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The Law of the European Union is the unique legal system which operates alongside the laws of Member States of the European Union (EU). EU law has direct effect within the legal systems of its Member States, and overrides national law in many areas, especially in areas covered by the Single Market. The EU is not a federal government; as established by the European Court of Justice, the Community constitutes "a new legal order" in international law. It is sometimes classified as supranational law. Currently there are around 500 million EU citizens in 27 Member States subject to EU law, making it one of the most encompassing modern legal systems in the world.

Like the EU itself, EU law can be divided into three pillars. The first of these, the European Community pillar, comprises the majority of law produced by the EU and is where the European Court of Justice has the most power. The EU can also enact legislation under the second and third pillar - relating to foreign policy and criminal law respectively - although the powers of the Court of Justice are much reduced and direct effect does not apply.

Similar to federal states, the legal system is used to ensure political results from the member states, because of the decentralized nature of the political system. Decisions are taken at the EU level but, implementation is overwhelmingly done by member states. By contrast, decision making and implementation inside member states is usually done by the same actors.

History and development

The development of law of the European Community has been largely moulded by the European Court of Justice (ECJ). In the landmark case of Van Gend en Loos in 1963, the ECJ ruled that the European Community, through the will of Member States expressed in the Treaty of Rome, "constitutes a new legal order of international law for the benefit of which the states have limited their sovereign rights albeit within limited fields."

The distinction between European Community (EC) law and European Union law is that based on the Treaty structure of the European Union. The European Community constitutes one of the 'three pillars' of the European Union and concerns the social and economic foundations of the single market. The second and the third pillars were created by the Treaty on European Union (the Maastricht Treaty) and involve Common Security and Defence Policy and Internal Security. Decision-making under the second and third pillars is not subject to majority voting at present. The Maastricht Treaty created the Justice and Home Affairs pillar as the third pillar. Subsequently, the Treaty of Amsterdam transferred the areas of illegal immigration, visas, asylum, and judicial co-operation to the European Community (the first pillar). Now Police and Judicial Co-operation in Criminal Matters is the third pillar. Justice and Home Affairs now refers both to the fields that have been transferred to the EC and the third pillar.

Several principles such as subsidiarity, proportionality, the principle of conferral, the principle of legal certainty, and the precautionary principle have become prominent in the development of European Union law. Scholars such as Catherine Barnard argue that the Four Freedoms form the substantive law of the EU: free movement of goods, service, capital, and labour within the internal market of the EU.

Criminal law

In 2006, a toxic waste spill off the coast of Côte d'Ivoire, from a European ship, prompted the Commission to look into legislation against toxic waste. Environment Commissioner Stavros Dimas stated that "Such highly toxic waste should never have left the European Union". With countries such as Spain not even having a crime against shipping toxic waste Franco Frattini, the Justice, Freedom and Security Commissioner, proposed with Dimas to create criminal sentences for "ecological crimes". His right to do this was contested in 2005 at the Court of Justice resulting in a victory for the Commission. That ruling set a precedent that the Commission, on a supranational basis, may legislate in criminal law - something never done before to outlined in treaties. So far though, the only other use has been the intellectual property rights directive. Motions were tabled in the European Parliament against that legislation on the basis that criminal law should not be an EU competence, but was rejected at vote. However in October 2007 the Court of Justice ruled the Commission could not propose what the criminal sanctions could be, only that there must be some.


The primary legislation, or treaties, are effectively the constitutional law of the European Union. They are created by governments from all EU Member States acting by consensus. They lay down the basic policies of the Union, establish its institutional structure, legislative procedures, and the powers of the Union. The Treaties that make up the primary legislation include:

  • the ECSC Treaty of 1951 (Treaty of Paris)
  • the EEC Treaty of 1957 (Treaty of Rome)
  • the EURATOM Treaty of 1957 (Treaty of Rome)
  • the Merger Treaty of 1965
  • the Acts of Accession of the United Kingdom, Ireland and Denmark (1972)
  • the Budgetary Treaty of 1970
  • the Budgetary Treaty of 1975
  • the Act of Accession of Greece (1979)

The various annexes and protocols attached to these Treaties are also considered a source of primary legislation. The heads of State and government of the member states of European Union signed a constitution in 2004, but since its defeat in referendums in France and the Netherlands it was decided to reform the institutions with the Treaty of Lisbon instead, which has now been ratified by all 27 EU member states.

