European Law Review
ISSN: 0307 5400
February 2016
EL Rev 2016 1
Editorial
Brexit and International Treaty-making
Obituary
Pierre Mathijsen (1924–2015)
Laurence Gormley
Article s
Gauweiler and the Legality of Outright Monetary Transactions
Paul Craig and Menelaos Mark ak is
Creating European Markets through Regulation: The Case of the Regulation on Advanc ed
Therapy Medicinal Products
Marton Varju and Judit Sándor
The Economic Effects of EU Tax Jurisprudence
Rita de la Feria and Clemens Fuest
Security Rights, the European Insolvency Regulation and Concerns about the Non-application
of A voidance Rules
Andrew Keay
Analysi s and Reflections
The Léger Ruling as Another Example of the ECJ’s Disappointingly Reticent Approach to the
Protection of the Rights of LGB Persons under E U Law
Alina Tryfonidou
Joining the Dots: External Norms, AFSJ Directives and the E U’s Role in Global Legal Order
Elaine Fahey
The ECB’s “Location Policy” for Central Counterparties: Is the General Court Drawing a
Line, or Taking One Step Back to Take Two Steps Forward?
Evangelos Ananiadis-Bassias
Book Reviews
EL Rev February 2016
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Editorial
Brexit and International Treaty-making
EU law; European Union; Referendums; Treaties
Since the election victory of the Conservative party in May 2015, the Government of the
United Kingdom has engaged in negotiations with its European Union partners. The subject matter of these negotiations were set out in a letter which Prime Minister David Cameron sent
to the President of the European Council on 10 November 2015. This letter outlines four
areas where the British Government is seeking change. Thes e include the following:
economic governanc e (that is preventing the members of the Eurozone from decision-making
which would affect the internal market in general and the Member States which are not
members of the Eurozone in particular); competitiveness; sovereignty (in particular the
removal of the referenc e to “ever closer union” in primary law and the strengthening of
national parliaments); and immigration (including the benefits granted to EU citizens).
At the time of writing, there is no agreement between the United Kingdom and the ot her E U
Member States. There is, however, a strong suggestion that such an agreement would be
reached at the European Council summit of 18–19 February 2016 and that a referendum
would be scheduled for the summer of 2016.
The issues raised by the British Prime Minister have attracted considerable legal and political
attention. The demands on immigration, in particular, have given rise to a debate about free
movement in the European Union and the integrity of the internal market. This debat e has
been deeply politicized and often carried out at an abstract level.
Less attention has been paid to the external relations implications for the United Kingdom of a
possible exit from the EU. In particular, how would such a development affect the international
obligations which the UK has assumed pursuant to EU law? After all, the Union has been an
active international player and has concluded international agreements in a wide range of
policy areas. These agreements are binding upon bot h the institutions of the Union and the
Member States (art.216(2) TFE U). As the Court of Justice puts it, such agreements “form an
1
integral part” of EU law.
The UK is not a party to all these agreements, even though it is bound by all of them. Some
cover areas whic h fall within the Union’s exclusive competence and have been concluded by
2
the Union alone. Following an exit from the EU, such agreements would not be applicable to
the UK which would, then, need to renegotiate its legal relationships with the third parties
concerned.
The legal implications under mixed agreements, that is agreements concluded by both the EU
and its Member States, are no less complex. Mixed agreements cover a considerable part of
3
the Union’s treaty-making activity. Whilst the UK is a party to such agreements, the rights
which it has enjoyed under their provisions, as well as the obligations it has assumed, would
not continue to apply automatically. For instance, mixed agreements may be of an essentially
4
bilateral nature. This is suggested by both their context and wording. It has also been
affirmed by the Court which, in European Development Fund, held that the Lomé Convention
between the EU and its Member States and African, Caribbean and Pacific states
5
“established an essentially bilateral ACP-EE C cooperation”.
1
R&V Haegeman Sprl v Belgium (181/73) [1974] E.C.R. 449; [1975] 1 C.M.L.R. 515.
See, for instance, the Agreement between the EC and Australia on trade in wine [2009] OJ L28/3.
3
See C. Hillion and P. Koutrakos (eds), Mixed Agreements Revisited (Oxford: Hart Publishing, 2010).
4
They refer to the contracting parties as “the European Union and its Member States, of the one part” and the other
contracting party “of the other part”: see, for instance, the Free Trade Agreement with South Korea [2011] OJ L127/1.
