A COMPREHENSIVE REVIEW OF

THE EUROPEAN UNION

BY:

MICHAEL LYONS

International Organizations

Professor Jiri Toman

2

TABLE OF CONTENTS

I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

II. THE HISTORICAL EVOLUTION LEADING TO THE

EUROPEAN UNION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

A. Early Development of the European Communities . . . . . . . . . 8

B. The Direct Effect of European Law . . . . . . . . . . . . . . . . . . . . .13

C. Early Enlargements to the EEC . . . . . . . . . . . . . . . . . . . . . . . .16

D. The Single European Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

E. The Treaty on European Union . . . . . . . . . . . . . . . . . . . . . . . .19

F. The Treaty of Lisbon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21

III. THE EUROPEAN UNION TODAY . . . . . . . . . . . . . . . . . . . . . . 23

A. Institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24

i. The European Parliament . . . . . . . . . . . . . . . . . . . . . . . 24

ii. The European Council . . . . . . . . . . . . . . . . . . . . . . . . . .26

iii. The Council of Ministers . . . . . . . . . . . . . . . . . . . . . . . .29

iv. The European Commission . . . . . . . . . . . . . . . . . . . . . .32

v. The Court of Justice . . . . . . . . . . . . . . . . . . . . . . . . . . . .35

IV. THE LEGISLATIVE PROCESS . . . . . . . . . . . . . . . . . . . . . . . . . 39

A. Comprehensive Legislative Process . . . . . . . . . . . . . . . . . . . . 41

V. EU LAW AS APPLIED TO A CITIZEN . . . . . . . . . . . . . . . . . . .46

A. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

B. Citizenship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47

C. Fundamental Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49

D. Right of Establishment and the Right to Provide Services . . . 53

E. The Right of Reparation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

VI. CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .57

3

I. INTRODUCTION

“Nationalism is an infantile disease.

It is the measles of mankind.”

– Albert Einstein.

According to Professor Siegfried Fina of the University of Vienna

Law School, the European Union is a “supranational organization.”1 The

European Union currently contains twenty-eight Member States who have

agreed, “as a result of their membership in the EU, to transfer some of their

powers to the EU institutions in specified policy areas.” This transferal of

power enables EU institutions to make “supranational binding decisions”

that ultimately permit Member States to collaborate and cooperate with each

other in ways unimaginable before the formation of the European Union. 2

This solidarity has propelled the European Union into a position of immense

1 Professor Dr. Siegfried Fina, Program Director. LLM Program in European and International Business Law, University of Vienna School of Law, Dept. of Commercial and Business Law, Lecture at the Vienna School of Law: EU Law: Introduction to the EU (26 May 2014) [hereinafter Fina Lecture) 2 European Parliament, About Parliament, (Nov. 16, 2014, 5:28 PM), http://www.europarl. europa.eu/aboutparliament/en/displayFtu.html?ftuId=FTU_1.4.1.html.

4

global power. In fact, the EU was the world’s largest exporter in 2011,

accounting for 15.4% of worldwide exports.3

Today, it seems obvious that an alliance between European nations

would produce great benefits for its people. For centuries, many bright

minds from many different nations put forth ideas that would eventually

pave the way for the European Union. However, these ideas could not

blossom into policy until the fierce nationalistic tendencies clouding much

of Europe were overcome.

Thus, centuries filled with philosophical thought and political rhetoric

advocating for a united Europe came and went before they were able to take

hold. The Second World War provided the final spark for European unity.

With much of the continent in ruin, many saw European unity as the only

viable option for peace, harmony, and order. What was needed was a

curtailing of national interests and a strong cooperative advocating for

European interests.

3 European Union, The Economy, (Nov. 16, 2014, 5:32 PM), http://europa.eu/about-eu/facts-figures/economy/index_en.htm.

5

II. THE HISTORICAL EVOLUTION LEADING TO THE

EUROPEAN UNION

Countless men and women contributed to the eventual formulation of

the European Union. However, there are some whose ideas have become

integral to the foundation and eventual disposition of the European Union as

we know it today. Central to these ideas was a yearning for a peaceful and

harmonious Europe, a Europe where the common interests of all would not

succumb to the national interests of few.

In 1693, William Penn published his Essay on the Present and Future

Peace of Europe. Within it, he advocated for the establishment of a

European Parliament whose decisions would be enforced by a European

Army. He also argued that actions taken by this Parliament be voted on

“based on the demographic and economic importance of various countries.”4

Penn believed that a European Parliament would save “money, both to the

Prince and the People; and thereby prevent those Grudgings and

4 William Penn, An Essay Towards the Present and Future Peace of Europe (Nov. 16, 2014, 5:55 PM), https://archive.org/stream/anessaytowardsp00penn/mode/2up.

6

Misunderstandings between them that are [likely] to follow the devouring

Expenses of War.” From these savings. governments would be able “to

perform [public] acts for Learning, Charity, [and] Manufacturing,” or what

he called “the Virtues of Government.”5

Immanuel Kant wrote Perpetual Peace: A Philosophical Sketch in

1795 where he advocated for the creation of a “federation of free states.”

Kant believed that “A state of peace among men who live side by side with

each other, is not the natural state; the natural state is one of war. A state of

peace, therefore, must be established for in order to be secured against

hostility it is not sufficient that hostilities simply be not committed; and,

unless this security is pledged to each by his neighbor (a thing that can occur

only in a civil state), each may treat his neighbor, from whom he demands

this security, as an enemy.”6

In 1798, English philosopher Jeremy Bentham wrote Principles of

International Law where he too advocated for European unity through a

European Parliament that would be able to secure freedom of trade and of

5 Id. 6 Immanuel Kant, Perpetual Peace: A Philosophical Sketch (Nov. 16, 2014 5:59 PM), https://www.mtholyoke.edu/acad/intrel/kant/kant1.htm#fn3.

7

the press. He also believed that this unity could reduce the money being

spent on national armaments.7

In 1814, Claude-Henri Saint-Simon proposed for “all European states

[to] be governed by national parliaments,” while “a European Parliament

should be created to decide on common interests.”8 In 1851, Victor Hugo

called for the creation of a United States of Europe while speaking at the

International Peace Conference in Paris. Hugo asserted, “A day will come

when we shall see . . . the United States of America and the United States of

Europe face to face, reaching out for each other across the seas.”9 In 1863,

Pierre Joseph Proudhon published Principle of Federation, where he argued

that nationalism inevitably leads to war and a Federal Europe could reduce

nationalism.

Despite the aforementioned ideas and warnings, European countries

remained staunchly nationalistic. This philosophy provoked the First World

War. With tens of millions dead, cities in ruin, and governments in upheaval,

nationalism was dealt its greatest blow yet. This reality led to the Briand

Memorandum or 1929. French Foreign Minister Aristide Briand submitted

the memorandum to twenty-six other European states. The memo advocated 7 Jeremy Bentham, Principles of International Law (1798). 8 Damian Chalmers, Gareth Davies & Giorgio Monti, European Union Law 7, (2d ed. 2010). 9 Discours d'ouverture, congrès de la paix, [Opening address, Peace Congress], Paris (21 August 1849); published in Actes et paroles - Avant l'exil (1875).

8

for a European Federal Union and “considered the League of Nations to be

too weak a body to regulate international relations.” Id. Unfortunately, many

considered this proposal too radical and its ideals failed to take hold.