Passing of laws

European laws are passed by the EU institutions through a number of procedures. In nearly all cases the European Commissionmarker (the executive branch) has a monopoly on legislative initiative. In such situation the Commission sends draft legislation to the Council of the European Union and European Parliamentmarker for amendments and approval. The former body is composed of national government ministers and the latter by directly elected politicians.

There are four main legislative procedures in the EU, with the main difference between them being how the European Parliament interacts with the Council of the European Union. These are the Codecision procedure, Assent procedure the Cooperation procedure and the Consultation procedure.

Institutional acts

The European Parliament, the Commission and the Council of Ministers are empowered by the Treaties to legislate on all matters within the EU's competence. Examples of this secondary legislation are regulation, directive, decision, recommendation and opinion. Secondary legislation also includes inter-institutional agreements, which are agreements made between European Union institutions clarifying their respective powers, especially in budgetary matters. The Parliamentmarker, Commissionmarker and Council are capable of entering into such agreements.

The classification of legislative acts varies among the First, Second and Third Pillars. In the case of the first pillar: Secondary legislation is classified based on to whom it is directed, and how it is to be implemented. Regulations and directives bind everyone, while decisions only affect the parties to whom they are addressed (which can be individuals, corporations, or member states). Regulations have direct effect, i.e. they are binding in and of themselves as part of national law, while directives require implementation by national legislation to be effective. However, states that fail or refuse to implement directives as part of national law can be fined by the European Court of Justice.

Directives and regulations can comprise of a mixture of maximum harmonisation and minimum harmonisation clauses, and can be enforced on either a home state or a host state basis. All EU legislation must be based on a specific Treaty article, which is referred to as the "legal basis" of the legislation. The European Constitution would have codified EU law and reduced secondary legislation to six clear types: EU laws, EU framework laws, decisions, regulations, recommendations and opinions.


The Court building in Luxembourg
The European Court of Justice (ECJ), has jurisdiction in various specific matters, conferred on it by the Treaties. In particular Article 220 EC charges the ECJ (and the Court of First Instance) with ensuring that the law is observed "in the interpretation and application of this Treaty", and this provision has been used by the Court to extend its powers beyond those otherwise expressly granted. Since the Maastricht Treaty, the Court has been empowered to impose pecuniary penalties on Member States who disobey. The Court has been instrumental in shaping law in the EU, and its approach is generally described as purposive or teleological The jurisprudence of the Court, together with that of the courts of the member states, has established and defined a number of principles of European Union law, which bind EU institutions and member states, including direct effect, the supremacy of European Union law over that of Member states, and state liability for damages.

According to the Treaty, the Court comprises one judge per member state; as of 2007 it has 27 judges. The judges are appointed "by common accord of the Governments of the Member states". The judges are appointed for a (renewable) period of six years. The Court is assisted by eight Advocates General. The Court usually sits in Chambers of three or five, but in some cases as a single judge, in especially important cases as a Grand Chamber of thirteen judges or as a full court.

The Court of First Instance (CFI) was established on the basis of the Single European Act in 1988 and was originally "attached to" the ECJ in a subsidiary role. Following the Treaty of Nice it was given greater independence and its own jurisdiction. The jurisdiction of the CFI includes direct actions by natural or legal persons against Community institutions for their acts (or failure to act), actions by Member states against the Commission, and actions relating to Community trade marks.

