The concept of (economic) sovereignty: the Apple/Ireland case

by Ana Filipa Afonseca, student of the Master´s degree in EU Law of UMinho

If we know the economic policy behind the article 107.º and 108.º of TFEU we will know better ourselves as European Union. Here, the sovereinty have a modern aproach because it deals with a new reallity, witch is the heart of EU: the idea of a single, free and fair market throught the Member States. That necessarilly increases a deep discussion about the institutional and Member State’s power to take attractive measures to grow up their own economy throught tax benefits, such as the case in analysis.

But, in fact, the Member States are now new states because they are regulated by common politics emerged by a supra national organ, which did not exist: the EU itself. When we say “new States” we are not calling for a conceptual reform in the international law as the elements of the 1st article of Montevideo’s Convention remain. It must be noted that the requirement of an effective Government does not take into account the way/fashion in which state policy is implemented but, symbolically, it is important to point out that there is a new set of rules that inevitably transform the path of State economic policy in the Member States of the EU.

In this way, if every competition rule in the TFEU as well as the economic freedoms ones are important to the new economic formula, the prohibition of State aid under Article 107 and 108 has an added symbolic force: it is addressed directly to the Member States, imposing a stand still position before their peers.

Continue reading “The concept of (economic) sovereignty: the Apple/Ireland case”

Editorial of February 2016



Pedro Madeira Froufe, Editor

Budgetary control, integration, sovereignty.

The budgetary control that the rules of the monetary Union demand from the Member States has given risen to some tension among some of the national Governments and Brussels. The most recent case (and let’s forget about what happened, and still happens, with Greece) regards Portugal. The new socialist Government, supported in the Parliament by Parties that always dealt uncomfortably with the idea and the dynamics of the integration process, is facing its first challenge with Brussels and the European Commission, regarding the Portuguese Draft Budgetary Plan for 2016.

As a matter of fact, the budgetary control (even if only understood as common supervision or monitoring of the internal budgetary decision is, effectively, a control) has the goal, in accordance with Article 126 TFEU, of “avoiding excessive deficits”. One should consider that, in the framework of monitoring that is attributed to the Commission by the same Article, this entity should intervene (and it should be stressed, within its “monitoring” role only) to identify and avoid, in terms of budgetary evolution and public debt, important deviations, within the criteria set out in Article 126(2)(a) and (b) TFEU. In the end, everything is built around the comparison between the programmed deficit and a certain benchmark rate in the relation between public debt and the national GDP (the “famous” 60% of that GDP in terms of public debt).

The Union is a “Union based on the rule of Law”. It pretends to be so with the (final) protection of rights and guarantees, as ensured by the European Court of Justice (ECJ). A Union of Law implies, evidently, the respect and the guarantee that the existent rules are effectively applied. In the case of the Union, the respect of the Primary Law, the Secondary Law, the fundamental praxis and legal acquis that support the dynamics of the integration. However, the reverse results in generating rules, also reasonable, within the context of the permanent balance relation between the Union and the Member States and, naturally, among those (and between each other). These relations must safeguard balance (isonomy) and ponderation, bearing in mind the goals of the integration process. In the end, there is a permanent negotiating process, a consensus dynamics that – even in the framework of the effective application of legal rules – is, naturally, in the foundations of a material “Union based on the rule of Law”.

That said, all actors have indeed to abide by the rules and this shall be done in good-faith (loyalty) even if, in extremis, those rules have to be feasible and balanced.

It is not whichever rule, regardless of the circumstances (and, in this case, the concrete Portuguese reality) that has to be implemented blindly and by hook or by crook. This also blocks the idea and dynamics of the “Union based on the rule of Law” and endangers the integration process. It is, however, inadmissible that some resort to the argument of “the national sovereignty” to criticise existent rules and to say even that the Portuguese Constitution “undoubtedly prevails” over the rules of the Treaties.

It is clear that, in the end, all will come to a solution through the dynamics of the negotiation, through the creation of balances, of bridges of consensus. No one will lose his face in political terms and the idea of respect of the existing legal framework will prevail. That is, ultimately, one of the lessons learned from the History of European Integration.

Picture credits: via this Youtube video [EU Commission’s opinion on the Portuguese Draft Budgetary Plan].

More on the Portuguese Draft Budgetary Plan for 2016 here.