chapter 7

Question 1

European Coal and Steel Community

Answer 1

established in 1952 because coal and steel were the most important materials for weapon production. it was believed that mutual dependence on trade in these materials would guarantee peaceful relations between former combatting countries.

Question 2

European Law

Answer 2

a field of law in its own right that is applicable in the domestic legal orders of its member states.

Question 3

supranational

Answer 3

means that (1) European law is directly applicable in its member states. this means that each citizen may invoke the law effectively, and (2) European law is superior to domestic law.

Question 4

four freedoms

Answer 4

constitute the common market in which there is free movement of goods, people, services, and capital. free movement of goods usually attracts most attention.

Question 5

free movement of goods

Answer 5

built around two concepts; (1) a ban on all fiscal restrictions, and (2) elimination of all quantitative restrictions to trade in goods.

Question 6

Article 30

Answer 6

stipulates that any charges at some point relate to the fact that a product crosses a border between EU Member States are illegal. this does not only include the obvious customs or charges related to import or export.

Question 7

the ban on fiscal restrictions

Answer 7

is specified in Article 30 and Article 110 TFEU.

Question 8

Article 110

Answer 8

reads that internal national taxation may not be abused to discriminate against foreign products. member states could easily circumvent Article 30 by imposing higher national taxes on products predominantly produced in other member states, thereby favouring domestically produced goods.

Question 9

Article 34 and 35 TFEU

Answer 9

prohibit quantitative restrictions on imports and exports, eg. quotas.

Question 10

Measure Having Equivalent Effect (MEE)

Answer 10

a domestic rule that has the same effect as a quantitative restriction and therefore has a discriminatory effect.

Question 11

principle of mutual recognition

Answer 11

when a product is lawfully put into circulation in one member state, this product may be sold in other member states under the same conditions.

Question 12

rule of reason doctrine

Answer 12

the principle of mutual recognition does not apply when a member state may invoke a rule of reason, which are eg. effectiveness of fiscal supervision, protection of public health, fairness of commercial transactions, and the defence of the consumer.

Question 13

sales modality

Answer 13

a trade rule about the circumstances under which a product can be sold. eg. rules on opening hours, dumping, advertisement. they say little about the product itself.

Question 14

Article 36

Answer 14

quantitative restrictions to trade may be justified under strict conditions, eg. mad cows case.

Question 15

Cassis de Dijon ruling

Answer 15

further specified MEE. two rules can be deduced; (1) principle of mutual recognition, and (2) rule of reason doctrine.

Question 16

Keck and Mithouard ruling

Answer 16

the court ruled that indistinctively applicable MEE that concern a sales modality are not conflict with EU law, as long as all market participants are equally affected by the standard.

Question 17

distinctively applicable MEE

Answer 17

they only apply to imported or exported products, eg. obliged import or export licenses, additional inspections requirements, more complex commercial rules.

Question 18

indistinctively applicable MEE

Answer 18

while the measure does not aim to discriminate against import or export goods, it still has a discriminatory effect.

Question 19

free movement of persons

Answer 19

originally only for EU nationals who wanted to work in another EU country. gradually broadened. the idea is that it contributes to the establishment of a free market economy. it also extends to non-EU citizens who are family members of a EU citizen and accompanies or joins them.

Question 20

Article 20 TFEU

Answer 20

in general, all citizens of EU Member States automatically enjoy the status of being a European citizen. they have the right to move and reside freely within the territory of the Member States.

Question 21

free movement of citizens directive

Answer 21

further specifies Article 20 TFEU.

Question 22

‘five-year rule’

Answer 22

the most commonly used right to obtain a permanent residence permit.

Question 23

Schengen Area

Answer 23

emerged separate from the EU, but has a considerable effect on free movement of persons.

Question 24

Schengen agreement

Answer 24

established in 1985 with Benelux, Germany, and France. it resulted in the removal of all border controls at common borders. they countries share a unified approach towards external border surveillance, harmonised rules on asylum seekers, and cooperation in police and law enforcement. it was gradually incorporated in EU law, especially by the Treaty of Amsterdam (1997). there are EU countries who opted out and non-EU countries that participate.

