Part II EU LAW Lesson 2.pptx

# European legal acts and instruments This topic explores the various legal acts and instruments that the European Union can adopt to implement its policies and achieve its objectives, along with the procedures for their adoption. ## 1. European legal acts and instruments ### 1.1 General principles of European law European law comprises primary law, which includes the Treaties (TEU and TFEU), protocols, and annexes, such as the Charter of Fundamental Rights. These Treaties grant EU institutions the powers to adopt secondary law. Secondary European law consists of legal instruments that generate legal consequences. ### 1.2 Legislative acts According to Article 289(3) TFEU, legal acts adopted through a legislative procedure constitute legislative acts. #### 1.2.1 Legislative procedures * **Ordinary legislative procedure** (Article 289(1) TFEU): This procedure involves the joint adoption of a legislative act by the European Parliament and the Council, based on a proposal from the Commission. Voting typically occurs by qualified majority (QMV) as outlined in Article 294 TFEU. This procedure signifies that the European Parliament and the Council act as co-legislators on an equal footing. * **First reading:** The Commission presents a proposal. The Parliament examines it, voting by a simple majority, and can amend, adopt, or reject it. Subsequently, the Council examines the Parliament's position. If the Council accepts the Parliament's position, the act is adopted. Otherwise, the Council adopts its own position and sends it back to Parliament. * **Second reading:** Both institutions have a deadline of three months (extendable by one month) to adopt their positions. In the Parliament's second reading, amendments to the Council's first-reading position require an absolute majority of its Members (currently 361 out of 720 votes). * **Conciliation:** If the Council cannot accept all amendments from the Parliament's second reading, a conciliation procedure is initiated. This involves negotiations within a Conciliation Committee to reach an agreement in the form of a 'joint text', which must then be confirmed by both the Parliament and the Council. > **Tip:** In most cases, legislation is adopted after the first reading of the ordinary legislative procedure. * **Special legislative procedure:** This procedure is an exception to the ordinary legislative procedure and is used in specific policy areas. The TFEU does not provide a precise description; rules are defined on a case-by-case basis in the relevant treaty articles. In practice, the Council often acts as the sole legislator, with the Parliament's role limited to consent or consultation. * **Consent procedure:** The Council adopts legislative proposals after obtaining the consent of the European Parliament. The Parliament can only accept or reject the proposal by an absolute majority vote; it cannot amend it. The Council cannot overrule the Parliament's opinion. Consent is used for new legislation on combating discrimination, concluding international agreements, human rights issues, and accession or withdrawal of Member States. * **Consultation procedure:** The Council adopts a legislative proposal after the Parliament submits its opinion. The Parliament may approve, reject, or propose amendments, but the Council is not legally obliged to follow the Parliament's opinion, though it must not decide without receiving it. Consultation is used for areas like social security and social protection, and administrative cooperation in freedom, security, and justice. > **Tip:** The definition of a legislative act is a formal concept, referring to the process of adoption, not necessarily the content. ### 1.3 Legal instruments Article 288 TFEU outlines the main types of legal instruments: #### 1.3.1 Regulations * **Characteristics:** * Have general application. * Are legally binding in their entirety. * Have direct effect and are directly applicable in all Member States. * **Purpose:** Used in domains where regulatory uniformity across Member States is essential, such as the protection of personal data. #### 1.3.2 Directives * **Characteristics:** * Are binding as to the result to be achieved. * Member States are left with the freedom to choose the means and methods of implementation, allowing for flexibility. * Can lead to differences between Member States if not implemented uniformly. * Generally, do not have direct effect during the implementation period; they can only be invoked between citizens or before national courts after a Member State has complied with its implementation obligation. However, vertical direct effect is possible in exceptional cases. * **Purpose:** Harmonisation directives are crucial for the realization of the internal market by ensuring equal rules, norms, and technical, safety, and quality standards across Member States. This promotes free movement of goods, services, capital, and people. * **Advantages of harmonisation:** 1. **Promoting free movement:** Aligns rules and standards, preventing national legislation from hindering trade. 2. **Mutual Recognition:** Forms the basis for recognizing products lawful in one country as saleable in others. 3. **Increasing consumer confidence:** Assures consumers that products meet comparable safety and quality standards. 