Thursday, November 25, 2010

This Week in Luxembourg

This week's Grand Chamber judgement concerns the rights of Union citizens with a right of permanent residence in another MS under art. 16 of Directive 2004/38. Specifically, Germany wants to send Mr. Tsakouridis back to Greece as soon as his sentence for organised drug smuggling is over, but the German court is uncertain whether that qualifies as an "imperative ground of national security" under art. 28(3). The ECJ, following AG Bot, says that it does. Note also the remarks on how to assess whether he qualifies for hightened protection in the first place. Land Baden-Württemberg v. Tsakouridis.

[UPDATE: AdjudicatingEurope has a post on this case, as does the website of the Dutch NRC newspaper, who emphasise the connection between this case and the recent French Roma uproar.]

The most politically sensitive case of the week is Case C-40/10, Commission v. Council (FR), where the 3rd Chamber (with Lenaerts as President and Von Danwitz as Rapporteur) essentially sided with the Commission in the ongoing dispute over the remuneration of the Eurocrats. The Court annulled all but art. 1 and 3 of Regulation 1296/2009, on the grounds that it violated art. 65 and Annex XI of the Staff Regulations (cf. p. 59-64 here), because it failed to correctly apply the cost of living adjustments prescribed. Let the screaming begin...

In his second case before the Court of Justice, Mr. Fuß the annoying fire fighter from Halle again wins his case. Having already established that the Working Time Directive applies to fire fighters as well, and that the city was not allowed to compulsorily transfer him to a desk job for insisting on his "rights" (Case C-243/09), he now mostly wins as to remedies. The gentleman's right to reparations may not be conditional on "a concept of fault going beyond a sufficiently serious breach of EU law", and it may not be conditional on his having made a prior application to the employer for less work. Fuß II.

AG Kokott has a nice case on dual citizenship. Here's the conclusion: "Where a Union citizen is a national of two Member States of the European Union but has always lived in only one of those two States, she cannot claim a right of residence under Directive 2004/38 in that State." In this case, the applicant had dual Irish/UK citizenship (of course), and was looking to secure a right of residence for her Jamaican husband. R. (ex parte McCarthy) v. Secretary of State for the Home Department

AG Trstenjak considered the scope of the ban on advertising for prescription-only medicinal products (cf. art. 88(1)(a) of Directive 2001/83). The question is whether a website that gives information about a medicinal product qualifies as advertising under this provision. The AG says that it does not, as long as the website gives only the information that was also provided to the MS regulator, and as long as the information is only accessible to someone who deliberately looks for it. (Instead of having it pop-up unsolicited.) MSD Sharp & Dohme v. Merckle (NL, DE, FR)

Finally, AG Jääskinen has an opinion on procedure & state aid in the appeal against case T-388/02. The question is to what extent other interested parties have a right to protect their procedural rights when the Commission declines to open the formal investigation procedure. The AG suggests that the existing case law on admissibility should be affirmed (cf. Cook and Matra), but that the General Court got its application wrong. The applicant should have been more explicit in explaining why there were "serious difficulties" Commission v. Kronoply and Kronotex (NL, DE, FR)

P.S. The archive of these emails is here.

Thursday, November 18, 2010

This Week in Luxembourg

The Grand Chamber judgement of this week, Mantello, deals with ne bis in idem and the European Arrest Warrant. The Court affirms that the notion of "same acts" (cf. art. 3(2) of the Framework Decision) is an "autonomous concept of EU law". The Court also finds that there was no double jeopardy here, relying on the issuing court's reply to the information request under art. 15(2) of the Framework Decision, something the AG had avoided. Unlike AG Bot, the Court did not make an explicit link with art. 54 of the Schengen Agreement, which also deals with ne bis in idem. Gaetano Mantello.

The Fourth Chamber discussed the issue of comparative advertising (cf. Directive 84/450, as amended by Directive 97/55). While the detailed factual issues remain to be worked out by the national court, of course, on the whole the judgement is favourable to the right of market participants to compare themselves to their competitors. Lidl SNC v. Vierzon Distribution (it was Lidl who were trying to stop the advertising in question)

In Commission v. Portugal, the Court rejected a Portugese authorisation scheme for construction companies as violating art. 49 EC, because the scheme failed to take into account the requirements already imposed on a non-Portuguese company by its home authorities.

