10 (pro-EU) reasons to be cheerful after Brexit

Cormac Mac Amhlaigh

As the dust continues to swirl around the momentous Brexit referendum result a month ago (and doesn’t show any signs of settling anytime soon) I suspect many EU sympathisers will be somewhere in the middle of the various stages of the Kübler-Ross Grief cycle: denial, anger, bargaining, depression, acceptance. So, somewhat incongruosly, are the ‘leavers’. Whereas there are almost as many emotions being experienced on all sides as there are potential options on what will happen next both in terms of the UK’s future relationship with the EU as well as the future of the EU itself, in this post I want to set out a number of (pro-EU) reasons – some obvious, some optimistic, others wildly speculative – to be cheerful amidst the uncertainty created by the Brexit vote.

  1. It is worth reminding ourselves that (a version of) the EU existed before the UK joined in 1972 (with Denmark and Ireland) and it will survive its withdrawal. Brexit will not have the same effect as one of the founding six, and particularly say Germany or France, leaving the bloc.
  1. The feared domino effect of other Member States agitating to leave has not transpired. Indeed post-Brexit opinion polls have shown a bounce in support for the EU in other EU Member states since Brexit.
  1. Even were an in/out referendum to be held in another EU Member state, there are good reasons to believe (barring unforeseeable ‘exogenous shocks’) that a majority would not vote to leave. No other EU Member State has a national media so relentlessly hostile to the EU as the UK. The UK’s top-two selling national newspapers (with a combined circulation as much as the next three put together) are rabidly anti-EU and a study released during the referendum campaign found that even the UK’s supposedly ‘neutral’ state broadcaster, the BBC, had been overwhelmingly negative about the EU over the past fifteen years. Against this heavily Eurosceptic background, there was still only 3% difference between leave and remain in the referendum result. This augurs well for an EU referendum in an EU Member state with a less hostile media.
  1. The referendum and its aftermath has increased curiosity, interest and knowledge about the EU and what it does among many previously disinterested EU citizens. Most obviously in the UK where google reported a sharp rise in searches asking was ‘What is the EU?’, albeit that this was after the polls had closed. Admittedly, much of this knowledge and information is starting from a pretty low base but any improvement has to be a good thing for the EU.
  1. Ever since the last British government passed the EU Act 2011, which requires referendums in the UK on certain future reforms at EU level, future EU reform would have been considerably hamstrung by the UK through the floating of a ‘referendum veto’ at every turn in negotiations.   An actual referendum on future EU reform, even reform which would have been disproportionality advantageous to the UK, would have been very unlikely to succeed given the general eurosceptic feeling in the UK as exemplified in the Brexit referendum result. Future negotiations would therefore have involved even more protracted wrangling over EU reform than is usually the case, with increasingly less patience with the UK among other EU Member States. In the Brexit result, future EU reform has dodged a considerably large UK-shaped bullet allowing for better reform at the EU level at a time when it needs to be efficient and decisive in the face of the many issues it currently faces.
  1. The Brexit vote has put EU legitimacy back on the agenda (again!). It provides a useful time to reflect on the broader legitimacy of the EU, particularly from the viewpoint of citizen knowledge about, and engagement with, the EU. Vital lessons can be learned from the way in which the EU was presented as well as misrepresented in the Brexit campaign debates and the extent to which EU questions tend to be dominated by domestic political concerns. This should feed into analysis and reflection on the never-ending project that is the enhancement of the EU’s legitimacy. Furthermore, unlike the high-stakes, pressure-cooker atmosphere of the eurocrisis, the Brexit vote has been followed by an important ‘cooling down’ period (helped considerably by Cameron’s decision not to push the Art. 50 button on his resignation) which allows for more probing and searching analysis into these big questions and better solutions to be developed.

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The CJEU’s Headscarves cases: analysis of the contrasting AG opinions

Darryl HutcheonDarryl Hutcheon

Conflicts between the religious practices of workers and the ‘neutrality’ policies of their employers have repeatedly come before the European Court of Human Rights (“ECtHR”) and domestic courts in the UK. They now arise for the first time before the Court of Justice of the European Union (“CJEU”) in two cases: C-188/15 Bougnaoui v Micropole SA and C-157/15 Achbita v G4S Secure Solutions NV80. This note analyses the opinion of Advocate General Sharpston in Bougnaoui handed down on 13 July 2016; contrasts that opinion with the earlier opinion[1] of AG Kokott in Achbita; and considers what these decisions tell us about the future trajectory of EU (and domestic) discrimination law.

Facts in both cases

Ms Bougnaoui and Ms Achbita are Muslim women who were employed in customer-facing roles by private sector employers. Both wore headscarves but wore nothing which covered their faces. Ms Bougnaoui was told that her headscarf had ‘embarrassed’ the employees of a company client she had visited; she was dismissed when she refused to agree not to wear a headscarf on future visits to that client. Ms Achbita had worked for her employer for some time before she started to wear a headscarf; she was then dismissed on the basis that her new practice breached a strict company ‘neutrality’ policy.

AG Sharpston’s opinion in Bougnaoui

Several aspects of AG Sharpston’s opinion are worthy of comment.

First, she rejected the suggestion that EU law on religious discrimination ought precisely to reflect the ECtHR’s article 9 (freedom of religion) jurisprudence, in effect by allowing a human rights justification/proportionality defence to direct discrimination claims ([58] – [67]). AG Sharpston maintained that the Framework Directive 2000/78 (“the Directive”) set down a clear distinction: indirect discrimination can be defended by reference to proportionality, but direct discrimination admits of (much) narrower exceptions.[2] Her position stands in contrast to the view expressed by some senior judges in the UK that the lack of a general justification defence to direct discrimination is a “defect” in the law: see e.g. R (E) v Governing Body of JFS [2009] UKSC 15 at [9].

