107-673: The European single market , also known as the European internal market or the European common market , is the single market comprising mainly the 27 member states of the European Union (EU). With certain exceptions, it also comprises Iceland , Liechtenstein , Norway (through the Agreement on the European Economic Area ), and Switzerland (through sectoral treaties ). The single market seeks to guarantee
214-587: A Deep and Comprehensive Free Trade Area (DCFTA) with the EU, Georgia , Moldova , and Ukraine have also been granted limited access to the single market in selected sectors. Turkey has access to the free movement of some goods via its membership in the European Union–Turkey Customs Union . The United Kingdom left the European single market on 31 December 2020. An agreement was reached between
321-421: A European Court of Justice ruling in 1999 stated that fishing rights (or fishing permits) are not goods, but a provision of service. The ruling further explains that, both capital and service can be valued in money and are capable of forming the subject of commercial transactions, but they are not goods. Council Regulation (EC) 2679/98 of 7 December 1998, on the functioning of the internal market in relation to
428-527: A clearing system , TARGET , for large euro transactions. The final stage of completely free movement of capital was thought to require a single currency and monetary policy , eliminating the transaction costs and fluctuations of currency exchange. Following a Report of the Delors Commission in 1988, the Treaty of Maastricht made economic and monetary union an objective, first by completing
535-648: A "deterrent effect on portfolio investments" and reducing "the attractiveness of an investment". This suggested the Court's preference that a government, if it sought public ownership or control, should nationalise in full the desired proportion of a company in line with TFEU article 345. Capital within the EU may be transferred in any amount from one country to another (except that Greece currently has capital controls restricting outflows, and Cyprus imposed capital controls between 2013 and April 2015). All intra-EU transfers in euro are considered as domestic payments and bear
642-606: A Belgian law requiring all margarine to be in cube shaped packages infringed article 34, and was not justified by the pursuit of consumer protection. The argument that Belgians would believe it was butter if it was not cube shaped was disproportionate: it would "considerably exceed the requirements of the object in view" and labelling would protect consumers "just as effectively". In a 2003 case, Commission v Italy Italian law required that cocoa products that included other vegetable fats could not be labelled as "chocolate". It had to be "chocolate substitute". All Italian chocolate
749-474: A Dutch lawyer moved to Belgium while advising a client in a social security case, and was told he could not continue because Dutch law said only people established in the Netherlands could give legal advice. The Court of Justice held that the freedom to provide services applied, it was directly effective, and the rule was probably unjustified: having an address in the member state would be enough to pursue
856-764: A company from shifting its central administration to Italy while it still operated and was incorporated in Hungary. Thus, the court draws a distinction between the right of establishment for foreign companies (where restrictions must be justified), and the right of the state to determine conditions for companies incorporated in its territory, although it is not entirely clear why. The "freedom to provide services" under TFEU article 56 applies to people who provide services "for remuneration", especially in commercial or professional activity. For example, in Van Binsbergen v Bestuur van de Bedrijfvereniging voor de Metaalnijverheid
963-569: A company in the UK could admittedly provide services in Denmark without being established there, and there were less restrictive means of achieving the aim of creditor protection. This approach was criticised as potentially opening the EU to unjustified regulatory competition , and a race to the bottom in standards, like in the US where the state of Delaware attracts most companies and is often argued to have
1070-581: A company moving its seat of business, without infringing TFEU article 49. This meant the Daily Mail newspaper's parent company could not avoid tax by shifting its residence to the Netherlands without first settling its tax bills in the UK. The UK did not need to justify its action, as rules on company seats were not yet harmonised. By contrast, in Centros Ltd v Erhversus-og Selkabssyrelsen
1177-630: A disagreement between the science community and the Dutch government whether niacin in cheese posed a public risk. As public risk falls under article 36, meaning that a quantitative restriction can be imposed, it justified the import restriction against the Eyssen cheese company by the Dutch government. More generally, it has been increasingly acknowledged that fundamental human rights should take priority over all trade rules. So, in Schmidberger v Austria
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#17327838115711284-462: A high level of protection and improvement of the quality of the environment, with also promoting scientific and technological advance. Even as the Lisbon Treaty came into force in 2009, however, some areas pertaining to parts of the four freedoms (especially in the field of services) had not yet been completely opened. Those, along with further work on the economic and monetary union, would see
1391-674: A lawyer from Stuttgart , who had set up chambers in Milan and was censured by the Milan Bar Council for not having registered, should claim for breach of establishment freedom, rather than service freedom. However, the requirements to be registered in Milan before being able to practice would be allowed if they were non-discriminatory, "justified by imperative requirements in the general interest" and proportionately applied. All people or entities that engage in economic activity, particularly