Penn, Kant, Bentham, Saint-Simon, Hugo, Proudhon, and Briand all

warned Europe against fierce nationalism. However, the shortsighted

ambitions of few triumphed over propositions for the unity of all. This

flawed ideology culminated in the Second World War. With millions dead,

cities in ruin, and governments in upheaval for the second time three

decades, European unity finally captured the hearts and minds of those in

power.

A. Early Development of the European Communities

Following the Second World War, enormous reconstruction efforts

were needed to repair extensive damage. There also existed fear that

rearmament could once again destabilize an already shaky Europe. In an

attempt to achieve both objectives, French civil servant, Jean Monnet drafted

a proposal that would come to be known as the Schuman Plan.

The Schuman Plan proposed the pooling of coal and steel production

amongst European nations. The objective of the Plan was to make the

9

possibility of war between France and Germany “not merely unthinkable,

but materially impossible.”10 The Schuman Plan asserted, “The pooling of

coal and steel production . . . will change the destinies of those regions

which have long been devoted to the manufacture of munitions of war, of

which they have been the most constant victims.”11

The Schuman Plan provided momentum for the signing of the Treaty

of Paris in 1951. It was through this Treaty that the ECSC, or the European

Coal and Steel Community, came into existence. France, Germany, Italy,

Belgium, Luxembourg, and the Netherlands adopted the ECSC. The ECSC

also “established a High Authority, an Assembly, a Council of Ministers,

and a Court of Justice.”12 The High Authority “supervised the modernization

and improvement of production, the supply of products under identical

conditions, the development of a common export policy and the

improvement of working conditions in the coal and steel industries.”13 The

Assembly had supervisory power over the Treaty and was made up of

representatives from each national Parliament. The Council consisted of six

heads of state whose “approval was required for important decisions taken

10 European Union, The Schuman Declaration of 1950 (Nov. 16, 2014 6:17 PM), http://europa.eu/about-eu/basic-information/symbols/europe-day/schuman-declaration/index_en.htm 11 Id. 12 Damian Chalmers, Gareth Davies & Giorgio Monti, European Union Law 10, (2d ed. 2010). 13 Id.

10

by the High Authority.”14 Finally, the Court of Justice ensured the identical

interpretation and observation of the Treaty by resolving differences

between Member States.15

The importance of the ECSC cannot be overstated. It provided the

platform from which decades of treaties between European nations were

promulgated. Furthermore, it enabled economic integration between the six

Member States by providing a common market for coal and steel. Most

importantly, however, it put forth a workable structure for the

implementation of treaties that has endured into the present. The ECSC

marked the first step towards a supranational Europe.

In 1957, the Treaty of Rome provided the next step towards greater

European integration. The Treaty established the European Economic

Community (EEC) and the European Atomic Energy Community

(EURATOM). The ideas underlying the EEC were propagated through the

Spaak Report, which made its goal the establishment of a common market.16

Article 2 of the EEC gave the Community the task of “establishing a

common market” through the adoption of economic policies whose goal was

14 Id. 15 Id. 16 Damian Chalmers, Gareth Davies & Giorgio Monti, European Union Law 11, (2d ed. 2010).

11

promoting the “harmonious development of economic activities.”17 The

central objectives of these economic activities were to promote closer

relations between Member States and increase Community standards of

living.

The establishment of a common market was the EEC’s greatest

achievement because it founded the famous “four freedoms” that underlie

the original six’s goal of free competition. These “four freedoms” include

the free movement of (1) persons, (2) services, (3) goods, and (4) capital.

The Treaty ultimately sought to “prohibit restrictive agreements and state

aids which can affect trade between Member States and whose objective is

to prevent or distort competition.”18

The EEC also established a customs union, “which required the

abolition of all customs duties or charges having equivalent effect on the

movement of goods between Member States and the establishment of a

common external tariff.”19 Furthermore, the Treaty established a “principle

of equal pay for work of equal value for men and women. 20

17 EEC art. 2 18 European Union, Treaty Establishing the European Economic Community, EEC Treaty (Nov. 16, 2014, 6:27 PM), http://europa.eu/legislation_summaries/institutional_affairs/treaties/treaties_eec_en.htm 19 Damian Chalmers, Gareth Davies & Giorgio Monti, European Union Law 12, (2d ed. 2010). 20 Id.

12

Finally, the EEC created a similar yet refined institutional

arrangement through which its objectives could be achieved. This

arrangement included four central institutions. First was the Commission.

The Commission was a body independent of the Member States who was

tasked with “proposing legislation and checking that the Member States and

other institutions complied with the Treaty and any secondary legislation.”21

The Assembly, which later became the European Parliament, was composed

of national parliamentarians, “had the right to be consulted in most fields of

legislative activity and was the body responsible for holding the

Commission [accountable].”22 The Council was made up of representatives

of the Member States. The Council required unanimity in reaching the

majority of its decisions and held “the power of final decision.” Finally, the

Court of Justice was established to monitor compliance and to hear cases

brought before it by national courts.

EURATOM was also agreed upon following the Treaty of Rome. Its

main objective was to develop atomic energy, ensure the security of its

supply, and enable Member States who could not meet the costs of

harnessing the energy to benefit from a pooling of funding. Furthermore,

EURATOM committed itself to the peaceful civil use of nuclear energy as

21 Id. 22 Id.

13

its central requirement was the prevention of nuclear materials “from being

diverted to military use.”23 The firm opposition to any activity that could be

seen as militant marked yet another step towards a more collegial, peaceful

Europe.

The ECSC, EEC, and EURATOM introduced Europe to the benefits

of Member State cooperation. However, this cooperation could have been

decimated without the help of the Court of Justice.

B. The Direct Effect of European Law

If the Treaties signed by the Community were to have any relevance,

nations and individuals had to know that they could rely on its provisions.

The new Communities would recede into irrelevance if a nation could

simply deny individuals the right to invoke Treaty provisions in their

national courts. Such was the question before the Court of Justice in the

famous case, Van Gend en Loos v Netherlands Inland Revenue

Administration.24

23 European Union, Treaty Establishing the European Atomic Community, EURATOM Treaty (Nov. 16, 2014 6:32 PM), http://europa.eu/legislation_ summaries/institutional_affairs/treaties/treaties_euratom_en.htm. 24 Case 26/62, Van Gend en Loos v. Netherlands Inland Revenue Administration, 1963 E.C.J., ECR 1.

14

The facts of the case were relatively straightforward. Van Gend en

Loos, a postal and transportation company, imported chemicals from West

Germany to the Netherlands. The Dutch authorities charged an import duty

on the chemicals to which Van Gend en Loos objected. Under Article 12 of

the EEC Treaty (Article 30 TFEU today), “Member States shall refrain from

introducing between themselves any new customs duties on imports and

exports or any charges having equivalent effect, and from increasing those

which they already apply with each other.” Van Gend en Loos paid the tariff

then went to the Dutch tax court, the Tariefcommissie, in an attempt to

invoke Community law to reclaim the funds.

