15 german law journal no. 6

GERMAN LAW JOURNAL

R e v i ew o f D e v e l o p m e n t s i n G e r m an , E u r o p e a n an d I n t e r n a t i o n a l Ju r i s p r u d en c e

Editor–in–Chief: Russell A. Miller

www.germanlawjournal.com

© Copyright 2000 – 2014 by German Law Journal GbR. All rights reserved. ISSN: 2071-8322 / ISSNL: 2071-8322

TABLE OF CONTENTS PAGE I

Vol. 15 No. 06 Pages 1029-1222 01 October 2014

Table Of Contents

Senior Editors: Betsy Baker; Nina Boeger; Gralf-Peter Calliess; Matthias Casper; Patrycja Dabrowska;

Jen Hendry; Elisa Hoven; Karen Kaiser; Malcolm MacLaren; Stefan Magen; Ralf Michaels; Christoph Safferling; Frank Schorkopf; Emanuel Towfigh; Floris de Witte

Speech Heiko Maas

Why It Is High Time to Reform the Homicide Statutes

1029-1034

Articles

Caroline Dostal, Anke Strauss & Leopold von Carlowitz

Between Individual Justice and Mass Claims Proceedings: Property Restitution for Victims of Nazi Persecution in Post-Reunification Germany

1035–1070

Kunbei Zhang Incomplete Data Protection Law

1071–1104

http://www.germanlawjournal.com/

TABLE OF CONTENTS PAGE II

Table Of Contents Special Issue—Twenty Years of EU Citizenship

Developments

Livia Fenger & Helena Lindemann The FRAPORT Case of the First Senate of the German Federal Constitutional Court and its Public Forum Doctrine: Case Note

1105–1120

Vigjilenca Abazi

The Future of Europol’s Parliamentary Oversight: A Great Leap Forward?

1121–1144

Special Section: Europe and the Lost Generation

Anastasia Poulou Austerity and European Social Rights: How Can Courts Protect Europe’s Lost Generation?

1145–1176

Hauke Brunkhorst

Twenty Years of CJEU Jurisprudence on Citizenship

1177–1196

Daniela Caruso

Lost at Sea

1197-1208

Katia Fach Gómez

Spain and the Lost Legal Generation: Spain’s Dysfunctional University System is Also to Blame

1209–1222

Speech

Why It Is High Time to Reform the Homicide Statutes

By Heiko Maas* A. The Nazi Roots of Sections 211 and 212 of the German Criminal Code The Bremen Regional Court is located in a monumental building – the Altes Gerichtshaus (Old Courthouse). A stone slab has adorned its facade since time immemorial. It has been placed directly under the jury courtroom – where the capital crimes come to trial. The inscription on the slab reads: “Thou shalt not kill.” During the National Socialist dictatorship the ruling powers wanted to take down the slab and destroy it. But some citizens of Bremen stopped them. Instead, the commandment against killing was merely covered with a stone slab and not uncovered again until after 1945.

1 The admonition can

still be seen today at the Bremen Regional Court. This episode from Bremen’s judicial history brings to light three things. First, “Thou shalt not kill” – one of the ten Biblical commandments – is the archetype for all rules associated with human coexistence. Second, the commandment did not suit the agenda of the National Socialists, who perfected the killing of human beings in their extermination camps with industrial means. Third, the people sensed intuitively that rejecting the commandment against killing was a fatal error that would lead to barbarism. That is why they made sure the commandment stayed where it was, even though it became invisible during the Nazi dictatorship. Luckily, history took a turn for the better. Today we live in a free state governed by the rule of law. Criminal law is the ultima ratio. Conduct that incurs criminal liability must be precisely defined in advance by statute. The punishment must relate to the crime and not to the perpetrator. And individual guilt is both the measure and the boundary of every penalty. In short: Today, we have a modern and liberal criminal law. But we have a few burdens from the past as well. There are still laws on the books whose language is influenced by the evil spirit of the Nazi ideology – and they are in the area where protection of the highest legal interests is at stake, where the guilt is greatest, and where the penalties are highest. To this day, our courts must still apply those outdated laws when they deal with murder and manslaughter. Working in the shadow of that legacy we force our courts to perform amazing feats of interpretation in order to arrive at just solutions. This should not be necessary in a state governed by the rule of law.

