Select Committee on European Union Tenth Report


CHAPTER 2: GENERAL PROVISIONS: FOUNDATIONS OF THE UNION

The structure of the Treaties

WHAT IS IN THE AMENDED TEU AND TFEU

2.1.  The TEU provides the basic constitutional and legal framework of the European Union, "setting out the objectives and principles" (Edward Q S115), and providing for the Common Foreign and Security Policy. It includes provisions on:

2.2.  As its new name suggests, the amended TFEU fills out the "detail" (Edward Q S115). In its amended form, it begins with the words "This Treaty organises the functioning of the Union" (new Article 1 TFEU). The Campaign against Euro-federalism (CAEF) interpreted the TEU as "the constitutional part" of the EU Treaty structure, and the TFEU as the "'implementational' part" (p S123).

2.3.  Nicolas Gros-Verheyde, writing in Europolitics (7 November 2007), suggested that this new division "implicitly subordinates [the TFEU] to the Treaty on the European Union, and consequently to the objectives that treaty sets for Europe. As a result, principles previously considered declarative … become fundamental principles guiding European policies". Professor Damian Chalmers[5], in oral evidence to us, said that "[i]t may be that one finds that various provisions in the Functioning are interpreted in the light of the earlier provisions, but broadly speaking they all have equal weight" (Q S3). He thought Mr Gros-Verheyde's case was "arguable", but "overstated" (Q S4). In supplementary written evidence, he added that he thought the risk "very slight indeed": "[t]he new Article 1 TEU makes clear that the two Treaties and, one assumes, their individual provisions are to have equal value. I see this as a further safeguard with equal value being understood as the detail and checks of the latter Treaty not being able to be undermined by the more open wording of the former Treaty" (p S16). Professor Steve Peers[6] wished that the division had been carried further, with the detailed rules on foreign policy placed in the TFEU, "since there is no distinction … between placing them there and keeping them in the TEU" (p S151).

WHAT BECOMES OF THE PILLARS?

2.4.  Under the existing Treaties, the "first pillar" of the European Union is the supranational European Community. The "second pillar" (foreign and security policy) and "third pillar" (justice and home affairs) are areas of intergovernmental cooperation with their own decision-making mechanisms, where the Union does not have explicit legal personality. The Lisbon Treaty merges the first and third pillars, and abolishes the European "Community" because the distinction is no longer necessary—there is just one organisation, the Union. Justice and home affairs policy moves into the generally applicable mechanisms of the Union (based on those of the old first pillar/Community), which are laid out in the TFEU. The Common Foreign and Security Policy, which remains subject to specific procedures, is outlined in the TEU. Sir Francis Jacobs thought that the Treaty's demolition of the pillar structure removed a "patchwork system … widely regarded as opaque, incoherent and generally unsatisfactory" (p S148). However, others may find a symbolic importance in a structure that, in legislative process terms, no longer sets the economic community in the foreground.

ARE THE AMENDMENTS TO THE STRUCTURE HELPFUL?

2.5.  The European Parliamentary Labour Party argued that, by establishing the Union as "one single legal entity and structure", the Lisbon Treaty will end the "confusion" between the European Community and the European Union (p S141). Sir David Edward thought that the reforms made by the Lisbon Treaty had the advantage of bringing the TEU and TEC/TFEU together "in what ought at least to be a coherent way" (Q S115). However, according to Professor Helen Wallace[7], "We have ended up with a slightly muddled outcome because of the circumstances in which this Reform Treaty has been born" (Q S161).

CONCLUSIONS

2.6.  The division of material between the TEU—principles and objectives, provisions on the institutional framework, general provisions and the CFSP—and the TFEU, containing the details on how the Union is to function, is clear. The provisions of the two Treaties will have equal value. The Protocols will have the same legal status as the articles of the Treaties. The Lisbon Treaty itself is, however, a complex document, not easily accessible to the people whom it affects, and this is likely to be an obstacle to informed debate as to the merits of the Treaty.

The values and objectives of the European Union

2.7.  The Lisbon Treaty amends the TEU to give, for the first time, a concise statement of the values and objectives of the Union in one place: Articles 2 and 3 of the amended TEU.

2.8.  Article 2 of the amended TEU sets out the Union's "values":

2.9.  This statement of "values" is new. It is partially drawn from the "principles" contained in Article 2 of the TEC and Article 6 of the current TEU. The new Article 2 adds "human dignity" and general "equality", but it includes terms from or very similar to those used throughout the Treaties and in Union case-law, making the question of whether there are any significant changes a matter of interpretation.

