The concept of 'economic activity' in the EU treaty: from ideological dead-ends to workable judicial concepts. Research Paper in Law 06/2011

[From the Introduction]. The economic rules, or put more ambitiously, the economic constitution of the Treaty,1 only apply to economic activities. This general principle remains valid, even if some authors strive to demonstrate that certain Treaty rules also apply in the absence of an economic activity,2 and despite the fact that non-economic (horizontal) Treaty provisions (e.g. principle of nondiscrimination, rules on citizenship) are also applicable in the absence of any economic activity.3 Indeed, the exercise of some economic activity transcends the concepts of ‘goods’ (having positive or negative market value),4 workers (even if admitted in an extensive manner),5 and services (offered for remuneration).6 It is also economic activity or ‘the activity of offering goods and services into the market’7 that characterises an ‘undertaking’ thus making the competition rules applicable. Further, it is for regulating economic activity that Article 115 TFEU, Article 106(3) TFEU and most other legal bases in the TFEU provide harmonisation powers in favour of the EU. Last but not least, Article 14 TFEU on the distinction between services of general economic interest (SGEIs) and non-economic services of general interest (NESGIs), as well as Protocol n. 26 on Services of General Interest (SGIs) confirm the constitutional significance of the distinction between economic and non-economic: a means of dividing competences between the EU and the member states. The distinction between economic and non-economic activities is fraught with legal and technical intricacies – the latter being generated by dynamic technological advances and regulatory experimentation. More importantly, however, the distinction is overcharged with political and ideological significations and misunderstandings and, even, terminological confusions.8

The European Court of Justice and the Draft Constitution: A Supreme Court for the Union? Research Paper in Law 8/2003

[Introduction]. The purpose of this paper is twofold. First, it examines selectively the provisions of the draft Constitution pertaining to the Court of Justice and assesses the ways in which the draft Constitution is likely to affect the jurisdiction and the function of the Court. Secondly, it discusses the challenges faced by the Court in relation to the protection of human rights by reference to the recent judgment in Schmidberger.1 Both aspects of the discussion serve to underlie that the Court is assuming the function of the Supreme Court of the Union whose jurisdiction is fundamentally constitutional in character. It has a central role to play not only in relation to matters of economic integration but also in deciding issues of political governance, defining democracy at European and national level, and contributing through the process of judicial harmonisation to the emergence of a European demos. This constitutional jurisdiction of the ECJ is not new but has acquired more importance in recent years and is set to be enhanced under the provisions of the new Constitution. The paper is divided as follows: The first section provides an overview of the way the new Constitution affects the ECJ. The subsequent sections examine respectively Article 28(1) of the draft Constitution, the appointment and tenure of the judiciary, locus standi for private individuals, sanctions against Member States, jurisdiction under the CFSP and the Chapter on freedom, security and justice, preliminary references, other provisions o f the Constitution pertaining to the Court, the principle of subsidiarity, and the judgment in Schmidberger. The final section contains some concluding remarks.

The EU should tax in harmony. CEPS Commentary, 3 May 2012

Rather than expending unnecessary negative energy on the blunt and indiscriminate financial transaction tax (FTT), this commentary argues that the EU should give priority to its tax base harmonisation project. Progress on this front would advance several objectives at once: it would make an important step towards more economic union, it would promote the EU as a business location and it would succeed in appropriating tax income to the location where corporate activities are effectively exercised.

Authorisations under EU internal market rules. Research Paper in Law, 05/2013

From the Introduction. That the requirement of a prior authorisation, as a precondition for the exercise of any economic activity, may restrict the freedom of establishment and the free provision of services is a truism. If an authorisation is required in the Member State where establishment is to take place or the service is to be offered (host Member State), then operators who lack such authorisation are in no right to proceed to the projected activity. Therefore, as soon as it is being accepted that the EU internal market rules are not only about discriminatory measures, but also cover mere restrictions, it comes as no surprise that national authorisation systems come to be scrutinized under the Internal Market rules.

