimum standards so that it would be open to those Member States to go further in protecting people holding religious beliefs. And, more crucially, the Court, mirroring the opinion of Advocate General Kokott, refers to the EU Charter of Fundamental Rights when assessing the legitimacy of the justification put forward by the employer. In particular, it finds that the business’s wish to ‘project an image of neutrality (…) relates to the freedom to conduct a business that is recognised in Article 16 of the Charter and is, in principle, legitimate’.

The reference to the Charter, which indirectly frames the question as a clash of fundamental rights, is important because, in the EU context, when the Charter applies it sets the fundamental rights standard. In simpler terms this means that should a Member State wish to provide more extensive protection to ensure that employees are not discriminated on grounds of their religious belief, something that is allowed under Directive 2000/78, it might be prevented from doing so since, pursuant to the Achbita ruling, it would infringe the right to conduct a business as protected by the Charter. In this way, far from leaving the desired flexibility and discretion to the Member States, the Court sets the standard – employers have a fundamental right, albeit with some limitations, to limit the employees’ right not to be discriminated against. One might well ask then, much as it has been remarked in relation to the Alemo Herron case, what is the point of minimum harmonization directives if the upward discretion of the Member States is so curtailed.

Conclusions

The Court of Justice did not have an easy task in the Achbita case: it was pretty much a ‘damned if you do, damned if you don’t’ scenario. For sure, some of us would have liked the balance at issue to be tilted firmly in favour of religious minorities, especially given the growing evidence of attacks and discrimination against, particularly, Muslim women. The Court chose a different path and that is, of course, within its prerogatives. However, the way that path was trodden upon leaves many open questions both in relation to the way the result was achieved, and to the many questions it overlooks. What is most troubling is the implication that the freedom of Member States to provide greater protection towards minorities may, in principle, be constrained by the Court’s interpretation of the freedom to conduct a business.

Barnard & Peers: chapter 9, chapter 20

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Monday, 20 March 2017

From Austerity Back to Legitimacy? The European Pillar of Social Rights: A Policy Brief



How Juncker can make ‘The European Pillar of Social Rights’ deliver a powerful message that the EU is an area of dignity, autonomy and social justice

Claire Kilpatrick (EUI), Elise Muir (Veni Fellow, Maastricht) and Sacha Garben (College of Europe, Bruges)

Since the financial crisis began and the EU's response to it included wider austerity in a number of countries, there have been doubts among many citizens that the EU is still committed to prosperity and rising living and working standards. The recently announced ‘European Pillar of Social Rights’ is an attempt to address this concern. In our view, the Pillar must include binding and high-profile pledges - on minimum wage and minimum income - in order to address citizens' concerns and for the EU to move on from austerity back to legitimacy.

The ‘European Pillar of Social Rights’ is a Commission policy initiative launched in March 2016. Our analysis reflects on the policy process and proposals to date. It explains why a High-Level Conference on the Pillar held in late January 2017 is the most important staging-post to date. We make proposals for orienting the Pillar initiative towards delivering dignity, autonomy and social justice in the EU and evaluate the constitutional implications, especially in terms of EU competence, of the commitments to introduce EU measures on minimum pay and income, and to restrict the Pillar to the euro-area states. The Pillar initiative seems likely to feed into the Commission White Paper on the Future of Europe launched in March 2017 which will be followed by a series of reflection papers of which the first mentioned is developing the social dimension of Europe. Accordingly it is an important new policy juncture for Social Europe which deserves analysis and input.

The Pillar is an open process with impressive civil society and EU institutional participation.

The High Level Conference organised by the Commission on 23 January 2017 on the European Pillar of Social Rights showed it attracts as much attention as it is mysterious. Numerous stakeholders alongside at least ten Commissioners, including President Juncker and Vice-President Dombrovskis, representatives of various EU institutions including President Tajani of the European Parliament and government ministers converged on Brussels to voice their opinions on the European Pillar of Social Rights.

The many interventions left little doubt that the precise legal shape and policy content of the Juncker Pillar remains undetermined and thus open for discussion. Hence, rather than reading the Pillar consultation document with its draft list of ‘principles’ as a quasi-finalised text with just its legal status and scope to be determined, the Pillar consultation is best seen as providing a vehicle for a wide range of proposals on resetting Social Europe.