According to the Treaty, the court comprises at least one judge per member state; as of 2007 it has 27 judges. The judges are appointed for a (renewable) period of six years. Like the ECJ, the CFI usually sits in Chambers of three or five, but in some cases as a single judge, as a Grand Chamber of thirteen judges, or as a full court. Decisions of the CTI can be appealed to the ECJ on matters of law. To reduce the workload of the ECJ and the CFI, the Treaty of Nice (Article 225a) introduced "judicial panels" to be used in some areas, with appeal to the CFI.

EU legal principles


It has been ruled many times by the European Court of Justice that EC(European Community-first pillar) law is superior to national laws. Where a conflict arises between EC law and the law of a Member State, EC law takes precedence, so that the law of a Member State must be disapplied. This doctrine, known as the supremacy of EC law, emerged from the European Court of Justice in Costa v. ENEL. Mr Costa was an Italian citizen opposed to nationalising the Italian energy company ENEL, because he had shares in it. He refused to pay his electricity bill in protest, and argued that nationalisation infringed EC law on the State distorting the market. The Italian government believed that this was not even an issue that could be complained about by a private individual, since it was a national law decision to make. The Court ruled in favour of the government, because the relevant Treaty rule on an undistorted market was one on which the Commission alone could challenge the Italian government. As an individual, Mr Costa had no standing to challenge the decision, because that Treaty provision had no direct effect. But on the logically prior issue of Mr Costa's ability to raise a point of EC law against a national government in legal proceeding before the courts in that Member State the ECJ disagreed with the Italian government. It ruled that EC law would not be effective if Mr Costa could not challenge national law on the basis of its alleged incompatibility with EC law.

It follows from all these observations that the law stemming from the treaty, an independent source of law, could not, because of its special and original nature, be overridden by domestic legal provisions, however framed, without being deprived of its character as community law and without the legal basis of the community itself being called into question.

However, while Community law is accepted as taking precedence to the law of Member States, not all Member States share the analysis used by the European institutions about why EC law overrides national law, when a conflict appears.

Many countries' highest courts have stated that Community law takes precedence provided that it continues to respect fundamental constitutional principles of the Member State, the ultimate judge of which will be the Member State (more exactly, the court of that Member State), rather than the European Union institutions themselves This reflects the idea that Member States remain the "Master of the Treaties", and the basis for EC law's effect. In other cases, countries write the precedence of Community law into their constitutions. For example, the Constitution of Ireland contains a clause that, '"No provision of this Constitution invalidates laws enacted, acts done or measures adopted by the State which are necessitated by the obligations of membership of the European Union or of the Communities..."

However, the difference of positions remained of solely academic importance. As of now, no court of any Member State has ever challenged the validity of any legal act of the European Union by any other means than referring the question to the European Court of Justice. The German legislature even accepted the judgment of the European Court of Justice in the case of Tanja Kreil, which rendered void a provision in the German constitution barring women from voluntary service in the armed forces, subsequently amended the constitution and accepted women for any position in the forces.

Direct effect

EU law covers a broad range which is comparable to that of the legal systems of the Member States themselves. Both the provisions of the Treaties, and EU regulations are said to have "direct effect" horizontally. This means private citizens can rely on the rights granted to them (and the duties created for them) against one another. For instance, an air hostess could sue her airline employer for sexual discrimination. The other main legal instrument of the EU, "directives", have direct effect, but only "vertically". Private citizens may not sue one another on the basis of an EU directive, since these are addressed to the Member States. Directives allow some choice for Member States in the way they translate (or 'transpose') a directive into national law - usually this is done by passing one or more legislative acts, such as an Act of Parliament or statutory instrument in the UKmarker. Once this has happened citizens may rely on the law that has been implemented. They may only sue the government "vertically" for failing to implement a directive correctly. An example of a directive is the Product liability Directive, which makes companies liable for dangerous and defective products that harm consumers.