5
Re European Development Fund (C-316/91) [1994] E.C.R. I-625; [1994] 3 C.M.L.R. 149.
2
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In other words, following an exit from the E U, the UK would have to re-examine the
international treaties under which it is currently bound in the context of EU law, and negotiate
many treaties which would straddle a wide range of policy areas. This would be bound to be a
long, difficult and expensive process which would raise a host of legal, policy, and practical
problems. For instance, in the areas where the Union enjoys exclusive competence, such as
the Common Commercial Policy, the UK has long given up its power to negotiat e international
agreements, as such power has been conferred on the Commission (art.218(3) TFE U).
There is also another practical issue which would have an impact on the negotiating position
of the UK following a possible exit from the EU. There is an increasing tendency in
international treaty-making for big package deals. In the case of the E U, the Commission has
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been advocating deep and comprehensive free trade agreements since the mid 2000s. Such
agreements include the Free Trade Agreement with South Korea, the Comprehensive
Economic and Trade Agreement with Canada, let alone the much maligned Transatlantic
Trade and Investment Partnership which is currently negotiated with the United States of
America. Such big deals require big markets to support them.
The political sensitivity of the upcoming referendum may give prominence to an emotional
response and may dominate the deeply politicized debate surrounding the current
negotiations bet ween the UK and the EU. Such response, however, should not marginalize
the need for a careful consideration of the legal and practical implications of a possible exit for
all the policy areas which would be affected. Whilst less eye-catching, this exercise should be
an essential part of the conversation about whether the UK should leave the EU.
[PK]
6
See “Global Europe: Competing in the World” COM(2006) 567 final.
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Obituary
Pierre Mathijsen (1924–2015)
Laurence Gormley
Article s
Gauweiler and the Legality of Outright Monetary Transactions
Paul Craig and Menelaos Markakis
The Gauweiler case has already made history, since it was the first reference from the
Bundesverfassungs gericht to the Court of Justice of the European Union (CJEU). Whether it
mak es history in other respects remains to be seen. The Bundes verfassungsgericht ’s
reference was framed by its jurisprudence on ultra vi res and identity lock s, and the
Bundesverfassungs gericht left the CJEU in no doubt that it felt that the European Central
Bank s (ECB)’s intervention via Outright Monet ary Transactions was unlawf ul, and could only
be saved if interpret ed in the manner set out by the referring court. The CJEU nonetheless
upheld the legalit y of the Outright Monetary Transactions (OMT) schema, and its reasoning,
together with that of the Bundesverfassungsgericht, is analysed in this article. It will be argued
that the CJEU’s decision was correct and legitimate in the light of the relevant Treaty
provisions. The ball is now firmly back with the Bundesverfassungsgericht, and it remains to
be seen whether it accepts the CJEU’s ruling or mak es history by refusing to follow it.
Creating European Markets through Regulation: The Case of the Regulation on
Advanced Therapy Medicinal Products
Marton Varju and Judit Sándor
This article analyses the EU regulatory efforts to create a European mark et for advanced
therapy medicinal products. It focuses on the pitfalls of European regulat ory intervention in a
difficult mark et which is characteris ed by multiple, often contradictory stak eholder
expectations, rapid scientific and technological change, and ethical diversity. It contends that
while the Regulation on Advanced Therapy Medicinal Products was, in principle, equipped to
address these challenges, its fundamental paradigms and choices, and its treatment of some
of the dilemmas of the emerging technology mark et, undermined its ability to establish the
balanced and sustainable mark et desired by the E U legislator.
The Economic Effects of EU Tax Jurisprudence
Rita de la Feria and Clemens Fuest
The aim of this article is to propose a new framework to assess the impact of Court of Justice
of the EU (CJE U) jurisprudence on the construction of a European internal mark et, by
considering whet her the jurisprudence of the Court on corporate taxation fulfils the mandate
set out in the European Treaties for establishing such a mark et. It is shown that the Court ’s
focus upon removing discriminatory obstacles to the fundamental freedoms does not
necessarily lead to a more level playing-field and increased tax neutralit y, an instrumental
objective towards attaining a European internal mark et. In order to assess the impact of the
jurisprudence of the Court upon neutralit y and a level playing-field, the decision in Lank horstHohorst, regarding the compatibility of thin capitalisation rules with free movement provisions,
will be used as case study. An economic analysis demo nstrates that, depending on the
reaction of Member States to the ruling, tax induced differences in capital costs faced by firms
operating within the European internal mark et may increase, while GDP and welfare may
decrease. Consideration of actual legislative amendments introduced to thin capitalisation
rules by Member States following Lank horst-Hohorst appear to indic ate that it is this negative
scenario which has prevailed. Results demonstrate that it is not always or necessarily the
case that decisions of the CJEU will le ad to a more level playing-field and tax neutralit y, thus
contributing to the establishing of a genuine E U internal mark et. The article considers the
constitutional implications of this conclusion, and the cons equent break ing of the
constitutional instrumental chain.