The principle issue before the court was as follows: “Whether Article

12 of the EEC Treaty has direct application within the territory of a member

state, in other words, whether nationals of such a state can, on the basis of

the article in question, lay claim to individual rights which the courts must

protect.”25 Thus, the ECJ sought to answer whether a party can invoke and

rely on provisions of Community law before a national court. The answer

was a resounding yes. The court stated: “Article 12 of the Treaty

establishing the European Economic Community produces direct effects and

25 Id.

15

create individual rights which national courts must protect.”26 The court

reasoned, “The Community constitutes a new legal order of international law

. . . that not only imposes obligations on individuals but is also intended to

confer upon them rights which become part of their legal heritage.”27

The importance of this opinion cannot be overstated. First, the Court

of Justice essentially created a “supranational organization that exists not

merely autonomously from the national legal orders but over and above

them.”28 By ratifying the Treaty “the States have limited their sovereign

rights.”29 Thus, even if Dutch law enabled the imposition of a tariff on Van

Gend en Loos, Community law, which expressly contradicts national law,

supersedes it. This created a legal system where Treaty provisions are

superior to national law and will prevail in most instances. This gave great

power to the Community as a singular unit and established the foundation

for what would become the European Union. It also made the ratification of

Treaty provisions extremely important to citizens and companies alike. If

measures contained within treaties are directly effective, legislative

negotiation and implementation become extremely important as it forces

26 Id. 27 Id. 28 Damian Chalmers, Gareth Davies & Giorgio Monti, European Union Law 15, (2d ed. 2010). 29 Id.

16

different nations with different ideals to come together and create solutions

that strengthen Europe as a whole.

The Van Gend en Loos decision also outlined the criteria for directly

effective legislation. For a law to be directly effective, the article must: (1)

Be clear, (2) be a negative, rather than a positive obligation, (3)

unconditional, (4) containing no reservation on the part of the member state,

and (5) not dependent on any national implementing measure.30 We will

return to direct effect in our discussion of the Treaty on the Functioning of

the European Union (TFEU). For now, it is important to recognize that the

Van Gend en Loos decision set the stage for a larger, more powerful

European Union. A Union whose citizens now understood that they could

legally depend on the Treaties their countries agreed to.

C. Early Enlargements to the EEC

In 1963, Great Britain sought to join the Community because EEC

Member States were experiencing faster economic growth. However, French

President Charles De Gaulle vetoed the application. Four years later, the

United Kingdom, Ireland, Denmark, and Norway applied to join the EEC.

30 Case 26/62, Van Gend en Loos v. Netherlands Inland Revenue Administration , 1963 E.C.J., ECR 1.

17

However, De Gaulle once again vetoed the application. De Gaulle had his

reasons for rejecting the application, especially with regards to Great Britain.

De Gaulle saw British membership as a possible hindrance to its leadership

in Community policy. He also personally despised the United States who he

saw as Britain’s greatest ally both militarily and economically.31

Following the resignation of De Gaulle, negotiations were reopened in

The Netherlands. In 1973, the EEC formally accepted the United Kingdom,

Denmark, and Ireland into the EEC. Greece became a member in 1981

followed by Portugal and Spain in 1986. While the EEC was growing, the

economic downturn of the early 1980s made further economic integration

and market competitiveness a key issue for the EEC Member States to

address going forward.

D. The Single European Act

To combat the declining economy, EEC members began to push for

the completion of the “internal market.”32 The internal market was defined

by the Single European Act as “an area without internal frontiers in which 31 Christos Lymbouris, The Role of De Gaulle in the Integration Process (Nov. 16, 2014, 8:32 PM), http://testpolitics.pbworks.com/w/page/20734319/The%2 0Role%20of%20De%20Gaulle%20in%20the%20Integration%20Process. 32 Damian Chalmers, Gareth Davies & Giorgio Monti, European Union Law 19, (2d ed. 2010).

18

the free movement of goods, persons, services and capital is ensured in

accordance with the provisions of this Treaty.”33 This internal market would

seek to remove obstacles to the free movement of goods, capital, services,

and people. To achieve this goal, the decision making process of the Council

had to be reformed because Council decisions still required unanimity. Thus,

the EEC had to be amended to allow for greater latitude in decision-making.

The SEA amended the requirement for Council unanimity in all

decisions except those concerning “taxation, the free movement of persons,

and the rights and interests of employed persons.”34 The SEA also

established the European Council and enhanced Parliamentary power. This

was a step in the right direction, however, President Kohl of Germany and

President Mitterand of France advocated for further political integration

amongst Member States to make the SEA’s goals more sustainable.35 These

goals were laid out in the Treaty on European Union.

33 European Union, the Single European Act (Nov. 16, 2014, 8:40 PM), http://europa.eu/legislation_summaries/institutional_affairs/treaties/treaties_singleact_en.htm. 34 Id. 35 Collette Mazzucelli, France and Germany at Maastricht: Politics and Negotiations to Create the European Union 138-39 (1997).

19

E. The Treaty on European Union

The Treaty on European Union was signed in Maastricht in 1992 and

entered into force in November 1993.36 The TEU was much more politically

ambitious than the EEC, which predominantly focused on economic

integration. The TEU outlined five primary goals: (1) Strengthen the

democratic legitimacy of the institutions; (2) improve the effectiveness of

the institutions; (3) establish economic and monetary union; (4) develop the

Community social dimension; and (5) establish a common foreign and

security policy. 37

The Treaty officially created the European Union consisting of three

pillars: (1) the European Communities, (2) common foreign and security

policy, and (3) police and judicial cooperation in criminal matters. The

European Communities bound themselves to a legislative process where the

European Commission proposes regulations which are then adopted by both

the Council and the European Parliament and are monitored for compliance

by the Court of Justice.38 The second pillar enabled Member States “to take

36 European Union, Treaty of Maastricht on European Union (Nov. 16, 2014, 8:51 PM), http://europa.eu/legislation_summaries/institutional_affairs/treaties/treaties _maastricht_en.htm. 37 Id. 38 Id.

20

joint action in the field of foreign policy.”39 Finally, the third pillar, or the

field of justice and home affairs (JHA) established an expectation for the

Union “to undertake joint action so as to offer European citizens a high level

of protection in the area of freedom, security, and justice.” All three pillars

highlight just how far the European Union had come from the days of fierce

nationalism. By mandating legislative processes calling for profound

cooperation between European Member States, the EU kept its focus on

Europe as a whole, devoid of nationalistic preferences.

The Treaty also created the Economic and Monetary Union (EMU).

Under the EMU, Member States became bound to coordinate their economic

policies, allow for oversight, and subject themselves to financial discipline

for abridging their duties. The EMU also sought to establish a single

currency.40

Finally, the TEU made incredible strides in the field of citizenship.

Under the Treaty, all citizens of Member States became citizens of the

European Union. For instance, a citizen from Germany also became a citizen

of the Union following the ratification of the TEU. EU citizenship bestowed

new rights for all Europeans including, the right to reside freely in the

Community, the right to vote and run for office in their State, the right to be

39 Id. 40 Id.

21

protected by other Member States’ consulates in the event that a EU citizen

does not have access to his country’s consulate, and the right to petition the

European Parliament.41 These new rights accorded great leverage and

freedom to all EU citizens. For example, a French citizen now had the right

to move to Germany, to vote in France, to run for office in France, to be

protected by the Belgium consulate in the United States, and to petition the

European Parliament.

Two subsequent Treaties entered into force in 1997 and 2001. The

Treaty of Amsterdam largely dealt with employment policy while the Treaty

of Nice established qualified majority voting in the Council and the make up

of the Commission. Finally, the Treaty of Lisbon established the European

Union as we know it today.

F. The Treaty of Lisbon

The Treaty of Lisbon was signed in December 2007 after years of

heated debate between highly divided Member States. Out of this came two

treaties, the amended Treaty on European Union (TEU) and the Treaty on

the Functioning of the European Union (TFEU). Together, these Treaties

41 Id.

22

replaced all of the existing legislation previously agreed upon by Member

States.

