In the week of the Irish referendum on the Lisbon Treaty, the Slovak Constitutional Court has published its opinion on whether the Treaty Establishing a Constitution for Europe (European Constitution) should have been approved by a referendum in Slovakia. The practical implications of the decision are not too significant, as the European Constitution is apparently buried and there is no desire in Slovakia to ratify it post mortem. Nonetheless, the decision may be regarded as the first major expression of the Slovak judiciary’s position towards European integration and may thus be relevant for future Slovak jurisprudence in this field.

The Complaint

The proceedings before the Constitutional Court were initiated in July 2005 by a group of natural persons grouped around conservative think-tanks and a party with marginal support but considerable influence in the public debate. The complaint was based on an alleged infringement of the complainants’ constitutional right to participate in the administration of public affairs, which should have been committed by the Slovak Parliament, when approving the European Constitution. The complainants were supposedly deprived of their right to participate in a referendum on the European Constitution, which they deemed obligatory under the Slovak Constitution.

The legal grounds for the Parliament’s approval of the European Constitution was Article 7 Section 2 of the Slovak Constitution, under which “the Slovak Republic may by an international treaty, which was ratified and promulgated […] or on the basis of such treaty, transfer the exercise of a part of its powers to the European Communities and the European Union.“ The complainants asserted that the European Constitution is not an international treaty within the meaning of Article 7 Section 2, but rather an international treaty on Slovakia’s entry into a state union. Although the term state union (štátny zväzok) is not defined in the Slovak Constitution, it clearly refers to a state entity. The entry into such state union is governed by Article 7 Section 1 of the Slovak Constitution. Under this provision, the Slovak Republic may enter into a state union with other states (or secede from it) only on the basis of a constitutional law, which shall be confirmed by a referendum.

The complainants claimed that following the adoption of the European Constitution, the EU will be constituted as a state union and that the European Constitution is thus an international treaty on the entry into a state union. They pointed to attributes of statehood (territory, population and jurisdiction) and the presence of such attributes in the European Constitution and emphasized the state functions of the EU (e.g. protection of fundamental rights, security, justice and foreign policy, supremacy of EU law, legal personality of the EU, symbols, flexibility clause). It was admitted that some of these features are already present in the EU, however, “after the adoption of [the European Constitution] the EU will evidently have these features, functions and symbols and it may thus be without any doubt considered a state union.”

Based on this argumentation, the European Constitution should have been approved by an obligatory referendum. By approving the European Constitution without such referendum, the Slovak Parliament allegedly deprived the complainants of their right to participate in the administration of public affairs.

The complainants rejected the idea that the obligation to hold a referendum was already satisfied by the referendum on Slovakia’s EU membership in May 2003. Citing legal acts and political declarations in connection with the 2003 referendum, they demonstrated that it was merely an “optional” referendum foreseen by the Slovak Constitution for important issues of public interest, whereas ratifying the European Constitution requires an obligatory referendum on entering a state union.

The Decision of the Constitutional Court

Shortly after the complaint has been lodged, the Constitutional Court issued a preliminary decision in favor of the complainants. It suspended the effectiveness of the Parliament’s approval of the European Constitution and declared that the President may not ratify the European Constitution before a judgment on the merits is delivered. This judgment was delivered more then two years later.

In its final decision, the Constitutional Court rejected the arguments of the complainants that the European Constitution constitutes the EU as a state union. The Court agrees that “the development of the EU does without any doubt have a tendency towards statehood”. However, “as of today it is impossible to determine in a serious way the precise moment when it reaches this stage”.

The Constitutional Court mentioned several features speaking against the argument of the complainants, that the European Constitution constitutes the EU as a state entity (e.g. decision making outside the institutions of the EU). It also emphasized that the European Constitution does not contain the intent to establish a state union. The Court concluded that the assertion of the complainants that the European Constitution constitutes the EU as a state union has not been proven. According to the Court, Slovakia may not by itself attribute the status of statehood to the EU, as “such decision would have to be made by the institutions of the EU with the consent of all member states”. Therefore, since the European Constitution does not constitute the EU as a state union, a referendum is not required under the Slovak Constitution and the rights of the complainants could not have been infringed in this respect.