Fundamental rights

Four freedoms

The core of European Union economic and social policy is summed up under the idea of the four freedoms - free movement of goods, workers, capital and the freedom of establishment to provide services.

Movement of goods

Under the first title of the Treaty of the European Communities one finds the provisions dealing with the free movement of goods. In the years between the two world wars, and leading into the Great Depression, governments around the world had employed vigorous policies of national protectionism. The erection of tariffs and customs duties on imports and sometimes the export of goods was widely seen as contributing to a fall in trade and hence the stalling of economic growth and development. Economists had long said, since Adam Smith and David Ricardo that the Wealth of Nations could only be strengthened by the long term lowering and abolition of barriers and costs to international trade. The abolition of all such barriers is the function of the treaty provisions. According to Article 28 EC,

"28. Quantitative restrictions on imports and all measures having equivalent effect shall be prohibited between Member States."

Article 29 EC states the same for exports. The first thing to note is that the prohibition is simply between member states of the European Community. One of the institutions' primary duties is the management of trade policy to third parties - other countries such as the United States, or China. For instance, the controversial Common Agricultural Policy is regulated under Title II EC, Article 34(1) authorising "compulsory coordination of national market organisations" with common European organisation. The second thing to note is that Article 30 sets out the exceptions to the prohibition on free movement of goods.

"30. The provisions of Articles 28 and 29 shall not preclude prohibitions or restrictions on imports, exports or goods in transit justified on grounds of public morality, public policy or public security; the protection of health and life of humans, animals or plants; the protection of national treasures possessing artistic, historic or archaeological value; or the protection of industrial and commercial property. Such prohibitions or restrictions shall not, however, constitute a means of arbitrary discrimination or a disguised restriction on trade between Member States."

So governments of member states may still justify certain trade barriers when public morality, policy, security, health, culture or industrial and commercial property might be threatened by complete abolition. One recent example of this was that during the mad cow disease crisis in the United Kingdom, France erected a barrier to imports of British beef.

Movement of workers

Movement of capital

Freedom of establishment

Social chapter

The Social chapter in the European Union refers to parts of the treaty which deal with the equal treatment of men and women under Article 141 EC and the regulation of working time under the Working Time Directive. One recent piece of anti-discrimination legislation is Directive 2006/54/EC "on the implementation of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation".

The UK secured an opt-out from the Social Chapter as many members of John Major’s government were fundamentally opposed to extension of the EU’s competence into social areas. The issue was so divisive that it threatened to split the Cabinet. Tony Blair abolished this opt-out immediately after coming to power in the 1997 general election.

Competition law

Since the goal of the Treaty of Rome was to create a common market, and the Single European Act to create an internal market, it was crucial to ensure that the efforts of government could not be distorted by corporations abusing their market power. Hence under the treaties are provisions to ensure that free competition prevails, rather than cartels and monopolies sharing out markets and fixing prices. Competition law in the European Union is largely similar and inspired by United States antitrust.

Collusion and cartels

The Treaty of the European Communities (TEC), under Article 81 (1), prohibits

"all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between member states and which have as their object or effect the prevention, restriction or distortion of competition within the common market."

Agreements, decisions and concerted practices, known collectively as "collusion" are deemed automatically void under Article 81 (2). Article 81 (3), however, makes exceptions for collusion that could be of economic benefit.

"The provisions of paragraph 1 may, however, be declared inapplicable in the case of (i) any agreement or category of agreements between undertakings; (ii) any decision or category of decisions by associations of undertakings; (iii) any concerted practice or category of concerted practices, which contributes to improving the production or distribution of goods or to promoting technical or economic progress, while allowing consumers a fair share of the resulting benefit, and which does not (a) impose on the undertakings concerned restrictions which are not indispensable to the attainment of these objectives; (b) afford such undertakings the possibility of eliminating competition in respect of a substantial part of the products in question.

The term "undertaking" essentially refers to businesses, but also any economic entity which carries on a trade.

