Crossing the Baltic Rubicon

In a classic work of American constitutionalism, Bruce Ackerman refers to the “constitutional moments” that define the political arrangements enshrined in a Constitution. In Ackerman’s work this development takes place in a paradoxical way, because such “constitutional moments” of US history do not involve an amendment of the written Constitution. They simply happen and then the Constitution changes forever, but not in writing.

EU Law has had its own share of constitutional moments. In a process characterized by integration through law, these moments have traditionally taken place in the terrain of the law and lawyers, mostly through judgments and then implemented through practice. Van Gend en Loos was a constitutional moment. The rebellion of constitutional courts against unbridled integration, starting with the German Constitutional Court in the Maastricht decision, was another constitutional moment. The discoveryof EU fundamental rights as general principles of EU law was another “constitutional moment”.

Last week another constitutional moment took place. In a rather technical area of law, the Statute of the European System of Central Banks, the Court of Justice ruled for the first time in a case that ensued in the annulment of a decision of a Member State. The Court did not declare that a Member State had failed to fulfill its obligations under EU Law. What the Court did was much more ambitious, for it annulled an act rendered by an authority of a Member State and extricated it from the domestic legal order. For the very first time, EU Law entered fully into the legal order of a Member State, declared a breach within the domestic legal order and eradicated the national legal act ipso iure. There was no need for the Member State to take any appropriate measures. No need for national courts to ensure the fulfilment of the duties enshrined in EU Law. The EU legal order did the job for them.

In the case of Rimsevics and ECB/Latvia (C-202 and 238/18), the Court was called to rule on the grounds of Article 14.2 of the Statute of the European System of Central Banks. This provision is, in the words of a dear colleague, an “extravagant rule”, unparalleled in the Treaties. It contains a remedy that looks like an infringement action, but it walks like an action of annulment. It empowers the governor of a national central bank, or the Governing Council of the ECB, to challenge before the Court of Justice the decision of a national authority to remove the governor from office if the removal has taken place disregarding the conditions established in the Treaties. When Mr. Rimsevics, Governor of the Central Bank of Latvia, was provisionally suspended from office as a result of criminal investigations, Article 14.2 of the Statute was the obvious provision to apply.

Before I continue, just a quick disclaimer: although I represented one of the parties in this case, the following lines are a purely personal account and view of the judgment. But as the reader will quickly note, it is no provocation to argue that the Court has crossed a Rubicon, a constitutional Rubicon that allows no turning back.

Contrary to the opinion of Advocate General Kokott, who purported that the Court should render a declarative judgment (in line with the requests of the applicants), the final decision was much bolder. After considering the features of Article 14.2 of the Statute, the Court, sitting in Grand Chamber, ruled that the action provided for in Article 14.2 of the Statute “has as its purpose the annulment of the decision taken to relieve a governor of a national central bank from office”.

The Court reviewed the terms and the evidence provided by the Latvian authorities and ruled that Article 14.2 had been breached. Mr. Rimsevics was removed from office without complying with the substantive requirements provided in the Statute. As a result, and here comes the constitutional moment, the Court “hereby annuls the decision of the Korupcijas novēršanas un apkarošanas birojs (Anti-Corruption Office, Latvia) of 19 February 2018 in so far as it prohibits Mr Ilmārs Rimšēvičs from performing his duties as Governor of the Central Bank of Latvia”.

In all its technicality, this rather simple statement hides a revolution with the potential of changing EU law forever. Despite its differences with public international law, EU law has remained faithful to basic principles of international orthodoxy, including the separation of legal orders that precludes international courts from judicially reviewing the legality of State action. The infringement procedure is a good example of how convention has prevailed in Luxembourg, whereby judgments are set to declare that a Member State has failed to comply with its obligations, but no annulment occurs directly in the judgment. The same happens in preliminary references in which national law is indirectly reviewed, where the Court limits its decision to state that EU law must be interpreted in the sense that it is opposed, or not opposed, to a rule of national law. The national court does the rest, including the purge or setting aside of the national act.