1498-603: A lawyer to the Belgian bar because he lacked Belgian nationality was unjustified. TFEU article 49 says states are exempt from infringing others' freedom of establishment when they exercise "official authority", but this did an advocate's work (as opposed to a court's) was not official. By contrast in Commission v Italy the Court of Justice held that a requirement for lawyers in Italy to comply with maximum tariffs unless there
1605-451: A mandatory requirement. Harmonisation would only be used to overcome barriers created by trade restrictions which survived the Cassis mandatory requirements test, and to ensure essential standards where there was a risk of a race to the bottom . Thus, harmonisation was largely used to ensure basic health and safety standards were met. By 1992 about 90% of the issues had been resolved and in
1712-555: A product's content) it was outside the scope of article 34, and so did not need to be justified. Selling arrangements can be held to have an unequal effect "in fact" particularly where traders from another member state are seeking to break into the market, but there are restrictions on advertising and marketing. In Konsumentombudsmannen v De Agostini the Court of Justice reviewed Swedish bans on advertising to children under age 12, and misleading commercials for skin care products. While
1819-482: A single unitary state with a single set of economic rules, or among the members of a strong national federation . For example, the sovereign states of the United States do to some degree have different local economic regulations (e.g. licensing requirements for professionals, rules and pricing for utilities and insurance, consumer safety laws, environmental laws, minimum wage) and taxes, but are subordinate to
1926-426: A single market can have a negative impact on some sectors of a national economy due to increased international competition. Enterprises that previously enjoyed national market protection and national subsidy (and could therefore continue in business despite falling short of international performance benchmarks) may struggle to survive against their more efficient peers, even for its traditional markets. Ultimately, if
2033-551: A single market. In the end, it was launched on 1 January 1993. The new approach, pioneered at the Delors Commission, combined positive and negative integration, relying upon minimum rather than exhaustive harmonisation. Negative integration consists of prohibitions imposed on member states banning discriminatory behaviour and other restrictive practices. Positive integration consists of approximating laws and standards. Especially important (and controversial) in this respect
2140-570: Is a customs duty if it is proportionate to the value of the goods; if it is proportionate to the quantity, it is a charge having equivalent effect to a customs duty. There are three exceptions to the prohibition on charges imposed when goods cross a border, listed in Case 18/87 Commission v Germany. A charge is not a customs duty or charge having equivalent effect if: Article 110 of the TFEU provides: No Member State shall impose, directly or indirectly, on
2247-451: Is a type of trade bloc in which most trade barriers have been removed (for goods ) with some common policies on product regulation, and freedom of movement of the factors of production ( capital and labour ) and of enterprise and services . The goal is that the movement of capital, labour, goods, and services between the members is as easy as within them. The physical (borders), technical (standards) and fiscal (taxes) barriers among
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#17327838115712354-597: Is also true in the context of the UK's National Health Service . Aside from public services, another sensitive field of services are those classified as illegal. Josemans v Burgemeester van Maastricht held that the Netherlands' regulation of cannabis consumption, including the prohibitions by some municipalities on tourists (but not Dutch nationals) going to coffee shops , fell outside article 56 altogether. The Court of Justice reasoned that narcotic drugs were controlled in all member states, and so this differed from other cases where prostitution or other quasi-legal activity
2461-438: Is commonly described as "frontier-free". However, several barriers remain such as differences in national tax systems, differences in parts of the services sector and different requirements for e-commerce. In addition separate national markets still exist for financial services , energy and transport . Laws concerning the recognition of professional qualifications also may not be fully harmonized. The Eurasian Economic Union ,
2568-418: Is imposed unilaterally on domestic or foreign goods by reason of the fact that they cross a frontier, and which is not a customs duty in the strict sense, constitutes a charge having an equivalent effect... even if it is not imposed for the benefit of the state, is not discriminatory or protective in effect and if the product on which the charge is imposed is not in competition with any domestic product. A charge
2675-433: Is misleading or aggressive, and sets out a list of examples that count as unfair. Increasingly, states have to give mutual recognition to each other's standards of regulation, while the EU has attempted to harmonise minimum ideals of best practice. The attempt to raise standards is hoped to avoid a regulatory " race to the bottom ", while allowing consumers access to goods from around the continent. Free movement of capital
2782-600: Is the adoption of harmonising legislation under Article 114 of the Treaty on the Functioning of the European Union (TFEU). The commission also relied upon the European Court of Justice 's Cassis de Dijon jurisprudence, under which member states were obliged to recognise goods which had been legally produced in another member state, unless the member state could justify the restriction by reference to
2889-495: Is the last stage and ultimate goal of a single market. It requires the total free movement of goods and services, capital and people without regard to national boundaries. A common market allows for the free movement of capital and services but large amounts of trade barriers remain. It eliminates all quotas and tariffs – duties on imported goods – from trade in goods within it. However non-tariff barriers to trade remain, such as differences between