In Pensionsversicherungsanstalt v. Kleist, the Second Chamber held that a Member State may not establish different retirment ages for men and women. In a Bulgarian retirement case, Georgiev v. Tehnicheski universitet - Sofia, filial Plovdiv, the same chamber upheld the arrangements at issue against a complaint of age discrimination.

In the state aid case of NDSHT Nya Destination Stockholm Hotell & Teaterpaket AB v. Commission, the General Court had held that the case was inadmissible because there was no decision to appeal against. This decision is now overturned on appeal by the Third Chamber. Incidentally, the case concerns a complaint by a competitor, which was rejected by the Commission.

In environmental law, AG Mengozzi argued that a permit for the exploitation of an airport that does not involve any actual changes in the manner in which the airport operates does not fall within the ambit of Directive 85/337, meaning that the Region of Flanders will not have to do an environmental impact study before giving Brussels Airport a new permit. Bruxelles Region Capitale et al. v. Flanders (NL, DE, FR)

P.S. The archive of these emails is here.

Friday, November 12, 2010

Supply Responses to Digital Distribution: Recorded Music and Live Performances

This one goes in the category: That took them long enough. Someone finally took a look at the effects of P2P and other modern music trading on the market for live music. Here's the abstract:

Changes in technologies for reproducing and redistributing digital goods (e.g., music, movies, software, books) have dramatically affected profitability of these goods, and raised concerns for future development of socially valuable digital products. However, broader illegitimate distribution of digital goods may have offsetting demand implications for legitimate sales of complementary non-digital products. We examine the negative impact of file-sharing on recorded music sales and offsetting implications for live concert performances. We find that file-sharing reduces album sales but increases live performance revenues for small artists, perhaps through increased awareness. The impact on live performance revenues for large, well-known artists is negligible.
The article is Mortimer, Nosko, and Sorensen, Supply Responses to Digital Distribution: Recorded Music and Live Performances (October 2010). NBER Working Paper Series, No. w16507.

I would have expected a positive effect for bigger bands as well, but I guess you can't win 'em all.

Thursday, November 11, 2010

This Week in Luxembourg

There are a number of Grand Chamber judgements this week:

In Mediaprint, the Court held that adding a prize competition to a newspaper is not an "unfair commerical practice" under Directive 2005/29, meaning that Austria is not allowed to ban it. For fun, consider the general definition of art. 5(2)(b): "A commercial practice shall be unfair if (...) it materially distorts or is likely to materially distort the economic behaviour with regard to the product of the average consumer whom it reaches or to whom it is addressed, or of the average member of the group when a commercial practice is directed to a particular group of consumers." Wow...

[UPDATE: has a post on this case.]
In a more reasonable area of concern for consumer welfare, the Grand Chamber held that an MS court must examine of its own motion whether an exclusive territorial jurisdiction provision in a consumer contract is unfair in the sense of Directive 93/13. Also interesting, the judgement says that it is OK for MS law to require a notification to the Justice Ministry when a court asks a prejudicial question, and it briefly discusses the division of labour between the ECJ and the MS court when it comes to deciding which contract terms are "unfair". (par. 36-44) VB Pénzügyi Lízing Zrt. v. Schneider.

In the joined cases Volker und Markus Schecke and Hartmut Eifert, the Grand Chamber follows AG Sharpston and declares that some of the transparency provisions of the European Agricultural Guarantee Fund go too far and violate recipients' right to privacy. While the Court actually goes a little further in declaring provisions invalid than the AG did, it does see fit to limit the potential fallout by restricting the temporal effect of the judgement, and clarifying the obligations of various EU and MS officials. Cf. EUObserver.

In the difficult Kurkish Separatist sympathisers Asylum case, the Grand Chamber follows AG Mengozzi (NL, DE, FR) on question 1, 2 and 4, saying thatalleged terrorist sympathisers have to be judged on a case by case basis, that continued present danger is not required for exclusion from refugee status and that the MS may offer asylum when Directive 2004/83 does not require it. However, the Court disagrees on the question of proportionality. The MS does not have to examine whether exclusion is proportionate. Germany v. B and D.

