Fundamental features of union law

1. Introduction

As was pointed out in Unit 1, the treaties establishing the European Communities, and now the Union, are more than classical international agreements creating mutual obligations between the Contracting Parties. Indeed, by ratifying those Treaties, the Member States intended to do much more than that, though they did not foresee all the consequences which, for instance, the Court has, over the years, drawn from the specific nature of those Treaties. Hence the question: what is it that distinguishes these Treaties from other international agreements?

In the first place, they have created quasi governmental bodies (the institutions), independent from the national public authorities, and endowed with legislative, administrative and judicial sovereignty rights, which were transferred to them by the Member States. Furthermore, Treaties lay down basic principles that are either worked out in the Treaties themselves or defined and implemented by acts of the institutions. The Treaties and acts constitute a set of rules which directly, i.e. without interference of national authorities, impose obligations upon, and consequently create rights for, the Member States and the natural and legal persons within the Union. The Treaties therefore present many analogies with national constitutions. Although they started out as international treaties, they have become, in fact if not in law, the "Constitution" of the Union.

The rules embodied in the Treaties (the latter being referred to as primary Union law) are constantly being expanded, implemented, interpreted and applied by the various acts and measures of the institutions, especially the courts (known as second Union law). The European Treaties have, therefore established a specific legal order.

It took years before all national courts and tribunals came to share the view that the European Treaties create a separate legal order but, at the time, several of them were quick to agree, as was the German Supreme Administrative Court. It stated that Union law constitutes, "a separate legal order, whose provisions belong neither to international law nor to the municipal law of the Member States".

It must be clearly understood that Union law only applies in cases involving cross-border situations; in other words, purely internal occurrences do not come within the ambit of Union Law.

Union law is, generally speaking, characterised by its direct applicability within the Member States, its direct effect and its primacy over national law. These concepts are briefly examined below.

2. Direct applicability

Union law, being distinct from national law, is also independent from it. This means that rights can be conferred and obligations imposed, both on the Member States and on natural and legal persons, directly by Union provisions, i.e. without interference from or intervention by national authorities. There is indeed no need for Member States to intervene in order to ensure that Union decisions, regulations and, in certain cases, directives have binding effect throughout the Union. Referring to regulations, the Treaty on the Functioning of the European Union uses the words, "shall be . . . directly applicable in all Member States". The latter should not be taken too literally. The territory of the Union is defined in the Treaty and thereby the geographical application of Union law. However, this does not preclude Union rules from applying outside the territory of the Union, when the activity in question retains sufficient links with the Union.

In addition, Member States are committed not to interfere with the application of Union law. This also follows from the Treaties, which provide that Member States, "shall refrain from any measure which could jeopardise the attainment of the Union's objectives".

More important than the acceptance of the legal autonomy of the Union legal order in regard to national law, is the understanding of its raison d'être. The European Treaties aim at establishing within the territories of the Member States a single market characterised by the basic freedoms (goods, persons, services, establishment, capital and payments) and constituting a geographical area wherein Union rules apply with the same force and with the same meaning and effect for all who operate therein. Therefore, the very nature of the law created by the European Treaties implies uniform interpretation and application. Without those characteristics there can be no Union. Union law is either uniform in all the Member States or it simply cannot exist.

3. Direct effect

If the consequence of direct applicability means non-interference with the implementation of Union law, for the citizens it means, in most cases, the possibility of invoking those Union rules in their national courts and tribunals to defend their rights; this is what is meant by direct effect. This allows all those who are subject to Union law to require the national judge to uphold the rights which those Union rules confer upon them. Applicability of Union law must indeed be understood in two ways: on the one hand, the obligations and prohibitions (i.e. obligations to abstain) imposed upon national authorities, institutions and persons, and, on the other hand, the rights granted to those in favour of whom those obligations were imposed. Obligations imposed upon Member States have, generally speaking, as their corollary corresponding rights for the citizens of the Union. For instance, by prohibiting the Member States from hindering the free movement of goods, the Treaty grants the persons within the Union the right to move goods unhindered from one Member State to another. The same applies to the other freedoms.

The question has been raised whether the national judge must, of his own "volition, apply Union rules that have direct effect. The Court accepted the domestic law principle of "judicial passivity" in civil cases and the concomitant rule that in civil suits it is for the parties to take the initiative. On the other hand, a Member State may not prevent a national judge from raising the question of the compatibility of national law with Union rules. It is thus not only the directly applicable regulations that are, as such, suited to, "grant to the citizens rights which the national tribunals are under obligation to protect", but all binding Union acts whatever their nature or form. Consequently, the question, "which provisions of Union law have direct effect"? should rather be put the other way: "which Union provisions that impose a clear and unconditional obligation upon a Member State, an institution or a person do not have direct effect?” The answer is: only those which leave to the addressee of the obligation a discretionary latitude.

However, the Court made it clear that in cases where the latitude is limited in time, the expiration of the time limit suffices to give direct effect to Union rules.

4. Precedence or primacy of union law

In retrospect it might seem evident that the autonomy of the Union legal order and the necessity for its uniform interpretation and application in all the Member States, automatically imply that Union provisions have precedence over national legislation in case of conflict. Since national courts and tribunals are under obligation to apply Union rules alongside the provisions of national law, it is not unlikely that conflicts will result from this simultaneous application. The European Treaties contain no explicit provisions regarding the solution to be applied in such cases. Attempts were therefore made to solve such conflicts in accordance with provisions of national law. However, few national legal systems provide for conflict rules of this nature.

A ground had therefore to be found which would be accepted by all national jurisdictions without reference to their particular national legal orders. This ground was obviously in the Union legal order itself. It is indeed accepted by all the Member States which, "have adhered to the Treaty on the same conditions, definitively and without any reservations other than those set out in the supplementary protocols". The Court has always considered that the wording and the spirit of the Treaty make it impossible for Member States to accord precedence to a unilateral and subsequent measure over a legal system accepted by them on the basis of reciprocity.

Therefore:

"[T]he law stemming from the Treaty, an independent source of law, could not, because of its special and original nature, be overridden by domestic legal provisions, however framed, without being deprived of its character as [Union] laws and without the legal basis of the [Union] itself being called into question".

To put it simply once more: either Union law stands by itself, is uniformly applied and has precedence over all domestic law, or it does not exist. This view is now generally accepted in all the Member States.''

Attached to the Treaty of Lisbon is a Declaration concerning primacy, which reads as follows:

"The Conference recalls that, in accordance with well settled case law of the Court of Justice of the European Union, the Treaties and the law adopted by the Union on the basis of the Treaties have primacy over the law of Member States, under the conditions laid down by the said case law."