Second, AG Sharpston concluded that the decision to dismiss Ms Bougnaoui constituted direct, and not just indirect, discrimination ([83] – [89]). “Religion” for these purposes included manifestations of religion like wearing a headscarf. The judgment does not directly engage with the question of how courts should identify whether a particular act constitutes a “manifestation of religion”, but the case-law of the ECtHR on that subject will doubtlessly be persuasive. The recognition that religion is not just a status but an identity partly constituted by acts is intuitively attractive and compares favourably to the sometimes strained efforts of British judges to dissociate “religion” from acts which are obviously part and parcel of a person’s religion.[3] It leaves open the interesting question of whether EU law will permit employers to sanction employees whose religiously-motivated behaviour impacts negatively on other employees or on their work (as in the well-known “evangelising at work” cases). English courts have addressed this situation by distinguishing action taken because of religion/religious manifestations and action taken because of “the way in which (a worker) manifested or shared it”.[4] AG Sharpston’s opinion can probably be reconciled with that approach.

Third, AG Sharpston concluded that there was no basis to conclude that article 4(1) of the Directive (the genuine occupational requirement defence to direct discrimination claims) applied on the facts ([90] – [102]). It was decisive that Ms Bougnaoui remained perfectly able to perform her professional duties. Notably, AG Sharpston found it “hard to envisage” any application of the article 4(1) defence in religious discrimination claims, other than on health and safety grounds ([99]). She also gave a narrow reading to article 2(5) of the Directive (pursuant to which the Directive is subject to national measures which are necessary in pursuit of various public policy objectives), suggesting it could not be relied on by employers citing business reasons ([104] – [105]).

Fourth, AG Sharpston remarked on the application of the principles of indirect discrimination (in case the Court concluded that her characterisation of the claim as direct discrimination was mistaken). While an employer’s business reasons could constitute a legitimate aim, the question of proportionality was more complex ([134]). These kinds of issues could ordinarily be resolved by discussion between employer and employee; but ultimately, where an employer stood to lose out because of the prejudiced attitudes of its customers, “the business interest in generating maximum profit should… give way to the right of the individual employee to manifest his religious convictions” ([133]).

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Political Reductionism at its Best: Some Considerations on the EU Institutions’ Response after the UK Referendum

Giuseppe-MartinicoGiuseppe Martinico

This post first appeared on the Verfassungsblog; it is reproduced here with kind permission.

Colleagues have already commented upon the response of the EU institutions to the outcome of the referendum held on 23 June, stressing the rushed and populist attitude shown by the Commission and the EU Parliament, referring, for instance, to the exclusion of the UK from the “informal” meeting of the European Council held on 29 June and to the way in which Juncker made a joke of Nigel Farage, asking why he was in the European Parliament after the UK vote.

However, there is another episode which is very telling, about the respect shown by the “political class” towards Art. 50 of the TEU and, in general, other relevant norms to be taken into account independently from the activation of the exit procedure, like, for instance Art. 4.2 TEU demanding equal treatment of the Members States and respect of their national identity and constitutional structure.

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The EEA Agreement and the ‘Norway option’: integration without co-determination

Henrik Nordling Henrik Nordling[1]

The result of the UK’s EU referendum has thrown the EEA Agreement to the forefront as a potential template for the UK’s future relationship with the EU. The term ‘Norway option’, under its various guises, is steadily referenced to as a potential compromise. However, Norway’s relationship with the EU is relatively complex: Norway has adopted about ¾ of the EU legislation of that of an ‘ordinary’ EU Member State, but does not have any powers of determination in the EU legislative process. Norway benefits from the advantages of being part of the internal market, but does not get to decide on the rules which govern it – only adhere to them. Nonetheless, Norway is not bound by some of the EUs most hotly debated policy areas, such as agriculture, fisheries and home affairs.

An overview of Norway’s EU relationship

The UK and Norway share a common past when it comes to the EU. In 1960 Norway and the UK were part of the seven states that founded the EFTA as an alternative to what was then the European Economic Community (EEC). Then in 1962 Norway, along with the UK, Denmark and Ireland applied to join the EEC only to be met with a resound ‘non’ from Mr De Gaulle. Although the General’s veto was aimed squarely at the Anglo-Saxons across the channel, Norway suffered collateral damage. Still, the Norwegian government continued negotiations and that were completed in 1972. Parliament was overwhelmingly in favour of joining the EEC, but the question was put to a referendum – yes one of those – and the result was a quite clear ‘no’ which caused the prime minister to resign and Norway ended up with a trade agreement with the EEC instead. History has a tendency to repeat itself. Norway then had a second referendum on EU membership in 1994, but the answer was once again No. As an aside, it is worth noting that on a regional basis the Yes vote was the clear winner in Oslo and the surrounding regions whilst No blanketed the rest of the country in both referendums.

The EEA Agreement was entered into between five EFTA States (Sweden, Austria, Norway, Iceland and Finland) and the EU Member States in 1992 and entered into force in 1994. Lichtenstein became a full participant in the EEA Agreement in 1995, and in the same year Sweden, Finland and Austria left the EFTA and the EEA to join the EU. This leaves us with today’s three remaining EEA EFTA States: Norway, Iceland and Lichtenstein. Switzerland, the fourth remaining EFTA State, chose to enter into a bilateral agreement with the EU.