The Europeanisation of Criminal Law and the Criminal Law Dimension of European Integration. Research Papers in Law, 3/2005

From the Introduction. In the academic year 1991-1992, Utrecht University, on my initiative, started to offer courses in European criminal law. This initiative came at a symbolic moment, just prior to the entry into force of the EU Treaty of Maastricht1 and the outlining of European policy in the areas of Justice and Home Affairs (JHA). The Director of the Legal Department, Paul DEMARET, was aware of the significance of this development and I have been given the opportunity to teach this subject at the College of Europe since 1995. Since then, JHA has evolved into one of the main areas of EU legislation. Now we are again on the threshold of an important historical feat. In June 2003, the European Convention reached agreement concerning a draft Treaty establishing a Constitution for Europe.2 The use of the term “Constitution” for the future EU Treaty is not simply cosmetic. The realisation has dawned that EU integration must be embedded in a treaty document which also regulates the rights and duties of citizens, not just with respect to European citizenship, but also with respect to, for example, Justice. Where JHA is concerned, this result acknowledges that the harmonisation of criminal law and criminal procedure and transnational cooperation cannot preclude the harmonisation of principles of due law and fair trial. Despite the substantial Europeanisation of criminal law, many criminal lawyers are defending the achievements and typicalities of their national criminal law like never before. EU initiatives are assessed from the perspective of the national agenda and national achievements. We are still too far removed from a European criminal law policy that is both European and enjoys national support. The core issue is therefore not how to keep our criminal (procedural) law national and free from European influences, but rather how to ensure democratic decision making, the quality of the constitutional state and the guarantees of criminal law in a national administrative model which has to operate increasingly interactively within a European and international context. In this contribution, the contours of the Europeanisation of criminal law are outlined and analysed. First, attention will be paid to the EC and, second, to the JHA. Following this, an evaluation and a look ahead at the current IGC are indicated.

Le principe de reconnaissance mutuelle dans la libre prestation de services = The principle of mutual recognition in the free provision of services. Research Papers in Law 2/2009

No abstract.

La réforme Dodd-Frank des produits dérivés de gré à gré : vers un modèle mondial?

Suite à la crise financière de 2008 les pays du G20 se sont interrogés sur la transparence des marchés, la stabilité du système et une façon de réguler les risques posés par le nouvel environnement économique. Les produits dérivés de gré à gré ont été identifiés et des engagements ont été pris en faveur de nouvelles régulations des dérivés de gré à gré et la gestion des risques sous-jacents. Les régulateurs ont donc adopté chacun à leur tour un cadre législatif régulant les dérivés de gré à gré tout en déployant un effort international d'harmonisation et de reconnaissance des contreparties assujetties à des régimes équivalents. Les autorités canadiennes en valeurs mobilières ont publié des projets de règlements. Nous nous interrogerons sur ce nouveau cadre réglementaire des dérivés de gré à gré élaboré par les autorités canadiennes en valeurs mobilières, prenant en considération les spécificités canadiennes et les acteurs actifs sur leur territoire. Notre étude traite de ces projets de règlements et de la difficulté d'encadrer les marchés des dérivés de gré à gré qui par définition ne comportent pas de plateformes de négociation ou de lieu géographique et de frontières mais se caractérisent surtout par le lien contractuel entre les parties et l'identification de ces parties. L'élaboration d'un nouveau cadre pour les dérivés de gré à gré qui régule les transactions transfrontières semble très délicat à traiter et les possibles conflits et chevauchements de lois seront inévitables. Confrontés à des définitions divergentes de contreparties locales, les parties à une opération seront condamnées à un risque de qualification en vertu des règlements nationaux sur les dérivés de gré à gré. Une concertation pourrait être renforcée et la détermination de l'autorité compétente ainsi que les concepts de contreparties locales, succursales ou filiales pourraient être harmonisés.

Prospects for regulatory convergence under TTIP. Bruegel Policy Contribution 2013/15, October 2013

An ambitious, comprehensive and high-standard trade and investment agreement between the European Union and the United States is feasible, but a key concern is whether the transatlantic trade partners will succeed in creating a meaningful agreement within the tight timeline of the Transatlantic Trade and Investment Partnership (TTIP) negotiations. The target of a ratified pact before a new European Commission takes office in November 2014 is an objective that is likely to conflict with the level of ambition on the substance. Regulatory congruence would require the unilateral and unconditional recognition by the TTIP partners of each other’s standards, procedures and conformity assessment tests. The way forward is to create a ‘living’ (or progressive commitment) agreement on regulatory cooperation with a horizontal template for coherence and conformity assessment and a detailed monitoring mechanism, with implementation starting immediately for a few selected sectors. Regulatory harmonisation under TTIP may not lead to emerging markets automatically upgrading to the higher TTIP standards. Domestic priorities and the high demand from a rising price-sensitive group of consumers will likely result in a dual regulatory regime in emerging markets in the medium-term.

