Fines against member states: An effective new tool in EU infringement proceedings?

Abstract

It can be considered a dramatic shift in European Union (EU) governance that the 1992 Maastricht Treaty introduced a provision allowing sanctions against member states that fail to comply with EU law. How effective are the new political opportunities in practice? The article discusses the slow development of the use of these fresh powers by the Commission, the comparatively small number of penalization judgments to date and three specific cases. It seems the new instrument is used in a strategic and variegated manner. Seen in the context of the overall mode of enforcement governance, it therefore appears significantly less ‘hard’ than expected. Softer instruments, such as co-financing, discursive action and shaming via the media are continuously being applied in parallel because penalties cannot always tame the member states and overuse of that instrument might hamper the EU’s legitimacy. Nonetheless, the new instrument is useful in terms of the Commission’s control and enforcement powers over the member states and the effectiveness of EU law in the multi-level regime of governance.

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Notes

  1. 1.

    Even the ‘nuclear’ possibility of action by the Union in the event of a serious and persistent breach of common values by a member state was only introduced later, in the 1997 Amsterdam Treaty. The problems of making this provision work seem at this point insurmountable (see, for example, Falkner, 2013).

  2. 2.

    To be sure, the ‘newness’ of the pecuniary penalties under the infringement proceedings is debatable. However, their real effect in practice only started in the late 1990s, fully comparable to the open method of coordination, which is usually considered a ‘new’ instrument. By contrast, in EU competition law, fines and periodic penalty payments had already been mentioned in the 1957 Treaties and set up under regulation no. 17/1962. Moreover, Dougan (2012) lists a few older sector-specific direct own sanctions of the EU under his heading of ‘Union Criminal Sanctions for the Enforcement of Union Law’.

  3. 3.

    On 27 October 2011, the Commission sued for the first time under the new proceedings (europa.eu/rapid/press-release_IP-11-1283_de.htm?locale=de, accessed 1 September 2014).

  4. 4.

    It needs mentioning here that the case with the first 2nd judgment (in 2000) under the post-Maastricht proceedings was not the first one with a Commission decision to refer to the ECJ a second time – the four cases decided earlier in the same year (1997) were actually closed before that stage.

  5. 5.

    This could explain why the Commission mentions a rather large number of ‘ongoing’ proceedings in its reports on the monitoring of the application of EU law recently: seventy-seven by the end of 2011, even 128 by the end of 2012 (see Annual reports 2011 and 2012, eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2012:0714:FIN:en:PDF, p. 10; ec.europa.eu/eu_law/docs/docs_infringements/annual_report_30/com_2013_726_en.pdf, p. 9).

  6. 6.

    Approximation based on OECD data listing a Greek GDP of US$253 993 300 000 for 2010 (OECD, 2010) (stats.oecd.org/Index.aspx), National Accounts, Main Aggregats, GDP; accessed 12 August 2011) and a ratio 1:1.25 to the Euro as valid on 1 July 2010 (www.finanzen.at/waehrungsrechner/USD-EUR).

  7. 7.

    The average total length of direct actions in 2007 was 18.2 months according to the ECJ Annual Report 2007, p.92 (curia.europa.eu/jcms/upload/docs/application/pdf/2008-09/07_cour_stat_2008-09-29_13-39-23_731.pdf). The Court explains the consecutive opening and closing of procedures arguing simply that Greece had only complied after the action was introduced (paragraph 4 of judgment). A Commission spokesman reported that ‘(a)ccording to the information transmitted by the Greek authorities during the procedure before the Court, the rehabilitation works at Messomouri ended on 3 April 2007 and at Kouroupitos on 20 April 2008, in line with the rehabilitation studies approved’ (EP, 2008).

  8. 8.

    On the basis of its ex ante financial analysis, which predicted a positive financial rate of return of nearly 35 per cent with Community funding (European Commission, 2010, p. 83). This document also suggests that ‘CBA (cost-benefit analysis, GF) was not used as basis for the decision-making … the application for funding was made in response to the pressure of the European Court for not complying with European legislation. The application does contain a financial CBA but not an option analysis nor a socio-economic CBA’ (ibid., p. 83; accessed 2 November 2013).

  9. 9.

    From a legal perspective, it seems indeed to have been a somewhat open question who can decide if an infringement has been mended and how (Kilbey, 2010, p. 382).

  10. 10.

    See, for example, www.dw.de/overfishing-is-a-problem-across-the-eu/a-17181163, accessed 2 November 2013. Commission proposal for a Council Regulation fixing for 2014 the fishing opportunities for certain fish stocks COM(2013)753, ec.europa.eu/fisheries/cfp/fishing_rules/tacs/info/com_2013_753_en.pdf, accessed 25 February 2014.

  11. 11.

    It seems that another Ministerial Decree, dated 23 August 1997, excluded non-Italian lecturers from voting in elections for the National University Councils. The Tribunale Amministrativo Regionale per il Lazio decided on 2 March 2011 (case published 15 June 2011) that the ministerial decree had to be annulled as it contrasted with the EU principles of non-discrimination based on nationality and the free movement of workers – as well as with the parameters of proportionality and principles of the Italian constitution. The Association of Foreign Lecturers in Italy holds that ‘14 years is rather a long time to wait for court judgment, justice deferred is justice denied’ and that cases that have not reached judgment within 5 years are entitled to damages under Article 6 of the European Convention of Human Rights, which is now being seized, according to AFLI (davidpetrie.wordpress.com/2011/07/14/16-years-on-lettori-launch-complaints-under-european-court-of-human-rights-legislation/, accessed 9 August 2011).

  12. 12.

    This follows two well-known schools in legal and administrative implementation studies, with the ‘enforcement approach’ highlighting that member states may have an interest in non-compliance and that the level of obedience may depend on the probability of punishment, while the ‘management approach’ stresses financial, administrative or other incapacities to comply and the importance of non-coercive strategies based on communication and support (for example, Tallberg, 2002; Hartlapp, 2007; Conant, 2012; Cremona, 2012). It needs mentioning that the ‘management approach’ has lately been strengthened on the EU-level with fire alarm mechanisms such as the SOLVIT network (Hobolth and Martinsen, 2013).

  13. 13.

    Tallberg (2000b, p. 117) offers an in-depth account of how the ECJ has realized some of the original ideas and set up the general principle of state liability in EU law, although the latter was encapsulated through various forms of non-action on national level.

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Acknowledgements

The empirical findings originate from a multi-annual research project the author directed at the Institute for European Integration Research (EIF) in Vienna, which covered all second referrals to the ECJ. Support by funds of the Oesterreichische Nationalbank is gratefully acknowledged (Anniversary Fund, project number 13 261). Several colleagues contributed to the research for this project: Nikolas Rajkovic, Andreas Obermaier, Florian Steininger and Marco Botta. I would like to highlight their participation in the project’s ground work and data gathering for tables and figures. Most importantly, Nikolas Rajkovic co-drafted 29 case studies with me (Falkner, 2014). However, the present article has been written exclusively by this author who is therefore responsible for any remaining shortcomings. Feedback on earlier drafts of the manuscript, in particular by Miriam Hartlapp, Renaud Dehousse, Colin Hay and the colleagues, and two anonymous referees on the special issue project, is gratefully acknowledged.

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Falkner, G. Fines against member states: An effective new tool in EU infringement proceedings?. Comp Eur Polit 14, 36–52 (2016). https://doi.org/10.1057/cep.2015.8

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Keywords

  • European Court of Justice
  • compliance
  • fines against member states
  • Greece
  • France
  • Italy