The EEA Agreement, at its most basic level, extends the EU’s internal market to the three EEA EFTA States, granting equal rights and obligations for citizens and economic operators in the EEA. The substantive scope of the EEA Agreement thus includes, at its core, the four freedoms (goods, services, persons and capital), competition rules and State aid. In order to ensure that the internal market functions well it was also imperative to include various ‘horizontal provisions’ related to the four freedoms (such as consumer protection and environmental regulation) that serve to strengthen and support the internal market. There are also provisions relating to cooperation outside the four freedoms. These are known as ‘flanking areas’ (such as research and development, culture and education) which further strengthen the cohesion of the EEA.

However, the EEA Agreement does not cover the following EU policies: Common Agriculture and Fisheries Policies, Customs Union, Common Trade Policy, Common Foreign and Security Policy, Justice and Home Affairs and Monetary Union. Although it should be noted that EU Member States have the ability to opt out of some of these policies to a certain extent.

An interesting reflection is that the relative proportion of EEA EFTA to EU Member States was 5:12 in 1992, which is considerably better than it is now at 3:28. Whether the same agreement would be reached under this constellation is not sure.

To put it simply the EEA EFTA States adopt some, but not all of the EUs rules and only within certain policy areas that are of ‘EEA Relevance’. But this divide is not as clear as it may seem when it comes to Norway, as cooperation can and does occur within policy fields that are outside the remit of the EEA Agreement. For instance, within the field of Justice and Home Affairs, Norway is a member of the Schengen area. Within the field of Foreign and Security Policy, Norway has entered into an agreement with the EU as regards EU civilian and military operations and has participated in EU-led operations in the Balkans and the Horn of Africa. Norway also participates in Europol, the European law enforcement organisation and has entered into an agreement based on the principles of the European Arrest Warrant. Norway has thus extended its cooperation with the EU to a number of areas where the two parties share common interests that are outside of the EEA Agreement.

Administration, legislation and the lack of co-determination

Administration of the EEA Agreement is shared between the EU and the EEA EFTA States. The European Commission carries out supervisory functions within the EU and the EFTA Surveillance Authority carries out the same role for the EEA EFTA States. This has led to the term ‘one agreement, two authorities’ which rings true insofar as it denotes the existence of separate supervisory organs. Nonetheless, both work together and must ensure uniform application of the EEA rules. The task of uniform interpretation within the EEA lies with the EFTA Court, which is responsible for interpreting the EEA Agreement with regard to the EEA EFTA States. Its role is similar to that fulfilled by the EU Court of Justice with regard to the EU Member States.

In terms of legislation, the EEA Agreement adopts the principle of ‘homogeneity’ which means that the same rules and conditions apply to all economic operators within the EEA. To this end, the EEA Agreement is continuously updated and amended to mirror the current EU internal market legislation. This importantly includes the incorporation of EU secondary legislation (notably Regulations, Directive and Decisions)

Under the EU legislative process all EU Member States will have several means to influence, shape and decide on the final text. But what about Norway – as an EEA EFTA State, would it be left without a ‘say’? Well, not exactly. Through a system known as ‘decision shaping’ Norway participates in expert groups and in the preparatory work of the Commission, providing comments on green papers that are sent to the European Parliament and Council. EEA EFTA States representatives also meet with their EU counterparts in the EEA Council to provide political oversight and guidance. An EEA Joint Parliamentary Committee provides a forum for MEPs and EEA EFTA national MPs to discuss matters of joint interest. These are all different forms of indirect influence, but a crucial detail of the EEA Agreement is that it does not give the EEA EFTA States any direct involvement in the EU legislative process or decisional powers. Essentially, although Norway may have a ‘say’ it does not have a vote.

EU legislation also does not have direct effect in Norway. Rather, EEA relevant legislation will have to be ‘incorporated’ into the EEA Agreement. The task of incorporation is performed by perhaps the most central of the ‘joint’ EU/EEA bodies: the EEA Joint Committee, which incorporates EU rules by way of decision (JCD).

The process of incorporation essentially involves a dialogue between the EEA EFTA States and EFTA institutions, on the one hand, and their EU counterparts and EU institutions on the other. Each ‘side’ of the EEA Agreement must give its consent to the contemplated JCD before it can be adopted by the EEA Joint Committee. Only once a piece of secondary legislation has been incorporated does it produce effects in Norway.

A distinguishing feature of the EEA Agreement is that the EEA EFTA States have not transferred legislative powers to the EEA Joint Committee. This implies that, on occasion, the EEA EFTA States may need to obtain the approval of their national parliament in order for the JCD to be binding. This is reflected in Article 103(1) EEA and known as a ‘constitutional requirement’ which allows for the direct involvement of the EEA EFTA States’ national parliament. Ultimately, the lack of transfer of legislative power provides the EEA EFTA States with something truly unique vis-à-vis their EU counterparts: a right of reservation. In effect, an EEA EFTA State can refuse to incorporate EU legislation that is EEA relevant. This is almost never used and the consequences are unclear. Norway has used this ability only once: in regards to the Third Postal Directive in 2011. This resulted in the EU threatening to exclude Norway from parts of the single market before the Directive was finally incorporated as part of the change of Government in Norway in 2013. Continue reading

