The Week Nº30

The Week

17-21 June 2024

ISSUE Nº30

Pro cedural Autonomy

En largemen t Selecti vi ty

So c ietas Eu ro paea

TABLE OF CONTENTS

IN-DEPTH:

In the Interest of National Procedural Autonomy: The Judgement in Case C-53/23

Raluca Bercea

Before, but not After. Workers’ Participation in European Societies at Risk?: the Konzernbetriebsratruling (C-706/22)

José María Miranda Boto

Compensation for Loss of Opportunity to Being Awarded a Public Contract (C-547/22, INGSTEEL)

Grith Skovgaard Ølykke

SYMPOSIUM ON THE 20TH ANNIVERSARY OF THE ‘GREAT’ EU ENLARGEMENT

Leaps in Time through the EU’s Common Foreign and Security Policy Post-Enlargement

Graham Butler

Toward a Post-normative Nontransformative Enlargement of the Union?

Nedim Hogic

EU enlargement: Wider AND deeper?

R. Daniel Kelemen

Linguistic Diversity in an Enlarging European Union

Anna Krisztian

COMPETITION CORNER: SYMPOSIUM ON SELECTIVITY IN STATE AID

Selectivity and Discrimination in Light of the Recent Ryanair v Commission Cases (C-209/21, C-210/21, C-320/21, C-321/21)

Juan Jorge Piernas López

And Now for Something Somewhat Different: An Economist’s Take on Selectivity

Simon Yarak and Nicole Robins

THE LONG READ:

EU Accession to the European Convention on Human Rights: An EU Negotiator’s Perspective

Felix Ronkes Agerbeek

HIGHLIGHTS OF THE WEEK

IN-DEPT H

In the Interest of National Procedural Autonomy: The Judgement in Case

C-53/23

Raluca Bercea

Introduction

An action for annulment challenging acts allegedly incompatible with judicial independence and the rule of law (i.e., the appointment of prosecutors competent to conduct criminal investigations against judges) is initiated in a Member State by national associations of magistrates seeking to defend the principle of the independence of the judiciary. Pursuant to the national procedural rules, the admissibility of such action is subject to the existence of a legitimate private interest arising from the direct link between theadministrative act subject to review and the aim and objectives of the association. Strictly interpreted, this condition excludes, in practice, such an action from being brought by professional associations of judges: not having a subjective right or a legitimate private interest to challenge the validity of the act, they cannot rely upon a legitimate public interest to do so either. Against this background, may the said associations rely on Article 2 and Article 19(1) TEU, read in the light of Articles 12 and 47 of the Charter of Fundamental Rights of the European Union (‘the Charter’), for the purpose to establish an unconditional locus standi in such cases, or, on the contrary, the matter should be considered as partaking in the procedural autonomy acknowledged to Member States? And, if so, is deference to national procedures and remedies appropriate or misplaced?

The Context

The applicants are the Asociaţia ‘Forumul Judecătorilor din România’ (‘Romanian Judges’ Forum’ Association’) and the Asociația ‘Mișcarea pentru Apărarea Statutului Procurorilor’ (‘Movement for the Defence of the Status of Prosecutors’ Association’), known for their implication in the movement of resistance during the rule of law backsliding in Romania As noted elsewhere, in response to the Court of Justice’s preliminary ruling in the AFRJ case, initiated by Asociaţia ‘Forumul Judecătorilor din România’, the Romanian Government undertook the political commitment to dismantle the Special Section for the Investigation of Offences in the Judiciary (‘SIOJ’), and to support other necessary amendments to the justice laws, so as to comply with the requirements under the Mechanism of Cooperation and Verification of Progress (‘MCV’). As a result, the SIOJ was dismantled in March 2022 and the MCV was lifted The European Commission (2022) Rule of Law Report noted the efforts of the Government to adopt a new judicial strategy, as well as its Anti-Corruption Strategy for 2021-2025, but warned about the new system of investigation and prosecution of criminal offences in the judiciary. The same concerns were expressed in the Opinion provided by the Venice Commission on 21 March 2022, namely whether the SIOJ underwent both a de jure and a de facto dismantling, and whether the structure replacing it could effectively fight corruption in the judiciary.

Fighting for the Rule of Law

Preserving the Rule of Law Through Transnational Soft Law is no longer an option in Romania, which has not been without controversy, as indicated by the steps taken by another professional association of Romanian prosecutors, ‘Inițiativa pentru Justiție” (‘Initiative for Justice’), that sought the annulment of the Decision closing the MCV. Therefore, the recourse by the national magistrates’ associations to other formal or informal mechanisms that had proven successful in the past was only a matter of time.

The law dismantling the SIOJ allocated the exclusive competence for conducting criminal prosecution of offences in the judiciary to prosecutors specifically appointed by the Prosecutor General, acting on a proposal of the general assembly of the ‘Consiliul Superior al Magistraturii’ (‘Supreme Council of the Judiciary’). The Minister for Justice, a member of the SCJ, adopted an Order to appoint several prosecutors in accordance with the respective law. The applicant associations challenged it, mainly considering that the allegations of corruption against judges and prosecutors should be investigated and prosecuted by specialist prosecutors, experts in fighting corruption and possessing adequate resources to carry out that task. They also objected to the participation of the general assembly of the SCJ in the appointment procedure and contended that the latter does not ensure that prosecutors are appointed on merit and are independent. Therefore, the responsibility for the investigation and the prosecution of such offences should be established in favour of the ‘Direcția Națională Anticorupție’ (‘National Anti-Corruption Directorate’), which specialises in fight against corruption and is structurally autonomous from the Prosecutor’s Office of the High Court of Cassation and Justice (‘Parchetul de pe lângă Înalta Curte de Casație și Justiție’).

The mechanism chosen by the applicant associations for these claims to reach the Court of Justice of the European Union has once again been the request for a preliminary ruling pursuant to Article 267 TFEU. In the past also, by taking advantage of the Court’s increased willingness to engage with questions concerning the rule of law at the national level, the associations have managed to design strategies capable of triggering preliminary rulings on the most controversial questions concerning the judiciary. As the Romanian Government notes before the Court of Justice in this very case, ‘[t]he action before the referring court is a ‘pilot case’ or ‘vehicle’ designed to obtain a request for a preliminary ruling pursuant to Article 267 TFEU’. This observation of the Government is confirmed by a blog post of January 2023 by the co-president of AFJR, who openly admits the strategic purpose of the procedure: ‘[T]he request for a preliminary decision recently submitted by the Pitești Court of Appeal will allow the Court of Justice of the European Union to analyse the creation of a new development, establishing the legitimacy of unconditional locus standi in situations where associations of judges seek to obtain effective jurisdictional protection in areas regulated by European Union law (promoting and defending the independence of judges and the rule of law, as well as safeguarding the status of the profession). Such an intervention would be a salutary one, likely to strengthen or reinforce, in certain EU Members where the counter-reform of the rule of law has gained momentum in the past years, the role that the associations of judges or prosecutors have undertaken at any risk, despite threats, unfair criticism and concerted attacks against their members’.

The question that arose was whether the Court, that had already expanded the scope of its own jurisdiction to cover the protection of national judicial independence ever since the Portuguese Judges case, considered to be ‘a ground breaking constitutional moment’, or one of the most ‘far-reaching judge-led developments in EU law in the recent past’, would embark on this new occasion in the relativisation of the principle of national procedural autonomy.

Same Old News

It appears however that the Court is not prepared to foster the development expected by the militant Romanian magistrates’ associations. Instead, it established that the Article 2 and Article 19(1) TEU, read in combination with Articles 12 and 47 of the Charter, must be interpreted as not precluding national legislation which, by making the admissibility of an action for annulment challenging the appointment of prosecutors competent to conduct criminal prosecutions against judges subject to the existence of a legitimate private interest, excludes, in practice, such an action from being brought by professional associations of judges seeking to defend the principle of the independence of the judiciary.

In doing so, the Court has consolidated its recent case law on several rule of law related issues, but also reaffirmed its perspective on the principle of Member States’ procedural autonomy. For instance, when addressing the issue of its jurisdiction, the Court relies on its previous case law and recalls that the national legislation establishing and governing of the SIOJ falls within the scope of EU law. Similarly, it reaffirms its interpretation of Article 19 TEU as giving concrete expression to the value of the rule of law enshrined in Article 2 TEU, pursuant to which the very existence of effective judicial review designed to ensure compliance with EU law is of the essence of the rule of law.

Connecting the rule of law to procedural autonomy, the Court recalls that Member States are to establish a system of legal remedies and procedures ensuring for individuals’ compliance with their right to effective judicial protection in the fields covered by EU law. Moreover, while it is for the Member States to determine the standing and interest of a party to bring legal proceedings, this should not undermine the right to effective judicial protection. In this respect, the Court notes that detailed procedural rules governing actions for safeguarding an individual’s rights under EU are limited by the principles of equivalence and effectiveness that the Romanian procedural rules abide by. Additionally, the Court recalls the absence of EU law provisions requiring the Member States to grant procedural rights to professional associations of judges enabling them to challenge any purported incompatibility with EU law of a national provision or measure connected with the status of judges or the independence of the judiciary.

The Court strongly relies on the theory of the appearances, that has created convergent case law at the European supranational level, when noting that it cannot be held that the mere fact that national legislation does not permit professional associations of judges to bring the said action for annulment suffices to create, in the minds of individuals, legitimate doubts as to the independence of judges. Therefore, the Court concludes that the

requirement of the independence of the judiciary cannot be interpreted, in a general manner, as obliging the Member States to permit professional associations of judges to bring such actions.

Finally, a right for judges’ associations to initiate legal proceedings against measures such as those at issue cannot be derived from Article 47 of the Charter either, as that would suppose that the association is relying on rights or freedoms guaranteed by EU law or is the subject of proceedings constituting an implementation of EU law, within the meaning of Article 51(1) of the Charter. However, according to relevant case law, an association that submits, before a national court, that national legislation relating to the appointment of judges is incompatible with that provision cannot be regarded, on that basis alone, as invoking the breach of a right conferred on it by a provision of EU law.

A Conclusion on Procedural Autonomy

According to the reading of this author, the Court’s judgement relies on procedural autonomy understood as division of functions between the EU and national legal systems, with the former providing the rights and the latter the remedies. Undoubtedly, the restrictive interpretation offered at the national level to the procedure law at stake in the case remains a sensitive and still unclarified question. A more reasonable interpretation of the respective rule should be that, in the specific hypothesis of non-governmental organisations whose purpose is circumscribed to promoting legitimate rights and interests, the locus standi condition allows them to promote public order interests related to their respective private interests. But this is a matter within the scope of national procedure law. At the EU level, as procedure is commonly seen as ancillary to substance, it remains an additional step of harmonisation dependent on the underlying substantive law. In the present case there is no indication that national rules are to be displaced as conflicting to EU law, therefore the EU system remains prohibited from also imposing procedures on Member State courts. Hence the Court cannot urge ‘a new development, establishing the legitimacy of unconditional locus standi in situations where associations of judges seek to obtain effective jurisdictional protection in areas regulated by European Union law’, in the applicants’ words.

Raluca Bercea is Professor of EU Law and Human Rights at the Law Faculty of the West University in Timisoara. Her most recent publication includes The Role of Judicial Associations in Preventing Rule of Law Decay in Romania: Informal Communication and Strategic Use of Preliminary References. German Law Journal. 2023, 24(8):1393-1411(with Sorina Doroga). This contribution results from research within the project „Statul de drept și constituționalismul periferic: transformări conceptuale și structurale [ROLPERIPHERAL]”, (PN-III-P4-PCE-2021-0319).

SUGGESTED CITACION: Bercea, R.; “In the Interest of National Procedural Autonomy: The Judgement in Case C-53/23”, EU Law Live, 19/06/2024, https://eulawlive.com/op-ed-in-the-interest-of-national-procedural-autonomy-the-judgement-in-case-53-23/

Before, but not After. Workers’ Participation in European Societies at Risk?: the Konzernbetriebsratruling (C-706/22)

José María Miranda Boto

The SE, a Vaguely Successful Model for Europe

The ‘European Company’ (SE, after Societas Europaea) was the great EU venture in the field of company law at the beginning of this century. With the Council Regulation (EC) nº 2157/2001, it was intended to create a company model that could operate throughout the internal market under a single form, thus avoiding bureaucratic complications.

Accompanying this regulation was Council Directive 2001/86/EC, which regulated the involvement of employees and their representatives through information and consultation mechanisms. Without the adoption of such an instrument, it would not be possible to register the SE, except in very specific cases.

It is difficult to know the real impact of this figure, as there is no global data on its implementation that is up to date. Some of the most relevant companies that have adopted this form are well-known, such as Airbus, BASF or LVMH, which are included in the Euro Stoxx 50 index. But the vast majority of them remain in the dark.

In 2018, Eurofound noted that less than 20% of existing SEs had more than 5 employees and could be considered active. The other part, a vast majority, ranged from that number of employees to a complete lack of economic activity. One does not need to be an expert in corporate engineering practices to suspect that there is something rotten in Denmark in view of these figures.

Already in its 2008 Communication on the implementation of the Directive, the European Commission had expressed its concern about the changes that could occur in an SE after its creation. It specifically noted: ‘However, as far as employee participation rights are concerned, the Directive does not provide for any such mechanism that would cater for the situation where, for instance, an SE with a few (or none) employees at the moment of its establishment increases its workforce subsequently or where an SE subject to employee participation transfers its registered office and is absorbed by a company of a different type without participation (or with less participation). In these situations employee participation rights could be lost or reduced’.

The Fear Became Reality

The scenario reflected in the Konzernbetriebsrat ruling (C-706/22) of 16 May 2024 is truly complex from a corporate point of view, and perfectly embodies the fears that the European Commission expressed in its report. The SE can be a tool for the diminution of the rights of workers’ representatives and the Court of Justice has not ruled out that possibility.

The European Company present in the case was O Holding SE, created by two companies, one domiciled in the UK (O Ltd) and one in Germany (O GmbH). As neither of them employed any employees, there was no negotiation prior to the registration of the company for the establishment of the relevant information and consultation mechanisms.

The day after its creation, O Holding SE became the sole shareholder of O Holding GmbH, a different company. This was a public limited company domiciled in Germany, which, under local law, had a supervisory board (Aufsichsrat). Shortly afterwards, the SE transformed this GmbH into a new limited partnership, O KG, which led to the disappearance of the supervisory board. O KG employed more than 800 employees in Germany, with a total workforce in the Member States of 2200 employees.

Following the relocation of O Holding SE’s headquarters to Germany, the works council of the O KG group (Konzernbetriebsrat, a separate workers’ representative body) took the company to court. It demanded that O Holding SE set up a special negotiating body in accordance with Directive 2001/86/EC. The argument for this was the existence of several subsidiaries of the SE which actually employed workers in different Member States.

In successive instances, the request was dismissed, until it reached the Bundesarbeitsgericht. The German Supreme Court for Labour asked for a preliminary ruling on the need for a negotiation taking place after the creation of the SE, which was not provided for in the Directive. This is a further demonstration of its well-established line of dialogue with the Court of Justice, which makes it almost certainly the most active supreme court in social matters.

It is worth noting that at no point does the judgment mention the existence of a European Works Council, which would not be out of the question in view of the numbers of workers mentioned. In view of the business practice described, however, it seems unlikely.

