154. Aside from the examples I have just mentioned, it is possible to identify a more general pattern reflecting the flexibility displayed by the Court of Justice. This pattern relates to the nature of the acceptable grounds of justification, and their assessment.
155. Traditional free movement cases. As a general rule, Member States may rely on two main categories of justifications to justify measures that are deemed restrictive by the Court. Initially,
47 See e.g. Case C-157/99, Geraets-Smits & Peerbooms, [2001] ECR I-5473; Case C-512/08, Commission v. France, [2010] ECR I-8833.
48 See, Infra, §§ 177.
49 Case C-336/96, Gilly, [1998] ECR I-2793.
50 Ibid., 47. See the Opinion in Case C-336/96, Gilly, [1998] ECR I-2793, 19.
51 This is confirmed by a case relating to corporate tax law. In Case C-311/97, Royal Bank of Scotland, [1999] ECR I-2651, above, the Court condemned a Greek tax provision according to which foreign companies were taxed at a 40% rate while domestic companied were taxed at a 35% rate. The Court was indifferent to the level of the tax, but took into account the fact such level did not equally burden domestic and foreign companies.
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they could only refer to the derogations expressly laid down in the Treaty.52 These derogations may be invoked with respect to discriminatory as well as indistinctly applicable measures.
However, the Court has always interpreted them very restrictively.53 They are therefore limited in scope. Member States may also justify their measures on the basis of mandatory requirements, a concept that was introduced in the seminal Cassis de Dijon case.54 The Court created this second category concurrently with the obstacle approach, as a way to counterbalance the substantial extension of the scope of restrictions, which, from then on, encompassed both discriminatory and indistinctly applicable measures.55 Public interest justifications give more latitude to Member States, since they allow them to protect a wider range of interests than express derogations. However, they may theoretically only be admitted if the restrictive measure is indirectly discriminatory or indistinctly applicable. The Court having never laid down precise criteria, the conditions for raising a public interest justification are quite unclear.56 Overall, it would appear to be rather liberal, since it rarely rejects grounds put forward by the Member States before entering the proportionality stage.57
156. The analysis of the Court’s traditional free movement cases nonetheless tends to show that the justifications admitted so far share three main features despite the variety of interests that they aim to protect. First, they must respect values that are shared and protected by a vast majority of Member States. Most of the justifications admitted encompass interests that are not protected at the European Union level, but that could, at some point, be protected at such a level. In this respect, it is often contended that there exists a functional link between the recognition of a public interest justification and the conferring of new harmonizing powers to
52 See Article 36 TFEU (derogations regarding the free movement of goods), Article 45§3 TFEU (derogations regarding the free movement of workers), Article 52 TFEU (derogations regarding the freedom of establishment), Article 62 TFEU (derogations regarding the freedom to provide services) and Article 65 TFEU (derogations regarding the free movement of capital).
53 E. SPAVENTA, “On discrimination and the theory of mandatory requirements,” 3 The Cambridge Yearbook of European Legal Studies 457, 466 (2000).
54 Case 120/78, Rewe-Zentral (Cassis de Dijon), [1979] ECR 649.
55 See L. W. GORMLEY, “The genesis of the rule of reason in the free movement of goods,” in The rule of reason:
rethinking another classic of European legal doctrine, (Ed.) A. A. M. SCHRAUWEN, (Groningen: Europa Law Pub., 2005), 19-33; C. BARNARD, The substantive law of the EU. The Four Freedoms, above, n. 36, 116; J. SCOTT,
“Mandatory or imperative requirements in the EU and the WTO,” in The law of the single European market:
Unpacking the premises, (Eds.) C. BARNARD & J. SCOTT, (Oxford, Hart Publishing, 2002), 269; V. HATZOPOULOS,
“Exigences essentielles, impératives ou impérieuses: une théorie, des théories ou pas de théorie du tout?,” 34 Revue Trimestrielle de Droit Européen 191 (1998).
56 V. HATZOPOULOS, “Exigences essentielles, impératives ou impérieuses: une théorie, des théories ou pas de théorie du tout?,” above, n. 55, 191s.
57 Ibid., 191s; V. HATZOPOULOS, “Recent developments of the case law of the ECJ in the field of services” 37 C. M.
L. Rev. 43, 78 (2000).
Ch. 3. Section 1. The Court of Justice self-imposed adjustments 123 the European legislator.58 All in all, authors generally agree to describe the function of justifications as a means to temporarily protect interests that will subsequently be safeguarded at some point at the European Union level.59 This leads to the identification of their second common feature. For justifications to be admitted, they must quite logically be compatible with the underlying principles and aims of the Treaty. Finally, they must not pursue economic aims.