Brexit, the Referendum and the UK Parliament: Some Questions about Sovereignty

Sionaidh Douglas-Scott

So, we have the result of the Referendum, and a majority of voters have voted to leave the EU. A mantra of Leave campaigners seems to have been the desire to ‘take back control’. There has been much talk of sovereignty, although less clarity on what it actually means. However, at its most basic, there are at least three notions of sovereignty that are relevant in the context of Brexit, and they are often confused. The first is parliamentary sovereignty, which is said to have particular resonance in the UK because, due to the vagaries of the uncodified UK Constitution, the Westminster Parliament has been recognised as a body with unlimited legislative power. Yet the parliamentary sovereignty of a representative democracy may seem to be at odds with popular sovereignty as exercised in a referendum. Popular sovereignty also has other implications, such as in Scotland, where an indigenous Scottish tradition claims that sovereignty resides in the Scottish people, in spite of the alternative claims of Diceyan parliamentary sovereignty. Thirdly, there is external sovereignty: whereby a country may be sovereign and recognised as independent by the international community. But states recognise that international agreements such NATO, or EU treaties, curb sovereignty in practice. However, these constraints are willingly accepted by states because of the benefits that pooling or ceding some sovereignty can bring – indeed it can even enhance sovereignty in another sense of a state’s power or ability to deal with certain issues.

These are three different concepts of sovereignty, but they have become very confused in the context of Brexit and the UK’s relations with the EU. Now we have the results of the Referendum vote, what are the implications of ‘taking back control’ for sovereignty? This blog examines three specific issues arising in the immediate aftermath of the Brexit vote which reveal the extent of confusion over sovereignty.

  1. The Referendum

The referendum result is not binding

The Referendum vote is an expression of popular sovereignty. But referenda have not been a highly significant feature of UK Constitutional law in the past and there is still uncertainty as to their place in our Constitution. Labour MP David Lammy has called on Parliament to ‘stop this madness’ and to vote in Parliament against the referendum decision to leave the EU. A large majority of MPs are in favour of remaining within the EU, so Parliament would not pass legislation to leave the EU unless it felt compelled to do so by popular demand expressed through a referendum. Could Parliament actually vote against Brexit? According to classic, Diceyan notions of sovereignty, if Parliament is actually sovereign it can legislate to do anything, including to ignore a non-binding referendum. The EU in-out Referendum is a creature of the European Union Referendum Act 2015. There is no requirement in the Act that the UK Government implement its results, nor does the statute set any time limit for implementing a vote to leave the EU. It is a pre-legislative, or consultative, referendum, enabling the electorate to express its opinion before any legislation is introduced. The 1975 referendum on the UK’s continued membership of the EEC was also an example of this type. In contrast, the legislation setting up the Alternative Vote (AV) referendum held in May 2011 (Parliamentary Voting System and Constituencies Act 2011)  would have introduced a new system of voting without further legislation, although this did not happen because there was a large majority against change.

So whether a referendum is legally binding depends on the structure of the legislation which enables it. Parliament decides that. The UK does not have a codified constitution with provisions requiring referendum results to be implemented, unlike, for example, Ireland, where the circumstances in which a binding referendum is held are set out in its Article 47 of its Constitution. Indeed, even those UK referenda that appear to dictate consequences, such as the AV referendum, are not completely binding, in the sense that Parliament (due to parliamentary sovereignty) could in any case repeal the legislation creating the obligation.

However, although there may be no legal obligation to abide by the result of the referendum that is not the same as saying there is no political commitment to do so, and MPs may feel a strong obligation to act on the results of the vote, especially if they fear reprisals from their electorate in the form of being voted out of office at a future election. So popular sovereignty and parliamentary sovereignty appear to be at odds. Which, if either, ought to predominate? Continue reading

The Quest for EU Reform after Brexit: Changes to the Role and Doctrines of the European Court of Justice

juropean-justiceProf. Peter Lindseth

“What if…?” These kinds of questions may now seem pointless in the aftermath of the victory of Leave in the EU Referendum. Instead we hear ‘What’s done is done’, ‘Leave means Leave’, ‘out is out’, etc., etc., etc.

But one question has always nagged at me ever since David Cameron brought his renegotiation deal back to the UK in February: What if it included a serious commitment to alter the role and doctrines of the European Court of Justice? Would that have tipped the balance toward the Remain side? Would we have been talking instead about a 52-48 victory for Remain? Would serious ECJ reform, both institutionally and doctrinally, have been enough to peel off the likes of Boris Johnson from the Leave camp, harnessing his energies for Remain and reform?

We will never know. But the question is still of interest, if for no other reason than the remaining Member States must now seriously consider a range of EU reforms in order to prevent further contagion of the Brexit virus. As former German Constitutional Court Judge Gertrude Lübbe-Wolff said in an interview on Verfassungsblog, ‘the shock over what has happened, and the fear of further disintegration, might produce an awakening effect. So I try to remain optimistic’. This post is in that spirit.

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The UK Referendum is a bad idea; voting to leave would make it worse

Erik Jones is Professor of European Studies and International Political Economy and Director of European and Eurasian Studies at the Johns Hopkins University School of Advanced International Studies (SAIS, www.sais-jhu.edu), and Senior Research Fellow at Nuffield College, Oxford.

This is an edited version of an article originally published on his personal website (www.erikjones.net), and is republished here with kind permission.

