EU Law Blog

Reform Treaty - Institutional Changes Part 1 (European Council, Commission, Parliament and High Representative)

Now let's look at the institutional changes brought about by the Reform Treaty.

There's a lot of them, so we'll deal with the European Council, the European Parliament and the Commission this time.

The European Council becomes a separate institution from the Council of the Union. It will have a President (a single person) to be appointed by qualified majority for a term of 30 months, renewable once. The President of the European Council will be a full time position and not linked to any national mandate unlike the position today where a head of a national government assumes the role.

Not much change to the Council. The current system of six-month Presidencies is largely unchanged. With the exception of the Foreign Affairs Council, which is chaired by the new High Representative of the Union for Foreign and Security Policy, the six-month Presidency of the various configurations of the Council will be held by representatives of the member States under an equal rotation system and on the basis of a common program drawn up with two other member States for a period of 18 months, known as a "team presidency".

The Commission will change a lot. Until 2014 the Commission will be composed of one Member per member State. But, from 2014, it will be composed of a number of Members corresponding to two thirds of the number of member States on the basis of a system of equal rotation allowing each Member State to have a national serving as a Member for two out of three terms of office. The number of Commission Members may be amended by a unanimous decision of the European Council.
Its right to initiate legislation will be extended (except in CFSP).
The President of the Commission will be elected by the European Parliament on the basis of a proposal from the European Council, which will take account of the result of the elections to the European Parliament. The President of the Commission will have the power to dismiss a Member of the Commission, a power he does not formally have at present.

The role and composition of the European Parliament undergoes changes. Its role and power is increased because nearly all legislation will be adopted by the co-decision procedure. It has increased powers in budgetary matters because it gets to approve the multiannual financial framework and because co-decision is used in setting all compulsory and non-compulsory expenditure. As for international agreements, the European Parliament will have to give its assent to all agreements relating to matters covered by codecision or requiring its approval, significantly increasing its role.
Its composition will be modified: The number of seats is limited to 751 (750 plus the President) from 2009. Each member State will be represented in accordance with the principle of degressive proportionality, with a minimum threshold of six members per member State and a maximum of 96. The distribution of seats will be decided unanimously by the European Council, acting on a proposal from the European Parliament and with the latter's approval. The distribution of seats agreed by the European Council is: 96 for Germany, 74 for France, 73 for the United Kingdom and Italy, and so on.

The High Representative for Foreign Affairs and Security Policy is given a big boost and will become a bit of a hybrid, straddling the Commission and the Council. He (or she) will be appointed by the European Council, acting by a qualified majority and with the agreement of the President of the Commission. He will be a Vice President of the Commission and be responsible within the Commission for responsibilities given to it in external relations and for coordinating other aspects of the Union's external action. The new High Representative is responsible for conducting the CFSP. He will chair the Foreign Affairs Council, submit the necessary proposals and receive executive mandates from the Council. He will be assisted by an External Action Service comprising officials from the Commission and the General Secretariat of the Council as well as the diplomatic services of the member States. He will represent the Union for matters relating to the common foreign and security policy together with the President of the European Council. On the other hand, the external representation of the Union on issues other than CFSP and on monetary matters will be ensured by the Commission and thus by the competent Members of the Commission (wexternal action).

That will do for now.

Next time, we'll look at the new big entrant, the national Parliaments, as well as some other institutional changes

Tillack wins in ECHR

Remember that business we wrote about a while ago concerning the journalist Martin Tillack who was "investigated" by OLAF for having obtained documents alleging corruption by Commission officials ?

At the instigation of OLAF, the Belgian police conducted raids and searched Mr Tillack’s home and office and basically trashed both places.

Mr Tillack then took his case to the European Court of Human Rights. He sued the Belgian state, alleging a breach of Article 10 of the European Convention on Human Rights (freedom of expression) and claimed damages.

He won. And he was awarded €10000 (US$ 14,834) in damages and €30000 (US$ 44,497.51) in costs.