In Rimsevics and ECB/Latvia the Court has taken an additional step by declaring the breach and, immediately after, annulling the national act that incurred in such a breach. The annulment or repeal of national law is not left to the national authorities, but quite the contrary: it is left to the Court to purge the rule itself, irrespective of the author or position of the authority rendering the rule. If the rule would have been a constitutional provision, the Court would annul. If the rule would have been a judgment of a national court, the Court would annul. The fact that the annulled act was an individual decision of an administrative body does not deprive the judgment of its seismic impact.

One could argue that the case is limited to a very specific provision that allowed the Court to do precisely that: annul a national act. But there is nothing further from the truth: Article 14.2 of the Statute makes no reference to the annulment of a national act, it simply conveys certain features of an action of annulment, but at the same time it also shows significant traits of an infringement action. The decision to annul a national act was not evidently and unconditionally provided in a Treaty provision. It is the interpretation of the Court that has managed to exert such an extraordinary effect, unparalleled in international law and EU law itself.

The rationale underlying the Court’s decision is quite straight forward. According to the Court, “the ESCB represents a novel legal construct in EU law which brings together national institutions, namely the national central banks, and an EU institution, namely the ECB, and causes them to cooperate closely with each other, and within which a different structure and a less marked distinction between the EU legal order and national legal orders prevails” (italics added).

Thus, one could argue that this result is confined to the European System of Central Banks and no more. But think twice. “Novel legal constructs” are constantly in the making in the EU. Just take a glimpse at the recently created European Prosecutor’s Office, in which another “novel legal construct” has been put into place to safeguard the financial interests of the EU. If in the future the Court strikes down a national criminal judgment on the grounds that the European Prosecutor’s Office is a “novel legal construct” within which “a different structure and a less marked distinction between the EU legal order and national legal orders prevail”, the assertion’s premiss would be correct. The same applies to the Single Supervisory Mechanism, whereby the ECB implements national law, and national authorities enforce EU law and ECB instructions. Novel legal constructs are not the exclusive domain of monetary policy, and the challenges of European integration are blending EU and national legal orders in unprecedented ways that blur the distinction between both systems.

It would be wrong to argue that Rimsevics and ECB/Latvia is an isolated decision. Quite the contrary: by stepping into national law and purging its legal order in a way that is unparalleled in international law, the Court of Justice has finally and fully stepped into the shoes of a national court. In fact, if this judgment is seen together with the Court’s efforts to protect the independence and integrity of national judiciaries, the overall effect is one in which a newCourt has emerged. A Court sitting at a constitutional apex, assisting national courts when their integrity is undermined, confronting Member States that drift away from the rule of law, and annulling national acts when necessary, particularly in areas in which a less marked distinction between the EU legal order and national legal orders prevail.

The final portrait emerging from this description is a genuine constitutional moment, crossing a Rubicon through the northern route, via Latvia.

 

 

 

 

 

 

A tribute to Gil Carlos Rodríguez Iglesias

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This morning, Gil Carlos Rodríguez Iglesias passed away. The first Spanish judge at the Court of Justice and its President from 1994 to 2003, we sadly lose today a powerful intellect that inspired many European lawyers.

Gil Carlos was the first of a generation of young Spanish lawyers that excelled in the newly democratic Spain as a professor of public international law. First, at the University Complutense of Madrid, later in Extremadura and finally in Granada, where he held the chair of public international law until his departure in 1986 to Luxembourg. I remember during my years of study in Granada, when Gil Carlos was at the time President of the Court, that the mere mention of his name was like evoking a saint or a mythical god. Despite his time far away at the Plateau du Kirchberg, he never lost his links with Granada, his disciples and his friends. The school of international law of Granada remains one of the leading centers of European law in Spain, in part thanks to Gil Carlos’ commitment and efforts.

Gil Carlos was the last President of the pre-great accession Court. A modest but mighty judicial institution of fifteen judges only, soon to be profoundly transformed by the arrival of thirteen more. His style was modest and gentle, but he leaded the Court’s works with an iron fist still remembered to this day by many who shared their time at the Court with Gil Carlos.

After his tenure at the Court he returned to Spain, where he held the chair at the University Complutense of Madrid, the school of his doctoral and post-doctoral years. He was appointed director of the Real Instituto Elcano, Spain’s leading thinktank in international affairs, and presided the Spanish section of FIDE until 2015.

