Tag: Meroni

Sword beach is in La Monnaie: King’s College London Centre of European Law celebrates its 40th anniversary with a high profile event in Brussels

Jose Manuel Panero Rivas

MA in Economics for Competition Law, King’s College London, LL.M in European Law, College of Europe, Bruges

 

 

Almost 70 years after the Normandy landings, the Centre of European Law of King’s College London arrived to the heart of Brussels to celebrate its 40th anniversary with the community of distance learners’ alumni. There, some of the most prominent London-based professors of the Centre were celebrating the success of the institution with their Brussels-based colleagues and former students. In attendance were Professors Biondi, Turk, Whish, Flynn, Jones, Wils, Buendía, Stefan amongst many others.

 

After a short introductory speech by Prof. Biondi (director of the CEL), the event was arranged in such a way that two different sessions ran simultaneously, one on EU Law (which was, in turn, divided into two sub-sessions) and another one on EU Competition Law. As the author is not ubiquitous, the EU Competition Law session, bearing the title “The increased use of settlements and commitments in antitrust enforcement: a success or a problem?” is not reviewed or summarised (although sources reported it was excellent, as it is the rule when one thinks of a session lectured by Profs. Whish and Wils). The lectures were followed by a great dinner not summarised here.

 

Free movement of capital with Prof. Flynn

There were two topics within the EU Law session. The first was “Recent developments on free movement of capital in relation to fiscal sovereignty” and was conducted by Prof. Flynn. This consisted in a review of two interesting 2009 CJEU judgments on the application of free movement of capital to issues related to charity. As Prof. Flynn mentioned, there is the general belief that “charity remains at home” but, notwithstanding that, the CJEU has consistently held that fundamental freedoms should equally apply to cases where the State provides a given framework for private entities and individuals donating to certain goals or institutions (not directly, as otherwise State aid rules might be applicable if the beneficiary develops an economic activity).

The first of them is Persche.[1] Mr Persche claimed that his donation of certain goods (Zimmer frames, toys, bed linen and towels) to Centro Popular de Lagoa, in Portugal, should qualify as deductible expenses for the purpose of his tax return in Germany. However, the German authorities refused his request on the grounds that the recipient of the donation was not established in Germany.

 

The Court clarified that the taxable treatment of such goods are within the scope of the rules on capital, irrespectively of their in-kind nature,[2] and that the inability to deduct these donations when the recipient is not established in Germany constitutes a restriction on the free movement of capital.

 

Thereafter, the Court analysed whether the restriction could be justified. Three arguments were put forward : (i) a tax allowance decreases Member State’s tax revenues, and the Member State should have to allow it only if there is a corresponding decrease in its expenses by the taxpayer taking a burden that would otherwise fall on the State; (ii) the tax advantages allow the Member State to discharge it of  some of its duties, which are confined to the territory of the Member State itself; and (iii) tax authorities cannot control that the funds benefiting from tax advantages granted outside the relevant Member States are indeed going to a truly charitable cause.

 

The Court dismissed all three arguments on the basis that: (i) the idea of justifications based on a reduction of fiscal incomes is neither a pure economic reason fitting within Article 65 TFEU nor does it constitute an overriding reason of public interest; (ii) the Member State should be free to choose the charitable goals it might consider appropriate and there is no good reason to consider that only specific institutions within its borders can fulfil such goal; and (iii) concerning the effectiveness of fiscal supervision, there are mechanisms within the EU for mutual assistance between tax administrations.[3]

 

The second judgment is Servatius,[4] where was at stake the eligibility of  a social housing project in Liège (Belgium) promoted by an association established in The Netherlands for the purpose of funding by the Dutch authorities of social housing projects. The system of prior authorisation established by the Dutch authorities was considered by the Court as a restriction of the free movement of capital. However, the Court considered that the financing of public housing could be considered as an overriding reason of public interests, particularly in the specific context of The Netherlands. Ultimately, as it happens often with preliminary rulings, the question on whether the measure was proportionate or not was left for the national court.

 

The paper prepared by Prof. Flynn is available here.

 

Constitutional problems with Prof. Turk

 

The second topic was a presentation by Prof. Turk on the constitutional problems posed by the current architecture of EU regulation of the financial sector under the title of ‘EU Institutional Architecture for Financial Regulation – Constitutional Issues and Solutions’.