2996-483: The Capital Movement Directive 1988 , Annex I, 13 categories of capital which must move free are covered. In Baars v Inspecteur der Belastingen Particulieren the Court of Justice held that for investments in companies, the capital rules, rather than freedom of establishment rules, were engaged if an investment did not enable a "definite influence" through shareholder voting or other rights by
3103-474: The Court of Justice held that Austria did not infringe article 34 by failing to ban a protest that blocked heavy traffic passing over the A13, Brenner Autobahn , en route to Italy. Although many companies, including Mr Schmidberger's German undertaking, were prevented from trading, the Court of Justice reasoned that freedom of association is one of the "fundamental pillars of a democratic society", against which
3210-530: The Court of Justice held that this rule meant all "trading rules" that are "enacted by Member States" which could hinder trade "directly or indirectly, actually or potentially" would be caught by article 34. This meant that a Belgian law requiring Scotch whisky imports to have a certificate of origin was unlikely to be lawful. It discriminated against parallel importers like Mr Dassonville, who could not get certificates from authorities in France, where they bought
3317-576: The EU delegations . Article 222, the Solidarity clause states that members shall come to the aid of a fellow member who is subject to a terrorist attack, natural disaster or man-made disaster. This includes the use of military force. Part 6, in articles 223 to 334, elaborates on the institutional provisions in the Treaty on European Union. As well as elaborating on the structures, articles 288 to 299 outline
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3424-793: The European Ombudsman and to contact and receive a reply from EU institutions in their own language. Article 25 requires the commission to report on the implementation of these rights every three years. Part 3 is the largest in the TFEU. Articles 26 to 197 concern the substantive policies and actions of the EU. Including the customs union Common Agricultural Policy and Common Fisheries Policy Title IV concerns free movement of people, services and capital : Including police and justice co-operation European Union competition law , taxation and harmonisation of regulations (note Article 101 and Article 102 ) Articles 119 to 144 concern economic and monetary policy , including articles on
3531-627: The European Research Area and European Space Policy are developed. Title XX concerns the increasingly important environmental policy, allowing action under articles 191 to 193. Title XXI, article 194, establishes the Energy policy of the European Union . Title XXII, article 195 is tourism. Title XXIII, article 196 is civil protection. Title XXIV, article 197 is administrative co-operation. Part 4, in articles 198 to 204, deals with association of overseas territories. Article 198 sets
3638-462: The European Union is achieved by a customs union and the principle of non-discrimination. The EU manages imports from non-member states, duties between member states are prohibited, and imports circulate freely. In addition under the Treaty on the Functioning of the European Union article 34, 'Quantitative restrictions on imports and all measures having equivalent effect shall be prohibited between Member States'. In Procureur du Roi v Dassonville
3745-605: The Eurozone crisis . According to TFEU articles 119 and 127, the objective of the European Central Bank and other central banks ought to be price stability . This has been criticised for apparently being superior to the objective of full employment in the Treaty on European Union article 3. Within the building on the Investment Plan for Europe, for a closer integration of capital markets, in 2015,
3852-623: The Gulf Cooperation Council , CARICOM and the European Union are current examples of single markets, although the GCC 's single market has been described as "malfunctioning" in 2014. The European Union is the only economic union whose objective is "completing the single market". A completed, unified market usually refers to the complete removal of barriers and integration of the remaining national markets. Complete economic integration can be seen within many countries, whether in
3959-517: The Scotch . This "wide test", to determine what could potentially be an unlawful restriction on trade, applies equally to actions by quasi-government bodies, such as the former " Buy Irish " company that had government appointees. It also means states can be responsible for private actors. For instance, in Commission v France French farmer vigilantes were continually sabotaging shipments of Spanish strawberries , and even Belgian tomato imports. France
4066-614: The free movement of goods among the Member States, was aimed at preventing obstacles to the free movement of goods attributable to "action or inaction" by a Member State. The regulation empowered the Commission to request intervention by a Member State when the actions of private individuals were creating an "obstacle" to free movement of goods. A resolution was adopted by the Council and member state government representatives on
4173-399: The "freedom of establishment" in article 49, and " freedom to provide services " in article 56. In Gebhard v Consiglio dell’Ordine degli Avvocati e Procuratori di Milano the Court of Justice held that to be "established" means to participate in economic life "on a stable and continuous basis", while providing "services" meant pursuing activity more "on a temporary basis". This meant that
4280-672: The Commission adopted the Action Plan on Building a Capital Markets Union (CMU) setting out a list of key measures to achieve a true single market for capital in Europe, which deepens the existing Banking Union, because this revolves around disintermediated, market-based forms of financing, which should represent an alternative to the traditionally predominant (in Europe) bank-based financing channel. The EU's political and economic context call for strong and competitive capital markets to finance
4387-609: The Court of Justice found that a UK limited company operating in Denmark could not be required to comply with Denmark's minimum share capital rules. UK law only required £1 of capital to start a company, while Denmark's legislature took the view companies should only be started up if they had 200,000 Danish krone (around €27,000) to protect creditors if the company failed and went insolvent . The Court of Justice held that Denmark's minimum capital law infringed Centros Ltd's freedom of establishment and could not be justified, because
