#16136 - Subsidiarity And Proportionality - European Law

Tutorial 1: European integration, institutions, and limits on european Law-making 3

1 – The evolution of European Integration 3

Craig, Ch 2 Craig and De Burca 4

Para I – Theories of Integration 4

I – Neofunctionalism (Early ideology) 4

II – Liberal intergovernmentalism (1950s: Moravcsik) 5

III – Multi-Level Governance 5

IV – Rational Choice Institutionalism (1990s) and constructivism 6

Para II – Democracy and Legitimacy 6

I – Some of the deficiencies are overstated 7

II – Democratic features prioritized by particular scholars 7

Craig, Ch1 Craig and De Burca (Texts, Cases and Materials) 8

2 – Institutions 11

3 – Law-Making 11

4 - LEGAL AND CONSTITUTIONAL LIMITS ON EUROPEAN LAW-MAKING 11

Introduction: Conferral 11

(a) Legal limits on European law-making – competence 12

Unfair Contract Terms Directive (93/13/EEC), [1993] OJ L 95/29 (Preamble) 13

Case C-376/98 Germany v Parliament and Council [2000] ECR I-8419 (“Tobacco Advertising”) 15

Case C-210/03 Swedish Match [2004] ECR I-11893 19

Cases C-154/04 & C-155/04 Alliance for Natural Health [2005] ECR I-6451 and 20

Case C-380/03 Germany v. Parliament and Council [2006] ECR I-11573 (“Tobacco Advertising II”) 21

Case C-58/08 Vodafone [2010] ECR I-4999 22

Case T-526/10 Inuit Tapiriit Kanatami et al v. Commission, judgment of 25 April 2013 (Seal Products II Case) 24

Case C-547/14 Philip Morris v. Secretary of State for Health (4 May 2016) ECLI:EU:C:2016:325 (and see AG Kokott’s Opinion, ECLI:EU:C:2015:853). 26

D. Wyatt, ‘Community Competence to Regulate the Internal Market’ 26

S. Weatherill, ‘The limits of legislative harmonisation ten years after Tobacco Advertising”’ (2011) 12 German LJ 827 27

P. Craig, ‘The ECJ and Ultra Vires Action: a Conceptual Analysis’ (2011) 48 CMLRev 395 29

(b) Constitutional limits on European law-making – Proportionality and Subsidiarity 29

(1) Proportionality 30

Case C-375/96 Galileo Zaninotto v. Ispettorato Centrale [1998] ECR I-6629, paras. 57-67. 31

Germany v. Parliament and Council [2006] ECR I-11573 (“Tobacco Advertising II”) 31

Case C-58/08 Vodafone [2010] ECR I-4999 32

Case 114/76 Bela-Mühle (Skimmed-Milk Powder) [1977] ECR 1211; 33

Case 240/78 Atalanta [1979] ECR 2137 34

Cases C-453/03 et al, ex p ABNA [2005] ECR I-10423 34

Case C-310/04 Spain v Council [2006] ECR I-7285 34

(2) Subsidiarity 35

Case C-233/94 Germany v. Parliament (Deposit Guarantee Directive) [1997] ECR I-2405, paras. 24-28; 38

Case C-491/01 ex parte British American Tobacco [2002] ECR I-11453, at paras. 177-185 39

Cases C-154/04 & C-155/04 Alliance for Natural Health [2005] ECR I-6451, paras. 99-108; 39

Case C-114/01 AvestaPolarit Chrome Oy, [2003] ECR I-8725, para. 56 39

Case C-518/07 Commission v. Germany [2010] ECR I-1885 40

Case C-58/08 Vodafone [2010] ECR I-4999 40

Case C-547/14 Philip Morris, see esp. AG Kokott (ECLI:EU:C:2015:853) on subsidiarity. 41

B. Bertrand, ‘Un principe politique saisi par le droit” (2012) 48 RTDE 329 42

G. Davies, ‘Subsidiarity: the wrong idea, in the wrong place, at the wrong time’ (2006) 43 CMLRev 63 44

P. Craig, ‘Subsidiarity: A Political and Legal Analysis’ (2012) 50 JCMS 72 at 82-84 46

R. Schütze, ‘Subsidiarity after Lisbon: Reinforcing the Safeguards of Federalism’ (2009) 68 Cambridge Law Journal 525; 48

P. Kiiver, ‘The Early-Warning System for the Principle of Subsidiarity’ (2011) 36 ELRev 98; 49

Jančić ‘The Game of Cards’ (2015) 52 CMLRev 939 51

Annual Report 2014 on Subsidiarity and Proportionality (Commission) 53

COM 2013 566 (Annual report 2012 on Subsidiarity and Proportionality) 53

Com (2016) 505 (Communication from the Commission to the European Parliament, the Council and the National Parliaments) 54

Questions 55

These only apply if there is shared competence.

is a principle which places a legal limit on the law-making powers of the EU institutions.