The ECHR held that the right of a journalist to protect his or her sources was protected by Article 10 of the European Convention on Human Rights that protected freedom of expression. According to the Court the right to protect sources was not a mere privilege to be granted or taken away depending on the lawfulness or unlawfulness of their sources, but was part and parcel of the right to information, to be treated with the utmost caution in the case of Tillack where he had been under suspicion because of vague, uncorroborated rumors, as subsequently confirmed by the fact that he had not been charged. The Court also described the lamentable and heavy handed manner in which the raids took place. It noted that almost all of Tillack's working papers and tools were seized and placed under seal (16 crates of papers, two boxes of files, two computers, four mobile phones and a metal cabinet). The Belgian police and OLAF even contrived to lose a chest of papers for seven months.

The ECHR judgment is only available in French here. Or try this link.

Reform Treaty : Salient Changes

In our second post on the Reform - Lisbon Treaty, we'll give a birds eye view of the salient changes that the new Treaty will bring about. Then, in some future posts we'll look at certain aspects, such as the institutional changes, in a little more detail.

The Reform Treaty does basically eight things.

1. It replaces the present European Union and the European Community with a single European Union enjoying legal personality. As a result the new EU only will have the power to conclude an international agreement within the areas of its competence.

2. The Reform Treaty will merge the three pillars that have been in existence since the Maastricht Treaty (see also, the text here). Special procedures for the common foreign and security policy (CFSP), including defence policy, will be retained though.

3. The new Treaty lays down and lists of the values and objectives of the Union in its first two provisions. The values are: Respect for human dignity, freedom, democracy, equality, the rule of law and respect for human rights, including the rights of persons belonging to minorities, pluralism, non-discrimination, tolerance, justice, solidarity and equality between men and women. Those values constitute the frame of reference for future accessions to the Union, and for any sanctions against a member State that infringes those values in an egregious and persistent manner. The new Treaty provides for an increased number of objectives : Peace, full employment, sustainable development, cultural diversity, solidarity, cohesion and protection of citizens. The objectives are more numerous than those currently listed in Article 2 of the EU Treaty. But, as we've noted before the principle of "free and undistorted competition", currently mentioned in Articles 3 and 4 of the EC Treaty, is eliminated as it is not an end in itself. As we noted, the antitrust rules themselves are unchanged and there will be a new Protocol on the internal market and competition having the same legal value as the Treaty itself.

4. Article 6 of the new European Union Treaty states that the Union will accede to the European Convention on Human Rights (ECHR). The FEU Treaty also provides that accession to the ECHR will be agreed by the Council acting unanimously, with the act concluding the agreement to be ratified by all member States.

5. The new Treaty clarifies the basic principles governing relations between the Union and the member States. Provisions set out the competences conferred on the Union, the duty of sincere cooperation and the principle of equality between member States. National security remains the sole responsibility of the member States according to an express provision to that effect. A subsequent post will deal with this in a little more detail.

6. The institutional framework is changed significantly. We'll deal with this in a later post too. For now it is enough to say that the European Council is set up as a discrete institution, separate from the Council, with a President appointed for a 30 month term. The Commission's composition is changed. Above all, the role of national Parliaments is reinforced with an "early warning system" allowing them to give an opinion on whether a proposal complies with the principle of subsidiarity or not.

7. A "neighborhood policy" is set up providing the Union's initiatives in this field with an explicit legal basis.

8. Rather ominously, a clause on withdrawal by a member State from the Union. Withdrawal is not subject to any prior condition and becomes effective once agreement has been reached between the Union and the member State concerned or, two years after notification of the intention to withdraw when no such agreement has been reached.

That's it for now, folks. The next installment will deal with the institutional changes.

Reform/Lisbon Treaty: Finalization, Ratification and Entry into Force

By popular request, we're going to write some posts about the contents of the Reform Treaty. The aim is to provide a succinct, introductory overview.