First Negotiation, then Incorporation. And Afterwards?

The judgment of the Court of Justice of 16 May 2024 largely followed the Advocate General’s Opinion. The decisive point in the proceedings was to determine whether or not there was mandatory negotiation subsequent to company changes, and not only prior to registration, as required by European and national transposing legislation.

The Court of Justice began by indicating which interpretative criteria it would use in its analysis of the Directive: ‘its wording, but also of its context, the objectives pursued by the rules of which it is part and, where appropriate, its origins”’

As regards wording, the first conclusion was almost obvious: registration of the SE and employee involvement go together at the origin: the Commercial Regulation and the Labour Directive ‘must be applied concomitantly’. The Directive foresees only three situations in which a subsequent procedure can exist: by decision of the special negotiating body itself, to amend the already existing agreement or in a scenario of application of the legal rules in the absence of agreement.

None of the three scenarios corresponds to the case described and according to the Court none of them could be interpreted flexibly to make it fit the rules. The words of the judgment are particularly severe in this respect: [the] ‘directive does not contain any corresponding provision which would give rise to an obligation to open negotiations on the involvement of employees or which would extend the guarantee of employees’ existing participation rights to situations in which structural changes are made to a holding SE already established by participating companies which do not employ employees, and do not have subsidiaries employing employees’.

In support of this interpretation, the Court, following the Advocate General, referred to the preparatory work on the Directive, the well-known Davignon Report.

In the same vein, he recalled the Council’s refusal to include an amendment of the European Parliament which would have introduced the need for negotiations in the case of structural changes. Nothing in the Directive’s past, in short, opened the door to further negotiation. To paraphrase the felicitous phrase about the meaning of tradition, ‘peer pressure from dead people’.

The argument is technically impeccable, but open to criticism from the point of view of the purpose of the Directive, which is the protection of workers and the rights of their representatives. Just think of the Comancase (C-673/16), for example. Whoever is able to find a mention of same-sex marriage in the preparatory work for Directive 2004/38/EC deserves a prize for legal archaeology (or creativity). And in that occasion, the Court ruled out that it had the proper meaning in the framework of the Directive.

Looking to the past in a conflict of interests such as the present one does not seem to be the most effective solution to ensure workers’ mobility. A Directive conceived in a EU of 15 where the internet was barely developed may require new parameters of interpretation in a hyper-connected world where working time and the workplace have mutated considerably. And so have the dynamics of business management.

The Possible Abuse of Law

The Bundesarbeitsgericht was probably aware of the outcome of its first question, which, when answered in the negative, as described above, cascaded into all the others. But the doubts expressed by the German court about a possible abuse of law, not formulated as a question to the Court of Justice but as part of its reasoning, opened the door to a possible alternative solution. It seems to me important to underline the Court’s decision to elaborate on this point, on which it had not been specifically asked.

The Directive itself contains in Article 11 specific rules in case of misuse of procedures, a situation which could be close to what happened in this case due to the short deadlines for corporate changes. In the words of the judgment, ‘it might be assumed from that circumstance that the formation is being misused for the purpose of depriving employees of rights to employee involvement or withholding such rights’.

It is a precept that instructs States to create implementing rules themselves to ensure worker participation. It is an abstract rule, lacking a catalogue similar to what can be found in Directive 1999/70/EC. Subsequent negotiation may be one such measure, but need not be.

In this respect, the Court limited itself to interpreting the notion: ‘a finding of an abusive practice requires, first, a combination of objective circumstances in which, despite formal observance of the conditions laid down by the EU rules, the purpose of those rules has not been achieved and, second, a subjective element consisting in the intention to obtain an advantage from the EU rules by artificially creating the conditions laid down for obtaining it’.

The great unknown that opens up is what the Bundesarbeitsgericht will do on the basis of this indication. This reinstates the flexibility denied by the first part of the judgment. It cannot be ruled out that the Court of Justice was well aware of the damage it was doing to the mechanisms of employee involvement in the SE. Bound by the words of the Directive, it is plausible that it used the mention of the German court, almost an obiter dicta, to give it a handle with which to amend the solution.

In any case, this ruling raises a problem for the mechanisms of information, consultation and participation of employees in the SEs, and the wording of the Directive does not respond to business practices such as those described. Perhaps it is time for the Commission to consult on the advisability of reforming Directive 2001/86/ EC, as it has done with the European Works Councils Directive? The internationalisation of companies in Europe cannot take place at the expense of the consolidated rights of workers and their representatives.

José María Miranda Boto is an Associate Professor of Labour Law at the University of Santiago de Compostela. He is the manager of the DIGILARE (101126503) research project, funded by the European Union, dealing with information and consultation of employees’ representatives in a digitalised world.

SUGGESTED CITATION: Miranda Boto, J.M.; “Before, but not After. Workers’ Participation in European Societies at Risk?: the Konzernbetriebsratruling (C-706/22)”, EU Law Live, 19/06/2024, https://eulawlive.com/op-ed-before-but-not-after-workers-participation-in-european-societies-at-risk-the-konz ernbetriebsratruling-c-706-22/

Compensation for loss of opportunity to being awarded a public contract (C-547/22, INGSTEEL)

Grith Skovgaard Ølykke

Introduction

In C-568/08, Spijker, the Court of Justice noted that the EU legislator has not detailed the criteria on the basis of which damage arising from an infringement of the public procurement rules must be determined and estimated in Directive 89/665 (as amended; the Remedies Directive), and therefore this is for the legal order of each Member State to determine, subject to the principles of equivalence and effectiveness (para. 90). In the analysed judgment, the Court of Justice interprets the concept of ‘damages’ in the Remedies Directive and explains that this concept also covers damages for loss of the opportunity to win the tendered contract. This head of claim is foreign to some national legal systems, and the Court of Justice leaves it up to the national legislators/review bodies to decide the content. It is thus not surprising that the analysed judgment, which was given on 6 June 2024, has already received quite a lot of attention in the public procurement community.

Background

The case C-547/22 INGSTEEL has its origin in a preliminary reference from a Slovakian court concerning a public procurement procedure initiated in 2013, by Slovenský futbalový zväz (the Slovak Football Association) for the award of a framework agreement for the construction, restructuring and modernisation of football stadiums. INGSTEEL participated in the tender as part of a consortium, but the contracting authority found that the consortium did not to meet the selection criteria for economic and financial standing, and therefore its tender was excluded from the procedure (i.e., the tender was not evaluated). The consortium contested the contracting authority’s assessment, and the national courtsubmitted a preliminary reference to the Court of Justice. In C-76/16, INGSTEEL and Metrostav, the Court of Justice found that the contracting authority had made a wrong assessment of the consortium’s documentation for fulfilment of the selection criteria. The national court annulled the decision to exclude the consortium and referred the case to the Public Procurement Regulatory Authority to take appropriate measures.

However, at that point in time the contracting authority had already entered into the framework agreement with the only other tenderer. Therefore, INGSTEEL filed a case against the Public Procurement Regulatory Authority for damages for loss of profit, hereunder for loss of the opportunity to be awarded the contract. INGSTEEL claimed to have suffered damage because the successful tenderer was only awarded the contract because of the unlawful exclusion. INGSTEEL argued before the national court that the consortium of which it formed part would have won the contract, because its tender satisfied all the conditions and was more advantageous than that of the successful tenderer.

The Public Procurement Regulatory Authority claimed that the damage was hypothetical because INGSTEEL could not prove that it would have won the public procurement procedure or, if that was the case, that it would have resulted in the entry into a contract with the contracting authority.

According to Article 2(1)(c) of the Remedies Directive, Member States must ensure that national review bodies are competent to award damages to the ‘persons harmed by infringement’ of the public procurement directives.

The questions referred by the national court were re-phrased by the Court of Justice to concern whether Article 2(1)(c) of the Remedies Directive must be interpreted as precluding national legislation (added by the Court of Justice) or a national practice which (per se) excludes the possibility for a tenderer of being compensated for the damage suffered as a result of the loss of the opportunity to being awarded the contract.

The Judgment

The Court of Justice started by identifying the core issue in the case, namely whether persons who are ‘harmed by an infringement’ of EU public procurement law include both those who have suffered loss as a result of not having obtained a public contract (loss of profit), and those who have suffered loss linked to the lost opportunity to participate in the procedure for the award of that contract and to make a profit as a result of such participation (loss of opportunity).

The Court of Justice resorted to the usual instruments of interpretation.

Regarding the literal interpretation, it held that the wording of Article 2(1)(c) of the Remedies Directive is broad andtherefore covers any type of damage suffered.

Regarding the context of Article 2(1)(c) of the Remedies Directive, the Court of Justice explained that the provision is a concrete expression of the principle of State liability for breach of EU law. As is well known, this principle requires that when the following conditions are met, individuals must be compensated in full for the harm or loss sustained: 1) the rule of EU law infringed must be intended to confer rights on the individual; 2) the breach must be sufficiently serious; 3) there must be a direct causal link between the breach and the damage sustained by the individuals. The Court of Justice also referred to Article 1(3) of the Remedies Directive which provides that remedies must be available to any person‘having or having had an interest in obtaining a particular contract and who has been or risks being harmed by an alleged infringement’. Further it pointed out that Recital 36 to Directive 2007/66, which amended the Remedies Directive, refers to Article 47 of the Charter on the right to an effective remedy and to a fair trial. Lastly, the Court of Justice mentioned that Article 2(7) of the Remedies Directive actually provides that after the conclusion of a public contract, the powers of the national review body may be limited to awarding damages to any person harmed by an infringement of the procurement rules in relation not the award of that contract. The Court of Justice ascribed the presence of this remedy to the EU legislator’s intention to provide a remedy of last resort which must remain available to persons harmed by an infringement of EU law where they are deprived of benefiting from other remedies. On this basis, it deduced that loss of opportunity is a damage separate from loss of profit (para. 39).

Regarding the objective of the Remedies Directive, the Court of Justice acknowledged that it does not fully harmonise remedies in public procurement procedures, but it also referred to Recital 6 of Directive 89/665 which provides that the intention of the Remedies Directive is to ensure that adequate procedures exist in all the Member States to permit inter alia compensation of persons harmed by an infringement.

Based on these interpretative steps, the Court of Justice concluded that according to Article 2(1)(c) of the Remedies Directive, it must be possible to claim compensation for a loss of the opportunity to be awarded the contract. However, it is up to national law to establish the criteria for assessing the damage resulting from the loss of opportunity, subject to the principles of equivalence and effectiveness (para. 45). AG Collins had come to the same conclusion in his Opinionon the case.

On the dispute in the national case, the Slovak government claimed that there was nothing in national law that prevented a claim for damages for loss of opportunity. This led the Court of Justice to finalise its judgment with a reminder to the national court of is obligation to interpret national law in conformity with EU law, hereunder –probably hinting at the wording of the questions in the preliminary refence that concerned the practice of national courts – to change settled national case-law.

Comments

The judgment gives rise to many questions and considerations of which only a few are mentioned here.

First, the EU legislator has chosen to rely on national law for the determination of compensation for harm incurred from infringement of the public procurement rules, subject to the principles of equivalence and effectiveness. In INGSTEEL, the Court of Justice states that according to Article 2(1)(c) of the Remedies Directive, national legislation and national practice cannot upfront preclude a claim for loss of opportunity. This feels like a déjà vu from Joined cases C-46/93 and C-48/93, Brasserie du pêcheur, para. 87, where the Court of Justice said the same thing about loss of profit (see also e.g. C-295/04 to C-298/04, Manfredi, para. 96; C-470/03, AGM-COS.MET, para. 95). The essence seems to be that rules or practices that per se exclude certain heads of claim are not allowed under the principle of effectiveness.

Second, this ‘negative integration’ touches quite fundamental aspects of national legal systems in those Member States where compensation for loss of opportunity is not already a recognised head of claim. By leaving the responsibility of implementation fully to the national legislators/national review bodies, the Court of Justice arguably remains comfortably in a position to assess the solutions adopted. Probably this will not be the first and last case on national rules on compensation for loss of the opportunity to be awarded a public contract.

Third, national review bodies that seek inspiration for assessment of claims of loss of opportunity could consult the case-law of the General Court on non-contractual liability of the EU institutions under Article 340 TFEU, e.g. T-199/14, Vanbreda; T-292/15, Vakakis (for an overview, see Ølykke, Telles and Petersen, ‘Review of case law from the General Court (2015 to mid-2020)’ (2021) PPLR, 225, at 244-247). It may in this regard be noted that

the General Court has a quite restrictive approach with regard to loss of profit (e.g. T-570/13, Agriconsulting Europe v Commission, para. 91-96; the judgment was upheld on appeal, but this specific issue was not assessed by the Court of Justice), which – although the legal basis is not the same – makes further clarity pertinent.

Grith Skovgaard Ølykke, PhD, is a Senior Researcher at Department of Economics, Management and Leadership of the Belgian Royal Military Academy/Department of Applied Economics and the Brussels Centre for Competition Policy of Vrije Universiteit Brussels. She is an external lecturer at Copenhagen Business School and is on the editorial board of Public Procurement Law Review. Grith is currently on leave from her position as Commercial Law Consultant at a major Danish Law Firm.

SUGGESTED CITATION: Skovgaard Ølykke, G.; “Compensation for loss of opportunity to being awarded a public contract (C-547/22, INGSTEEL)”, EU Law Live, 18/06/2024, https://eulawlive.com/op-ed-compensation-for-loss-of-opportunity-to-being-awarded-a-public-contract-c-547-22-ingsteel/

SYMPOSIUM

SYMPOSIUM ON THE 20th ANNIVERSARY OF THE ‘GREAT’ EU ENLARGEMENT

Leaps in Time through the EU’s Common Foreign and Security Policy Post-Enlargement

Graham Butler

The 20th Anniversary of the ‘Great’ EU Enlargement: the Common Foreign and Security Policy

This contribution to the symposium aims to analyse the transformation of the European Union’s (EU) Common Foreign and Security Policy (CFSP) over the past two decades, following the 2004 enlargement of the EU which saw the ten Central, Eastern, and Southern European States acceding to the Union as Member States. Furthermore, this Op-ed seeks to explore potential future direction for the CFSP as a policy domain.

The analysis is divided into three distinct sections. The first provides an examination of the current developments in the CFSP, with a particular focus on the ongoing war in Ukraine. This aims to provide an overview of the present state of affairs within the policy area. The second takes a retrospective look at the CFSP during the time of the ‘great’ EU enlargement twenty years ago. This period was characterised by a distinctly different geopolitical landscape, with particular emphasis on the Middle East and the continued repercussions from the wars in Afghanistan and Iraq in which a number of EU Member States were involved. The third projects forward to the year 2044, twenty years from the present day, to speculate on the potential future of the CFSP. This projection is based on the developments observed in the policy area to date. The aim is to provide insights into what the CFSP might look like in the coming decades, with nothing at all being certain.

Present: The CFSP in 2024

The present year, 2024, marks a significant period for the EU’s CFSP, as it is currently experiencing a surge in relevance and application. Some, such as the present author, toiled in this field when there was much less focus on it (see, Butler, 2019). This surge is primarily due to the aftermath of the 2022 Russian invasion of Ukraine.

