Vertical juridical disputes over legal bases

Abstract

Legal interpretation plays a role in interstitial institutional changes because actors may refer to the Court's rulings in order to strengthen their bargaining power, when changing rules or to support their choice of rules. The Court's rulings constitute an interstitial formal change in themselves since these rules may subsequently be incorporated into the Treaty. The constitutional nature of the Court's rulings prevents member states from overruling these formal institutions. In vertical competence disputes, the Court, on the one hand, typically interprets enabling rules in a way that favours the European Union's power and legitimates supranational intervention. Although this undermines member states' position vis-à-vis the Union, they have embraced the Court's interpretation in the European Constitution. On the other hand, member states have been more creative when establishing standard-setting rules such as the principle of subsidiarity. The new principle aims at changing the Court's poor application of this test, but also provides the Court with new tools to assess the exercise of power by the European Union. It does not reduce the ambiguity of rules conferring power. On the contrary, as incomplete contracts, the new institutional framework will be the object of interstitial institutional changes, either formal or informal, and offers fertile ground for vertical disputes to be settled by the Court.

Notes

1. The tension between parliaments and constitutional courts represents the tension between democratic legitimacy and argumentative legitimacy.

2. These consequences are known as positive and negative legality, respectively.

3. The distinction between enabling norms and standard-establishing norms is implicitly made in Articles 230 EC and 35.6 TEU. Here, the European Court of Justice is required to consider the legality of secondary law referring to several causes of illegality. These provisos refer, among others, to ‘lack of competence’ and ‘violation of the Treaty and secondary law’. The former relates to disputes over enabling norms, and the latter to disputes over standard-establishing norms.

4. Despite the Court's ruling, it is difficult to establish which fields fall within the exclusive competence and which do not. In Opinion 1/94, concerning the World Trade Organization, the Court adopted a less expansive approach. It declared that several multilateral agreements on agriculture, sanitary and phytosanitary measures, and the agreement on technical obstacles to trade, within the framework of the WTO, fall within the exclusive Community competence on Common Commercial Policy (formerly Article 113). However, several matters covered by the General Agreement on Trade in Services, or the Agreement on Trade Related Intellectual Property Rights, did not fall within the scope of the Common Commercial Policy, and the Community did not have exclusive competence since these measures were not necessary for the attainment of some internal Community objective.

5. Case 22/70, Commission v. Council, [1971] ECR 263. In the ERTA case, the Court held that external competences either could be explicitly assigned to the Community, or derive from internal competences. In any case, the existence of Community powers excludes the possibility of concurrent powers on the part of the member states.

6. There is a third kind of competence that causes no litigation on legal bases: parallel powers. They refer to competences that both member states and the Union can exercise alongside each other. These competences only require coordination law, and the harmonising of minimum standards, but normally exclude harmonisation measures to prevent or eliminate differences between legislation and practice of member states.

7. See Farrell and Héritier (2007) on the formalisation of informal institutional rules at IGCs. In the formal–informal–formal sequence put forward by them, informal institutions are either formalised or rejected by member states in IGCs. This, as has been explained, does not apply to a particular sort of formal institutions, namely the Court's rulings.

8. Bergström et al. (2007) review the bargaining strength of European organisations by analysing the conditions under which these actors make credible threats to use their veto power in law-making processes. In Moral Soriano, the threat of turning to the Court is considered also as a tool to reinforce the bargaining strength of organisational actors.

9. For example, the aim of Spain in the Spain v. Council case concerning the protection of the Danube was to reinforce its bargaining position for future policy-making processes concerning the protection of international rivers running towards Portugal.

10. The obligation to state reasons does not necessarily mean to identify the legal basis of Union's acts, if this can be determined from other parts of the measure. In the first judicial case on legal basis (Case 45/86, Commission v. Council, [1987] ECR 1493) the disputed regulation departed from the Commission's proposal to base it on Common Commercial Policy competence (Article 133 EC); the Council considered that the measure also had major development policy aims, and, therefore, should be based on the residual power clause (Article 308 EC). However, this was not stated in the justification of the disputed regulation. When the conflict came before the Court, it stated: ‘failure to refer to a precise provision of the Treaty need not necessarily constitute an infringement of essential procedural requirements (article 253 EC) when the legal basis for the measure may be determined from other parts of the measure. However, such explicit reference is indispensable where, in its absence, the parties concerned and the Court are left uncertain as to the precise legal basis' (para. 9).

11. Indeed, the requirement to state reasons (Article 253 EC) and justify the approval of legislative measures is an important procedural condition for the lawful exercise of Community powers.

12. Joined cases C-164/97 and C-165/97, European Parliament v. Council, [1999] ECR I-1139.

13. Case C295/90 European Parliament v. Council, [1992] ECR I-4193.

14. Rasmussen (2007) examines the Commission’ right of initiative as a guarantee of the supranational character of the European Union.

15. C-202/88, France v. Commission, [1991] ECR I-1223.

16. C-359/92, Germany v. Council, [1994] ECR I-3681.