Abstract
Under the cloak of the projection of the national principle of proportionality to Union law, European courts have radically altered the substance of European law. This has been done both to supranational and national constitutional law and by means of redefining its substantive content. European courts have through proportionality assigned an abstract and a concrete constitutional weight to the right to private property and to entrepreneurial freedom through the four economic freedoms and the principle of undistorted competition. That has placed outside the realm of the constitutionally possible key public policies without which some of the fundamental collective goods at the core of the social and democratic Rechtsstaat become extremely vulnerable. This chapter shows how this accentuated bias of the European socio-economic constitution follows from the way in which European courts have defined economic freedoms as the yardstick of European constitutionality. This entails the automatic assignment of the argumentative benefit to economic freedoms, the construction of all other constitutional goods in the semblance of economic freedoms, and the use of asymmetric standards of evidence when having to justify the adequacy and necessity of economic freedoms and other constitutional goods.
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Notes
- 1.
Article 19.1 TEU reads: “The Court of Justice of the European Union shall include the Court of Justice, the General Court and specialised courts. It shall ensure that in the interpretation and application of the Treaties the law is observed.” There is also a third European Court, the Civil Service Tribunal, which basically decides controversies between the institutions of the Union and the supranational civil service. This entails that such a Court rarely decides questions with a constitutional dimension. For that reason I do not pay attention to it in this chapter.
- 2.
- 3.
With the key difference that European Courts remain, contrary to national constitutional courts, free to make the lack of a formal mandate to review the constitutionality of norms to bear.
- 4.
- 5.
This is so because the national constitutions of the Member States (as, I would argue, the founding Treaties of the Communities) are underpinned by the characterization of the state as a Social and Democratic Rechtsstaat, aimed at the simultaneous realization of the civic, political and socio-economic rights of its citizens, something which required playing down and circumscribing the protection afforded to the right to private property.
- 6.
Among others, Jacobs 1999.
- 7.
- 8.
García Pelayo 1977.
- 9.
Alexy 2002, p. 66.
- 10.
- 11.
Beatty 2004, p. 169. Both Alexy and Beatty would further add that a constitution cannot exist without reference to proportionality as an optimizing principle (of the realization of constitutional principles) (Beatty 2004, p. 163). But perhaps we can suspend our disbelief on this regard, as it may well be, as Habermas claims, that such understanding of principles fails to give proper due to some specific norms in modern legal systems, such as the prohibition of torture, which should not be regarded as being subject to being optimized. But that is not of essence in our previous discussion. What matters is that proportionality is not a positive principle, but a structural principle of legal reasoning.
- 12.
Tridimas 2006.
- 13.
Alexy 1989, p. 230.
- 14.
Proper attention to the structural nature of the principle of proportionality as a syntactic structure of general practical reasoning should lead us to distinguish very clearly between the formal requirements of practical reasoning and the substantive elements with which we fill in the syntactic structure, and to which I have just referred. The correctness of a legal argument depends not only on following the structure of proportionality, but in getting the substance right. Indeed, in that distinction, in rendering us capable of making that distinction, resides the key analytical value of the principle of proportionality. It allows us to distinguish what parts of the decision are required by the very structure of legal reasoning (as a special case of general practical reasoning), which parts of the decision are dependent on substantive assumptions made in a rather uncontroversial way in previous legal decisions (essentially, through acts of constitutional significance and importance) and which parts depend on substantive assumptions made by the decision-maker. In particular, attention should be paid to the actual foundation of assumptions on the argumentative and proof burdens, the specific conceptions of each legal principle and the abstract weight assigned to each of them.
- 15.
Explicit constitution-making processes in “revolutionary” constitutional traditions—such as the French, Italian or to a rather large extent, Spanish one—and key constitutional moments in “evolutionary” constitutional traditions—such as the British or to a rather large extent, German one.
- 16.
It should be added that the lack of a common constitutional vocabulary is a contingent feature. It is the result not of what European is a strong sense (in a deep ontological sense, if such pedantic expression is necessary), but of how it has become to be what it is. Similarly, the in-built bias in favour of economic freedoms, implicit in the automatic assignment of the argumentative burden to economic freedoms, is not intrinsic to what European Union is, but the result of a discretionary choice taken by European Courts that can be reversed.
- 17.
Fossum and Menéndez 2011.
- 18.
Ibid.
- 19.
Case C-26/62, Van Gend en Loos, ECLI:EU:C:1963:1; Case C-6/64, Costa v E.N.E.L., ECLI:EU:C:1964:66.