Seen as such a process, the Pillar consultation has been a success. Over 16,000 individuals and organisations filled in the questionnaire issued as part of the Consultation and around 200 written contributions were submitted to the Commission. In Autumn 2016, national consultation events were held across the EU Member States. The very substantial NGO and union presence at the High-Level Consultation testifies to civil society engagement and investment in the Pillar consultation. Amongst these, the Social Policy Platform deserves to be highlighted. By bringing together since 1995 over 30 different social NGOs, including Age Platform Europe, PICUM (Platform for International Cooperation on Undocumented Migrants), EAPN (European Anti-Poverty Network), Housing Europe, ILGA-Europe, European Youth Forum and the European Disability Forum, it had an added legitimacy and voice in the process. It disseminated well-defined proposals for the Pillar. In light of Juncker’s announcement in his closing speech, it produced the most resonant proposal of a minimum income directive and a proposal on minimum pay via the European Semester.

The frames of discussion failed to give EU social rights and values their central place in the Pillar.

The European Pillar of Social Rights initiative comes after a decade which has altered perceptions of the EU as a benign or mildly positive force for social justice in Europe.  Sovereign debt and EMU governance are one important reason for this shift. Another relates to concerns triggered by free movement after the 2004 and 2007 enlargements. Political developments make it vital for the EU to use the Pillar to reassert the pursuit of social justice as a central part of its mission. Yet the urgency and importance of recentring the EU’s social justice roles and responsibilities was not fully acknowledged by many actors at the High-Level Consultation. There is a risk of doing too little.
Getting the frames of analysis right is crucial to guide the Pillar and the decisions and actions on its implementation. The frames or narratives which were very present during the High-Level Consultation were:

Social Europe was desirable provided EMU debt and deficit limits were respected;
Social Europe, the EMU and the internal market can or do happily co-exist;
Social Investment is the guiding frame for the Pillar of Social Rights and is not incompatible with social rights as human rights;
Adapting to new technologies and work platforms is the main priority for Social Europe.

In our view, these frames should not be those guiding the Pillar process or its implementation. Instead it is vital to make it explicit that the driving force for legal and policy change is the desire to protect the dignity and autonomy of individuals as well as social justice.

Dignity recognises the equal and intrinsic worth of every human being while autonomy requires political institutions not to deprive individuals of valuable options in areas of fundamental importance in their lives. In the absence of such an explicit message in the Pillar, or if the message is blurred by economic arguments in support for change, or made subject to economic conditions, or wishing away hard choices between the economic and the social, or attributing Social Europe’s malaise to new technologies and platforms, the message and its delivery will be imperilled. 

Protection of individuals and their dignity and autonomy has a firm EU law basis bolstered by national constitutional and international human rights law. Dignity is the foundational principle of the EU Charter of Fundamental Rights and many of the rights it contains are specifications of those foundational commitments. Hence ,for example, the Charter ‘recognises and respects the right to social and housing assistance so as to ensure a decent existence for all those who lack sufficient resources’ (Article 34(3)) and ‘the right to working conditions which respect his or her health, safety and dignity’ (Article 31). Most closely related to the value of autonomy in Social Europe are the EU Charter commitments to the right to engage in work and pursue a freely chosen occupation as well as the freedoms of association (Article 15), expression, information and consultation (Articles 11 and 27), to collectively bargain and take collective action (Article 28).

Beyond the EU Charter and human and constitutional rights’ commitments, the EU’s social justice and progress objectives feature prominently in the Treaties: in the TFEU’s preamble as the resolve to ensure the ‘social progress of their States by common action to eliminate the barriers which divide Europe’. Article 3 TEU conceptualises the EU as ‘a social market economy’ aiming at full employment and social progress, and provides that it ‘shall combat social exclusion and discrimination, and shall promote social justice and protection’. These objectives shall furthermore be mainstreamed across all EU policies, in accordance with Article 9 TFEU, which provides that ‘in defining and implementing its policies and activities, the Union shall take into account requirements linked to the promotion of a high level of employment, the guarantee of adequate social protection, the fight against social exclusion’.