It may have been sufficient to reject the complaint on these grounds. Nonetheless, the Constitutional Court relied on another argument brought up by the Slovak Parliament. Under the Slovak Constitution, issues of fundamental rights, taxes and the state budget may not be decided in a referendum. The European Constitution including the Charter of Fundamental Rights would have added new rights to the Slovak catalogue of fundamental rights (e.g. prohibition of reproductive cloning). Therefore, the Court deemed a referendum on the European Constitution not only not-obligatory but actually unconstitutional. This argument seems to be somehow peculiar. As the complainants objected, in such case even the first referendum on EU membership in 2003 may be deemed unconstitutional, because the Accession Treaty and the EC/EU Treaties include provisions on fundamental rights, taxes and the state budget.

Conclusion

The practical implications of the judgment are apparently of minor importance. Although the Court has lifted its preliminary injunction prohibiting the President from ratifying the European Constitution, there is no reason to ratify it now. Nonetheless, the judgment is a significant expression of the Constitutional Court’s views on European integration and may set the cornerstones of Slovak constitutional theory and jurisprudence with respect to the EU.

The Court declared that it views European integration as having a tendency towards statehood. However, the Court does not seem to be concerned about this trend and it has not clarified what attributes the EU has to acquire to cross the line towards statehood. Moreover, it has not indicated any “red line”, at the crossing of which it would step in as the guardian of Slovak sovereignty. It is hardly possible to make any predictions based on this judgment. However, it may be expecteds that the Slovak Constitutional Court will also in future act in line with the general political support for the EU in Slovakia and not position itself as an obstacle to deepening European integration.

Juraj Gyarfas, Lawyer, Bratislava, Slovakia

“L’arrêt BUPA du TPI du 14 février 2008 et la mise en œuvre des principes posés dans l’arrêt Altmark”

Abstract

The BUPA case gave an opportunity to the CFI to revisit the Altmark criteria on whether a compensation for obligations of services of general economic interest amounts to state aid.

The case concerned a scheme pursuant to which public services obligations were imposed to all operators on the Irish private health insurance market, with a system for compensation between the various operators. In light of the peculiar nature of the scheme at issue, the CFI made a teleological interpretation of the Altmark criteria, based on the spirit and purpose which prevailed in the Altmark case.

In particular, the third Altmark condition, concerning the calculation of the compensation could not be applied. The fourth Altmark condition was also inapplicable, for lack of any undertaking to use as a benchmark. The CFI was however satisfied that both conditions were met by reference to their spirit and purpose, in particular in light of the need to preserve the sovereign choice of Ireland on the organisation of its health insurance system. Finally, and although the CFI examined each condition separately, it used constant cross references from the application of one Altmark condition to other Altmark conditions. This creates the impression that it wished to return to a more comprehensive, all-encompassing analysis of compensation schemes, such as the approach that had prevailed in the Ferring case. The parallel drawn by the Tribunal throughout its analysis of the Altmark criteria with the application of Article 86 EC further supports this view.

All in all, the approach of the CFI suggests a move towards a relaxation in the application of the Altmark criteria, opening the door to a way back to a more pragmatic, Ferring like, approach of the compensation for obligations of services of general economic interest.