Question 25

Article 45 TFEU

Answer 25

stipulates the free movement of workers.

Question 26

Article 49 TFEU

Answer 26

stipulates the free movement of the self-employed.

Question 27

Regulation 1612/68

Answer 27

prohibits discrimination in the access to employment, and discrimination while being employed. both direct and indirect discrimination are prohibited. exemption is when people are employed in the public sector. then, discrimination on the grounds of nationality is allowed.

Question 28

freedom of establishment

Answer 28

a self-employed person might need to set up the necessary infrastruce in another EU Member State to participate in economic activities.

Question 29

Article 49

Answer 29

two main components; (1) right to have access to self-employment in the host country, and (2) right to effectively exercise this right once established in the host country. direct and indirect discrimination is prohibited. a court may also simply assess whether the rules hinder or restrict the enjoyment of this right.

Question 30

Article 54 TFEU

Answer 30

specifies that the freedom of establishment also applies to companies.

Question 31

Article 56 TFEU

Answer 31

stipulates the freedom to provide and receive services in the EU. this can be invoked by both the service provider and the service receiver, as long as one crosses a EU border and experiences a trade barrier. direct and indirect barriers, and the hindering of services providing is prohibited.

Question 32

Article 63 TFEU

Answer 32

prohibits restrictions on the free movement of capital and payments, eg. sales of mortgages, investments in real property, and purchase of shares.

Question 33

free movement of capital

Answer 33

in a true free economy the financing of economic activity is not restricted to country borders. it is linked to the creation of the monetary union. consequentially, factors like fluctuating exchange rates cannot result in trade barriers.

Question 34

primary legislation

Answer 34

the treaties that are signed and ratified by the EU Member States. most importantly the TFEU.

Question 35

Treaty on the Functioning of the European Union (TFEU)

Answer 35

lays down the general fundaments of European economic integration.

Question 36

secondary legislation

Answer 36

the laws produced by the European legislature, based on and authorised by the primary legislation. it is more detailed and specifies primary legislation. they consist mostly of regulations, directives, decisions, recommendations, and opinions.

Question 37

regulation

Answer 37

legislation that applies within the EU without the interference of national parliaments. traditionally the strongest and most powerful legislative act of the EU. it applies when adopted by the European legislature and all Member States should act in compliance.

Question 38

directive

Answer 38

legislation in which a certain goal or principle is adopted that should be implemented by the EU Member States the way they see fit.

Question 39

decision

Answer 39

legislation that only applies to an individual case.

Question 40

recommendations and opinions

Answer 40

legally non-binding. they are recommendations or opinions on how something should be done or understood. the commission adopts recommendations on issues in preparation of forming new laws and policies. other EU institutions may adopt opinions in which they wish to communicate their view on EU matters.

Question 41

competition law

Answer 41

companies also need to behave and live up to the principles of free trade to realise a free market economy.

Question 42

Article 101 TFEU

Answer 42

prohibits cartels.

Question 43

cartel

Answer 43

usually agreements or practice that have the same effect; distorting fair competition.

Question 44

Article 102 TFEU

Answer 44

prohibits the abuse of a dominant position.

Question 45

Hoffman-LaRoche case

Answer 45

the court concluded that when an undertaking or group of undertakings could independently act on a market, there is a dominant position. this means that the company can autonomously regulate prices, supply, and other trading conditions while their competition is unable to influence these factors.

Question 46

relevant market

Answer 46

is determined by considering two aspects; product aspect and geographical aspect.

Question 47

product market

Answer 47

usually defined by considering whether or not a product has substitute products in practice.

Question 48

geographic market

Answer 48

may also influence the market size on an undertaking.

Question 49

concentration

Answer 49

can be a merger, takeover, or a joint venture. when two formally independent undertakings become one economic entity, this might have undesirable effects regarding free competition. undertakings need to inform the European Commission prior to realisation if there is a community dimension.

Question 50

‘community dimension’

Answer 50

when a concentration could potentially affect the cross-border trade between EU Member States.