2.10.  Article 3 of the amended TEU sets out the objectives of the Union:

BOX 1
ARTICLE 3 OF THE AMENDED TEU

1. The Union's aim is to promote peace, its values and the well-being of its peoples.

2. The Union shall offer its citizens an area of freedom, security and justice without internal frontiers, in which the free movement of persons is ensured in conjunction with appropriate measures with respect to external border controls, asylum, immigration and the prevention and combating of crime.

3. The Union shall establish an internal market. It shall work for the sustainable development of Europe based on balanced economic growth and price stability, a highly competitive social market economy, aiming at full employment and social progress, and a high level of protection and improvement of the quality of the environment. It shall promote scientific and technological advance.

It shall combat social exclusion and discrimination, and shall promote social justice and protection, equality between women and men, solidarity between generations and protection of the rights of the child.

It shall promote economic, social and territorial cohesion, and solidarity among Member States.

It shall respect its rich cultural and linguistic diversity, and shall ensure that Europe's cultural heritage is safeguarded and enhanced.

4. The Union shall establish an economic and monetary union whose currency is the euro.

5. In its relations with the wider world, the Union shall uphold and promote its values and contribute to the protection of its citizens. It shall contribute to peace, security, the sustainable development of the Earth, solidarity and mutual respect among peoples, free and fair trade, eradication of poverty and the protection of human rights, in particular the rights of the child, as well as to the strict observance and the development of international law, including respect for the principles of the United Nations Charter.

6. The Union shall pursue its objectives by appropriate means commensurate with the competences which are conferred upon it in the Treaties.

2.11.  This Article replaces the lists of objectives and activities set out in Article 2 of the current TEU and Article 3 of the current TEC. In comparison to the objectives currently set out in Article 2 TEU, the aim of promoting "peace, its values and the well-being of its peoples" is new, as is the explicit objective of a high level of protection and improvement of the quality of the environment (currently included in the "Principles" of the TEC—Article 2 TEC). The statement that the Union shall respect cultural and linguistic diversity and safeguard and enhance Europe's cultural heritage is also an addition. The paragraph on economic and social objectives adds specific references to "price stability" and a "highly competitive social market economy". There is also a stronger and clearer commitment to combating social exclusion and discrimination and to promoting social justice and protection. The references to "territorial cohesion" and "solidarity among Member States" are new, and the Union's objectives in the international scene are provided in greater detail.

2.12.  In amending the Union's objectives (as set out in current Article 2 TEU), references are removed to the common defence policy, the introduction of a citizenship of the Union (the common defence policy features in Article 2 TFEU, and citizenship is set out in Part Two of the TFEU), and the objective of maintaining the acquis communautaire, which was inserted as part of the compromise reached at Maastricht.

2.13.  In comparison to the list of activities set out in the TEC (Article 3), there is no mention of the aim to ensure "that competition in the internal market is not distorted" (see Chapter 9). There is also no mention of a number of the other TEC activities, such as a common policy in the sphere of agriculture and fisheries, a common policy in the sphere of transport, and a contribution to the attainment of a high level of health protection.

2.14.  The report on the Lisbon Treaty by the European Parliament's Committee on Constitutional Affairs[8] has the European Parliament welcoming "the fact that the Treaty establishes in a clearer and more visible way the values, common to all Member States, on which the Union is founded, as well as the objectives of the Union and the principles governing its action and its relations with Member States" (European Parliament resolution of 20 February 2008 on the Treaty of Lisbon). In written evidence to us, Andrew Duff MEP said the Lisbon Treaty "clarifies the values and reaffirms the objectives of the Union" (p S135). However, Sir David Edward thought the amendments a backwards step, and told us that "whereas the objectives in the EC Treaty were very clear, the objectives of the proposed Treaty on European Union might be said to amount in some respects to little more than a wish list. From the point of view of the citizen and from the point of view of a court, the proliferation of objectives, without any very clear indication of which are to take precedence over others, is going to create difficulty" (Q S115).

CONCLUSIONS

2.15.  The statement of Values in Article 2 TEU closely follows the statement of "principles" set out in Article 6(1) of the current TEU. "Respect for human dignity" and general "equality" have been added, and the Values are placed in the context of other values assumed to prevail in the Member States, such as tolerance and justice. We agree that these other values are accepted among the Member States. Respect for human dignity and equality have been recognised as general principles of EC law in the case-law of the European Court of Justice, so their addition does not, in our view, amount to a significant change.

