Introduction to EU Policies

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Introduction to EU Policies Institutional
Architecture

• VIII.
• The internal market and its development

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I.Theory of economic integration
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• Stagesof Economic Integration
• FREE TRADE AGREEMENT (FTA) tariff zero between
  member countries and reduced non-tariff barriers
• CUSTOMS UNION (CU) FTA common external tariff
• INTERNAL MARKET (IM) CU free movement of
  capital and labour force
• ECONOMIC UNION (EU) IM common economic
  policies and institutions

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UE EC CFSP PJCCM
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• EC
• \
• INTERNAL MARKET (freedoms of common market)
• POLICIES (environment, research, justice and home
  affairs etc.)

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single market/common market/internal market

• Single market no duties, free movement of
  goods, services, workers and capital
• Common market all that no physical barriers
  to trade
• Internal market all that competition rules
  harmonisation of some other important policies
  (environment, consumer protection, ect)

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• II.
• History of the European economic integration

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• 1957 Treaty on EEC
• 1965 abolishement of all quota and duties on
  internal trade ...
• But
• Frontier formalities (delays, high costs of
  transport)
• Differential indirect tax rate (distortions of
  trade)
• Difficulties in taking advantage of the freedoms
  of movement of workers, freedom of
  establishement, freedom to provide services (no
  rules on recognition of qualification, controls
  on the borders)
• Public procurement in states were reserved to
  national suppliers
• 1985 European Councils meetings decision to
  draft program with detalied agenda how to
  complete the single market by 1992
• 1986 Single European Act (new voting procedures)
• White paper of Commission (Crokfields paper,
  Delorss Commission) ?

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• Lord Crockfields white paper
• 300 actions
• Target dates for all of them
• Removal of physical barriers
• frontiers controls from 1988 SAD (single
  administrative document) replacing 700 previously
  existing documents
• Removal of technical barriers
• Barriers created by differents national
  regulations and standards harmonisation of
  national standards, and in the absence of
  harmonized norm principle of mutual recognition
• Liberalisation of public procurement
• Free movement of captial
• Adoption of the Communitys trade mark system
• Removal of fiscal barriers
• Approximation of VAT and excise duty rates
  (indirect taxation)

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1986-1992(two Delors Commissions)

• 282 proposed directives and regulations
• by December 31st 1992 over 90 were adopted
• And 79 already implemented by MS
• Success although by 2000 1 500 law suits against
  MS for non-respect of market rules

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Shengen

• 1990 (agreement between Belgium, France,
  Netherlands, Germany, Luxembourg) entered into
  force in 1994
• External borders harmonisation of visa
  requirements (one visa valid for the all Shengen
  countries) common list of suspect individuals
• Judicial matters close cooperation involving
  irreguralities in taxation, police cooperate
  (SIS)
• By the Amsterdam treaty acquis Shengen was
  introduced to the I pillar

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• Economic and Monetary Union

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The Lisbon summit 2000

• Europe needs to be more entrepreneurial and
  innovative to if it wants to catch up with the
  USA
• Reports has shown that twice as many Americans as
  Europeans were thinking of setting up their own
  buisness
• Lisbon agenda making of the EU the most
  competitive economic area of the world by 2010
• Full employment (from 61 to 70, employment of
  women from 51 to 60)
• European Social Policy Agenda (liberalisation of
  the labour market)
• Dismanteling of monopolies (communication)
• New EU legislation on e-commerce, e-money,
  services

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• III.
• Practice and functioning
• of the Internal market

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PILLARS OF THE COMMON MARKET

• Free of movement of goods
• Free of movement of workers
• Freedom to provide services
• Freedom of establishment
• Free movement of capital
• Competition rules (rules addressed to
  undertakings, rules of state aid)

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FREE MOVEMENT OF GOODS

• Article 25, 28, 29, 30, 90 of the EC Treaty
• Ban on duties and fiscal barriers to trade
• Ban on physical and technical barriers to trade
  (Dassonville, C-8/74, Keck and Mithuard
  C-267,268/91)
• What is agood ?
• Is a garbage a good?
• Is an energy a good?
• Is a content of the TV program a good?