In other news, there is:

Commission v. Portugal, where the First Chamber held that Portugal's Golden Share, or rather the rights connected to that share, in Energias de Portugal was in violation of the free movement of capital.

In Dita Danosa v. LKB Lizings SIA, the Second Chamber considered the possibility that a member of the board of directors of a capital company might be a worker in the sens of art. 10 of Directive 92/85, which forbids the dismissal of workers while they are pregnant or on maternity leave. The ultimate answer will have to wait until the Latvian court rules.

The Second Chamber also has a case about biopatents, but I'm not even going to pretend to understand what that is about. Hogan Lovells v. Bayer.

AG Mengozzi has an opinion about the French system for (complementary) health insurance in light of the EU's competition laws, including the law on Services of General Interest. Despite the fact that it involves employers being obligated to buy such insurance, the AG finds the system in conformity with the Treaties. Given precedents such as Albany (1999), that makes sense. AG2R Prévoyance v. Beaudout (DE, FR)

Also this week, the Commission fined various air cargo carriers a total of € 799 million for price fixing. The biggest bite, € 340 million, is for AirFrance/KLM. Cf. Press Release.

P.S. The archive of these emails is here.

Tuesday, November 09, 2010


I already read Mikhail Khodorkovsky's speech in court last week in Dutch translation, but now it's finally become available in English translation as well, courtesy of The New Republic:

I can recall October 2003. My last day as a free man. Several weeks after my arrest, I was informed that President Putin had decided: I was going to have to "slurp gruel" for eight years.

It was had to believe that back then.

Judging by the prosecutors’ presentation: “give them 14 years” and “spit on previous court decisions”, over these years they have begun to fear me more, and to respect the law even less.

The first time around, they at least went through the effort of first repealing the judicial acts that stood in their way. Now they’ll just leave them be; especially since they would need to repeal not two, but more than 60 decisions.

I do not want to return to the legal side of the case at this time. Everybody who wanted to understand something has long since understood everything. Nobody is seriously waiting for an admission of guilt from me. It is hardly likely that somebody today would believe me if I were to say that I really did steal all the oil produced by my company.

But neither does anybody believe that an acquittal in the YUKOS case is possible in a Moscow court.

Notwithstanding, I want to talk to you about hope. Hope–the main thing in life.

I remember the end of the ’80s of the last century. I was 25 then. Our country was living on hope of freedom, hope that we would be able to achieve happiness for ourselves and for our children.

We lived on this hope. In some ways, it did materialize, in others it did not. The responsibility for why this hope was not realized all the way, and not for everybody, probably lies on our entire generation, myself included.

I remember too the end of the last decade and the beginning of the present, current one. By then I was 35. We were building the best oil company in Russia. We were putting up sports complexes and cultural centers, laying roads, and resurveying and developing dozens of new fields; we started development of the East Siberian reserves and were introducing new technologies. In short, we were doing all those things that Rosneft, which has taken possession of Yukos, is so proud of today.

Thanks to a significant increase in oil production, including as the result of our successes, the country was able to take advantage of a favorable oil situation. We felt hope that the period of convulsions and unrest was behind us at last, and that, in the conditions of stability that had been achieved with great effort and sacrifice, we would be able to peacefully build ourselves a new life, a great country.

Alas, this hope too has yet to be justified. Stability has come to look like stagnation. Society has stopped in its tracks. Although hope still lives. It lives on even here, in the Khamovnichesky courtroom, when I am already just this side of 50 years old.

With the coming of a new President (and more than two years have already passed since that time), hope appeared once again for many of my fellow citizens too. Hope that Russia would yet become a modern country with a developed civil society. Free from the arbitrary behavior of officials, free from corruption, free from unfairness and lawlessness.

It is clear that this can not happen all by itself, or in one day. But to pretend that we are developing, while in actuality, we are merely standing in one place or sliding backwards, even if it is behind the cloak of noble conservatism, is no longer possible.

