‘Member States

‘Member States, and professional organisations within them, have always shown resistance to the freedoms given under Article 49. However, the EU through both its legislation and perseverance of the Court of Justice has been able to overcome this and to ensure that the rights under the Article can be enjoyed by all’
Discuss how the EU has developed the principle of recognition of professional qualifications in protection of freedom of establishment in the light of the above statement.
In 1952 the Treaty Establishing the European Coal and Steel Community (ECSC Treaty) came into force. This treaty saw six states, Germany, France, Italy, Belgium, the Netherlands and Luxembourg sign the Treaty to allow for efficient distribution of steel and coal and made war between the six states almost impossible as a direct effect of this cooperation between states. In 1957 the Euratom Treaty was made to create the necessary conditions for a quick establishment and growth of nuclear industries of each of the six member states. Following this, also in 1957 the European Economic Community Treaty (EEC Treaty) was signed in Rome. The aim of this was to simplify trade and economic activities to boost the economy and ensure its stability. This treaty was developed on legal provisions which abolished obstacles of free movement of people, services, capital and goods throughout the six member states. As there were now three independent treaties all signed by the six member states, which followed their own procedures, 1967 saw the Merger Treaty put in place to simplify things and create common institutions under which the previous treaties would merge. The result of this was that the six member states were known as the European Economic Community. Over time, there were many changes made to the EEC Treaty which widened and increased the powers of the EU. In 1986 the Single European Act was signed in Luxembourg with a focus on the efficiency and effectiveness of law making to ensure the objectives set out in the EEC Treaty were met. Furthermore, in 1992 yet another treaty was signed, this time in Maastricht and was termed; the Treaty on European Union (TEU) or Maastricht Treaty. This treaty created the EU and changes the EEC Treaty to the Treaty Establishing the European Community. Further treaties set out to simplify previous treaties and paved the way for the expansion of the EU such as the Treaty of Amsterdam 1997 and the Treaty of Nice 2001. In 2007 the Treaty of Lisbon was debated and negotiated by an intergovernmental conference of member states, this led to the renaming of the EC to the Treaty on the Functioning of the European Union (TFEU) or Lisbon Treaty which came into effect in December 2009.
When the EEC was established in 1957, there was a common market which resulted in free movement of goods, workers, services and capital between the member states. These freedoms set out to allow free trade to provide businesses the possibility of production and provision of services efficiently to the benefit of the economy of each of the member states. Furthermore, the common market created economic growth because of investment from outside the EU by imposing a Common Customs Tariff to those who bought good from outside of the EU in which provided an incentive for third countries to set up business based inside the EU to avoid being charged for importing to the EU. The free movement of people between states means that they can travel to where the business needs them and encourages a higher level of employment. The Freedom of establishment allows business from one member state to set up in another member state which creates more employment and more spending power for individuals. Free movement of capital allows both individuals and business to invest in business in other member states, thus attracting investment into the local economy. Furthermore, the introduction of a single currency in 18 member states meant a reduction in trading costs, however it also creates an interdependence for member states to help others with debts. Consequently, countries such as the UK have not adopted the Euro and instead retained their own currency.

The TFEU imposes rules on member states to create and maintain a common market. There are rules which restrict the activity of member states, including cross-border trade, freedom of workers, freedom to set up new business and the flow of capital. As the common market provides free trade there has been a competition law put in place to prevent business from restricting competition and abusing the consumers. The supranational body set up to run the common market consists of the institutions of the EU. These institutions are responsible for the general operation of the EU, development of new legal rules, maintaining the market and setting further developmental goals of the EU. The institutions include the legislative body (European Parliament and the Council); the executive (the European Commission) and the judiciary (the Court of Justice and the General Court). All institutions must act in the best interests of the EU and not the benefit of a single member state. The Court of Justice is the highest court and supreme authority on EU law with its main role being to ensure that national courts apply EU law in the same way to avoid inconsistencies and fragmentation of the market. The Court of Justice has the authority to settle legal disagreements between member states, business and individuals. The court is made up of one judge from each member state to ensure fair representation of each national legal system (Article 251 TFEU); eight “advocates-general” (Article 252 TFEU) whose role is to present their impartial opinions on any case bought before the court to the public. Those appointed to the Court of Justice are done so by joint agreement of governments of member states for a period of six years which may be renewed. The president of the Court of Justice is appointed by fellow judges and serves for three years. The institutions create secondary legislation including directives and regulations which supersede national rules and create a barrier to the freedoms set out in the TFEU. Secondary legislation is the laws made by the institutions under the power that they have been given in Article 249 (1). As set out in Article 288 of the TFEU examples of secondary legislation are; regulations, directives, decisions, recommendations and opinions. With regards to consumer rights, there are many different directives which create rights for consumers throughout the EU which are automatically applicable to all member states. These legal acts aim to remove barriers created by national rules and enhance market integration. The general principles of law have been established in EU law, however as there is not always a clear divide of the application of the general principles, the Court of Justice is able to develop further principles.