Gil Carlos was a giant of European law, a force of good and reason so badly needed in these turbulent times. We will miss the man, the judge, the professor and the dignity that he exemplified, but his legacy and memory will remain, hopefully as a guiding light that helps us find the way in the unchartered waters of European integration.

 

 

The Year of the Infringement

Happy 2019! I wish all the readers of this blog a very successful and eventful new year.

And to start 2019, nothing better than a post on naughty States and the stellar role recently played by infringement actions before the Court. Who would have thought that the infringement procedure would be close to outmaneuver the preliminary reference procedure and overtake its position as the “jewel of the crown” among the remedies of the Court? But that is what we have started to witness in the past months, and will probably consolidate throughout 2019. Thus, 2019 could very well be… the year of the infringement.

This is not a completely new story. 2017 and 2018 provided extraordinary examples of how the infringement procedure could be used, particularly in the Polish forest case and, more recently, in the case of the Polish forcefully retired judges. Those cases proved that the interaction between the interim measures procedure and the infringement procedure can be crucial in order to ensure the effectiveness of EU law. The Grand Chamber ruled twice on these matters, the first time to confirm that the sanctions mechanism of Article 260 TFEU can be used in the context of interim measures (quite a ruling!), and the second to remind that interim measure inaudita parteagainst Member States can be retroactive (quite another ruling!).

But 2019 will provide us with further developments in the field of infringements, and some of them are of a huge significance, both in procedural and substantive terms.

First, the Polish proceedings concerning the independence of the judiciary will prove how far the Court of Justice is willing to go in the interpretation of a very broad and generic provision, as is Article 19 TEU, which generically ensures the independence of the judiciary. Is this provision enough to justify the launch of an infringement procedure against the reform of a national judiciary? If the Court of Justice sides with the Commission, what would happen next? Should Member States consult with the Commission any further amendments to their judiciary? Wouldn’t the EU be stepping into a closely guarded domain of national sovereignty, its domestic judiciary? It looks like the Court will probably side with the Commission, but the seismic consequences of that conclusion could be felt for many years.

Shortly after, the Court will be ruling on Commission/Hungary (C-235/17), a case that has nothing to do with the rule of law crisis in that country, but with a point that could be applied to any infringement action against any Member State: can the Commission bring an infringement action on an independent ground of review based solely on the Charter of Fundamental Rights? The case raises key issues of principle, not only about the scope of application of the Charter, but also on the Commission’s policy on infringements, which could leave the institution in a position closer to the one of an Ombudsman in the promotion and defense of fundamental rights. So far, in a thoroughly reasoned Opinion, AG Øe claims that the Commission cannot bring an action on such grounds, but the counterarguments are powerful too. Some fundamental rights are self-executing, even in horizontal situation, as the Court has stated recently in some high-profiled cases (Egenberger, Bauer…). Also, the Court’s decisions in preliminary judgments confirm that the Charter can act as a sole ground of infringement in areas only indirectly covered by EU law (think about consumer protection and the vast number of breaches of the right to an effective protection in civil judicial proceedings ruled by the Court). It would be strange if the Commission is subject to a stricter standard of proof of the link between the Charter and the implementation of EU law, simply because the case is brought through an infringement action. We shall see, but the case will condition the role of the Charter as a significant or insignificant legal instrument in the Commission’s infringement policy.

We will also hear about the unknown (to date) Article 14.2 of the Statute of the European System of Central Banks, which grants the Governing Council of the ECB the right to bring an action against a Member State having unlawfully removed a governor of a national central bank. The typical provision that was drafted with the hope that it would never be applied, finally ended up being put to the test in the case of ECB/Latvia (C-238/18), together with Rimšēvičs/Latvia (C-202/18). But is Article 14.2 an infringement procedure or an action of annulment? Or none of the above? AG Kokott has rendered a powerful Opinion arguing that the remedy looks like an infringement, moves like an infringement and talks like an infringement. But the Court will have the final say, again in Grand Chamber, in a case that will open the door to a new generation of sui generisinfringements brought by Institutions other than the Commission.