The CFSP, which was previously moderately utilised and researched by few, has seen a substantial increase in the number of legal instruments, leading to a broader understanding of the policy. Consequently, law firms have begun to establish specialised practices in this area, and the uptick in interest in the CFSP from both scholars and practitioners is extremely welcome.

The CFSP’s prominence in the current era – taking the Russian invasion of Ukraine in 2022 as the case study – is most notable in two distinct matters undertaken by the EU, both reactive and proactive.

Reactively, the EU promptly imposed autonomous restrictive measures (sanctions) on individuals committing acts contrary to international peace and security. In other words, problems in the European neighbourhood called for a unilateral European response, without resort to or explicit reliance upon other international partners. This

autonomous action has led to hundreds of individuals being subjected to coercive measures intended to deter them from engaging in wrongful conduct. Whilst controversial for its widening scope, the EU’s sanctioning regime through the CFSP has been targeted on named entities, and whilst in force, imposes obligations on both States and private individuals through the EU to maintain the effectiveness of the adopted sanctions until the sanctions are removed.

Proactively, the EU has taken the initiative to directly support Ukraine through the CFSP at a time when Ukraine has needed all the external support that it could muster. Among the measures taken within the CFSP include the provision of armaments such as artillery, missiles, and other related ammunition through the ‘European Peace Facility (EPF)’. The EPF, embedded within the CFSP, is an off-balance sheet instrument funded by the Member States, and used to finance the EU’s defense and military activities. This initiative marks a first for the EU: arming a third State to defend itself during wartime. Alongside this measure, the EU has launched a new Common Security and Defense Policy (CSDP) mission, the EU Military Assistance Mission in support of Ukraine (EUMAM Ukraine). This mission aims to support and train Ukraine’s armed forces (in EU Member States) to ensure they have the necessary capacity to resist territorial incursions by a neighbouring aggressor. Thus far, tens-of-thousands of enlisted members of the Ukrainian armed forces have received training under the EU banner.

In essence, the present has seen Ukraine inadvertently become the catalyst for the EU to utilise its potential power under the CFSP more frequently, and ambitiously.

Past: The CFSP in 2004

Looking back to 2004, the year of the ‘great’ EU enlargement, the landscape was markedly different. The year commenced with only fifteen Member States, three of which declared neutrality (Austria, Ireland, Sweden), and a fourth (Denmark) having a treaty-based opt-out in EU measures within the CFSP that had ‘defence implications’. Moreover, the United Kingdom was still a Member State of the EU. Europe was anticipating a decade of peace and prosperity at home (though American-led wars were still active in the Middle East), a stark contrast to the regrettable turmoil of the 1990s in the Balkans. The integration of most (though not all) of the new Member States into the CFSP was strategically planned to ensure that their past affiliations with an Eastern bloc were firmly relegated to history.

The accession of each new Member State to the EU did not pose any significant challenges, as the continuation of unanimous decision-making within the Council, a non-legislative field of EU external action, allowed each existing and new Member State to exercise a ‘veto’ over any CFSP action they disagreed with. The EU Treaties also permitted Member States to abstain in certain Council decision-making, allowing them to neither veto the adoption of a specific EU legal act, and nor be obliged to apply the decision that was abstained upon. However, such abstention required the Member State to accept that the decision adopted without them commited the EU, and prohibited the abstaining Member State from acting contrary to that position.

The first Member State to formally exercise the right of abstention was Cyprus, one of the Member States from the ‘great’ EU enlargement. In 2008, Cyprus refused to participate in the CFSP Decision to establish Eulex Kosovo, a Common Security and Defence Policy (CSDP) mission, in a third State whose recognition has not been uniformly agreed upon by Member States. This precedent paved the way for other Member States, such as Austria, Ireland, and Malta, to exercise their right of abstention in CFSP decision-making in 2022, objecting to a Council Decision on the provision of weapons to Ukraine that could be used for ‘lethal force’, due to national political considerations.

Furthermore, twenty years ago, the EU had not yet developed its own autonomous sanctions regime. Instead, at the time, the EU amended secondary law, partially through the EU, to implement UN sanctions in the EU legal order, effectively transposing public international law. In essence, the EU would adopt the list of individuals to be sanctioned by the Sanctions Committee under the authority of the United Nations Security Council, and incorporate it into EU law under the applicable procedures. In-and-around 2004, the ‘Kadi’ saga began to emerge, marking a notable disagreement between the General Court and the Court of Justice on how international sanctions should be incorporated into the EU legal order. The autonomous sanction regime of the EU has relegated some of the relevance of this conundurum.

Future: the CFSP in 2044

The future of the CFSP is undoubtedly leaning towards its eventual integration into the broader EU legal order. In other words, the CFSP is anticipated, one day, to cease being a separate domain and instead become an integral part of the overall EU external action. While the EU has not been a (formal) pillarised legal order for some time, the CFSP in real terms still acts as a de facto hidden pillar, which is a critical aspect often overlooked in non-legal analyses of EU foreign, security, and defence policy.

This distinction between CFSP and non-CFSP action by the EU is not always readily apparent, but the intricacies of the CFSP are highly relevant for the legality of EU external action. Indeed one of the leading disputes in this area concerns the very preliminary matter of the jurisdiction of the Court of Justice of the European Union (CJEU) over the CFSP. This basic problem demonstrates that the full normalisation of the CFSP as a policy subject to ‘specific rules and procedures’ (Article 24(1) TEU) is still some distance away, despite the CJEU’s consistent (and commendable) efforts in the post-Treaty of Lisbon era to erode, within reason, some of the absurd constitutional characteristic of the CFSP as foreseen in the EU Treaties, and consider it as part of the broader external relations acquis, while retaining its separateness only where absolutely necessary.

Treaty reform that would enable full judicial oversight and review of the CFSP and its actions by the CJEU would be at the top of the wish-list for CFSP reform, and most certainly will be gone by 2044. However, more realistic reforms that can be implemented without resorting to treaty amendment would first involve opening up the CFSP in terms of its decision-making within the Council. The EU Treaties already provide for a specific CFSP ‘passerelle clause’ to transition nearly all decision-making in the EU from unanimity to qualified majority in the Council. This development should be one of the easiest decisions to make, mirroring what was provided for in the

legislative realm back in the 1980s by the Single European Act. Unfortunately, any changes to the CFSP to make decision-making more pluralistic with the formal involvement of the Commission and the Parliament encounter the same problem as the lack of ‘full’ jurisdiction of the CJEU over the CFSP: the current text of the EU Treaties, which would need to be amended.

Returning to the present, the Russian invasion of Ukraine has already resulted in at least one EU Member State, Denmark, unilaterally changing its stance regarding its relationship to the EU’s Common Security and Defence Policy (CSDP). In the aftermath of the invasion in 2022, Denmark chose to renounce its opt-out from CSDP matters that had ‘defence implications’, and is now a full Member State for all foreign, security, and defence matters, having forgone this part of a protocol to the EU Treaties. However, this is just one technicality for one EU Member State without major EU significance.

The real test for the EU will be to see whether the CFSP can continue to evolve as a matter of deliberate necessity and proactivity, or whether it will be one of responsiveness in the face of crises. If the only significant progress between 2024 and 2044 within the development of the CFSP is a move to full jurisdiction of the CJEU over the CFSP, and a shift from unanimity to qualified-majority decision-making within the Council, then that would certainly be a disappointment. Numerous innovative ideas for what to do about the CFSP will emerge in the meantime, and it will be a matter of political will to see if any of them will be acted upon.

Graham Butler is Full Professor of Law at the University of Southern Denmark.

SUGGESTED CITATION: Butler, G.; “Leaps in Time through the EU’s Common Foreign and Security Policy Post-Enlargement”, EU Law Live, 20/06/2024, https://eulawlive.com/op-ed-leaps-in-time-through-the-eus-common-foreign-and-security-policy-post-enlargement/

Toward a post-normative nontransformative enlargement of the Union?

Nedim Hogic

Introduction

Russian aggression against Ukraine returned the enlargement process to the center of attention of policymakers and political commentators. Opening the negotiations and granting candidacy status for Ukraine, Moldova, Georgia, and Bosnia and Herzegovina that occurred in the last year made many forget that this process has demonstrated little but failures in the last decade. We may observe this most aptly in foreign and security policy. ‘The Western Balkans became a laboratory to implement the EU’s foreign and security policy,’ stated former Enlargement Commissionaire Ollie Rehn 18 years ago. But that laboratory became a competing arena for all interests where the European influence was just one of the many and where European values – despite their overuse in the discourse surrounding the enlargement – failed to bring about the much-needed transformation of the region. In this Op-Ed, I look at some of the lessons learned from the failed enlargement of the Western Balkans. I map how seeking solutions that bypass the current problems risks making enlargement post-normative and nontransformative. I conclude by examining how the recent initiatives from the European Commission address the problem.

The Pre-Enlargement Failures in Rule of Law and Economic Development

The lengthy enlargement saga of the Western Balkans (WB), which commenced with the EU’s 2003 commitment towards expansion to the region, is a story that warns us to what extent the current enlargement model across the vast policy area covered by the so-called enlargement package is broken. Its only success, anchoring the WB economies in the European sphere of influence, did not bring much prosperity to the region. The region stands at roughly 40% of GDP per capita compared to 62%, the lowest value amongst the EU Member States achieved in Bulgaria, which joined the Union in 2007. A precarious economic development model with a full opening to investments, goods import, and limited working mobility supported authoritarian tendencies. That was because the full opening of the WB countries economies to the EU was not followed by access to structural and cohesion funds. That left a gaping hole of need for infrastructural and other development. Without access to structural and cohesion funds and yet exposed to the import of more competitive European goods and services, the region turned to investments from other, most notably Russian and Chinese sources. The asymmetric nature of the economic relationship between the Union and the WB countries was made worse by the brain drain, especially the brain drain of healthcare workers, which has left the WB countries with severe shortages and problems in healthcare provision.

The rule of law fared worse. The constitutions and laws of the WB countries changed in the last decade due to the rule of law-related demands from the EU feature all formal preconditions for judicial independence. However, decoupled from economic development and viewed narrowly as primarily related to judicial independence, this formal compliance with the criteria and demands from the EU monitoring missions and experts failed to safeguard democracy. The EU observations neglected political preconditions for judicial independence and directed much of its spending in vain. As Stephenson observed, the main preconditions for judicial independence are regular shifts in power. Regular shifts in power are also a precondition for a democratic society, which backslide under the enlargement policies pursued by the domestic and European actors. Qualities such as separation from government influence, lack of arbitrary removal, appointment without political interference, and competitive salaries are all important for a functional judiciary. Still, as we have seen from the examples in the Union itself, their formal realisation doesn’t prevent State capture

These shortcomings concerning economic development and the rule of law as the backbones of the transformative processes present in the previous enlargements risk making further enlargement nontransformative and postnormative. The geopolitical urgency that prompted the Commission to open negotiations with Ukraine amidst calls for the country to be admitted under a fast-track procedure or, even without it, did not end the concerns regarding the transformative power of the Union, in particular about the rule of law conditionality. Theoretically, the EU could ignore the rule of law conditionality in the WB States and admit them into the Union. But that could mean an obligation to do the same in the case of Ukraine, whose sheer size of economy and population goes well beyond that of the WB States, making such a course of action unlikely. Finally, the continuing relevance of the rule of law as one of the focal points of European external action and a core of the criteria for the enlargement makes its abandonment unrealistic. Seeking a way out of the trap in which no progress in the rule of law, limited progress in the economic development and political crisis, the re-imagination of the enlargement process around the idea of integration into the single market began taking place in the last five years.

Pros and Cons of the EEA

Proposed first by the European Stability Initiative in 2019, the idea that a single market access comparable to that created in 1992 by the EU and European Free Trade Agreement countries, the European Economic Area (EEA), should be offered instead of enlargement has gradually acquired a certain degree of attractiveness.

The EEA-style arrangement’s main advantage to the EU and its Member States is political. Enlargement policies are unpopular in Europe as they are blamed for rising populist sentiments. The absence of a deal on the EU’s reform makes enlargement—at least under the Franco-German plan—impossible. Legally, under Art. 128 of the EEA Agreement, accession to the EEA might take the EFTA route, thus escaping the troublesome path to membership. The broad scope of EEA-relevant legislation (for example, the entire package regarding the digital economy) would undoubtedly help create positive changes limited to economic development and wider societal transformation. For some countries, such as Sweden, the experience of the EEA has contributed to a smooth transition to the Union, so the proposal is not without value for the WB States.

However, not all qualities of the eventual application of an EEA-like deal with the candidate countries are acceptable to the EU. An EEA-style arrangement would enable the countries to influence EU-wide policies, thus representing a significant departure from the existing economic and legal arrangement through the Stabilization and Association Agreements (SAA) or, in the case of Ukraine Deep and Comprehensive Free Trade Agreement (DCFTA) between the candidate countries and the EU. The SAAs are trade deals, but deals projected to integrate the countries into a single market and serve as preparation for full membership. The EEA does not operate under such dynamics – it was conceived as a deal to create a unified economic space between then-EFTA countries and the then-European Economic Community. Today, the EEA has 31 member countries and represents a distinct legal order made to reproduce the effects of another legal order, the EU legal order. On an institutional level, unlike the candidate countries, the EEA Member States may participate in formulating new laws and policies. They can do so by agenda setting, influencing laws and policies to be adopted, and participating in EU expert groups And for that, the States, most importantly, Norway pays. That is something that the Balkan States that hope to become a net recipient of at least some part of the structural and cohesion funds don’t do and wouldn’t be allowed to do as the EU clearly does not want any symmetric relationship with them. While the six Western Balkan countries may not have the economic leverage to control any segment of the EU’s economy, the same cannot be said of Ukraine and its potential in agricultural production. Although the EEA excludes agricultural policies (and fisheries) from its scope of regulation, some EU Member States fear that Ukraine could demand a special status or nothing short of full membership. From a legal standpoint, the jurisprudence of the EFTA Court testifies to a dynamics of judicial dialogue that has enriched the whole European legal development. The European policymakers do not expect such a contribution from a legal space that the EU broadly considers severely deficient regarding the quality of its law. The SAAs and the DC FTA were made, as Kuleba observed, so the countries swallow as much acquis as possible without meaningful involvement in policy shaping. That also unmasks the main fear of Ukraine and the Balkan countries: substituting enlargement for EEA membership would keep them outside of the Union forever.

Finally, part of the problem is the institutional setup and fragmentation of the EU’s policymaking. The EEA remains a niche topic even in Brussels. It remains to be seen as a trade deal, not a tool for transforming countries. Tellingly, the EEA is handled by the DG Grow, primarily in charge of internal markets, while the enlargement is dealt with under the DG Near, which handles relations with candidate states. While collaboration between the two is much needed to improve the current state of the enlargement process, different expertise frameworks limit joint engagement. All these reasons make a reproduction of the EEA face too many obstacles and too many whatifs to be considered a politically viable alternative to the enlargement. Instead, the gradual integration – upon much insistence from France – is to follow a staged accession model.