According to a well-enshrined principle, “[i]t is settled case-law that economic grounds can never serve as justification for obstacles prohibited by the Treaty.”60 The Court’s stand on this issue is based on the basic idea that:
If Member States were able to rely on economic grounds […] they could stop the free movement the moment its impact is felt. Allowing Member States to limit free trade for economic reason would defeat the objective of the EC Treaty to replace purely national markets with a more efficient European one.61
157. Free movement cases involving retained powers. The Court of Justice case law involving powers retained by Member States reveals that the recognized justifications depart from the general framework laid down above in several important respects. Listing the justifications that the Court has recognized so far helps shed light on their peculiarities:
58 M. FALLON, Droit matériel général de l’Union européenne, (Brussels: Bruylant-Academia; Athens: Sakkoulas, 2002), 146. Case C-200/96, Metronome Musik, [1998] ECR I-1953 constitutes, for instance, a good illustration of a
‘communitarization’ of interests previously recognized by the Court’s negative integration case law.58 In this case, the legality of Directive 92/100/EEC of 19 November 1992 on rental right and lending right, and on certain rights relating to copyright in the field of intellectual property was challenged on the grounds that it was contrary to fundamental rights and constitutional law, in particular the freedom to pursue a trade or profession. The Court rejected the argument on the basis that: “Those objectives [the economic and cultural development of the Community and the guarantee that authors and performers can receive appropriate income and amortize their investments] in fact conform with the objectives of general interest pursued by the Community. It should be borne in mind, in particular, that the protection of literary and artistic property, which is a category of industrial and commercial property within the meaning of Article 36 of the Treaty, constitutes a ground of general interest which may justify restrictions on the free movement of goods […].” (At 23) Thus, the Court inferred that the Directive at hand was legal mainly because it aimed to protect the same interests as those encompassed by a mandatory requirement.
59 See L. GORMLEY, “The genesis of the rule of reason in the free movement of goods,” above, n. 55, 23: “The rule of reason is a reflection of the lacunae that (still) exist in the present state of interpretation of the Community.
Thus the Court has sought to ensure that interests or values which are clearly compatible with the basic aims of the Treaty do not go unprotected in the period before their protection has been assured at the Community level.” See also M. FALLON, Droit matériel général de l’Union européenne, above, n. 58, 140.
60 Case C-367/98, Commission v. Portugal, [2002] ECR I-4731, 52. (Emphasis added)
61 J. SNELL, “Economic aims as justification of restrictions on free movement,” in The rule of reason: rethinking another classic of European legal doctrine, Ed. A.A.M. SCHRAUWEN, (Groningen: Europa Law Pub., 2005), 48.
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Effectiveness of fiscal supervision [Case 120/78, Rewe-Zentral (Cassis de Dijon), [1979] ECR 649, 8];
Coherence of the tax system [Case C-204/90, Bachmann, [1992] ECR I-249, 21];
Prevention of tax avoidance by preventing wholly artificial arrangements [Case C-264/96, Imperial Chemical Industries (ICI), [1998] ECR I-4695, 26];
Balanced allocation of tax jurisdiction [Case C-446/03, Marks & Spencer, [2005] ECR I-10837, 46].
(iii) Rules governing surnames
Principle of immutability of surnames as a means designed to prevent risks of confusion as to identity or parentage of persons [Case C-148/02, Garcia Avello, [2003] ECR I-11613, 40s];
Objective of integration [Case C-148/02, Garcia Avello, [2003] ECR I-11613, 40s];
Nationality is an objective criterion which makes it possible to determine a person’s surname with certainty and continuity and which ensures that persons of a particular nationality are treated in the same way and that the surnames of persons of the same nationality are determined in an identical manner [Case C-353/06, Grunkin & Paul, [2008] ECR I-7639, 30];
Constitutional identity in conjunction with public policy [Case C-208/09, Wittgenstein, [2010] ECR I-13693, 83];
Protection of the national language [Case C-391/09, Vardyn & Wardyn, [2011] ECR I-3787, 87].
(iv) undermining a social security system’s financial balance [Case C-158/96, Kohll, [1998] ECR I-1931];
Guarantee of the quality of medical services, balanced medical and hospital service open to all insured people [Case C-158/96, Kohll, [1998] ECR I-1931];
Maintenance of treatment capacity or medical competence on national territory is essential for public health, and even the survival of, the population [Case C-157/99, Geraets-Smits & Peerbooms, [2001] ECR I-5473, 70].
(vi) Higher education
Ensuring that the grant of assistance to cover the maintenance costs of students from other Member States does not become an unreasonable burden which could have consequences for the overall level of assistance which may be granted by that State [Case C-209/03, Bidar, [2005] ECR I-2119, 56];
Safeguarding the homogeneity of the higher university education system [Case C-147/03, Commission v.