- 20.
Case C-11/70, Internationale Handelsgesellschaft, ECLI:EU:C:1970:114; Case C-29/69, Stauder, ECLI:EU:C:1969:57.
- 21.
Case C-8/74, Dassonville, ECLI:EU:C:1974:82.
- 22.
In formal terms, thus, the role played on national constitutional texts by the norms affirming a “constitutional core” (as the eternity clause in the German constitution, the norms distinguishing different review procedures and making more onerous to amend certain provisions of the Constitution in other constitutional traditions; or the norms defining the set of fundamental rights whose protection citizens can directly seek from the constitutional court) is played in Community law by the criteria which make of a Treaty provision one with direct effect. The “economic” side of the substantive constitutional yardstick was only very preliminary developed in the early case law of the ECJ on customs (as in Van Gend en Loos) and in the old Article 95. But it was fleshed out in earnest from mid-1968 onwards, that is, once the fourth stage towards the common market was completed. From that date onwards, the ECJ considered that three of the four economic freedoms (and the principle of undistorted competition) were so defined in the Treaties as to merit to be acknowledged direct effect once the transitory phases were over. The fourth freedom (the free movement of capital) was so circumscribed and limited in the original drafting of the Treaties as to be considered as not having direct effect. That would remain being the case until the 1988 Directive (ad intra) and the Maastricht Treaty (1991) radically changed the Community legal discipline and consequently the status of this freedom, which within a decade moved from Cinderella to über-freedom.
- 23.
This is the lasting legacy of the fact that under the traditional Community Method, the Council of Member States was required to unanimously support a given legislative proposal for its becoming Community law in force. Even if procedurally speaking a decision of the Council (even if unanimous) was rather different from a decision taken in an Intergovernmental Conference, the fact of the matter was that a unanimous decision of the Council came close to a decision supported by a constitutional will. So in fact the ECJ tended to look for inspiration to construct Treaty provisions on secondary legislation and not the reverse. Even if qualified majority making and co-decision have changed things, the fact still is that the degree of legitimacy which a regulation or directive carries with it makes the ECJ very cautious when undertaking review on the basis of economic freedoms. Very different considerations apply when it comes to the protection of fundamental rights. Here it is not only the case that the main reference point cannot be the decisions of the Council of Ministers (a body of an open executive nature), but the substantive contents of national constitutions.
- 24.
Their right not to be discriminated through the enjoyment of Community fundamental rights and economic liberties compensates the democratic pathology stemming from the mismatch between the circle of those affected by national laws and those entitled to participate in the deliberation and decision-making over national laws. This is perhaps the core implication of Weiler’s principle of constitutional tolerance. See Weiler 2002.
- 25.
Cf. ‘Declaration of the Commission concerning the consequences of the judgment given by the European Court of Justice on 20 February 1979 (“Cassis de Dijon”), OJ C 256, of 30.10.1980, pp. 2 and 3.
- 26.
Key leading cases were Case C-76/90, Säger, ECLI:EU:C:1991:331; Case C-55/94, Gebhard, ECLI:EU:C:1995:411; Case C-415/93, Bosman, ECLI:EU:C:1995:463; and after the entry into force of Directive 88/361 on free movement of capital, Case C-163/94, C-165/94 & C-250/94, Sanz de Lera, ECLI:EU:C:1995:451. On the literature, see Castro Oliveira 2002; Hatzopoulos and Uyen 2006; Wymeersch 2002; Mohamed 1999; Landsmeer and Flynn 2002; Andenas et al. 2005. An overall interpretation congenial to the one hinted at here can be found in Somek 2008.
- 27.
Case C-85/96, Martínez Sala, ECLI:EU:C:1998:217.
- 28.
- 29.
Case 120/78, Rewe-Zentral (Cassis de Dijon), ECLI:EU:C:1979:42; Case C-212/97, Centros, ECLI:EU:C:1999:126.
- 30.
The figures are taken from Becht et al. 2008.
- 31.
Menéndez 2011.
- 32.
Or eventually, with the principle of non-discrimination on the basis of sex by reference to Article 157 TFEU or to citizenship to the extent that it gives rise to autonomous rights.
- 33.