Download the article “L’arrêt BUPA du TPI du 14 février 2008 et la mise en œuvre des principes posés dans l’arrêt Altmark” here (FR)

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“Effectiveness of State Aid Recovery and National Procedures: What is Left of Procedural Autonomy?”
Abstract

La procédure de contrôle des aides d’Etat vise notamment la récupération des aides nouvelles que la Commission européenne a déclarées incompatibles avec le marché commun, et ce afin de rétablir les conditions d’une concurrence libre et non faussée. Les Etats membres sont en effet tenus, en vertu de l’article 14(3) du règlement n°659/1999/CE, de garantir une récupération effective dans de brefs délais. Or dans certains Etats membres, le jeu de certaines règles de procédure a pu avoir pour effet de ralentir, voire de rendre impossible, l’exécution par les Etats membres de leurs obligations. Face à ces situations, il est revenu à la CJCE d’opérer une mise en balance des principes d’autonomie procédurale et d’effectivité. Nous nous sommes proposés, dans cet article, d’analyser le jeu de ces deux principes complémentaires dans le cadre spécifique de l’exécution par les juridictions nationales de décisions de la Commission.

La Commission a tout d’abord sonné la charge contre une invocation abusive du principe d’autonomie procédurale dans deux affaires portées devant la Cour à l’encontre de la Grèce et de la France. Les juges du Kirchberg ont ainsi condamné l’adoption par un Etat membre d’une législation visant à protéger l’entreprise bénéficiaire de ses créanciers, dans la mesure où cela rendait impossible l’exécution de la décision ordonnant le recouvrement. Dans une seconde affaire, la Cour est allée plus loin, en jugeant que l’effet suspensif des recours en droit national, s’il avait pour effet de retarder la récupération, était contraire à l’article 14(3) du règlement précité. Ceci correspond à la confirmation par la Cour d’une obligation de résultat pesant sur les Etats membres, qui ne peuvent s’abriter derrière des arguments formels pour justifier l’inexécution de leurs obligations.

Cette restriction sévère de l’autonomie procédurale a par la suite été confirmée dans deux jugements rendus à l’occasion de questions préjudicielles, en signe d’un début d’appropriation des règles par les juridictions nationales. La Cour a ainsi enrichi le principe d’effectivité en mettant à la charge du juge national de nouvelles obligations en matière d’administration de la preuve. Elle a également écarté l’application du principe de l’autorité de la chose jugée d’une juridiction nationale si cela faisait obstacle à l’effectivité de l’obligation de récupération.

Ces arrêts, loin de sonner le glas de l’autonomie procédurale, correspondent à une démarche pragmatique de la Cour, qui modélise, au gré des affaires, un droit procédural communautaire des aides d’Etat. Les solutions retenues dans ce domaine de compétence communautaire exclusive ne doivent pas être généralisées à l’ensemble du droit communautaire. Une telle extension viderait le principe d’autonomie procédurale de son sens et risquerait de désorienter, voire braquer, les juridictions nationales. Une application véritablement effective des règles de récupération dépend en effet de l’action de ces derniers, juges quotidiens de droit communautaire.

Downloard the article “Effectiveness of State Aid Recovery and National Procedures: What is Left of Procedural Autonomy?”
here (English)

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Na mocy przepisów Traktatu WE dotyczących pomocy państwa Komisja Europejska wszczęła formalne postępowanie wyjaśniające w sprawie przeznaczenia 47 mln EUR środków publicznych na rzecz projektu inwestycyjnego realizowanego przez BDN Sp. z o.o. Sp. k., należącej do niemieckiej spółki BVG Medien Beteiligungs GmbH („BVG”). Celem inwestycji jest sfinansowanie budowy nowej drukarni wklęsłodrukowej w Nowogrodźcu w południowo-zachodniej Polsce. Komisja ma wątpliwości, czy projekt jest zgodny z unijnymi przepisami w sprawie pomocy regionalnej, zwłaszcza jeśli chodzi o zakres zdolności produkcyjnych powstałych dzięki jego realizacji. Otwarcie szczegółowego postępowania wyjaśniającego daje zainteresowanym stronom możliwość zgłaszania uwag na temat proponowanych środków, nie przesądza jednak o wyniku postępowania.

