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Constitutional law


There are three sources of European Union law: primary law, secondary law and supplementary law. The main sources of primary law are the Treaties establishing the European Union (TEU). Secondary sources are legal instruments based on the Treaties as well as unilateral secondary law and conventions and agreements. Supplementary sources are laws which are not provided for by the TEU, including case law by the Court of Justice of the European Union, international law and general principles of European Union law.[1]

Treaties


The primary law of the EU consists mainly of the founding treaties of the European Union, also known as the TEU and TFEU or Treaties of the European Union. The Treaties contain formal and substantive provisions, which frame policies of the European Union institutions and determine the division of competences between the European Union and the 27 member states. The TEU establish that European Union law applies to the metropolitan territories of the member states, as well as certain islands and overseas territories, including Madeira, the Canaries and the French overseas departments. European Union law also applies in territories where a member state is responsible for external relations, for example Gibraltar and the Åland islands. The TEU allows the European Council to make specific provisions for regions, as for example done for customs matters in Gibraltar and Saint-Pierre-et-Miquelon. The TEU specifically excludes certain regions, for example the Faroe Islands, from the jurisdiction of European Union law. Treaties apply as soon as they enter into force, unless stated otherwise, and are generally concluded for an unlimited period. The Treaty of Rome provides that commitments entered into by the member states between themselves before the treaty was signed no longer apply. Since the Treaty of Rome has been signed member states are regarded subject to the general obligation of the principle of cooperation, as stated in the TEU, whereby member states pledge to not take measure which could jeopardise the attainment of the TEU objectives. The Court of Justice of the European Union can interpret the Treaties, but it cannot rule on their validity which is subject to international law. Individuals may rely on primary law in the Court of Justice of the European Union if the Treaty provisions have a direct effect and they are sufficiently clear, precise and unconditional.[2]

The principle Treaties that form the European Union began with common rules for coal and steel, and then atomic energy, but more complete and formal institutions were established through the Treaties of Rome 1957 and the Maastricht Treaty 1992. Minor amendments were made during the 1960s and 1970s.[3] Major amending treaties were signed to complete the development of a single, internal market in the Single European Act 1986, to further the development of a more social Europe in the Treaty of Amsterdam 1997, and to make minor amendments to the relative power of member states in the EU institutions in the Treaty of Nice 2001 and the Treaty of Lisbon 2007. Since its establishment, more member states have joined through a series of accession treaties, from the UK, Ireland, Denmark and Norway in 1972 (though Norway did not end up joining), Greece in 1979, Spain and Portugal 1985, Austria, Finland, Norway and Sweden in 1994 (though again Norway failed to join, because of lack of support in the referendum), the Czech Republic, Cyprus, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia in 2004, and Romania and Bulgaria in 2007. Greenland signed a Treaty in 1985 giving it a special status. Norway has remained the only Scandinavian power not to have joined the European Union which can be credited entirely to the Norwegian people.


Legislatures


The legislature of the European Union is principally composed of the European Parliament and the Council of the European Union. European Union treaties allow for the adoption of legislation and other legal acts so as to allow the EU to pursue the objective set out in the treaties. These are secondary European Union law. The treaties have not established any single body as a legislature. Instead legislative power is spread out among the Institutions of the European Union, although the principal actors are the Council of the European Union (or Council of Ministers), the European Parliament and the European Commission. The relative power of a particular institution in the legislative process depends on the legislative procedure used, which in turn depends on the policy area to which the proposed legislation is concerned. In some areas, they participate equally in the making of EU law, in others the system is dominated by the Council. Which areas are subject to which procedure is laid down in the treaties of the European Union.

The Commission, Council and Parliament can all create secondary law, which includes unilateral acts and agreements by the Legislature of the European Union. Unilateral acts can be done under Article 288 of the TFEU, including regulations, directives, decisions, opinions and recommendations. Unilateral acts not falling under Article 288 TFEU are atypical acts such as communications and recommendations, and white and green papers. Agreements can include international agreements, signed by the European Union, agreements between Member States; and inter-institutional agreements, for example between European Union institutions.[2]

Directives, regulations, decisions, recommendations and opinions constitute European Union legislation, which must have a legal basis in specific Treaty articles, or primary European law. Directives set (sometimes quite specific) objectives but leave the implementation to the EU's member states. Regulations are directly applicable to member states and take effect without the need for implementing measures.

