Constitutional Law of the European Union - Case Study Example

Accordingly. Germany must defend that the decision to restrict its national policy of supporting companies with financial benefits should have been taken by unanimous voting. Article 94 also envisages that there shall be a unanimous decision in respect of directives, regulations and regulations affecting the common market functioning. This is a good defence for Germany to maintain that if national companies are not supported with financial benefits, they will be adversely affected by unhealthy competition from the financially strong companies.

Though there are proviso for derogation of these requirements by adopting Qualified Majority Voting, (QMV), the derogation power for overriding the unanimous voting requirements can not used for restricting a single member state from supporting its national companies when there possibilities of similar practices being followed at all member states in some form or other though the commission may not have received complaints.. There is no reason how it will distort competition when such practices likely to be followed by all the member states.

Hence a decision of this nature should not be discriminatory towards a single member state alone. . In the instance case itself, though there were complaints against France and Germany, action is directed at Germany only. Hence the decision is blatantly discriminatory by the abuse of QMV. The EC Treaty itself has provisions for creating interventionist funds to ward off difficulties. Hence Germany can rely on the above defences before the court of justice for cancelling the impugned decision.

As Luxembourg Compromise was only a guideline and not statutory until recently without anticipating any such exigency, Germany can argue that this QMV principles must be reviewed so as to prevent vested interests from joining together against a single member state by insisting on unanimous voting. Germany's practice has been open and transparent while other member states are not likely to be so as there is no way of detecting such practices in guise. Germany being singled out alone will result in competition distortion.

Moreover the commission does not appear to have followed the procedures giving opportunity to Germany before taking the impugned decision. In case no C-288/962, the court of justice has observed as follows.Plea in law alleging failure to observe the rights of the defence92 By its first plea in law the German Government complains that the Commission denied it and the Land of Lower Saxony access to the observations, mentioned in section II of the grounds of the contested decision, which had been sent to the Commission, during the administrative procedure, by letters of 31 August 1995, 1 September 1995 and 4 September 1995, by four competitors of Jadekost.

93 According to section II, the letters in question pointed out, in particular, that Jadekost had used the aid granted to win market share from its competitors through sales at below-cost prices.