4. **Creating a level playing field:** Ensures fairer competition among companies. 5. **Lowering costs for companies:** Eliminates the need for country-specific product variants. 6. **Compliance with EU law:** Ensures uniform interpretation and application of EU law. * **Examples:** Directives concerning consumer protection, such as those on distance marketing of financial services, unfair commercial practices, misleading advertising, and liability for defective products, are vital for the proper functioning of the single market. Directive (EU) 2019/771, concerning contracts for the sale of goods, provides consumers with protection measures like repair, replacement, price reduction, or contract termination in case of non-conformity. > **Example:** Harmonisation directives ensure that if a product meets the safety standards in Germany, it can also be sold in France without needing to comply with different French safety standards, thus facilitating the free movement of goods. #### 1.3.3 Decisions * **Characteristics:** * Binding in their entirety. * If specific addressees are mentioned, they are only binding towards those addressees. * Can have a general scope or a particular/limited scope. * Have direct effect. #### 1.3.4 Other instruments * **Recommendations:** These do not generate legal consequences. ### 1.4 Voting mechanisms and decision-making Decision-making in supranational organizations like the EU is based on principles agreed upon in Treaties. Member States must comply with legislation even if they voted against it in a legislative organ. * **Voting systems:** Simple majority, qualified majority, or unanimity. * **Qualified Majority Voting (QMV) in the Council:** * **General principle (Article 16(4) TEU):** As of 1 November 2014, QMV is defined as at least 55% of the Council members, representing at least 65% of the EU population. A blocking minority requires at least four Council members. * **Derogation when not all members participate (Article 238(3) TFEU):** If Member States opt out of certain policy domains, QMV is defined as at least 55% of the participating Member States, representing at least 65% of the population of those participating States. A blocking minority needs at least the minimum number of Council members representing more than 35% of the participating population, plus one member. * **Derogation when the Council does not act on a Commission/High Representative proposal (Article 238(2) TFEU):** A "superqualified majority" is required: at least 72% of the Council members, representing at least 65% of the EU population. If not all members participate, this applies to the participating Member States. > **Tip:** Understand the distinction between the general QMV rule and the specific rules for when Member States opt out of voting. * **Simple Majority Voting (Article 238(1) TFEU):** The Council acts by a majority of its component members. This typically applies to procedural matters, such as adopting its rules of procedure. * **Blocking Minority:** A group of Member States whose votes, when combined, can prevent a proposal from being adopted, even if it has majority support. * **Abstention:** An abstention in QMV counts as a vote against. Abstention does not prevent a decision from being adopted by unanimity. * **Unanimity:** Required for certain sensitive matters considered vital by Member States, such as common foreign and security policy (with exceptions), citizenship rights, EU membership, harmonisation of indirect taxation, certain aspects of justice and home affairs, harmonisation of social security, and EU finances. Unanimity implies a high degree of intergovernmental cooperation. > **Tip:** The principle of unanimity in sensitive areas reflects a weaker form of integration compared to QMV and the ordinary legislative procedure. ### 1.5 Purposes of the EU Article 3 TEU outlines the core purposes of the EU: * To promote peace, values, and well-being of its peoples. * To offer an area of freedom, security, and justice without internal frontiers. * To establish an internal market for sustainable development and balanced economic growth. * To establish an economic and monetary union with the euro as its currency. * To uphold and promote EU values and interests in its international relations, contributing to peace, security, sustainable development, solidarity, free and fair trade, poverty eradication, and human rights. #### 1.5.1 Area of freedom, security, and justice This purpose evolved through the Treaties of Maastricht and Amsterdam, with the Lisbon Treaty consolidating much of this cooperation into the first pillar, governed by supranational methods. Competences in areas like immigration, asylum, cross-border security, judicial cooperation in civil and criminal matters, and police cooperation are conferred upon the EU, allowing for the adoption of regulations and directives. #### 1.5.2 Establishment of the internal market This was an initial purpose of the EU, involving the creation of a customs union (abolished in 1970) and the free movement of goods, services, persons, and capital. Harmonisation of Member State legislation is crucial to remove barriers to this free movement. Anti-competitive behaviour by undertakings is prohibited under Articles 101 and 102 TFEU, with the Commission and the Court of Justice of the European Union (CJEU) overseeing