* Federal Minister of Justice and Consumer Protection. This is a revised version of a speech given at the Symposium of the German Bar Association on 29 April 2014 in Berlin. It was translated into English by Barbara Agnes Reeves, Language Services of the Federal Ministry of Justice and Consumer Protection. The German language version of the speech appeared as: Heiko Maas, Warum wir endlich eine Reform der Tötungsdelikte brauchen, 50 RECHT UND POLITIK 65 (2014).

1 See MATTHIAS KÖCKERT, DIE ZEHN GEBOTE 9 (2007).

1030 G e r m a n L a w J o u r n a l [Vol. 15 No. 06

Sections 211 and 212 of the current German Criminal Code were substantially written in 1941.

2 Their primary author was Roland Freisler, one of the most despicable jurists of that

time. Freisler was infamous as the President of the so-called Volksgerichtshof (People’s High Court). He had also been involved in legislative initiatives as State Secretary in the Reich’s Justice Ministry. The structure of the law, with the introduction “A murderer...is” and the term “base motives,” stems from the pen of Freisler.

3 The section on murder fit in

well with the Nazi ideology on criminal law. Punishment – in the horrendous language of that era – also had the goal of “elevating the racial composition of the people by eradicating unsuitable elements.”

4 For that reason, criminal law did not operate with

concrete elements of criminal offences, but rather with offender types.5

According to Freisler, the language of the law formulated these “types” so that “the judge could look at him and say: ‘this subject deserves the noose.’”

6 Criminal law became the gateway to

despotism. The much-needed clarity of the law was precisely what the regime sought to avoid. Today, we look back with trepidation when we see how many Nazi jurists were allowed to continue judging, teaching or writing legislation after 1945. This personnel continuity in the Federal Justice Ministry is currently the subject of a study by the Rosenburg Project, initiated in 2010. The Project is named after the first post-war seat of the Ministry – the Rosenburg in Bonn. An independent commission is currently examining the influence that those who participated in Nazi crimes wielded on the justice system and the Justice Ministry of the young Federal Republic.

7 At the same time, however, we must look at the

substantive continuities as well. For example, if one believes criminal law professor Gerhard Wolf, “today’s criminal law (...) was influenced in core sections of its principles by legal rules, scholarly opinions and judgments that had also characterised the period between 1933 and 1945.”

8

2 See Act (Amendment of the Criminal Code) of 4 September 1941, RGBl. I. 549.

3 See Roland Freisler, Gedanken über das Gesetz zur Änderung des Reichsstrafgesetzbuches, 103 DEUTSCHE JUSTIZ 929, 932 (1941).

4 EDUARD MEZGER, KRIMINALPOLITIK AUF KRIMINOLOGISCHER GRUNDLAGE 79 (1934).

5 See Freisler, supra note 3, at 931. See also Monika Frommel, Die Bedeutung der Tätertypenlehre bei der Entstehung der §§ 211, 212 StGB im Jahr 1941, 29 JURISTEN ZEITUNG 559 (1980).

6 Roland Freisler, Gedanken zur VO gegen Volksschädlinge, 101 DEUTSCHE JUSTIZ 1450, 1451 (1939).

7 See DIE ROSENBURG. DAS BUNDESMINISTERIUM DER JUSTIZ UND DIE NS-VERGANGENHEIT (Manfred Görtemaker & Christoph Safferling eds., 2013), available at www.uwk-bmj.de.