Impossible and simply dangerous for the country.

It is not possible to reconcile oneself with the notion that people who call themselves patriots so tenaciously resist any change that impacts their feeding trough or ability to get away with anything. It is enough to recall art. 108 of the Code of Criminal Procedure of the Russian Federation arresting businessmen for filing of tax returns by bureaucrats.

And yet it is precisely the sabotage of reforms that is depriving our country of prospects.

This is not patriotism, but rather hypocrisy.

I am ashamed to see how certain persons in the past, respected by me are attempting to justify unchecked bureaucratic behavior and lawlessness. They exchange their reputation for a life of ease, privileges and sops.

Luckily, not all are like that, and there are ever more of the other kind.

It makes me proud to know that even after 7 years of persecutions, not a single one of the thousands of YUKOS employees has agreed to become a false witness, to sell their soul and conscience.

Dozens of people have personally experienced threats, have been cut off from family, and have been thrown in jail. Some have been tortured. But, even after losing their health and years of their lives, people have still kept the thing they deemed to be most important, human dignity.

Those who started this shameful case, Biryukov, Karimov and others, have contemptuously called us “entrepreneurs”, regarding us as low-lifes, capable of anything just to protect our prosperity and avoid prison.

The years have passed. So who are the low-lifes now? Who is it that have lied, tortured, and taken hostages, all for the sake of money and out of cowardice before their bosses.

And this they called “the sovereign’s business”!

Shameful. I am ashamed for my country.

I think all of us understand perfectly well the significance of our trial extends far beyond the scope of my fate and Platon’s, and even the fates of all those who have guiltlessly suffered in the course of the sweeping massacre of YUKOS, those I found myself unable to protect, but about whom I remember every day.

Let us ask ourselves: what must be going through the head of the entrepreneur, the high-level organizer of production, or simply any ordinary educated, creative person, looking today at our trial and knowing that its result is absolutely predictable?

The obvious conclusion a thinking person can make is chilling in its stark simplicity: the siloviki bureaucracy can do anything. There is no right of private property ownership. A person who collides with “the system” has no rights whatsoever.

Even though they are enshrined in the law, rights are not protected by the courts. Because the courts are either also afraid, or are themselves a part of “the system”. Should it come as a surprise to anyone then that thinking people do not aspire to self-realization here, in Russia?

Who is going to modernize the economy? Prosecutors? Policemen? Chekists? We already tried such a modernization it did not work. We were able to build a hydrogen bomb, and even a missile, but we still can not build our own good, modern television, our own inexpensive, competitive, modern automobile, our own modern mobile phone and a whole pile of other modern goods as well.

But then we have learned how to beautifully display others’ obsolete models produced in our country and an occasional creation of Russian inventors, which, if they ever do find a use, it will certainly be in some other country.

Whatever happened with last year’s presidential initiatives in the realm of industrial policy?

Have they been buried? They offer the real chance to kick the oil addiction.

Why? Because what the country needs is not one Korolev, and not one Sakharov under the protective wing of the all-powerful Beria and his million-strong armed host, but hundreds of thousands of “korolevs” and “sakharovs”, under the protection of fair and comprehensible laws and independent courts, which will give these laws life, and not just a place on a dusty shelf, as they did in their day with the Constitution of 1937.

Where are these “korolevs” and “sakharovs” today? Have they left the country? Are they preparing to leave? Have they once again gone off into internal emigration? Or taken cover amongst the grey bureaucrats in order not to fall under the steamroller of “the system”?

We can and must change this.

How is Moscow going to become the financial center of Eurasia if our prosecutors, “just like” 20 and 50 years ago, are directly and unambiguously calling in a public trial for the desire to increase the production and market capitalization of a private company to be ruled a criminally mercenary objective, for which a person ought to be locked up for 14 years? Under one sentence a company that paid more tax than anyone else, except Gazprom, but still underpaid taxes; and with the second sentence it’s obvious that there’s nothing to tax since the taxable item was stolen.

A country that tolerates a situation where the siloviki bureaucracy holds tens and even hundreds of thousands of talented entrepreneurs, managers, and ordinary people in jail in its own interests, instead of and together with criminals, this is a sick country.