compliance. * **Prohibited actions under Article 101 TFEU:** Agreements between undertakings, decisions by associations of undertakings, and concerted practices that restrict competition, such as price-fixing, market sharing, limiting production, or applying dissimilar conditions. * **Prohibited actions under Article 102 TFEU:** Abuse of a dominant position within the internal market. * **Consequences of violations:** Automatic nullity of agreements, significant fines by the European Commission (up to 10% of annual turnover), claims for damages by affected parties, and reputational damage. * **Adverse effects on competition and market functioning:** Higher consumer prices, reduced consumer choice, decreased innovation, misallocation of resources, distorted supply and demand signals, potential for shortages or surpluses, poor investment decisions, and deadweight loss. * **Predatory pricing:** Setting prices artificially low to eliminate competition, followed by price increases once a dominant position is achieved. #### 1.5.3 Economic and Monetary Union (EMU) The introduction of a single currency, the euro, aims to facilitate the internal market by eliminating currency exchange costs and economic risks. However, this requires strong economic and monetary cooperation among Member States. Currently, 19 Member States are members of the eurozone. While not a full economic union, Member States retain political and legislative powers regarding their budgets, provided they comply with EU principles and undergo monitoring. ### 1.6 Principles governing the functioning of the EU Articles 4 and 5 TEU outline four key principles: #### 1.6.1 Principle of sincere cooperation (loyalty) * **Scope:** Applies to Member States and EU institutions. * **Obligations:** Member States must assist each other in carrying out tasks stemming from the Treaties, take appropriate measures to ensure fulfilment of EU obligations, and refrain from any measure that could jeopardise the Union's objectives. EU institutions must also practice sincere cooperation with Member States. * **Enforcement:** Breaches can lead to actions for infringement of EU law before the CJEU, potentially resulting in financial penalties. #### 1.6.2 Principle of conferral (attributed competences) * **Scope:** Applies to the EU. * **Obligation:** The Union shall only act within the limits of the competences conferred upon it by the Member States in the Treaties to attain the objectives set out therein. Competences not conferred remain with the Member States. * **Types of competences:** * **Exclusive competences (Article 3 TFEU):** The EU is the sole legislator; Member States can only act if empowered by the EU. Examples include the customs union and competition rules. * **Shared competences (Article 4 TFEU):** The EU and Member States can legislate. Member States exercise their competence when the EU does not or has decided not to. Examples include the internal market and environmental protection. * **Supporting competences (Article 6 TFEU):** The EU can only support, coordinate, or complement the action of Member States, without harmonising their laws. Examples include human health and culture. > **Tip:** Always identify the legal basis (specific article in the Treaties) for any legislative act. #### 1.6.3 Principle of subsidiarity * **Scope:** Applies to the EU in areas that do not fall within its exclusive competence. * **Condition:** 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 (at central, regional, or local level) but can be better achieved at Union level due to the scale or effects of the action. * **Application:** Primarily applies to shared and supporting competences, often determined by the cross-border element of an issue. #### 1.6.4 Principle of proportionality * **Scope:** Applies to all EU actions, regardless of the type of competence. * **Condition:** The content and form of Union action shall not exceed what is necessary to achieve the objectives of the Treaties. EU institutions must limit the exercise of their powers. * **Relationship with subsidiarity:** Proportionality applies after the condition for subsidiarity has been met (i.e., if the EU decides to act). > **Tip:** The CJEU and national parliaments supervise compliance with the principles of subsidiarity and proportionality. --- # Purposes of the European Union The European Union is founded upon several core purposes that guide its actions and objectives, as articulated in its foundational Treaties. These purposes encompass fostering peace, establishing an area of freedom and security, creating a unified internal market, and implementing an economic and monetary union, while also projecting its values and interests globally. ### 3.1 Article 3 TEU: A Comprehensive Overview of EU Purposes Article 3 of the Treaty on European Union (TEU) provides a concise summary of the primary objectives the EU is committed to achieving: * **Promoting peace, EU values, and the well-being of its peoples:** This foundational purpose reflects the historical context of the EU's creation, aiming to prevent conflict and foster a shared sense of community. * **Offering an area of freedom, security, and justice without internal frontiers:** This involves ensuring the free movement of persons within the EU, coupled with robust measures for external border