Austria, [2005] ECR I-5969, 50], which must be examined in the light of the public health argument [Case C-73/08, Bressol, [2010] ECR I-2735, 54];
Objective of ensuring that students complete their courses in a short period of time, thus contributing to the financial equilibrium of the education system of the MS concerned [Cases C-11/06 & 12/06,
Aim of solidarity [Case C-192/05, Tas-Hagen, [2006] ECR I-10451, 35];
Ensuring that there is a connection between the society of the Member State concerned and the recipient of a benefit [Case C-499/06, Nerkowska, [2008] ECR I-3993, 37];
Necessity to verify that the recipient continues to satisfy the conditions for the grant of that benefit [Case C-499/06, Nerkowska, [2008] ECR I-3993, 37];
Desire to provide a benefit that takes into account differences between Member States such as differences in the cost of living [Case C-221/07, Zablocka, [2008] ECR I-9029, 39];
Need to ensure effective monitoring of the employment and social situation of beneficiaries [Case C-221/07, Zablocka, [2008] ECR I-9029, 39].
Ch. 3. Section 1. The Court of Justice self-imposed adjustments 125 This table shows that the acceptable grounds of justification relating to the eight fields analyzed herein may be divided into three categories. First, these grounds comprise at least two justifications that are of the same nature as grounds traditionally accepted in negative integration cases. The ‘prevention of risks of confusion as to identity or parentage of persons’
and ‘ensuring that persons of a particular nationality are treated in the same way and that the surnames of persons of the same nationality are determined in an identical manner’ comply with the three usual criteria that are necessary for the admission of justifications. They correspond to values shared by Member States, which could even be potentially protected at European Union level.62 They are moreover compatible with the principles and aims laid down in the Treaty, and they do not pursue economic aims. However, the two other categories are specific to cases involving powers retained by Member States. They aim to protect the essential functions of the state, and economic interests respectively.
a. Flexible assessment of justifications relating to essential functions of the State
158. Meaning. The second category encompasses grounds of justification that correspond to objectives aiming to preserve functions that are essential to the state, taken as an autonomous entity, which holds an existence independent from that of the European Union. It first comprises the last category – as will be seen below, economic grounds essentially aim to protect national budgetary interests. In addition, it is also composed of justifications seeking to preserve Member States’ political functions and/or social functions.
159. The preservation of the state’s political functions – Rules governing surnames. As shown by the following examples, the justifications accepted by the Court of Justice reflect the need for safeguarding the survival of Member States as independent and autonomous political entities.
Member States have relied on such grounds of justification in many of the fields analyzed herein. In Wittgenstein,63 the Court of Justice accepted for the first time the argument whereby the Austrian constitutional rule aimed to protect the constitutional identity of the state, read in conjunction with public policy:
62 See Article 81§2 TFEU in the field of judicial cooperation in civil matters: “For the purposes of paragraph 1, the European Parliament and the Council, acting in accordance with the ordinary legislative procedure, shall adopt measures, particularly when necessary for the proper functioning of the internal market, aimed at ensuring: […] (c) the compatibility of the rules applicable in the Member States concerning conflict of laws and of jurisdiction.”
63 Case C-208/09, Wittgenstein, [2010] ECR I-13693.
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[I]n accordance with Article 4(2) TEU, the European Union is to respect the national identities of its Member States, which include the status of the State as a Republic.64
It concluded that:
By refusing to recognize the noble elements of a name such as that of the applicant in the main proceedings, the Austrian authorities responsible for civil status matters do not appear to have gone further than is necessary in order to ensure the attainment of the fundamental constitutional objective pursued by them.65
Several factors may have influenced the reasoning of the Court of Justice. First, the fact that the Austrian rule has a constitutional status within the Austrian legal order must have been of significant importance. This constitutional rule moreover reflects Austria’s own historical past.
Second, it is also notable that the Austrian rule at issue is unconditional. Contrary to Garcia Avello and Grunkin & Paul,66 the Austrian legal order does not comprise any procedure that would allow nationals or non-nationals to bear a title of nobility. Therefore, Wittgenstein shows that, as far as rules governing surnames are concerned, the Court’s power-based approach does not require Member States to set up arrangements that do not already exist in their legal systems. Instead, it requires them to extend the possibility to rely on existing mechanisms to non-nationals or nonresidents.
160. This is confirmed by the latest case decided in this field, Vardyn & Wardyn.67 The central issue of this decision was whether a person who belongs to an ethnic minority or a national of another Member State may invoke European Union law for the purposes of requiring the authorities of a Member State to use his/her mother tongue, contrary to the constitutional principles in force in that State for safeguarding the official national language. The facts of Vardyn & Wardyn indeed involved the refusal of the Lithuanian authorities to modify several civil documents of a Lithuanian national and a Polish national according to the Polish alphabet. The Court applied a ‘serious inconvenience test’68 and ruled that most of these refusals69 did not constitute a restriction on the right to move and reside freely. In a very
64 Ibid., 92 (Emphasis added).
65 Ibid., 93 (Emphasis added).
66 Case C-148/02, Garcia Avello, [2003] ECR I-11613; Case C-353/06, Grunkin & Paul, [2008] ECR I-7639. See, Infra, § 217.