Dominance and monopoly

Article 82 TEC is designed to prohibit abuse by very large corporations who dominate the market.

"Any abuse by one or more undertakings of a dominant position within the common market or in a substantial part of it shall be prohibited as incompatible with the common market insofar as it may affect trade between Member States.

This provision is then clarified through the use of some specific categories of behaviour which are deemed "abusive".

"Such abuse may, in particular, consist in (a) directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions; (b) limiting production, markets or technical development to the prejudice of consumers; (c) applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage; (d) making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.

Mergers and acquisitions

Under the authority of Article 82 TEC, the European Commission became able not only to regulate the behaviour of large firms it claims abuse their dominant positions or market power, but also the possibility of firms gaining the position within the market structure that enables them to behave abusively in the first place. Regulation 139/2004 deals with mergers that have a "Community dimension" and lays out a procedure whereby all "concentrations" (i.e. mergers, acquisitions, takeovers) between undertakings are subject to approval by the European Commission.

Public sector regulation

Public sector industries, or industries which are by their nature providing a public service, are involved in competition law in many ways similar to private companies. Under EC law, Articles 86 and 87 create exceptions for the assured achievement of public sector service provision. Many industries, such as railways, telecommunications, electricity, gas, water and media have their own independent sector regulators. These government agencies are charged with ensuring that private providers carry out certain public service duties in line of social welfare goals.

See also


  1. The Rules of Federalism: Institutions and Regulatory Politics in the EU and Beyond (Dr. R. Daniel Kelemen)
  2. How the EU takes decisions
  3. see Art.2 TEC; "The Community shall have as its task, by establishing a common market and an economic and monetary union and by implementing common policies or activities..."[1]
  4. Art. 220 TEC
  5. Craig and de Burca (2007) p.72f
  6. see Art. 228 TEC
  7. Craig and de Burca (2007) p.73
  8. Article 223; Craig and de Burca (2007) p.67
  9. Article 223; Craig and de Burca (2007) p.67
  10. Article 222; Craig and de Burca (2007) p.67
  11. Craig and de Burca (2007) p.67
  12. Craig and de Burca (2007) p.68
  13. Craig and de Burca (2007) p.69
  14. Case 6/64, Costa v. ENEL [1964] ECR 585, 593
  15. now found in Art. 86 and Art. 87
  16. "But this obligation does not give individuals the right to allege, within the framework of community law... either failure by the state concerned to fulfil any of its obligations or breach of duty on the part of the commission."
  17. Case 6/64, Falminio Costa v. ENEL [1964] ECR 585, 593
  18. in the U.K. see, Factortame Ltd. v Secretary of State for Transport [1991] 1 AC 603; in Germany see Solange II (Re Wuensche Handelsgesellschaft, BVerfG decision of 22 October 1986 [1987] 3 CMLR 225,265); in Italy see Frontini v. Ministero delle Finanze [1974] 2 CMLR 372; in France see, Raoul George Nicolo [1990] 1 CMLR 173
  19. see especially, Solange II (Re Wuensche Handelsgesellschaft, BVerfG decision of 22 October 1986 [1987] 3 CMLR 225,265)
  20. see Article 3 TEU for a list
  21. under Art. 141 TEC, C-43/75 Defrenne v. Sabena [1976] ECR 455
  22. 85/374/EEC
  23. Case C-1/00 Commission v. France n.b. this case was brought under Art. 226, for France's failure to fulfill its obligations under various EU directives, which are in turn sourced on the Art. 28 and 31


  • Tobler, Christa; Beglinger, Jacques (2007), Essential EC Law in Charts (1st ed.), Budapest: HVG-ORAC, associated publication of E.M.Meijers Institute of Legal Studies, Leiden University. ISBN 978-963-7490-96-5. With webcompanion: Visualisation/graphic representations of EC law in the form of charts/diagrams.

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