A state that destroys its best companies, which are ready to become global champions; a country that holds its own citizens in contempt, trusting only the bureaucracy and the special services is a sick state.

Hope–the main engine of big reforms and transformations, the guarantor of their success. If hope fades, if it comes to be supplanted by profound disillusionment, who and what will be able to lead our Russia out of the new stagnation?

I will not be exaggerating if I say that millions of eyes throughout all of Russia and throughout the whole world are watching for the outcome of this trial.

They are watching with the hope that Russia will after all become a country of freedom and of the law, where the law will be above the bureaucratic official.

Where supporting opposition parties will cease being a cause for reprisals.

Where the special services will protect the people and the law, and not the bureaucracy from the people and the law.

Where human rights will no longer depend on the mood of the tsar. Good or evil. 4

Where, on the contrary, the power will truly be dependent on the citizens, and the court only on law and God. Call this conscience if you prefer.

I believe, this is how it will be.

I am not at all an ideal person, but I am a person with an idea. For me, as for anybody, it is hard to live in jail, and I do not want to die there.

But if I have to I will not hesitate. The things I believe in are worth dying for. I think I have proven this.

And you opponents? What do you believe in? That the bosses are always right? Do you believe in money? In the impunity of “the system”?

Your Honor!

There is much more than just the fates of two people in your hands. Right here and right now, the fate of every citizen of our country is being decided. Those who, on the streets of Moscow and Chita, Peter and Tomsk, and other cities and settlements, are not counting on becoming victims of police lawlessness, who have set up a business, built a house, achieved success and want to pass it on to their children, not to raiders in uniform, and finally, those who want to honorably carry out their duty for a fair wage, not expecting that they can be fired at any moment by corrupt bosses under just about any pretext.

This is not about me and Platon at any rate, not only about us. It is about hope for many citizens of Russia. About hope that tomorrow, the court will be able to protect their rights, if yet some other bureaucrats-officials get it into their head to brazenly and demonstratively violate these rights.

I know, there are people, I have named them in the trial, who want to keep us in jail. To keep us there forever! Indeed, they do not even conceal this, publicly reminding everyone about the existence of a “bottomless” case file.

They want to show: They are above the law, they will always accomplish whatever they might “think up." So far they have achieved the opposite: out of ordinary people they have created a symbol of the struggle with arbitrariness. But for them, a conviction is essential, so they would not become “scapegoats”.

I want to hope that the court will stand up to their psychological pressure. We all know through whom it will come.

I want an independent judiciary to become a reality and the norm in my country, I want the phrase from the Soviet times about “the most just court in the world” to stop sounding just as ironic today as they did back then. I want us not to leave the dangerous symbols of a totalitarian system as an inheritance for our children and grandchildren.

Everybody understands that your verdict in this case–whatever it will be–is going to become part of the history of Russia. Furthermore, it is going to form it for the future generation. All the names those of the prosecutors, and of the judges will remain in history, just like they have remained in history after the infamous Soviet trials.

Your Honor, I can imagine perfectly well that this must not be very easy at all for you perhaps even frightening and I wish you courage!

The Search for grounds for recusal

Quite unexpectedly, the Wilders case has reached the Supreme Court for the first time before the Court of First Instance has even ruled. Diederik Aben, one of the Advocates-General before the Supreme Court, made the supreme error of writing a note - not in his official capacity of course - about the correctness of the recusal decision taken by the recusal chamber on 22 October 2010. As one might expect, he does not think the decision was correct. In his 3-page note, he identifies a number of alleged errors, most importantly the fact that the Court of Appeals decision mandating prosecution is not open to review, least of all by the Court of First Instance. It follows, Aben argues, that the witness testimony that caused all that ruckus, prof. Jansen's testimony about his conversations with Appellate Judge Schalken, was irrelevant to the case at bar. It is difficult to see, Aben continues, how the decision not to hear Jansen would cause the defense to have "reasonable doubts" about the impartiality of the court. (Which, in any event, may not be the correct criterion.)