control, asylum, immigration, and the prevention and combating of crime. * **Establishing an internal market:** This is a cornerstone objective, aiming to create a single economic space where goods, services, capital, and people can move freely. * **Working for sustainable development based on balanced economic growth and price stability:** The EU is committed to economic prosperity that is both long-term and stable, as detailed in Article 3(3) TEU. * **Establishing an economic and monetary union with the euro as its currency:** This aims to enhance economic integration and facilitate trade through a single currency. * **Upholding and promoting EU values and interests in its global relations:** The EU seeks to contribute to global peace, security, sustainable development, solidarity, free and fair trade, poverty eradication, and the protection of human rights in its interactions with the wider world. The Union pursues these objectives using appropriate means, strictly adhering to the competences conferred upon it by the Treaties, a principle known as the **principle of conferral**. This means the EU can only act within the scope of powers explicitly granted to it by the Member States through the Treaties, with any powers not conferred remaining with the Member States. ### 3.2 Promotion of peace The promotion of peace is intrinsically linked to the EU's very inception, born out of the desire to prevent further devastating conflicts after World War II. Initially achieved through economic cooperation in specific sectors, this objective expanded with the increasing competences of the European Economic Community (EEC) and Euratom. This enhanced economic interdependence fostered greater trust among Member States, significantly reducing the likelihood of war. The EU's commitment to peace was recognized with the Nobel Prize for Peace in 2012. ### 3.3 An area of freedom, security, and justice The establishment of an area of freedom, security, and justice (AFSJ) has been a progressive development throughout the EU's history: * **Maastricht Treaty:** Introduced initial steps through cooperation in Justice and Home Affairs (JHA) within the "third pillar," addressing challenges arising from the increased freedom of movement of individuals. * **Amsterdam Treaty:** Significantly advanced the AFSJ by transferring substantial parts of the third pillar JHA cooperation into the "first pillar" (the Community method), leading to more supranational decision-making. Key areas transferred included immigration, asylum, border controls, cross-border security, customs cooperation, fraud prevention, and judicial cooperation in civil and criminal matters. * **Lisbon Treaty:** Further solidified the AFSJ by abolishing the third pillar entirely, integrating all JHA competences into the first pillar. This means the EU now primarily operates with two pillars: the core "Community pillar" and the intergovernmental Common Foreign and Security Policy (CFSP) in the second pillar. However, it is important to note that certain sensitive areas still require unanimity voting. The Treaty on the Functioning of the European Union (TFEU) grants the EU legislative powers in these AFSJ domains, enabling the adoption of regulations and directives. For example: * **Cross-border controls:** Regulation 562/2006 on the rules governing the movement of persons across borders (Schengen Borders Code). * **Asylum:** Directive 2011/95 on standards for the qualification of persons as beneficiaries of international protection, and Directive 2003/9 laying down minimum standards for the reception of asylum seekers. * **Immigration:** Directive 2003/86 on family reunification of third-country nationals, Directive 2008/115 on returning illegally staying third-country nationals, and Directive 2004/38 on family reunification of EU citizens. * **Police Cooperation:** Articles 87-89 TFEU empower the EU to legislate on police cooperation, including the collection, storage, and exchange of information, as well as cooperation on staff, equipment, and research into crime detection. * **Judicial Cooperation:** Based on mutual confidence between Member States, the EU establishes rules for judicial cooperation in cross-border matters such as bankruptcy, family law, and purchase agreements. ### 3.4 Establishment of the internal market The establishment of the internal market is a primary and long-standing purpose of the EU, encompassing two key stages: 1. **Establishment of the customs union:** Achieved by 1970, this involved the elimination of customs duties and taxes on goods moving between Member States and the adoption of a common external tariff for goods entering the EU. 2. **Creation of a single internal market:** This aims to enable the free movement of goods, services, persons, and capital without hindrance at internal borders. To achieve this, all barriers to such movement must be abolished. Key elements for the functioning of the internal market include: * **Removing internal physical borders:** Facilitating the seamless flow of individuals and goods. * **Harmonisation of Member State legislation:** Differences in national laws and regulations can create significant obstacles to the free movement of goods and services. Harmonisation directives are crucial to ensure uniform rules, norms, and technical, safety, and quality standards across all