Staged Accession and Benchmarking

The staged accession model attempts to address all the fears of those who feel that benchmarking and an accurate measure of progress is the key to resolving many of the previously mentioned problems. The model, developed by a Serbian think tank with support from European transnational civil society, tries to take benchmarking, the

practice of measuring progress in meeting certain policy objectives, seriously. Thus, every step in meeting specific benchmarks is rewarded with access to more funds. This is useful for monitoring purposes, making the entire process more transparent and less prone to biased observations, and also highlights the oft-forgotten transactional nature of the membership. However, the number of steps it introduces would make the enlargement process resemble early computer games in which endless stages or levels are completed only for a failure at one stage, leading to the loss of all progress achieved in a certain area. Specifically, this is true for the usage of funds that can – under this conception – be frozen for many different reasons. Therefore, it isn’t easy to follow the lens through which the authors view the candidate States and the EU. With progress in different clusters (policy areas of the acquis lumped together) divided in different percentages that automatically trigger acquirement and the loss of funding, the only tangible benefit of the model is that it would give a coherent roadmap that, despite severe problems in its practicality, could be followed.

The Future is Unwritten

What is to be expected, then? The EU seems poised to pursue an experimentalist path toward integrating the candidate countries into the single market without a clear idea of transforming them into prosperous EU Member States. Examples of such integration activities are in the Priority Action Plan under the DCFTA with Ukraine and the Growth Plan for the Western Balkans. These two initiatives, explicitly mentioned in the most recent policy document regarding enlargement that the Commission has issued, the Communication on preenlargement reforms and policy reviews, aim towards single market integration, offering insufficient funds for financing policy goals and infrastructure projects. The rule of law is touted as the highest value of the process. Still, there is remarkably little space dedicated to it compared to the earlier restatements of the enlargement policy. The charted way forward sets aside the insistence on the rule of law reforms as the only critical part of the Fundamental First approach under which the Commission claims to operate. As a novelty, the European Rule of Law Reports, like those used for the EU Member States, will replace the often confusing and sloppy country reports.

Instead, the transformative power is expected from the gradual integration into the single market. But, the full scope of such integration remains undefined. The Commission’s document highlights policy areas, such as the Single European Payment Area, and policy processes, such as the digitalisation and green transition. That is good as a continuing insistence on the rule of law reforms without consideration of the socio-economic structure underpinning it could be counterproductive, raising expectations that cannot be met. Lacking the power of the sword or the power of the purse, the judiciary alone cannot lift the countries out of poverty or eliminate State capture. Instead, endless proposals for the rule of law reforms should be replaced by understanding what you expect the legal system and judiciary branches of government to accomplish.

None of this, however, guarantees that enlargement will happen. Any member state may veto the decision to invite a country to join the Union and many aspects of the enlargement process. The implementation of the Franco-

German plan to reform the Union would change this. But, with the uncertainty surrounding the institutional reforms proposed by the plan any enlargement remains unlikely, risking, therefore, that all policy actions that we describe to remain useless.

Nedim Hogic is Postdoctoral Research Fellow University of Oslo.

SUGGESTED CITATION: Hogic, N.; Toward a post-normative nontransformative enlargement of the Union?, EU Law Live, 19/06/2024,https:// eulawlive.com/op-ed-toward-a-post-normative-nontransformative-enlargement-of-the-union/

EU enlargement: Wider AND deeper?

R. Daniel Kelemen

A year ago, EU enlargement remained in the deep freeze to which Commission President Jean Claude Juncker had consigned it back in 2014. The chances that candidate States in the Western Balkans might join the Union anytime soon seemed slim. The notion that Ukraine and Moldova might soon be accepted as candidates for membership was pure fantasy. But after February 2022, Russia’s bloody invasion of Ukraine transformed the EU enlargement debate. By May 2024, as the EU celebrated the 20th anniversary of the 2004 Big Bang enlargement, the EU had opened accession negotiations with Ukraine and Moldova and granted Georgia (conditional) candidate country status, and the prospect that some Western Balkan States might accede to the Union in the coming decade had become eminently plausible.

The 20th anniversary of the 2004 enlargement and the EU’s commitment to a new vision for a wider Union spanning from Ireland and Portugal in the West to Ukraine’s contested borderlands with Russia in the East marks a moment for both looking back and looking forward. When a new European Commission is installed next year, reform of EU enlargement policy will be high on its agenda. Looking back, we can ask whether the 2004 enlargement was a success? What mistakes were made? Did widening the Union undermine deepening as many suggested it would? Looking forward, we can ask what issues should the Commission prioritise as it prepares for the next round of enlargement? What can EU leaders learn from the recent history of enlargement, and how can they avoid repeating mistakes made in the past? Is there reason to believe that a new round of widening –potentially bringing the Union to as many as 35 or 36 Member States – will come at the expense of deepening? Or, to the contrary, could widening the EU actually encourage deepening of integration?

While the enlargement process certainly helped precipitate some serious economic and political problems in both new and old Member States, if we take the long view and consider the counterfactuals, we should conclude that on the whole the 2004 EU enlargement has been a resounding success.

We must not ignore the problems. Economically, the EU’s insistence on imposing a rigid neoliberal model on accession States exacerbated the shocks they were experiencing with the transition to a market economy –contributing to deep recessions, soaring inequality, mass emigration, and social dislocations with great human costs. These shocks – and the migration and unemployment they involved – in turn had political impacts, contributing to the decline of the left and the rise of the populist right. And given that one of the main promises of enlargement was to entrench democracy in the accession States, one can certainly not consider it an unalloyed success since the EU allowed two accession States – Hungary and Poland – to become the two most rapidly autocratising States in the world in the 2010s.

Though these economic and political problems had the greatest impact in the accession States, they also affected

the Union as a whole. For instance, as the EU failed to respond adequately to the emergence of autocratic Member State regimes it became mired in what I’ve termed an authoritarian equilibrium or autocracy trap, and as a result found its foreign policy threatened by these increasingly autocratic regimes and found the foundations of the EU legal order attacked by them.

But even recognising the seriousness of these problems, we must conclude that overall enlargement has been a major success. Most of the ten countries that joined the EU in 2004 have more than doubled their GDP per capita since accession – a rate of growth far higher than the EU average. The economic performance of countries that joined in 2004 far exceeded that of those States on the EU’s periphery – like Moldova and Ukraine – who were denied the opportunity to accede. And politically, while we have learned that EU membership is no guarantee against democratic backsliding, EU membership still places some limits on how far autocratic leaders will go in hardening their rule. Orbán has turned Hungary into an electoral autocracy, but he hasn’t turned it into a bloody dictatorship like Lukashenko’s Belarus just outside the EU’s domain.

And what of the relationship between widening and deepening? The prospect of a new round of enlargement has revived the old question of whether widening the EU will undermine deepening. To assess this looking forward, we should first look back. Quite simply, there is no reason to believe that the 2004 enlargement slowed down the deepening of integration. The past two decades have seen the EU deepen profoundly –largely in response to the series of crises it faced. The EU’s responses to each of the major crises it has faced in recent years– from the Eurozone crisis, to the refugee crisis, to the Covid-19 crisis, to the rule of law crisis, to the crisis of Russian aggression –have led to significant strengthening of the EU’s authority in existing areas of competence or to the establishment of new competences. While it is possible that a smaller Union would have deepened even more in response to these crises, for the most part States that joined the Union in or after 2004 did not prevent deepening.

Why did the last round of widening not prevent deepening, and what does this mean for the likely impact of a future round of enlargement that could see the EU take in Western Balkan States, Moldova, and Ukraine?

As Anand Menon, Jonathan Slapin and I have argued, the impact of widening on deepening depends very much on the position of the enlargement States relative to existing States – and whether or not the new members are preference outliers likely to block policy agreements. For much of the EU’s history, accession States were not preference outliers – as the biggest opposition to deepening came from existing Member States (usually the UK). Also, while widening may enhance the risk of gridlock and impede deepening in the short-term, it has also tended to strengthen the role of supranational actors and provided the impetus for institutional reforms that facilitated deepening in the long-term.

Should we expect similar dynamics to prevail in the new round of enlargement the EU is contemplating? As they say in the world of investment, past performance is no guarantee of future results. While widening did not impede deepening in the past, this is no guarantee that expanding the EU to embrace a number of fragile democracies to its east would not come at the expense of deepening this time around.

Why might this time be different? First of all, in the past institutional reforms taken in advance of enlargement –such as extension of qualified majority voting to new fields – ensured that enlargement would not lead to gridlock. However, today the EU is contemplating enlargement at a moment where it has failed to adequately address failures of the last round of enlargement – namely the failure to defend the EU against the emergence of autocratic Member State governments. For instance, two of key issues the EU must tackle to ensure widening does not block deepening in the future include removing national vetoes on EU security policy and putting in place safeguards to ensure that new Member States are credibly committed to democracy and the rule of law. But the EU can be sure that its current autocratic Member State (Hungary) and potentially some aspiring autocracies (such as the Fico government in Slovakia) would veto any such reforms. There is no more poignant reminder of this than the fact that a lackey of Hungary’s autocratic ruler Viktor Orbán has served as enlargement Commissioner for the past five years – entrusted with promoting rule of law and democracy in candidate States. In short, EU enlargement policy has been poisoned by autocrats within, and as a result, it currently lacks credibility.

Another factor to consider is the broader fraying of the EU legal order. More and more national judiciaries are challenging core principles that have long underpinned the functioning of the EU legal order – such as the primacy of EU law. At the same time, the Commission has retreated from its traditional role as the guardian of the Treaties. As Tommaso Pavone and I have demonstrated, since 2004 the Commission has dramatically relaxed enforcement of EU legal norms and reduced its use of infringement procedures across the broad range of areas of EU law. Taking all this together, we must recognise that the EU legal order – which has served as the backbone of the integration project since its inception – is weakening. In this context, to admit a number of new Member States with weak rule of law traditions and significant histories of corruption would seem perilous.

Overriding geopolitical considerations justify the EU moving ahead with the enlargement process expeditiously despite the risks. But before it undertakes another round of widening, the EU must reinforce its legal order and its commitment to rigorous enforcement of EU law. If the EU fails to do so, then ironically the new Member States might finally succeed in joining the Union only to find it coming apart at the seams.

R. Daniel Kelemen is McCourt Chair at Georgetown University, McCourt School of Public Policy

SUGGESTED CITATION: Daniel Kelemen, R.; “EU enlargement: Wider AND deeper?”, EU Law Live, 20/06/2024, https://eulawlive.com/op-ed-euenlargement-wider-and-deeper/

Linguistic Diversity in an Enlarging European Union

Anna Krisztian

The 2004 enlargement of the European Union brought about more diversity in the EU in many different respects. Ten additional political and legal systems and cultures had to be smoothly integrated into the Union of 15, bringing with them a bundle of new challenges. The European Union comprises a unique multilingual supranational legal order, in which linguistic diversity exists at different levels: there is linguistic diversity within Member States, between Member States, and also in EU institutions; in their everyday operation, in their communication with citizens, as well as in their formal and informal decision-making procedures, including the publication of legislation and non-binding documents. The EU has an obligation to protect and promote linguistic diversity on its territory (see Article 3(3) of the Treaty on European Union andArticle 22 of the Charter of Fundamental Rights of the EU), and to respect Member States’ national identities at the same time (see Article 4(2) of the Treaty on European Union).

The ‘big bang’ enlargement also resulted in the recognition of nine additional languages as official languages of the EU, which meant almost doubling the number of official languages at the time. Since then, four additional languages were added to the mix. Whereas the total number of official languages at present (24) is close to the number of Member States (27), contrary to common belief, the ‘one language per Member State’ rule never existed officially. And this is not only because some Member States share certain languages, but also because the accession of a new Member State does not automatically bring about the designation of a new official EU language. Irish for instance became an official language only in 2007, 34 years after the country joined the bloc. And even then, temporary derogatory measures were put in place to allow for the building up of sufficient capacities to translate into and from Irish in EU institutions, providing the Irish language with full parity with other official languages as late as in 2022. Such a derogatory period also applied to the Maltese language for three years after Malta’s accession in 2004, for similar reasons. Likewise, a Member State’s withdrawal does not automatically impact the number of official languages. English remained an official language of the Union, despite the United Kingdom’s withdrawal from it. In fact, English, like all the other official languages of the European Union, is now listed under Article 1 of Regulation 1/1958. This regulation, which was the very first piece of secondary legislation ever adopted by an EU institution – determining the Union’s language regime and thereby signifying the fundamental importance of the matter – has been amended each time a new language needed to be added, i.e. most recently, in 2013.

Today this provision lists 24 languages, which also means that in principle EU institutions must operate in all these languages (though under Article 6 of the Regulation, they remain free to regulate the use of languages in their rules of procedures in specific cases), that citizens must be given the opportunity to communicate with EU

institutions in all these languages, and that EU legislation must be published in all these languages. Those who consider this endeavor to be symbolic rather than being of practical relevance may wonder how much it costs to maintain the EU’s multilingual public administration. In 2023, this figure was EUR 349 million, which might seem like a considerable amount, however, it actually makes up only 0.2% of the EU’s total budget. Interestingly, regardless of the increasing number of official languages and the ever-intensifying legislative activity of the EU, the number of staff employed for instance by the European Commission’s translation unit has been decreasing over the years, in part due to the availability of more and more efficient machine translation tools. Translation tools were introduced after the 2004 enlargement, as the Commission’s old translation system was not suitable for dealing with all the official languages of the newly acceding countries. New technologies may also help overcome the challenges of having to resort to relay languages. The use of relay languages increased markedly upon the accession of new Member States, as it was impossible to find qualified translators for all combinations of the 24 languages.

Linguistic diversity within the Member States is a different matter altogether, rendering language questions more sensitive in some Member States than others. Nevertheless, languages have always played an important role in the course of European integration itself. Language questions determined the fate of many legislative instruments adopted at the EU level. For instance, the creation of European intellectual property rights provided for by Article 118 TFEU took decades to materialise, predominantly because of disagreements between Member States as to the applicable language regime. The finally adopted Translation Regulation now provides that applicants who file patent applications at the European Patent Office in one of the official languages of the Union that is not an official language of the EPO (i.e. English, German or French) are entitled to reimbursement of all translation costs up to a ceiling. This was a crucial point for Member States that wanted EPO’s language regime to be fairer and that hence blocked the legislative process for a long time.

Outside the realm of EU public administration, however, the use of one particular language, English is often preferred – or even promoted by EU institutions, with the view of overcoming language barriers between people and businesses interacting within the EU’s internal market. The European Parliament in its 2021 resolution on the future of free movement of services called for the use of English in communication between national authorities (e.g. under the Professional Qualifications Directive) and by single contact points disseminating information to citizens (e.g. under the Single Digital Gateway). Similarly, on occasion applicants for funding of cross-border cooperation projects have been encouraged to submit their application packages in English, even when multilingualism played an important role in the project to be funded.

Regardless of the Union’s efforts of protecting and promoting linguistic diversity in particular in the public domain, there is still room for improvement. As the most recent standard Eurobarometer survey confirms, only 9% of Europeans regard languages as creating most ‘a feeling of community among EU citizens’. Shall this be interpreted as linguistic diversity dividing people rather than bringing them closer together? While this could be a critical interpretation, one should consider that at the same time 24% of respondents see culture as creating most a feeling of community – and arguably, languages are part of Europe’s intangible cultural heritage. Luckily, though,

while Europeans might not regard languages as an important factor in bringing people together, multilingualism as such is valued very highly, as confirmed by the second ever Eurobarometer survey on ‘Europeans and their languages’ published in May 2024. Namely, 86% of respondents thought that everyone in the EU should be able to speak at least one language in addition to their mother tongue, 76% considered that improving language skills should be a policy priority and 84% agreed that regional and minority languages should be protected.