Security Rights, the European Insolvency Regulation and Concerns about the Non application of Avoidance Rules
Andrew Keay
This article addresses debtors who have entered insolvenc y proceedings in a Member State
of the EU so that the European Regulation on Insolvency Proceedings applies, and before the
opening of insolvency proceedings they granted some form of securit y to another party. The
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article analyses the issues that are relevant to determining whether the granting of security
prior to the advent of insolvency proceedings under the Regulation can be avoided, and it
examines the extent to which pre-insolvenc y trans actions involving securit y would be
protected by arts 5 and 13 of the Regulation. It then analyses the concerns that might be
articulated in relation to the application of art.13 and what options are available to the E C
to address these concerns.
Analysi s and Reflections
The Léger Ruling as Another Example of the ECJ’ s Di sappointingly Reticent Approach
to the Protection of the Rights of LGB Persons under EU Law
Alina Tryfonidou
In the 1980s, in the midst of the AIDS epidemic, many countries introduc ed l ifetime bans on
blood donations by men who had sexual relations with men (MS M). These blank et b ans have,
recently, begun to be challenged and, as a result, many count ries have either relaxed them or
completely abolished them. The case under examination (Léger) is another instance of
questioning the legalit y of such a ban. In particular, in this case, the European Court of
Justice was called on to rule on whether a measure such as the French lifetime exclusion
from blood donation of the MS M population that was at issue before the referring court is
contrary to EU law. The Court ruled that although discriminatory on th e ground of sexual
orientation, such a ban may be justified in certain circumstances, and left it to the national
court to mak e the final decision. This article seek s to analyse the case and to explain why, in
the author’s view, the Court can be accused of—once more—not going far enough in the
protection of lesbian, gay and bisexual (LGB) rights.
Joining the Dots: External Norms, AFS J Directive s and the EU’ s Role in Global Legal
Order
Elaine Fahey
This article considers how external norms, i.e. instruments of public international law,
including but not limited to conventions, agreements and treaties qua norms “internalise” into
17 proposed and adopted Area of Freedom, Security and Justice (AFSJ) Directives of the last
legislative cycle of the EU, from 2009 to 2014. The article considers select Directives, namely
(1) the first EU criminal law Directive; (2) the first AFSJ Directive struck down by the Court; (3)
a Directive employing a norm common to internal and external rule-mak ing; (4) UN
Conventions in AFSJ Directives; and (5) Directives omitting the promotion of any external
norms. The study of the promotion of external norms is argued to reveal m uch about the
relationship bet ween the “external” and “internal” of EU law and polic y, and the evolution of its
AFSJ. The EU’s participation in these external norms is also relevant for the study of the EU ’s
role in the world.
The ECB’ s “Location Policy” for Central Counterparties: Is the General Court Drawing
a Line, or Taking One Step Back to Take Two Steps Forward?
Evangelos Ananiadi s-Bassi as
In a much-await ed ruling on 4 March 2015 in Case T-496/11 the General Court of the EU
annulled the Eurosystem ’s Oversight Policy framework (OPF) euro area loc ation requirement
for central counterparties (CCPs) clearing transactions over securities denominated in euro.
In so doing, the Court held that the OPF was a legally challengeable act, thereby declaring
admissible the action brought by the UK. The Court steered clear of the question of the OPF
location requirement ’s compatibility with freedom of movement, as enshrined in the Treaty,
limiting the scope of its review to the regulatory competence of the European Central Bank
(ECB) over securities clearing systems. The E CB was found to have no regulatory power over
CCPs but may continue providing recommendations to public authorities on CCP -relat ed
oversight standards and practices. This article offers an overview of the major points of the
Court ’s ruling, and an assessment of its lik ely implications.
Book Reviews
Tables
Index
EL Rev February 2016
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