Synopsis

  • Argues that the Vote Leave campaign’s arguments based around boosting British “sovereignty” are seriously mistaken, and that the use of referendums actually usurps parliamentary sovereignty (in that it will effectively bind future parliaments).
  • Claims that the EU does not constrain British sovereignty, rather that British institutions exercise sovereignty to work within European constraints.
  • Suggests four ways in which EU cooperation has made UK Government action more effective: (1) the UK Government has considerable input into the shape and application of EU law, purported alternatives suggested by Leave campaigners to “EU laws” often just reflect domestic political disagreement and attempts to unpick Government decisions; (2) most market regulations are the result of competition/adoption of best practice across jurisdictions, including the EU – this wouldn’t change following Brexit, simply government action to promote British interests would likely be less effective; (3) any good British regulatory innovation is likely to be expensive for British companies unless the Government can find some way to win allies for its wider adoption; and (4) the best situation from a regulatory perspective is to have a large market for innovation and competition in regulation – policy-makers want the best regulations given current practice and they want to adapt to the best regulations that emerge in the future.

Two bad ideas

The EU referendum on 23 June is based on (at least) two bad ideas. The first is that the popular legitimacy of a referendum can restore the sovereignty of Parliament. The Vote Leave campaign believes they can take power from Brussels and give it back to Westminster. That is a fantasy. Parliament will be more constrained and less effective if the UK leaves. The second bad idea is that referendums are more democratic than Acts of Parliament (which is the kind of decision that brought the UK this far in its relationship with Europe). By giving the people the chance to speak their mind on a yes-or-no (in-or-out, remain-or-leave) question, we can discover what they really want. That is not how people work. Real people prefer trial and error. Real people also like to delegate responsibility for making complicated decisions. This matters because the two bad ideas combine to make the worst of all possible worlds. If the UK votes to “Leave”, voters will discover that they have made a terrible mistake only to learn that there is no easy way to fix it.

Referendums usurp parliamentary sovereignty

Let’s start from first principles: popular referendums do not protect parliamentary sovereignty; they usurp it. When David Cameron announced his intention to hold an in-or-out referendum, he made it clear that the goal was for the British people to have their say and finish the debate. What that means in principle is that future parliaments should not revisit the matter. The people will have spoken and so Parliament’s hands are tied. The fact that the people elect MPs does not trump the voice of the people themselves. The fact that many of ‘the people’ will soon pass onto the next life and so leave this constraint on future generations who haven’t yet learned to talk doesn’t matter either. As if to underscore this point, David Cameron tried to win concessions from Europe that would be similarly permanent. Britain’s opt-out from the European goal of an “ever closer union” is “irrevocable”, for example. Future parliaments should not revisit that issue either. This whole debate has made the scope for parliamentary action narrower and not wider. Current politicians have tricked the people into usurping the sovereignty of Westminster.

The situation is not worse under Europe. It is better. Nothing that has been agreed about Europe by past UK parliaments is irrevocably binding – or meant to be so. The same is true for every other country participating in the European project. If you needed any reassurance on that point, just look at how much attention the current referendum is getting elsewhere. Other European leaders know that the British government can take the UK out of the EU. So does the United States government, as President Barack Obama made clear during his recent visit. None of these political leaders thinks it would be a good idea for Great Britain to leave Europe, but they all respect that it is within the power of the UK Government to do so. The same is not true for an American state. Those states exercise sovereignty – and some, like Texas, flirt at times with secessionist rhetoric – but they are not sovereign in the same way that the UK is as an EU ‘member’ state.

The notion of ‘membership’ is important in that respect. Short of expulsion, membership is largely a self-enforcing activity. When the British legal system enforces European rules, they do so on the basis of British legal commitments made by Westminster and not as the agents of some higher power. There is no European enforcement mechanism that can override British institutions. And if British institutions choose to ignore European legal requirements there is little that the European Union can do about it. The EU could threaten to expel Britain in order to bend the UK Government to its will, but only the Government can decide whether and how to respond to that threat. If the recent example of Poland is any illustration, then expulsion – from the room and not even from the Union – is unlikely to happen.

My point is not that national governments can and should ignore their European commitments. Rather it is that commitment to Europe is an act of self-interest rather than the result of some kind of enforcement. In that sense, the threat of expulsion is not only unlikely but also unnecessary (although some observers of democratic backsliding in some of the newer Member States are likely to disagree with me on this point). Most governments accept the judgments of the European institutions. They may not like the specific decision, but they respect that some institution has to render judgment when there is disagreement over whether there are rules in a given situation, what the rules mean, and how they should be implemented. David Cameron conceded this point explicitly in his Bloomberg speech. The European Union does not constrain British sovereignty; British institutions exercise sovereignty to work within European constraints.

EU cooperation makes UK government action more effective

This self-restraint is rational insofar as participation in European institutions makes parliamentary activity more effective. No doubt many MPs will argue that is not the case. They will also complain that some enormous percentage of British laws are drafted in Brussels and not at Westminster. And they will highlight one or two key areas where they would do things differently if freed from European constraints. There is a complicated subterfuge in this line of argument that needs to be unpacked to be considered. Let me do that in four steps.

First, the real effect of the Leave campaign would be to overturn past parliamentary decisions. Successive British parliaments have delegated rule-making authority to European institutions in which they have also demanded representation. Successive British parliaments have also participated in a series of sweeping reforms to the procedures for how those European institutions make rules. And successive British parliaments have converted European rules into national legislation. At each step along the way, opponents of Europe have had the opportunity to protest both inside and outside the Houses of Parliament. Sometimes those opponents of Europe have won concessions and sometimes they have blocked change. Participation in the euro and the Schengen area are two examples. Sometimes, however, those opponents of Europe have either failed to influence the conversation or they have had little real reason to complain. Here we might put much of the single European market. So the difference between the world we live in today and a world without Europe boils down to those policy areas where opponents of Europe wanted to do something different and yet failed to sway a majority of Parliament. Now they want to reverse those defeats.