Whether citizens’ enthusiasm for multilingualism will be upheld with future rounds of enlargement is yet to be seen. With no less than nine countries being candidates for accession at the time of writing, how will the EU accommodate an ever-increasing number of official EU languages and their speakers in the future? As certain outdated institutional settings have long been inadequate for a Union of 27 (see for instance Bruno de Witte’s op-ed in this symposium on, among others, the unanimity rule in the Council), perhaps the time will soon be ripe for a decision to officially limit the number of languages used in and by EU institutions. Seeing some Member States’ vehemence when it comes to language questions however, this will not be easily accomplished.

Anna Krisztian is a researcher at the Europa Institute of Leiden Law School. Anna wrote her Ph.D. at the European University Institute on the legal regulation of linguistic diversity in the European Union.

SUGGESTED CITATION: Krisztian, A.; “Linguistic Diversity in an Enlarging European Union”, EU Law Live, 18/06/2024, https://eulawlive.com/ op-ed-linguistic-diversity-in-an-enlarging-european-union/

SYMPOSIUM

COMPETITION CORNER:

SYMPOSIUM ON SELECTIVITY IN STATE AID

Selectivity and discrimination in light of the recent Ryanair v Commission cases (C-209/21, C-210/21, C-320/21, C-321/21)

Juan Jorge Piernas López

In a number of recent judgments, the Court of Justice has analysed the relationship between the State aid rules and the general principle of non-discrimination based enshrined in article 18 TFEU. As summarized by Cyndecka, the Court found that State aid is discriminatory by nature, but compatible aid does not breach the principle of nondiscrimination. It is worth examining the implications of these judgments in the context of the definition of State aid, and particularly for the criterion of selectivity, as well as for the compatibility of State aid.

Discrimination and the notion of aid

The Court found that Article 107(1) TFEU is linked to discrimination, as this provision deems incompatible national measures that introduce differences in treatment between undertakings in a comparable situation (e.g. case C-320/21 TFEU, para. 111). The case-law of the Court in recent years appear to confirm this finding.

Indeed, the Court has increasingly linked the notion of aid, and particularly the criterion of selectivity therein, with discrimination. For instance, the Grand Chamber of the Court referred to discriminatory parameters in Commission v Poland and Commission v Hungary. Similarly, concerning fiscal aid, Advocate General Kokott has held that “the decisive factor is whether […] the conditions governing the tax advantage have been selected in a non-discriminatory manner [concluding that, in essence] this selectivity test is a discrimination test.”

The General Court also observed in case T-378/20 (paragraph 65) that “individual aid […] by definition benefits only one company, to the exclusion of all the other companies, including those in a situation comparable to that of the recipient of that aid. Consequently, such individual aid, by its nature, brings about a difference in treatment, or even discrimination, which is however inherent in the individual character of that measure.” Similarly, the European Commission concluded in 2016 that “fiscal measures that discriminate between taxpayers in a similar factual and legal situation constitute, in principle, State aid.”

It therefore appears safe to conclude, as did Advocate General Pitruzella, that “the case-law of the Court has, for some time now, highlighted the close connection between the concept of selectivity, inherent in the concept of aid, and the concept of discrimination”. To this extent, Advocate General Jacobs already observed in the 1996 Kimberley Clark case (paragraph 28) that a difference in the treatment of different operators “is the kernel of the concept of aid within the meaning of Article [107(1) TFEU]”.

Discrimination and the compatibility of aid

Assuming that discrimination is enshrined in the concept of State aid, and notably in the criterion of selectivity, the Court was asked to analyse whether the principle of non-discrimination based on nationality under Article 18 TFEU play any role in the analysis of the compatibility of State aid.

Confirming the view of the General Court and of Advocate General Pitruzella, the Court found that the principle of non-discrimination under Article 18 TFEU is implemented in the Treaty State aid provisions, and therefore that this provision does not apply independently in the State aid field (e.g. case C-320/21 TFEU, paras. 110112). This finding is based on the well-settled case-law of the Court according to which Article 18 TFEU applies independently only to situations governed by Union law for which the Treaty lays down no specific rules of nondiscrimination. To this extent, the Court has underlined that in relation to the freedom of movement for workers, the right of establishment, the freedom to provide services and the free movement of capital, the principle of non-discrimination was implemented in specific Treaty provisions (see e.g. C-379/92 Peralta).

The Court´s finding would also be consistent with the 2004 Thermenhotel Stoiser Franz judgment, where the General Court held that the first paragraph of Article 18 TFEU was not apt to be applied independently in the context of a State aid case “by reason of the existence of the competition rules of the Treaty. They cover discrimination, not in relation to the nationality of the undertakings allegedly affected, but by reference to the geography and sector of the market considered” seemingly linking the notion of discrimination to that of material or geographical selectivity.

However, the foregoing must be reconciled with the case-law of the Court, in Grand Chamber formation, according to which the application of the State aid rules must never produce a result which is contrary to the specific provisions of the Treaty or the general principles of Community law, such as the principle of equal treatment, cited by the Court in Nuova Agricast, Hinkley and Braesch. The judgments under review quote this case-law. However, as explained above, they consider that Article 18 TFEU does not apply independently as the State aid rules are specific provisions under this article. Despite this finding, I think the previous case-law of the Court and the objectives of the State aid rules under the Treaty demand a thorough analysis of whether the principle of equal treatment and non-discrimination has been respected.

In relation to the previous case-law, even assuming that the Treaty rules are specific provisions under Article 18 TFEU, and therefore that this latter provision does not apply independently, the general principle of equal treatment and non-discrimination would still apply in my opinion, as the Grand Chamber of the Court has underlined in recent judgments. This principle prohibits blatant discriminations based, for instance, on nationality. To this extent, in Nuova Agricast the Court analysed whether the Commission had infringed the principle of equal treatment in a State aid decision and underlined that this principle “requires that comparable situations must not be treated differently and that different situations must not be treated in the same way unless such treatment is objectively justified.”

In my opinion, a discrimination based on nationality is liable to go beyond what is necessary under Article 107(2) or (3) TFEU, and therefore be contrary to the principle of equal treatment and the case-law of the Court, a possibility that should be analysed separately in the compatibility assessment. To this extent, in 2021 the Commission invoked Article 18 TFEU in an opening State aid decision as one of the EU Law provisions the contravention of which would make a State aid scheme incompatible with Article 107(3) TFEU, and citing the abovementioned Hinkley decision, therefore assuming that Article 18 TFEU is relevant in the context of the compatibility analysis (and has not been subsumed by Articles 107(2) and 107(3) TFEU), although this decision certainly predates the judgments under review. In particular, the Commission noted that the measure under review “introduce[d] a discrimination — based on nationality — […] Such discrimination based on nationality is incompatible with Union law, in particular with Article 18 TFEU.”

Even in cases of more subtle discrimination, a detailed analysis would in my opinion have to be carried out. The Schumacker decision of the Court could provide some guidance. In that judgment, the Court noted that national rules which made a distinction on the basis of residence in that non-residents were denied certain benefits which were, conversely, granted to persons residing within the national territory, were liable to operate mainly to the detriment of nationals of other Member States, constituting prima facie indirect discrimination by reason of nationality. However, the Court did not stop the analysis at that point, but instead added that discrimination can arise only through the application of different rules to comparable situations or the application of the same rule to different situations, and concluded that, in relation to direct taxes, the situations of residents and of non-residents were not, as a rule, comparable.

The question for our purposes could therefore be, whether, in relation to the State aid rules, and particularly to the granting of aid to alleviate the consequences of a crisis, the situations of resident and of non-resident undertakings are (or are not) comparable and, if so, whether there is any justification for the different treatment. It therefore appears that the principle of equal treatment, even absent Article 18 TFEU, has an independent role to play in the context of the analysis of the compatibility of State aid measures.

Finally, concerning the goals of the State aid rules within the Treaty architecture, the State aid rules aim to ensure the level playing field in the internal market, which can certainly be hampered by discrimination based on nationality. This type of discrimination might also increase disparities among Member States, whose financial resources are very different, which would be contrary to the goals of economic, social and territorial cohesion in the Union recognized in Articles 3 TEU and Article 174 TFEU. In this context, the words of Professor Ryziger in 1965 are still relevant today: « il est assez peu probable de voir un Etat, tout au moins dans la période actuelle, accorder des aides a des entreprises étrangères, qu’il va sans dire que les aides d’Etat vont d’abord aux nationaux, et que dans cette mesure on peut dire que l’incompatibilité entre certaines aides et le Marché Commun se rattache à l’interdiction de discrimination en raison de la nationalité. » (Paul-Francois Ryziger « Discriminations et subventions », in Dix ans de jurisprudence de la Cour de justice des Communautés européennes, Europäische Arbeitstagung (Köln : Heymanns, 1965), pp- 245-258 at page 253).

Juan Jorge Piernas López is Assistant Professor of International Law and International Relations at the University of Murcia (Spain) and consultant to the World Bank and other public institutions in competition and State aid law and policy. He is the author of The Concept of State Aid under EU Law: From internal market to competition and beyond, published by Oxford University Press in 2015.

SUGGESTED CITATION: Piernas López, J.J.; “Selectivity and discrimination in light of the recent Ryanair v Commission cases (C-209/21, C-210/21, C-320/21, C-321/21)”, EU Law Live, 14/06/2024, https://eulawlive.com/competition-corner/selectivity-and-discrimination-in-light-of-the-recentryanair-v-commission-cases-c-209-21-c-210-21-c-320-21-c-321-21-by-juan-jorge-piernas-lopez/

And now for something somewhat different: an economist’s take on selectivity

Simon Yarak and Nicole Robins

Introduction: what do economists have to say about selectivity?

Selectivity is undoubtedly a legal topic. As economists, we tend to spend most of our time in State aid assessing the criterion of ‘advantage’, and analysing whether compatibility criteria are met for measures that do constitute State aid. An exception is perhaps the case of certain direct taxation measures where, if the legal conclusion is that transfer pricing guidelines and the arm’s length principle may be deemed to form part of the relevant reference framework, transfer pricing analysis (based on functional analysis, and the identification of the appropriate benchmarks) may be performed.

Selectivity is one of the key criteria for a measure to constitute State aid, but there are others, and in particular the far less prominent criterion of distortions to competition (and the closely related one of effect on trade). When assessing the existence of aid, this criterion is not discussed in any detail, as it is many contexts all but assumed when an advantage is found in a liberalised sector with (potential) competition (Notion of Aid Notice, para 187). Even in the case of compatibility assessments, the effects of aid schemes or measures on the relevant markets are not always assessed in detail, and the balancing test has been referred to as something of a ‘black box’.

In this piece, we explore the links between the criterion of selectivity and that of distortions to competition. We find that, while they are related to an extent, they rest on fundamentally different principles and concepts, and intuition on how they relate to each other is not always helpful. We conclude that, as a result, the detailed assessment of selectivity at the stage of determining the existence of aid would be usefully complemented by a robust analysis of distortions when assessing the compatibility of aid measures.

Does ‘greater selectivity’ equal ‘greater distortions’?

It is intuitively tempting to equate the distortions of the aid to some sort of mathematical result of two other criteria: advantage and selectivity, i.e. a ‘more selective’ measure and a ‘greater advantage’ would result in greater distortions. As a mirror image of this view, any ‘non-selective’ measure would not be distortive, or at least less so given that the criteria are distinct.

However, this is where the factual question of distortions can differ from the question of selectivity. It is perhaps most helpfully illustrated by a case such as Eventech v Parking Adjudicator (C-518/13). In its judgment, the Court of Justice concluded that London black cabs and minicabs were in ‘sufficiently distinct’ factual and legal situations, such that the policy of only granting the former access to bus lanes was not selective. This was despite the

Court’s acknowledgement that the two categories of cabs were in direct competition at least on some segments of the market (namely, pre-booked journeys). This is a very clear example of a drastic distinction between the principles and approach that underpin selectivity on the one hand, and the market reality of competition between undertakings that are or not targeted by a measure.

The example of sectoral measures: the traps of intuition

Perhaps more interestingly, we can also use the example of aid measures or schemes provided to an entire sector (or even multiple sectors), such as a rebate on energy taxes for companies in the manufacturing sector (Adria-Wien Pipeline, C-143/99) or tax measures in favour of road hauliers (Italy v Commission, C-6/97). Intuition may lead to consider such measures as ‘less’ selective, as they would be available to a large number of undertakings, and it could therefore be tempting to consider them as less distortive.

First, to determine whether this intuition regarding the distortions is correct, an initial step is in our view to draw a distinction between the distortions to competition on the one hand, and the wider effects of the aid on the other.

For example, a decarbonisation scheme offered to an entire sector is more impactful in reducing greenhouse gas emissions than a measure provide only to a few selected undertakings, all other things equal. However, this does not mean that it is more distortive, if all companies benefit to the same extent. Implicitly, the standard adopted here for distortions to ‘competition’ is one of ‘level playing field’, which is consistent with the philosophy of State aid rules.

Second, the question of the geographic scope of the effects should also be considered. Indeed, if a Member State provides a measure to an entire sector where competition takes place at a local level, the effects on competition would likely be more limited than in the case of a measure benefitting an entire sector in that Member State, but where a significant competitive constraint is imposed by imports from undertakings established elsewhere in the EU. We note that this also touches on the criterion of the effect on trade (and that the same point would also be true of measures of general application within a Member State, which do not constitute State aid).

Third, one must also ask whether the only relevant ‘competition’ is that which takes place between companies in the sector affected by the measures. For example, a measure provided to the entire ‘sector’ of biscuit producers could have distortive effects on producers of chocolate bars. In another vein, a measure in favour of the entire sector of biomass plants, which are fuelled by wood pellets, may not create significant distortions between plants, but could heavily affect other industries that also use wood pellets as an input.

The economic tool to understand the disconnect: market definition

In the two points that precede, we have deliberately avoided using one word in particular, the ‘market’. Readers familiar with other areas of competition law may have recognised in these points some key aspects of the definition of the relevant markets, an exercise that is frequently undertaken in other contexts such as mergers and antitrust, but less so in State aid. In particular, one can make out the outline of two key dimensions of market definition, namely geographic- and product market definition.

This provides the conceptual tools to articulate the difference between the concept of selectivity (especially material selectivity) and the notion of legal and factual comparability on the one hand, and the concept of distortions, which ultimately rests on the question of the relevant markets. We understand that being in the same relevant market does not imply being in a comparable factual and legal situation (and vice versa), although there will of course be some degree of correlation in many cases.

To an extent, this disconnect between selectivity should not come as a surprise: they are, after all, two distinct criteria for the existence of aid. Furthermore, on a formal level, we understand that the Court of Justice has even confirmed in Italian Republic and Sardegna Lines v Commission (C-15/98 & C-105/99) that the existence of distortions cannot be inferred from selectivity (see Bacon, K. (ed.), European Union Law of State Aid, 3rd Edition) .

Conclusion

What to make of all this, then? As economists specialised in the field of State aid, we draw two main conclusions first, it is a good reminder that our intuition as economists of what constitutes a selective advantage, which comes primarily from our instinct of thinking about markets, should not be relied upon when thinking about selectivity. This also applies, to an extent, to companies wishing to complain about selective measures in favour of competitors—legal analysis alone is able to determine whether a measure is selective or not.