2.16.  The statement of objectives in Article 3 TEU replaces the one found in the current TEU. While the new statement covers much of the same ground, the formulation of the objectives differs from the present provisions, and some objectives are removed and some are added, such as references to the development of "a highly competitive social market economy" and to promoting "social justice and protection". The differences are likely to have some effect on the way in which other provisions of the Treaties are interpreted, not only by the European Court of Justice but also by the other institutions when undertaking their tasks. In certain cases, notably Article 352 TFEU (the revised version of the current Article 308 TEC, sometimes known as the "flexibility clause", considered further in Chapter 11), the statement of objectives will be directly relevant to the scope of Treaty provisions. In other cases the effects of the change will be felt only at the margins, in particular, to resolve uncertainty in interpretation of other Treaty provisions. Whether the changes will mean that proposals that would not be made under the existing Treaties will be brought forward, or that potential proposals will not emerge, remains to be seen.

Citizenship of the Union

2.17.  The Lisbon Treaty introduces references to EU citizenship in the provisions on Democratic Principles in Title II of the TEU, and amends the provisions of the TEC on citizenship.

2.18.  The amended TEU (Article 9) describes EU citizenship as deriving from nationality of a Member State, and as additional to (not a replacement for) national citizenship, foreshadowing the same description and more detailed provisions in the TFEU. Article 10 TEU notes that the Union is founded on representative democracy where EU citizens are "directly represented" in the European Parliament and Member States are represented in the European Council, and affirms the right of citizens to participate in the democratic life of the EU. Article 11 TEU provides for citizens' "initiatives"—a proposal for EU action may be initiated if a million signatures can be obtained to back the proposal.

2.19.  The TFEU contains other and more detailed provisions on citizenship, based on the current Articles 17 to 22 of the TEC. The new features are as follows. An illustrative list of the rights provided by the Treaties is added (Article 20 TFEU). The Council of Ministers will have a new power to adopt, by unanimity, measures in the field of social security and social protection for the purpose of facilitating rights of free movement and residence within the EU (Article 21). There is also a power for the Council to adopt measures for the better coordination of the provision of consular assistance by the Member States to one another's nationals (Article 23); such provision is currently provided for in the TEC. The procedure for citizens' initiatives is set out in Article 24, and is considered further in Chapter 11 of this report.

CONCLUSIONS

2.20.  We note two changes of significance: the citizens' initiative, and (though other competences currently exist in these areas) the new explicit competence for measures on social security and social protection linked to rights of movement and residence. Some will see symbolic significance in the additional references to citizenship and its role in the amended TEU.

The competences of the European Union

THE PRINCIPLES OF CONFERRAL, SUBSIDIARITY AND PROPORTIONALITY

2.21.  Competence is the term used to define the responsibility for decision-making in a particular policy field. The Lisbon Treaty seeks to describe and codify the division of competences between the Union and the Member States (new Articles 4 and 5 of the amended TEU, new Title I of the TFEU).

2.22.  Article 5 of the amended TEU states that "The limits of Union competences are governed by the principle of conferral", under which "the Union shall act only within the limits of the competences conferred upon it by the Member States in the Treaties to attain the objectives set out therein." The amended TEU (Article 4) confirms for the first time and in the clearest terms that "competences not conferred upon the Union in the Treaties remain with the Member States". The Union "shall respect [Member States'] essential State functions, including ensuring the territorial integrity of the State, maintaining law and order and safeguarding national security. In particular, national security remains the sole responsibility of each Member State."

2.23.  Article 5 clarifies that "in areas which do not fall within its exclusive competence, the Union shall act only if and insofar 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". This is the principle of subsidiarity; the Treaty refers, for the first time, to the sub-state level. Furthermore, "Union action shall not exceed what is necessary to achieve the objectives of the Treaties"—the principle of proportionality. The application of the subsidiarity and proportionality principles is described in detail in a Protocol to be annexed to the Treaties. These principles were previously included, in less specific terms, in Article 5 of the TEC. The Lisbon Treaty gives national parliaments power to police the principle of subsidiarity: see Chapter 11.

HOW WILL THE UNION'S COMPETENCES WORK?

2.24.  The TFEU "determines the areas of, delimitation of, and arrangements for exercising [the Union's] competences" (new Article 1, TFEU). In new Article 2 of the TFEU further details are provided on the operation of the Union's competences under the reformed Treaties, as shown below.

BOX 2
Article 2 of the TFEU

1. When the Treaties confer on the Union exclusive competence in a specific area, only the Union may legislate and adopt legally binding acts, the Member States being able to do so themselves only if so empowered by the Union or for the implementation of acts of the Union.

2. When the Treaties confer on the Union a competence shared with the Member States in a specific area, the Union and the Member States may legislate and adopt legally binding acts in that area. The Member States shall exercise their competence to the extent that the Union has not exercised its competence. The Member States shall exercise their competence again to the extent that the Union has decided to cease exercising its competence.