8 Gerhard Wolf, Befreiung des Strafrechts vom nationalsozialistischen Denken?, 36 JURISTISCHE SCHULUNG 189, 195 (1996).

2014] Time to Reform the Homicide Statutes 1031 B. How the Post-War Judiciary Has Tempered Nazi Law Of course, it is not as if the judiciary of the Federal Republic has done nothing but blindly apply Nazi law in dealing with homicide offences. Furthermore, the legislature has changed the threatened penalty. With the abolition of the death penalty in the Basic Law, murder is now threatened with a penalty of life in prison. But the problem is that our judiciary, in applying the homicide offences in a manner consistent with the rule of law, is forced to reshape the law by engaging in extensive legal interpretation. One striking example of this involves the efforts of the courts to come to just results in cases that have become known as the “domestic tyrant cases.” The violent husband who beats and abuses his wife for years, and at some point beats her to death, will probably not be convicted of murder because he has not fulfilled the elements of that crime as defined. Contrast this with the abused wife who – in her desperation – kills her abuser. She resorts to killing her abuser because she is physically weaker than her husband and cannot risk provoking an open confrontation with her violent partner. So she kills him while he is sleeping – and has, therefore, “murdered by stealth.” The respective convictions and penalties in these examples are manslaughter and a fixed-term prison sentence for the man, and murder and life in prison for the woman. This, of course, is manifestly unjust. Even in cases where stealth “is the weapon of the weak and defenceless against superior strength, violence and brutality,”

9 its consequence is the most severe

penalty known in our penal system. The current version of section 211, therefore, disadvantages those people who are physically weaker, and these are often women.

10 The

judiciary has had a very difficult time dealing with this injustice. For example, in just such a case, a regional court mitigated the woman’s sentence due to “unusual circumstances.”

11

This certainly seems fair, but it is a ground for mitigation that cannot be found anywhere in the law. C. The Continuing Need for Reform and the Reform Debate As shown by the above example, the judiciary has, over the decades, made the murder section palatable from a rule-of-law standpoint. But the situation remains unsatisfactory. There continues to be a big difference in the length of the prison terms imposed for murder and manslaughter. If the sentence is “life,” the time in prison averages 18 years and six months.

12 By contrast, if the conviction is for manslaughter the average prison

9 Hans-Heinrich Jescheck, Anmerkung zu BGH, 6 JURISTEN ZEITUNG 387 (1957).

10 See Rudolf Rengier, Totschlag oder Mord und Freispruch aussichtslos? Zur Tötung von (schlafenden) Familientyrannen, 23 NEUE ZEITSCHRIFT FÜR STRAFRECHT 233, 234 (2004).

11 See Decision of the Federal Court of Justice (BGH), 22 NEUE ZEITSCHRIFT FÜR STRAFRECHT 482 (2003).

12 Based on those released from prison between 2002 and 2010 following a life sentence.


term is only six years and five months.13

For the convicted individual, it makes an immense difference whether he is considered to be a murderer or a manslaughterer. Therefore, the fact that the law offers virtually no guidance as to how murder and manslaughter are to be differentiated is highly problematic. What, for example, constitutes “base motives”? Is a man who kills his wife because she has left him acting out of base motives? The jurisprudence here makes a difference as to whether the man acted more out of desperation or more out of anger. It considers only anger to be particularly contemptible; it does not usually judge desperation in the same manner.

14 This may be an acceptable

differentiation, but the courts cannot derive it from the statute. The fact that existing law lacks precision – of all things, where the highest legal interests and most severe penalties are at stake – is most unsatisfactory. The casuistry itself is not even the biggest problem here. The problem is that the personality of the perpetrator is often key to establishing the elements of the offence, and the criteria for this are personal rather than legal. Jealousy, a sense of honour, or self-interest can be either understandable or reprehensible emotions because they are morally charged. Sixty-five years of case law on “base motives” shows clearly how much depends on the Zeitgeist. Judges have succeeded in coming to fair judgments despite this norm. They have been forced to interpret this section with its dubious history – and they have made the best of it. But according to my understanding of the Constitution, the division of powers between the legislature and the judiciary means something quite different. The legislature determines precisely and distinctly the boundaries of criminal conduct and the judges apply the law on a case-by-case basis. But this is currently not true, which is why the legislature should take action and finally do away with this structural defect in the statute on murder. Many people have very persistently called for this for many years. As early as 1980, the German Jurists’ Forum (Deutscher Juristentag) advocated a comprehensive reform of the homicide offences based on an expert opinion by Albin Eser. At that time, there were already numerous suggestions for amendment.

