The EU and the challenges of the digital economy

Bitcoin Cryptomoney Cryptocurrency Btc Cryptography

 by Iva Guterres, PhD student at the University of Leeds

In 1995 Don Tapscotts coined the term Digital Economy in his book, “The Digital Economy: Promise and Peril in the Age of Networked Intelligence”. At the time, he was far for imagining just how the future would be dictated by the internet and technological development (then still in its infancy). In the meantime, the internet has become a huge part of the global economy.  Tapscotts’ book established the connection between the internet and the way economic models would change the way business was done and seen from there onwards.

At the beginning of the 1990s one major question rose on the legal landscape. What would the challenges be for global e-commerce and the tax rules or even global digital taxation? In 1996, David Tillinghast[i] wrote an article in which he questioned how traditional tax rules or policies would react to cross-border e-commerce.

Since then, history has witnessed radical changes in society and in the economy, which took Klaus Schwas, founder and chairman of the World Economic Forum, to write the book, “The fourth Industrial Revolution in 2016”.

In recent years, the EU and the OECD have been keeping an eye on business activities, especially since 2013, through the BEPS project (The Base Erosion and Profit Shifting). This was motivated by the behaviour of multinationals attempting to avoid paying tax in their home countries by taking their businesses abroad to low and no-tax jurisdictions. This generated practices and behaviors of schemes indicting aggressive fiscal planning.
Continue reading “The EU and the challenges of the digital economy”

Advertisements

Editorial of March 2018

Election_MG_3455

 by Tiago Cabral, member of CEDU

Homeopathic Democracy: The European Power Struggle over the Spitzenkandidaten

1. According to article 17(7), TEU “taking into account the elections to the European Parliament and after having held the appropriate consultations, the European Council, acting by a qualified majority, shall propose to the European Parliament a candidate for President of the Commission. This candidate shall be elected by the European Parliament by a majority of its component members”. There are several issues in this article, some of them we even had the opportunity to discuss before.

2. In fact, when talking about the President of the European Commission (EC) it is quite a stretch to state that there is an “election” by the European Parliament (EP). Politically inspired wording notwithstanding, the truth is that the European Council (ECON) holds most of the cards in the selection of EC’s President and the balance of power tends to favour this institution. There are also some notorious similarities between the position of the EP in relation to the ECON in the selection of the President of the EC and the position of the EP in relation to the Council in the consent legislative procedure. While it is possible to argue that there is an “indirectly-indirect election”[i], we believe that it would be more accurate to state that the Parliament approves and has veto power over the ECON’s choice.

3. However, the 2014 elections to the EP brought with them a rather interesting innovation: the Spitzenkandidaten (leading candidate). This procedure aims to give “direct” or at least “quasi-direct” democratic legitimacy to the President of the EC by tying the nomination to the EP’s elections. First the political parties choose their leading candidate, then the people vote, then the ECON and EP obey their will by confirming candidate chosen by the citizens[ii]. There is some debate on who should be nominated by the ECON and approved by the EP, the candidate from the party who won the most seats in the elections or the candidate from the coalition best placed to guarantee a passing majority. Under the current Spitzenkandidaten rules the second choice seems to make the most sense. Nevertheless, it seems likely that in the current European political climate the candidate from the biggest party will also be the best positioned to achieve a solid majority.
Continue reading “Editorial of March 2018”

The EU and the adoption of Free Trade Agreements (FTAs): heading towards a vetocracy?

Symbolic One Against All All Against One Discussion

 by Francisco Pereira Coutinho, Professor at the NOVA Law School, UNL

Few would disagree that signing free trade agreements (FTAs) is one of the raisons d ´être of the European Union (EU). As the United Kingdom will probably discover after leaving the EU, the bargaining power of a State, even a member of the G8, is far inferior to that of the world largest economy, which is also the one that most imports, exports, receives and sends foreign direct investment. Ever since the Rome Treaty (1957) granted ius tractum to the European Economic Community, dozens of FTAs were adopted. The latter are pivotal to the European economy: around 31 million employments in the EU (1/7 of the total) depend, direct or indirectly, from the external trade.

