Vol. 13 No. 5 (May 2003)

 

BETWEEN COMPETITION AND FREE MOVEMENT: THE ECONOMIC CONSTITUTIONAL LAW OF THE EUROPEAN COMMUNITY, by Julio Baquero Cruz. Hart Publishing,  2002. 176pp.  £37.00 Hardcover.  ISBN: 1-84113-336-1

 

Reviewed by Sideek Mohamed, Faculty of Law, Stockholm University, Sweden.

 

Declaration 23 of the Treaty of Nice specifically calls for a deeper and wider political debate about the future of the European Union (EU). It categorically provides for the convening of an Intergovernmental Conference in 2004 to consider, inter alia, how to establish and monitor a more precise limitation of powers between the EU and its Member States, and for the simplification of Treaties. In order to facilitate the achievement of these objectives, a Convention on the future of the EU was set in motion in 2002. When the Convention concludes—sometime in 2003—it will submit its proposals to the European Council. It is widely expected that the Convention will agree to draw up a basic constitutional treaty.

 

The significance of this doctoral thesis by Julio Baquero Cruz, which seeks to identify and fill the gaps in the economic constitutional law for the EU, is a timely contribution to current political discussions on the future course of the EU. The book deals with a multitude of themes ranging from the different concepts of a constitution, rules of free movement, to economic competition. The second part of the book focuses more specially on the relationship between competition and free movements. The author highlights in a clear and precise language the interaction, gaps, and loopholes between these two major sets of norms in the European Community (EC) Treaty. He advocates a more uniform legal approach to economic freedoms of goods, services, and capital—but not of workers.  

 

The themes and methodology for the book are presented precisely and concretely in the introductory chapter. The second chapter looks at different constitutional concepts, but the author appears to favour an operational conception of the European economic constitution, based on economic integration through the principles of free movement and competition. In Chapter Three the author generates a lively discussion on the notion of an economic constitutional law. In Chapter Four he draws a distinction between the Community economic pillar and the Union pillar, but refuses to confer any constitutional significance to the latter. Chapter Five is devoted to an interesting discussion on the economic constitutional law of the Community with special reference to the concept of internal market, legal hierarchy, and method of interpretations, including a comparison with the economic laws of the Member States.  

 

The general relationship between competition and free movements—treated together with commercial and monetary policies as the basic layers of the economic constitutional law of the Community—are dealt with in Chapter Six. Chapters Seven and Eight assess problems connected to the application of free movement rules in the private sphere and competition rules promulgated by State action. Finally, Cruz offers his thoughts on Community economic constitutional law and the relationship between competition and free movement are briefly expressed in the concluding section of the book. 

 

On the whole, the book is quite solid, but I have mild critical comments and observations regarding some of Cruz’s analysis. First, this book is a refined version of a doctoral thesis. The author himself confesses that his thesis covers a multitude of themes and compares it to a tree whose trunk grows in different directions. A doctoral thesis in legal science should deal with a specific theme, and its originality and specificity should grow in a vertical rather than a horizontal direction. The scattered “growth” approach renders some of it a bit challenging to follow.

 

Another objection to the otherwise excellent piece of legal research is the apparent downgrading of the significance of the free movement of workers in relation to other economic freedoms. The various justifications adduced by the author for this line of thinking are not sufficiently convincing. The free movement of workers, with the free movement of goods, services, establishment, and capital, are integral parts of the EU internal market. Cruz appears implicitly to suggest that this freedom need not necessarily be treated as a central to an EU economic constitution. Even though liberalization of rules governing worker movement was complemented by the adoption of a series of social and labour laws, the relevance and significance of this freedom to the stability and development of the European economy should not be underestimated. The mere fact that the rights of migrant workers are acknowledged, protected and strengthened by EU legislation is not grounds to deprive this freedom the due place it deserves in the structure of the Community’s economic constitution.

 

The assertion that competition rules may have extra-territorial effects, whereas the free movement rules are confined to intra-community trade, should be qualified. For example, Article 56 of the EC Treaty provides for the liberalisation of both internal and external movements of capital. In SANZ DE LERA, the European Court of Justice (ECJ) declared that Article 56 shall have direct effect, and the implication of this judgment is that free movement of capital from the EU towards Switzerland and Turkey—which are still not EU members— are also liberalized.

 

Cruz suggests that since the decisions taken under Title VI of the EU Treaty shall not go immediately into effect, the Union pillar shall not have any constitutional significance. In addition, the European Court of Justice has also consistently held in several cases that if a Treaty provision is not formulated in clear, precise, and unambiguous language, it will be denied direct effect. For example, the ECJ stated precisely that, in CASATI (1981), because of ambiguous language. The effect of this judgment, according to the tests developed by Cruz, was that the free movement of capital would have been denied a place within the ambit of the Community’s economic constitutional law. It was not until Articles 67-73 were repealed and replaced by Articles 56-60 in 1994 that capital freedom could be considered part of economic constitutional law.

 

The nature of the recommendations of the Convention on the future of the EU would decide the fate of the relevance of a distinct economic constitution. There should not be any major obstacles to merging the institutional and procedural arrangements presently found in Title VI, which organizes Union activity in respect to Police and Judicial Cooperation in Criminal Matters (the so-called “Third Pillar”), with the arrangements presently applicable under the EC Treaty (the so-called “First Pillar”). On the other hand, the institutional organization presently found in Title V, which coordinates Union activity in respect to Common Foreign and Security Policy (the so-called “Second Pillar”) might remain strongly differentiated. The major differences of opinion among the EU Member States over the Iraqi crisis are a clear indication that the current status quo of the Second Pillar would remain intact. If the Convention recommends the abolition of the distinction between the First and Third Pillars, and accommodates them within the framework of a Constitutional Treaty, it is likely that the concept of the so-called economic constitution might lose its significance.

 

Despite these few reservations and observations, this book is an invaluable and timely contribution to fill a gap existing in the literature on European economic constitutional law. It will be a useful reference book to policy makers who are now in the process of examining the kind of constitution that will be appropriate for the EU. I recommend BETWEEN COMPETITION AND FREE MOVEMENT as an essential purchase to legal scholars, academics, and political scientists who are interested in tracking the future course of the EU in the constitutional sphere. It will also be an excellent library addition to support any graduate or post-graduate courses specializing in the study of the legal inter–relationships between free movements and competition, one of the underlying themes of this book.

 

CASE REFERENCES

CASATI, European Court of Justice, C-203/80 (1981) ECR 2595.

 

SANZ DE LERA AND OTHERS, European Court of Justice, C-163/94 (1995) ECR 1-4821.

 

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Copyright 2003 by the author,
Sideek Mohamed.