3. The Member States shall coordinate their economic and employment policies within arrangements as determined by this Treaty, which the Union shall have competence to provide.

4. The Union shall have competence, in accordance with the provisions of the Treaty on European Union, to define and implement a common foreign and security policy, including the progressive framing of a common defence policy.

5. In certain areas and under the conditions laid down in the Treaties, the Union shall have competence to carry out actions to support, coordinate or supplement the actions of the Member States, without thereby superseding their competence in these areas.

Legally binding acts of the Union adopted on the basis of the provisions in the Treaties relating to these areas shall not entail harmonisation of Member States' laws or regulations.

6. The scope of and arrangements for exercising the Union's competences shall be determined by the provisions of the Treaties relating to each area.


TYPES OF COMPETENCE

2.25.  Leaving aside competence for common foreign and security policy (see Article 2(4) and Chapter 7 below), there are three types of Union competence: exclusive competence, shared competence, and supporting competence. Where the Union has exclusive competence (see Article 2(1) TFEU, reproduced above), only the Union can legislate and adopt legally binding acts, and the principle of subsidiarity does not apply. The existence of exclusive competences is well established in Treaty law and European Court of Justice (ECJ) case-law.

2.26.  Shared competence exists in areas where the Union and Member States are both able to act. This is the case in most areas both under the current Treaties, and under the reformed Treaties, as a list in the reformed TFEU confirms (see below). As Box 2 shows, "The Member States shall exercise their competence to the extent that the Union has not exercised its competence". A Protocol to the Lisbon Treaty states that "when the Union has taken action in a certain area, the scope of this exercise of competence only covers those elements governed by the Union act in question and therefore does not cover the whole area" (Protocol on the exercise of shared competence). Member States are therefore free to act in the same area, as long as they do not enact legislation that conflicts with EU law or principles (see Article 2(2) TFEU, reproduced above).

2.27.  The Union has competence to carry out actions to support, coordinate or supplement the actions of member States in certain areas. Action by the Union in these areas of supporting competence may include adopting incentive measures and making recommendations; but it does not supersede the competence of Member States to act and must not entail the harmonisation of national laws (Article 2(5) TFEU).

WHAT WILL THE UNION'S COMPETENCES BE?

2.28.  For the first time, Articles 3-6 of the TFEU provide lists setting out the divisions of policy areas into these types of competence; however, these lists are short and do not cover every aspect of Union activity. The lists allocate competences as set out below. For the detailed provisions relating to every competence, reference must be made to the subsequent provisions of the TFEU (see Article 2(6)).

TABLE 1

Types of EU competence

Union competence Policy areas
"The Union shall have exclusive competence in the following areas:"
(Article 3 TFEU)
Customs union
  Competition rules necessary for the functioning of the internal market
  Monetary policy for Member States which have adopted the euro
  Conservation of marine biological resources under the common fisheries policy
  Common commercial policy
  Conclusion of an international agreement when its conclusion is provided for in a legislative act of the Union or is necessary to enable the Union to exercise its internal competence, or insofar as its conclusion may affect common rules or alter their scope
"The Union shall share competence with the Member States where the Treaties confer on it a competence which does not relate to the areas referred to in Articles 3 [exclusive competence, above] and 6 [supporting competence, below]."
"Shared competence between the Union and the Member States applies in the following principal areas:"
(Article 4 TFEU)
Internal market
  Social policy, for the aspects defined in the TFEU
  Economic, social and territorial cohesion
  Agriculture and fisheries, excluding conservation of marine biological resources
  Environment
  Consumer protection
  Transport
  Trans-European networks
  Energy
  Area of freedom, security and justice
  Common safety concerns in public health matters, for the aspects defined in the TFEU
  And any other Union competence which is not listed in this table
"competence to carry out activities, in particular to define and implement programmes; however, the exercise of that competence shall not result in Member States being prevented from exercising theirs"
(Article 4 TFEU)
The areas of research, technological development and space
"competence to carry out activities and conduct a common policy; however, the exercise of that competence shall not result in Member States being prevented from exercising theirs"
(Article 4 TFEU)
The areas of development cooperation and humanitarian aid
"The Union shall have competence to carry out actions to support, coordinate or supplement the actions of the Member States. The areas of such action shall, at European level, be:"
(Article 6 TFEU)
Protection and improvement of human health
  Industry
  Culture
  Tourism
  Education, vocational training, youth and sport
  Civil protection
  Administrative cooperation
"The Member States shall coordinate their economic policies within the Union. To this end, the Council shall adopt measures, in particular broad guidelines for these policies."
"Specific provisions shall apply to those Member States whose currency is the euro."
(Article 5 TFEU)
"The Union shall take measures to ensure coordination of the employment policies of the Member States, in particular by defining guidelines for these policies."
(Article 5 TFEU)
"The Union may take initiatives to ensure coordination of Member States' social policies."
(Article 5 TFEU)