The EU’s online gambling regulatory approach and the crisis of legal modernity. EU Centre Singapore Working Paper No. 19, January 2014

Online gambling is a fast growing service activity in the world - its economic significance is clearly shown by the high level of innovation by gambling operators all over the world, as well as by the increasing amount of tax revenues generated in those States that allow this activity. Nevertheless, states face many difficulties in controlling and regulating online gambling, given the specific nature of the Internet, and the never-ending quest by gamblers for new gaming websites that offer superior odds, a wider gaming variety, and greater bets combination. In this working paper, Dr Salvatore Casabona examines the legality of online gambling in the context of the European Union (EU), and discusses the Union's regulatory approach to online gambling, the lack of harmonisation and the issue of member state sovereignty at the crossroad of European Law on online gambling, and the potential for a new regulatory paradigm to emerge.

Enforcement in the EU Single Market. CEPS Paperbacks. October 2012

Enforcement of and compliance with laws and regulations in the single market of the European Union are not only legally necessary, but also of crucial economic importance for business, consumers and the EU economy at large. This book provides a comprehensive overview of the current EU enforcement landscape and its functioning. The classical infringement route via the Court of Justice of the European Union remains critical as a last resort, but it is increasingly seen as very slow and costly. The new emphasis relies heavily on a range of pre-infringement as well as preventive initiatives that prevent new technical barriers from arising. They also tend to be far less costly and more rapid, informal and effective in pursuing a properly functioning internal market. These improvements are welcome news for the single market, yet EU enforcement still has problems to solve, for example in the area of public procurement.

In sickness and in health: protecting and supporting public investment in Europe. Bruegel Policy Contribution 2014/02, February 2014

The long-term decline in gross public investment in European Union countries mirrors the trend in other advanced economies, but recent developments have been different: public investment has increased elsewhere, but in the EU it has declined and even collapsed in the most vulnerable countries, exaggerating the output fall. The provisions in the EU fiscal framework to support public investment are very weak.The recently inserted ‘investment clause’ is almost no help. In the short term, exclusion of national co-funding of EU-supported investments from the fiscal indicators considered in the Stability and Growth Pact would be sensible. In the medium term, the EU fiscal framework should be extended with an asymmetric ‘golden rule’ to further protect public investment in bad times, while limiting adverse incentives in good times. During a downturn, a European investment programme is needed and the European Semester should encourage greater investment by member states with healthy public finances and low public investment rates. Reform and harmonisation of budgeting, accounting, transparency and project assessment is also needed to improve the quality of public investment.

Was the ECB’s Comprehensive Assessment up to standard? CEPS Policy Brief No. 325, 10 November 2014

The Comprehensive Assessment conducted by the European Central Bank (ECB) represents a considerable step forward in enhancing transparency in euro-area banks’ balance sheets. The most notable progress since the previous European stress test has been the harmonisation of the definition of non-performing loans and other concepts as well as uncovering hidden losses, which resulted in a €34 billion aggregate capital-charge net of taxes. Despite this tightening, most banks were able to meet the 5.5% common equity tier 1 (CET1) threshold applied in the test, which suggests that the large majority of the euro-area banks have improved their financial position sufficiently that they should no longer be constrained in financing the economy. As shown in this CEPS Policy Brief by Willem Pieter de Groen, however, the detailed results provide a more nuanced picture: there remain a large number of the banks in the euro area that are still highly leveraged and in many cases unable to meet the regulatory capital requirements that will be introduced in the coming years under the adverse stress test scenario.