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4494-555: The Court reasoned that the prohibition would deter people from buying it: it would have "a considerable influence on the behaviour of consumers" that "affects the access of that product to the market ". It would require justification under article 36, or as a mandatory requirement. In contrast to product requirements or other laws that hinder market access , the Court of Justice developed a presumption that "selling arrangements" would be presumed to not fall into TFEU article 34, if they applied equally to all sellers, and affected them in
4601-537: The Dutch prohibition pursued a legitimate aim to prevent "undesirable developments in securities trading" including protecting the consumer from aggressive sales tactics, thus maintaining confidence in the Dutch markets. In Omega Spielhallen GmbH v Bonn a "laserdrome" business was banned by the Bonn council. It bought fake laser gun services from a UK firm called Pulsar Ltd, but residents had protested against "playing at killing" entertainment. The Court of Justice held that
4708-469: The EEC struggled to enforce a single market due to the absence of strong decision-making structures. Because of protectionist attitudes, it was difficult to replace intangible barriers with mutually recognized standards and common regulations. In the 1980s, when the economy of the EEC began to lag behind the rest of the developed world, Margaret Thatcher sent Lord Cockfield to the Delors Commission to take
4815-477: The EU economy. The CMU project is a political signal to strengthen the single market as a project of all 28 Member States, instead of just the Eurozone countries, and sent a strong signal to the UK to remain an active part of the EU, before Brexit. As well as creating rights for "workers" who generally lack bargaining power in the market, the Treaty on the Functioning of the European Union or TFEU also protects
4922-735: The EU external border goods may circulate freely between member states. Under the operation of the Single European Act , customs border controls between member states have been largely abandoned. Physical inspections on imports and exports have been replaced mainly by audit controls and risk analysis. Article 30 of the TFEU prohibits not only customs duties but also charges having equivalent effect. The European Court of Justice defined "charge having equivalent effect" in Commission v Italy . [A]ny pecuniary charge, however small and whatever its designation and mode of application, which
5029-504: The EU move further to a European Home Market . The "Four Freedoms" of the single market are: The range of "goods" (or "products") covered by the term "free movement of goods" "is as wide as the range of goods in existence". Goods are only covered if they have economic value, i.e. they can be valued in money and are capable of forming the subject of commercial transactions. Works of art , coins which are no longer in circulation and water are noted as examples of "goods". Fish are goods, but
5136-771: The EU shall respect the status of religious, philosophical and non-confessional organisations under national law. The second part begins with article 18 which outlaws, within the limitations of the treaties, discrimination on the basis of nationality. Article 19 states the council with the consent of the European Parliament "may take appropriate action to combat discrimination based on sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation". Articles 20 to 24 establishes EU citizenship and accords rights to it; to free movement, consular protection from other states, vote and stand in local and European elections , right to petition Parliament and
5243-431: The EU to act for consumer protection , in article 169. Title XVI, articles 170–172 empower action to develop and integrate Trans-European Networks . Title XVII, article 173, regards the EU's industrial policy, to promote industry. Title XVIII, articles 174 to 178 concern economic, social and territorial cohesion (reducing disparities in development). Title XIX concerns research and development and space policy, under which
5350-727: The European Economic Community ), which brought about the creation of the European Economic Community (EEC), the best-known of the European Communities (EC). It was signed on 25 March 1957 by Belgium , France , Italy , Luxembourg , the Netherlands and West Germany and came into force on 1 January 1958. It remains one of the two most important treaties in the modern-day European Union (EU). Its name has been amended twice since 1957. The Maastricht Treaty of 1992 removed
5457-635: The Functioning of the European Union The Treaty on the Functioning of the European Union ( TFEU ) is one of two treaties forming the constitutional basis of the European Union (EU), the other being the Treaty on European Union (TEU). It was previously known as the Treaty Establishing the European Community (TEC). The Treaty originated as the Treaty of Rome (fully the Treaty establishing
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#17327838115715564-510: The GDP of member countries is on average 9 percent higher than it would be if tariff and non-tariff restrictions were in place. One of the core objectives of the European Economic Community (EEC) upon its establishment in 1957 was the development of a common market offering free movement of goods, service, people and capital. Free movement of goods was established in principle through the customs union between its then- six member states . However,
5671-520: The German constitutional value of human dignity , which underpinned the ban, did count as a justified restriction on the freedom to provide services. In Liga Portuguesa de Futebol v Santa Casa da Misericórdia de Lisboa the Court of Justice also held that the state monopoly on gambling, and a penalty for a Gibraltar firm that had sold internet gambling services, was justified to prevent fraud and gambling where people's views were highly divergent. The ban