15 Meanwhile, there is a broad consensus

regarding the need for reform. Sections 211 and 212 of the Criminal Code are “almost universally seen as in need of reform.”

16 There has been no lack of ideas for reform in

13 Based on those convicted in 2012 of sections 212, 213 of the Criminal Code; including attempts and aiding/abetting.

14 See THOMAS FISCHER, § 212, in STRAFGESETZBUCH (STGB) – KOMMENTAR margin no. 28 (61st ed., 2014).

15 See ANETTE GRÜNEWALD, DAS VORSÄTZLICHE TÖTUNGSDELIKT 1 (2010).

16 FISCHER, Anmerkung vor §§ 211-212, supra note 14, at margin no. 3.

2014] Time to Reform the Homicide Statutes 1033 recent times as well.

17 But because no endeavour has yet been successful, this project is

seen as a “forgotten reform,”18

and some commentators have meanwhile resigned themselves to this, concluding that “the reform of the homicide offences is overdue, but it is not in sight.”

19

D. Grand Coalition = Grand Reform? A New Attempt at an Overdue Reform It is certainly true that reform is overdue. But now it is finally in sight as well. I would like to take up this challenge, and I believe that this is a good time for it. To that end, I have established a Commission that began its work on 20 May 2014. It was tasked with elaborating concrete proposals for a reform of the homicide statutes. The Commission is composed of experts from academia and legal practice; policymakers need to tap the expertise of those who have long been addressing the issue.

20 Their arguments are well-

founded and solid from a historical, philosophical, criminological, systematic and psychological perspective. As such, the debates in the Commission promise to be quite diverse. The Commission will address the ideologically tainted language of the statute, the relationship between murder and manslaughter, and the consequences for those who aid and/or incite. The Commission will also examine the consequences of a conviction for murder, including mandatory life in prison, the possibility of determining guilt of particular gravity, or ordering preventive detention. My motive here is not to call life imprisonment into question, but rather only to bring consistency back to existing law and to the language of the Criminal Code. And we are also striving to find a solution to the “domestic tyrant” cases – one that no longer disadvantages women. The proposals should be ready in about one year. This is an ambitious schedule. But I believe it can be done because we can rely on a great deal of important preliminary work. The framework conditions for a successful reform are optimal for two reasons. The first

17 See the proposed legislation by Schleswig-Holstein, BR-Drs. 54/14. On the proposal by the German Bar Association, see Stefan König, Überlegungen zur Reform der Tötungsdelikts-Normen, 50 RECHT UND POLITIK 9 (2014).

18 Anette Grünewald, Zur Abgrenzung von Mord und Totschlag - oder: Die vergessene Reform, 44 JURISTISCHE

ARBEITSBLÄTTER 401 (2012).

19 Ralf Eschelbach, § 211, in BECK-ONLINE KOMMENTAR ZUM STGB margin no. 1 (Bernd von Heintschel-Heinegg ed., 3rd ed. 2014).

20 The members of the Commission include: Prof. Dr. Dieter Dölling (Heidelberg), Prof. Dr. Anette Grünewald (Humboldt University of Berlin), Bernhard Jass (Berlin Homicide Squad), Dr. Stefan König und Tanja Brexl (German Bar Association), Prof. Dr. Hans-Ludwig Kröber (Berlin), Prof. Dr. Reinhard Merkel (Hamburg), Martin Reinhard (München), Regina Rieker-Müller, Regional Court presiding judge (Stuttgart), Prof. Dr. Ruth Rissing-van Saan (former Federal Court of Justice presiding judge), Prof. Dr. Christoph Safferling (Marburg), RiAG Dr. Jan Schady, Labour Court Judge (Kiel), BABGH Prof. Dr. Hartmut Schneider, federal prosecutor at the Federal Court of Justice.