European Court of Justice


The Court of Justice of the European Union is established through article 19 of the Maastricht Treaty and includes the Court of Justice, the General Court and specialised courts. Its duty is to “ensure that in the interpretation and application of the Treaties the law is observed”. The Court of Justice consists of one judge from each European Union member state, and the General Court includes at least one judge from each member state. Judges are appointed for a renewable six year term. It is the role of the Court of Justice to rule, in accordance with the Treaties, on cases brought by a member state, a European Union institution or a legal person. The Court of Justice can also issue preliminary rulings, at the request of a member state’s courts or tribunals, on the interpretation of European Union law or the validity of acts by European Union institutions. The Court of Justice can rule in other cases if they are provided for in the Treaties.[4]

Supplementary sources of EU law are unmodified sources, including Court of Justice of the European Union case law, international law and the general principles of law. Supplementary sources are generally of judicial origin and are used by the Court of Justice of the European Union in cases where the primary and/or secondary legislation leave gaps or do not settle the issue. Since the 1970s fundamental rights, recognised as general principles of European Union law, have become part of primary legislation in European Union law. The European Union and its member states must abide by international law, including its treaties and customary law, and has particularly influenced the development of general principles of European Union law. However, the Court of Justice of the European Union can excluded certain principles of international law that it considers incompatible with the structure of the European Union, such as the principle of reciprocity in the fulfilment of state obligations.[5]

European Union competition law

European Union competition law arose out of the desire to ensure that the efforts of government could not be distorted by corporations abusing their market power. Hence under the treaties are provisions to ensure that free competition prevails, rather than cartels and monopolies sharing out markets and fixing prices. Competition law in the European Union is largely similar and inspired by United States antitrust. Four main policy areas include:


  • Cartels, or control of collusion and other anti-competitive practices that affect the EU (or, since 1994, the European Economic Area). This is covered under Articles 101 of the Treaty on the Functioning of the European Union (TFEU).

  • Monopolies, or preventing the abuse of firms' dominant market positions. This is governed by Article 102 TFEU. This article also gives rise to the Commission's authority under the next area,

  • Mergers, control of proposed mergers, acquisitions and joint ventures involving companies that have a certain, defined amount of turnover in the EU/EEA. This is governed by the Council Regulation 139/2004 EC (the Merger Regulation).[1]

  • State aid, control of direct and indirect aid given by Member States of the European Union to companies. Covered under Article 107 of the Treaty on the Functioning of the European Union.(TFEU)

This last point is a unique characteristic of the EU competition law regime. As the EU is made up of independent member states, both competition policy and the creation of the European single market could be rendered ineffective were member states free to support national companies as they saw fit. Primary authority for applying EU competition law rests with European Commission and its Directorate General for Competition, although state aids in some sectors, such as transport, are handled by other Directorates General. On 1 May 2004 a decentralised regime for antitrust came into force to increase application of EU competition law by national competition authorities and national courts.

State aid


Article 107 TFEU, similar to Article 101 TFEU, lays down a general rule that the state may not aid or subsidise private parties in distortion of free competition, but has the power to approve exceptions for specific projects addressing natural disasters or regional development.

The general definition of State Aid is set out in Article 107(1) of the TFEU.[45]

Measures which fall within the definition of State Aid are unlawful unless provided under an exemption or notified.[46]

For there to be State Aid under Article 107(1) of the TFEU each of the following must be present:

There is the transfer of Member State resources;

Which creates a selective advantage for one or more business undertakings;

That has the potential to distort trade between in the relevant business market; and

Affects trade between the Member States.

Where all of these criteria are met, State Aid is present and the support shall be unlawful unless provided under a European Commission exemption [47]

The European Commission applies a number of exemptions which enable aid to be lawful.[48] The European Commission will also approve State Aid cases under the notification procedure.[49]

State Aid law is an important issue for all public sector organisations and recipients of public sector support in the European Union [50] because unlawful aid can be clawed back with compound interest.

There is some scepticism about the effectiveness of competition law in achieving economic progress and its interference with the provision of public services. France's president Nicolas Sarkozy has called for the reference in the preamble to the Treaty of the European Union to the goal of "free and undistorted competition" to be removed.[51] Though competition law itself would have remained unchanged, other goals of the preamble—which include "full employment" and "social progress"—carry the perception of greater specificity, and as being ends in themselves, while "free competition" is merely a means.

Directive (European Union)

directive is a legislative act of the European Union,[1] which requires member states to achieve a particular result without dictating the means of achieving that result. It can be distinguished from regulations which are self-executing and do not require any implementing measures. Directives normally leave member states with a certain amount of leeway as to the exact rules to be adopted. Directives can be adopted by means of a variety of legislative procedures depending on their subject matter.




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