5778-412: The German government's arguments that the measure proportionately protected public health under TFEU article 36, because stronger beverages were available and adequate labelling would be enough for consumers to understand what they bought. This rule primarily applies to requirements about a product's content or packaging. In Walter Rau Lebensmittelwerke v De Smedt PVBA the Court of Justice found that
5885-402: The Member States' rules on product safety, packaging requirements and national administrative procedures. These prevent manufacturers from marketing the same goods in all member states. The objective of a common market is most often economic convergence and the creation of an integrated single market. It is sometimes considered as the first stage of a single market. The European Economic Community
5992-599: The Treaty on European Union. Article 206 and 207 establish the common commercial (external trade) policy of the EU . Articles 208 to 214 deal with co-operation on development and humanitarian aid for third countries. Article 215 deals with sanctions while articles 216 to 219 deal with procedures for establishing international treaties with third countries. Article 220 instructs the High Representative and Commission to engage in appropriate co-operation with other international organisations and article 221 establishes
6099-466: The UK Government and European Commission to align Northern Ireland on rules for goods with the European single market, to maintain an open border on the island of Ireland . The market is intended to increase competition , labour specialisation , and economies of scale , allowing goods and factors of production to move to the area where they are most valued, thus improving the efficiency of
6206-563: The aim "to ensure normal conditions of competition and to remove all restrictions of a fiscal nature capable of hindering the free movement of goods within the Common Market". Aspects of the EU Customs area extend to a number of non-EU-member states, namely Andorra , Monaco , San Marino and Turkey, under separately negotiated arrangements. The United Kingdom agreed on a trade deal with the European Union on 24 December 2020, which
6313-401: The allocation of resources. It is also intended to drive economic integration whereby the once separate economies of the member states become integrated within a single EU-wide economy. The creation of the internal market as a seamless, single market is an ongoing process, with the integration of the service industry still containing gaps. According to a 2019 estimate, because of the single market
6420-447: The bans have remained (justifiable under article 36 or as a mandatory requirement) the Court emphasised that complete marketing bans could be disproportionate if advertising were "the only effective form of promotion enabling [a trader] to penetrate" the market. In Konsumentombudsmannen v Gourmet AB the Court suggested that a total ban for advertising alcohol on the radio, TV and in magazines could fall within article 34 where advertising
6527-405: The corresponding domestic transfer costs. This includes all member States of the EU, even those outside the eurozone providing the transactions are carried out in euro. Credit/debit card charging and ATM withdrawals within the Eurozone are also charged as domestic; however, paper-based payment orders, like cheques, have not been standardised so these are still domestic-based. The ECB has also set up
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#17327838115716634-465: The costs of receiving treatment in Germany. The Dutch health authorities regarded the treatment as unnecessary, so she argued this restricted the freedom (of the German health clinic) to provide services. Several governments submitted that hospital services should not be regarded as economic, and should not fall within article 56. But the Court of Justice held that health care was a "service" even though
6741-627: The countries of single market. Consumers are benefited by the single market in the sense that the competitive environment brings them cheaper products, more efficient providers of products and also increased choice of products and their quality. What is more, businesses in competition will innovate to create new products; another benefit for consumers. Single market play significant role in increasing prosperity of nations involved in this area. For example, single market helps European Union to achieve annual growth of GDP with 2.2% p.a. between 1992 and 2006, rise in employment and job creation. Transition to
6848-890: The criteria. Title IX concerns employment policy, under articles 145–150. Title X concerns social policy, and with reference to the European Social Charter 1961 and the Community Charter of the Fundamental Social Rights of Workers 1989 . This gives rise to the weight of European labour law . Title XI establishes the European Social Fund under articles 162–164. Title XII, articles 165 and 166 concern education, vocational training, youth and sport policies. Title XIII concerns culture, in article 167. Title XIV allows measures for public health, under article 168. Title XV empowers
6955-431: The enterprise fails to improve its organization and methods, it will fail. The consequence may be unemployment or migration. National participation into single market opens political debates, about skills loss through worker migration from less developed countries, and wage suppression in countries to which they migrate. Every economic union and economic and monetary union includes a common market. Treaty on
7062-605: The environment, press diversity, fairness in commerce, and more: the categories are not closed. In the most famous case Rewe-Zentral AG v Bundesmonopol für Branntwein , the Court of Justice found that a German law requiring all spirits and liqueurs (not just imported ones) to have a minimum alcohol content of 25 per cent was contrary to TFEU article 34, because it had a greater negative effect on imports. German liqueurs were over 25 per cent alcohol, but Cassis de Dijon , which Rewe-Zentrale AG wished to import from France, only had 15 to 20 per cent alcohol. The Court of Justice rejected
7169-512: The euro. Chapter 1: Economic policy - Article 122 deals with unforeseen problems in the supply chain and "severe difficulties caused by natural disasters or exceptional occurrences beyond its control" Chapter 1: Economic policy – Article 126 deals with how excessive member state debt is handled. Chapter 2: Monetary policy – Article 127 outlines that the European System of Central Banks should maintain price stability and work with