And yesterday we found AG Szpunar’s excellent Opinion in the saga of Germany’s reluctance to follow the Council’s voting instructions in the Intergovernmental Organisation for International Carriage by Rail. In yesterday’s Commission/Germany (C-620/16), an interesting procedural argument was raised by the defendant: Germany departed from the Council’s voting instructions and breached the Council Decision with which Germany disagreed. Germany took the Council to Court and challenged the Decision. Germany lost. However, in the meantime, the Commission launched infringement proceedings against Germany almost immediately after the recalcitrant vote. But the letter of formal notice and the reasoned opinion were issued once the rebellious vote had been cast, so there was nothing much to do by then. Thus, Germany argued that the Commission lacked any interest to bring the action, to which the AG has counterargued by claiming that the Commission was right to bring the action, or otherwise Member States would profit from their breaches of EU law by issuing acts of immediate effect. The AG argues, with the support of the case-law, that some breaches produce effects only in short segments of time, but that does not preclude the Commission from bringing an infringement action after the effects have faded, as long as the Commission brings the action immediately after the act takes place. This is the key: the Commission’s ability to react quickly, which it did in this case. But if the Commission had decided to await the Court’s decision in the action of annulment against the Council Decision, which could have a been a reasonable stance too, the AG’s proposal would ensue in the inadmissibility of the infringement action. We shall see what the Court finally says, but the issue is conceptually and procedurally complex, and crucial for the Commission’s infringement policy.

The infringement procedure became a rather unexciting area of practice for quite some time, mostly because the Commission did not have reasons to use it in novel ways. But the current times have put the Commission in a new role, struggling as it is now with phenomenal challenges unimagined year ago. The infringement procedure is proving to be a powerful ally in the Commission’s efforts to overcome such challenges, and so far the Court has been willing to play ball. But for how long? In 2019 we will find out.

In the meantime, happy new year to y’all.

Brexit and EU Citizenship After Wightman

The Wightman case is a landmark decision of the Court of Justice that deserves careful attention. The speed at which developments are taking place in Brexitworld are probably clouding our eyes for the time being, but in the following months a more thorough analysis of the judgment will probably emerge and provide further insight into this extraordinary case.

For the time being, I want to raise a point of the judgment that so far has come unnoticed in the discussions (at least in the ones I have followed), which could show the way for the hundreds of thousands of Britons living in the continent and who are about to lose their EU citizenship.

In paragraph 64 of the Wightman judgment, the Court argues, shortly before ruling on the revocability of the withdrawal application, as follows:

“It must also be noted that, since citizenship of the Union is intended to be the fundamental status of nationals of the Member States (see, to that effect, judgments of 20 September 2001, Grzelczyk, C‑184/99, EU:C:2001:458, paragraph 31; of 19 October 2004, Zhu and Chen, C‑200/02, EU:C:2004:639, paragraph 25; and of 2 March 2010, Rottmann, C‑135/08, EU:C:2010:104, paragraph 43), any withdrawal of a Member State from the European Union is liable to have a considerable impact on the rights of all Union citizens, including, inter alia, their right to free movement, as regards both nationals of the Member State concerned and nationals of other Member States.”

As a result, the Court concludes that “given that a State cannot be forced to accede to the European Union against its will, neither can it be forced to withdraw from the European Union against its will.”

For the first time, the Court is openly admitting that Brexit has “a considerable impact on the rights of all Union citizens”, and such impact must be pondered on by the withdrawing Member State in case it decides to revoke its intention to withdraw. In other words, the impact of Brexit on EU citizens conditions the interpretation of Article 50 TEU and consequently it entitles the withdrawing Member State to halt the process. As a logical result, the impact of the withdrawal on EU citizens must also have an effect on the interpretation of all Treaty provisions, particularly those that deal with fundamental rights, EU citizenship and free movement of persons.

This passage of the Wightman judgments confirms what Piet Eeckhout and Eleni Frantziou have coined as the constitutional interpretation of Article 50 TEU. This provision is not only procedural, it also reflects underlying rights and duties that fall upon the Union and the Member States. Such rights and duties have their foundation on several pillars of integration enumerated in Wightman, and they include the EU’s values (Article 2 TEU), the protection of fundamental rights (the Charter) and EU citizenship (Article 20 TFEU)

The rights and duties of Article 50 TEU apply to all the parties involved in the withdrawal process: the withdrawing Member State, the remaining Member States and the Union. In the case of the withdrawing and remaining Member States, the Wightman ruling confirms that the protection of EU citizens is a key imperative throughout the withdrawal process. In the same way that the withdrawing Member State must take into account the interests and rights of citizens (and thus its power to revoke the withdrawal process if necessary) the same applies to the remaining Member States. National authorities must do everything in their power to protect EU citizens residing in their territory form the “considerable impact” of a withdrawal of a Member State from the Union.

