The Internal Market 2.0

Sacha Garben, Inge Govaere, Sacha Garben, Inge Govaere

• Publisher: Hart Publishing
• Year: 2021
• ISBN:
  9781509939046
• Edition: 1
• Topic: Jura
• Subtopic: Völkerrecht

This edited volume brings together leading authors and actors in EU internal market law and policy, revisiting the classic themes in a contemporary context and considering (re-)directions for the future. The EU would not be where and what it is today without its internal market. It is the cradle of the EU's most important legal doctrines and the source of the most significant amount of European integration. And, as Brexit has underlined, it remains the primary political reason for EU membership. Considering the well-established and fundamental nature of internal market law, it is striking to find many crucial doctrinal questions still unanswered today, as explored by this book. Furthermore, these questions now find a new legal, social and political context: one that is acutely aware of the contested nature of the EU and its policies and the need to embed the internal market project in a broader setting of constitutional norms and values. This need is made all the more pressing by the rapidly changing and often disruptive technological context. The various contributions to this book contribute to finding a new direction for continued European integration in changing times, by rethinking, and where necessary reinventing, the role and purpose of this area that remains the EU's beating heart.

1

Introduction: The ‘Internal Market 2.0’

SACHA GARBEN AND INGE GOVAERE

I.The EU, the Internal Market and Yet Another ‘Crisis’

By establishing an internal market, the EU has gradually become a closely interwoven and interconnected market, economy and society – precisely as the Member States themselves have consciously and deliberately decided it should be. Merging the markets into one and creating economic interdependence has been instrumental to maintain peace and stability among the EU Member States for over 70 years. Quite paradoxically, the Brexit saga is testimony of the success of European integration for exposing the difficulty of disentangling the Gordian knot of how to secure the advantages of participation in (some aspects of) the internal market without the concurrent obligations of EU membership. For one thing, this means a common understanding that EU-wide solidarity and concertation is needed not least in times of crisis. As disasters and disaster-decisions in one Member State affect the situation in other Member States, the problem of one is the problem of all. At the time that this book goes to press, the EU is yet again in the throes of a ‘crisis’.¹ The COVID-19 virus and ensuing global pandemic has sadly resulted in many untimely deaths and has caused governments across the world to take unprecedented measures restricting personal and economic activity and movement.

The political, societal and economic consequences of these developments have yet to fully materialise. As is becoming commonplace when difficult circumstances appear on the international scene, the fact that the EU institutions or even the EU Member States individually and/or collectively cannot swiftly and decisively solve the issue, is portrayed as an illustration of the failure of the European Union as such. This is often more than a little unfair: the issue may not actually be within the EU’s power, as the Member States may not have provided the EU with the necessary competences to act in a way that can resolve or successfully manage the issue,² and it may not even be appropriate for the EU to impose the uniform, harmonised approach that implicitly seems to be the expectation of those who attack the Union for a lack of action. At the same time, while the cause of the particular difficulties may lie wholly outside the EU’s control, and while it may simply lack the competences to take full and effective control over them, it is often also true that the EU’s policies that are in place will very likely in some way significantly interact with both the problems and the solutions in any given transnational challenge. This means that the EU inevitably gets tied into the issue.

In particular as these common institutions were created, whenever we are faced with a common problem that furthermore has specific interactions with common policies, it is not entirely unreasonable for people to expect a strong common response. All the more so because, in light of its still more limited input legitimacy, the EU is extra reliant on its output legitimacy.³ Add to this the temptation of national governments under pressure to deflate as much tension and blame to the EU level as they can, while having little incentive to act in the common good rather than in their own (constituencies’) self-interest, and we can see how the Union quickly becomes a focal point of criticism. And thus in the context of the ‘Corona-crisis’, we have seen Member States unilaterally closing borders with other Member States, restricting or banning export of personal protective equipment (such as protective glasses, face masks, gloves, surgical overalls and gowns), medicines and medical devices (in one case extending to 1,324 products)⁴ and entering into corrosive rows over the financial measures to be taken, with the Union’s response in turn branded as unsatisfactory.

Furthermore, in these particular circumstances, the scientifically mandated response of social (or rather physical) distancing just so happens to hit the EU precisely where it hurts: the free movement that – despite some political difficulties over the past years – remains its hallmark and crown achievement,⁵ and one of its core competences. This inevitably draws the EU deeply into the issue and its management. Moreover, the positive side of that interconnectedness is the potential that lies in the infinitely larger and richer set of resources and solutions when pooled together, bolstering the problem-solving capacity of individual States because of the collective: ie, stronger together. Lives can be saved by sharing ICU-capacity and other facilities, cooperation can accelerate vaccine development, financial support can mitigate the recession. Balancing the case for unity and the case for diversity, the ‘subsidiarity-calculus’⁶ thus indicates that national decisions should be taken in accordance with a common framework even if they can (and perhaps should) diverge on substance, and that there has to be a certain measure of solidarity in the sharing of risk and resources.