Second, the criterion of distortions to competition is clearly the ugly duckling among the criteria for the existence of aid (for example, only one page is dedicated to it in the Notion of Aid Notice; compared to the 13 pages on selectivity, or the 12 pages on advantage). However, we should not succumb to our bias as economists, and call for detailed competition analysis at the stage of determining whether a measure constitutes aid—it could be rather disproportionate.

Nonetheless, when assessing the compatibility of aid measures, for the purposes of assessing whether distortions are limited to a minimum and performing the balancing test, greater weight should be placed on factors other than the degree of selectivity of the measure, such as the characteristics of the subsidy as well as the firm and the market, including the degree of competition in the relevant market.

Simon Yarak is a Senior Consultant at an international economics and finance consultancy in Brussels, and specialises on State aid and (foreign) subsidy control issues. He is a co-author of ‘Assessing the practical implications of the Foreign Subsidies Regulation – revisiting the acquisition of Vossloh Locomotives by CRRC’, Competition Law Journal, 2023.

Nicole Robins is a Partner at an international economics and finance consultancy in Brussels, and heads its State Aid and Subsidy Control practice. She focuses on economic and financial analysis in the context of State aid and the Foreign Subsidies Regulation. She also teaches the State aid module on the postgraduate diploma in Economics for Competition Law at King’s College London.

SUGGESTED CITATION: Yarak, S. and Robins, N.; “And now for something somewhat different: an economist’s take on selectivity”, EU Law Live, 19/06/2024, https://eulawlive.com/competition-corner/and-now-for-something-somewhat-different-an-economists-take-on-selectivity-by-simon-yarakand-nicole-robins/

THE LONG READ

EU Accession to the European Convention on Human Rights: An EU Negotiator’s Perspective

Felix Ronkes Agerbeek 1

I. A New Hope

Mission: Impossible. That is how the editors of a prestigious law journal once described the European Union’s accession to the European Convention on Human Rights.2 It is too soon to say whether they were right or wrong. One thing is certain: the EU has not abandoned its longstanding aspiration to accede to the Convention.3

Between 2020 and 2023 – ten years after the negotiations that had led to the first draft accession agreement – delegates from the EU and from the Member States of the Council of Europe worked out a revised set of accession instruments. This happened out of the limelight, but in full transparency. Almost every negotiating document was published on the website of the Council of Europe.4 Most importantly, the outcome is available online for everyone to scrutinise.5

This is a strange moment to take stock of the negotiations. The agreement is provisional and its fate is still uncertain. Even in the best of scenarios, EU accession to the Convention is likely to require several years, if only because every Member State of the Council of Europe will have to ratify the agreement. Nevertheless, it is also a logical moment to assess the situation. The fact that there is now a revised set of draft accession instruments is a noteworthy development and an essential step forward on the road towards accession. To borrow a title from another famous movie franchise: the talks that took place in Strasbourg from September 2020 to March 2023, and the outcome of those talks, represent neither the first nor the last episode in the saga of the EU’s accession to the Convention; they do, however, represent ‘A New Hope’.

1. Member of the Legal Service of the European Commission; chief negotiator on behalf of the EU for the 2020–2023 negotiations on the accession of the European Union to the European Convention on Human Rights. This paper is an abridged version of a contribution to a forthcoming European Papers Special Section. I am grateful to Liesbeth A Campo, Megan Anderson, Hans-Jörg Behrens, Julio Baquero Cruz, Friedrich Erlbacher, Stian Øby Johansen, Rick Lawson, Tonje Meinich, Allan Rosas and Irene Suominen for their remarks on an early draft. I also owe a debt of gratitude to my fellow negotiator Mihaela Carpus Carcea for her collegiality and wisdom throughout the negotiations. The views expressed in this paper are in an individual capacity and cannot be attributed to my employer.

2. Editorial comments, Common Market Law Review, (2015) 52, Issue 1, 1-16, at 14.

3. Enshrined, since 2009, as an obligation in art. 6(2) TEU.

4. Council of Europe, EU Accession to the ECHR (‘46+1’ Group)

5. Council of Europe, Final Consolidated Version of the Draft Accession Instruments.

II. Lessons from Opinion 2/13

At their origin, the Convention and the EU are both manifestations of the same political and moral enterprise: to make sure that Europe would not repeat the horrors that had taken place on its soil during the twentieth century. However, they pursue that goal with different techniques. The Convention technique is to set minimum standards for the protection of human rights with which the contracting states must comply, and the primary task of the European Court of Human Rights is to supervise them based on individual petitions. By contrast, the Union technique is to integrate political communities into an ‘ever closer union’, and the primary task of the Court of Justice is, together with national courts, to weave the legal fabric that holds the overarching community together.

The Convention technique (of overseeing political communities) and the Union technique (of integrating them) are, generally speaking, complementary, as the long track record of constructive interaction between the two legal systems shows.6 In certain respects, however, they stand in tension with each other. The main areas of tension are well known to anyone who has read Opinion 2/13: mutual trust, advisory opinions, inter-party applications between EU Member States, human rights protection in the Common Foreign and Security Policy, and the attribution of responsibility between the EU and its Member States for the purpose of applying the Convention.7 Opinion 2/13 presses on these trigger points and insists that they be addressed. Not because they are caused by accession, but because accession of the EU to the Convention might otherwise cement the existing situation while at the same time binding the EU inextricably into the Convention system.

Consider, for instance, the much-debated topic of mutual trust in the Area of Freedom, Security and Justice (AFSJ). Throughout the AFSJ, fundamental rights issues are very salient. Fundamental rights considerations can form part of the rationale for requiring mutual trust.8 However, fundamental rights considerations can also prompt difficult questions about the limits of mutual trust. Both the Court of Justice and the European Court of Human Rights have had to grapple with such questions. But the two courts approach the problem from a different frame of reference, which primes them to reach contradictory results, at least in theory. When the Convention’s intergovernmental frame of reference is taken to its extreme, the result is ‘no trust’: each state must be held directly and severally accountable under the Convention, including for having placed trust in the other. When the Union’s constitutional frame of reference is taken to its extreme, the result is ‘blind trust’, because the requesting state and the cooperating state are components of a larger political entity that assumes responsibility under the Convention. In practice, neither court takes its own frame of reference to such an extreme. The European Court of Human Rights acknowledges that EU Member States must give ‘full effect’ to

6. On the relationship between EU law and the Convention, see e.g. S. O’Leary, ‘A Tale of Two Cities: Fundamental Rights Protection in Strasbourg and Luxembourg’, Cambridge Yearbook of European Legal Studies, (2018) 3-31.

7. Opinion 2/13 Accession of the European Union to the ECHR, EU:C:2014:2454.

8. See e.g. ECtHR Romeo Castaño v Belgium, App n. 8351/17 [9 July 2019].

mutual recognition mechanisms established by EU law and, when they do, reviews the compatibility of their actions with the Convention under the rubric of a ‘manifest deficiency’ test.9 The Court of Justice accepts that mutual trust between EU Member States has its limits and that there are circumstances in which fundamental rights concerns preclude the authorities of a Member State from cooperating with the authorities of another Member State.10 Differences in emphasis remain, but on the whole, the case law of the two courts reflects a careful, ongoing search for a middle ground in which each court tries to take the other’s concerns into account.11

Prior to Opinion 2/13, however, the question of how the case law of the two courts on mutual trust would develop was very much up in the air. The pivotal judgments of that period were the ruling of the European Court of Human Rights in M.S.S. v Belgium and Greece (January 2011)12 and that of the Court of Justice in N.S. v Secretary of State for the Home Department (December 2011).13 Both cases concerned the sending of asylum seekers back to the country where they had made their first application for asylum: Greece. In M.S.S. v Belgium and Greece, the European Court of Human Rights found that, at the material time, the asylum process and conditions in Greece suffered from systemic deficiencies. Nevertheless, in its reasoning, the Court emphasised, first and foremost, the need for ‘independent and rigorous scrutiny [by the sending state] of any claim that there exist substantial grounds for fearing a real risk of treatment contrary to art. 3 [ECHR]’.14 In N.S. v Secretary of State for the Home Department, the Court of Justice was asked, essentially, whether a sending state could place blind trust in the EU Member State of destination. The Court answered: ‘no’. In fact, it concluded that, in the circumstances under consideration, EU law precluded the transfer of asylum seekers to Greece. However, the Court of Justice relied entirely on the systemic deficiencies which the European Court of Human Rights had identified in its judgment in M.S.S. v Belgium and Greece. Moreover, the Court of Justice seized the occasion to emphasise that the relevant EU asylum legislation was built on a presumption that the treatment of asylum seekers in all Member States would observe fundamental rights. According to the Court, it would be incompatible with that legislation if ‘any infringement’ would prevent the transfer of

9. See ECtHR Avotiņš v Latvia App n. 17502/07 [23 May 2016] and ECtHR Bivolaru and Moldovan v France App n. 40324/16 and 12623/17 [March 2021].

10. E.g. Case C-163/17 Jawo EU:C:2019:218; Joined Cases C-404/15 and C-659/15 PPU Aranyosi and Căldăraru EU:C:2016:198; Case C-699/21 E.D.L. EU:C:2023:295; Case C-578/16 PPU C.K. and Others EU:C:2017:127.

11. A development that raises the stakes for both courts – but also serves as a powerful reminder of the common political and moral enterprise to which they owe their existence – is the worrying phenomenon of ‘rule of law backsliding’ in Europe. This issue was not yet at the forefront when the 2010-2013 accession negotiations took place. It places a strain on the EU legal order and on the AFSJ. See also: C Ladenburger, Y Marinova and J Tomkin ‘Institutional Report’ (2023), ‘Mutual Trust, Mutual Recognition and the Rule of Law’, Proceedings of the XXX FIDE Congress 2023 (Sections 4.1 and 4.2).

12. ECtHR M.S.S. v Belgium and Greece App n. 30696/09 [21 January 2011].

13. Joined Cases C-411/10 and C-493/10 N.S. and Others EU:C:2011:865. See also the judgment of 10 December 2013 in Case C-394/12 Abdullahi v Bundesasylamt EU:C:2013:813.

14. M.S.S. v Belgium and Greece para. 293. See also ECtHR Tarakhel v Switzerland and Sharifi and Others v Italy and Greece App n. 16643709 [21 October 2014].

an asylum seeker to another EU Member State.15 The Court added: ‘At issue here is the raison d’être of the European Union and the creation of an area of freedom, security and justice.’16

Looking back, it is apparent that, although they had reached the same outcome, the two courts were giving off conflicting signals and that, for the Court of Justice, the concern at stake was existential. Yet, few had it on their radar at the time.17 At any rate, the 2013 accession instruments made no reference to the principle of mutual trust. Accordingly, in Opinion 2/13, the Court of Justice forcefully repeated its concern and acted on it. I would summarise the message that emerges from the Opinion as follows: The principle of mutual trust is a foundational principle of the relationship between the Member States of the EU: it follows from the raison d’être of the EU that EU law should be able to require its Member States to cooperate fully with each other. The accession instruments must preserve this feature of EU law. In particular, the EU cannot accede to the Convention, insofar as the Convention could oblige one Member State to carry out an independent and rigorous scrutiny of any claim that another Member State, with whom EU law requires it to cooperate, infringes the Convention. The Court of Justice’s concerns about mutual trust exemplify its self-understanding as a constitutional court, which – like any constitutional court – must do more than protect fundamental rights; it must keep a political community together. In fact, that self-understanding permeates the entire Opinion.18

While it is tempting to portray Opinion 2/13 as indicative of the Court of Justice’s attitude towards the European Court of Human Rights, it would be more accurate to say that the Opinion reflects the Court of Justice’s keen awareness of the overall network in which it operates. The European Court of Human Rights figures prominently in that network, but larger in number are the nodes of the network occupied by national courts, including national constitutional courts. National courts are the Court of Justice’s direct interlocutors. The Court of Justice exercises authority over them and is also highly dependent on them. It is an intricate relationship, and fundamental rights adjudication often provides the context in which the strength of that relationship is put to the test. How a political community balances competing social goods in a case involving fundamental rights says something important about

15. The Court of Justice again relied exclusively on the ‘systemic deficiency’ criterion in Case C-394/12 Adbullahi EU:C:2013:813 para. 62, but later nuanced its position in PPU C.K. and Others v Slovenia paras 71-75, 92-95 and in Jawo para. 95. See also, in the context of European arrest warrants, Aranyosi and Căldăraru para. 89. For insightful discussions of this case law: K. Lenaerts, ‘La vie après l’avis: Exploring the Principle of Mutual (yet not Blind) Trust’, Common Market Law Review, (2017), 54, Issue 3, pp. 805-840, and D Halberstam, ‘The Judicial Battle over Mutual Trust in the EU: Recent Cracks in the Façade’ (9 June 2016) Verfassungsblog 16. N.S. and Others cit. para. 83.

17. Asylum law experts had of course noticed that the two European courts were walking out of step: e.g. S. Peers, ‘Tarakhel v Switzerland: Another Nail in the Coffin of the Dublin System?’ (5 November 2014) EU Law Analysis. However, only a few observers expressly recognised the problem as a possible obstacle to EU accession to the Convention: e.g. D. Ritleng, ‘The accession of the European Union to the European Convention on Human Rights and Fundamental Freedoms: A Threat to the Specific Characteristics of the European Union and Union Law?’ (Uppsala Faculty of Law Working Paper 2012:1) .

18. D. Halberstam, ‘“It’s the Autonomy, Stupid!” A Modest Defense of Opinion 2/13 on EU Accession to the ECHR, and the Way Forward’ German Law Journal (2015) 16, Issue 1, pp. 105-146; and J. Baquero Cruz, What’s Left of the Law of Integration: Decay and Resistance in European Union Law (Oxford University Press 2018) pp. 155-166.

that community’s self-understanding.19 The basic claim of the Court of Justice is that, in the field of EU law, a choice will have to be struck which derives from the specificity of the EU: ‘The Court is calling on its national counterparts to accept that it, the [Court of Justice], will do and has to do within the [EU] legal order what they, national courts, do, have to do, within the national realms. It is not about high or low standards. It is a call to acknowledge the [EU] as a polity with its own separate identity and constitutional sensibilities which has to define its own fundamental balances – its own core values even if these cannot be dissociated entirely from the context in which the [EU] is situated. The [EU] is its Member States and their citizens. The [EU] is, too, an autonomous identity.’ 20

Thus, in Opinion 2/13, the Court of Justice is essentially asking the European Court of Human Rights to recognise what it is continually asking national courts to accept: that in the field of EU law, fundamental rights adjudication requires an EU-wide view of the relevant polity and of the competing social goods. Seen from that perspective, the Opinion’s central message is as much directed to national highest courts as it is to the European Court of Human Rights. Indeed, Opinion 2/13 is preoccupied, most of all, with what might happen if national constitutional courts and the European Court of Human Rights were to mutually reinforce each other’s state-centric default approach to human rights adjudication. Troubled by what Opinion 2/13 meant for the prospect of EU accession to the Convention, certain commentators concluded that the Court of Justice fails to take human rights seriously.21 But that is clearly an exaggeration. The Court of Justice regularly weighs fundamental rights arguments in the specific framework of the EU legal order.22 It also takes care to respect the Convention and to harmonise its case law with that of the European Court of Human Rights, as art. 52(3) of the EU Charter of Fundamental Rights requires. Of course, EU accession to the Convention would provide an additional layer of fundamental rights protection, with the European Court of Human Rights taking on the role of ‘fair and impartial spectator’.23 Accession to the Convention is not, however, a precondition for a genuine commitment on the part of the Court of Justice to protect fundamental rights in the EU legal order. Quite the contrary, the imperative to take human rights seriously fits the Court of Justice’s selfunderstanding as a constitutional court.