Defining Europe's Capital Markets Union. Bruegel Policy Contribution Issue 2014/12, 13 November 2014

The new European Commission has signalled that it will work to create a ‘capital markets union’. This is understood as an agenda to expand the non-bank part of Europe’s financial system, which is currently underdeveloped. The aim in the short term is to unlock credit provision as banks are deleveraging, and in the longer term, to favour a more diverse, competitive and resilient financial system. Direct regulation of individual non-bank market segments (such as securitisation, private placements or private equity) might be useful at the margin, but will not per se lead to significant capital markets development or the rebalancing of Europe’s financial system away from the current dominance by banks. To reach these goals, the capital markets union agenda must be broadened to address the framework conditions for the development of individual market segments. Six possible areas for policy initiative are, in increasing order of potential impact and political difficulty: regulation of securities and specific forms of intermediation; prudential regulation, especially of insurance companies and pension funds; regulation of accounting, auditing and financial transparency requirements that apply to companies that seek external finance; a supervisory framework for financial infrastructure firms, such as central counterparties, that supports market integration; partial harmonisation and improvement of insolvency and corporate restructuring frameworks;and partial harmonisation or convergence of tax policies that specifically affect financial investment.

An Unemployment Insurance Scheme for the Euro Area: A simulation exercise of two options. CEPS Special Report No. 98/December 2014

This study offers an in-depth economic analysis of the two main proposals for the creation of a European unemployment insurance scheme. One proposes the creation of a harmonised European unemployment benefit scheme that would apply automatically to every eligible unemployed person. The alternative, termed ‘reinsurance’ here, would transfer funds to national unemployment insurance schemes to finance benefits from the centre to the periphery when unemployment is measurably higher than normal. The rationale behind these proposals is to set up an EU-level shock absorber to overcome coordination failures and the crisis-budget constraints of individual countries. The authors consider the possible trade-offs and challenges of, for example, the definition of the trigger, the fiscal rule and the harmonisation of national benefits. They conclude that while both options are viable, ‘reinsurance’ offers a stronger stabilisation effect for the same amount of European distribution.

Mutual recognition in goods and services: an economic perspective. Bruges European Economic Policy (BEEP) Briefing 2/2002

Mutual recognition is a remarkable innovation facilitating economic intercourse across borders. In the EU's internal goods market it has been helpful in tackling or avoiding the remaining obstacles, namely, regulatory barriers between Member States. However, there is a curious paradox. Despite the almost universal acclaim of the great merits of mutual recognition the principle has, in and by itself, contributed only modestly to the actual realisation of free movement in the single market. It is also surprising that economists have not or hardly underpinned their widespread appreciation for the principle by providing rigorous analysis which could substantiate the case for mutual recognition for policy makers. Business in Europe has shown a sense of disenc hantment with the principle because of the many costs and uncertainties in its application in actual practice. The purpose of the present paper is to provide the economic and strategic arguments for employing mutual recognition much more systematically in the single market for goods and services. The strategic and the "welfare" gains are analysed and adetailed exposition of the fairly high information , transaction and compliance costs is provided. The information costs derive from the fact that mutual recognition remains a distant abstraction for day-to-day business life. Understandably, verifying the "equivalence" of objectives of health and safety between Member States is perceived as difficult and uncertain. This sentiment is exacerbated by the complications of interpreting the equivalence of "effects". In actual practice, these abstractions are expected to override clear and specific national product or services rules, which local inspectors or traders may find problematic without guidance. The paper enumerates several other costs including, inter alia, the absence of sectoral rule books and the next-to-prohibitive costs of monitoring of the application of the principle. The basic problems in applying mutual recognition in the entire array of services are inspected, showing why the principle can only be used in a limited number of services markets and even there it may contribute only modestly to genuine free movement and competitive exposure. A special section is devoted to a range of practical illustrations of the difficulties business experiences when relying on mutual recognition. Finally, the corollary of mutual recognition - regulatory competition - is discussed in terms of a cost/benefits analysis compared to what is often said to be the alternative , that is "harmonisation" , in EU parlance the "new approach" to approximation. The conclusion is that the manifold benefits of mutual recognition for Europe are too great to allow the present ambiguities to continue. The Union needs much more pro-active approaches to reduce the costs of mutual recognition as well as permanent monitoring structures for its application to services (analogous to those already successfully functioning in goods markets). Above all, what is required is a "mutual recognition culture" so that the EU can better enjoy the fruits of its own regulatory ingenuity.