The argumentative benefit granted to economic freedoms was rather inconsequential as long as economic freedoms were understood as operationalisations of the principle of equality, and thus were substantially defined by national standards. This was so because the national standards of protection of economic freedoms were the result of weighing and balancing economic freedoms with other constitutional principles, so that the renvoi to national constitutional standards implies that the argumentative benefit is based on a previous balancing undertaken at the national constitutional level. Indeed, when national norms enter into conflict with economic freedoms as operationalisations of the principle of non-discrimination, what is put into question is exclusively the personal scope of application of the national norms, not their inner normative logic. Things change considerably once we conceptualise economic freedoms as self-standing, transcendental standards defined at the end of the day by the European Courts. This is so because the Community conception of economic freedom replaces the national standard, and as such, does away with the crafted balance reached at the national level. But if that is so, there is no obvious reason why we should assign an argumentative favour to economic freedoms.
- 34.
Case C-491/01, British American Tobacco, ECLI:EU:C:2002:741.
- 35.
Case C-112/00, Schmidberger, ECLI:EU:C:2002:437, Opinion delivered on July 11, 2002, para 100: “The issue boils down to the following: if a (potential) barrier to trade arises, the Community must be in a position to act. Such action must, as I construe the biotechnology judgment, consist in the removal of those barriers. Article 95 EC creates the power to do so”. Cf. para 106: “In other words, the realisation of the internal market may mean that a particular public interest—such as here public health—is dealt with at the level of the European Union. In this, the interest of the internal market is not yet the principal objective of a Community measure. The realisation of the internal market simply determines the level at which another public interest is safeguarded” (my emphasis).
- 36.
Para 229: “The value of this public interest [public health] is so great that, in the legislature’s assessment other matters of interest, such as the freedom of market participants, must be made subsidiary to it.”
- 37.
Case C-515/08, dos Santos Palhota, ECLI:EU:C:2010:245, Opinion of 5 May 2010.
- 38.
Para 53.
- 39.
Case C-438/05, Viking, ECLI:EU:C:2007:772.
- 40.
Niglia 2016.
- 41.
Typically, Case 4/73, Nold, ECLI:EU:C:1974:51 and Case 44/79, Hauer, ECLI:EU:C:1979:290, where the right to private property was invoked against regulatory powers on coal retailing and on use of agricultural land.
- 42.
What is revealing is that it is substantively identical to the ones which have been at the heart of public debate in the last years, with the revealing difference that what conflicted with collective goods was a Community protected economic freedom, and that the Court solved the conflicts according to a different normative logic.
- 43.
Indeed even before that personal taxation was subject to review of European constitutionality in Avoir Fiscal. It was in the leading judgment on Cassis de Dijon, precisely in the ruling in which “rule of reason” exceptions were first referred to, that the ECJ coined the justification (see para 8 of the ruling).
- 44.
See for example the Commission Communication (2006) 254 on a European strategy to combat tax fraud.
- 45.
Case C-264/96, ICI v United Kingdom, ECLI:EU:C:1998:370, para 26: “As regards the justification based on the risk of tax avoidance, suffice it to note that the legislation at issue in the main proceedings does not have the specific purpose of preventing wholly artificial arrangements, set up to circumvent United Kingdom tax legislation, from attracting tax benefits, but applies generally to all situations in which the majority of a group’s subsidiaries are established, for whatever reason, outside the United Kingdom. However, the establishment of a company outside the United Kingdom does not, of itself, necessarily entail tax avoidance, since that company will in any event be subject to the tax legislation of the State of establishment”.
- 46.
C-324/00, Lankhorst-Hohorst, ECLI:EU:C:2002:749; C-446/03, Marks & Spencer, ECLI:EU:C:2005:763; C-255/02, Halifax, ECLI:EU:C:2006:121; C-196/04, Cadbury Schweppes, ECLI:EU:C:2006:544.
- 47.
C-167/01, Inspire Art, ECLI:EU:C:2003:512.
- 48.
C-167/01, Inspire Art, ECLI:EU:C:2003:512.
- 49.
Opinion of AG Mengozzi in C-298/05, Columbus Container Services, ECLI:EU:C:2007:197, paras 182 and 183: actual physical existence plus financial activity are enough to pass the test.
- 50.
A most benign manifestation of such a role would follow the path of the German Constitutional Court in several of its “European” judgments, including the Lisbon judgment. A rather less benign result would ensue if national constitutional courts would limit themselves to act as guardians of the national constitutional law.
- 51.
As I argue in Menéndez 2017.
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Menéndez, A.J. (2017). The Guardianship of European Constitutionality: A Structural Critique of European Constitutional Review. In: Andenas, M., Bekkedal, T., Pantaleo, L. (eds) The Reach of Free Movement. T.M.C. Asser Press, The Hague. https://doi.org/10.1007/978-94-6265-195-1_8
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