19. J. Weiler, The Constitution of Europe: ‘Do the New Clothes Have an Emperor?’ and Other Essays on European Integration (Cambridge University Press 1999) p. 106.

20. Ibidem, at p. 117. The original text refers to the ‘Community’ instead of the ‘EU’.

21. E.g. E. Spaventa, ‘A Very Fearful Court? The Protection of Fundamental Rights in the European Union after Opinion 2/13’ Maastricht Journal of European and Comparative Law (2015) 22, issue 1, pp. 35- 56.

22. A. Rosas, ‘The Court of Justice of the European Union: A Human Rights Institution?’, Journal of Human Rights Practice (2022) 14, issue 1, pp. 204-214.

23. The term is borrowed from A. Smith, The Theory of Moral Sentiments, 1759. On the importance, in the context of justice, of Smith’s device of the ‘impartial spectator’: A Sen, The Idea of Justice (Allen Lane 2009).

Opinion 2/13 translates into a to-do list of 11 items.24 That list, in turn, revolves around three basic ideas. First, insofar as the European Court of Human Rights becomes the ultimate arbiter of whether an act that emanates from EU law complies with the Convention, it must be ensured that the Court of Justice is the penultimate arbiter of whether that act complies with fundamental rights (Idea no. 1). Second, within the scope of EU law, Member States have a special, federal-type relationship between them, which must be acknowledged and preserved within the context of the Convention system, since this is the raison d’être of the EU (Idea no. 2). Finally, only EU law itself (i.e. with the Court of Justice as the ultimate arbiter) can delineate, in a manner that binds the EU and its Member States, the scope of EU law and thus, by implication, the division of powers between the EU and its Member States (Idea no. 3). Each of these ideas is perfectly logical when seen through a constitutional lens. They express a valid and profound concern for the preservation of the project of European integration, whose unique feature is precisely that, unlike the Convention, it challenges the traditional notion of the nation state as the ultimate political unit. Fundamentally, the EU and the Convention are two systems stemming from a shared moral and political endeavour, each approaching that endeavour from its own perspective. The EU legal system integrates political communities; the Convention system oversees political communities. Reconciling these two perspectives was the main challenge of the negotiations.

III. The Provisional Agreement of 17 March 2023

On 17 March 2023, the 46+1 Group – the Strasbourg-based forum for the negotiations25 – reached a provisional agreement on a revised package of accession instruments that seeks to address all issues arising under Opinion 2/13, except the issue of human rights protection in the Common Foreign and Security Policy (CFSP). I will briefly outline the main changes the Group made to the draft accession instruments.

A first set of amendments relates to the ‘co-respondent mechanism’.26 This is the procedural device that makes it possible for the EU to be held accountable alongside its Member States in situations where an EU Member State implements EU law.27 At present, when a Member State implements EU law, the European Court of Human Rights can, if it finds a violation, only rule against that Member State. The EU is treated as a third party and will not be held liable if the Court finds a violation of the Convention.

24. (1) Art. 53 ECHR (paras 186-189); (2) mutual trust (paras 191-195); (3) advisory opinions under Protocol No 16 ECHR (paras 196200); (4) inter-party applications under art. 33 ECHR (paras 201-213); (5) the co-respondent mechanism & division of competences (paras 220-225); (6) reservations under art. 57 ECHR (paras 226-228); (7) joint responsibility (paras 229-234); (8) initiating the prior involvement procedure (paras 236-240); (9) systematic information for the purposes of the prior involvement procedure (para. 241); (10) the prior involvement procedure & secondary law (paras 241-244); and (11) acts in the area of the Common Foreign and Security Policy (paras 249-257).

25. The number ‘46’ stands for the Member States of the Council of Europe; ‘+1’ stands for the European Union. The group was called the ‘47+1 Group’ until Russia’s exclusion from the Council of Europe, in March 2022, due to its military aggression against Ukraine.

26. Art. 3(2), (3), (5), (6) and (7) of the revised Agreement and paras 60-67, 68 and 71 of the Explanatory Report.

27. And for the Member States to be held accountable alongside the EU in the event the European Court of Human Rights were to rule that a provision in EU primary law (notably the EU Treaties) is incompatible with the Convention.

As a result, a Member State might get caught between its obligations under EU law and those under the Convention. This would be problematic for everyone involved. After accession, the co-respondent mechanism will enable the EU to participate systematically in the proceedings in situations where an EU Member State implements EU law. If the European Court of Human Rights then finds a violation, the EU will be held liable under the Convention together with the respondent Member State and must help remedy the situation. The co-respondent mechanism already featured in the draft accession agreement of 2013. However, some alterations were needed in the light of Opinion 2/13, mainly to avoid that the European Court of Human Rights would have to take a binding decision about who is accountable for a violation of the Convention based on its own views about the division of powers between the EU and its Member States. Accordingly, the revised accession instruments place the responsibility for triggering the EU’s co-respondent status clearly in the hands of the EU.28 Furthermore, if the Court finds a violation, the Member State and the EU will always be jointly liable.29 This set of amendments corresponds to Idea no. 3 mentioned above.

A second, smaller set of amendments relates to the ‘prior involvement procedure’. This is a procedural device according to which, in cases that are about the compatibility of EU law with the Convention, the European Court of Human Rights can temporarily suspend the proceedings to make sure that the Court of Justice is ceased of the matter first. The prior involvement procedure aims to ensure that, in matters of EU law, the Court of Justice has spoken before the European Court of Human Rights fulfils its role under art. 34 ECHR, in full respect of the Convention principle of subsidiarity. Again, this mechanism already featured in the draft accession agreement of 2013. A few refinements had to be introduced, however, to help ensure that no eligible cases would slip through the net.30 This set of amendments corresponds to Idea no. 1.

A third set of amendments relates to cases brought by one High Contracting Party to the Convention against another pursuant to art. 33 ECHR (‘inter-party applications’). Under EU law, when EU Member States have disputes with each other about the interpretation or application of EU law, or when there is a dispute between a Member State and an EU institution, the dispute must be settled within the EU, before the Court of Justice, using the procedures for settling disputes that exist under the EU Treaties.31 According to Opinion 2/13, the accession agreement ought to have reflected this feature of the EU legal order by stipulating that art. 33 ECHR cannot be used for disputes between EU Member States, or between EU Member States and the EU, concerning the application of the Convention within the scope ratione materiae of EU law. The revised accession agreement contains additional provisions to that effect.32 This set of amendments corresponds to Ideas no. 2 and no. 3.

28. Art. 3(5) and (6) of the revised Agreement and paras 60-67 of the Explanatory Report.

29. Art. 3(7) of the revised Agreement and para. 71 of the Explanatory Report.

30. Art. 3(2) and (3) of the revised Agreement and paras 68, 75-78 of the Explanatory Report.

31. Art. 344 TFEU. See Case C-459/03 Commission v Ireland (MOX plant) EU:C:2006:345.

32. Art. 4(3) and (4) of the revised Agreement and paras 80-85 of the Explanatory Report.

A fourth, fifth and sixth set of amendments each introduce new provisions to deal with matters that came to light in Opinion 2/13 and which the draft accession agreement of 2013 did not address. The first of these new provisions relates to the matter of mutual trust. It stipulates that the accession shall not affect the application of the principle of mutual trust within the EU.33 This amendment corresponds to Idea no. 2. The second is about art. 53 ECHR. Art. 53 ECHR essentially says that the Convention sets a minimum level of protection of human rights and that a High Contracting Party is free to establish a higher level of protection. The new provision safeguards the possibility for EU law to set a uniform standard of protection that is binding on EU Member States, provided that that standard does not fall short of the minimum level of protection guaranteed by the Convention.34 This amendment also corresponds to Idea no. 2. Lastly, there is a new provision about the relationship between the mechanism established by Protocol No. 16 to the Convention and the preliminary ruling procedure provided for in art. 267 TFEU. Protocol No. 16 contains a procedure that allows the European Court of Human Rights to give advisory opinions to national courts on ‘questions of principle relating to the interpretation or application of the rights and freedoms defined in the Convention or the protocols thereto’.35 Only a ‘highest court or tribunal’ of a High Contracting Party that has ratified Protocol No. 16 may refer requests to the European Court of Human Rights for an advisory opinion. However, when a question relates to EU law, the highest courts and tribunals of EU Member States are typically under an obligation to request a preliminary ruling from the Court of Justice, in accordance with art. 267 TFEU.36 Indeed, in matters of EU law, the Court of Justice is the apex court in the EU’s domestic legal system. The new provision accordingly clarifies that, in matters of EU law, national courts of EU Member States are not a ‘highest court or tribunal’ within the meaning of Protocol No. 16.37 This amendment corresponds to Idea no. 1.

A seventh and final set of amendments is unrelated to Opinion 2/13. It concerns voting in the Committee of Ministers of the Council of Europe. When the European Court of Human Rights rules that a High Contracting Party has violated the Convention, that Party must remedy the violation under the supervision of the Committee of Ministers. After accession, the Committee of Ministers will also supervise the implementation by the EU of a judgment of the European Court of Human Rights if the Court has found the EU to be in breach of the Convention. In those situations, the EU and its Member States will be obliged under the EU Treaties to vote in unison.38 The problem is that, under the Committee of Minister’s normal voting rules, the EU and its Member States together hold enough votes to adopt almost any decision, regardless of how the others would vote. The draft accession

33. Art. 6 of the revised Agreement and paras 87-88 of the Explanatory Report.

34. Art. 1(9) of the revised Agreement and para. 38 of the Explanatory Report.

35. Art. 1(1) of Protocol No. 16 to the Convention.

36. See Case C-561/19 Consorzio Italian Management EU:C:2021:799 and Case 314/85 Foto-Frost EU:C:1987:452.

37. Art. 5 of the revised Agreement and para. 86 of the Explanatory Report. The 46+1 Group also amended art. 1(2) of the draft accession agreement in order to permit the EU to accede to Protocol No. 16 if it would want to.

38. See Article 218(9) TFEU.

instruments of 2013 acknowledged this problem and introduced special voting arrangements to address it. However, during the 2020-2023 negotiations, non-EU Member States pointed to inadequacies in these voting arrangements. Those arrangements were therefore further adjusted to ensure that the EU and its Member States cannot, by voting in unison, determine how the Committee of Ministers decides in cases regarding the EU.39

One important and difficult matter remains as yet unresolved: human rights protection in the CFSP. With respect to acts in the CFSP, the EU Treaties establish a limitation on Court of Justice’s powers of judicial review.40 The precise scope of this limitation is a matter of ongoing debate and litigation. The Court of Justice plainly has jurisdiction to rule on actions for annulment and damages claims regarding individual ‘restrictive measures’ (sanctions) imposed by the EU. But it is unclear, for instance, to what extent the Court of Justice has jurisdiction to hear actions against measures adopted by the EU in the context of civil or military missions abroad that are under EU command.41 At issue here is one of the basic tenets of Opinion 2/13: insofar as the European Court of Human Rights becomes the ultimate arbiter of whether an EU act complies with the Convention, it must be ensured that the Court of Justice is the penultimate arbiter of whether that act complies with fundamental rights (Idea no. 1). Consequently, the jurisdiction of the European Court of Human Rights in respect of acts of the EU cannot be more wide-ranging than that of the Court of Justice. This issue does not lend itself very well to resolution by the 46+1 Group given that it would be undesirable to reduce the jurisdiction of the European Court of Human Rights. Moreover, the question of the precise scope of the Court of Justice’s jurisdiction in respect of alleged human rights violations in the CFSP is currently being considered in two pending court cases.42 The Advocate General delivered her Opinion in those cases on 23 November 2023. According to her, the Court of Justice must have jurisdiction ‘to ensure that CFSP decisions do not cross red lines imposed by fundamental rights’.43 If the Court were to follow the Opinion, it would greatly improve the prospect of EU accession to the Convention.

IV. Conclusion

Those who have read the negotiating documents carefully may have noted that, for almost every issue under negotiation, the 46+1 Group ultimately found a solution that was different from what the EU originally had in mind. One possible explanation for that might be that my colleagues and I did a terrible job. Not surprisingly, I prefer a different explanation. In my experience, the negotiations were an exercise in collective problem solving in which the combined wisdom of the Group prevailed over the

39. Art. 8 of the revised Agreement, Rule 18 (Appendix 3), and paras 96-107 of the Explanatory Report.

40. Arts. 24(1) TEU and 275 TFEU.

41. For a more in-depth discussion, see P. Van Elsuwege, ‘Judicial review and the Common Foreign and Security Policy: Limits to the gapfilling role of the Court of Justice′ Common Market Law Review (2021) 58 Issue 6, pp. 1731-1760.

42. Case C-351/22 Neves 77 Solutions EU:C:2023:907 and Joined Cases C-29/22P and C-44/22 P KS and KD EU:C:2023:901.

43. Opinion of AG Ćapeta in KS and KD cit. point. 155.

ideas of any one party. Clearly, it is much too soon to declare ‘mission accomplished’. Yet, the 2020–2023 negotiations were a necessary and, I hope, decisive step forward on the road towards EU accession to the Convention.

SUGGESTED CITATION: Felix Ronkes Agerbeek; “EU Accession to the European Convention on Human Rights: An EU Negotiator’s Perspective”, https://eulawlive.com/weekend-edition/weekend-edition-no192/

HIGHLIGHT F THE WEEK S O

Commission Delegated Regulation (EU) 2024/1085 on assessment methodology for market risk models, published in OJ

Monday 17 June

On 19 April 2024, Cortex Havacilik ve Turizm Ticaret AŞ, a Turkish company based in Kepez, initiated legal proceedings against the European Commission, challenging the imposition of a flight ban on their aircraft: Ticaret v Commission (Case T-213/24).

Read on EU Law Live

Irish Supreme Court seeks Court of Justice guidance on surrendering terrorism suspect under EU-UK agreement

Monday 17 June

On 19 April 2024, Cortex Havacilik ve Turizm Ticaret AŞ, a Turkish company based in Kepez, initiated legal proceedings against the European Commission, challenging the imposition of a flight ban on their aircraft: Ticaret v Commission (Case T-213/24).

Read on EU Law Live

Novis Insurance Company’s legal actions against European Commission and EIOPA, published in OJ

Monday 17 June

On 19 April 2024, Cortex Havacilik ve Turizm Ticaret AŞ, a Turkish company based in Kepez, initiated legal proceedings against the European Commission, challenging the imposition of a flight ban on their aircraft: Ticaret v Commission (Case T-213/24).

Read on EU Law Live

Action against Commission for failure to initiate formal investigation in State aid case involving Slovak glass and sand producer, published in OJ

Monday 17 June

Official publication was made of an action, brought on 24 April 2024, by Kerkosand against the Commission in Case (T216/24).