Second, many of those decisions would have come out similarly – at least in broad terms – even without European integration. Remember, both the Schengen Area and the euro are off the table. So the focus is on the Single Market. All markets have regulations and most market regulations are the result of competition across jurisdictions. Moreover, the UK Government is involved in a large number of international organisations that share ‘best practice’ for how markets should be regulated, how different regulations interact, and how much it costs to do business across different regulatory jurisdictions. This is the information that policymakers use to ‘modernise’ the rules that define the domestic marketplace. As the world becomes increasingly interconnected through market activity, that modernisation involves increasing amounts of information gathered from the experience of other countries and filtered through international forums like the European Union. The Leave campaign is quick to admit that practice will not change if the UK were to leave the EU. That is much the same as admitting that a lot of the actions of the British parliament would start outside of London even if the EU did not exist. The question is whether those actions would have been as effective in representing the British national interest.

Third, smaller markets have to accept the rules set by larger markets if they do not want to put their firms at a competitive disadvantage. Here you might think of weights and measures. There was a time when every market town had a town hall that provided examples of the standard weights and measures that applied for lawful transactions. That kind of local idiosyncrasy was one of the first victims of market integration. Every market town also had its own ‘time’ that pivoted around the sun’s apex at noon. That kind of idiosyncrasy has disappeared as well. Of course there are some holdouts. The United States still uses a form of imperial weights and measures and North Korea recently introduced its own time zone, setting the country’s clocks back by thirty minutes. Most of the rest of the world makes do with the metric system and time zones set at hourly increments and centred on Greenwich. If you dig into the details, moreover, you will see that a lot of market regulations and voluntary industrial standards show the same pattern of convergence. Moreover, the pattern is set by the largest markets and not necessarily the cleverest regulators or standard setters (unless some clever innovation is quickly adapted by a large market). This means that any good British regulatory innovation is likely to be expensive for British firms unless the British Government can find some way to win allies for its wider adoption. It also means that a lot of British regulation is going to be determined by the relative costs of doing business.

Fourth, the best situation from a regulatory perspective is to have a large market for innovation and competition and to use that large market to build a coherent regulatory framework to achieve two complementary objectives: policymakers want to adopt the best regulations given current practice and they want to adapt to the best regulations that emerge in the future. That challenge is bet met through international cooperation because almost no regulatory jurisdiction is big enough, innovative enough, and flexible enough to do everything on its own. Moreover, this is as true for the United States as it is for the European Union. That is why governments on both sides of the Atlantic pushed for a transatlantic trade and investment partnership. They knew that this kind of regulatory cooperation would be more challenging than a standard trade agreement. The current controversy over the agreement is less of a surprise than many pretend. But policymakers also saw that some kind of transatlantic trade and investment partnership is the only way to get what you want from market regulations in an increasingly integration global economy. The Leave campaign wants to move in exactly the opposition direction. That result will be to force the British parliament into accepting rules made elsewhere without any input from the UK or to abandon the goal of national competitiveness.

The decision we face

If you add this all together, the Leave campaign will constrain the sovereignty of Westminster, it will overturn regulatory decisions that Eurosceptics already fought in Parliament and lost, it will rob Parliament of influence, and it will threaten the competitiveness of British firms. By contrast, the Remain campaign will promote British interests by placing trust in elected representatives to work with Britain’s closest allies in order to project shared values across a global market. That is the choice Britons face and yet it is not a choice they should have to make.

Instead, they should vote to remain in the EU and to give responsibility for European policy to MPs and government. Then they should vote – not just once, but every five years – to hold those politicians to account for their actions. In other words, by choosing to remain, the British people should make a clear choice for representative democracy. This way Britons can not only preserve parliamentary sovereignty but they can also make sure that Parliament remains responsive to the needs of future generations. Most importantly, they can ensure that the British people can benefit from the best market regulations that the world has to offer (rather than forcing their politicians to invent everything on their own).

The choice is simple. Leave means anachronism, idiosyncrasy, and ineffectiveness; remain means accountability, sovereignty, and progress. Once you strip out all the bad ideas at the heart of the Leave campaign, it hardly looks like a choice at all.

Plus ça change: the legal implications of remaining within the EU

Claire Darwin - Matrix ChambersClaire Darwin, Matrix Chambers

[This article was written on 5th February 2016, and does not reflect any legal or political developments after that date].

Whilst much legal ink has been spilt on the legal implications of the UK leaving the EU (aka Brexit), remaining a member of the EU will have legal implications too. The EU referendum, currently expected to be held on 23 June 2016, will offer the UK electorate a choice between remaining within the EU on the basis of a “new settlement” hurriedly being negotiated between the UK and the 27 other EU member states, and leaving the EU forever.

Greater clarity on the settlement proposals was finally achieved on 2 February 2016, with the publication of the draft Decision of the Heads of State or Government, meeting within the European Council, concerning a new settlement for the UK within the EU (the draft Decision). Section E specifically states that the draft Decision will only take effect if the UK decides to remain a member of the EU.

The key proposals

The Draft Decision is, according to the FT, modelled on an agreement reached at a European Council meeting in Edinburgh in December 1992 whereby it was agreed that Denmark would be granted four significant exceptions from the Maastricht Treaty. That agreement was achieved by way of a binding accord signed by all Member States which the FT describes as having ‘acted like a promissory note from EU leaders’ or ‘a form of post-dated treaty change.’

Similarly, the draft Decision will not amend the EU Treaties and there are no details of any specific draft amendments to them. However, it does promise that certain matters, such as the agreement on a “multi-speed” EU, will be incorporated into the Treaties at the time of their next revision. The recital also states that the clarifications in the draft Decision will have to be taken into consideration as being an instrument for the interpretation of the Treaties. These promises and clarifications, which will be contained within a European Council decision signed by all 28 member states, will then be binding on those member states.