More interesting than the AG's opinion about this recusal decision, which is no more reviewable than the earlier CoA decision, is the fact that he apparently had the illusion that his note on the matter would not circulate beyond the limited group of acquaintances for which it was intended. How naive can you get?

CAP Reform - Poland Style

Here's an interesting news story: Poland is calling for "an overhaul of EU agricultural funding". I think we can all agree that that is an interesting move for a country that - off the top of my head - has more farmers than the entire rest of the EU put together.

[According to the CIA World Factbook, in Poland 17,4% of the labour force works in agriculture, for a total of 3 million people. For the EU as a whole, they have 5,6% and a total of 12,6 million. In other words, Poland represents about a quarter of the EU's farming population.]

Now basically there are two scenario's here: On the one hand, it is possible that the Peasant Party minister responsible spoke without fully appreciating what he was doing. After all, it is one thing for countries like the Netherlands and the UK to call for CAP reform, but for Poland to join them is an entirely different matter. Of course, joining them is hardly what he did, but it will be percieved that way all the same. (What he in fact did is demand that all the differences between the EU-15 and the new accession countries be abolished in this area.)

On the other hand, it is also possible that Poland decided it is worth the risk. They may have estimated that the votes for any serious budget cuts on CAP in the 2014-2020 period (which is what we're talking about here) are simply not there, and that there is some kind of deal to be made that benefits the farmers of Poland at the expense of their French counterparts. Part of this calculation may have been the French-German discussion paper on CAP reform published in September, which has a distinct market-oriented flavour. Needless to say, market oriented is not what you want to hear if you're Marek Sawicki. Even if the overall size of the CAP budget is not going to be changed, and if there is to be no national co-payments, Poland would still want to keep competitiveness out of agriculture. Quoth Wikipedia:

Agriculture employs 16.1% of the work force but contributes 3.8% to the gross domestic product (GDP), reflecting relatively low productivity. Unlike the industrial sector, Poland's agricultural sector remained largely in private hands during the decades of communist rule. Most of the former state farms are now leased to farmer tenants. Lack of credit is hampering efforts to sell former state farmland. Currently, Poland's 2 million private farms occupy 90% of all farmland and account for roughly the same percentage of total agricultural production. Farms are small—8 hectares on average—and often fragmented. Farms with an area exceeding 15 ha accounted for 9% of the total number of farms but cover 45% of total agricultural area. Over half of all farm households in Poland produce only for their own needs with little, if any, commercial sales.

Unsurprisingly, what Poland seem to want is as much as possible of a straight per-hectare payment.

Monday, November 08, 2010

Door gevaarlijke gekken omringd

Hardly a day goes by that I'm not reminded of the title of W.F. Hermans' Door Gevaarlijke Gekken Omringd, or - somewhat less poetically - in English: Surrounded by Dangerous Lunatics. Today, the most insane story I heard was the ruling of the Court of Appeals in The Hague, holding that it is still unlawful to remove squatters from their "homes" without a court order. Unlike the court of first instance, the appellate court found that the relevant provision of the Act on Squatting, which just entered into force, violated the ECHR's protection of the home. Unfortunately, the full judgement is not yet available, but the press release is.

First of all, how is this not a classic case of abuse of right? (Cf. art. 17 ECHR) These people simply hide behind the protection of the home to get away with stealing someone else's property. (Cf. art. 1 of Protocol 1)

Secondly, why not put them in jail? Art. 138a Sr, the new provision on squatting, is expressly included in the list of art. 67(1)(b) Sv of crimes that warrant detention pending trial despite the fact that the don't carry a penalty of at least 4 years. (Squatting carries a maximum sentence of a year in prison, though it will often be increased by a third under art. 138a(3) Sr when the crime is committed by two or more individuals working in concert. Adding in the aggravating factor of use of threats under art. 138a(2) Sr, the maximum penalty is 2 years + 1/3 * 2 years = 2 years and 8 months.) Just for clarity, Sr denotes the Penal Code and Sv refers to the Code of Criminal Procedure.

