European Commission Law - Essay Example

European Commission Law The European Union was established for multiple reasons but one of its defining characteristics is its implications for economic stability among member states and the ability to freely trade goods between member states. More specifically, the freedom of establishment and the freedom of services is provided for by the European Union and is the focal point of this discussion. Article 43 of the Treaty of the European Commission is pertinent to the freedom of establishment. It is as follows: Within the framework of the provisions set out below, restrictions on the freedom of establishment of nationals of a Member State in the territory of another Member State shall be prohibited. Such prohibition shall also apply to restrictions on the setting-up of agencies, branches or subsidiaries by nationals of any Member State established in the territory of any Member State. Freedom of establishment shall include the right to take up and pursue activities as self-employed persons and to set up and manage undertakings, in particular companies or firms within the meaning of the second paragraph of Article 48, under the conditions laid down for its own nationals by the law of the country where such establishment is effected, subject to the provisions of the chapter relating to capital: “Companies or firms formed in accordance with the law of a Member State and having their registered office, central administration or principal place of business within the Community shall, for the purposes of this Chapter, be treated in the same way as natural persons who are nationals of Member States” (The Treaty of the European Commission, 2008). Similarly, the freedom to provide services exists concurrently with the freedom of establishment. This is set forth in article 49 of the treaty and together, these two freedoms compose the fundamental freedoms which are critical to the European internal market: “Within the framework of the provisions set out below, restrictions on freedom to provide services within the Community shall be prohibited in respect of nationals of Member States who are established in a State of the Community other than that of the person for whom the services are intended” (The European Commission, 2008). The freedom of establishment and services essentially translates to “The principle of freedom of establishment enables an economic operator (whether a person or a company) to carry on an economic activity in a stable and continuous way in one or more Member States. The principle of the freedom to provide services enables an economic operator providing services in one Member State to offer services on a temporary basis in another Member State, without having to be established”(The European Commission, 2008). Clearly, these freedoms allow an open market to exist across borders for all member states such that tariffs and fees are not legally placed on importers in most conditions and those who seek to broaden business horizons from state to state are granted such allowances. The consequences of such liberty is a successful European economy which tends to not be limited from one state to another with respect to member states only. When considering the freedom of establishment and the freedom of services, it is important to know whether or not that freedom extends to or has implications on citizens within the EU and their respective economies. This can be easily summarized by saying that one of the main reasons why states so eagerly have sought to join the European Union is to benefit from the economic advancements that come from being within the union. When states have applied for entrance into the union, they have often gone to some lengths to do so. Many states have actually had to modify laws and statues in order to be in accordance with free trade regulations implemented by the treaty, “These provisions have direct effect. This means, in practice, that Member States must modify national laws that restrict freedom of establishment, or the freedom to provide services, and are therefore incompatible with these principles. Member States may only maintain such restrictions in specific circumstances where these are justified by overriding reasons of general interest, for instance on grounds of public policy, public security or public health; and where they are proportionate”(The European Commission, 2008). By becoming a member state, states actively serve to boost their economy and global position as a prosperous country. Opening up to free trade and free movement of goods essentially serves to not only enhance the overall existence of the states within the union themselves, but aso the individual citizens of said states, “The recently adopted Services Directive aims to create a legal framework for ensuring that both service providers and recipients benefit more easily from the fundamental freedoms guaranteed in Articles 43 and 49 of the Treaty. The directive complements existing Community instruments and its provisions are, to a large extent, based upon the case law of the European Court of Justice”(The European Commission, 2008). To look more closely at the direct implications of freedom of establishment and services, it may be helpful to look directly at specific cases which have centered on this portion of the treaty. One particular case involved the Internal Transport Workers’ Federation and The Finnish Seaman’s Union vs. Viking Line. The case transpired in 2003 and was deemed to have imposed a violation of the freedom of establishment as deemed by the court, “The Court held that the threat of strike action by a trade union to force an employer to conclude a collective agreement the terms of which are liable to deter it from exercising freedom of establishment constitutes a restriction on that freedom prohibited by Article 43 EC”(EU Law, 2007). Another case relevant to this topic is as follows: “France: elimination of the preference for the outgoing concession-holder in the case of hydroelectricity concessions. Following the Commissions decision to refer this matter to the Court of Justice in June 2008, France adopted Decree No 2008/1009 of 26 September 2008 which repeals the provisions of the Decree of 1994 giving preference to the outgoing concession-holder in the case of procedures for the award of water utilization licenses. This new Decree (which is also in conformity with the new Act of 31 December 2006 repealing the provisions of the Act of 1919 which provided for the same preference) thus eliminated disparity of treatment between operators, which runs counter to the principle of non-discrimination in relation to freedom of establishment (Article 43 of the Treaty). This type of discrimination has already been contested and eliminated in two infringement cases (1999/4902 and 2002/2282) relating to Italian legislation on the award of hydroelectricity concessions (see IP/07/912 of 27 June 2007)”(Europa, 2008). This particular case is a specific example of infringement of freedom of establishment and services as dictated by article 43 of the treaty of the European Commission. As with most of the other provisions allowed for in the European Commission Treaty, the freedom of establishment and services is not an optional right afforded among member states, but is an absolute right which must be permitted by states within the union. Failure to observe and honor such rights between union states is punishable by fines and limitation of union privileges. In order for states to maintain their rights and privileges as union members, they must honor the basic freedoms set forth in the European Commission Treaty. References: The European Commission. 2008. “Freedom to Provide Services/Freedom of Establishment” [online] available at http://ec.europa.eu/internal_market/services/principles_en.htm 9 accessed 8 January 2009]. EU Law. 2008. “Boycotts, Strikes and the Freedom of Establishment Case C-438/05. [online] available at http://eulaw.typepad.com/eulawblog/establishment_freedom_of/ [accessed January 8 2009]. Europa Press Release. 2008. “Freedom of Establishment and Freedom to Provide Services” [online] available at http://ec.europa.eu/internal_market/services/principles_en.htm [accessed 8 January 2009]. Read More