The Lisbon Treaty broadened the legal capacity of the EU to adopt ‘new generation’ FTAs, which are trade agreements which contains, in addition to the classical provisions on the reduction of customs duties and of non-tariff barriers to trade in goods and services, provisions on various matters related to trade, such as intellectual property protection, investment, public procurement, competition and sustainable development (ECJ, Opinion 2/15, para. 17).

The Comprehensive Economic and Trade Agreement (CETA) is a ´new generation’ bilateral FTA that was signed on 30 October 2016 between Canada, of one part, and the EU and the Member States, of the other part. It is expected to increase EU-Canada trade in goods and services by 23% and boost EU GDP by about €12 billion a year.
Continue reading “The EU and the adoption of Free Trade Agreements (FTAs): heading towards a vetocracy?”

The EU and its neighbourhood: engagement without enlargement?

35193838343_38353cfafb_o

 by Sandra Fernandes, Professor at UMinho/Researcher of the CICP

Taking a rapid glance at the EU immediate neighbourhood, both Eastward and Southward, the prospects do not look very positive. Since the annexation of Crimea by the Russian Federation in March 2014 and the ongoing conflict in Ukraine, both the relations with Moscow and with the countries of the Eastern Partnership (EaP) have not produced the desired results. The EaP was designed in 2009 to boost the 2004 European Neighbourhood Policy (ENP) and improve convergence with the EU standards, offering approximation without a clear enlargement schedule. On the Southern border of the Mediterranean, the unfulfilled expectations of the Arab Springs and the war in Syria have exposed the lack of effects of the Barcelona Process and have put under serious crisis the ability of the Union to respond to unprecedented migration flows. The Process launched in 1995 has been updated since then into the Euro-Mediterranean Partnership (Euromed) and later, in 2008, into the Union for the Mediterranean. The ENP added to this political format from 2004 onwards.

Bulgaria has just assumed the Presidency of the Council of the EU for the next six months, as a Southern member state having EU external borders with both the Balkans and Turkey. Taking into considerations some of this Presidency’s priorities, we explore here the major challenges that the EU external action has to face in order to impact on stabilisation in its European vicinity, looking at both the Balkan countries and the Eastern neighbours. For that purpose, we put under perspective the effectiveness of EU past and present policies and the current state-of-play in these neighbourhing countries.
Continue reading “The EU and its neighbourhood: engagement without enlargement?”

Past a “Great Perhaps”, the transnational lists for the European Parliament Election become a great doubt

5521340354_a3cf9a1a95_o

by Sergio Maia, Managing Editor

Considering the “Great Perhaps” – as Rabelais stated in his very last words when passing away to the final destination – surrounding Brexit, one great doubt has just emerged. Yesterday, the European Parliament voted and approved in plenary (431 x 182. There were 61 abstentions) the report on the new seats distribution of MEPs for the period after the UK withdrawal. Yet, the inclusion of a joint constituency comprising the entire territory of the Union, the well-known transnational lists topic, was rejected. Previously and long evaluated, the Constitutional Affairs Committee (AFCO) had approved (17 x 8) the future structure in Jan., 24th. That would mean that in the next elections, besides the usual ballot, there’d be one separate “section” in which the European citizens and residents would vote for representatives not on a Member State-by-Member State basis, but on a general basis instead. Such “section” would have 27 seats (ideally with preannounced runners) to be fulfilled by the most voted candidates in the ballots across the whole Union without national divisions. The Council still would have to unanimously agree on the issue before the new system entered into force (and the Parliament would need to vote again confirming) but the proposal is in this part (for) now off the table.