The general approach should thus be, in EU law generally as in the case of responding to disasters such as the COVID-19 pandemic, to ‘manage diversity’.⁷ While perhaps it could be said that the legal and political framework for financial solidarity, as well as arguably the one for civil protection, has proven to be inadequate in the face of this task in the Corona-crisis,⁸ the internal market framework has instead actually proven to function relatively well. Many of the containment measures taken by the Member States of course restrict the free movement of goods, services and people, but they fall squarely in the regime for legitimate justification in Article 36 of the Treaty on the Functioning of the European Union (TFEU), Article 45(3) TFEU and Article 52(1) TFEU.⁹ The Member States have a margin of discretion in this regard, as ‘account must be taken of the fact that the health and life of humans rank foremost among the assets and interests protected by the Treaty and that it is for the Member States to determine the level of protection which they wish to afford to public health and the way in which that level is to be achieved’, which ‘may vary from one Member State to another’.¹⁰ They are mandated to take a ‘better safe than sorry’ approach on the basis of the precautionary principle.¹¹ The normative precedence accorded to the protection of health and the empowerment of Member States in upholding that interest is entirely appropriate, ethically as well as constitutionally, even if it fragments the internal market and limits free movement.¹² At the same time, it is also appropriate to ensure that the measures do not do unnecessary harm, and therefore EU law correctly rejects an ‘anything goes’ approach. It is settled law that the national measures need to comply with the principle of proportionality, and thus have to be appropriate, necessary and proportionate stricto sensu. The European Commission needs to be able to oversee these measures, through notification, to limit the impact of the national measures to what is necessary and to ensure they do not in the bigger scheme of things create a counterproductive effect, by placing them in the European context of supply and demand and production chains. The Commission has indicated that draconian export bans are unlikely to meet that test.¹³ The Commission has furthermore demanded that Member States keep their borders open in relation to the circulation of essential goods and services,¹⁴ to frontier workers¹⁵ and to allow the entry of EU citizens residing on their territory.¹⁶ Most Member States seem to comply with this, and if they do not, they can be referred to the Court of Justice of the European Union (the Court). The internal market framework can be perfectly well enforced against Member States’ kneejerk (over-)reactions, and they know it. And thus, for instance, after the Commissioner for the Internal Market Thierry Breton intervened, Germany and France authorised the export of masks, gowns and other protection to Italy, despite their initial national requisition measures.¹⁷ This shows how the internal market as an area constructed largely through the Community Method over the years provides distinct advantages, also in times of crisis,¹⁸ over those EU policies dependent on the intergovernmental or ‘EU Method’¹⁹ of executive dominance.²⁰

This is not to say that the internal market framework is perfect, and that it should not be further improved also in light of the COVID-19 experience. There certainly is scope to fine-tune the ‘managed diversity’ of the internal market, in health and in other areas, as Kai Purnhagen argues in chapter thirteen. His contribution traces a development in EU internal market law from supranationality to managed diversity and proposes as a steering principle (alongside the traditional hallmarks of subsidiarity, proportionality and conferral) the principle of solidarity. Applying this framework specifically to COVID-19,²¹ the case is made to adopt ‘a different approach to the Union’s competence to control national measures on the basis of proportionality’, instead based on ‘the principle of solidarity between the Member States, the Union’s obligation to protect public health, and the right to health care within Union law’.²² On this approach, ‘scarce products needed for combatting COVID-19 need to be channeled to those who need them most, and this means keeping internal Union borders open for the supply of essential products, especially food, as well as medical equipment, devices and medicines’.²³ It is argued that ‘the internal market is at the service of the health of Europe’s population’, assuming a concept of Union public health and Union solidarity, ‘rather than the usual interpretation where public health is a policy area in which domestic solidarity within Member States’ is the principle that is ‘traded-off against market integration’ – ostensibly a novel interpretation of internal market law ‘not based on case law or any other legal instrument’.²⁴ Novel as it may be, the Commission seems in full agreement: it too has emphasised the importance of solidarity in the scrutiny of national COVID-19 restrictions, stating:

The Single Market is at the heart of the European Union. In times of crisis it is the solidarity instrument to ensure that essential goods necessary to mitigate health risks outbreak can reach all those in need. By making sure those goods are available across the EU, the Single Market contributes to the protection of our health. Unilateral national restrictions to the free movement of essential supplies to the healthcare systems create significant barriers and affect dramatically Member States’ capacity to manage the COVID-19 outbreak.²⁵

II.Uniformity Versus Diversity

The concern for the appropriate balance between unity and diversity in the internal market is one of the main red threads that emerges in this edited volume. As discussed above, the COVID-19 situation has showcased the inbuilt balance between common standards and national regulatory autonomy in the framework of public health justification to national restrictive measures. It would seem that in relation to the pandemic, EU internal market law is actually ‘doing its job well’ in accordance with the criteria developed by Gareth Davies:²⁶ it is functional, provides concepts and a framework which encourages substantively good results, it provides limits to the EU’s powers and provides the basis for a legitimating discourse.²⁷ Also in other areas of the internal market, some of our authors find a shift towards a ‘deferential’ approach that accommodates national concerns. Bruno de Witte in chapter seven notes in relation to the freedom to provide services, that

generally speaking, the Court seems to leave considerable deference to choices made by national governments and to the fact finding by national courts. There are roughly equal numbers of judgments in which the Court finds national measures compatible or incompatible with Art 56. So, all in all, the view that the Court of Justice still functions as an ‘engine of liberalisation’ seems less persuasive than before, at least in the field of ser...