Social Insurance Monopolies in Community Competition Law and the Italian Constitution: 'Practical' Convergences and 'Theoretical' Conflicts

An Italian judge, following earlier suggestions of the national antitrust Authority, has referred to the Court of Justice for a preliminary ruling under Article 234 EC Treaty two questions on the interpretation of Articles 81 and 86 of the EC Treaty. With those questions, raised in an action brought by a self‐employee against the Istituto Nazionale per l'Assicurazione contro gli Infortuni sul Lavoro (INAIL) concerning the actor's refusal to pay for social insurance contributions, the Tribunale di Vicenza has in summary asked the Court of Justice whether the public entity concerned, managing a general scheme for the social insurance of accidents at work and professional diseases, can be qualified as an enterprise under Article 81 EC Treaty and, if so, whether its dominant position can be considered in contrast with EC competition rules. This article takes this preliminary reference as a starting point to consider in more general terms the complex constitutional issues raised by what Ge´rard Lyon‐Caen has evocatively called the progressive ‘infiltration’ of EC competition rules into the national systems of labour and social security law. The analysis is particularly focused on the significant risks of ‘constitutional collision’, between the ‘solidaristic’ principles enshrined in the Italian constitution and the fundamental market freedoms protected by the EC competition rules, which are implied by the questions raised in the preliminary reference. It considers first the evolution of ECJ case law—from Poucet and Pistre to Albany International BV—about the limits Member States have in granting exclusive rights to social security institutions under EC competition rules. It then considers specularly, from the Italian constitutional law perspective, the most recent case law of the Italian Constitutional Court on the same issues. The ‘contextual’ reading of the ECJ's and the Italian Constitutional Court's case law with specific regard to the case referred to by the Tribunale di Vicenza leads to the conclusion that there will probably be a ‘practical convergence’in casu between the ‘European’ and the ‘national’ approach. Following the arguments put forward by the Court of Justice in Albany, the INAIL should not be considered as an enterprise, in line also with a recent decision of the Italian Constitutional Court. And even when it was to be qualified as an enterprise, the INAIL should in any case be able to escape the ‘accuse’ of abuse of dominant position and be allowed to retain its exclusive rights, pursuant to Article 86 of the EC Treaty. This ‘practical convergence’in casu does not, however, remove the latent ‘theoretical conflict’ between the two approaches and the risk of ‘constitutional collision’ that it implies. A risk of a ‘conflict’ of that kind could be obviously detrimental for the European integration process. The Italian Constitutional Court claims for herself the control over the fundamental principles of the national constitutional order, assigning them the role of ‘counter‐limits’ to the supremacy of European law and to European integration. At the same time, and more generally, the pervasive spill over of the EC market and competition law virtually into every area of national regulation runs the risk of undermining the social and democratic values enshrined in the national labour law traditions without compensating the potential de‐regulatory effects through measures of positive integration at the supranational level. This also may contribute to undermine and threaten, in the long run, the (already weak) democratic legitimacy of the European integration process. The search for a more suitable and less elusive and unilateral balance between social rights and economic freedoms at the supranational level should therefore become one of the most relevant tasks of what Joseph Weiler has called the ‘European neo‐constitutionalism’. In this perspective, the article, always looking at the specific questions referred to the Court of Justice by the Tribunale di Vicenza, deals with the issue of the ‘rebalance’ between social rights and economic and market freedoms along three distinct but connected lines of reasoning. The first has to do with the need of a more open and respectful dialogue between the ECJ and the national constitutional courts. The second is linked to the ongoing discussion about the ‘constitutionalization’ of the fundamental social rights at the EC level. The third finally considers the same issues from the specific point of view of the division of competences between the European Community and the Member States in the area of social (protection) policies.     

Reforming the Market or the State? Article 30 and the European Constitution: Economic Freedom and Political Rights

This article takes as its starting-point the relationship between Article 30 of 30 of the EC Treaty (general rule on the free movement of goods) and the European Constitution. On the one hand, it examines Article 30 in the context of the constitutional dilemmas facing the European Union, particularly the balance of powers to be defined between Member States and the Union, between public power and the market, and between the legitimacy of Community law vis à vis that of national law. On the other hand, it reviews different conceptions of the European Economic Constitution by analysing the role of Article 30 in the review of market regulation.     

