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European Integration and the European Court of Justice

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European Integration and the European Court of Justice The Inside Threat: European Integration and the European Court of Justice Gary Duncan Linköpings universitet, Sweden Master of Science in International and European Relations Department of Management and Economics Abstract The European Court of Justice (ECJ) has long been recognized as a major engine behind the European integration project for its role in passing judgments expanding the powers and scope of the European Community, while member states have consistently reacted negatively to judgments limiting their sovereignty or granting the Community new powers. It is this interplay between the Court and member state interests that cause the ECJ to pose a threat to the future of integration. Using a combined framework of neofunctionalism and rational choice new institutionalism, six landmark cases and the events surrounding them are studied, revealing the motivations behind the Court’s and member states’ actions. From the analysis of these cases is created a set of criteria which can be used to predict when the ECJ will make an activist decision broadening the powers of the Community at the expense of the member states as well as when, and how, member states will respond negatively. 2 Table of Contents I. Establishing the Issue.......................................................................................................4 II. Literature Review............................................................................................................6 III. Theory............................................................................................................................9 A. Definitions and Introduction to Theory..............................................................9 B. Neofunctionalism..............................................................................................14 C. Rational Choice New Institutionalism..............................................................22 D. Operationalization.............................................................................................31 IV. Methodology................................................................................................................34 V. A Selective History and Analysis.................................................................................36 A. Van Gend en Loos.............................................................................................36 B. Francovich........................................................................................................46 C. Costa v ENEL....................................................................................................52 D. Internationale Handelsgesellschaft...................................................................59 E. Les Verts............................................................................................................65 F. Commission v Council 03..................................................................................70 G. Cases Not Reviewed.........................................................................................75 VI. Analysis and Conclusion.............................................................................................76 A. Developing Criteria for Court and Member State Action................................76 B. Looking Toward the Future..............................................................................85 VII. Works Cited................................................................................................................89 3 I. Establishing the Issue The roots of European integration are nebulous. The continent, or at least parts of it, has been integrated in one form or another several times throughout the centuries. Despite this long history, the European Community (EC) and integration project as they exist today are not the product of any previous attempts at integration, such as the Roman Empire of Caesar or the Holy Roman Empire of Charlemagne, but rather of the most disintegrative event in European history: World War II. After the devastation and horror “of the war years, and the climate of nationalism which preceded them, many hoped for a new model of political cooperation in Europe.”1 Recognizing the threat of unchecked nationalism, and reasoning that closer cooperation decreased the likelihood of conflict between European countries, while also strengthening their position vis-à-vis the USA and USSR, the European Coal and Steel Community (ECSC) was created in 1951 and served as the first step in the process of establishing a supranational authority over Europe.2 From this limited beginning, integration has grown to include a European Union (EU) of twenty five nations, a common currency in most, European citizenship, and potential for a European defense force. However, as Garrett and Weingast argued in 1993, “there is no guarantee that the trend to ever greater European integration – legal or otherwise – will continue. At any moment, the opposition of a few states will be enough to derail the whole process.”3 The above quote is the starting point of this thesis. If continued European integration is not guaranteed then what will cause that trend to reverse? What could 1 P Craig & G de Burca, EU Law: Text, Cases, and Materials, 3rd ed, OUP, Oxford, 2003, p. 7. 2 Craig & de Burca, EU Law: Text, Cases, and Materials, p. 9. 3 K Alter, ‘Who are the ‘Masters of the Treaty’?: European Governments and the European Court of Justice’, International Organization, vol. 52, no. 4, 1998, p. 138. 4 possibly cause any of the member states to reevaluate their decision to participate in the EC and actually leave it? Solving this question is vital to any understanding of the Community and its future and cannot be ignored by either those in favor of integration or opposed to it, if they hope to succeed in their endeavors. In reality, there is not one simple answer to the above questions; with the various reasons member states have for joining, the varied influence and power the Community has in different areas, and the multiple interest groups lobbying their governments, no one European action or policy can be identified as the cause of disintegration. Rather, a number of things could potentially lead to this reversal. The aim of this thesis is to demonstrate how one actor, the Court of Justice of the European Communities (ECJ or Court), as a major force behind integration may serve as one of these causes and be the catalyst which derails the entire Community project. The hypothesis is that the Court will pass a judgment so expansionist and contrary to member state interests that the ensuing backlash will be fatal to integration as it exists today. The ECJ first took form as the court of the ECSC. It was created in the “classical, continental European, Montesquieu’an” style, meant to serve as a third power between the member states and ECSC.4 As such, the Court was not expected to actively engage itself in the political process. Even when the Court went from being the ECSC’s court to the EC’s court it still had a very limited mandate. Article 164, now Article 220, which established the Court’s authority, gave it only one task: “ensure that in the interpretation and application of the Treaty the law is observed.”5 As the Community’s court, the 4 H Rasmussen, On Law and Policy in the European Court of Justice: A Comparative Study in Judicial Policymaking, Martinus Nijhoff Publishers, Dordrecht, 1986, pp. 201-2. 5 European Community Treaty, 1957. Treaty of Nice, 2000. 5 ECJ’s fundamental task was to promote trade and economic prosperity through the rule of law, as this was seen as more effective than diplomacy and more appropriate than warfare.6 Despite this limited mandate, it is widely accepted that the Court has engaged in blatantly political decision making that has increased the power of the Court and the Community and limited the sovereignty of the member states. This is something to which the European judges sitting in the “fairytale land Duchy of Luxembourg” readily admit.7 Before the Court can be seen as a potential threat to European integration its motivations for making activist decisions must be identified, as well as the motivations member states have for following or fighting ECJ decisions. This is a theoretical exercise that must explain what the Court and member states want, how they can be expected to pursue their interests, and how they can be expected to react to the actions of the other. In order to accomplish this, this thesis will combine the explanatory powers of neofunctionalism and rational choice new institutionalism. II. Literature Review When it comes to the European Court of Justice there is no shortage of literature. From books to academic articles, the literature abounds with those who champion the Court, those who lambaste its behavior and those who have ideas for its reform, with the categories often overlapping. The same can be said of the literature surrounding the theories used in this thesis, neofunctionalism and rational choice new institutionalism. The literature used to research and develop this thesis can be broadly categorized in one 6 M Volcansek, & J Stack, Courts Crossing Borders: Blurring the Lines of Sovereignty, Carolina Academic Press, Durham, 2005, pp. 17-19. 7 Volcansek & Stack, p. 49. 6 of three areas: general literature about the Community or Court, literature dealing with neofunctionalism, and that dealing with rational choice new institutionalism. Paul Craig and Grainne de Burca’s works EU Law: Text,
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