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External aspects

• Custom union
• Which products can circulate without a duties?
• Rules of origin European products
• The substantial transformation test
• Value added percentage test

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Internal aspects

• Free movement within Community
• Derogation from this rule according to article 30
  of the EC Treaty (public morality, public health
  and life of humans, animals and plants)
• Mutual recognition principle (Cassis de Dijon, C
  120/78)
• Harmonisation by means of Directives

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FREE MOVEMENT OF WORKERS

• Article 39 of the EC Treaty (directly applicable)
  
• Important secondary EC legislation
• Regulation 1612/68/EEC
• Now Directive 2004/38/EC
• Right to entry and to residence to the worker and
  his/her family
• Coordnation of the social security schemes
• Who is a worker? (e.g. Martinez Sala)

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• Principle of the equal treatment of nationals of
  another member states
• in access to employment,
• conditions of employment,
• vocational training
• and social benefits
• Mutual recognition of the qualifications
  (sectoral directives)
• Measure to facilitate the mobility
• e.g. EURES the European Employment and Job
  Mobility Network
• EuroPASS

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FREEDOM OF ESTABLISHMENT

• Article 43 of the EC Treaty
• What it is fixed establishment
• independent, permanent, with the transborder
  character (C-55/94 Gebhard, C-268/99 Jany)
• Addressee of article 43
• Member States
• Individuals
• Enterprises (C-81/87, Daily Mail)
• Non discrimination
• Direct and indirect discrimination is forbidden
  (C-340/89 Vlassopoulou, C-19/92 Kraus)
• Accessory rights
• Restrictions

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FREEDOM TO PROVIDE SERVICES

• Article 49 of the EC Treaty
• What is service? Article 50 of the EC Treaty
• renumeration, (C-159/90 Grogan, temporarily
  provided, with transborder character, (transfer
  of border by the provider, the client (Luisi and
  Carbone, C-286/82), the service)
• problems to make distinction between freedom to
  provide of services and establishment or free
  movement of workers (C-55/94 Gebhard, C-113/89
  Rush Portuguesa)
• Non-discrimination and mutual recognition
  principle
• What with the services which are legal in one
  member state and illegal in another member state
  (C-159/90 Grogan, C-36/02 Omega Spielhallen)?
• Restrictions (article 55 of the EC Treaty)
• New Services Directive

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FREE MOVEMENT OF CAPITAL

• Article 56 of the EC Treaty
• Definition of the capital
• No treaty definition
• ECJ and Secondary Law
• Liberalization of the capital flow (Directives)
• What can flow freely
• Direct investments
• Investments in real estate
• Operations concerning the stock exchange
• Banking services

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• COMPETITION RULES
• Competition policy - essential for the completion
  of the internal market, as the raison d'être of
  the internal market is to allow firms to compete
  on a level playing field in all the Member States
  .
• Competition policy sets out to encourage economic
  efficiency by creating a climate favourable to
  innovation and technical progress.
• In a market economy, competition promotes
  economic success, safeguarding the interests of
  European consumers and ensuring that European
  undertakings, goods and services are competitive
  on the world market.
• Commissions wide powers! Competition policy is
  implemented directly by the European Commission
  (inquiries, decisions)

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• RULES CONCERNING ENTERPRISES
• II. RULES CONCERNING STATES

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RULES CONCERNING ENTERPRISES (articles 81, 82 of
the EC Treaty)

• A. Ban on abuse of the dominant position
• directly or indirectly impose unfair prices or
  other unfair trading conditions
• limite production, markets or technical
  development to the detriment of consumers
• apply dissimilar conditions to equivalent
  transactions with other trading parties
• make the conclusion of contracts subject to
  acceptance by the other parties of supplementary
  obligations which have no connection with the
  subject matter of such contracts.
• (ex. Microsoft case)

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• B. Restrictive agreements and concentrated
  practices
• horizontal or vertical agreements that fix prices
  directly or indirectly agreements on conditions
  of sale agreements on production or delivery
  quotas on investments market-sharing
  agreements agreements conferring exclusive
  rights to public service contracts
• agreements leading to discrimination against
  other trading parties collective boycotts
• C. Merger control
• Commission check whether the intended merger
  will lead to the dominant position on the market
  and will distort the competition

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RULES CONCERNING MEMBER STATES (article 87 of the
EC Treaty)

• Ban on state aid
• What is prohibited state aid?
• it confers an economic advantage on the
  recipient
• it is granted selectively to certain firms or to
  the production of certain goods
• it could distort competition and it affects trade
  between Member States.
• Derogations
• state aid having a social character, granted to
  individual consumers, provided that it is granted
  without discrimination related to the origin of
  the products concerned
• aid to make good the damage caused by natural
  disasters or exceptional occurrences
• aid granted to areas of Germany affected by the
  division of the country.
• Some other aids can be declared compatible with
  the internal market by the Commission
• E.g. Lucchini (steel industry), Polish Gdansk
  Shipyard

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Seminar

• Case study