Delegation of Regulatory Powers in a Mixed Polity

It is a common place of academic and political discourse that the EC/EU, being neither a parliamentary democracy nor a separation‐of‐powers system, must be a sui generis polity. Tocqueville reminds us that the pool of original and historically tested constitutional models is fairly limited. But however limited, it contains more than the two systems of rule found among today's democratic nation states. During the three centuries preceding the rise of monarchical absolutism in Europe, the prevalent constitutional arrangement was ‘mixed government’—a system characterised by the presence in the legislature of the territorial rulers and of the ‘estates’ representing the main social and political interests in the polity. This paper argues that this model is applicable to the EC, as shown by the isomorphism of the central tenets of the mixed polity and the three basic Community principles: institutional balance, institutional autonomy and loyal cooperation among European institutions and Member States. The model is then applied to gain a better understanding of the delegation problem. As is well known, a crucial normative obstacle to the delegation of regulatory powers to independent European agencies is the principle of institutional balance. By way of contrast, separation‐of‐powers has not prevented the US Congress from delegating extensive rule‐making powers to independent commissions and agencies. Comparison with the philosophy of mixed government explains this difference. The same philosophy suggests the direction of regulatory reform. The growing complexity of EC policy making should be matched by greater functional differentiation, and in particular by the explicit acknowledgement of an autonomous ‘regulatory estate’. At a time when the Commission aspires to become the sole European executive, as in a parliamentary system, it is particularly important to stress the importance of separating the regulatory function from general executive power. The notion of a regulatory estate is meant to emphasise this need.     

Strict Compliance versus Commercial Reality: The Practical Application of EC Public Procurement Law to the UK's Private Finance Initiative

Abstract: The Private Finance Initiative (PFI) has been described as the largest cultural change for decades in the way the public sector operates in the United Kingdom. Most of these projects have to be delivered within the framework of public procurement law. This article investigates whether the divergence between the legal framework and the commercial requirements of PFI has resulted in the development of a ‘PFI procurement practice’. If so, it is aimed to examine the reasons for developing the practice and whether it deviated from procurement law. The results of the qualitative empirical study, on which the article is based, are not limited to PFI procurement, but have wider implications for EC procurement law and the general debate over whether it is suitable for modern procurement practice. The findings are also of interest to legal sociologists and European Union lawyers as they describe circumstances under which addressees of the law deviate from supra‐national rules.     

The Lisbon Judgment of the German Constitutional Court,the Primacy of EU Law and the Problem of Kompetenz‐Kompetenz: A Conflict between Right and Right in Which There is No Praetor1

The ECJ has long asserted its Kompetenz‐Kompetenz (the question of who has the authority to decide where the borders of EU authority end) based on the Union treaties which have always defined its role as the final interpreter of EU law. Yet, no national constitutional court has accepted this position, and in its Lisbon Judgment of 2009 the German Constitutional Court (FCC) has asserted its own jurisdiction of the final resort' to review future EU treaty changes and transfers of powers to the EU on two grounds: (i) ultra vires review, and (ii) identity review. The FCC justifies its claim to constitutional review with reference to its role as guardian of the national constitution whose requirements will constrain the integration process as a standing proviso and limitation on all transfers of national power to the EU for as long as the EU has not acquired the indispensable core of sovereignty, i.e. autochthonous law‐making under its own sovereign powers and constitution, and instead continues to derive its own power from the Member States under the principle of conferral. Formally therefore, at least until such time, the problem of Kompetenz‐Kompetenz affords of no solution. It can only be ‘managed’, which requires the mutual forbearance of both the ECJ and FCC which both claim the ultimate jurisdiction to decide the limits of the EU's powers—a prerogative which, if asserted by both parties without political sensitivity, would inevitably result in a constitutional crisis. The fact that no such crisis has occurred, illustrates the astute political acumen of both the FCC and the ECJ.     