LIMITS ON UNION COMPETENCE

2.29.  A Declaration agreed at the IGC about the delimitation of competences (Declaration in relation to the delimitation of competences) "underlines" that competences not conferred upon the Union in the Treaties remain with the Member States. The Declaration goes into more detail about shared competence, explaining the reference in Article 2(2) of the TFEU to the Member States exercising their competence to the extent that the Union has decided to cease exercising its competence. This situation arises when the relevant EU institutions decide to repeal a legislative act, "in particular better to ensure constant respect for the principles of subsidiarity and proportionality."

2.30.  The ability to repatriate competences (the mirror image of conferral) is included in the Treaties for the first time under the Lisbon Treaty reforms. The Council may, at the initiative of one or more of its members, and in accordance with Article 241 of the TFEU (which allows the Council to request the Commission to initiate proposals), request the Commission to submit proposals for repealing a legislative act. In the Declaration, the IGC "welcomes the Commission's declaration that it will devote particular attention to these requests." The Declaration also points out that the Member States, meeting in an inter-governmental conference[9], may decide to amend the Treaties, including by increasing or decreasing the competences conferred on the Union.

2.31.  Professor Wallace welcomed these "references to the possibility of proposals to reduce the competences of the Union also being legitimate ideas to put on the table", saying "[t]hat used to be regarded as blasphemy" (Q S164). The European Parliamentary Labour Party said that whether such reductions were necessary or not depended on Member States, "because they [in the Council] are the gatekeepers of what goes into the European domain and what does not … The EU does not determine its own remit—member states do—and the Reform Treaty will not change this" (p S141). Elmar Brok MEP told us that "it is clearly defined [in this Treaty] that the European Union does not have the competence of competences, it is clearly said in this Treaty that every competence the European Union has is given by Member States and can be taken away by the Member States" (Q S339).

ARE THE UNION'S COMPETENCES EXTENDED BY THE LISBON TREATY?

2.32.  Defining the extent to which the Union's competences are extended by the Lisbon Treaty is difficult. The Treaty includes new articles formally specifying new competences, but some of these largely confirm areas of competence in which the Union has already legislated on a different legal basis. Competence is also extended less visibly by amendments to pre-existing articles, but again, the significance of such changes is debated.

2.33.  The Minister for Europe, Jim Murphy MP, provided a list of the new or extended competences, noting that "[i]n almost all of these areas, the EU already takes action under other legal bases" (p S79). The extensions of competence he listed, which are analysed in greater detail later in this report, were in the following areas:

2.34.  The Minister's view was that the extension of competence within the Lisbon Treaty was considerably less than in previous treaties such as the Maastricht Treaty or the Single European Act (Q S241). Elmar Brok MEP believed that "including the Single European Act, there is no Treaty where we have less transfer of competences" (Q S333).

2.35.  Professor Wallace welcomed the extensions of legislative competence in the field of justice and home affairs, but opposed those in sport, tourism and space policy (Q S169). Changes in the justice and home affairs area are discussed in Chapter 6.

2.36.  The European Parliamentary Labour Party stated that "[t]he Union's objectives and competences in the fields of climate change, energy, space, children's rights, tourism, sport, public health and civil protection are defined in a clearer way, but are not new competences. Indeed, no new subject matters are given to the EU institutions—just changes to how the EU can handle them" (p S141).

ARE THE LISBON TREATY'S DEFINITIONS OF COMPETENCES HELPFUL?

2.37.  John Palmer felt that the Lisbon Treaty's "new statement [of competences] will provide a clearer definition of the competences of the EU" (p S13), and Sir Francis Jacobs[10] told us that the provisions were "valuable" and that it was "helpful" to have a "clear statement" of the competences (p S147). Professor Wallace thought that it "does not remove the potential for grey areas". She felt that "[i]t is probably nonetheless important to have the phrasing that is there because … it is a particular reassurance for people who have nervousness about subsidiarity and related questions" (Q S164).

2.38.  David Heathcoat-Amory MP felt that the division of competences "could be useful", but in his view it "fails because the division is really entirely on the terms of the European Union" (Q S62). Neil O'Brien[11] agreed that the delimitation of competences did not serve UK interests. He suggested that a division of competences had been seen as desirable in order to prevent "competence creep" but that the sharing of competences had actually been drawn up in an undesirable way as far as the UK was concerned (Q S64).

