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Don’t Just Do Something, Stand There! Reforming the EU

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About The Author

Anirudh Mandagere (Former Law and Social Policy Editor)

Anirudh is the judicial assistant to Lord Justice Jackson. Previously he studied History at St. Catherine’s College, University of Oxford and undertook the Graduate Diploma in Law and the Bar Professional Training Course at City University. Outside of the law, Anirudh enjoys running, badminton and watching the cult Netflix series, ‘Bojack Horseman’.

This article is part of the 'Brexit' series, edited by Matt Bogdan.

With the upcoming referendum on the UK's membership of the European Union, the Brexit series intends to explore key issues surrounding Brexit, particularly what effect EU law currently has on the UK, and what would be left with it gone.

Other articles from this series are listed at the end of this article.

There are three years which represent significant turning points in British history. In 1906, the Liberal Party swept to power, and instituted the foundations of the welfare state. In 1945, the Labour Party under Clement Attlee secured an overall majority and pursued a programme of nationalisation, culminating in the establishment of the National Health Service. In 1979, the Conservative Party under Margaret Thatcher was elected to government, resulting in the privatisation of nationalised industry, severe clampdowns on trade union activity and the mass sale of council homes.

There is now another year to add to the list – 2016. The result of the EU referendum has shattered the political establishment, and left the country intensely polarised. It shocked the markets, reignited the question of Scottish independence and has called into question the ‘Good Friday’ Agreement in Northern Ireland. The fallout from the referendum has only just begun.

Among those who supported Remain, there are many people to blame for ‘Brexit’. David Cameron, who called a referendum in an effort to heal divisions over Europe, and failed to articulate a positive case for EU membership. Jeremy Corbyn, for taking a ‘backseat’ during the campaign, and in doing so confusing Labour members as to what exactly their position was. The weak and unfortunately named BSE Campaign, whose ‘Project Fear’ strategy failed to convince voters. Aside from this, blame must be apportioned to the inattentive, rigid and inflexible leadership of the European Union. Obsessed with federalisation and the idea of a ‘United States of Europe’, the European Commission failed to adapt to the Euro Crisis, the influx of refugees and the rise of anti-EU populism across the continent. The failure of the EU to adapt to changing circumstances has only just become apparent. Speaking before the historic referendum, the European Council President Donald Tusk admitted that:

It is us who today are responsible. Obsessed with the idea of instant and total integration, we failed to notice that ordinary people, the citizens of Europe, do not share our Euro-enthusiasm.

The spectre of a breakup is haunting Europe, and a vision of a federation doesn’t seem to me like the best answer. We need to understand the necessity of the historical moment.

Brexit could be the shock that the EU needs to reform. No longer can the EU Commission President speculate over an ‘EU Army’ against the wishes of member states. Already, far-right anti-EU populist movements are gearing up across the continent to demand a referendum. The European Union needs to tread carefully if it does not wish to go the way of the Holy Roman Empire.

For the European Union to survive, it must understand that member states are significantly frustrated at the way it has operated over the past decade. The failure of EU leadership to react in any meaningful way to British Euroscepticism was made apparent in the paltry ‘reform’ package that Cameron was offered. It reflected the rigidity of its leadership, and the failure to adapt the EU to changing circumstances and significant dissatisfaction within member states. Beset by financial, diplomatic and migration crises, the European Union must change the way it operates.

Supremacy and Subsidiarity

The Leave Campaign used the principle of ‘supremacy’ in EU law to great effect. The principle, enunciated in the judgments of Costa v ENEL and Simmenthal, states that ultimately EU law is supreme over national law. Thus any law of the member state which conflicts with EU law must be set aside. As any first-year law student will tell you, this has severe implications for the notion of ‘parliamentary sovereignty’. The Victorian notion of parliamentary sovereignty, discussed by Albert Dicey, postulates two aspects to parliament’s power. Firstly, that it can legislate on any subject-matter whatsoever, and secondly that no court can overturn an act of parliament. Both these precepts were effectively nullified in the landmark judgment of R v Secretary of State for Transport, ex parte Factor-Tame, in which the ‘Merchant Shipping Act’ was held to be incompatible with EU law, and had to be set aside. For the first time, parliament had its authority restricted, ending ‘1000 years of history’.

The nature of supremacy makes it difficult for meaningful dialogue to take place within the EU, and has been used by the Court of Justice to expand the remit of EU law. It encourages centralised policy-making which often does not meet the needs of the member states. A prime example of this is the Port Services Regulation, which was widely criticised by leading ‘Leave’ campaigners during the referendum campaign. In essence, the regulation would establish internal competition and provide for the establishment of a regulatory body to oversee that such competition was enforced. While this would be beneficial to ports on the continent, which tend to be state-owned and beneficial on grants, it would be harmful to ports in Britain – which are generally small and privately owned. By obligating a measure of internal competition, it would deter investment and wreck the economies of scale. This   exemplifies the fact that a measure which might seem to impose a level playing field between member states may, in fact, indirectly disadvantage some.

Supremacy encourages centralisation and interference by the EU’s highest organs in the affairs of the member state. Yet to assume, as the Leave Campaign suggested, that the EU is destined to continue on a path of overwhelming centralisation is false. It ignores the principle of ‘subsidiarity’, which is at the heart of the European Union Legal Order (Article 5(3) of Treaty on the European Union).