Challenging EU constitutional law: The Italian Constitutional Court's new stance on direct effect and the preliminary reference procedure

This article seeks to examine the relationship between EU law and the Italian legal order in light of the recent Italian Constitutional Court (ICC)’s jurisprudence attempting to redefine EU core principles. When fundamental rights are at stake, three assumptions are challenged: the determination of direct effect shall be a prerogative of the ECJ; EU directly effective provisions entail the disapplication of conflicting national law; judges have the discretion to refer preliminary references to the ECJ where a clarification on EU law is needed. The contribution argues that the judicial search for a balance between sovereignty and supranationality is undermined by the ICC's new resistance to the well‐established EU jurisprudence. In that respect, the paper posits that the ICC's activism is the result of an unjustified ‘argumentative self‐restraint’ of the ECJ vis‐à‐vis the evolution of EU foundational principles.     

The Perils of ‘As If’ European Constitutionalism

This review article offers thoughts on Kaarlo Tuori's recent book, European Constitutionalism, and more particularly on what he calls the ‘disciplinary contest over the legal characterisation of the EU and its law’. As the book's title suggests, Tuori privileges the constitutional perspective in that contest, so much so—he freely admits—that his analysis ‘predetermine[s] how the EU and its law will be portrayed’. And therein also lies the book's main weakness. Tuori's predetermined ‘constitutional’ interpretation, like so much of the dominant legal discourse in the EU today, ultimately obscures the core contradiction in EU public law. National institutions are increasingly constrained in the exercise of their own constitutional authority but supranational institutions are unable to fill the void because Europeans refuse to endow them with the sine qua non of genuine constitutionalism: the autonomous capacity to mobilise fiscal and human resources in a compulsory fashion. The EU's lack of constitutional power in this robust sense derives from the absence of the necessary socio‐political underpinnings for genuine constitutional legitimacy—what we can call the power‐legitimacy nexus in EU public law. To borrow Tuori's own evocative phrase, the EU possesses at best a ‘parasitic legitimacy’ derived from the more robust constitutionalism of the Member States as well as from the positive connotations that using ‘constitutional’ terminology evokes regardless of its ultimate aptness. The result is an ‘as if’ constitutionalism, the core feature of which is an increasingly untenable principal‐agent inversion between the EU and the Member States, one with profound consequences for the democratic life of Europeans. The sustainability of integration over the long term depends on confronting these adverse features of ‘European constitutionalism’ directly, something that legal elites—whether EU judges, lawyers, or legal scholars—ignore at their peril.     

Political Self‐control and European Constitution: The Assumption of National Political Loyalty to European Obligations as the Solution to the Lex Posterior Problem of EC Law in the National Legal Orders

Current understandings of the constitutional effectiveness of EC law emphasise the European Court of Justice's (ECJ's) claims of supremacy and direct effect, and the acceptance of those claims by the national courts. However, the lex posterior problem of EC law in the national legal order—the problem whereby the application of European obligations in the national legal order could be legislated away by subsequent contrary national legislation—has been addressed not by national courts' acceptance of Costa but by national courts' assumption that national legislatures do not intend to legislate contrary to prior European obligations, often developed from separately established national doctrines which assume legislative fidelity to treaty obligations. As such, the solution to the lex posterior problem of EC law in the national legal orders rests on these national legal doctrines combined with pervasive national legislative self‐restraint. Political self‐control in the Member States supports the European legal order.     

Ignorance of the Criminal Law,and Duties to Avoid it

‘Ignorance of the law is no defence,’ so we are told from an early stage in our legal studies. Or, to be more accurate, ‘ignorance of the criminal law is no defence to a criminal charge.’ That appears to be the rule in this country, apart from a couple of well‐established exceptions and another possible one. I will argue that it is a preposterous doctrine, resting on insecure foundations within the criminal law and on questionable propositions about the political obligations of individuals and of the State. In developing these arguments, I will draw attention to the differing problems of ignorance of the criminal law in three broad areas – regulatory offences, serious crime, and offences of omission – with a view to suggesting that there is a great deal more that the State needs to do if the issue of ignorance of the criminal law is to be dealt with adequately and fairly. I begin by scrutinising the relevant rule of English criminal law and the justifications offered for it. I then go on to situate the ‘ignorance‐of‐law’ doctrine in the context of the principle of legality and the rule of law, those bastions of liberal criminal law theory. Part three then explores the three broad areas of the criminal law, and parts four and five carry the debate into the political obligations of individuals and of the State in these matters.     