The general seat change has happened because the composition of the EP needed to go through modifications given the MEPs from the United Kingdom end their terms in 2019 and will not be candidates again following Brexit.
Continue reading “Past a “Great Perhaps”, the transnational lists for the European Parliament Election become a great doubt”

Editorial of February 2018

5202454842_700dc53a37_o

 by José Igreja Matos, President of the European Association of Judges/Vice-President of the International Association of Judges

Populism and Judiciary

Judicial independence faces today, particularly in Europe, new threats emerging from populist political regimes.

Accepting the fundamental axiom that in a State based upon the Rule of Law, it is always up to the Courts to guarantee the effectiveness of human rights, and there is a strong operative connexion between the exercise of human rights – or the correspondent imposition of duties – and the mission conducted by the judicial systems.

This detected closeness explains the present decline of judicial independence in different regions, particularly within EU geographical space.

One the most interesting findings when analysing those countries deriving to populist and authoritarian policies is the immediate option, since the very early stages, for an vigorous attack on the independence of the judiciary propelled by surgical legislative reforms in the area of Justice. Recently in Poland, for instance, three different laws discussed in Parliament focused in nuclear foundations of judicial careers – Supreme Court, High Judicial Council and Presidents of First Instance Courts.
Continue reading “Editorial of February 2018”

The Customs Union – an island under construction?

17151463241_5c37e1a40b_o

 by Andreia Barbosa, PhD student at the Law School of UMinho

“No country is an island”[i]. It is an idea that is entirely valid in the context of the European Union and is particularly relevant in the area of ​​the Customs Union. Although the European Union represents only 6.9% of the world’s population, the volume of trade with the rest of the world corresponds to approximately 20% of the volume of world exports and imports[ii].

In fact, and in order to meet the characteristics that have been identified as necessary for a perfect Customs Union, there can be no frontiers among the Member States, although their territories may be separated by sea.

In particular, in the field of the European Union, the levying of customs duties between Member States no longer makes sense in view of the establishment of the internal market. Thus, the 1957 Treaty of Rome prohibited customs duties and charges having equivalent effect in trade between Member States. A Customs Union emerged, where national borders were replaced by the limits of the customs territory of the Union.

It happens that the Customs Union is not – and cannot be – an island. Commercial contact with the rest of the world is essential for the very survival of the Member States, making it reasonable that trade with third countries is sometimes facilitated, in approximate terms to those that exist internally. Free trade agreements are particularly important in this area.
Continue reading “The Customs Union – an island under construction?”

Just married!… right? Same-sex marriage and free movement of EU citizens – an account on the Opinion of Advocate General Wathelet in Coman and Others

 

pexels-photo-236131

 by Sophie Perez Fernandes, Junior Editor


Lapalissade
stands for tautology, an utterly obvious truth.

Last week, Advocate General Wathelet, in his Opinion in Coman and Others, considered that the term ‘spouse’ used in Article 2(2)(a) of Directive 2004/38 on the right of EU citizens and their family members to move and reside freely within the territory of the Member States, should be given a uniform interpretation as an autonomous concept of EU law and, under such interpretation, that the term ‘spouse’ includes, in the light of the freedom of residence of EU citizens and their family members, spouses of the same sex.

Isn’t/Shouldn’t it be a lapalissade?…

The protection of family as such is guaranteed by numerous international legal instruments of protection of fundamental rights, namely the Universal Declaration of Human Rights (Article 16), the International Covenant on Civil and Political Rights (Article 23) and the International Covenant on Economic, Social and Cultural Rights (Article 10). In these instruments, family is regarded as “the natural and fundamental group unit of society”. The protection of family is also guaranteed by the ECHR, which, in Articles 8 and 12, protects, respectively, the right to respect for private and family life and the right to marry – provisions that are, in turn, on the basis of Articles 7 and 9 CFREU concerning the right to marry and the right to found a family. Also, “respect for family life” was considered by the ECJ as “one of the fundamental rights which (…) are recognized by Community law” even before the CFREU had been proclaimed[i].
Continue reading “Just married!… right? Same-sex marriage and free movement of EU citizens – an account on the Opinion of Advocate General Wathelet in Coman and Others”