Member States, thereby promoting free movement, increasing consumer confidence, creating a level playing field for businesses, and reducing costs for companies. * **Prohibition of distortion of competition:** The EU actively works to prevent anti-competitive behaviour by companies and Member States. Articles 101 and 102 TFEU prohibit agreements between undertakings that restrict competition and the abuse of a dominant market position, respectively. The European Commission, the Court of Justice of the European Union (CJEU), and the General Court supervise compliance with these rules. **Prohibited actions under EU competition law include:** * **Price-fixing:** Agreements to set purchase or selling prices, or other trading conditions. * **Market sharing:** Dividing markets or customers among competitors. * **Limiting production or development:** Controlling or limiting the production or technical development of products. * **Applying dissimilar conditions:** Applying different terms to similar transactions with different trading partners, disadvantaging some. Violations of competition law can lead to automatic nullity of agreements, significant fines imposed by the European Commission (up to 10% of a company's annual turnover), claims for damages, and severe reputational damage. Adverse effects on competition and the functioning of the market due to anti-competitive practices include: * **Higher prices for consumers.** * **Erosion of consumer choice.** * **Reduced innovation.** * **Misallocation of economic resources.** * **Distorted supply and demand signals.** * **Shortages or surpluses of goods.** * **Poor investment decisions.** * **Deadweight loss (loss of welfare).** It is crucial to distinguish between price-fixing (artificially high prices) and predatory pricing (artificially low prices), both of which create barriers to entry for new competitors and ultimately harm consumers and market dynamism. ### 3.5 Establishment of the economic and monetary union and the introduction of a single currency The existence of multiple currencies within the EU posed significant economic risks and hindered the efficient establishment of the internal market by complicating commercial transactions and the movement of goods and services. To address this, the EU has pursued the introduction of a single currency, the euro. A critical condition for the success of a single currency is a strong and broad economic and monetary union. Without this, the euro risks devaluation due to economic or budgetary problems in even a limited number of Member States. The project of introducing the single currency was initiated by a specific treaty (this detail is not explicitly provided in the given text, but is historically linked to the Maastricht Treaty). Currently, 19 out of the 27 Member States are members of the Eurozone. While the EU has achieved a significant degree of monetary union, it is not a fully integrated economic union, as Member States retain political competences and legislative powers concerning their budgets. However, these powers must be exercised in compliance with EU principles and are subject to monitoring of economic and budgetary policy by the EU, as outlined in Article 121 TFEU. ### 3.6 Promotion of the well-being of its peoples Beyond economic and security concerns, the EU is dedicated to promoting the overall well-being of its citizens. This encompasses ensuring high standards of health, safety, and consumer protection, as well as fostering social cohesion and addressing environmental concerns. This overarching purpose underpins many of the specific policy areas and legal instruments developed by the Union. --- # Principles governing the functioning of the EU This section details the foundational principles that underpin the European Union's operations and its relationship with its Member States. ### 3.1 General Principles and Purposes of the EU The EU's functioning is guided by overarching purposes and fundamental principles enshrined in the Treaties. Article 3 of the TEU outlines five key purposes: * Promoting peace, its values, and the well-being of its peoples. * Offering citizens an area of freedom, security, and justice without internal frontiers, ensuring free movement of persons alongside appropriate measures for external border controls, asylum, immigration, and crime prevention. * Establishing an internal market. * Working towards sustainable development based on balanced economic growth and price stability. * Establishing an economic and monetary union with the euro as its currency. In its external relations, the Union aims to uphold and promote its values and interests, contributing to the protection of its citizens, global peace, security, sustainable development, solidarity, mutual respect, free and fair trade, poverty eradication, and the protection of human rights. The Union pursues these objectives using appropriate means, acting only within the limits of the competences conferred upon it by the Treaties, aligning with the **principle of conferral**. #### 3.1.1 Promotion of peace This purpose is intrinsically linked to the EU's post-World War II origins, initially fostered through economic cooperation in specific areas. The expansion of competences over time enhanced confidence among Member States, contributing to the prevention of further conflict. The