The Question Concerning the Common Frame of Reference

The many directives on private consumer law enacted in the last three decades have met with considerable neglect and resistance amongst domestic judges, legislatures and scholars, bringing about less legal unity and more ‘legal fragmentation'—to say it in the words of the Commission. The Draft Common Frame of Reference is one more attempt, on the part of certain strands of European private law scholarship, at imposing a formal break on, and at overcoming, such fragmentation. Presented as a ‘comprehensive and self‐standing’ document, its ambition is to definitively implement the Commission‐generated, market‐orientated agenda of private law reform, so much resisted at the national level. The article argues that the EU legislative institutions should not go ahead with the plan of incorporating the Draft's content in EU law, by adopting a CFR. A CFR would confer an unprecedented degree of authority on a range of contested directive‐generated rules, from the test of fairness to the risk development defence in product liability. In creating a climate in which CFR‐based legalistic arguments promote unity over fragmentation, a CFR would emasculate public debate by implementing, under the spell of legal necessity, exactly those partisan, Commission‐initiated policies that have been, and still are, openly opposed in domestic legal circles. The Draft embodies a grammar of imposition that should be questioned.     

'Solange, chapter 3': Constitutional Courts in Central Europe—Democracy—European Union

Abstract: Soon after the accession of eight post‐communist states from Central and Eastern Europe to the EU, the constitutional courts of some of these countries questioned the principle of supremacy of EU law over national constitutional systems, on the basis of their being the guardians of national standards of protection of human rights and of democratic principles. In doing so, they entered into the well‐known pattern of behaviour favoured by a number of constitutional courts of the ‘older Europe’, which is called a ‘Solange story’ for the purposes of this article. But this resistance is ridden with paradoxes, the most important of which is a democracy paradox: while accession to the EU was supposed to be the most stable guarantee for human rights and democracy in post‐communist states, how can the supremacy of EU law be now resisted on these very grounds? It is argued that the sources of these constitutional courts’ adherence to the ‘Solange’ pattern are primarily domestic, and that it is a way of strengthening their position vis‐à‐vis other national political actors, especially at a time when the role and independence of those courts face serious domestic challenges.     

The Origins of the ‘Nonmarket Economy’: Ideas,Pluralism & Power in EC Anti‐dumping Law about China

‘Market’ and ‘market economy’ exercise a powerful, even magnetic grip on our collective imagination. But what do we mean by ‘market economy’? Does it make sense to speak of a ‘nonmarket economy’, and if so, what does it mean? How are the ideas of ‘market economy’ and ‘nonmarket economy’ related? Focusing on EC anti‐dumping law, this article seeks to answer these questions. It argues that the legal concept of ‘nonmarket economy’ in EC anti‐dumping law has been socially constructed, by means of relations among a plurality of institutional and normative sites, as part of a changing configuration of legal ideas in specific historical circumstances, and in contexts of political, economic, social, and symbolic power. This argument is articulated in three parts. First, the concept of ‘nonmarket economy’ in EC anti‐dumping law, though drawing on earlier elements, had its main roots in the early Cold War. Second, starting in the 1960s, the GATT multilateral negotiating rounds began to define more specific international rules of the game, but a variety of more localised processes played essential roles as forces of change. Of special importance were, first, the tension between legislative rules and administrative discretion in the United States, and, second, the Europeanisation of foreign trade law in the course of European integration. Third, the EC law concept of ‘nonmarket economy’ was born in the late 1970s. The main reasons were changes in the international anti‐dumping law repertoire, specific ideas in Europe about comparative economic systems, and the perceived emergence of new economic threats, including exports from China.     