2.39.  Professor Chalmers said that there was nothing in the Lisbon Treaty which would prevent or limit the European Court of Justice from extending competences from the base established by the Lisbon Treaty (Q S33). On the other hand, Sir Francis Jacobs thought that the Court could expect to be called upon more often to address the Treaties' requirements regarding competences, "and perhaps to do so more stringently than hitherto … there may well be successful challenges to Union measures on these grounds" (p S148).

ARE SHARED COMPETENCES RESIDUAL COMPETENCES?

2.40.  Alongside the issue of any explicit extensions of competence made by the Treaty, David Heathcoat-Amory MP and Neil O'Brien were concerned about the list of shared competences included in the TFEU. Mr Heathcoat-Amory told us that "the definition of shared competences is that when the European Union legislates over one of them, the Member States lose their power to legislate in that area. So it is not a shared competence; it is rather that Member States will have a residual competence and that is not a welcome development" (Q S62). He pointed out that "the list here [Article 4 TFEU] of 11 policy areas is not exclusive; it only says 'in the following principal areas'" (Q S66). The definitions in Article 4 were in his view also very broad (Q S63). We note however that Article 4 is governed by Article 2, which states that the scope of the Union's competence is to be determined by the Treaty provisions specific to each area. Neil O'Brien suggested that the shared competences were potentially more trouble than they were worth in court. He believed that "these Articles will increasingly be used by the Court of Justice in making quite contentious legal rulings" (Q S64).

2.41.  According to Mr O'Brien, the Protocol on the exercise of shared competence (see above) "is really just re-stating the problem because the idea of the area is not defined there in any way … we still have the problem that it is up to the Court to decide on the limits of competence, so we have the problem of who guards the guards" (Q S67). Professor Wallace did not think the inclusion of the Protocol indicated any difficulty: she observed that "[i]t would not be the first time that a protocol or declaration had made a statement of the obvious" (Q S167).

CONCLUSIONS

2.42.  The TEU sets out for the first time a clear statement that the Union may only exercise such competences (powers) as the Member States have conferred on it—the principle of conferral (Articles 4 and 5). All other competences remain with the Member States, which may decide to reduce the competences of the Union (see Article 48(2) TEU). The significance of these provisions lies in the articulation of these principles; their content has always been implicit in the Treaties.

2.43.  The TFEU sets out, for the first time, categories of competences—exclusive, shared and supporting (Articles 2 to 6 TFEU)—and refers to competences in the descriptions of each category by more or less broadly-defined areas. The categories reflect the provisions of the TEC setting out the competences and the conclusions of the ECJ as it has examined those provisions over the years. Most areas of EU activity are defined as shared competences, where the list is illustrative, not exhaustive. In the case of the supporting competences, Union action "shall not entail harmonisation of Member States' laws or regulations". The listing of areas of competences should not be regarded as determining the precise nature of the competences. For the detailed provisions relating to every competence, reference must be made to the subsequent provisions of the TFEU (see Article 2(6)).

2.44.  The TFEU (Article 2(2)) sets out that when the Treaties confer on the Union a competence that is shared with Member States, the Member States may only exercise their competence "to the extent that the Union has not exercised its competence".

2.45.  We consider that setting out the categories and the listing of areas of competence is a useful clarification. We comment in later chapters of this report on the additional competences which the Treaty confers.

Legal personality

2.46.  The European Community and Euratom have had express legal personality since their establishment. The Lisbon Treaty replaces the Community with the Union (Article 1, amended TEU), and inserts a new Article (Article 47) into the TEU final provisions which declares "The Union shall have legal personality." A single legal personality is thereby extended to the whole Union, i.e. the current Community plus the current second and third pillars.

WHAT IS THE PRACTICAL EFFECT OF EXTENDING LEGAL PERSONALITY TO THE WHOLE UNION?

2.47.  The question of whether the extension of express legal personality has any impact on the Union's ability to enter into treaties in foreign and security policy has proved to be a contentious one.

2.48.  According to Professor Chalmers, the merging of the first and third pillars would extend legal personality to justice and home affairs without the new Article being necessary, so the "real issue" was the extension of express legal personality to the second pillar. The Union had already entered into a number of international treaties in both the second and third pillars, and to this extent it already had implied legal personality. However, where the Union was involved in foreign affairs, for example in operations in Mostar in the 1990s, the reform made it possible for the Union to be held formally accountable (Q S10). Conferring legal personality on the Union would give it the capacity to sue and be sued in the area of foreign affairs (QQ S12-14).

