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rule of law and politics November 11, 2014

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THe EU’s Court of Justice held in Elisabeta Dano, Florin Dano v Jobcenter Leipzig (Case C-333/13) that EU rules on social security schemes do not prohibit Member States from excluding

nationals of other Member States… from entitlement to certain ‘special non-contributory cash benefits’ … although those benefits are granted to nationals of the host Member State who are in the same situation, in so far as those nationals of other Member States do not have a right of residence under Directive 2004/38 in the host Member State.

Ms Dano, a Romanian national, and her son, had been living in Leipzig with Ms Dano’s sister. She challenged a denial of non-contributory benefits. The Court noted the general principle of non-discrimination but that a particular derogation in the relevant EU rules:

it must be pointed out that, whilst Article 24(1) of Directive 2004/38 and Article 4 of Regulation No 883/2004 reiterate the prohibition of discrimination on grounds of nationality, Article 24(2) of that directive contains a derogation from the principle of non-discrimination.
Under Article 24(2) of Directive 2004/38, the host Member State is not obliged to confer entitlement to social assistance during the first three months of residence or, where appropriate, the period of seeking employment, referred to in Article 14(4)(b) of the directive, that extends beyond that first period, nor is it obliged, prior to acquisition of the right of permanent residence, to grant maintenance aid for studies to persons other than workers, self-employed persons, persons who retain such status and members of their families.
It is apparent from the documents before the Court that Ms Dano has been residing in Germany for more than three months, that she is not seeking employment and that she did not enter Germany in order to work. She therefore does not fall within the scope ratione personae of Article 24(2) of Directive 2004/38.

Ms Dano had been in Germany for more than three months but less than five years. In these circumstances the Court said:

To accept that persons who do not have a right of residence under Directive 2004/38 may claim entitlement to social benefits under the same conditions as those applicable to nationals of the host Member State would run counter to an objective of the directive, set out in recital 10 in its preamble, namely preventing Union citizens who are nationals of other Member States from becoming an unreasonable burden on the social assistance system of the host Member State…. the applicants do not have sufficient resources and thus cannot claim a right of residence in the host Member State under Directive 2004/38. Therefore…they cannot invoke the principle of non-discrimination in Article 24(1) of the directive.

In the UK, where migration within the EU is a hot topic, Cameron said he would be looking closely at the judgment to see what he could do with it. The sort of careful parsing of the rules illustrated by the judgment isn’t inevitably what we see from the Court of Justice, but in an environment where concerns about immigration threaten the stability of the EU it isn’t surprising to see a careful rather than an ambitious approach to interpretation of the requirements of EU law.

court of justice distinguishes kükükdeveci January 15, 2014

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In Association de médiation sociale v Union locale des syndicats CGT, the Court of Justice of the EU (Grand Chamber) has held that Article 27 of the EU’s Charter of Fundamental Rights cannot be invoked in a dispute between individuals in order to disapply a provision of national law implementing Directive 2002/14/EC which is incompatible with EU law.

The Directive established a general framework for informing and consulting employees (“employee is defined as “any person who, in the Member State concerned, is protected as an employee under national employment law and in accordance with national practice.”) Article 3(1) of the Directive limited the application of the Directive as follows:

This Directive shall apply, according to the choice made by Member States, to: (a) undertakings employing at least 50 employees in any one Member State, or (b) establishments employing at least 20 employees in any one Member State. Member States shall determine the method for calculating the thresholds of employees employed.

Article L. 1111-3 of the Code du Travail establishes rules for calculating the relevant number of employees for the purposes of the Directive. A dispute arose as to whether the Association de médiation sociale (AMS) was subject to the Directive’s requirements. The Court of Justice held that the French rules were incompatible with the Directive:

An interpretation of Directive 2002/14 according to which Article 3(1) thereof allows the Member States to exclude from the calculation of the staff numbers of the undertaking a specific category of workers on grounds such as those put forward by the French Government in the case in the main proceedings is incompatible with Article 11 of that directive, which requires Member States to take all necessary steps enabling them to guarantee the results imposed by Directive 2002/14, in that it implies that the States would be allowed to evade that obligation to reach a clear and precise result imposed by European Union law … it must therefore be concluded that Article 3(1) of Directive 2002/14 must be interpreted as precluding a national provision, such as Article L. 1111-3 of the Labour Code, under which workers with assisted contracts are excluded from the calculation of staff numbers in the undertaking when determining the legal thresholds for setting up bodies representing staff.

Article 3(1) of the Directive was capable of producing direct effects, but not between private parties (which AMS is, as “an association governed by private law, even if it has a social objective”). The Court then considered whether Kükükdeveci (where a national court was instructed to apply the general principle of non-discrimination on grounds of age, as given expression in a directive, disapplying contrary provisions of national law if necessary) might help. It didn’t. Art 27 of the Charter provides:

Workers or their representatives must, at the appropriate levels, be guaranteed information and consultation in good time in the cases and under the conditions provided for by Union law and national laws and practices

The Court said:

the facts of the case may be distinguished from those which gave rise to Kücükdeveci in so far as the principle of non-discrimination on grounds of age at issue in that case, laid down in Article 21(1) of the Charter, is sufficient in itself to confer on individuals an individual right which they may invoke as such.