Don't expect anything as good or as detailed as Professor Steve Peers' of the University of Essex, England, analysis of the draft back in November 2007. Professor Peers kindly sent us the link to his analyses and we recommend them most highly.

The Reform Treaty amends the Treaty on European Union (EU Treaty), which will keep its name and the "Treaty establishing the European Community" (EC Treaty), which changes its name to the "Treaty on the Functioning of the European Union" (FEU Treaty). Sure that's an ugly name and rather unfortunate as "feu" means "late" in French (as in "le feu Monsieur Dupont", the late Mr Dupont). The Euratom Treaty is largely unchanged in substance though its institutional provisions will be updated mutatis mutandis.

The draft has now been agreed on a political level and is currently being finalized and the articles renumbered. If it is ready, the Reform Treaty will be signed in Lisbon on December 13th 2007. It will become known as the "Lisbon Treaty". On December 12th the Charter of Fundamental Rights will be "proclaimed" by the Presidents of the European Parliament, Council and Commission in the version set out in the Constitutional Treaty of October 29th 2004.

After that, the Treaty will have to be ratified by the member States in accordance with their respective constitutions. If all the ratifications are completed in time, the Treaty will enter into force on January 1st 2009. Failing that, it will enter into force on the first day of the month following the last ratification (Article 48 EU Treaty). Some provisions in the Treaty enter into effect later. For instance, the new rules on the composition of the Commission and the new definition of the qualified majority in the Council enter into force in 2014.

Recognition of US Judgments in Europe: Baumgartner's Article

Professor Samuel Baumgartner of the University of Akron Law School has written an interesting - and useful - article on whether and how US judgments are recognized and enforced in Europe.

US litigation has several distinctive features that somehow shock lawyers and policy makers in Europe and there is some resistance to enforcing US judgments there. Added to which there is competition between London and New York to become the courtroom of the world. So what really happens ? Professor Baumgartner's article helps to provide an answer.

Here's what the abstract states:

Transnational cases have become a prominent part of the litigation landscape in the United States. Class actions against foreign defendants are widespread, the Alien Tort Claims Act has emerged as a mainstay of proceedings to enforce international human rights law in U.S. courts, and the globalization of the economy has led to an increase in transnational regulatory litigation. In all these cases, however, the parties need to ask themselves whether an ensuing judgment or settlement can be recognized or enforced abroad. For quite some time, the perception in the United States has been that U.S. judgments do not fare very well when the time comes to recognize or enforce them abroad. If so, the resolution of a considerable number of transnational cases in this country would have no effect abroad, not exactly the result that lofty talk about ?transnational adjudication? would seem to entail.
In this paper, I intend to provide some answers to the question how well U.S. judgments really fare in Europe, where many of the important trading partners of the United States are located. I conclude that, on average, the recognition and enforcement of U.S. judgments does indeed face more obstacle in Europe than do European judgments in the United States. However, much depends on the country, the subject matter involved, the person of the defendant, and the connection of the dispute to the recognition state, among other things. Thus, a multilateral judgments convention, such as the one initiated by the United States in 1992, could indeed bring similar improvements as have resulted from various conventions and EC regulations adopted by the Europeans regarding their own judgments. The same goes for the federal recognition statute recently proposed by the American Law Institute.

You can download the article here.

Garlic, Food Supplements, Public Health and Free Movement of Goods: Case C-319/05

Garlic is good for you and vampires hate it.

That's why Germany classified garlic preparations in capsules as a medicinal product within the meaning of Directive 2001/83/EC on the Community code relating to medicinal products. The consequence of such a classification is that the product cannot be placed on the market without a marketing authorization which is granted after pharmacological tests have been carried out. And they probably can only be sold in pharmacies.

The Commission considered that the garlic preparations in question should not be classified as a "medicinal product" and that the consequence of that classification is to impose a burden on importers of the product in Germany amounting to a restriction on the free movement of goods contrary to Article 28 EC. Consequently, the Commission took Germany to Court.