7276-448: The federal government on any matter of interstate commerce the national government chooses to assert itself. Movement of people and goods among the states is unrestricted and without tariffs. A single market has many benefits: with full freedom of movement for all the factors of production between the member countries, the factors of production become more efficiently allocated, further increasing productivity. For both business within
7383-691: The forms of legislative acts and procedures of the EU . Articles 300 to 309 establish the European Economic and Social Committee , the Committee of the Regions and the European Investment Bank . Articles 310 to 325 outline the EU budget . Finally, articles 326 to 334 establishes provision for enhanced co-operation . Part 7, in articles 335 to 358, deals with final legal points, such as territorial and temporal application,
7490-448: The free movement of goods , capital , services , and people , known collectively as the "four freedoms". This is achieved through common rules and standards that all participating states are legally committed to follow. Any potential EU accession candidates are required to agree to association agreements with the EU during the negotiation, which must be implemented prior to accession. In addition, through three individual agreements on
7597-418: The free movement of goods had to be balanced, and was probably subordinate. If a member state does appeal to the article 36 justification, the measures it takes have to be applied proportionately . This means the rule must be pursue a legitimate aim and (1) be suitable to achieve the aim, (2) be necessary, so that a less restrictive measure could not achieve the same result, and (3) be reasonable in balancing
7704-406: The freedom to provide services in respect of public works contracts. The Court of Justice has held that secondary education falls outside the scope of article 56, because usually the state funds it, though higher education does not. Health care generally counts as a service. In Geraets-Smits v Stichting Ziekenfonds Mrs Geraets-Smits claimed she should be reimbursed by Dutch social insurance for
7811-434: The government (rather than the service recipient) paid for the service. National authorities could be justified in refusing to reimburse patients for medical services abroad if the health care received at home was without undue delay, and it followed "international medical science" on which treatments counted as normal and necessary. The Court requires that the individual circumstances of a patient justify waiting lists, and this
7918-402: The initiative to attempt to relaunch the common market. Cockfield wrote and published a White Paper in 1985 identifying 300 measures to be addressed in order to complete a single market. The White Paper was well received and led to the adoption of the Single European Act , a treaty which reformed the decision-making mechanisms of the EEC and set a deadline of 31 December 1992 for the completion of
8025-464: The interests of free trade with interests in article 36. Often rules apply to all goods neutrally, but may have a greater practical effect on imports than domestic products. For such "indirect" discriminatory (or "indistinctly applicable") measures the Court of Justice has developed more justifications: either those in article 36, or additional "mandatory" or "overriding" requirements such as consumer protection , improving labour standards , protecting
8132-544: The internal market by incorporating the Schengen Area within the competences of the EU. The Schengen Agreement implements the abolition of border controls between most member states, common rules on visas, and police and judicial co-operation. The official goal of the Lisbon Treaty was to establish an internal market, which would balance economic growth and price stability, a highly competitive social market economy , aiming at full employment and social progress, and
8239-406: The internal market, second by creating a European System of Central Banks to co-ordinate common monetary policy, and third by locking exchange rates and introducing a single currency, the euro . Today, 20 member states have adopted the euro , one is in the process of adopting ( Bulgaria ), one has determined to opt-out ( Denmark ) and 5 member states have delayed their accession, particularly since
8346-520: The investor. That case held a Dutch Wealth Tax Act 1964 unjustifiably exempted Dutch investments, but not Mr Baars' investments in an Irish company, from the tax: the wealth tax, or exemptions, had to be applied equally. On the other hand, TFEU article 65(1) does not prevent taxes that distinguish taxpayers based on their residence or the location of an investment (as taxes commonly focus on a person's actual source of profit) or any measures to prevent tax evasion . Apart from tax cases, largely following from
8453-425: The legitimate aim of good administration of justice. Case law states that the treaty provisions relating to the freedom to provide services do not apply in situations where the service, service provider and other relevant facts are confined within a single member state. An early Council Directive from 26 July 1971 included works contracts within the scope of services, and provided for the abolition of restrictions on
8560-488: The market and consumers, a single market is a competitive environment, making the existence of monopolies more difficult. This means that inefficient companies will suffer a loss of market share and may have to close down. However, efficient firms can benefit from economies of scale , increased competitiveness and lower costs, as well as expecting profitability to increase as a result. This is true especially for companies selling goods and services easily distributed all around
8667-496: The member states are removed to the maximum extent possible. These barriers obstruct the freedom of movement of the four factors of production (goods, capital, services, workers). A common market is usually referred to as the first stage towards the creation of a single market. It usually is built upon a free trade area with no tariffs for goods and relatively free movement of capital, workers and services, but not so advanced in reduction of other trade barriers . A unified market