PL, EN, FR, DE

Conformemente alle norme in materia di aiuti di Stato previste dal trattato CE, la Commissione europea ha autorizzato l’istituzione in Italia di uno sgravio fiscale volto a favorire la produzione e l’impiego di biodiesel. La misura modifica e proroga un regime approvato in precedenza e introduce un obbligo di fornitura di biocarburanti. La coesistenza dell’obbligo di fornitura e dello sgravio fiscale rappresenta una novità e non si può prevedere in questa fase in che modo essa inciderà sul mercato. Nonostante tali incertezze, non esistono rischi di sovracompensazione in quanto lo sgravio fiscale proposto si applicherà soltanto ad una percentuale del biodiesel immesso e coprirà soltanto una parte della differenza dei costi di produzione. L’aiuto è stato quindi considerato compatibile con il mercato unico.

IT, EN, FR, DE

The European Commission has decided to refer Italy to the Court of Justice for failing to comply with a Commission decision of 14 December 2004 (see IP/04/1494) declaring tax incentives in favour of companies taking part in trade fairs abroad incompatible with the Single Market and ordering their recovery from the recipients. More than three years after the decision, the Italian authorities have not yet achieved an effective and immediate execution of the recovery order.

EN, IT, FR, DE

La Commission européenne a décidé de ne pas soulever d’objection en vertu des règles du traité CE sur les aides d’Etat à l’égard du régime français de réduction fiscale accordée aux redevables de l’impôt de solidarité sur la fortune (ISF) qui investissent dans des PME. La réduction d’ISF sera conditionnée par des investissements dans des PME.

FR, EN, DE

The European Commission has closed its in-depth investigation under EC Treaty state aid rules into the provision of Italy’s 2004 Finance Law that allowed former public-owned banks to release hidden capital gains matured during their privatisation by paying a nominal tax of 9% instead of the ordinary company tax of 37.25%. The investigation, opened in May 2007 (see IP/07/737), found that this tax scheme favoured a select group of Italian banks without objective justification under the tax system for company reorganisations in Italy. To redress the distortion of competition caused by the aid unlawfully granted, the Italian Government must recover the aid from its beneficiaries. On the basis of the circumstances of the case the Commission has limited the recovery to the difference between the tax actually paid and the tax the beneficiary banks would have had to pay, had they applied a general tax revaluation scheme provided for by the same Finance Law of 2004. The aid to recover is estimated to a total of €123 million among the nine beneficiaries.

EN, IT, FR, DE

La Commission européenne a infligé des amendes pour un total de €32 755 500 à Allied Arthur Pierre, Compas, Coppens, Gosselin, Interdean, Mozer, Putters, Team Relocations, Transworld et Ziegler pour avoir fixé les prix, s’être réparti les marchés et avoir manipulé les procédures d’appels d’offres des services de déménagements internationaux, et ce en violation de l’article 81 du traité CE interdisant les accords entre entreprises. L’entente a fonctionné pendant près de dix-neuf ans (d’octobre 1984 à septembre 2003). Ses membres fixaient les prix, présentaient de faux devis aux clients et se dédommageaient entre eux pour les offres rejetées. L’amende infligée à Allied Arthur Pierre a été diminuée de 50% en raison de la bonne coopération de l’entreprise lors de l’enquête menée au titre de la communication de la Commission de 2002 sur la clémence. La Commission avait ouvert l’enquête de sa propre initiative.

FR ; DE ; EN

De Europese Commissie heeft besloten dat de 3,54 miljoen euro aan steun van het Vlaams Gewest voor de financiering van opleidingsacties bij Volvo Cars Gent (”VCG”) verenigbaar zijn met de staatssteunregels van het EG-Verdrag. Het Vlaams Gewest had de steun voor in totaal 6,02 miljoen euro in mei 2007 aangemeld. De Commissie stelde daarop een diepgaand onderzoek in (zie IP/07/1311), aangezien zij meende dat de steun deels zou kunnen worden gebruikt voor de financiering van opleidingsacties die VCG hoe dan ook zou hebben uitgevoerd, dus ook zonder de steun. Deze exploitatiesteun verstoort de concurrentie tussen assemblagefabrieken en is in principe verboden. Naar aanleiding van de bezorgdheid van de Commissie heeft België de steun aangepast, zodat alleen opleidingsacties worden gesteund die zonder de steun niet zouden zijn uitgevoerd.