EU's commitment to peace was recognized with the Nobel Prize for Peace in 2012. #### 3.1.2 An area of freedom, security, and justice The initial steps towards creating this area began with the Maastricht Treaty (third pillar: cooperation in Justice and Home Affairs) to address challenges arising from the freedom of movement. The Amsterdam Treaty expanded this scope significantly by transferring a substantial part of the third pillar to the first pillar, integrating it into the Community method. Key areas now under this umbrella include immigration, asylum, border crossing, cross-border security, customs duties, fraud prevention, judicial cooperation in civil matters, and judicial cooperation in criminal matters. The Lisbon Treaty further consolidated this by removing the third pillar, leaving the EU with two main pillars: the significant "community pillar" and the intergovernmental pillar for the Common Foreign and Security Policy (CFSP). However, several sensitive areas still require unanimity voting. The TFEU grants the EU legislative powers in these domains, allowing for the adoption of regulations and directives. #### 3.1.3 Establishment of the internal market This was an initial core purpose of the EU, comprising two main parts: 1. **Establishment of the customs union:** Achieved in 1970, this eliminated customs duties and taxes on goods transferred between Member States and established a common external tariff. 2. **Creation of a single internal market:** This aims to ensure the free movement of goods, services, persons, and capital without internal border hindrances. This requires abolishing all barriers, including physical borders, and harmonizing Member State legislation. Differences in national rules can impede the free movement of goods and services, necessitating harmonization directives to ensure equal legal conditions. Furthermore, the EU prohibits the distortion of competition within the internal market and establishes rules for fair competition, which are overseen by the Commission and the Court of Justice of the European Union (CJEU). ##### 3.1.3.1 Prohibition of anti-competitive behaviour Articles 101 and 102 of the TFEU prohibit anti-competitive behaviour by undertakings. This includes: * **Agreements between undertakings:** Contracts, decisions, or any form of cooperation between independent companies, or decisions by associations of undertakings (e.g., trade associations). * **Concerted practices:** Coordination between companies that may not be explicitly agreed upon but is intended to influence competition. Examples of prohibited actions include price-fixing, market sharing, limiting production or technical development, and applying dissimilar conditions to similar transactions, thereby disadvantaging certain parties. Violations can lead to: * **Automatic nullity:** Agreements violating Article 101 are void. * **Fines:** The European Commission can impose substantial fines, up to 10% of a company's annual turnover. * **Damages:** Businesses or consumers harmed by infringements can claim compensation. * **Reputational damage:** Breaching competition law can severely damage a company's reputation. ##### 3.1.3.2 Adverse effects on competition and market functioning Anti-competitive practices have several detrimental effects: * **Higher prices for consumers:** Price-fixing agreements artificially inflate prices. * **Erosion of consumer choice:** Consumers face higher prices and limited options. * **Reduced innovation:** Collusion disincentivizes companies from investing in new technologies or improving products. * **Misallocation of economic resources:** Distorted market signals lead to inefficient production and investment. * **Illegality under EU law:** Such agreements are void and subject to significant fines. Market functioning is distorted by: * **Distorted supply and demand signals:** Artificially manipulated prices disconnect production costs from consumer value. * **Shortages or surpluses:** Price ceilings can lead to shortages, while price floors can cause surpluses. * **Inefficient allocation of economic resources:** Wrong incentives for producers lead to shortages of desired goods and overproduction of less desired ones. * **Poor investment decisions:** Investors struggle to accurately assess risks and returns. * **Deadweight loss:** Market inefficiencies result in a loss of overall welfare. Practices like price fixing (artificially high prices) and predatory pricing (artificially low prices to eliminate competition) create barriers for new entrants and can lead to market monopolization. #### 3.1.4 Establishment of the economic and monetary union and the introduction of a single currency The existence of multiple currencies posed economic risks and hindered the establishment of an internal market. The introduction of a single currency (the euro) was intended to resolve these issues. However, this requires a strong and broad economic and monetary union to prevent devaluation due to economic or budgetary problems in any Member State. Currently, 19 out of 27 Member States are members of the Eurozone. While not a full economic union, Member States retain political and legislative competences over their budgets, provided they comply with EU principles and accept economic and budgetary policy monitoring. ### 3.2 Core Principles Governing