Amongst the measures agreed upon within the Treaty on European

Union were the EU’s mission and values, democratic principles, the

composition and central functions of the EU institutions, procedures for

amending the new treaties, and provisions governing integration.42 Perhaps

the most important measure was Article 47, which gave the European Union

legal personality.43 This merged the European Communities into the EU.44

This gave the EU the ability to bind itself to international agreements,

“become a member of international organization[s] and join international

conventions, such as the European Convention on Human Rights

(ECHR).”45

The Treaty on the Functioning of the European Union (TFEU) is

much more important in practice because it “sets out the explicit

competences of the Union.”46 It is under the TEU and the TFEU that all

governments, citizens, and businesses within the EU are bound.

42 TEU art. 3 43 TEU art. 47 44 European Union, Legal Personality of the Union (Nov. 16, 2014, 9:04 PM), http://europa.eu/legislation_summaries/glossary/union_legal_personality_en.htm. 45 Id. 46 Damian Chalmers, Gareth Davies & Giorgio Monti, European Union Law 40, (2d ed. 2010).

23

III. THE EUROPEAN UNION TODAY

The Preamble to the Treaty on European Union made two things

clear. First, the European Union is a supranational organization whose goal

is to unite Europe as much as possible. The text explicitly “Recall[s] the

historic importance of the ending of the division of the European continent

and the need to create firm bases for the construction of the future Europe.”47

To accomplish this, the TEU “Desire[s] to deepen the solidarity between

their peoples while respecting their history, their culture and their

traditions.”48 This is no easy task. Today, the EU has twenty-eight Member

States, twenty-four different official languages, and countless different

cultures and traditions. This makes the differences spread across the United

States, for example, seem trivial. The TEU seeks to tackle this great

divergence of ideas by “enhanc[ing] further the democratic and efficient

functioning of the institutions so as to enable them better to carry out, within

a single institutional framework, the tasks entrusted to them.”49

47 TEU Preamble 48 Id. 49 Id.

24

A. Institutions

Article 13 of the TEU sets out seven institutions for all areas of EU

cooperation. This cleaned up the mess left over by previous treaties. Today,

(1) the European Parliament, (2) the European Council, (3) the Council, (4)

the European Commission, (5) the Court of Justice of the European Union,

(6) the European Central Bank, and (7) the Court of Auditors, “ensure the

consistency, effectiveness and continuity of [EU] policies and actions.”50

Under Article 4, the “competences not conferred upon the Union in the

Treaties remain with the Member States.” Therefore, the aforementioned

institutions have no legal authority to act outside of the explicit competences

granted to them through the TEU and TFEU.

1. The European Parliament

Article 14 lays out the European Parliament’s legislative ability,

membership, and voting powers. Parliamentarians are elected every “five

years by direct universal suffrage in a free and secret ballot.”51 Just this year,

Europeans elected a new Parliament. It is interesting to note that the EU’s

50 TEU art. 13 51 TEU art. 14

25

voter turnout for 2014 was 43.09%. EU Parliamentary elections have been

experiencing a downward trajectory in voter turnout since its high of 62% in

1979.52 The United States posted similarly disappointing voter turnout

numbers in its midterm election this year. The 2014 U.S. midterm elections

hit a 72-year voter-turnout low of 36.4%. It appears that the ever-increasing

polarity between political viewpoints has had an adverse effect on voter-

turnout on both sides of the Atlantic.

Article 14 also allocates 750 Parliamentary seats with an extra seat for

the President of the Commission, whom it elects. These 750 seats are

allocated through degressive proportionality. This system is very similar to

the United States House of Representatives. For example, Germany, the

largest EU Member State by population, has the most seats within

Parliament. Similarly, California, the largest United State, has the most seats

in the House of Representatives. However, it does not allocate seats strictly

proportional to Member State population. Under Article 14(2) of the TEU,

even the smallest Member State, Malta, is allocated 6 seats in the

Parliament. Malta has a just under 450,000 citizens. Germany is the largest

country allocating it the maximum 96 seats possible under Article 14(2).

Germany has a population of 80.7 million. Simple math will tell you that

52 UK Political Info, European Parliament Election Turnout 1979-2014 (Nov. 16, 2014, 9:12 PM), http://www.ukpolitical.info/european-parliament-election-turnout.htm.

26

Malta has one representative for every 75,000 citizens while Germany has

one representative per every 840,000 citizens. Thus, EU Member States like

Germany, France, and the United Kingdom made dramatic concessions in

the elections of Parliament in their effort to include smaller countries in the

political process. This highlights the EU’s goal of free competition and

adheres to Ricardian economic principles.

EU legislation must also pass Parliamentary muster and will be

discussed below in the section “Legislative Process.”

2. The European Council

Under Article 15(2) of the TEU, “The European Council shall consist

of the Heads of State or Government of the Member States, together with its

President and the President of the Commission.” The heads of state are each

country’s top executive from a formal standpoint. For instance, the Prime

Minister of United Kingdom and the Federal Chancellor of Germany are

European Council members because their titles are paramount within their

respective governments. The European meets “twice every six months, [and

are] convened by its President.”53

53 TEU art. 15(3)

27

The President of the European Council is elected “by a qualified

majority, for a term of two and a half years, renewable once.”54 The

President’s responsibilities include chairing and driving meetings,

facilitating consensus amongst heads of state, presenting a report to

Parliament after each meeting, and making sure that the agenda set by the

European Council is being implemented through the other institutions.55

This is an exceedingly difficult task. For example, if the President of France

were elected European Council President, he would be expected to work and

negotiate an agenda with smaller Member States who may not share his

same views or aspirations. Furthermore, the President must somehow appear

neutral which could expose him politically back home. This duty provides

yet another way the EU places European solidarity ahead of nationalistic

predilections.

Article 15(1) prohibits the European Council from “exercise[ing]

legislative functions,” but it does command the European Council to define

the general political direction as well as the priorities of the EU. A good way

to think about the European Council is as a collective presidency. Here in

the United States, President Obama has no legislative power, however, he

does outline objectives and priorities in his political agenda. He then

54 TEU art. 15(5) 55 TEU art. 15(6)

28

advocates for Congress to aid him in accomplishing this agenda through its

legislative powers.

The European Council does, however, exercise power in certain areas.

For instance, it sets the criteria to be met by a state wishing to join the

Union.56 Under Article 48(3) of the TEU, the European Council has “the

power to instigate treaty reform.”57 This process includes consultation with

Parliament and the adoption “by a simple majority” of the amendments by

the Commission. The President of the European Council may then “convene

a Convention composed of representatives of the national Parliaments, of the

Heads of State . . . of the European Parliament and of the Commission.” This

power compliments the European Council’s overall agenda-setting power. In

this way, the European Council exerts more control over the EU governing

body than the President of the United States exerts over Congress. The U.S.

President can ask for Congress to convene and tackle legislation, however,

Congress is not compelled to acquiesce under United States federal law.

56 TEU art. 49 57 TEU art. 48(2)-(4)

29

3. The Council of Ministers

Like the European Council, the Council of Ministers, also known as

the Council of the European Union or simply the Council, represents

national interests. The Council has 28 representatives, or one from each

Member State. This representative is authorized to “commit the government

of the Member State in question and cast its vote.”58 An interesting wrinkle

exists within the Council in that it has ten different configurations. These

configurations include: (1) General affairs, (2) foreign affairs, (3) economic

and financial affairs, (4) justice and home affairs, (5) employment, social

policy, health and consumer affairs, (6) competitiveness, (7) transport,

telecommunication and energy, (8) agriculture and fisheries, (9)

environment, and (10) education, youth, culture and sport. Thus, each

Member State has a representative for each configuration.