Treaty change is, of course, now impossible before 23 June 2016 (the likely Referendum date), since any such change would have to be ratified by national Parliaments and, in some cases, by referendums. It is unclear when the anticipated revision of the EU Treaties will happen in practice, and it may well not happen for some years.

Sovereignty and the new “multispeed” EU

The phrase “an ever closer union among the peoples of Europe”, which first appeared in the 1957 Treaty of Rome, has been restrictively interpreted in the draft Decision. The draft Decision clarifies that references in the Treaties and their preambles to ever closer union should not be interpreted as an equivalent to the objective of political integration, and that they do not offer a basis for extending the scope of any provision of the Treaties or of EU secondary legislation. Further, the phrase “should not be used either to support an extensive interpretation of the competences of the Union or of the powers of its institutions as set out in the Treaties”.

The recital recognises the existence of a “multispeed” EU, whereby different member states will have different paths of integration and those that want to deepen integration will move ahead whilst respecting the rights of other member states, such as the UK, who do not. This is further recognised in Section C, which records that the references to ever closer union in the Treaties are consistent with different member states adopting different paths of integration.

The draft Decision acknowledges that the UK does not agree that further integration is inevitable or desirable.

Competence and subsidiarity

The EU legal system is based on the principle of conferral of powers, whereby the EU is only permitted to act within the limits of the competences (or powers) that have been conferred on it by the member states (Article 5, Treaty on European Union (TEU)). The principle of subsidiarity (Article 5(3), TEU) was introduced by the Maastricht Treaty in order to prevent the EU from unduly encroaching on the role of national governments in areas of shared competence. The EU is only permitted to act if and in so far as the objectives of the proposed action cannot be sufficiently achieved by member states, but can be better achieved at EU level.

The draft Decision reiterates the importance of the principle of subsidiarity, and explains that its purpose is to ensure that decisions are taken as closely as possible to the citizen

In line with its emphasis on the accountability of EU institutions and the repatriation of competences, the draft Decision includes a mechanism which gives a national Parliament 12 weeks to object to draft EU legislation on the basis that it does not comply with the principle of subsidiarity; however, a significant percentage of national Parliaments will have to object for this “red card” to come into play.

Eurozone and non-euro discrimination

The UK and other EU member states outside of the Eurozone have apparently become increasingly concerned about fair treatment by the bloc of countries that have adopted the euro. The draft Decision requires countries within the Eurozone to respect the rights and competences of those member states that are outside it. It also introduces a new form of unlawful discrimination: anti-sterling discrimination! Member states will be prohibited from discriminating based on the official currency of the member state, and any discrimination will have to be justified.

Freedom of movement

The draft Decision will not impede the ability of EU citizens to move freely between member states; however, it does contain a number of measures which are intended to discourage freedom of movement within the EU by certain groups. Such measures are intended to address concerns about so-called “benefit tourism” and marriages of convenience between EU citizens and non-EU citizens. The draft Decision recognises that it is legitimate for member states to adopt measures avoiding or limiting flows of workers, provided that the flow is of such a scale that it has negative effects for both the member states of origin and the host member states.

The Draft Decision notes that the European Commission will submit proposals to amend secondary legislation (Regulation 883/2004 on the coordination of social security systems) so that child benefits can be linked to the cost of living where the child resides.

Further, the European Commission will submit proposals to amend Regulation 492/2011 on freedom of movement for workers within the Union. The latter will be amended to introduce an ‘emergency brake’, a mechanism which would allow a Member State to restrict access to its in-work benefits if an exceptional situation as regards the inflow of workers exists. It will be for the European Commission to determine whether such an exceptional situation exists.

Finally, the Draft Decision records that Member States are able to take action to address cases of contracting or maintaining marriages of convenience with third country nationals for the purpose of making use of free movement to regularise unlawful stay in a Member State.

Interestingly, the draft Decision does not contain any proposal to limit the definition of a worker (for the purposes of Article 45 of the Treaty on the Functioning of the EU and secondary legislation) to workers earning more than about £13,000 a year, a proposal which according to the FT is now said to be “off the table”. Nor does it make any mention of the proposal by the UK government that new EU migrants should be banned from qualifying for in-work benefits and social housing for four years after their arrival in the UK. Continue reading

Is the right to vote ‘governed’ by EU Law?

Dr Iyiola Solanke

Voting is a civil right, guaranteed by international instruments for the protection of human rights as well as in primary EU law. Article 10 TEU sets out that elections are central to the democratic life of the Union; Under Article 14 (3) TEU MEPs are to be elected in free and secret ballots for a term of 5 years; under Article 20 TEU, EU citizens enjoy the right to vote and stand in EP elections. This is repeated in Article 39 CFR. In addition, Article 3 of Protocol 1 of the ECHR, protects the ‘free expression of the opinion of the people in the choice of the legislature’.  Given this, is the deprivation of the right to vote under national law compatible with EU law?

The Facts

Mr Delvigne was sentenced in 1988 to 12 years in prison for murder – under the French Criminal Code of 1810 this sentence also attracted loss of the right to vote. In 1992, the Code was updated to enable anybody subjected to deprivation of civil rights to apply for their reinstatement, either wholly or in part. According to French electoral law, any person so deprived of the right to vote was not to be registered on the electoral roll for the period set out in the judgment. Mr Delvigne lost his right to vote not only in national but also in European Parliament elections. He argued that this was a breach of the principle of equality set out in Article 39 CFR – French law stripped him of his rights as a Union citizen. Being unsure as to the answer, the national court referred two questions to the CJ.