EU Functioning Articles 4 and 5 of the TEU summarize four key principles governing the EU's functioning: * **Principle of sincere cooperation/loyalty:** Applies to Member States. * **Principle of conferral/attributed competences:** Applies to the EU. * **Principle of subsidiarity:** Applies to the EU in areas of shared and supporting competences. * **Principle of proportionality:** Applies to the EU in all areas of its action. These principles are closely connected but have distinct scopes of application. #### 3.2.1 Principle of loyalty or "sincere cooperation" This principle, outlined in Article 4(3) TEU, mandates that the Union and its Member States, in full mutual respect, shall assist each other in carrying out tasks derived from the Treaties. Member States must take all appropriate measures to ensure the fulfilment of obligations arising from the Treaties or the acts of EU institutions and refrain from any measure that could jeopardize the attainment of the Union's objectives. This principle entails both positive obligations (efforts to achieve Union objectives) and negative obligations (refraining from harmful measures). The Lisbon Treaty extended this principle to EU institutions themselves, making it a two-way street of mutual support. > **Tip:** Breaches of the principle of sincere cooperation can lead to infringement proceedings before the CJEU, potentially resulting in financial penalties for the Member State. **Concrete application:** Member States must support EU institutions in achieving Union purposes. For instance, they must intervene to block disruptions to the internal market, even if caused by individual citizens. Failure to do so can trigger an infringement procedure initiated by the Commission. Similarly, national institutions must not apply rules that violate EU law. #### 3.2.2 Principle of conferral Article 5(2) TEU, read in conjunction with Article 2(6) TFEU, states that the Union shall act only within the limits of the competences conferred upon it by the Member States in the Treaties to achieve the objectives set out therein. Any competences not conferred on the Union remain with the Member States. This means the EU can only adopt legislative acts if it has been explicitly granted the competence by the Treaties, requiring a clear legal basis for each act. There are three types of competences: * **Exclusive competences (Article 3 TFEU):** The EU has the sole power to legislate and adopt binding acts. Member States can only act if empowered by the EU to implement these acts. These areas include the customs union, competition rules for the internal market, monetary policy for euro area countries, conservation of marine biological resources under the common fisheries policy, common commercial policy, and the conclusion of international agreements under specific conditions. * **Shared competences (Article 4 TFEU):** The EU and Member States can both legislate and adopt legally binding acts. Member States exercise their competence when the EU has not exercised or has decided not to exercise its own. These areas include the internal market, social policy (specific aspects defined in the Treaty), economic, social and territorial cohesion (regional policy), agriculture and fisheries (excluding conservation of marine biological resources), environment, consumer protection, transport, energy, area of freedom, security, and justice, shared public health concerns, research, technological development, space, development cooperation, and humanitarian aid. * **Supporting competences (Article 6 TFEU):** The EU can only act to support, coordinate, or complement the actions of Member States. EU legislative acts in these areas do not entail the harmonization of Member State laws or regulations. These areas include the protection and improvement of human health, industry, culture, tourism, education, vocational training, youth and sport, civil protection, and administrative cooperation. These competences can be seen as an implicit tool for the EU to extend its reach, provided there is a link to a basic Treaty competence. #### 3.2.3 Principle of subsidiarity Article 5(3) TEU dictates that in areas not falling within the EU's exclusive competence, 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 (at central, regional, or local levels) but can be better achieved at the Union level due to the scale or effects of the action. > **Tip:** The principle of subsidiarity applies only to **shared** and **supporting** competences. It requires that the EU's action be more efficient than that of the Member States. The presence of a cross-border element is often a decisive factor in applying this principle. #### 3.2.4 Principle of proportionality Article 5(4) TEU states that the content and form of Union action shall not exceed what is necessary to achieve the objectives of the Treaties. The institutions of the Union must apply this principle as laid down in the Protocol on the application of the principles of subsidiarity and proportionality. > **Tip:** The principle of proportionality **always applies**, regardless of the type of competence. It ensures that EU actions are limited to what is strictly necessary to achieve the Treaty objectives. It is closely linked to subsidiarity: first, the EU must determine if it's necessary for it to act; then, it must ensure its