On its face, it covers very different things than subsidiarity:

• Subsidiarity = when the Union should intervene (reflects self-government – local decisions are better than EU ones)

• Proportionality = the quality of the intervention (reflects a presumption in favour of private autonomy and requiring justification for state intervention: requires the measure to be suitable for achieving the objective and to impose the fewest possible constraints on individuals)

Proportionality requires the content and form of Union action not to exceed what is necessary to achieve the objectives of the Treaties, its current formulation in ex parte Fedesa (1990) – where it is conflated into two balancing tests:

• Whether there is an appropriate balance between the ends sought and the means used, and whether the means used are suitable to the ends sought (the suitability of the measure)

• Whether the effect of the measure on other interests and values is excessive (the necessity of the measure)

Thus, the principle offers the possibility of very wide-ranging review of EU action, allowing judges the possibility to address the merits of the measure (excessive or not suitable) and consider a wide range of arguments (balance all interests and values against each other in necessity, and consider the wider policy and broader ethos/rationale behind the political system that gives rise to a measure in suitability).

The extent to which this is taken up will depend on the legal culture within which it arises (Cohen-Eliya, Porat):

• A culture of justification (broad conceptions of rights every administrative and legislative action is required to justify itself)

• A culture of authority (proportionality exists not to allow merit-review but to check that the institution is the appropriate body to take the decision; once this is determined, the sphere of authorization is treated as a black box where the legislator enjoys discretion)

This second culture is reflected in Fedesa (“manifestly inappropriate” test); often the Court sees the realization of the objectives of European integration as sufficient; this is “damning” as it is difficult to see how simply realizing a system (independent of anything else) is necessarily valuable.

But perhaps the impact of proportionality is best seen in the change in legislative culture brought about through it:

• in 2003 the EU institutions moved away from a process of law-making to a process of regulation (where the instrument deployed is no longer necessarily legislation, but other more suited instruments with less intrusive effects on private parties) using instruments like co-regulation and self-regulation (Inter-Instititutional Agreement on Better Law-Making (2003)).

• in 2005 the Commission established a programme simplifying the regulatory environment, bringing together subsidiarity and proportionality, on the basis of a commitment to EU regulation only where it is necessary, simple and effective. As part of this, the Commission proposed a strategy to repeal all irrelevant or obsolete legislative acts (Commission, Implementing he Community Lisbon Programme: A Strategy for the Simplification of the Regulatory Environment, COM (2005) 535)

• then a “Smart Regulation” initiative supplemented this, calling for a programme of reducing the administrative burdens imposed on private actors by EU law by simplifying or repealing EU legislation, and by ex post evaluation of the effectiveness of all EU legislation (Commission, Action Programme for Reducing Administrative Burdens in the EU Final Report)

• A Regulatory Fitness programme took this further: it maps out the regulatory areas with greatest potential for simplification and reduction, involving stakeholders in the process (Commission, Regulatory Fitness and Performance: Results and Next Steps)

Thus, subsidiarity and proportionality are recasting the EU legislative landscape strong deregulatory bias. Problem = lack of transparency + structure + pluralism about the process of repealing unnecessary legislation (compared to the process of enacting legislation). Who decides whether a measure is obsolete? On what basis? How do you distinguish between “dormant” and “obsolete” legislation?

The contested provision requires the quantities for distillation to be apportioned among various producers in a region on the basis of yield per hectare, for the objective of improving conditions in the wine market by preventing overproduction.

Judgment:

C argued that:

1º the criterion of yield per hectare was inappropriate for pursuing the objective + penalizes excessively winegrowers who are not overproducing while encouraging those producing poor quality wine (because the criterion doesn’t allow you to distinguish poor quality wine or overproduction).

2º possible to envisage an equally effective but less prejudicial method: the criterion of end-of-year stocks, which shows whether there is overproduction (a criterion that the Commission itself recognized was more relevant).

Rs (Council, Commission and Spanish Government) argue that:

1º the decision between measures is a political choice falling within the responsibilities of the Council, and that the Community legislator cannot be in a position to foresee the future effects of an adopted measure a measure cannot be held unlawful merely because it subsequently proves less effective than it could have been.

2º the criterion is appropriate because there is general correlation between high yield and low quality, and because other criteria are inappropriate (like end of year stocks would be too...