And won. The Court of Justice held in Case C-319/05 Commission v. Germany that Germany had classified the product wrongly as a medicinal product thereby imposing a restriction on the free movement of goods prohibited by Article 28 EC.

The Court then turned to the question of whether the German measure was justified for reasons relating to the protection of public health in accordance with Article 30 EC. The Court held that there was no public health justification for such a measure.

The judgment examines how the public health exception works. It recalls that it is for the member States, in the absence of harmonization and to the extent that uncertainties continue to exist in the current state of scientific research, to decide on their intended level of protection of human health and life. The member States also decide on whether to require prior authorization for the marketing of foodstuffs but they must take into account the requirements of the free movement of goods within the EC (Case 174/82 Sandoz, paragraph 16, and Joined Cases C-158/04 and C-159/04 Alfa Vita Vassilipoulos and Carrefour-Marinopoulos, paragraph 21). When they exercise their discretion in taking measures to protect public health, the member States must comply with the principle of proportionality: They must confine their measures to what is actually necessary to ensure the safeguarding of public health; they must be proportional to the objective thus pursued, which could not have been attained by measures which are less restrictive of intra-EC trade (see Sandoz, paragraph 18, Case C-192/01 Commission v. Denmark, paragraph 45; and Case C-24/00 Commission v. France, paragraph 52).

In this case the Court found that Germany, instead of making the garlic pills subject to such an authorization procedure, could have prescribed suitable labelling to warn consumers of the potential risks related to taking this product. The protection of public health would thus have been ensured without such serious restrictions on the free movement of goods (see, to that effect, Case C-17/93 van der Veldt, paragraph 19).

Wondering why take garlic capsules when you can chew on the real thing ? The capsules are better if you want intimate moments with someone you are not yet intimate with. So a trip to the pharmacy is recommended in any event.

Agricultural Revolution: Regulation 1234/2007

A brand new regulation - Council Regulation (EC) n° 1234/2007 of October 22nd 2007 establishing a common organization of agricultural markets and on specific provisions for certain agricultural products (Single CMO Regulation) - published recently brings about a quiet revolution in the agricultural sector. Not a revolution as dramatic as that brought about by Jethro Tull or Turnip Townshend but an important change in the legislative environment nonetheless.

Regulation 1234/2007 replaces 21 separate regulations establishing common organizations of markets for different agricultural products. It establishes a system common to all the products concerned. Those products include live trees, ornamental flowers, pigmeat, eggs, poultrymeat, raw tobacco, bananas, fruit and vegetables, processed fruit and vegetables, beef and veal, milk, wine, flax and hemp, sheep and goat meat, cereals, rice, dried fodder, olive oil, seeds, hops and sugar.

Up until now, each product had its own regulation setting up a common organization of the market. The consequence was a considerable degree of overlap between them and sometimes different mechanisms were adopted to solve similar or identical problems.

Of course, different rules will exist to take account of the particularities of each product. Nevertheless, the single regulation should simplify the regulatory environment considerably.

Regulation 1234/2007 enters into application on January 1st 2008.

For some useful background information on the Commission's proposal, see here. Some interesting "Questions and Answers" are available here.

Transparency and Privacy: Case T-194/04

There's an obvious tension between transparency and privacy. Now the Court of First Instance has stepped right into the fight and sided categorically with transparency. In its recent judgment in Case T-194/04 The Bavarian Lager Co. Ltd. v. Commission the Court of First Instance renders almost nugatory the protection afforded by Regulation 45/2001 on the protection of individuals with regard to the processing of personal data by the EC institutions.