Controlling Immigrants: The Latent Function of Italian Administrative Orders

Enforcement of new—or relatively new—administrative powers targeting control and criminalization of behaviorbehavior has become increasingly common in Italian cities in recent years. Defined as ordinanze sindacali, Mayors’ Administrative Orders (MAOs) have traditionally been among the powers available to mayors to regulate urban life. Under a new national law passed in 2008, their use in controlling undesirable behavior ranging from minor social and physical incivilities to prostitution and social problems like begging and vagrancy has become increasingly common. In this paper, using data from our own research and from national and local studies, we discuss these orders from a new perspective, showing how they have been used in Italy to criminalize statuses and behaviors of a specific vulnerable social group: namely, legal and illegal immigrants. We describe the main features of these administrative tools, their complex interactions with the criminal justice system and immigration laws, and the mechanisms through which they target irregular and regular immigrants and their use of public space. We contextualize their enforcement in Italian cities in the broader development of exclusionary policies against immigrants and in the more general tendency to increase criminalization of groups and behaviors that seem to be part of a common punitive turn in many Western countries.     

Country Profile: A Review of the New Juvenile Offenders Status in Cambodia

This publication seeks to explore whether the position of juvenile offenders vis‐à‐vis the Cambodian criminal law has changed with the passage of the new criminal legislation and whether this change has been positive or otherwise. The quality of this change will demonstrate to the reader whether the overall process of the reform of the juvenile justice component of the Cambodian system of criminal justice, which spans the last fifteen years and has been funded by the international community, has been a success. The author limited the scope of this inquiry to a comparison between the various domestic laws applicable to juvenile offenders and did not include comparisons with international law, model laws or juvenile laws of other states. Being the first publication of its kind, this analysis limits its claim to the analysis of the relevant statutory provisions rather than ‘practice notes’ which have yet to develop.     

Drug Globalization: Eventual Legalization of Beer in Iceland and Marihuana Decriminalization in the USA

This article discusses whether different motivations for and perceptions of the police role, either as ‘law and order‐oriented thrill‐seekers’ or as ‘social workers’ lead officers to adopt different approaches towards the public. The first category police rank‐and‐file officers' desire for action and excitement, causing them to perceive policing as a mission, also causes them to have a distorted view of reality whereby they perceive members of the public either as significant adversaries or as insignificant ones. For them, ‘real police work’ means chasing and catching villains, and this delusional picture of what policing is may lead them to enlarge and redefine ‘insignificant criminals’ and thus perceive them as ‘villains’ who merit and justify police targeting. However, as these insignificant criminals—beggars, drug addicts, vagrants, ethnic minority youths, and drunks—are not perceived as actually ‘significant adversaries’, the targeting of and encounters with them also produce fatigue in police officers as these activities fail to comply with many police officers' desire to ‘catch the villain’, and the encounters are repetitive and tedious. Police fatigue and stereotyping may entail cynicism due to the ways in which some groups respond to police targeting, such as accusing the police of racism or threatening them with complaints. It is argued that the first type of police officers to a larger degree will experience fatigue and cynicism than the second type of officers—‘the social workers’—who are motivated by a will to ‘help others’, and who receive more rewarding responses from the public.     

The National Judiciary—Sword of European Court of Justice Rulings: The Example of the Kohll/Decker Jurisprudence

The role of the national judiciary in enforcing EC law, and particularly European Court of Justice (ECJ) rulings, has been largely neglected by empirical legal and political science research. Existing research has categorised the role of the national judiciary as either shielding national legislation from the ECJ or as serving as a ‘sword’ to foster integration and to force change on reluctant governments. This article sides with the second assumption and attempts to empirically assess it using the example of the patient mobility jurisprudence by the ECJ, the so‐called Kohll/Decker jurisprudence. The three case studies on France, the UK and Germany show that national courts played an important role in overcoming the resistance against this jurisprudence: via a multiplication of national court cases that contradicted domestic legislation they forced the legislator to end judicial uncertainty.     