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The rules set out by EU law take priority over conflicting national law so that market integration can be achieved effectively. The principle of supremacy is not set out in any of the treaties, however the case of Van Gen den Loos in 1963 addressed this and referred to EC law as a “new legal order of international law” suggesting that it imposed rights and obligations on member states regardless of the national rules of a specific state. The treaties established a new legal system rather than a set of rules meaning member states removed their sovereignty on matters which are covered by EU law. A further case which established the principle of supremacy was Costa v ENEL 1964 in which the court of justice made a point that national law could not override EU law. Failure of a national supreme court to apply EU law may result in that member state being liable for any losses. Within the UK, parliamentary sovereignty was the constitutional principle which required UK courts to apply legislation from parliament and o never questions its validity with the only limit being an Act which limits the power of Parliament to legislate. EU supremacy undermines parliamentary sovereignty as if an Act conflicts with EU law, then EU supremacy stipulates that the national court set aside the Act and instil the EU law. As the UK is a member state, it is bound by the European Communities Act 1972 which means that it is obliged to apply EU supremacy. Similarly, the German Federal Constitutional Tribunal held that as the Court of Justice provides protection of fundamental rights similar to the German Constitution, it would adhere to EU supremacy only so long as the Court of Justice continued to give high standards of protection. In the Lisbon Case 2009, the German Federal Constitutional Tribunal stated that German law gives power to the EU rather than the principle of supremacy imposing its rules on Germany. Café Jacques Vabres 1975 saw the Cour de Cassation accept the principle of EU law supremacy. EU law is supreme to French statues, however it is not supreme over the French constitution. The principle of EU supremacy is accepted by all member states; however, it is interpreted inconsistently by each state. The Court of Justice would prefer that all member states adopt that EU supremacy is supranational and is the result of the natural course of order of EU law. Countries that automatically give legal force to legal obligations imposed by a treaty are monist whereas countries who require legal force through national legislation are called dualist. In the UK, subject to section 2(1) of the European Communities Act 1972, treaty obligations and regulations are directly applicable as provisions of EU law are applied automatically and without the need to further legislate at a national level. Directives are not directly applicable as they do need implementation of UK legislation to become law in the UK. EU law is only directly effective if it can be enforced by a court in the UK. In the case 26/62 Van Gen den Loos v Nederlandse Administratie de Belastingen (1963) ECR 1, the Court of Justice states that Van Gen could enforce Article 25 against the Dutch government if certain criteria were met. The criteria are that EU law must be sufficiently clear and precise; unconditional; have no discretion as to the implementation by member states or institutions. A community law such as that in the aforementioned case is vertically effective when enforceable only against the state. Conversely, a community law is horizontally effective when enforceable against private individuals e.g. companies or people. Treaties and Regulations are directly applicable and directly effective, however directives are only directly effective vertically as if a member state fails to implement a directive an individual cannot be penalised for the failure. Where a state does not implement EU law, the state can be sued for the failure to implement legislation where it is obliged to do so; in particular, where a state does not implement directives such as the case C-6&9/90 Francovich v Italy (1991) ECR I-5357. The Court of Justice held that the Italian State were liable for their failure to implement the directive where the following conditions were fulfilled; the directive gave rights to individuals; those rights were identifiable within the wording of the directive and there was a causal link between the failure to implement and the damage caused to the individual. Furthermore, in Pubblico Ministerio v Ratti 1979, a further condition was outlined stating that a directive cannot be used against the state if it has not been implemented yet.
The development of Article 49 is subject to case law of the Court of Justice and the secondary legislation produced by the institutions of the EU. The CJ has developed the effectiveness of Article 49, an example is the case of Thieffry v Conseiil de l’Ordre des Avocats a la Cour de Paris C-71/76 in which a Belgian national obtained a French certificate of equivalence for his qualifications and a certificate of aptitude for the profession of avocat in which he had worked for a number of years, however, he was subsequently refused admissions to the Paris bar due to his lack of a French law degree. Although there was a lack of directive at the time of the case, the Court of Justice still held that “a person subject to community law could not be denied the benefit of that freedom by virtue of the fact that the directives provided for by Article 57 of the treaty had not yet been adopted”. In Ordre des avocats au Barreau de Paris V Onno Klopp C-107/83 a Germam lawyer had the required German qualifications to apply for the Paris bar, however he was refused admission as he wanted to retain professional residence in Germany and establish this in France which was against the French rule of ‘only one professional residence’. The Court of Justice held that if this rule were maintained it would be prevent integration of lawyers to more than one member state and having two professional residences did not present an obstacle to the application of the rules of a profession in the host state.
The mobility of lawyers demonstrates the effectiveness of freedoms of establishment set out in article 49 of the TFEU.
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