factor favouring reform is the matter of how the law is perceived by the population. The majority of the people have never really internalized the law as it currently exists. Most laypeople still believe today that, on one hand, “murder” is premeditated, intentional killing, and on the other hand, “manslaughter” is killing on impulse. This was the law until the Nazis changed it, and this is what many laypeople still think although the legal situation is actually different. So after the reform is finished, nobody must fear that the German people will not be able to get used to the new law. After all, they are barely familiar with the law as it now exists. The second factor favouring reform is that crime has decreased. Homicide offences have been declining steadily for the past 20 years. While police crime statistics counted more than 1,200 murders in 1995, today the annual rate is only 630.

21 In the past several years, the number of murders has been cut almost in half.

Germany has become increasingly safe in this respect. The reason we emphasize this is so that the reform project does not get pulled into a debate on security policy, where it does not belong. Today, we are able to speak quite rationally about the basic rule-of-law goal of this reform without having to worry that it will turn into a fight over the proper response to crime. For these reasons, I am confident that the new Commission will create a solid basis for the parliamentary debate. By the end of this parliamentary term in 2017, the changes could already be enacted. Legal policymakers have certainly taken their time in tackling this reform. The Nazis created the rule on homicide offences 73 years ago, and its substance still exists today. Thirty-four years have passed since the appeal for reform issued by the German Jurists’ Forum. Let us not delay this project any longer. We should finally take action – it is high time.

21 See police crime statistics of the Federal Criminal Police Office, available at www.bka.de.

Articles

Between Individual Justice and Mass Claims Proceedings: Property Restitution for Victims of Nazi Persecution in Post-Reunification Germany By Caroline Dostal,* Anke Strauss** & Leopold von Carlowitz***

A. Introduction German history of the twentieth century offers a rich resource of precedent for property restitution and compensation programs. The Federal Republic of Germany instituted different mass claims proceedings shaped to “reverse” or mitigate violations of property rights that took place as part of (a) the persecutions by the Nazi regime from 1933 to 1945, (b) the Land Reform (Bodenreform) during the Soviet occupation of East German territories from 1945 to 1949, and (c) the nationalization activities of the German Democratic Republic (GDR) from 1949 to 1990. Except for cases under the Land Reform in the Soviet zone, restitution preceded compensation as the main means of redress. All reparation schemes involved specific compensation arrangements including elaborate property evaluation systems.

* Caroline Dostal, lawyer and mediator, is employed as Legal Adviser with the Federal Ministry of Finance in Berlin. From 2002 to 2008, she worked as Legal Adviser for the Federal Office for Central Services and Open Property Issues (BADV) where she built up the litigation department and conducted model case proceedings up to the Federal Administrative Court. Email: [email protected]

** Anke Straus is currently posted as Chief of Mission of the International Organization for Migration (IOM) in Morocco. She has extensive experience in property-related mass claims proceedings having served as Senior Legal Officer/Team Leader within the IOM-run German Forced Labour Compensation Programme in Geneva (2001-2005), Director of the Legal Department of the Commission for Real Property Claims and Displaced Persons and Refugees (CRPC) in Sarajevo (1999-2001), and as Legal Officer for the Claims Conference on Jewish Material Claims against Germany (JCC) (1996-1998). Email: [email protected]

*** Leopold von Carlowitz currently serves as Adviser to the “Support to Land Reform” Program of the Deutsche Gesellschaft fuer Internationale Zusammenarbeit (GIZ) in Namibia. From 1999 to 2001, he worked as Head of the Property Verification and Claims Unit of the United Nations Interim Administration Mission in Kosovo (UNMIK) where he was responsible for the establishment of a mass claims property restitution mechanism for refugees and displaced persons. He published widely on issues relating to international property rights development, post-conflict peacebuilding and rule of law assistance. Email: [email protected]


International research on property restitution1 and compensation so far has largely not

focused on these cases, although Germany instituted the most prominent reparation effort in size and scope undertaken after World War II.