67 Case C-391/09, Vardyn & Wardyn, [2011] ECR I-3787.
68 See H.VAN EIJKEN, 49 C. M. L. Rev. 809, 816s (2012).
69 Namely the refusal to revise the name of the wife on her birth certificate and her name on the marriage certificate, the refusal to revise entries in civil documents and the omission of the Polish diacritical marks in the husband’s name.
Ch. 3. Section 1. The Court of Justice self-imposed adjustments 127 unusual way, it left it to the national court to decide whether the refusal of the Lithuanian authorities to amend the marriage certificate “in order that the joint surname of the husband and wife is entered both uniformly and in a manner which complies with the spelling rules” of Poland, the husband’s Member State of origin amounted to a restriction. The Court of Justice gave some guidance to the national court in case it were to find a restriction. In this regard, it referred once again to Article 4(2) TEU.70 It indeed regarded the protection of the Member State’s official language as falling within its national identity and held that:
[I]t will be for the national court to decide whether such refusal reflects a fair balance between the interests in issue, that is to say, on the one hand, the right of the applicants in the main proceedings to respect for their private and family life and, on the other hand, the legitimate protection by the Member State concerned of its official national language and its traditions.71
Accordingly, the Court adopted a very cautious approach, both at the restriction and proportionality stages. It nonetheless did not completely depart from the principles stemming from Garcia Avello and Grunkin & Paul, and noted that:
[T]he surnames of nationals of the other Member States may, in Lithuania, be written using characters of the Roman alphabet which do not exist in the Lithuanian alphabet.72
Thus, contrary to the absolute Austrian rule that was at issue in Wittgenstein, the Lithuanian law did not wholly preclude the use of characters of the Roman alphabet, which could tend to increase the appellants’ chances of success.
161. The approach undertaken by the Court is, in this respect, very peculiar. The Court is indeed generally inclined to assess very strictly the proportionality of measures that lay down absolute or almost absolute exclusions and/or prohibitions. A recent illustration can be found in Anton Las.73 In this ruling, a Belgian rule was at issue, according to which cross-border employment contracts concluded in the Dutch-speaking part region were to be drafted in Dutch exclusively. The Court acknowledged that:
According to the fourth subparagraph of Article 3(3) TEU and Article 22 of the Charter of Fundamental Rights of the European Union, the Union must respect its rich cultural and linguistic diversity. In accordance with Article 4(2) TEU, the Union must also respect the
70 Case C-391/09, Vardyn & Wardyn, [2011] ECR I-3787, 86.
71 Ibid., 91.
72 Ibid., 93.
73 Case C-202/11, Anton Las, [2013] To be published.
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national identity of its Member States, which includes protection of the official language or languages of those States.74
However, it nevertheless found that the national measure was contrary to the free movement of workers because it was too absolute. It noted, in particular, that less restrictive means than an absolute obligation were available, such as a piece of legislation that “would also permit the drafting of an authentic version of such contracts in a language known to all the parties concerned.”75 By contrast, in the cases involving powers retained by Member States, the Court has developed an opposite approach. It justified the disproportionate character of the national measures in Garcia Avello and Grunkin & Paul on the grounds that the national legal orders at issue comprised mechanisms that could have allowed the appellants to see their surnames recognized. Conversely, it considered that the measures in Wittgenstein and Vardyn & Wardyn were proportionate because the Austrian and Lithuanian legal orders did not contain such pre-existing arrangements. Thus, the Court endorses a deferential approach when Member States rely on interests that are highly related to their national identity – the constitutional identity, the protection of the national language – and that are, in addition, unconditionally protected by their legal systems – through the implementation of intangible principles.
162. The preservation of the state’s political functions – Nationality and direct taxation. Many other cases analyzed herein confirm the Court’s tendency to give substantial weight to justifications aiming to protect the political functions of the state. They concern, in particular, the peculiar relationships that bind each Member State with its own population, as well as the Member States’ specific and unique conceptions of such relationships. This is perceptible in the field of nationality. As seen earlier,76 the Court recognized in Kaur that the United Kingdom had full
162. The preservation of the state’s political functions – Nationality and direct taxation. Many other cases analyzed herein confirm the Court’s tendency to give substantial weight to justifications aiming to protect the political functions of the state. They concern, in particular, the peculiar relationships that bind each Member State with its own population, as well as the Member States’ specific and unique conceptions of such relationships. This is perceptible in the field of nationality. As seen earlier,76 the Court recognized in Kaur that the United Kingdom had full