NL ; EN ; FR ; DE

La Commission européenne a décidé de ne pas soulever d’objection en vertu des règles du traité CE sur les aides d’Etat à l’égard du soutien financier de 99 millions d’euros accordé par la France au programme de recherche-développement (R&D) intitulé « QUAERO ». QUAERO est réalisé par un consortium de 23 partenaires dont le chef de file est le groupe Thomson. Il vise le traitement automatique des contenus numériques multimédias.

FR ; EN ; DE

The European Commission today called for a new approach to looking at the role and governance of European agencies. In recent years, using agencies to implement key tasks has become an established part of the way the European Union does its business. The communication calls on the European Parliament and the Council to give a new momentum to the need to develop a clear and coherent vision on the place of agencies in European governance. The Commission calls for the establishment of an inter-institutional working group to allow the key issues facing agencies to be set out as ground rules to apply to all.

EN ; FR ; DE ; PL ; ES

The European Commission has cleared under the EU Merger Regulation the proposed acquisition of the online advertising technology company DoubleClick by Google, both of the US. The Commission’s in-depth investigation, opened in November 2007 (see IP/07/1688), concluded that the transaction would be unlikely to have harmful effects on consumers, either in ad serving or in intermediation in online advertising markets. The Commission has therefore concluded that the transaction would not significantly impede effective competition within the European Economic Area (EEA) or a significant part of it.

EN ; FR ; DE

Im Rahmen der EU-Vorschriften über staatliche Beihilfen hat die Europäische Kommission heute das Verfahren bezüglich der Steuervergütungen für den Unterglasanbau in Deutschland mit einer positiven und teilweise negativen Entscheidung abgeschlossen. Nach Prüfung der Maßnahme kam die Kommission zu dem Ergebnis, dass die Regelung mit dem Gemeinsamen Markt vereinbar ist, soweit sie dem Gemeinschaftsrahmen für staatliche Umweltschutzbeihilfen genügt. Dagegen entschied die Kommission, dass ein Teil der Steuerermäßigungen nach dem Gemeinschaftsrahmen oder anderen EU-Rahmenregelungen nicht zu begründen und mit dem Gemeinsamen Markt unvereinbar ist. Für diesen Teil hat die Kommission die Rückforderung der Beihilfe angeordnet.

DE ; FR ; EN

La Commissione europea ha autorizzato ai sensi del regolamento UE sulle concentrazioni l’acquisizione proposta dell’italiana UBI Vita, il ramo assicurazione vita di UBI S.c.p.a., da parte dell’impresa italiana Aviva Italia Holding S.p.A. Dopo aver esaminato l’operazione, la Commissione ha concluso che essa non ostacolerà in maniera significativa la concorrenza effettiva nello Spazio economico europeo (SEE) o in una sua parte sostanziale.

IT ; EN ; FR ; DE

Na základe sťažnosti sa dnes Európska komisia rozhodla začať formálne zisťovanie týkajúce sa zmluvy o poskytovaní letiskových služieb na bratislavskom letisku, ktorá údajne zvýhodňuje Ryanair. V rozhodnutí Komisia od letiska požaduje aj predloženie kópie zmluvy, čo letisko doteraz odmietalo. Bez prístupu k tomuto dokumentu a na základe informácií poskytnutých sťažovateľom Komisia má pochybnosti o tom, či je táto zmluva zlučiteľná s pravidlami EÚ týkajúcimi sa štátnej pomoci.

SK ; EN ; FR ; DE

The European Commission has cleared under the EU Merger Regulation the proposed acquisition of Combined Insurance Company of America (CICA) by ACE Limited of the Cayman Islands. The Commission concluded that the operation would not significantly impede effective competition in the European Economic Area (EEA) or in any substantial part of it.

EN ; FR : DE