 

As the readers of this blog know, there are currently different levels of regulation in the field. On the first level there are EU Directives and Regulations (such as the Capital Requirements Directive (CRD)[5] and the Bank Recovery and Resolution Directive (BRRD)[6]). On a lower level, the Commission adopts subordinate regulations. However, the ever increasing number of agencies (European Securities and Markets Authority – ESMA -, European Banking Authority _- EBA – European Insurance and Occupational Pensions Authority – EIOPA) prepare the drafts of those technical regulations, which specify the relatively broad concepts contained in the Directives or Regulations. Whilst those technical rules are formally approved by the Commission, some observers have pointed out the existence of a certain “rubberstamping” on the action of the Commission (especially because agencies are increasingly well funded while the Commission struggles to have the necessary resources to do a proper job). However, the problem is that, irrespective of the kind of “technical” decisions that are to be adopted, they would almost always have a political content. Therefore, the involvement of the Commission might be necessary after all.

 

This happens in a scenario in which there is a progressive takeover of the agencies by the Member States, whose representatives involved in the decision-making processes within the agencies act in the “general interest of the Union” but, one might wonder whether this “general interest of the Union” is as general as the one genuinely promoted by the Commission.

 

This status quo was reconsidered in the cases of Meroni[7] and ESMA,[8] which should be taken into account if the powers and acts of the agencies or the Commission in the field are challenged in the future.

 

The presentation prepared by Prof. Turk is available here.

 

Both presentations within the EU Law session were extremely interesting, fostering a remarkable debate.

 

Although the dinner is not to be reviewed, Prof. Whish’s speech is worth noting. The highly respected and regarded KCL Competition Law Emeritus Professor expressed his genuine joy for the success of the distance learning programmes, of which he is very proud. Prof Whish is fully committed with the distance learning programmes as he is the Director and Professor in the Programme on Competition Law, as well as co-director of the Economics for Competition Law Programme.

 

Overall, it has been an excellent experience that deserves to be repeated. Besides the interest of the lectures, it has been an excellent occasion for the Centre to consolidate its footprint in Brussels. And it has been extremely successful as it has been perceived as a tour de force and, when testing the audience, certain remembrances with the unforgettable passages in which Oliver Twist says “Please, Sir, I want some more”[9] (even if the Directors of the Centre do not resemble Mr. Bumble in any way) become apparent.

 

And finally, a big thank you to Andrea Cordwell James for her assistance in providing the presentations and obtaining the consent of the authors to share with the readers the materials presented during the lectures.

 

[1] Case C-318/07 Persche [2009] ECR I-359.

[2] Even if the provisions on free movement of goods were to be applied, one might not expect a different result given the facts of the case.  This might, however, be different if the situation would refer to beneficiaries located outside the EU.

[3] Particularly Directive 2011/16/EU of 15 February 2011 on administrative cooperation in the field of taxation.

[4] Case C-567/07 Winingstichtung Sin Servatius [2009] ECR I-9021.

[5] Capital Requirements Directive. For the documents integrating the CRDIV package see http://ec.europa.eu/internal_market/bank/regcapital/legislation_in_force_en.htm#maincontentSec1

[6] Bank Recovery and Resolution Directive. For an overview of the progress of adoption of the Directive see http://ec.europa.eu/internal_market/bank/crisis_management/index_en.htm

[7] Case 9/56 Meroni.

[8] Case C-270/12 UK v Paliament and Council. n.y.r.

[9] C. Dickens, Oliver Twist.

REVIEW: EU Law Panels at the International Graduate Legal Research Conference (IGLRC) 2013 at King’s College London, 8-9 April 2013

Christy Burzio and Adrienne Yong
PhD Candidates at King’s College London

 

It was a great privilege for the authors of this post to have been present for the seventh annual IGLRC held at King’s College London on the 8-9 April 2013. Indeed, the panels were sure to provoke a lot of great discussion chaired by Professor Alex Türk, both in the realm of the tense political, social side of the Union and in the midst of the tough economic times Europe faced and still faces. As greatly varied subjects within EU Law itself, there were two panels split accordingly, the first discussing the EU’s modern social side including issues on identity, fundamental rights and political undertones of judicial review and revocation and the second primarily focused on the financial side of the EU in austerity, agencies and supervisory authorities in banking.