A preliminary question in this request for a preliminary ruling was whether the CJ had jurisdiction under Article 51 (1) CFR – was French electoral law implementing EU law? France, Spain and the UK argued that there was no connection thus no CJ jurisdiction. However, Germany, the EP and the Commission disagreed: by adopting national provisions on the right to vote in elections to the EP, France was implementing its obligation under Article 14 (3) TEU. The AG and the Grand Chamber agreed – by ‘performing a specific obligation derived from EU law’ [AG,31] to ‘ensure that the election of Members of the European Parliament is by direct universal suffrage and free and secret’ [CJ, 32] France was implementing Union law.

However, the Grand Chamber narrowed its enquiry to Article 39(2) – it held that as Delvigne was a French citizen seeking the right to vote in France, Article 39(1) CFR –  an expression in the Charter of Article 20(2)(b) TFEU – did not apply. Yet as an expression of Article 14 (3) TEU, the CJ was

‘… clear that the deprivation of the right to vote to which Mr Delvigne is subject …represents a limitation of the exercise of the right guaranteed in Article 39(2) of the Charter’ [45]

Although Mr Delvigne won in relation to this principle, he lost upon its application – the Grand Chamber found that the limitation arising from the French Criminal Code respected the ‘essence’ of the right to vote in the Charter, was proportionate and necessary to meet genuine objectives of general interest. The national rule therefore was not precluded by Article 39(2) of the CFR. Continue reading

Si.mobil v European Commission (T-201/11) – ‎Undermining the Effectiveness of EU Competition law?

si.mobilPablo Figueroa and Catherine Derenne[1]

“”That’s very important,” the King said, turning to the jury.  They were just beginning to write this down on their slates, when the White Rabbit interrupted:  “Unimportant, your Majesty means, of course,” he said in a very respectful tone, but frowning and making faces at him as he spoke.

“Unimportant, of course, I meant,” the King hastily said, and went on himself in an undertone, “important—unimportant—unimportant—important—” as if he were trying which word sounded best.”

(L. Carroll:  “Alice in Wonderland”)

According to the Automec case-law (paras. 73 ff), the European Commission has discretion as to how it deals with complaints.  That said, the Court of Justice of the European Union has clearly stated that the Commission’s discretion when rejecting complaints is not “unlimited” (Ufex and Others v. Commission, para. 89).  Regulation 1/2003 awarded to the Commission two additional grounds under which to dismiss cases.  Pursuant to Article 13, the Commission can dispose of complaints where “one authority is dealing with the case” (13(1)) or where a complaint “has already been dealt with by another competition authority” (13(2)).

In late 2014, the General Court has issued a Ruling in the context of the Si.mobil case interpreting the first of these provisions in a way which further enhances the Commission’s “not unlimited” discretion when rejecting complaints (the “Si.mobil Ruling”).  More specifically, the General Court endorsed the Commission’s deference to the National Competition Authorities of the EU Member States (the “NCA”s).  In our view, in doing so, the General Court allowed the Commission to abdicate from its constitutional Role of Guardian of the Treaties and to disregard the effectiveness of the Competition provisions in those Treaties.

Moreover, the Si.mobil Ruling was issued in the context of a broader series of Rulings which further enhance the Commission’s discretion when rejecting complaints (See Alexiadis, P. and Figueroa, P., “Commission Discretion Unchained”, Competition Law Insight, 17 March 2015).  Indeed, the Si.mobil Ruling becomes particularly surprising in the light of a series of unambiguous and repeated statements of the Commission in relation to the institutional failures of certain NCAs.  Note for example the Speech of former Vice-President Almunia in May 2014 where he expressed concerns in relation to the lack of resources and independence of certain NCAs.

The Si.mobil Ruling hinged on the interpretation of Article 13(1) Regulation 1/2003, according to which, “[t]he Commission may […] reject a complaint on the ground that a competition authority of a Member State is dealing with the case”.

On 14 August 2009, Si.mobil telekomunikacijske storitve d.d. filed a complaint before the Commission against Telekom Slovenije d.d. (“TS”), the incumbent mobile operator in Slovenia, for an alleged abuse of TS’ dominant position consisting, inter alia, in margin squeezes and predatory pricing.  On 24 January 2011, the Commission rejected the complaint mainly on the grounds that the Slovenian NCA (the “UVK”) was already dealing with the case.

The Commission’s case rested on the proposition that Article 13 of Regulation 1/2003 should be interpreted in such a manner that the mere fact that an NCA claims to be dealing with a case is sufficient, in and of itself, to enable the Commission not to take the case (Commission Decision Si.mobil / Mobitel, Section 2(1)).  Under the Commission’s interpretation, even in scenarios with an effect on trade between Member States, and thereby meriting the application of the EU Competition rules, as long as such NCA claims to deal with, for example a margin squeeze case, which tends to be resource-intensive to investigate, the Commission is obliged to relinquish jurisdiction.

However, such a proposition involves a dramatic re-assessment of the Commission’s role as regards the exercise of its jurisdiction in relation to subject-matter which falls within the exclusive competence of the Union, and thus has far-reaching implications for the Community’s legal order.  By de facto completely disregarding the general legal principle of “effectiveness” from its decision to assert jurisdiction to apply European law, the Commission undermines the very foundations of the Treaties whose application is entrusted to ensure pursuant to Article 17 of the Treaty on the European Union (the “TEU”). Continue reading