8774-515: The merging of the three pillars into the reformed European Union. In March 2011, the European Council adopted a decision to amend the Treaty by adding a new paragraph to Article 136. The additional paragraph, which enables the establishment of a financial stability mechanism for the Eurozone , runs as follows: The Member States whose currency is the euro may establish a stability mechanism to be activated if indispensable to safeguard
8881-454: The objective of association as promoting the economic and social development of those associated territories as listed in annexe 2. The following articles elaborate on the form of association such as customs duties. Part 5, in articles 205 to 222, deals with EU foreign policy . Article 205 states that external actions must be in accordance with the principles laid out in Chapter 1 Title 5 of
8988-564: The opinions of Advocate General Maduro , a series of cases held that government owned golden shares were unlawful. In Commission v Germany the Commission claimed the German Volkswagen Act 1960 violated article 63, in that §2(1) restricted any party having voting rights exceeding 20% of the company, and §4(3) allowed a minority of 20% of shares held by the Lower Saxony government to block any decisions. Although this
9095-403: The principles of an open markets and free competition. The Article 140 describes the criteria for inclusion in monetary union (the euro) or having exception from it, and also says that it is a majority of the council, not the state alone, which decides upon usage of euro or national currency. Thereby are states obliged (except UK and Denmark) to introduce the euro if the council finds they fulfil
9202-464: The products of other member states any internal taxation of any kind in excess of that imposed directly or indirectly on similar domestic products. Furthermore, no Member State shall impose on the products of other member states any internal taxation of such a nature as to afford indirect protection to other products. In the taxation of rum case , the ECJ stated that: The Court has consistently held that
9309-546: The public interest in collecting taxes, denial of capacity went too far: it was an "outright negation" of the right of establishment. However, in Cartesio Oktató és Szolgáltató bt the Court of Justice affirmed again that because corporations are created by law, they are in principle subject to any rules for formation that a state of incorporation wishes to impose. This meant that the Hungarian authorities could prevent
9416-475: The purpose of Article 90 EC [now Article 110], as a whole, is to ensure the free movement of goods between the member states under normal conditions of competition, by eliminating all forms of protection which might result from the application of discriminatory internal taxation against products from other member states, and to guarantee absolute neutrality of internal taxation as regards competition between domestic and imported products. Free movement of goods within
9523-431: The same day, under which the member states agreed to take action where necessary to protect the free movement of goods and other freedoms, and to issue public information where there were disruptions, including their efforts to address obstacles to free movement of goods. The customs union of the European Union removes customs barriers between member states and operates a common customs policy towards third countries, with
9630-425: The same manner in fact. In Keck and Mithouard two importers claimed that their prosecution under a French competition law , which prevented them from selling Picon beer under wholesale price, was unlawful. The aim of the law was to prevent cut throat competition , not to hinder trade. The Court of Justice held, as "in law and in fact" it was an equally applicable "selling arrangement" (not something that alters
9737-663: The same year the Maastricht Treaty set about to create an Economic and Monetary Union as the next stage of integration. Work on freedom for services took longer, and was the last freedom to be implemented, mainly through the Posting of Workers Directive (adopted in 1996) and the Directive on services in the internal market (adopted in 2006). In 1997 the Amsterdam Treaty abolished physical barriers across
9844-401: The self-employed, or "undertakings" such as companies or firms, have a right to set up an enterprise without unjustified restrictions. The Court of Justice has held that both a member state government and a private party can hinder freedom of establishment, so article 49 has both "vertical" and "horizontal" direct effect. In Reyners v Belgium the Court of Justice held that a refusal to admit
9951-399: The social welfare system or public safety in their chosen member state. This required reduction of administrative formalities and greater recognition of professional qualifications of other states. Fostering the free movement of people has been a major goal of European integration since the 1950s. Single market A single market , sometimes called common market or internal market ,
10058-537: The stability of the euro area as a whole. The granting of any required financial assistance under the mechanism will be made subject to strict conditionality. The consolidated TFEU consists of seven parts: In principles, article 1 establishes the basis of the treaty and its legal value. Articles 2 to 6 outline the competencies of the EU according to the level of powers accorded in each area. Articles 7 to 14 set out social principles, articles 15 and 16 set out public access to documents and meetings and article 17 states that
10165-404: The use of a product, this can also infringe article 34. So, in a 2009 case, Commission v Italy , the Court of Justice held that an Italian law prohibiting motorcycles or mopeds from pulling trailers infringed article 34. Again, the law applied neutrally to everyone, but disproportionately affected importers, because Italian companies did not make trailers. This was not a product requirement, but
