Being in the EU is neither easy nor predictable

NEXT TIME you go to a trendy night club and order an expensive imported beer check the label. If it is German beer, like Beck’s, it is likely to indicate that it is brewed according to the requirements of the ‘beer purity law’ of 1521.

Yes, Germany requires all domestically produced beer to contain nothing else but spring water, malt and hops. This is the law that was laid down almost five centuries ago. Since additives such as preservatives and state enhancers were not known at that time, the law makes no reference to them.

Modern brewing techniques have changed since 1521, and many breweries try to reduce costs by speeding up the maturation process. They also adjust their beers for different tastes. These techniques require the use of additives. For this reason, some years ago Germany tried to stop the importation of beer that contained substances not authorised by the law of 1521. It claimed that it was protecting consumers’ interests.
Germany was challenged in court by the importers. Eventually the case arrived at the Court of Justice of the European Community. The German claims were rejected and the prohibition of importation of beers with additives was found to be in breach of the fundamental EU principle of free movement of goods.

For Germany that was an unexpected consequence of being a member of the European Union. All member states have had similar experiences. It is impossible to know in advance how EU rules may apply to different sectors of the economy or to different economic activities.

Cyprus is slowly waking up to this fact of EU life. When the lorry drivers went on strike to protect their prerogatives, they alleged that no one told them that they had to have certain qualifications in order to be able to be in that profession. They also argued that there was no EU directive that required those qualifications. It is difficult to know whether they were indeed not informed.

What is certain is that more such cases will happen, and they will come as a surprise. Some smart lawyer will discover that European rules apply in ways not thought of before. She will go to a Cypriot court, the Cypriot judge will be confused, will not really know what to make of her arguments, and will try to get rid of that nuisance by asking the European Court in Luxembourg for a ‘preliminary ruling’. This is exactly how the German beer judgment arose. In fact many landmark judgments of the Court have been the result of requests for preliminary rulings.

These rulings serve an important purpose. They ensure consistent interpretation and application of EU law in all the member states of the Union. So if a national judge has doubts he or she can ask the European Court for guidance. The big difference between national courts, many of which exhibit a conservative streak, and the European Court is that the latter is not afraid to innovate and push the frontiers of EU law to promote the process of integration. Indeed it has been accused of political activism.

It is interesting that the same accusation has been levelled against the US Supreme Court. But without its daring judgments perhaps the United States would still be segregated, abortion would still be illegal, and burning the flag would still be a crime. The point I want to make here is not that abortion or flag burning is good. Rather my point is that those judgments have had a significant impact on the political and social landscape of the country. The same happens with the European Court — it is not afraid of slaying holy cows.

Membership of the EU will not simply mean that new laws and rules will come from Brussels. It will also mean that old laws and rules will be applied in unexpected ways by Luxembourg. Life will become less predictable on the island of Cyprus.

Together with more unpredictability, it is certain that some of the new rules or the re-interpreted old rules will also cause major political problems and will force the government to make tough decisions. The truckers case is just a first example of many that will follow. All member states have had their share of tough internal decisions. Just witness the predicament of the Swedish government that was snubbed by the negative referendum on the euro last month and the uncomfortable manoeuvring of the British prime minister on the same issue.

About 12 years ago the EU passed a directive on the treatment of hazardous waste. Greece failed to apply the directive to a rubbish dump near Chania on the island of Crete. The dump had to be moved, and naturally no one wanted it in their back yard. It was politically convenient for Athens to ignore the problem in Crete.

Not so for the European Commission, which took Greece to the European Court. The Court found Greece in breach of its obligations. Still it was politically difficult for Athens to comply with the ruling of the Court. It ignored it again. The Commission again took Greece to court and asked this time for the imposition of a fine for failing to comply with the earlier ruling. The Court levied a fine of EUR 20,000 per day. Perhaps EUR 20,000 a day is peanuts for a country. But it soon accumulates and becomes a drain on the resources of the country. Seven months later, and with EUR 4 million less in its coffers, Greece managed to remedy the situation 12 years after the case was detected, and stop the fine.

Falling foul of EU rules can have serious financial consequences. Other countries have had to pay back to the EU millions of euros in Community financial assistance simply because they followed the wrong procedures. Mismanagement of EU funds is regularly reported in the press. What is less well known is that the same thing can happen when national money is used in breach of EU rules. Last week the European Court found in favour of the Commission which refused to authorise German subsidies to Volkswagen because the German authorities failed to comply with a previous decision of the Commission which had asked Germany to get back older subsidies from the same company. Even though the new subsidies were compatible with EU rules, the Commission did not approve them in order to punish Germany for its previous transgression.

Even for the big countries, being a member of the EU is not always easy or politically comfortable. EU institutions such as the Commission and the Court have minds of their own. EU rules have a disconcerting habit of creeping in unexpected ways into domestic politics and legal proceedings. No wonder lawyers love the European Union.

Phedon Nicolaides is a Professor at the European Institute of Public Administration, Maastricht, The Netherlands