This seems like a very complicated system, however, it does ensure a

certain extent of expertise. Under this system, Member States can send their

experts in each field without being forced to send one representative

responsible for understanding each and every configuration. In a way, this is

better than the Congressional approach used in the United State’s because

58 TEU art. 16(2)

30

Congressmen often have no special knowledge or expertise in certain fields.

As a result, they often vote along party lines and may do a disservice to their

state’s interests in the process.

Like the European Council, The Council of Ministers has its own

President, however, this presidency only last six months. The Presidency is

held “by Member State representatives . . . on the basis of equal rotation.”59

This President is charged with convening Council meetings and setting the

daily agenda.

Most importantly, the Council is part of the bicameral legislative

branch of the EU. Along with the European Parliament, the Council

“exercises[s] legislative and budgetary functions.”60 Most legislation is

passed through qualified majority voting. This complicated process is seen

as a compromise between larger Member States, who seek greater EU

representation because of its larger populace, and smaller Member States,

whose agendas could be disregarded due to their relatively small populace.

Qualified majority voting is complex. First, larger states get more

“votes” than smaller states. For example, Germany, France, Italy and the

United Kingdom each get 29 votes tallied towards each piece of legislation.

Meanwhile, Estonia, Cyprus, Latvia, Luxembourg and Slovenia only get 4

59 TEU art. 16(9) 60 TEU art. 16(1)

31

votes apiece. The total amount of votes for all Member States is 345. For

legislation to pass the Council it must first be adopted by a majority of

countries, or 15 today. Second, the legislation must garner acceptance from a

majority of voting weights, which equals 255 of the possible 345 votes or

74%. Member States can ask for the legislative process to be taken one step

further. In this circumstance, the legislation has to garner the support of 62%

of the total EU population as calculated by Member State representative

votes. This is seen as a check on smaller state collusion to defeat a larger

state interests in the legislation.

For instance, if Germany, who represents 16.5% of the total EU

population, vetoes a bill that was supported by 20 smaller member states

representing at least 72% of the voting weight, it can defeat the bill by

showing that without its population, the legislation fails to meet the 62%

benchmark.61 This complex formula is what the EU had deemed most fair in

light of the enormous disparity in population between Member States.

However, this formula was altered on November 1 of this year.

Qualified majority now means that 55% of Member States must vote

for the legislation and those States must comprise 65% of the EU population.

61 TFEU art. 238

32

To block legislation, at least 4 Member States representing at least 35% of

the EU population have to vote against the legislation.62

If a bill passes these three tests, it will enter into force as long as it has

Parliamentary consent. The greater legislative process will be discussed

below.

4. The European Commission

The European Commission serves as a neutral legislative body within

the EU. It is made up of 28 commissioners, one from each state, who serve

five-year terms.63 This is a fascinating governing body because of its

unrivaled commitment to neutrality. This commitment is illustrated by the

requirement that Commissioners “be completely independent” from the

interests of their respective national governments to the point that their

“independence is beyond doubt.”64 Correspondingly, Commissioners must

completely devote their efforts to the EU, they may not hold any other

position in any other field, and they must disregard all national interests.

62 TEC art. 238(3) 63 TEU art. 17(1) & (3) 64 Id.

33

While this would seem like an impossible task, there are multiple

measures in place to safeguard Commissioner independence. First, the

European Council proposes the Commission’s President to the European

Parliament who may or may not elect the candidate.65 Once the President’s

neutrality is agreed upon, the Council and the nominated President appoint

the other 27 Commissioners from the remaining Member States. Like the

President, these 27 candidates do not become Commissioners until

Parliament gives them their vote of approval in light of their independence.66

Once Commissioners are in office, “they remain accountable to Parliament,

which has the sole power to dismiss the Commission.”67 This power derives

from Article 17 of the TEU, which commands Commissioners to neither

seek nor take instructions from anyone and “refrain from any action

incompatible with their duties of the performance of their tasks.”68 Thus,

Commissioner independence is absolutely indispensable to the position.

The duties of the President of the Commission are far greater than

those outlined for the President’s of the Council and the European Council.

He/she is responsible to “(a) lay down guidelines within which the

65 TEU art. 17(7) 66 Id. 67 European Union, European Commission (Nov. 17, 2014, 9:09 AM), http://europa.eu/about-eu/institutions-bodies/european-commission/index_en.htm. 68 TEU art. 17(3)

34

Commission is to work; (b) decide on the internal organization of the

Commission, and (c) ensur[e] that it acts consistently [and] efficiently as a

collegiate body.”69 It is an incredible responsibility to make sure that all

other 27 Commissioners remain independent of outside pressures. To avoid

the entire dismissal of the Commission by Parliament, the President has the

power to request the resignation of a Commissioner who is then bound to

step down.70

The Commission’s objectives are many. It (1) proposes new laws to

Parliament and the Council, (2) manages the EU’s budget and allocates

funding, (3) enforces EU law, and (4) represents the EU internationally be

negotiating agreements with countries outside of the EU.71

The Commission is the sole EU body that initiates actual legislation

that binds the entire EU. “It does this only on issues that cannot be dealt with

effectively at national, regional or local levels.”72 This is the Principle of

Subsidiarity. The Commission is further restricted by the Principle of

Proportionality, which disallows any Union action from exceeding what is

69 TEU art. 17(6) 70 Id. 71 TEU art. 17(1) 72 European Union, European Commission (Nov. 17, 2014, 9:17 AM), http://europa.eu/about-eu/institutions-bodies/european-commission/index_en.htm.

35

necessary to achieve the objectives of the European Treaties.73 The greater

legislative process will be discussed below.

The Commission also enforces EU law. In this way, the Commission

is the “guardian of the Treaties.”74 If the Commission believes that a

Member State is failing to apply EU law, it first asks the State to correct the

problem. If the State fails to do so, the Commission has the right to “refer

the issue to the Court of Justice,” who may then impose fines and

penalties.75

5. The Court of Justice

The Court of Justice sits in Luxembourg and its main purpose is to

interpret “EU law to make sure it is applied in the same way in all EU

countries.”76 The Court “consist[s] of one judge from each Member State.”

These judges are charged with,

(a) rul[ing] on actions brought by a Member State, an institution or a natural or legal person; (b) giv[ing] preliminary rulings, at the request of courts or

tribunals of the Member States, on the interpretation of Union law or the

73 TEU art. 5(4) 74 TEU art. 17(1) 75 Id. 76 European Union, Court of Justice of the European Union (Nov. 17, 2014, 9:21 AM), http://europa.eu/about-eu/institutions-bodies/court-justice/index_en.htm.

36

validity of acts adopted by the institutions; [and] (c) rul[ing] in other cases provided for in the Treaties.77

Each judge is selected by each Member State to serve a term of six

years and may be reappointed for an additional term.78 Similar to judges here

in America, ECJ judges need assistance. They get this assistance from

“Advocates-General” who operate similarly to law clerks here in the States.