Of course, even when detention is theoretically authorised, it is not always possible. Under art. 67(3) Sv, it is only allowed when there are "serious concerns" about the defendant. But I would think - though the Dutch judiciary undoubtedly does not - that the fact that the defendant will undoubtedly re-offend once he walks out of the police station would qualify. Squatter gets arrested --> Squatter gets released pending trial --> Squatter goes back to his squat. How is that not a serious concern?

In the alternative, how hard can it be to find a few that qualify for the aggravating factor of art. 138a(2), the threat of violence or other manners to induce fear. It must be possible to round up a few particularly serious offenders, who would qualify for detention pending trial, and who could serve "pour encourager les autres".


Thursday, November 04, 2010

Europe’s plot to take over the world

And, speaking of Gideon Rachman (see below), my favourite Gideon Rachman column is still "Europe's Plot to Take over the World", on the occasion of the G20 Summit in Pittsburg last year. Hopefull the FT won't mind if I quote somewhat liberally:

The realisation that the G20 is Europe’s Trojan horse struck me at the G20’s last summit in Pittsburgh a couple of weeks ago. The surroundings and atmosphere were strangely familiar. And then I understood; I was back in Brussels, and this was just a global version of a European Union summit.

It was the same drill and format. The leaders’ dinner the night before the summit; a day spent negotiating an impenetrable, jargon-stuffed communiqué; the setting-up of obscure working groups; the national briefing rooms for the post-summit press conferences.

All of these procedures are deeply familiar to European leaders – but rather new to the Asian and American leaders whom the Europeans are carefully entangling in this new structure. Watching an Indonesian delegate wandering, apparently carefree, through the conference centre in Pittsburgh, I felt a stab of pity. “You don’t know what you are getting into,” I thought. “You are going to waste the rest of your life talking about fish quotas.” (Or, this being the G20, carbon-emission quotas.)
As a result, the Europeans seemed much more tuned into what was going on than some of the other delegations. Puzzling over the new powers given to the IMF to monitor national economic policies in the Pittsburgh conclusions, I was interrupted by an old friend from the European Commission, who recognised the language immediately. “Ah yes,” she said, “the open method of co-ordination.”
Once the EU gets its teeth into an issue, it never really lets go. Processes started at EU summits – which often seem minor bits of bureaucratic paper-shuffling – often turn out to have important political implications, years later. The same could well be true of some of the decisions made in Pittsburgh – such as the language on tax havens and bankers’ bonuses.

From the very start, the EU advanced through small, apparently technical, steps focusing on economic issues – the so-called “Monnet method”. Monnet himself believed that Europe would be built through “the common management of common problems”. Is this so very different from President Barack Obama’s recent appeal for “global solutions to global problems”?

Of course, there is still a huge gap between the capabilities of the modern EU and those of the G20. There is no army of G20 civil servants to match the bureaucrats of Brussels. There is no body of G20 law and no G20 court to enforce the group’s decisions. Nor is there much immediate prospect that the US or China – both countries that zealously guard their sovereignty – will cede any serious powers to a G20 law-making body.

Yet the kernel of something new has been created. To understand its potential, it is worth going back to the Schuman Declaration of 1950, which started the process of European integration. “Europe,” it said, “will not be made all at once, or according to a single plan. It will be built through concrete achievements, which first create a de facto solidarity.”

The G20 now has some achievements and a burgeoning sense of solidarity between the members of this new, most exclusive, club. Who knows what comes next?

Of course, part of why I like this column is because it is such a happy message. And what about the G20 not having its own civil servants? Here's a blog post from Foreign Policy's blog discussing exactly that: Does the G20 need bureaucrats?

Tea Party and Foreign Policy

In the Financial Times, Gideon Rachman ponders the consequences of last Tuesday's election results for America's foreign policy. His conclusions are not comforting:

The problem with a foreign policy grounded in a belief that America is uniquely powerful and virtuous is that it assumes that the rules that apply to other nations do not apply to the US as well. As a result, the Tea Party people are not well adapted to cope with the inexorable rise of new centres of power around the world. They are liable to interpret setbacks and frustrations, at home and abroad, not as a consequence of the inevitable and growing constraints on American power – but as a result of some sort of “stab in the back”, whether by “liberal elites” in Washington, or conniving foreigners overseas. That, in turn, risks leading to an unstable foreign policy that is aggressive, self-righteous and self-pitying in equal measures.