A European Pillar of Social Rights must be founded on these values and be concerned with their promotion and guarantee in a changed EU membership and EMU context.

The EU constitutional implications of a Eurozone pillar and minimum income and pay guarantees

The Commission President made a twofold announcement: an initial focus of the Pillar on the Eurozone and a dual guarantee for minimum pay and income.

We strongly endorse the proposals to focus on minimum pay and income for those living and working in Europe. These proposals not only address the preoccupation that the EU has threatened these protection floors, they also enshrine the values of dignity and autonomy in the EU. Yet to properly realise those values requires minimum pay and income instruments to apply to all EU Member States, not simply Euro area states. Sovereign debt arrangements applied to three non-euro area states and concerns that enlargement threatens the social floor are not confined to euro area states either. Minimum pay and minimum income are social guarantees of a fundamental nature that should apply across the EU. Indeed the social acquis, other than the brief opt-out by the UK between Maastricht and Amsterdam, has always applied to all those living and working in Europe and should continue to do so.

Moreover, to make them tangible, these EU minimum income and pay guarantees must be enshrined in visible and effective instruments. In both cases, our preference would be for legally binding Directives which should be complemented with soft law commitments in the European Semester and programme commitments in sovereign debt loan states.

This raises questions of EU competence to adopt such legally binding measures.

For minimum income, we agree with the Social Policy Platform that Article 153(1)(h) TFEU which allows for binding measures to be adopted using the ordinary legislative procedure for the integration of persons excluded from the labour market is appropriate.

It is widely assumed that it is impossible for the EU to adopt a minimum pay directive because Article 153(5) TFEU states that the social policy legal base ‘shall not apply to pay’. However, the Commission may have in mind a creative literal reading of the combination between Article 153(5) and Article 352 TFEU (the ‘residual powers’ clause of the Treaties). Article 153(5) TFEU could be read as excluding only the adoption of a minimum pay directive under the Social Policy Title of the Treaty without excluding other possible legal bases.

Article 352 TFEU would then be examined as a potential legal basis for a minimum pay directive. Article 352 can be used ‘where the Treaties have not provided the necessary powers’ but cannot be used to harmonise Member States’ laws or regulations ‘where the Treaties exclude such harmonisation’. However, this harmonisation exclusion could be read as applying only in those cases where the Treaties clearly in terms outlaws harmonisation such as in the areas of vocational training (Article 166 TFEU) and culture (Article 167 TFEU) (each allowing legislative measures to be adopted ‘excluding any harmonisation of the laws and regulations of the Member States’). It therefore would not apply to Article 153(5) TFEU. Following this interpretation, a minimum pay directive could be adopted if it achieved the unanimous Member State support required under Article 352 TFEU. It remains to be seen if such a line of reasoning would be accepted by the EU legislator.

The question could be raised whether the internal market legal basis of Article 115 TFEU could be used for the adoption of a minimum pay directive (Article 114 TFEU cannot be used, since Article 114(2) TFEU prevents reliance on Article 114(1) to protect the rights and interests of employed persons). There is an argument that such a measure, even if it would retain certain differences in minimum pay levels among EU Member States, would help reduce distortions in competition. Not only would it facilitate the application of the Posting of Workers Directive in the area of cross-border service provision, having a certain minimum pay level in all Member States could more generally help limit competition on wages. Whether the expected reduction in distorted competition would be sufficient to fulfil the conditions for use of the internal market legal basis is an open question, and would depend in part on at what (relative) level the wage would be set and whether this significantly decreases current differences in pay among the Member States.

However, even if this would be accepted as possible in legal terms, there are several reasons why Article 115 TFEU would not be the advisable course of action. If the directive is about achieving genuinely social objectives, the use of an internal market legal basis is unwise, as the Court is then more likely to interpret the measure in a market-friendly way in case of a conflict between ‘the social’ and ‘the market’ (which is arguably what happened in the case of the Posting of Workers Directive, as well as the Collective Redundancies Directive).  And as Article 115 TFEU requires unanimity as much as Article 352 TFEU, there is little strategic advantage in using it either.