 

The first panel consisted of Eleni Frantziou (University College London), Ana Júlia Maurício (Cambridge) and Erin O’Leary (Liverpool John Moores). It was interesting that whilst the topics of each presenter did vary greatly on the face of it, it would ultimately emerge that they all voiced a commonality. Some presented it as a concern, others as an issue to be acknowledged. They all came back to the same point regarding the un-reconciled status of the EU as lacking coherence in terms of its policy and direction. However, whilst pessimistic in nature on the outset, the three presenters each demonstrated a keen desire for there to perhaps be more room for constitutionalism within the EU legal order and structure. The presence of this trend was an interesting one to note and one certainly considered as being characteristic of the EU generally. The themes were presented from the point of view of fundamental rights and horizontal effect, from national final administrative acts and revocation and from a more socio-legal linguistic identity point of view.

 

The first panel began with a refreshing reference to artistic culture, entitled ‘The constitutional value of the Charter of Fundamental Rights after Lisbon: The importance of being earnest’, analogising Oscar Wilde with the constitutional value of the Charter of Fundamental Rights. After an update on the status of fundamental rights under Lisbon, the sensitive issues were tackled. The fact that there was an undermining of the Charter’s constitutional impact was lamented, which hindered the consolidation of a European identity. This was due to excessive reliance on general principles of EU Law as opposed to the Charter in governing how citizens enjoy rights. It was argued that the Court of Justice of the European Union (CJEU) had to be earnest about their direction for the Charter before it could be clearly stated exactly what their intentions were. The perspective advanced was that there needed to be a new methodology for the application of human rights following the Lisbon Treaty, placing the Charter first, then the ECHR, and following that, general principles to aid in correct interpretation. This interesting methodology instigated a lively debate considering its merits and demerits leaving great food for thought as we then delved into a more technical topic.

 

The provisions and conditions regarding revoking national final administrative acts could be described as a niche area, certainly the thoughts of this author when reading the title of the second presentation, ‘National final administrative acts contrary to EU Law: A critical analysis of the Court of Justice’s case law’. The speaker considered the political relationship between remedies and behaviour of MS in complying with EU law. Though a topic clearly outside many of the attendees’ remit of knowledge, clarity in both delivery and content aided the audience in comprehending the specific topic separated into two parts, firstly aid (state and national aid) and then in regards to the free movement of persons. The presentation and discussion both centred round the stark difference in treatment concerning the treatment of both by the CJEU. Highlighted were the exceptional cases,[1] which seemed to be at odds with the prior line of reasoning. It was commendable to the speaker that though her topic was not widely understood before the day began, she certainly shed some light on the matter by the end of it. Ultimately again, the theme emerged of the divergence rife within the Union’s constitutional decisions. Her focus on this idea contextualised her area of expertise with that of the previous in term of the delicate balance required in both because of the EU’s constitutional nature.

 

The panel rounded off with a non-lawyer’s perspective on the hypocrisy in the EU’s motto in her take that it was more akin to being ‘United in diversity: the lesser of two evils’. As highlighted, to hear a fresh non-legal perspective of an idea of predominantly considered in the legal sphere was a welcome and indeed interesting debate. From a largely linguistic point of view, the notion of the diversity of languages and its consequences for the united Union was considered. The large number of both languages and cultures in the EU contribute to the difficulty in becoming such. This was due to the inherent connection between the two and the undesirability to have a lingua franca for the Union. It perpetuated the idea that there has been a failure to achieve equality, which means there is also legal certainty compromised. It seemed that there was an inevitable sphere of linguistic uncertainty. Again, identity was a key issue given that without an agreement as to one, there would constantly be a tension in the supranational order. Whilst there was significant criticism advanced as to the lack of a clear answer for why there is such hypocrisy and tension within the Union, it only served to emphasise again that this characteristic of the EU would be here to stay, and likely the source and subject of many a debate to come.

 

The second panel was an opportunity for one of the authors to dig deeper into a relevant debate, of which topics and presentations on offer didn’t disappoint. The EU has been epitomised in recent months as an unpredictable political playground. Solidarity and austerity are seen as two conflicting schools of thought, with a line being firmly drawn between the two. The solidarity of many countries has faltered under immense economic pressure. Germany’s resistance to guarantee funds to enable further bailouts and the UK’s proposed attempts at future renegotiations and referendums have spurred a culture of countries looking from the outside at the problems facing the EU from within. The term ‘austerity’ has become taboo to many EU citizens and only the most daring of us would ever utter these words in order to raise a debate. Luckily for us, the speakers were not worried by such a fear.