10272-528: The word "economic" from the Treaty of Rome's official title and, in 2009, the Treaty of Lisbon renamed it the "Treaty on the Functioning of the European Union". Following the 2005 referendums, which saw the failed attempt at launching a European Constitution , on 13 December 2007 the Lisbon Treaty was signed. This saw the 'TEC' renamed as the Treaty on the Functioning of the European Union (TFEU) and, once again, renumbered. The Lisbon reforms resulted in
10379-469: The worst standards of accountability of boards, and low corporate taxes as a result. Similarly in Überseering BV v Nordic Construction GmbH the Court of Justice held that a German court could not deny a Dutch building company the right to enforce a contract in Germany on the basis that it was not validly incorporated in Germany. Although restrictions on freedom of establishment could be justified by creditor protection, labour rights to participate in work, or
10486-470: Was an agreement with a client was not a restriction. The Grand Chamber of the Court of Justice held the commission had not proven that this had any object or effect of limiting practitioners from entering the market. Therefore, there was no prima facie infringement freedom of establishment that needed to be justified. In regard to companies, the Court of Justice held in R (Daily Mail and General Trust plc) v HM Treasury that member states could restrict
10593-822: Was liable for these hindrances to trade because the authorities "manifestly and persistently abstained" from preventing the sabotage. Generally speaking, if a member state has laws or practices that directly discriminate against imports (or exports under TFEU article 35) then it must be justified under article 36, which outlines all of the justifiable instances. The justifications include public morality , policy or security, "protection of health and life of humans , animals or plants", "national treasures" of "artistic, historic or archaeological value" and "industrial and commercial property". In addition, although not clearly listed, environmental protection can justify restrictions on trade as an over-riding requirement derived from TFEU article 11. The Eyssen v Netherlands c ase from 1981 outlined
10700-423: Was made from cocoa butter alone, but British, Danish and Irish manufacturers used other vegetable fats. They claimed the law infringed article 34. The Court of Justice held that a low content of vegetable fat did not justify a "chocolate substitute" label. This was derogatory in the consumers' eyes. A "neutral and objective statement" was enough to protect consumers. If member states place considerable obstacles on
10807-545: Was not an impediment to the actual purchase of shares, or receipt of dividends by any shareholder, the Court of Justice 's Grand Chamber agreed that it was disproportionate for the government's stated aim of protecting workers or minority shareholders. Similarly, in Commission v Portugal the Court of Justice held that Portugal infringed free movement of capital by retaining golden shares in Portugal Telecom that enabled disproportionate voting rights, by creating
10914-893: Was proportionate as this was an appropriate and necessary way to tackle the serious problems of fraud that arise over the internet. In the Services Directive a group of justifications were codified in article 16 that the case law has developed. In May 2015 the Juncker Commission announced a plan to reverse the fragmentation of internet shopping and other online services by establishing a Single Digital Market that would cover digital services and goods from e-commerce to parcel delivery rates, uniform telecoms and copyright rules. The free movement of people means EU citizens can move freely between member states for whatever reason (or without any reason) and may reside in any member state they choose if they are not an undue burden on
11021-415: Was signed by Prime Minister Boris Johnson on 30 December 2020. Article 30 of the Treaty on the Functioning of the European Union ("TFEU") prohibits border levies between member states on both European Union Customs Union produce and non-EUCU (third-country) produce. Under Article 29 of the TFEU, customs duty applicable to third country products are levied at the point of entry into EUCU, and once within
11128-430: Was subject to restriction. If an activity does fall within article 56, a restriction can be justified under article 52 or over-riding requirements developed by the Court of Justice. In Alpine Investments BV v Minister van Financiën a business that sold commodities futures (with Merrill Lynch and another banking firm) attempted to challenge a Dutch law prohibiting cold calling customers. The Court of Justice held
11235-485: Was the first large-scale example of a common market. A single market allows for people, goods, services and capital to move around a union as freely as they do within a single country – instead of being obstructed by national borders and barriers as they were in the past. Citizens can study, live, shop, work and retire in any member state. Consumers enjoy a vast array of products from all member states and businesses have unrestricted access to more consumers. A single market
11342-530: Was the only way for sellers to overcome consumers' "traditional social practices and to local habits and customs" to buy their products, but again the national courts would decide whether it was justified under article 36 to protect public health. Under the Unfair Commercial Practices Directive , the EU harmonised restrictions on restrictions on marketing and advertising, to forbid conduct that distorts average consumer behaviour,
11449-910: Was traditionally seen as the fourth freedom, after goods, workers and persons, services and establishment. The original Treaty of Rome required that restrictions on free capital flows only be removed to the extent necessary for the common market. From the Treaty of Maastricht , now in TFEU article 63, "all restrictions on the movement of capital between the Member States and between Member States and third countries shall be prohibited". This means capital controls of various kinds are prohibited, including limits on buying currency, limits on buying company shares or financial assets, or government approval requirements for foreign investment . By contrast, taxation of capital, including corporate tax , capital gains tax and financial transaction tax , are not affected so long as they do not discriminate by nationality. According to
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