2.49.  Neil O'Brien suggested that the Government had traditionally resisted the conferral of a legal personality on the Union (Q S51). The Minister for Europe told us that the Government's position had changed because the Government was "able to secure the distinct treaty status for CFSP [Common Foreign and Security Policy]", retaining its special intergovernmental status. He said that "with the retention in a separate Treaty [the TEU as opposed to the TFEU] of CFSP, what this single legal personality does to the Union, the Government feels, is confirm the existing practice" (Q S242).

2.50.  The Campaign against Euro-federalism saw the granting of legal personality to the Union as a step towards a European Federal State, giving the Union a "distinct corporate existence for the first time, something that all States possess. This new Union would be separate from and superior to its Member States" (p S124). Neil O'Brien also did not accept the move as codification. He said that there was a concern that "if the Union gets into the business of signing treaties in both the JHA [justice and home affairs] and the CFSP [Common Foreign and Security Policy] pillars, that could have implications for internal competences as well, because of course if the Union is doing international deals in these areas, there is implied internal competence and that could have knock-on effects on our laws here" (Q S51). David Heathcoat-Amory MP thought the move of "important symbolic significance", in that "[i]t will encourage the European Union to be seen and to try and be seen on the international stage as a unit replacing Member States" (Q S58).

2.51.  However, Professor Peers told us that there is not "any reason to suppose that an express legal personality increases the EU's competence as regards the Member States" (p S151). An IGC Declaration (Declaration concerning the legal personality of the European Union) asserts that the express conferral of legal personality "will not in any way authorise the Union to legislate or to act beyond the competences conferred upon it by the Member States in the Treaties."

2.52.  The European Parliamentary Labour Party thought that fears about the granting of legal personality were "misguided", as the EC "has always had legal personality" (p S141). Professor Peers agreed that "the concern about this issue from some quarters is simply misplaced", and Sir Francis Jacobs said that such concern is "at least in part based on misunderstandings" (p S151; p S148).

2.53.  Professor Peers noted that the EU "has been widely understood by EU institutions, Member States and non-Member States to have an implied legal personality for a number of years, and has signed and concluded a significant number of treaties in its own name since 2001" (p S151). Sir Francis Jacobs stated that "Article 24 already confers a treaty-making power [on the Union], which has frequently been used, and has been accepted by third States", and that "the European Communities also have treaty-making powers … [and] have concluded many hundreds of treaties and other international agreements" (p S148). Brendan Donnelly[12] agreed that "the Reform Treaty simply recognises an existing reality" in this area, thereby putting an end to an existing controversy (p S131). Both Professor Peers and Mr Donnelly pointed out that a number of international organisations already enjoyed express or implied legal personality (p S151, pp S131-2).

2.54.  Sir David Edward was also not concerned in the least. He felt that the issue was "a red herring", only remarked on because previously "it was tucked away at the end of the other Treaties and possibly was not noticed" (Q S118). Professor Wallace agreed with the Government that "the provision is much more about clarification and simplification than about introducing major new points of principle" and could see "a welcome point to doing that"—it would be helpful "not to have to argue about the legal personality of the Union when you are trying to get inter-agency cooperation" in troubled areas of the world (Q S163).

2.55.  Sir Francis Jacobs pointed out that, since the Lisbon Treaty replaces the Community with the Union, the effect of denying the Union treaty-making power "would be to remove the Community's existing treaty-making power, as well as disabling the Union from exercising its existing power" (p S148).

2.56.  The new Article 216 of the TFEU provides more fully for the Union's ability to make international treaties in line with Union competences. Under the reformed Treaties, the Union may conclude an agreement with third countries or international organisations "where the Treaties so provide", "where the conclusion of an agreement is necessary in order to achieve, within the framework of the Union's policies, one of the objectives referred to in the Treaties", if the agreement "is provided for in a legally binding act of the Union" or if the agreement "is likely to affect common rules or alter their scope". John Palmer thought that "[g]iving the EU a legal personality will enable the Union to operate more effectively internationally" (p S13).

2.57.  The European Community, which has had express legal personality since its establishment, has entered into numerous agreements, notably in the area of trade. The European Union has entered into agreements in exercise of the powers set out in current Articles 24 and 38 TEU; for example, the Agreement with the USA on the processing and transfer of passenger name records data by air carriers made in 2007.