The Paradox of American Critical Legalism

Duncan Kennedy's essay is a reprint from his recently published book. We hope to draw attention to Kennedy's work among students of European integration since we believe his analysis to be relevant both to the specific debate on the impact of European integration upon private law and to comparative legal study in general. European legal scholarship has only recently begun to examine the problems of private legal integration. The late appearance of private law in the integration arena is due to a primarily instrumental understanding and strategic use of law in the European market-building project: only once legal ‘barriers to trade’ were eliminated and national regulatory law replaced by Europeanised norms, did the degree to which the core institutions of ’private‘ law had been (indirectly) affected by the integrationist logic become apparent. Comparative legal research, however, has benefited from this awakening of interest. European Commission projects have widened the scope of and intensified comparative studies in Europe. Equally, experience gained from the ‘Integration Through (Public) Law’ project has led to a new private legal debate on the impact of national traditions, the concept of legal cultures and the social functions of private law. Accordingly, whilst Duncan Kennedy's deliberations on the history of American legal thought and the differences between American and European legal cultures are generally to be commended for their sensitive treatment of the specificities of the civil law system and the common law heritage, they are equally of particular topical concern since in addition to highlighting America's ‘utter faith and utter distrust in law,’ they also investigate the fundamentally different approaches adopted towards ‘the project law’ within each of the member states of the EU. If European private lawyers are to come to terms with the problems of integration and convergence, they must first tackle these deep-seated divergences between their own national legal cultures.     

All Bark and No Bite: Notes on the Federal Constitutional Court's 'Banana Decision'

The Federal Constitutional Court's banana decision of 7 June 2000 continues the complex theme of national fundamental‐rights control over Community law. Whereas in the ‘Solange II’ decision (BVerfGE 73, 339) the Federal Constitutional Court had lowered its standard of review to the general guarantee of the constitutionally mandatorily required minimum, the Maastricht judgment (BVerfGE 89, 155) had raised doubts as to the continued validity of this case law. In the banana decision, which was based on the submission of the EC banana market regulation by the Frankfurt‐am‐Main administrative court for constitutional review, the Federal Constitutional Court has now confirmed the ‘Solange II’decision and restrictively specified the admissibility conditions for constitutional review of Community law as follows. Constitutional complaints and judicial applications for review of European legislation alleging fundamental‐rights infringements are inadmissible unless they show that the development of European law including Court of Justice case law has since the ‘Solange II’ decision generally fallen below the mandatorily required fundamental‐rights standard of the Basic Law in a given field. This would require a comprehensive comparison of European and national fundamental‐rights protection. This paper criticises this formula as being logically problematic and scarcely compatible with the Basic Law. Starting from the position that national constitutional courts active even in European matters should be among the essential vertical ‘checks and balances’ in the European multi‐level system, a practical alternative to the Federal Constitutional Court's retreat is developed. This involves at the first stage a submission by the Federal Constitutional Court to the Court of Justice, something that in the banana case might have taken up questions on the method of fundamental‐rights review and the internal Community effect of WTO dispute settlement decisions. Should national constitutional identity not be upheld even by this, then at a second stage, as ultima ratio taking recourse to general international law, the call is made for the decision of constitutional conflicts by an independent mediating body.     

Provisional Court Protection in Administrative Disputes in Europe: The Constitutional Status of Interim Measures Deriving from the Right to Effective Court Protection. A Comparative Approach

Abstract: Interim protection in remedies against the public administration has proved to be one of the key issues in today's justice. In effect, the slowness of judicial proceedings means that final judicial decisions cannot guarantee the rights and interests of the litigants any more, because those decisions arrive too late. Thus, effective judicial protection is at stake. On the other hand, public administrations have traditionally disposed of privileges, one of the most important of them being the so‐called executive character of administrative acts. The national debate on the equilibrium between both principles—effective judicial protection and the executive character of administrative acts—needs to be exported to the Community law context. Community law should therefore learn from national experiences, as other legal orders, such as the Spanish one, have done, turning to comparative law in order to improve their own model of interim protection.     

Criminal Law beyond the State: The European Model

This article will analyse two models of criminal law beyond the State, which are here termed ‘eunomic’ and ‘dialogic’. It will then focus on one case study, European criminal law, which was inherently ‘dialogic’ until the last decade of the past century but has now quite unique features. In accordance with classic liberal views, criminal law has always been conceptualised as one of the most salient attributes of the sovereign State. The monopoly on the use of violence was to be legitimised by the State's concern for the sphere of autonomy of the individual. It is submitted in this article that it is precisely this condition that is lacking in the current European model, which promotes security‐oriented paradigms of self‐fulfilment and effectiveness. However, criminal law, if properly conceived, could in theory function as a powerful vehicle of integration.