Subsidiarity is drawn from Catholic social teaching. The principle was captured by Pope Pius XI in his 1931 encyclical, Quadragesimo anno. Firstly, it suggests that higher-level state institutions should not do things which can be done by lower-level state institutions. Thus, in theory the powers of the European Union should only be limited to that which cannot be done by member states. Secondly when a higher-level state institution acts, it must do so in a way that helps society rather than directs them. Thirdly if a function can be carried out without the need for state intervention, then the state should not interfere.

The principle of subsidiarity was introduced in the Maastricht Treaty by the then Head of the EU Commission, and practising Catholic, Jacques Delors. As it stands in Catholic social teaching, the principle is geared towards decentralisation and a ‘hands off’ approach to governance. However, the definition of subsidiarity in the Treaty on the European Union is at odds with this decentralising philosophy. Under Article 5 on the TEU, subsidiarity is described in a way that encourages centralisation. It states that:

The Union shall act only if and in so far as the objectives of the proposed action cannot be sufficiently achieved by the Member States, either at central level or at regional and local level, but can rather, by reason of the scale or effects of the proposed action, be better achieved at Union level. (Emphasis added)

The wording of subsidiarity within the TEU has inverted its original purpose. It encourages EU intervention in areas where the EU believes it could pursue those policies better, rather than when it is absolutely necessary. This interpretation of subsidiarity does not effectively restrain the centralising tendency of the EU, but gives licence to the Court of Justice to increase the power of the Union over its member states. An example of how this could work in practice can be illustrated by examining the controversial ‘Tobacco Products Directive’, which imposes severe restrictions on the advertising of vaping throughout the European Union on the basis of the free movement of goods. Subsequently, Court of Justice upheld the legality of the measure. Under the current definition of ‘subsidiarity’, the Union had the power to act in this field, and reasoned that the goal of ‘free movement of goods’ would be better achieved by enacting heavy restrictions on advertising, so as to prevent inconsistent applications across member states. By contrast under the original definition of ‘subsidiarity’, the Union’s power to act in this regard would be limited. It would be difficult to justify the banning of advertising as ‘essential’ for the free movement of goods.

The principle of subsidiarity is an important one. However, the way it has been drafted within the TEU has made it an agent of harmonisation, rather than one of decentralisation. This has dramatically expanded the power of the European Union over member states, and contributed to significant unease over the pace of ‘federalisation’. Returning to the original Catholic roots of ‘subsidiarity’ is essential for ensuring that the centralising tendency of the European Union can be reined in.

Reform of the Court of Justice

The Court of Justice lies at the heart of the EU Legal Order. The basis of EU law is in its treaties, much of which are inherently vague in their language and rely on abstract principles such as ‘fidelity to the Union’ (Article 4(3)). This encourages judges to rely on ‘teleological interpretation’, in which the Court interprets legislative provisions in light of the purpose, values, legal, social and economic goals these provisions aim to achieve. This approach often results in the broadening of powers available to the bodies of the European Union. The powerful position enjoyed by the EU judiciary constitutes a problem because the Court has a vested interest in centralisation. As Vaubel suggests, ‘the more powers it transfers to the EU level, the more important and interesting are the cases that the judges will be entitled to decide’. The nadir of the Court’s interpretation to aggrandise in its own power was in the notorious Mangold judgment. In this case the Court of Justice held that Germany contravened the Employment, Equality Framework Directive, despite the fact that the directive in question did not have to be implemented until a year later.

The Court of Justice was created with the aim of mediating between the interests of the EU and the member states. It is clear that this has failed. The ‘centralising’ tendency of the European Court of Justice must be counterbalanced by the creation of a new court. An engaging suggestion has been made of a ‘Court of Review’ which would be comprised of national high court judges. It would exist as a separate appeals court, which would hear cases from the Court of Justice which significantly affected the distribution of power between member states and the European Union. It would be charged with balancing the ‘interests’ of the Court of Justice with the interests of domestic courts. For too long the tradition of ‘purposive’ interpretation has been used by the Court of Justice to justify its encroachment into policy-making. For example, Article 114 of the Treaty on the Functioning of the European Union (TFEU) has been interpreted by the Court as the basis for EU financial regulation. This is despite the fact that differences within regulation are consistent with the ‘free movement of capital’. The existence of a separate appeals court would temper the flexibility of the Court’s interpretation and ensure that the provisions of the Treaty were not manipulated to increase the Court’s power.

Conclusion

Distraught on the success of revolutionary France against Prussia at the Battle of Valmy in 1792, the Prussian soldiers looked to the great writer, Goethe, for motivation. He had previously cheered them up with great speeches, but this time he could only declare that ‘[f]rom this place, and from this day forth begins a new era in the history of the world, and you can all say that you were present at its birth’. Goethe’s words are pertinent in light of Brexit. A new era in British history has started; the consequences of which we are yet to realise, or even understand.

The experience of ‘Brexit’ should serve as a warning to the complacent institutions of the European Union. If recent reports are correct, there is significant frustration with the European Commission among the heads of member states. This frustration is not unwarranted; the European Commission, and indeed the heads of all the EU institutions are responsible for British withdrawal. The passion to create a ‘United States of Europe’ has imperilled the very existence of the European Union itself. To institute meaningful reform, the European Union should accept its limitations and seek to slow down its centralising ethos. 

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Tagged: Brexit, European Union

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