Wednesday, November 03, 2010

Hirst v. United Kingdom

In a clear case of "oops", my otherwise realiable newspaper reported this morning that the ECtHR had ruled that prisoners could not be denied the right to vote, at least not categorically. While they did in fact rule that, the ruling in question is more than five years old. (The 2004 panel judgement is here, and the 2005 Grand Chamber judgement is here.) The article in question is only a small one-columner, and it is easy to see how the error occurred. The final byline, which for such articles usually refers to the wire service that provided the story, refers to the BBC, presumably to this article. Clearly the responsible copy editor overlooked the part of the story that explains that the ECtHR judgement is five years old, and that the UK government waited until now to comply, despite a resolution from the Council of Europe's Committee of Ministers from December 2009, warning them to make sure the new elections would comply with the ECHR. In the intervening years, the Labour governments had fun with various consultations, the instrument beloved by governments the world over to avoid actually doing something.

As to the substance of the case, suffice it to say that prisoners voting presents some unique difficulties in an electoral system with single candidate constituencies like the UK, but nothing that can't be overcome by having them vote in their home constituency. Otherwise, I think the unique vulnerability of prisoners to the whims of the political system is reason enough to make sure that their right to vote is only taken away in rare circumstances. (And don't even get me started about the common US practice of denying convicted felons the right to vote even after they've been released from prison.)

Alstom v. Eurostar and Siemens

I was going to write about this case last week, but I had to wait until the text of the judgement appeared on Bailii. The case is Alstom Transport v. Eurostar International and Siemens [2010] EWHC 2747 (Ch), of October 29, 2010. The dispute in question is between the French train builder Alstom and Eurostar, and concerns a tender that did not turn out the way Alstom had hoped. Inbetween the usual complaints about technical specifications and criteria, it is a wonderful case of a French and a German company wooing an English princess.

The case can be viewed on two levels: On the one hand, there is the tendering issue, which is understandable hampered by the ongoing regulatory uncertainty about the regulator's willingness to allow Eurostar (and, in the future, Deutsche Bahn) to use distributed power systems (DPS) in addition to the current concentrated power systems (CPS). [In normal English, the difference is that CPS involves having the engine and traction system up front and DPS involves having it underneath the floor of the carriages throughout the train.]

Eurostar's tender allowed offerors to use either system, even though the Intergovernmental Commission which ultimately regulates the Channel Tunnel has not yet permitted DPS even today. (Cf. par. 48 of the judgement.) Alstom alleged that this uncertainty made it impossible to prepare an adequate bid. (Even though Siemens did not seem to have the same problem.)

On the other hand, there is the position of France as both an important party to the regulatory process and a stakeholder in Alstom's fortunes. Under the Treaty of Canterbury, France appoints one half of the members of the Intergovernmental Commission and the Channel Tunnel Safety Authority. (Cf. UK Rail Regulator website.) At the same time, the French state remains heavily involved in Alstom's business, even though it no longer holds any shares. (As it did after the 2004 bailout.) The result is predictable: France is fighting against any move towards allowing DPS, so as to give Alstom's existing CPS design a better chance. (Cf. Financial Times.) In the end, it looks like DPS will probably be allowed.

Amidst all this, Vos, J.'s judgement isn't helping Alstom's case. Not only did Alstom lose, but the judge was also highly critical at times. Most notably:

136: (...) I bear in mind here ALSTOM's own internal audit that indicates at least that ALSTOM was, to a significant extent, the author of its own misfortune in failing to take the bid adequately seriously and according other projects higher priority.

138: (...) looking at the matter generally, the evidence leaves me with the impression that Siemens took the bidding process far more seriously than ALSTOM, placed it at the front of its list of priorities, and perhaps most importantly paid greater attention to what Eurostar was telling bidders and to what was contained in the ITN and BAFO documents.

In the mean time, the Commission, too, has concluded that there is no evidence to suggest a breach of EU public procurement law. (Cf. Financial Times.)