The story goes like this. The Commission commenced Article 226 EC proceedings against the United Kingdom because of some legislation in force at the time that restricted the import of foreign beer. The Commission, with a view to finding a satisfactory solution to the case, organized a meeting with British government officials and trade representatives. Ultimately, a solution was reached and the case closed. But then, an importer of German beer wanted to know the names of the individuals who attended the meeting. For what purpose you may well ask. The Commission asked the individuals concerned whether they agreed to have their names revealed. Five of those attendees, no doubt fearing retribution or harassment by the importer, refused to have their identity revealed. The Ombudsman got involved and handed down a scathing report denouncing the Commission for not revealing the identity of those who had refused to have their names disclosed, claiming they had no right to privacy. The Article 29 Working Party then handed down a report in response (but the Court of First Instance pays scant attention to that inconvenient truth). The German importer made a request for the minutes of the meeting with the names of attendees included under Regulation 1049/2001 (the public access to documents regulation). The Commission refused to disclose the names invoking data protection and the terms of Regulation 45/2001. The importer then challenged the Commission's refusal before the Court of First Instance.

The Court of First Instance annulled the Commission's refusal. The judgment must be read to be believed.

The Court held that the list of participants in the minutes contained personal data, since the persons who participated at that meeting could be identified there. Notwithstanding the fact that it was personal data, it was not protected by Regulation 45/2001 because the mere fact that a document contains such data does not necessarily mean that the privacy or integrity of the persons concerned is affected, even though professional activities are not in principle excluded from the concept of "private life".

It also held that the privacy and integrity of a person is not compromised even if personal data relating to that person is revealed. As a consequence, any objection by such a person to disclosure of the personal data cannot prevent disclosure under Regulation 1049/2001.

What was quite extraordinary was the way in which the European Data Protection Supervisor intervened to plead that the very regulation that established his office did not apply, referring to his "paper" on public access to documents and data protection.

Emissions Trading, Greenhouse Gas Emissions, National Allocation Plans : Case T-374/04

The Court of First Instance has annulled yet again a Commission decision that sought to oblige a member State to stick to the total amount of allowances of greenhouse gas emissions. In Case T-374/04 Germany v. Commission it held that the Commission was wrong to prevent Germany from foreseeing the possibility of ex post reductions in greenhouse gas emissions once it national allocation plan ("NAP") had been notified pursuant to Directive 2003/87/EC.

Directive 2003/87/EC of the European Parliament and of the Council of October 13th, 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC sets up a Community scheme for greenhouse gas emission allowance trading in order to reduce such emissions. Each Member State must develop a national plan for the allocation of greenhouse gas emission allowances (‘NAP’), in accordance with certain criteria set out in the directive. The NAP must state the total quantity of allowances that the Member State intends to allocate and how it proposes to allocate them. The first NAP, for the three-year period beginning on January 1st, 2005, had to be published and notified to the Commission by March 31st 2004 at the latest. Under the directive, the Commission has three months to reject a NAP, in whole or in part, if it is incompatible with the criteria laid down by the directive. All amendments made to the NAP by the member State must be approved by the Commission.

Germany duly notified its NAP for the period 2005-2007 to the Commission. Its NAP allowed, in certain specified cases, a reduction in the amount of allowances allocated to an installation in the course of an allocation period. The Commission adopted its decision declaring that the ex post adjustments/reductions in the German NAP were incompatible with the criteria laid down in Annex III to Directive 2003/87/EC. Germany then asked the Court of First Instance to annul that decision.

The Court of First Instance agreed with Germany that the ex post reductions in emissions in the NAP were compatible with Directive 2003/87/EC.

The judgment is quite a complex one but in essence the Court of First Instance held that nothing in Directive 2003/87/EC prevented ex post adjustments of allocations given to installations and that it was possible for member States to change the allocations given to new entrants during the course of the emission trading period.

It seems clear that the German system would not have increased the overall quantities of allowances. It would have led however to changes in the total allowances during a given trading period which would perhaps not have been conducive to creating a robust emission trading market. The question remains whether Directive 2003/87/EC lays down the right rules to set up a proper and effective emissions trading market or whether it should be modified.

For a previous post on emissions trading, see here.