The Court suggests that a damages remedy might be available in these circumstances – the usual next step, although I don’t know how useful it would in fact be in such a case. And there isn’t much in the judgment to allow us to know which general principles will merit Kükükdeveci treatment and which will not.

eu citizen participation and the european ombudsman April 19, 2013

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On April 23 the European Ombudsman is organizing an event (focusing on solving the economic crisis and building a clean and healthy Europe) at the European Parliament:

to help focus on European citizens and how they can concretely contribute to shaping the European Union, either by using the European Citizens’ Initiative (ECI), by turning to the European Ombudsman, or by mobilising large groups of citizens to carry out grassroots initiatives.

The event will be streamed live.

never-closer union? January 23, 2013

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Finally, that speech. From a man who heads up a government without a real electoral mandate, supported by MPs from another party who have ignored their own campaign promises, a vow to re-negotiate the UK’s relationship with the EU and ask UK voters what they think:

At some stage in the next few years the EU will need to agree on Treaty change to make the changes needed for the long term future of the Euro and to entrench the diverse, competitive, democratically accountable Europe that we seek.
I believe the best way to do this will be in a new Treaty so I add my voice to those who are already calling for this.
My strong preference is to enact these changes for the entire EU, not just for Britain.
But if there is no appetite for a new Treaty for us all then of course Britain should be ready to address the changes we need in a negotiation with our European partners.
The next Conservative Manifesto in 2015 will ask for a mandate from the British people for a Conservative Government to negotiate a new settlement with our European partners in the next Parliament.
It will be a relationship with the Single Market at its heart.
And when we have negotiated that new settlement, we will give the British people a referendum with a very simple in or out choice. To stay in the EU on these new terms; or come out altogether.
It will be an in-out referendum.
Legislation will be drafted before the next election. And if a Conservative Government is elected we will introduce the enabling legislation immediately and pass it by the end of that year. And we will complete this negotiation and hold this referendum within the first half of the next parliament.
It is time for the British people to have their say. It is time to settle this European question in British politics.

There’s a lot in the speech about the problems of having rules set in Brussels (as if the UK didn’t agree to the EU’s procedures for adopting new rules and didn’t participate in those procedures) and an invocation of the idea that “national parliaments ….are, and will remain, the true source of real democratic legitimacy and accountability in the EU.” Lots of tub-thumping rhetoric here without a secure basis in reality. And perhaps much more damaging to the UK in Europe than the handbag.

uk parliament discussing uk opt-out re crime January 9, 2013

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Martin Howe QC is discussing EU law today with two House of Lords EU sub-committees (video is here). Some of his examples of EU over-reaching are ridiculously aged. For example, he cited Defrenne v Sabena, a 1976 decision of the Court of Justice. Surely the time for protesting that decision is long past? The written evidence (much of which apparently addresses the benefits of UK involvement in EU policing and crime policy) is to be available tomorrow.

2013: european year of citizens January 2, 2013

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The European Year of Citizens has its own website. Georgios Papastamkos, Vice President of the European Parliament said:

EU is lacking a truly European public sphere. EU citizens should become the centre of the public debate of Europe’s future. It is high time the EU came closer to its citizens, firstly to listen and then to explain; explain that for more than half a century Europe has been a space of peace and friendship, rights and opportunities, mobility and exchanges, progress and prosperity, education and culture.

gender and economic policy October 26, 2012

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MEPs rejected Yves Mersch as a candidate for the ECB Executive Board on the basis that insufficient attention is being paid to the issue of gender (the decision is here). If Mersch is appointed to the Executive Board it will likely be all male at least until 2018.

Press reports suggest that the Parliament’s emphasis on the need for gender diversity at the ECB is a distraction from the serious issues of addressing the crisis, and make the EU look less credible. But this downplaying of the issue seems to me to be emblematic of the problem. Not working to take advantage of the talent of women as well as of men is short-sighted.

The World Economic Forum’s Gender Gap Report for 2012 which examines the gender gap in countries around the world states:

The correlation among competitiveness, income and development and gender gaps is evident… While correlation does not prove causality, it is consistent with the theory and mounting evidence that empowering women means a more efficient use of a nation’s human talent endowment and that reducing gender inequality enhances productivity and economic growth. Over time, therefore, a nation’s competitiveness depends, among other things, on whether and how it educates and utilizes its female talent.

cameron on the eu summit October 24, 2012

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From a statement to the UK Parliament on October 22:

Britain is not in the eurozone and we will not be joining the eurozone, but it is in our national interest for the uncertainty surrounding the eurozone to end. I have argued for some time that a working eurozone needs a working banking union. It is one of the features that a successful single currency needs. Obviously you do not need a banking union because you have a single market; you need it because you have a single currency—so Britain should not, and will not, be part of that banking union.
Britain’s banks will be supervised by the Bank of England, not by the European Central Bank, and British taxpayers will not be guaranteeing or rescuing eurozone banks, but we do need eurozone members to get on with forming a banking union. At the Council, I joined those who were arguing for progress to be made on the plan that had been announced in June. To put it simply, I believe that it is not enough to have a banking union that is stripped of the very elements—such as mutualised deposit guarantees, a common fiscal backstop and a framework for rescuing banks—that are needed to break the dangerous link in the eurozone between sovereign debt problems and the stability of eurozone banks. But because not all countries outside the eurozone—like Britain—will want to join such a banking union, it is also essential that the unity and integrity of the single market is fully respected. The organisation that currently ensures a level playing field for banking within the single market is the European Banking Authority. We need to make sure that it will continue to function properly, ensuring fair and effective decision making. This, again, is specifically recognised in the conclusions. More broadly, as eurozone countries take steps to deepen their economic and monetary union—as they will—it is important that we secure, as I did, an explicit commitment in the conclusions that the final report and road map in December will include “concrete proposals” to ensure that the integrity of the single market is respected.

In response to questions he said:

We want the eurozone banking to go ahead, but there are dangers, because if the ECB members voted en bloc in the European Banking Authority, they would automatically have qualified majority voting—that is the problem. That is why the conclusions of the summit include these words:
“An acceptable and balanced solution is needed regarding changes to voting modalities and decisions under the European Banking Authority…Regulation.”
That is very important conclusions language that we fought quite a battle to secure. My point is that I do not want to veto the banking union, but unless this problem is properly sorted—and Britain has a totally legitimate argument about why it needs to be sorted—we cannot allow it to go ahead.

what single market (commission proposes enhanced co-operation with respect to financial transaction tax)? October 23, 2012

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Despite industry opposition, the Commission has published a proposal for a Council Decision approving enhanced co-operation with respect to a financial transaction tax after it became clear that the EU as a whole would not adopt such a tax because of “fundamental and un-bridgeable differences amongst Member States” which meant that unanimous agreement (required for tax measures) could not be achieved. But the document recognises that the original proposal for an EU ftt was based on the idea that different approaches in different Member States would distort competition and fragment the market. Harmonized rules for a subset of EU states also risk distorting competition and fragmenting the market. The Commission says:

Risks of fragmentation of the internal market and of a distortion of competition will first of all be reduced and/or avoided within the scope of the FTT jurisdiction covered by enhanced cooperation. Compared to a situation without such cooperation, the functioning of the internal market, at the level of the 27 Member States, would be improved rather than undermined.

Enhanced co-operation must not “undermine the internal market or economic, social and territorial cohesion. It shall not constitute a barrier to or discrimination in trade between Member States, nor shall it distort competition between them” and Art 329 TFEU states that “[a]uthorisation to proceed with enhanced cooperation shall be granted by a decision of the Council acting unanimously.” So it isn’t obvious that this will happen. But alongside the uncertainties about the banking union/SSM the proposal raises new questions about whether the EU will in fact have a single market in financial services any time soon.

eu summit and banking union October 19, 2012

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The final Presidency conclusions differed a bit from the draft. For example, the roadmap the European Council wants in December is now to include “concrete proposals” to achieve the following:

The process towards deeper economic and monetary union should build on the EU’s institutional and legal framework and be characterised by openness and transparency towards Member States which do not use the single currency and by respect for the integrity of the Single Market.

The draft had the objective but not the concrete proposals idea. There’s also some redrafting of the timetable- the SSM legislative framework is to be agreed by the new year and operational implementation will follow. The language about the accountability of the ECB changed. Now:

There is a need to ensure a clear separation between ECB monetary policy and supervision functions, and the equitable treatment and representation of both euro and non-euro area Member States participating in the SSM. Accountability takes place at the level at which decisions are taken and implemented. The SSM will be based on the highest standards for bank supervision and the ECB will be able, in a differentiated way, to carry out direct supervision. It will also be in a position to use the effective powers conferred on it by the legislation as soon as it comes into force. In addition, it is of paramount importance to establish a single rulebook underpinning the centralised supervision.

This is still not a model of clarity. And they kick the can down the road on voting in the EBA:

It is important to ensure a level playing field between those Member States which take part in the SSM and those which do not, in full respect of the integrity of the single market in financial services. An acceptable and balanced solution is needed regarding changes to voting modalities and decisions under the European Banking Authority (EBA) Regulation, taking account of possible evolutions in the participation in the SSM, that ensures nondiscriminatory and effective decision-making within the Single Market. On this basis, the EBA should retain its existing powers and responsibilities.

The conclusions state that within the euro area “Strong mechanisms for democratic legitimacy and accountability are necessary”. But whereas the draft conclusions suggested that the EU should explore the idea of enhancing the role of the social partners, this language does not appear in the final conclusions.

Update: Although there’s not much sign of agreement on critical details, some groups have reacted positively to the summit. For example, the EESC:

The EESC is pleased to learn that, even though belated, a European banking union will come to life. It is crucial that the Member State governments have the breadth of vision to create more Europe, handing over some powers and ensuring that they can be applied, in order to achieve effective European governance that is socially useful and economically efficient. New and stricter rules will offer security to people and markets.