Read on EU Law Live

Apple’s action against Commission’s decision finding iMessage to be a number-independent interpersonal communications service, published in OJ

Monday 17 June

An action, brought on 22 April 2024, from Apple and Apple Distribution International against decision of the European Commission setting out the reasons on which the Commission has not designated the applicants as a gatekeeper pursuant to the Digital Markets Act, was officially published in the OJ.

Read on EU Law Live

ECtHR launches new “ECHR/EU” page on its Knowledge-Sharing platform (ECHR-KS)

Monday 17 June

The European Court of Human Rights launched a new “ECHR/EU” page on its ECHR Knowledge Sharing Platform (ECHR-KS) that aims to disseminate case-law knowledge of the European Convention on Human Rights (ECHR), complementing existing resources like HUDOC.

Read on EU Law Live

Request for a preliminary ruling concerning interpretation of Council Regulation 6/2002 of 12 December 2001 on Community Designs, published in OJ

Monday 17 June

The Official Journal of the EU published a request for a preliminary ruling from the Fővárosi Törvényszék (Hungary), lodged on 18 March 2024, in LEGO A/S v Pozitív Energiaforrás Kft., a case concerning an action for a declaration as to the infringement of rights in a design and for a determination of the legal consequences to be drawn from that infringement

Read on EU Law Live

Commission approves Italian State aid supporting ships in using shore-side electricity when stationed in maritime ports

Monday 17 June

The European Commission approved a €570 million Italian scheme to support ships in using shore-side electricity when they are at berth in maritime ports, thus contributing to a reduction of greenhouse gas emissions, air pollution and noise in line with the objectives of the European Green Deal.

Read on EU Law Live

Council approves High Seas Treaty so safeguard marine biodiversity

Tuesday 18 June

The Council formally approved the High Seas Treaty, officially known as the Agreement on the Conservation and Sustainable Use of Marine Biological Diversity of Areas Beyond National Jurisdiction (BBNJ).

Read on EU Law Live

Court of Justice: EU law does not impose obligation on Member States to automatically recognise refugee status granted in another Member State

Tuesday 18 June

The Grand Chamber of the Court of Justice delivered its judgment in a case concerning a preliminary ruling request, by which the referring court sought clarification on whether a Member State is required automatically to recognise refugee status granted in another Member State: Bundesrepublik Deutschland (Effet d’une décision d’octroi du statut de réfugié) (C753/22).

Read on EU Law Live

Refugee status precludes extradition to country of origin: Court of Justice rules

Tuesday 18 June

The Court of Justice delivered its judgment in Case C-352/22 | Generalstaatsanwaltschaft Hamm (Request for the extradition of a refugee to Türkiye) concerning the relationship between the rules of EU law on international protection and the competence of the Member States in respect of extradition in order to take into account the special protection needs of a person who has refugee status in a Member State other than the one responsible for examining a request for extradition concerning that person.

Read on EU Law Live

Commission conducts unannounced inspections of consultancy firm involved in the tyres sector

Tuesday 18 June

The European Commission carried out unannounced inspections at the premises of a consultancy firm in two Member States, following its concerns that the company may have violated EU rules prohibiting cartels and restrictive business practices (Article 101 TFEU).

Read on EU Law Live

Court of Justice decision on competence and legal standing in the Banco Popular Español Resolution Mechanism: Commission v. SRB (C-551/22 P)

Tuesday 18 June

The Grand Chamber of the Court of Justice ruled on the appeal filed by the European Commission against the General Court’s judgment in the case involving the Single Resolution Mechanism (SRM) applied to Banco Popular Español SA: Commission v SRB (C-551/22 P).

Read on EU Law Live

Negotiating position on a new regulation on the use of railway infrastructure capacity in the single European railway area, adopted by Council

Tuesday 18 June

The Council adopted its negotiating position on a new regulation aimed at optimising the use of railway infrastructure capacity within the European railway area.

Read on EU Law Live

Commission launches public consultation on new draft rules facilitating State aid for land and multimodal transport

Tuesday 18 June

The European Commission has launched a public consultation in relation to its draft rules for land and multimodal transport replacing the Guidelines on State aid for railway undertakings (‘Railway Guidelines’) as well as on its new Transport BlockExemption Regulation (‘TBER’).

Read on EU Law Live

AG Richard de la Tour hands down Opinion in case regarding use of organic production logo of the EU in relation to products originating from organic farming

Tuesday 18 June

In Herbaria Kräuterparadies II (C-240/23), Advocate General Richard de la Tour delivered his Opinion in a case concerning a preliminary reference, by which clarification is sought on the use that must be made of the organic production logo of the European Union in the event of imports of products originating from organic farming.

Read on EU Law Live

AG Emiliou: Union law precludes national law granting last instance court discretion to request preliminary ruling from Court of Justice, when appellant raises issue of EU law

Tuesday 18 June

Advocate General Emiliou handed down his Opinion in a case concerning a preliminary reference on whether the third paragraph of Article 267 TFEU precludes a provision of the Slovenian Code of Civil Procedure, under which, in proceedings relating to the grant of leave to bring an appeal on a point of law, the Slovenian Supreme Court is not to consider the issue of whether, as a result of a party’s request that a reference for a preliminary ruling be made to the Court of Justice, it is required to refer one or more questions to the Court of Justice for a preliminary ruling: KUBERA (C-144/23).

Read on EU Law Live

Directive (EU) 2024/1619 on supervisory powers, sanctions, third-country branches, and environmental, social and governance risks, published in OJ

Wednesday 19 June

Official publication was made of Directive (EU) 2024/1619 of the European Parliament and of the Council of 31 May 2024 amending Directive 2013/36/EU as regards supervisory powers, sanctions, third-country branches, and environmental, social and governance risks.

Read on EU Law Live

Directive (EU) 2024/1654 amending existing rules on authorities’ access to bank account registries and measures facilitating use of transaction records, published in OJ

Wednesday 19 June

Official publication was made of Directive (EU) 2024/1654 of 31 May 2024 amending Directive (EU) 2019/1153 as regards access by competent authorities to centralised bank account registries through the interconnection system and technical measures to facilitate the use of transaction records.

Read on EU Law Live

Commission Recommendation laying out guidelines for interpretation of Article 4 of Directive 2023/1791 on energy efficiency targets and national contributions, published in OJ

Wednesday 19 June

The Official Journal of the EU published Commission Recommendation (EU) 2024/1722 setting out guidelines for the interpretation of Article 4 of Directive (EU) 2023/1791 as regards energy efficiency targets and national contributions.

Read on EU Law Live

EFTA Court streams hearing of case concerning compatibility of Norwegian legislation abolishing general possibility to hire temporary workers with freedom of services

Wednesday 19 June

Starting from 10.00, the oral hearing in Case E-2/24, regarding a request for an Advisory Opinion in proceedings between Bygg & Industri Norge AS and Others and Staten v/Arbeids- og inkluderingsdepartementet on the interpretation of Article 36 of the EEA Agreement, was streamed on the website of the EFTA Court.

Read on EU Law Live

ESAs suggest improvements to sustainable finance disclosure regulation

Wednesday 19 June

The European Supervisory Authorities (EBA, EIOPA, and ESMA) published a joint opinion on the Sustainable Finance Disclosure Regulation (SFDR), advocating for a coherent framework that supports the green transition and consumer protection.

Read on EU Law Live

New EU Regulations and Directive on framework on Anti-Money Laundering and Countering Financing of Terrorism, published in OJ

Wednesday 19 June

Official publication was made of Regulation (EU) 2024/1620 of the European Parliament and of the Council of 31 May 2024 establishing the Authority for Anti-Money Laundering and Countering the Financing of Terrorism.

Read on EU Law Live

General Court upholds EU sanctions on Igor Rotenberg linked to invasion of Ukraine

Wednesday 19 June

The General Court delivered its judgment in Case T-738/22, in which Igor Rotenberg, a Russian businessman, contested Council Decision (CFSP) 2022/1530 and Implementing Regulation (EU) 2022/1529, which maintained his inclusion on EU restrictive measures lists related to actions affecting Ukraine’s territorial integrity.

Read on EU Law Live

General Court dismisses action seeking partial annulment of Commission Decision finding Portuguese income tax scheme as unlawful State aid

Wednesday 19 June

The Fifth Chamber of the General Court delivered its judgment in a case concerning an action seeking the annulment of Articles 1 and 4 to 6 of Commission Decision (EU) 2022/1414 of 4 December 2020 on aid scheme SA.21259 (2018/C) (ex 2018/NN) implemented by Portugal for Zona Franca da Madeira: Vima World v Commission (Zone franche de Madère) (T-671/22).

Read on EU Law Live

Commission provides policy guidance to Member States under the 2024 European Semester Spring Package

Wednesday 19 June

The European Commission’s Spring 2024 European Semester Package outlines comprehensive policy guidance aimed at strengthening the EU’s economic competitiveness, resilience, and fiscal stability amidst challenging global conditions.

Read on EU Law Live

Council adopts negotiating mandate on simplified financial reporting requirements

Wednesday 19 June

The Council reached an agreement on a proposal to simplify certain reporting requirements in the field of financial services and investment support.

Read on EU Law Live

Regulation 528/2012 on the advertising of biocidal products precludes the use of the indication ‘skin friendly’

Thursday 20 June

The Court of Justice handed down judgment in dm-drogerie markt (C-296/23), a request for a preliminary reference from the Federal Court of Justice (Germany) concerning Regulation 528/2012 on the advertising of biocidal products.

Read on EU Law Live

Request for Advisory Opinion from the EFTA Court concerning Council Directive 98/59/EC related to collective redundancies and the associated rights and protections for workers, published in OJ

Thursday 20 June

Héraðsdómur Reykjavíkur (Reykjavik District Court) requested an Advisory Opinion from the EFTA Court concerning the case of Margrét Rósa Kristjánsdóttir v the Icelandic State, which was officially received on 20 February 2024, involving the interpretation of specific provisions of Council Directive 98/59/EC related to collective redundancies and the associated rights and protections for workers.

Read on EU Law Live

Regulation 2024/1717 amending the Schengen Borders Code, published in OJ

Thursday 20 June

Official publication was made of Regulation (EU) 2024/1717 of the European Parliament and of the Council of 13 June 2024 amending Regulation (EU) 2016/399 on a Union Code on the rules governing the movement of persons across borders. Read on EU Law Live

Council reaches agreement on bank crisis management and deposit insurance framework

Thursday 20 June

The Council agreed on a negotiating mandate to review the crisis management and deposit insurance (CMDI) framework for banks.

Read on EU Law Live

Court of Justice rules on Dutch residence permits for posted Ukrainian workers

Thursday 20 June

The Court of Justice delivered its judgment in Staatssecretaris van Justitie en Veiligheid (case C-540/22) concerning whether the Netherlands can require Ukrainian workers, posted by a Slovak company to a Dutch firm, to obtain additional residence permits after a 90-day period.

Read on EU Law Live

Two new European Citizens Initiatives found admissible by the Commission

Thursday 20 June

The European Commission decided to register two European Citizens’ Initiatives, entitled ‘Air-Quotas’ and ‘Stop Destroying Videogames’.

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Jurisdictional issues in international child abduction cases clarified by Court of Justice

Thursday 20 June

The ruling issued by the Fourth Chamber of the Court of Justice of the European Union on June 20, 2024, addressed complex legal questions surrounding international child abduction and parental responsibility.

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Interpretation of Article 82 GDPR: Compensation for moral damage in data breach cases, clarified by the Court of Justice

Thursday 20 June

The Court of Justice addressed critical questions regarding the interpretation of Article 82 of the General Data Protection Regulation (GDPR) concerning the compensation for moral damages resulting from data breaches.

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Court of Justice clarifies concept of ‘communication to the public’ in case concerning copyrights in the field of information society services

Thursday 20 June

The First Chamber of the Court of Justice deliverd its judgement in a case concerning a preliminary ruling request seeking to clarify whether there is a ‘communication to the public’ within the meaning of Article 3 of Directive 2001/29/EC on the harmonisation of certain aspects of copyright and related rights in the information society when the operator of an apartment building provides televisions in that apartment building which each receive broadcasts via an indoor antenna without a central reception for transmitting the signals: GEMA (C-135/23).

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Article 9(1)(a) of Directive 2003/88 does not preclude national rules subjecting workers’ right to obtain compensation to the condition that they provide proof of loss

Thursday 20 June

The Court of Justice handed down judgment in Artemis security (C-367/23), a request for a preliminary reference from the French Court of Cassation concerning the interpretation of Article 9(1)(a) of Directive 2003/88 concerning certain aspects of the organisation of working time.

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EUIPO v. Indo European Foods: Applicable substantive law in trademark proceedings is that which was in place at the time of the EUIPO’s final decision

Thursday 20 June

The Court of Justice handed down judgment in EUIPO v. Indo European Foods (C-801/21 P), an appeal, under Article 56 of the Statute of the Court of Justice, brought against the General Court’s judgment in Indo European Foods v. EUIPO (T-342/20, ‘the judgment under appeal’). The case concerns, among others, the effects of Brexit on trademark proceedings before the General Court.

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Commission opens in-depth investigation on alleged State aid granted to land management associations to support environmental protection activities

Thursday 20 June

The European Commission opened an in-depth investigation on whether public support granted to Flemish land management associations between 2003 and 2018 is compatible with EU State aid rules.

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An individual’s fear that their data may have been unlawfully disclosed to third parties is sufficient to establish a right to compensation under Article 82(1) GDPR provided that this fear is duly proven

Thursday 20 June

The Court of Justice handed down judgment in PS (Adresse erronée) (C-590/22), a request tribunal from the District Court of Wesel (Germany) concerning the interpretation of Article 82(1) of the GDPR.

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AG Medina: Article 7 of the Charter does not preclude search and seizure of emails of undertaking investigated for infringement of competition rules

Thursday 20 June

AG Medina delivered her Opinion in a case concerning a request for preliminary ruling seeking to clarify, in essence, whether business records transmitted by email constitute ‘correspondence’ for the purposes of Article 7 of the Charter of Fundamental Rights, and whether such a provision precludes such business records, arising from communication between managers and employees, from being seized in the course of an investigation into agreements and practices prohibited under Article 101 TFEU: Imagens Médicas Integradas (C-258/23).

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AG Medina: Article 19(1) TEU precludes national provisions which set out an absolute prohibition of a legal remedy for a breach of national rules on the (re)allocation of cases to judges

Thursday 20 June

Advocate General Medina delivered her Opinion in S. (C-197/23), a request for a preliminary reference from the Court of Appeal in Warsaw concerning the interpretation of Articles 2, 6 and 19(1) TEU and of Article 47 of the Charter of Fundamental Rights.

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EBA publishes key standards and guidelines for Crypto-Asset Regulation

Friday 21 June

The European Banking Authority (EBA) released a comprehensive package of technical standards and guidelines under the Markets in Crypto-Assets Regulation (MiCAR), which finalises the EBA’s technical contributions under MiCAR and includes provisions for reporting, liquidity stress testing, and supervisory colleges.

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In-Depth investigation initiated: Emirates Telecom / PPF Telecomu under EU Regulation 2022/2560

Friday 21 June

The European Commission initiated an in-depth investigation under Regulation (EU) No 2022/2560 into a proposed concentration involving Emirates Telecommunications Group Company PJSC (e&) and PPF Telecom Group B.V.

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