For those interested in the more general aspects of judicial review, the Court of First Instance repeated its classic statement of the standard of review of measures taken consequent upon complex economic and policy assessments. The Court stated at paragraph 81 that Community judicature conducts a full review as to whether the Commission applied properly the relevant rules of law, whose meaning must be determined in accordance with the methods of interpretation recognized by the case-law. On the other hand, the Court of First Instance cannot take the place of the Commission where the latter must carry out complex economic and ecological assessments in this context. Thus, the Court must confine itself to verifying that the measure in question is not vitiated by a manifest error or a misuse of powers, that the competent authority did not clearly exceed the bounds of its discretion and that the procedural guarantees, which are of particularly fundamental importance in this context, have been fully observed (see, Case T-13/99 Pfizer Animal Health v Council, paragraphs 166 and 171; Case T-70/99 Alpharma v Council, paragraphs 177 and 182; and Case T-392/02 Solvay Pharmaceuticals v. Council, paragraph 126).

One of the elements the Court of First Instance took into account to judge the legality of the Commission's decision in this case was some guidance on the application of Directive 2003/87 which the Commission itself had issued and published. Thus, the Court was led to examine whether the decision in question complied with the guidance that the Commission had previously adopted. The Court repeated that in certain circumstances such guidance could have legal effects.

It held in particular that by adopting rules of administrative conduct designed to produce external effects and announcing by publishing them that it will henceforth apply them to the cases to which they relate, an institution limits the exercise of its own discretion and cannot depart from those rules. Should it do so, the institution in question may commit a breach of general principles of law, such as the principles of equal treatment, of legal certainty or of the protection of legitimate expectations. As a result, such rules of conduct of general application may produce legal effects and that, in particular, the administration may not depart from them in an individual case without giving reasons that are compatible with the principle of equal treatment (interestingly, the Court referred to the position of the Commission guidelines on the method of setting fines in competition matters, Joined Cases C-189/02 P, C‑202/02 P, C‑205/02 P, C-208/02 P and C-213/02 P Dansk Rørindustri and Others v Commission , paragraphs 209 to 211; see also, with regard to guidelines adopted by the Commission on State aid, Case T-16/96 Cityflyer Express v Commission, paragraph 57), provided that such an approach is not contrary to other superior rules of EC law. Specifically in the fields of agriculture, health and the environment, the Court has recognized that the EC institutions may lay down for themselves guidelines for the exercise of their discretion by way of measures not provided for in Article 249 EC, in particular by communications, provided that they contain an indication as to the approach to be followed by those Community institutions and do not depart from the Treaty rules (see Pfizer Animal Health v Council, paragraph 119, Alpharma v Council, paragraph 140).

Expiration of Coal and Steel Treaty, Antitrust and Legal Bases: Cases T-27/03, T-46/03, T-58/03, T-79/03, T-80/03, T-97/03, T-98/03, T-45/03, T-77/03 and T-94/03

The Court of First Instance has handed down a bucket load of judgments - well, actually three judgments - annulling a Commission decision imposing fines on several Italian producers of reinforcing bars for breaches of the Coal and Steel Treaty antitrust rules.

The Court of First Instance found in Joined Cases T-27/03, T-46/03, T-58/03, T-79/03, T-80/03, T-97/03, T-98/03 SP SpA and others v. Commission and in Case T-45/03 Riva Acciaio SpA v. Commission, Case T-77/03 Ferapli Siderurgica SpA v. Commission and Case T-94/03 Ferriere Nord SpA v. Commission that, at the time the Commission took the decision, it lacked the legal basis to do so. Accordingly it annulled the decision.

What happened was this. The Commission adopted a decision on December 17th 2002, ostensibly based on Article 65 ECSC. That decision fined several Italian enterprises for breaches of Article 65 ECSC. The problem was that the ECSC Treaty had expired on July 23rd 2002. Thus, when the decision was adopted, its legal basis was no longer in effect.

The Court of First Instance held the EC institutions have conferred powers only (Opinion 2/00 of the Court, paragraph 5) and thus every measure adopted by the EC institutions must have a legal basis empowering them to adopt the measure. It made clear that the legal basis must be in force at the time the measure is adopted.