Subsidiarity concerns will evidently be addressed by setting pay and income levels appropriate to each state. EU respect for the Council of Europe and commitment to social rights can be underlined by using that body’s European Social Charter commitments and elaboration of the right to a fair remuneration (Article 4(1)) and to social assistance (Article 13) as base-lines.

The former provision requires States ‘to recognise the right of workers to a remuneration such as will give them a decent standard of living’, and the European Committee of Social Rights has ruled that the lowest net wage must be above a minimum threshold, set at 50% of the net average wage, while state conformity will be assumed above 60% of the net average wage. The latter provision deems assistance appropriate where the monthly amount paid to a person living alone is not manifestly below the poverty threshold (50% of median equivalised income as established by Eurostat).

If it is decided necessary for transitional or political reasons to proceed with the nineteen euro area states or some other subset of EU Member States, this opens a further set of questions about the legal basis of measures for minimum pay and income as the legal bases indicated are for all Member States. Although the Lisbon Treaty added a new legal basis, Article 136 TFEU, for measures addressed only to euro area states, we do not consider this a suitable basis for minimum income and pay legislative proposals for two reasons. The first is that, although used (questionably) to create measures providing for EMU sanctions for euro area states (see C. Kilpatrick, ‘The New Economic Component of EMU: A Lawful and Effective Design?’ EUI Working Paper, ADEMU Horizon 2020 Project Series, 2016), its centre of gravity lies in strengthening coordination and surveillance under the European Semester. The second is that legislative proposals for minimum pay and income, based on dignity, autonomy and social justice, should not be grounded in a macro- economic competence.

What then are the alternatives for legislative measures on minimum pay and income covering only some EU Member States? One possibility is enhanced co-operation, a process whereby some Member States adopt EU law without unwilling Member States (see Article 20 TEU and Articles 326-334 TFEU). This can be used only as a last resort where the Council has established that the objective sought cannot be achieved within a reasonable period by the EU as a whole and hence could provide an alternative avenue for minimum income and pay proposals should EU-wide agreement prove unattainable.

Another possibility is ‘going outside’ the Treaties via an international agreement on these matters between only the participating euro area states or those states and other willing participants. The former was the model used in the sovereign debt crisis to set up the European Stability Mechanism in 2012 and its predecessor, the European Financial Stability Fund in 2010. The latter was the path chosen for the Fiscal Compact Treaty of 2012. However, such parallel integration however raises important legitimacy concerns: see S. Garben, ‘Restating the Problem of Competence Creep, Tackling Harmonization by Stealth and Reinstating the Legislator’, in: S. Garben and I. Govaere (eds.), The Division of Competences in the EU Legal Order: Reflections on the Past, the Present and the Future (2017, Hart Publishing).

This is not to deny Mr Juncker’s welcome recognition that the constraints imposed in the context of EU macro-economic governance justify special attention to socializing the European Semester. It is also certainly the case that EU legislative commitments can usefully be complemented by action in the European Semester. We make proposals to do so in the next section. 

Beyond the Juncker announcement: the Pillar needs to strengthen, broaden the social acquis and socialize the European Semester

At the time of the 60th anniversary of the Treaty of Rome, it may be recalled that the TFEU enables the adoption of EU legislation on a fairly broad set of social questions. For instance, Article 153 TFEU allows for the adoption of legislation on workers’ health and safety, working conditions or information and consultation of workers. A whole body of social legislation has been adopted at EU level and begs for modernisation. As mentioned in this note already, the Charter of Fundamental Rights of the European Union - that has the same legal value as EU primary law since the entry into force of the Lisbon Treaty - also contains a set of provisions on solidarity that have so far been little used.

Curiously, the ability for the EU to intervene through legally binding instruments had been subject to little attention during the High Level Conference. One could hence fear that the Commission will shy away from making hard law proposals. We would thus like to underline the importance of anchoring the Pillar in EU social policy and giving expression to the social provisions contained in the Charter. This is necessary to ensure that the Pillar indeed enhances the protection of the dignity and autonomy of individuals across Europe.