 

The first speaker was Luca Lionello, (Catholic University of Milan) with a presentation entitled ‘Austerity Measures, Shift of Sovereignty and Democratisation of European Institutions’. The title was intriguing given its boldness in tackling austerity and sovereignty in the same sentence. Aren’t these terms a modern day juxtaposition? The presentation dug deeper into the reality of austerity measures and the impact they have on country independence. He tackled the recent adoption of the Euro plus pact, the Six Pack and the Treaty on Fiscal Stability, as several EU members have adopted austerity measures to respect the new rules on fiscal integration. However, the question on everyone’s lips was; are these measures legitimate and can they solve anything? Luca raised three main points to question the legitimacy of the measures (1) as fiscal policy is a core competent of national sovereignty, the development of a strong European supervision on national budgets will probably oblige members states to reform their own constitution, (2) the new economic governance is managed by intergovernmental bodies that dont directly respond to the citizens in contradiction with the EU’s democratic principle and (3) the adoption of austerity measures under the new rules on fiscal integration has caused the violation in many member states of social and labour rights. The tone of the talk was hopeful that the way to remedy these illegitimacy’s was providing European institutions with the competence and the appropriate means to guarantee social protection of the EU according to the principle of subsidiary. However, with recent economic catastrophes, like that seen in Cyprus, it seems principle of subsidiarity may take a backseat on the EU agenda while we ride through the storm.

 

With subsidiarity at the forefront of the audiences mind, we were greeted by Pieter Van Cleynenbreugel, (University of Leuven) with a presentation entitled ‘Between Delegation and Attribution: Article 114 TFEU, Integrated Administration and the Constitutional Circumvention of the Meroni-judgement on the Establishment of new EU Regulatory Agencies’. The cynical tone of the speakers’ thoughts was presented by the notion that the Meroni judgment [2] is still repeatedly invoked to curb the regulatory powers of independent EU agencies. This powerful debate has been made even more relevant by the introduction of the institutional set up and decision-making powers of the new European Supervisory Authorities (ESA’s) in financial markets regulation. A decisional tug of war is ongoing at EU level between the Meroni delegation limits with the EU treaties’ competence attribution framework. It seems the EU has been rather inventive in delegating power as the incorporation allows it to partially circumvent traditional Meroni delegation limits and to re-qualify them as novel, thus enabling and restraining instruments governing the process of agency establishment in general rather than agency delegation in particular. After a discussion on the relevant case law and highlighting Articles 114 and 291 TFEU, the line of reasoning given by the EU was adamantly and persuasively criticised by the speaker, leaving many thinking, where do we go from here?

 

It was with bated breath that the audience waited for the last speaker on the Panel. Gianni Lo Schiavo (King’s College London) presented on ‘The European Financial Supervisors: A true constitutional challenge in the aftermath of the European Crisis’. This was clearly the hot topic of the panel with many audience members having prepared questions in advance for the speaker to answer. The speaker took a novel approach to his presentation and made a clear case for the introduction of the macroeconomic layer into the European economic constitution established by the Maastricht Treaty. The issues raised by the speaker covered not only the economic crisis but the underlying constitutional crisis as well.  Whilst the new European Financial Supervisors were shown to be important improvements, Gianni spent no time getting to the harsh questions of these entities. The first problem was the shaky ground that these entities seem to have been built upon. The new European delegated governance is being shaped, but it is unclear whether their role will be enhanced as standalone bodies. Secondly, and importantly, the discussion turned to sovereignty; how do these bodies relate to national authorities and their powers, could this indicate a real ‘top down’ process of market regulation and control? The presentation ended stressing the urgency of the need for clear answers of effectiveness and shared responsibilities.

 

Both panels presented papers that prove themselves in both relevance and content. They raised significant issues, but more importantly current issues, and like with any conference by the end both authors found themselves with more questions than they started with as to the future of the EU’s plans in many aspects, on their direction in future development on fundamental rights, identity and that ever tricky balance between sovereignty and supranationality, and on economic recovery and the agencies that could aid in its implementation.

[1] C-119/05 Lucchini [2007] ECR I-6199; C-249/11 Byankov [2012] judg of 4 Dec 2012, nyr.

[2] Case C-9/56 and 10/56, Meroni v High Authority [1958] ECR I-0133