The stark difference, however, is that these Advocates-General are appointed

to the same six-year term as the judges they work for and can be reappointed

at the will of Member States.79 The Court of Justice gets further assistance

from the General Court. This court “deals with cases brought forward by

private individuals, companies and some organizations, and cases relating to

competition law.”80

Thus, the system is very similar to our federal court system. The

General Court handles the majority of the cases brought forth involving the

interpretation and application of EU law. In the United States, the Federal

District Courts interpret federal law and apply the facts to the said law.

Furthermore, the General Court can hear disputes between individuals or

legal persons who reside in different Member States. This provides a neutral

77 TEU art. 19(2)-(3) 78 TEU art. 19(2) 79 Id. 80 European Union, Court of Justice of the European Union (Nov. 17, 2014, 9:26 AM), http://europa.eu/about-eu/institutions-bodies/court-justice/index_en.htm.

37

third-party to hear the dispute and give litigants confidence that nationalistic

preferences will not compromise judgment. This is much like diversity

jurisdiction in United States District Courts.

If the dispute is exceedingly important, it goes before the ECJ, which

operates similarly to the United States Supreme Court. The five most

common types of cases the ECJ hear include: (1) requests for a preliminary

ruling, (2) actions for failure to fulfill an obligation, (3) actions for

annulment, (4) actions for failure to act, and (5) direct actions.81

Requests for preliminary rulings are extremely beneficial to the EU as

a whole. With 28 Member States and 24 different official languages, certain

laws put forth by the EU run the obvious risk of misinterpretation. To guard

against this, a Member State may request advice from the Court of Justice.

Once the interpretation is clear, the Member State can conform with the

legislation and therefore the goals the EU sought to achieve. It can also

avoid being in violation of the law thereby steering clear of suits brought by

other Member States or individuals.

Actions for failure to fulfill an obligation occur when either the

Commission or a Member State believes that another Member State is in

81 Id.

38

violation of EU law, or it is failing to fulfill its obligations under EU law.82

If the Court finds that the country is violating EU law it gets the opportunity

to “put things right at once” or subject itself to a fine.83 This “second

chance” makes sense especially when a Member State’s national law

conflicts with EU law. New legislation can take time to properly develop

and implement, making it fair to give a country a little more time to

conform.

Actions for annulment concern the legality of EU law. For instance,

the Commission can propose a law that is eventually passed by the

Parliament and the Council of Ministers and then implemented on a national

level. However, if the EU violates the Principle of Subsidiarity by adopting

legislation that can be handled at national or even local levels, a Member

State can request the ECJ to annul the law. This authority is identical to the

U.S. Supreme Court’s authority to hold federal legislation unconstitutional.

Actions for failure to act concern the failure of an EU institution to

fulfill its obligations under the Treaties. Direct actions occur when “any

person or company has suffered damage as a result of the action or inaction

of the Community or its staff.”84 This brings to mind the Van Gend en Loos

82 Id. 83 Id. 84 Id.

39

case where a company was forced to pay an import duty in violation of

Community law. There, the company was compensated for the expenses it

paid to Dutch authorities because the EU law at issue superseded the

national law.

IV. THE LEGISLATIVE PROCESS

The European Union consists of 500 million people living in 28

different countries who speak 24 different languages and adhere to countless

different cultural norms. With this diffuse and complex citizenry in mind, it

is understandable why the legislative process in the European Union is so

complicated. How can the Union adopt legislation that benefits the EU as a

whole without overly disadvantaging some? The Treaty of Lisbon, the TEU

and the TFEU are Europe’s most recent answer to this question. These

Treaties have produced an exceedingly complex process that legislation

must sustain. Nevertheless, the complexity of the process yields a system

with multiple checks and balances, where principles of neutrality and greater

European unity trump nationalistic predilections.

40

In its simplest form, the legislative process can be summed up as

such. First, the European Council, which is represented by the heads of each

Member State, define the general political direction they deem best for the

entire EU. They then highlight priorities they would like to see the other

institutions strive towards. Citizens, experts, and interest groups also discuss

how best to achieve these priorities and lobby the EU to take their respective

positions. Second, the European Commission, who is independent of

national pressures, proposes legislation to the Parliament. Third, the

European Parliament, who is elected by their Member States and thus serves

their interests, gives the legislation its first reading and either adopts the

legislation or amends it. Fourth, the same piece of legislation comes before

the Council of Ministers. The Council gives it its first reading and if both

Parliament and the Council agree on the legislation it enters into force. Once

the legislation enters into force, it is binding on all Member States.85 Finally,

if the directives are violated by any Member State, business, or individual,

the Court of Justice has the authority to remedy the injury. Of course, the

actual legislative process involves additional intricacies but it is important to

gain a general understanding before diving into the details.

85 TFEU art. 294

41

A. Comprehensive Legislative Process

The legislative process is outlined in Article 294 of the TFEU. Under

Article 294, the Commission kicks off the official legislative process by

preparing “legislative proposals on its own initiative or at the request of

other EU institutions.”86 More often than not, the Commission makes

proposals on its own initiative. This “right of initiative” is enshrined in

Article 17(2) of the TEU, which states: “Union legislative acts may be

adopted only on the basis of a Commission proposal.” The Commission

drafts legislation and proposes the measure as long as it garners a simple

majority of Commissioner approval. The Commission will then send their

proposals to the European Parliament and the Council of Ministers.

Once the proposal is sent to Parliament, its President appoints the

committee, or committees, that have expertise in the area.87 These

committees debate the legislation and may call on the Commission to defend

the positions it put forth. Once the legislation is adopted by the appropriate

committee, “it is placed on the plenary agenda.”88 The plenary, or the 751

Members of the European Parliament, discuss and debate the legislation and 86 European Union, Legislative Powers: Ordinary Legislative Procedure (Nov. 17, 2014, 9:36 AM), http://www.europarl.europa.eu/aboutparliament/en/0081f4b3 c7/Law-making-procedures-in-detail.html. 87 Id. 88 Id.

42

subject it to a vote. Parliament requires a simple majority to approve

legislation.

Parliament has three options, (1) reject the proposal as a whole, (2)

approve the proposal without amendments, or (3) approve the proposal

subject to amendments. To better understand the entire process; let’s assume

that Parliament adopts the proposal subject to amendments. In this case, the

final draft of the bill is postponed until the Commission has a chance to state

its position on each amendment. If the Commissions position can be

reconciled in Parliament, Parliament submits its official position to the

Council of Ministers.89

The Council of Ministers receives the legislation at the same time as

Parliament; however, they are unable to adopt their own position until after

Parliament has spoken. The Council makes its first reading then reaches a

“political agreement.” This agreement is “a broad outline of its proposed

first reading position.”90 After receiving Parliament’s position and

conducting its own first reading, the Council puts forth its amended

proposal.

The Council’s proposal then goes before Parliament who may accept

the position. If this happens, the legislation is approved. Parliament may also

89 Id. 90 Id.

43

reject the Council’s position. If this happens the legislation will not enter

into force.91 Parliament’s remaining choice is to propose amendments in a

similar fashion to its first reading, then send their renewed position back to

the Council. If the Council accepts Parliament’s newest amendments, the

legislation will pass. If the Council only approves some amendments, the bill

goes before the Conciliation Committee.92

It makes sense to require a Conciliation Committee. If the process has

progressed this far, it seems obvious that the general goal of the bill is

important enough to pass. Thus, Article 294(8) requires that “the President

of the Council” and “the President of the European Parliament . . . “convene

a meeting of the Conciliation Committee.” The Conciliation Committee is

“composed of the members of the Council . . . and an equal number of

members representing the European Parliament.”93 The committee is tasked

with “reaching agreement on a joint text . . . on the basis of the positions of

the European Parliament and the Council at second reading.”94 The

Committee has six weeks to adopt a joint text. If they cannot agree the bill

91 Id. 92 TFEU art. 294(8) 93 TFEU art. 294(10) 94 Id.

44

fails to enter into force. If the Committee does agree, they send the text back

to Parliament and the Council for a third and final reading.95

The text sent to Parliament and the Council from the Conciliation

Committee cannot be altered. Parliament votes in plenary and still requires a

simple majority. The Council votes by qualified majority.96 If both

bicameral institutions approve the legislation, it enters into force. If either

institution rejects the Conciliation Committee’s text, the bill is officially

dead. This convoluted legislative process was summed up by Professor

Siegfried Fina of the University of Vienna in his chart below.