We have already made suggestions elsewhere to broaden and consolidate the EU social acquis (see S. Garben, C. Kilpatrick and E. Muir, Towards a European Pillar of Social Rights: Upgrading the Social Acquis, College of Europe Policy Brief #1.17). We suggested the adoption of (1) a Directive for the Protection of Dependent Workers, ensuring the application of the existing EU social and labour law measures to all dependent workers (2) a Protection against Precarious Work Directive, (3) a Directive for the Enforcement of Workers’ Rights.  We also called for (4) a Declaration safeguarding the integrity of the social acquis as an EU floor for worker protection.

A further re-centring of EU competences in the social field could lead to the re-adoption of Directives such as the Collective Redundancies Directive and the Directive on the Transfer of Undertakings on social legal bases. Indeed, these Directives remain abnormally grounded in EU internal market competences. It would be naïve to ignore the possibility of tensions between the economic and the social dimensions of these instruments, as illustrated by the recent AGET case before the CJEU (freedom of establishment v. domestic rules protecting against collective redundancies). The social nature of these legislative instruments ought thus to be consolidated. The assertion of such an autonomous mandate for social rights would allow to better articulate economic and social concerns in cases of tensions.

In the meanwhile, existing tools of economic governance could be re-adjusted to make more space for genuine social priorities. In that sense, the social platform wisely suggested to use the infrastructures of the European Semester to counter the current trend pushing Member States to readjust wages downwards. The Commission could indeed support the introduction of references to adequate minimum wages in the Annual Growth Survey as well as in the Country Specific Recommendations and keep track of the development of wage levels. This would give more bite to the employment policy prong of the European Semester.

To that effect, it is important that Country Specific Recommendations continue to be adopted on the dual legal bases of Articles 121(2) (economic policy) and 148(4) TFUE (employment policy). Key players at European level are thus not only those in charge of economic and financial affairs but also those responsible for employment and social policy who are more likely to ensure that due attention is paid to employment and social concerns indeed. Mark Dawson has usefully observed that the involvement of the latest category of actors could be further enhanced in the Macroeconomic Imbalance Procedure (MIP; see M. Dawson, ‘The European Semester: Displacing Social Policy in the New ‘New Governance’’ in C. Kilpatrick (ed.) The Displacement of Social Europe (forthcoming). On file with the author).

Indeed, to the extent that this procedure does result in suggesting - if not imposing – changes in domestic social and employment policies as part of the Country Specific Recommendations, the decision-making process leading to their adoption shall be adjusted. This should allow for a stronger involvement of actors specialised in the field such as the Council configuration on Employment, Social Policy, Health and Consumer Affairs. For instance, see the Report from the Council Employment Committee and Social Protection Committee on ‘Assessment of the 2016 Country-specific Recommendations (CSRs) and the implementation of the 2015 CSRs’ on labour market aspects (p 10) and on social protection and inclusion (p 21).

Now, the Juncker Commission may be considering reserving, or enhancing, the emphasis on minimum pay (and income) in recommendations specific to Euro area members. Although we would regret a focus on Eurozone members only, if this approach was adopted it would be all the more so important to refer to Article 148 TFEU (employment policy) as a legal base besides Articles 136 (Eurozone) and 121(2) TFEU (economic policy) in order to ensure adequate representation of social players and interests.

Conclusion

The most concrete elements of information received during the Conference are unquestionably the announcements made by Commission President Juncker. Let us be clear, sending a message that the EU guarantees (directly or indirectly) minimum income and wages would be most welcome; and giving flesh to such guarantees through tools available in the context of EU economic governance is understandable. This however should be framed with appropriate conceptual and legal tools placing individual protection at the core of the process and, to that effect, it ought to be backed up with a solid effort to modernise the EU social acquis.

In that sense, it is to be hoped – as hinted at by President Juncker himself - that the initiative for the European Pillar of Social Rights will live up to the standards of the ambitious social agenda called for by Commission President Delors in the late 1990s. It may be recalled that this had resulted in the Proclamation by 11 out of the 12 Member states of the Community Charter of Fundamental Social Rights and came with a strong impulse for the adoption of new legislation (point 28 of that Charter). In the new EMU and enlargement context, the legislative focus should be on providing an updated and more comprehensive EU floor of social rights and should be accompanied by proposals to socialise the European Semester both in its process and its substance.

Barnard & Peers: chapter 20
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