2 Following the fall of the Berlin Wall,

Germany also undertook the most extensive re-privatization program involving significant property restitution and compensation of all formerly socialist countries of Central and Eastern Europe. Furthermore, compensation for property losses was also one component of the German forced laborer reparation scheme introduced after the political settlement of a U.S. class action lawsuit against German companies.

3

The present article focuses on the restitution and compensation of Jewish property “aryanized”

4 or confiscated during the Third Reich in the territory of the former East

Germany. The term “aryanization” is used to denote the transfer of Jewish-owned independent economic enterprises to “Aryan“ German ownership throughout the Third Reich and the countries it occupied. Unlike the Federal Republic of Germany, the socialist GDR did not return or compensate for property taken or lost as a consequence of Nazi persecution.

5 While a number of English-language articles have been written on the West

German restitution and compensation systems initiated by the Allies after 1945, there are virtually none on the modification of these systems in former East Germany after German

1 The term “reparations” will be used throughout this article to refer to “things done or given as an attempt to deal with the consequences of political violence” and will comprise both restitution and compensation. The term “restitution” will be used throughout this article to refer “to those measures that seek to reestablish a victim’s status quo ante,” whereas “compensation” is being referred to mean “those measures that make up for the harms suffered through the quantification of harms.” See THE HANDBOOK OF REPARATIONS 456, 564 (Pablo de Greiff, ed., 2006).

2 Cf. Richard M. Buxbaum, A Legal History of International Reparations, 23 BERKELEY J. OF INT’L L. 314 (2005).

3 The settlement included the establishment of the “Remembrance, Responsibility and Future” foundation whose primary purpose was to pay compensation for slave labor and forced labor during the Nazi regime. The program included the amount of 200 million Deutschmark (or 102 million EUR) set aside to compensate for property losses in territories occupied by the German Reich suffered as a result of racial persecution or other Nazi wrong, provided the loss occurred with the “direct, essential and harm-causing participation of a German Enterprise” and had not been covered by any of the previous German Reparation schemes. For details, see Richard M. Buxbaum, Deutsche Industrie, Wiedergutmachung und Völkerrecht, in PROFITEURE DES NS-SYSTEMS?: DEUTSCHE UNTERNEHMEN

UND DAS “DRITTE REICH” (Jürgen Lillteicher ed., 2006); INTERNATIONAL ORGANIZATION FOR MIGRATION (IOM), PROPERTY

RESTITUTION AND COMPENSATION: PRACTICES AND EXPERIENCES OF CLAIMS PROGRAMS 31–33 (2008) [hereinafter IOM]; Pierre A. Karrer, Innovation to Speed Mass Claims: The Work of the Property Claims Commission of the German Foundation “Remembrance, Responsibility and Future,” 5 J. WORLD INVESTMENT & TRADE 57 et seq. (2004).

4 Avraham Barkai, Arisierung, in 1 ENCYCLOPEDIA OF THE HOLOCAUST 84 (Israel Gutman ed., 1990).

5 Hanri Mostert, Lost Information and Competing Interests in Restoring Germany’s Dispossessed Property – the Recent Decision of the German Federal Administrative Court, 5 GERMAN L. J. 2–6 (2004).

2014] Property Restitution for Victims of Nazi Persecution 1037

reunification in 1990.6 This article seeks to fill this gap by outlining and analyzing the post-

unification German restitution and compensation efforts for lost or taken Jewish property. Reparations are part of the history of the twentieth-century world politics. Reparation claims have gained considerable strength over the years, as is made obvious by the new wave of reparations starting in the 1990s.

7 This development of new claims owes a great

deal to German reparations after World War II, which set a precedent for—and constitute a turning point in—victims’ rights.

8

Research on international mass claims proceedings usually names the establishment of the Iran-United States Claims Tribunal in 1981 to settle claims (including property claims) resulting from the Iranian hostage taking in 1979 as the key event that led to the surge of mass claims processes at the end of the last century.