95 TFEU art. 294(13) 96 European Union, Legislative Powers: Ordinary Legislative Procedure (Nov. 17, 2014, 9:44 AM), http://www.europarl.europa.eu/aboutparliament/en/0081f4b3 c7/Law-making-procedures-in-detail.html.

45

Many laws have survived this gambit and have thus become binding

on all Member States, individuals, and businesses. Perhaps the most

important group of laws passed by the European Union involve the “four

freedoms.” These include the free movement of (1) goods, (2) people, (3)

services, and (4) capital. To better understand these four freedoms, it is

46

helpful to look at a real life example taken from my studies abroad in

Vienna, Austria.

V. EU LAW AS APPLIED TO A CITIZEN

“Vienna wasn’t just a city, it was a tone that either one carries forever in

one’s soul or one does not. It was the most beautiful thing in my life.”

-Sandor Marai.

A. Introduction

It was my first night out in Vienna. A light spring rainstorm gave

Vienna a brisk and refreshing aura more intoxicating than anything I had

ever experienced in a metropolitan city. The people, the architecture, the art,

and the music all contribute to an enticingly addictive ambiance making

Vienna the most beautiful city I have ever had the pleasure of visiting. The

city’s profound magnetism affects people from around the world. In fact,

20% of Vienna’s two million inhabitants are foreigners.97

97 Vienna in Figures (Nov. 17, 2014, 10:28 PM), https://www.wien.gv.at/statistik/pdf/viennainfigures.pdf.

47

Andreas, a student who studied law at the University of Vienna, was

kind enough to invite me to the celebration of his friend’s graduation from

law school. I walked into the room unsure of what to expect. Here I was in a

new city meeting new people. Would they like me? Do they like Americans?

Should I have attempted to learn more German?

There are few experiences in life that induce more anxiety than

walking into a party in a foreign country alone. However, I quickly realized

that the anxiety I felt towards this new experience was thoroughly

unfounded. Andreas and his friends were exceedingly welcoming and made

sure I had a good time. Throughout the night Andreas introduced me to

wonderful people, but none more wonderful than Sandra. Sandra was very

tall, very blonde, and very beautiful. Her tremendous beauty would

intimidate any man, but she was precisely the kind of woman I dreamt of

meeting. And luckily for me, her charm matched her beauty. Throughout the

night she revealed a quick rendition of her life story.

B. Citizenship

Sandra was born in Slovenia, with both of her parents carrying

Slovenian citizenship as well. Under Article 20 of the TFEU, “Every person

48

holding the nationality of a Member State shall be a citizen of the Union.

Citizenship of the Union shall be additional to and not replace national

citizenship.”98 Slovenia was once part of the Austro-Hungarian Empire and

was more recently “one of Yugoslavia’s six constituent republics.” 99

Slovenia officially became a member of the European Union in 2004.100

Slovenia uses the concept of jus sanguinis as one of its means for

acquiring citizenship. 101 Under this concept, “a person may obtain

citizenship of the Republic of Slovenia through his or her parents or at least

one of them, provided that the parent is a Slovenian citizen at the time of

birth of the aforementioned person.”102 Both of Sandra’s parents were

citizens of Slovenia when she was born, thus, according to Slovenian law

she is a citizen of the Republic of Slovenia. Because she is a citizen of

Slovenia, and Slovenia is a Member State, Sandra is a citizen of both her

home country and the Union.

98 TFEU art. 20 99 Slovenia as a Member State, (Nov. 17, 2014, 10:30 AM), http://europa.eu/about-eu/countries/member-countries/slovenia//index_en.htm. 100 Id. 101 Republic of Slovenia Ministry of the Interior, Citizenship in Slovenia, (Nov. 17, 2014, 10:31 AM), http://www.mnz.gov.si/en/services/slovenia_your_new_country/ 102 Id.

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C. Fundamental Rights

As an EU citizen, Sandra enjoys certain fundamental freedoms

available to all citizens of the Union. These include: Article 21(1) “the right

to move and reside freely within the territory of the Member States;”103 and

Article 45 “the right to move freely within the territory of Member States” to

work.104 Article 45(2) of the TFEU states that “Such freedom of movement

shall entail the abolition of any discrimination based on nationality between

workers of the Member States as regards employment, remuneration and

other conditions of work and employment.”105

Sandra moved to Vienna 5 years ago and is currently employed as a

marketing associate for a travel agency. Though I do not know how easy this

transition was for her, one can’t help but admire the fact that the Member

States of the European Union have shown an exceptional ability to

collaborate and cooperate. The TFEU is one in a long line of treaties made

between an ever-growing number of Member States. The fundamental

freedoms granted to EU citizens via these Treaties convey Europe’s general

willingness to forgo nationalistic preferences for the betterment of the Union

103 TFEU art. 21 104 TFEU art. 45 105 Id.

50

as a whole. This is no small feat considering the EU comprises 500 million

citizens who come from 28 different countries and speak 24 different

languages. The fact that it is even possible for the 28 Member States of the

EU to agree on any treaty and the fact that EU law is disseminated in all 24

official highlights a level of cooperation that has no international equal.

As a citizen of both Slovenia and the EU, Sandra has the ability to

rely on the provisions set forth in treaties adopted by all Member States.

This powerful right was first adopted by the European Court of Justice in the

landmark case Van Gend en Loos v Netherlands Inland Revenue

Administration. 106There, the European Court of Justice articulated the

principle of direct effect. When legislation adopted by Member States is

directly effective “individual rights which national courts must protect” are

created.107 The criteria outlined in Van Gend en Loos for directly effective

legislation require that the article: (1) Be clear, (2) be a negative, rather than

positive obligation, (3) unconditional, (4) containing no reservation on the

part of the member state, and (5) not dependent on any national

implementing measure.108

106 Case 26/62, Van Gend en Loos v. Netherlands Inland Revenue Administration , 1963 E.C.J., ECR 1 107 Id. 108 Id.

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The TFEU provisions outlined above all meet these criteria. For

instance, TFEU Article 21, which confers EU citizens with “the right to

move and reside freely within the territory of the Member States,” is: (1)

Very clear, (2) it does not require a citizen to do anything positive before

they move to another member state, (3) it is a right without any conditions

attached, (4) no member states reserve the right to deprive certain citizens of

the right to enter their territory, and finally (5) the provision does not require

a member state to implement any measure to allow the free movement of

persons into their country. Thus, Sandra can rely on Article 20 of the TFEU

if her residence in Austria ever came into question or was hindered in any

unlawful manner.