In fact, some Member States have already been acting in accordance with this interpretation of Article 50 TEU and have enacted specific measures to ensure that EU citizens living in their territory and in the verge of losing their citizenship have the ability to continue being EU citizens. That was the case of Britons with a right to request nationality in a Member State that did not admit double nationality, or only allowed it in very restrictive cases. Germany and Luxembourg introduced measures to allow Britons to enjoy double nationality and thus to retain their EU citizenship after Brexit day. These measures applied to Britons with very close links to the host Member State and after having exercised free movement for several years on the grounds of EU law. Consequently, it is fair that the free moving EU citizen is granted reasonable assurances to remain an EU citizen if he or she wishes so.

However, other Member States are reluctant to open this door. The Netherlands is an extreme case. It refuses any recognition of double nationality and therefore long-standing British residents there are facing a stark choice. However, a country like Spain applies dubious double standards. It admits double nationality for nationals from Portugal, Andorra, The Philippines and Latin American countries, as well as Sephardic Jews with links to Spain and brigadistas of the Spanish civil war. Nevertheless, Britons having lived in Spain for years and complying with all the legal requirements to become Spanish nationals, after many years of having benefitted from free movement under EU law as EU citizens, must make the tragic choice between their British passport or their EU citizenship.

This approach is unfair, it is discriminatory and it undermines the constitutional rationale of Article 50 TEU, read together with Article 20 TFEU. If Member States have a duty under EU law not to provoke a legal or de facto deprivation of the status of EU citizenship of a national of a Member State, they should also be precluded from introducing discriminatory and disproportionate conditions to facilitate those nationals to continue being EU citizens.

Wightman paves the way for an active stance of Member States in the protection of EU citizens, particularly of those who reside in the territory and are about to lose their EU citizenship against their will. In some cases, these EU citizens will lose their status without even having the chance to express their democratic will. Most of the Britons with a right to claim nationality of a Member State had lost their right to vote in the 2016 referendum and their voice was unheard at the time. They lost such right because they had previously made use of the free movement rights that the Treaties granted to them. Therefore, it is fair for EU law to now give a helping hand, and preclude Member States from inflicting on these EU citizens an irreparable loss. A loss that is unwanted, not consulted and in breach of the values enshrined in Article 2 TEU.

And this is another unreflected outcome of the Wightman ruling. Brexit is not only about States and the Union. It is also about people. And mostly about EU citizens being stranded in the limbo of a shambolic catastrophe that the UK insists on inflicting on itself and its peoples.

Sharpening the Teeth of EU Social Fundamental Rights: A Comment on Bauer

Tuesday was a big day in Luxembourg. The Court of Justice rendered what is probably the most important set of judgments on fundamental rights in a long time. Since the days of Akerberg Fransson, Digital Rights, Melloni, etc…, the Grand Chamber had not delivered such a principled decision on the thorny issue of fundamental rights, and it has done so in a field that has traditionally been managed with caution and circumspection by the Court: employment and social fundamental rights.

In the cases of Bauer et al (C-569/16 and C-570/16, and a total of three judgments, but dealing with the same question of principle), the Court stated that Article 31(2) of the Charter, which includes the right of “every worker […] to an annual period of paid leave”, is directly effective and has the ability to empower national courts to set aside incompatible national provisions.

It might sound rather technical, but it is a tremendous development for the sources of EU law and for fundamental rights protection in the field of social policy.

The judgment must be put in its proper context. In 2005, in the case of Mangold, the Court introduced a notable exception to its long-standing case-law on direct effect of directives. In Mangold the Court argued that, despite its traditional case-law, directives that “concretize” a general principle of EU law have direct effect and therefore can be invoked between private parties. This approach caused an uproar in several Member States, but it was basically digested and confirmed in further case-law. The approach worked perfectly well in the case of discrimination, which had several Directives applicable in the field of employment that interacted with Treaty provisions and general principles of EU law. The Court was concerned that the enactment of Directives would in the long run undermine the effectiveness of those Treaty provisions and principles on discrimination. Thus, the Mangold case-law prevailed.