CONCLUSIONS

2.58.  The Lisbon Treaty confers legal personality expressly on the EU, giving it the capacity to enter into legal relationships with other parties in its own right. But the European Community (in relation to the first pillar) has always had express legal personality and the European Union implicitly has had legal personality to the extent that it has the power to enter into international agreements under Articles 24 and 38 of the current TEU. Conferring legal personality expressly on the Union will have the effect that the other attributes of such status, such as the ability to join international organisations or to take, or be subject to, proceedings in international tribunals, will apply to the EU in the areas currently covered by the second and third pillars.

2.59.  The conferral of legal personality does not itself affect the EU's competences, including its powers to enter into international agreements, or the relative competences of the EU and its Member States.

The impact of the Treaty on the size of the Union

EUROPEAN UNION ENLARGEMENT

2.60.  To a considerable extent, the Lisbon Treaty is a response to the enlargement of the EU over the past decade and the pressures it has put on the EU institutions (see Q S295, Business for New Europe p S141, Coalition for the Reform Treaty p S128). As to whether the Treaty's adjustments would fit the Union for more enlargement, John Palmer told us that "[w]e are in almost a ten-year hiatus in which we have to see to what extent this Treaty … prepares the Union to be able to handle yet further members" (Q S36). He thinks the Treaty "will not hold up" any applications (Q S36).

2.61.  The Lisbon Treaty makes some small changes to the terms governing the accession of a European State applying to become a Member State of the EU (Article 49, current TEU; Article 49, amended TEU). Firstly, the applicant must respect the Union's "values" as set out in the amended Article 2 TEU, rather than the current Treaty's "principles" (Article 6, current TEU)—the only changes are the addition of "equality" and "human dignity" (see paragraph 9). It also has to be "committed to promoting them" for the first time.

2.62.  As before, the country must apply to the Council, but the European Parliament and national parliaments will now also have to be notified (but will not have any new powers). The European Parliament will now give its "consent" by a majority rather than its "assent" by an absolute majority of its membership.

2.63.  A new sentence is added specifying that "[t]he conditions of eligibility agreed upon by the European Council shall be taken into account". Andrew Duff MEP told us that this meant that "[e]nlargement policy will now need to take into account the Copenhagen criteria" (p S138), the accession criteria agreed by the Copenhagen European Council in 1993 and the Madrid European Council in 1995. These criteria are currently political, economic and the requirement to be able to take on the obligations of membership. The reference to the European Council's conditions may enable the EU to expand the criteria by adding new enlargement conditions, such as the Union's integration capacity.

2.64.  Professor Peers found it "hard to see what practical impact the amendments to Article 49 could have", especially as, in his opinion, integration capacity was already taken into account in the timing of enlargement. According to Professor Peers, the amendments were "a political gesture to those Member States where there is a greater degree of concern about enlargement—without raising in themselves any new practical barrier to enlargement" (p S155).

2.65.  Brendan Donnelly thought that the notification of an accession application to the European Parliament and national parliaments would "help the expression" of any "public and political reservations" surrounding the membership of any applicant country, "but it will not itself have created them or even substantially facilitated their emergence" (p S134).

RIGHT TO WITHDRAW FROM THE UNION

2.66.  The Lisbon Treaty expressly acknowledges Member States' right to withdraw from the Union for the first time (Article 50, amended TEU). A Member State can make the decision to withdraw "in accordance with its own constitutional requirements". It will then notify the European Council of its intention, and negotiate and conclude an agreement with the Union. The agreement will be concluded on behalf of the Union by the rest of the Council, acting by a qualified majority, after obtaining the consent of the European Parliament. The Treaties cease to apply to that Member State when the agreement enters into force, or two years after the notification of the desire to withdraw, unless the European Council and the State concerned decide to extend the negotiations. Any withdrawing State wishing to apply for re-admittance must do so on the same basis as any other acceding country.

CONCLUSIONS

2.67.  The amended TEU provides expressly for the European Council to set conditions of eligibility for states aspiring to become members of the EU. This codifies existing practice under which the current "Copenhagen criteria" were agreed.

2.68.  It is significant that the Lisbon Treaty adds to the Treaties a clause confirming the right of a Member State to withdraw from the Union, and also sets out the procedure it could use to negotiate a withdrawal.



5   Professor in EU Law, London School of Economics. Back

6   University of Essex.  Back

7   Centennial Professor, European Institute, London School of Economics.  Back

8   Drafted by Richard Corbett MEP and Íñigo Méndez de Vigo MEP. Back

9   In accordance with the ordinary revision procedure provided for in Article 48(2) to (5) of the amended TEU. Back

10   Advocate General at the European Court of Justice, 1988-2006. Back

11   Director of Open Europe. Back

12   Director of the Federal Trust; written evidence submitted in a personal capacity. Back


 
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