Article 45 of the TFEU also meets the Van Gend en Loos criteria and

is thus a directly effective measure that Austria is bound to uphold. This

includes “the abolition of any discrimination based on nationality between

workers of the Member States as regards employment, remuneration and

other conditions of work and employment.”109 Thus, if Sandra were ever

denied access to work, compensated less than an Austrian in her same

position, or forced to work in sub par conditions solely because she is of

Slovenian descent, she could rely on Article 45 of the TFEU in an action

109 TFEU art. 45

52

against an individual, a company, or even Austria itself, depending on the

genesis of the discrimination.

In sum, Sandra is a citizen of Slovenia, which has been a member of

the EU since 2004. As a citizen of a member state she is a citizen of the EU

under Article 20 of the TFEU, granting her certain fundamental freedoms.

Two of these freedoms include the right to reside here in Austria and the

right to be protected against discriminatory employment practices while she

resides here. It appears this has been the case for her since moving to

Vienna. She tells me that she absolutely loves the city and plans on staying

longer.

Before coming to Vienna to study I was unaware that there were such

fundamental rights available to all members. It would appear that the general

youth of the European Union is quite beneficial. The Member States and

their leaders have been able to look at the governmental makeup of other

countries, gauge their strengths and weaknesses, and have, in my opinion,

adopted progressive measures that promote international harmony. The EU

is not perfect, however it is moving in a direction that the rest of the world

would be well served to explore. The measures put in place enable EU

Member States to maximize the tremendous potential available within its

borders.

53

D. Right of Establishment and the Right to Provide Services

Let’s imagine that Sandra is quite successful in her job and would like

to one day open her own travel agency in Vienna. Let’s also imagine that she

already owned and operated a similar company in Slovenia. Companies must

satisfy two requirements to trigger the rights afforded to EU establishment.

First, they must be “formed in accordance with the law of a Member State.”

110 Second, the company must either “hav[e] their registered office, central

administration or principal place of business within the Union.”111 Thus,

Sandra would have to establish her company in accordance with the law of a

member state. It would be advisable for her to form her company in

accordance with Irish law as they have a tax structure that is internationally

recognized as beneficial. If she were to open her primary business here in

Vienna, the city she loves, she would satisfy the second Article 54

requirement for establishment.

Article 54 was held directly effective in Case 81/87, The Queen v.

H.M. Treasury and Commissioners of Inland Revenue, 1988, E.C.J., ECR 1.

There, the ECJ stated: “The transfer of the central management and control

110 TFEU art. 54 111 Id.

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of a company to another Member State amounts to the establishment of the

company in that Member State because the company is locating its centre of

decision-making there, which constitutes genuine and effective economic

activity.”112 Therefore, the relocation of Sandra’s company from Slovenia to

Vienna cannot be hindered, and the Austrian government must afford this

right of establishment devoid of any discrimination.

If Sandra formed her business in the manner outlined above, her

company would enjoy certain rights granted through the TFEU. Amongst

these includes the right to equal protection under Article 49. Article 49

states: “restrictions on the freedom of establishment of nationals of a

Member State in the territory of another Member State shall be

prohibited.”113 Additionally, Article 55 states: “Member States shall accord

nationals of the other Member States the same treatment as their own

nationals as regards participation in the capital of companies or firms . . .

without prejudice to the application of the other provisions of the

Treaties.”114 Furthermore, her company would have the right to “be treated

in the same way as natural persons who are nationals of Member States.”115

Thus, under the TFEU Sandra’s company could not be discriminated against

112 Id. 113 TFEU art. 49 114 TFEU art. 55 115 Id.

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with regards to her ability to open and operate a business in Vienna despite

the fact that she formed her business in Ireland and is a Slovenian national.

Considering the fact that a travel agency does not usually provide

tangible products, Sandra would be offering a service, and services enjoy

further protection under the TFEU. For example, Article 56 states:

“restrictions on freedom to provide services within the Union shall be

prohibited in respect of nationals of Member States who are established in a

Member State other than that of the person for whom the services are

intended.”116 Therefore, if Sandra’s office were here in Vienna and

established in Ireland, the services she provided to an Austrian national, for

example, would be free from any Austrian regulation at odds with EU law.

This is a tremendous freedom that it allows for greater competition, which

is, in the end, beneficial to consumers.

Article 61 would additionally protect Sandra’s business, as “each

Member State shall apply such restrictions without distinction on grounds of

nationality or residence to all persons providing services within the

meaning.”117 Thus, if the Austrian government sought to heighten

requirements for travel agents, such as requiring that they have a university

degree for example, they could not require her to get better grades or go to a

116 TFEU art. 56 117 TFEU art. 61

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better school than an Austrian national, because that would be blatant

discrimination.

E. The Right of Reparation

If Sandra were discriminated against, or denied any of the

aforementioned fundamental freedoms by Austria, she would have the right

to redress her damages in the Court of Justice. The Court has repeatedly

held, “the principle that the State is liable for loss and damage caused to

individuals as a result of breaches of Community law for which the State can

be held responsible is inherent in the system of the Treaty.”118

Sandra’s recovery would then turn on her ability to prove three

conditions. First, “the rule of law infringed must be intended to confer rights

on individuals.”119 Second, “the breach must be sufficiently serious.” 120 And

third, “there must be a direct causal link between the breach of the obligation

resting on the State and the damage sustained by the injured party.”121

The first prong would be easy enough for Sandra to prove. The right

of establishment and the right to perform services are fundamental freedoms 118 Case C-392/93 The Queen v. HM Treasury ex parte British Telecommunications, 1996, E.C.J., ECR I-1631. 119 Id. at Paragraph 39. 120 Id. 121 Id.

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that the Treaties directly bestow upon individuals. The second prong would

be met if, for example, Sandra could prove that the discrimination she

suffered at the hands of Austria amounted to her unemployment and

subsequent departure from the country. The third prong could be difficult to

prove. To show a direct causal link, Sandra would have to prove corruption

or discriminatory practices at the government level. This could prove to be

an exceedingly expensive endeavor as discovery on such a scale would take

great effort. However, if she were able to meet this more difficult third prong

she would be entitled to the recovery of damages from the Austrian

government.

VI. CONCLUSION

The plethora of freedoms Sandra enjoys from being a citizen of

Slovenia and the Union are quite impressive. She is free to move throughout

the EU. She is free to reside anywhere within the EU. She is free to work

anywhere in the Union and she possesses rights protecting her from

discrimination based on her nationality. She is free to establish a business

anywhere in the Union. She is free to set up her principal office here in

Vienna. And finally, she is free to provide services without fear of being

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discriminated against for her Slovenian descent. If her rights are violated,

she is free to seek redress in the Court of Justice.

These rights convey just how impressive EU collaboration and

cooperation truly is. The fact that Sandra lives and works in Vienna without

having to overcome any substantial obstacle highlights just how far the

European Union has come.

The days of fierce nationalism are largely a thing of the past for EU

Member States. The EU continually learns from its past mistakes and makes

great effort to evolve into a system that satisfies its ever-growing

membership. This membership includes 28 different countries, 24 different

languages, 500 million people, and countless different cultures.

Incorporating these competing interests into a single organization is an

accomplishment that should be celebrated.

While the EU is not perfect, it has shown the world that reaching

across borders, accepting differences, and finding common ground produces

far greater benefits than clinging to nationalism. If the world is to move

forward and reach its greatest potential it must first dismantle the archaic

national allegiances that have plagued this planet throughout human history.

The European Union, its institutions, and its people confirm that we are one

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species capable of tremendous accomplishments so long as we allow

ourselves to work together.