Four years later, the Charter of Fundamental Rights entered into force, and as of 1 December 2009 the full array of general principles enshrining fundamental rights became written primary law. And the obvious question was: if a Directive concretizes a provision of the Charter, does the Mangold rationale apply as well? Also, the issue of horizontal protection of fundamental rights ensued, mostly inspired by the Court’s reluctance to embrace horizontal direct effect of directives. As of 2009 an interesting debate began. A debate that resonated strongly in national legal orders, which have all struggled in one way or another with the issue of enforceability of fundamental rights between private parties. This time the debate took a different twist as a result of the peculiar idiosyncrasies of EU law and its sources of law.

In Association de Médiation Sociale (AMS) the Court sent a first and worrying message. When dealing with a provision of the Charter such as Article 27 (workers’ right to information and consultation in the workplace), the Court argued that it was not a directly applicable provision and therefore its concretization by Directive 2002/14 did not deploy a Mangold effect. The Court was eager to highlight that AMS was in stark contrast with Mangold precisely because of the general principles involved: in Mangold it was a directly invokable provision (no discrimination on the grounds of age), in AMS the provision of the Charter needed further legislation to be cognizable as an invokable rule of law. The Court seemed to agree with the Advocate General by hinting that Article 27 is a “principle” and not a “right” in the sense of Article 51.2 of the Charter. But that was not explicitly nor clearly stated in the judgment.

On Tuesday, the Court seems to have reversed its restrictive approach in AMS and it has embraced a full Mangold approach for certain social fundamental rights. The case concerned Article 31(2) of the Charter and the right to paid leave, in the context of a German law disproportionately restricting the worker’s ability to claim compensation for not enjoyed days of leave prior to the termination of the contract. The Court agreed with the referring court that German legislation was not in line with Directive 2003/88, but the main proceedings concerned litigation between a worker and his employer. Thus, in a horizontal situation, the standard and traditional case-law would rule that the Directive could not be invoked directly against the employer.

The Court reversed its traditional stance and bluntly argued that Article 31(2) of the Charter is an imperative rule that can be directly invoked, even between private parties. The interaction between the Charter right and Directive 2003/88 produces that result. Thus, in a single stroke the Court allowed the national court to set aside national legislation contrary to Article 31(2), and in proceedings between private parties. It is quite an achievement, considering the history and circumstances of social rights in EU law.

On the point of horizontal effect of Article 31(2), the Court refers to its recent decision in Egenberger, in which it confirmed the horizontal application of the right to freedom of religion. However, in Bauer there is an important development, because the Court explicitly argues that in the case of social rights there is a direct reference in the written provision of the Charter to “the worker” and “the employer”. Thus, when the written rule of the Charter individualizes the addressees, it appears that there is a strong presumption in favor of horizontal application. That seems to be a first in the case-law.

And on the point of direct effect and the setting aside of national law, the Court has finally extended the Mangold rationale to social rights different to discrimination, thus opening a new playing-field in the enforcement of social rights in Europe. It is true that in Egenberger the Court extended the Mangold approach to the fundamental right to an effective legal protection. However, that right is not used in horizontal situations, but in vertical contexts between a party and a court. In Bauer et al, the Court has undergone a genuine expansion of the Mangold approach in a purely horizontal right, the right to paid leave. If AMS appeared to have cornered Mangold and leave it in the specific and isolated territory of discrimination law, Bauer et alhas reversed that situation and it has now put AMS in the isolated corner instead. Now there is a strong presumption that other Charter social rights, if “concretized” by proper EU law, will have direct effect in horizontal relations, thus empowering national courts to set aside any provision of national law in breach of the Charter right.

These are good news for the protection of social rights in Europe. These are badly needed rights not only for vulnerable groups, but also for the EU itself. The social pillar of European integration cannot be limited to vaporous rhetoric by good-willed politicians. It must also be able to bite, and sometimes it needs to bite hard. In Bauer et al the Court has taken the first step in sharpening the teeth of EU social law. Now we must wait and see if it will have the courage, in a nearby future, to take a nice bite.