The European Pillar of Social Rights: a first step in the right direction or rather a palliative, cosmetic care? Some critical remarks from a constitutional perspective

33040836690_ccefe21303_o

 by Pietro Masala, Postdoctoral Research Fellow (García Pelayo), CEPC, Madrid

On 17 November 2017 the European Pillar of Social Rights (EPSR), a document proposed by the Juncker Commission expressing “principles and rights essential for fair and well-functioning labour markets and welfare systems in 21st century Europe” (as said in its Preamble), was solemnly proclaimed by an interinstitutional conference in Gothenburg, in the framework of a “Social summit for fair jobs and growth”. It is, of course, too early to evaluate the concrete impact of this document on the development of the social dimension of the European Union. Nevertheless, it is possible to examine its contents and the acts which prepared its proclamation (namely, a Commission communication establishing the EPSR and a Commission recommendation setting the EPSR principles and rights[i]), in order to express some essential critical remarks.These shall help understand the EPSR’s constitutional meaning and implications in the present phase of the integration process.

It is widely recognised that, during the last decade, the financial crisis and, especially, the new economic governance which has been introduced and implemented in the eurozone as a response, have significantly increased the pre-existing “constitutional imbalance between ‘the market and ‘the social’ in the European Union”[ii] . The asymmetry between these two components was justified, at the early stages of the integration process, by a clear separation of powers and tasks between the European Communities (the market) and the Member States (the social), but it is no longer tolerable in the present Union. Both external and internal factors affect the sovereignty of the Member States in defining and implementing their social and employment policies, in a way that has reduced substantive equality and internal solidarity in European societies. On one hand, the new context of globalization implies new challenges for the “European social model”; on the other hand, the development of the European single market and of the Economic Monetary Union has had a strong impact on national welfare states.These factors as a whole induce to believe that the conferral of more extended powers (and resources) to the Union, allowing the partial federalisation of the social domain, is desirable, as it would entail a more effective protection of social rigths, through a fair cooperation between the Union and the Member States.

Continue reading “The European Pillar of Social Rights: a first step in the right direction or rather a palliative, cosmetic care? Some critical remarks from a constitutional perspective”

Editorial of January 2018

7610985594_2375f72b19_o

by Sergio Maia, Managing Editor


The European Pillar of Social Rights has taken the first steps – and now how far will it make the Union walk?

One year after the end of the public consultation period of the European Pillar of Social Rights (EPSR) that preceded its formal presentation and adoption, it is an inviting, seemingly appropriate time to remark its concrete meanings and consequences. The EPSR and its political and legislative initiatives (such as the adoption of a clarification of the Working Time Directive or the proposals for a Directive on Work-Life Balance and for a Directive on Transparent and Predictable Working Conditions) have started to redesign the materialisation of the social model underlying the public reason of the Union. Those public reason and social model are embedded in Article 3(3), TEU; Article 9, Article 151, TFEU, just to name a few.

According to that set of rules, the Union is bound to full employment, social progress, the fight against exclusion, the promotion of social justice, social protection and cohesion. To sum up, in other words, there exists, I believe, a social democratization rationale behind the objectives of the integration to which the exercise and the enjoyment of citizenship rights and fundamental rights protection are directly associated. This social democratization drives (and must do so) the fulfilment of the economic freedoms as well as the rights enshrined in the CFREU. Without social democratization, the European citizenship and its fundamental rights are worth very little. The case-law of the CJEU in Dano, Alimanovic and Commission v. UK proves just that.

The two aforementioned spindles are in the core of the Union based on the rule of law as the fruition of those rights – i.e., social model – shapes the purposes of the public reason of the European polity. Then, how does the Pillar promote the European social model?

Continue reading “Editorial of January 2018”