action is proportionate. Compliance with both subsidiarity and proportionality is subject to judicial control by the CJEU and scrutiny by national parliaments. --- ## Common mistakes to avoid - Review all topics thoroughly before exams - Pay attention to formulas and key definitions - Practice with examples provided in each section - Don't memorize without understanding the underlying concepts

| Term | Definition | |------|------------| | Legal Acts | Acts adopted through a legislative procedure which generate legal consequences within the European Union. | | Legal Instruments | These are the specific forms through which EU law is expressed, including Regulations, Directives, and Decisions, as well as other forms like recommendations. | | Regulations | EU legal acts that have general application, are legally binding in their entirety, and are directly applicable in all Member States without the need for national transposition. | | Directives | EU legal acts that are binding as to the result to be achieved by the Member States, but leave the choice of form, methods, and means to national authorities, requiring transposition into national law. | | Decisions | EU legal acts that are binding in their entirety. If they specify addressees, they are binding only on those addressees. | | Ordinary Legislative Procedure | The standard legislative procedure in the EU, where the European Parliament and the Council act as co-legislators, adopting legal acts jointly on a proposal from the Commission. | | Special Legislative Procedure | A legislative procedure used in specific, more sensitive policy areas where the European Parliament's role is limited to consent or consultation, and the Council often acts as the sole legislator. | | Qualified Majority Voting (QMV) | A voting system in the Council of the EU where a decision is adopted if it receives support from a specified percentage of Council members representing a specified percentage of the EU's population. | | Unanimity | A voting system where all members of the Council must agree for a decision to be adopted; typically used for sensitive matters. | | Principle of Conferral | The principle stating that the EU shall act only within the limits of the competences conferred upon it by the Member States in the Treaties to achieve the objectives set out therein, with competences not conferred remaining with the Member States. | | Principle of Subsidiarity | The principle that in areas not falling within the EU's exclusive competence, the EU shall act only if and in so far as the objectives of the proposed action cannot be sufficiently achieved by the Member States but can rather be better achieved at Union level. | | Principle of Proportionality | The principle that the content and form of EU action shall not exceed what is necessary to achieve the objectives of the Treaties, ensuring that EU institutions limit the exercise of their powers. | | Internal Market | A key objective of the EU, characterized by the free movement of goods, services, capital, and persons without internal frontiers, achieved through the removal of barriers and harmonization of laws. | | Harmonization Directives | Directives aimed at aligning national laws, norms, and standards across Member States to ensure the smooth functioning of the internal market and facilitate free movement. | | Mutual Recognition | A principle whereby a product that is legally sold in one Member State can also be sold in other Member States, forming a basis for the internal market. | | Area of Freedom, Security, and Justice (AFSJ) | An area within the EU where citizens can move freely without internal border controls, coupled with appropriate measures for external border controls, asylum, immigration, and the prevention of crime. | | Sincere Cooperation (Principle of Loyalty) | The principle that the Union and the Member States shall, in full mutual respect, assist each other in carrying out tasks flowing from the Treaties, and that Member States shall take all appropriate measures to ensure the fulfilment of obligations arising from the Treaties and refrain from jeopardizing the Union's objectives. | | Objective Liability | A form of liability where a party can be held responsible for damages regardless of fault or negligence, often applied in product liability cases. | | Direct Effect | The principle that certain provisions of EU law are capable of creating rights for individuals which national courts must protect, meaning they can be invoked directly before national courts. | | Vertical Direct Effect | The ability of individuals to invoke EU law provisions against the State or public bodies. | | Horizontal Direct Effect | The ability of individuals to invoke EU law provisions against other private parties. | | Price Fixing | An illegal agreement between undertakings to set prices or other trading conditions, leading to artificially high or low prices and distorting competition. | | Predatory Pricing | A pricing strategy where a dominant company sets prices at an artificially low level to eliminate competitors, with the intention of raising prices once competition is weakened or eliminated. | | Deadweight Loss | A loss of economic efficiency that can occur when the equilibrium for a good or service is not achieved, resulting in a loss of welfare for consumers and producers. |