9 Mass claims processes intend to

provide effective remedies for thousands of individuals who suffered losses, damage, or injuries as a result of an armed conflict or a similar event causing widespread damage. Modern claims programs are expected to accomplish this task in a shorter period of time and at a lower cost than ordinary dispute resolution systems.

10 To achieve this goal, most

mass claims processes apply innovative ways to cope with the plentiful evidentiary challenges that usually exist in post-conflict situations or after passage of a considerable period of time—such as the unavailability and destruction of evidence, the passing away of potential witnesses, or the lack of first-hand information, since claimants are often descendants of the originally damaged party/owner. Such challenges are often addressed by the use of presumption and “relaxed” standards of proof for relevant facts such as ethnic discrimination.

11 Mass claims programs also tend to limit oral proceedings and

6 On West German restitution and compensation, see, for example, NORMAN BENTWICH, THE UNITED RESTITUTION

ORGANIZATION 1948-1968 (1969); Kurt Schwerin, German Compensation for Victims of Nazi Persecution, 67 NW. U. L. R. 479 (1972). For a recent overview of the West German reparations effort (without focus on property restitution), see Ariel Colonomos & Andrea Armstrong, German Reparations to the Jews After World War II: A Turning Point in the History of Reparations, in HANDBOOK OF REPARATIONS 390 et seq. (Pablo de Greiff ed., 2006).

7 ELAZAR BARKAN, THE GUILT OF NATIONS: RESTITUTION AND NEGOTIATING HISTORICAL INJUSTICES xxiv-xxviii, 318 (2000).

8 Colonomos & Armstrong, supra note 6, at 411.

9 See, e.g., John R. Crook, Mass Claims Process: Lessons Learned Over Twenty-Five Years, in REDRESSING INJUSTICES

THROUGH MASS CLAIMS PROCESSES 41 (Int’l Bureau of the Permanent Court of Arbitration ed., 2006). For listings of the main mass claims programs, see INTERNATIONAL MASS CLAIMS PROCESSES: LEGAL AND PRACTICAL PERSPECTIVES 13 (Howard M. Holtzmann & Edda Kristjansdottir eds., 2007); IOM, supra note 3.

10 Hans Das, The Concept of Mass Claims and the Specificity of Mass Claims Resolution, in REDRESSING INJUSTICES

THROUGH MASS CLAIMS PROCESSES 6 (International Bureau of the Permanent Court of Arbitration ed., 2006).

11 IOM, supra note 3, at 4. See also Jacomijn J. van Haersolte-van Hof, Innovations to Speed Mass Claims: New Standards of Proof, in REDRESSING INJUSTICES THROUGH MASS CLAIMS PROCESSES 13 (Int’l Bureau of the Permanent Court of Arbitration ed., 2006).


appeals processes, and develop standardized and often computerized modes for accelerated claims processing, including unified claim forms, the grouping of claims, statistical modeling and sampling, computerized matching, and standardized valuation and verification methodologies.

12

Many mass claims programs are directed at the restitution or compensation of properties lost, taken under duress, or confiscated in the course of armed conflict, discriminatory systems, or forced migration.

13 In particular, in the direct aftermath of wars or

humanitarian crises, corresponding programs tend to favor restitution over compensation, often due to financial constraints.

14 However, as stipulated in the Principles on Housing and

Property Restitution for Refugees and Displaced Persons by the former U.N. Sub-Commission for the Promotion and Protection of Human Rights, compensation is seen as an integral component of a property restitution process and should be used “when the remedy of restitution is not factually possible, or when the injured party knowingly and voluntarily accepts compensation in lieu of restitution, or when the terms of a negotiated peace settlement provide for a combination of restitution and compensation.”

15

Even if the German restitution and compensation schemes, like the Iran-United States Claims Tribunal,

16 do not fulfill all criteria of a modern mass claims process, they are

nevertheless an important and early case of such proceedings that deserve more attention in pertinent historical accounts. The Western Allies’ policy to make (West) Germany return or compensate Jewish property constituted a novelty in international law, as no precedent existed in 1945 for the international protection of property rights of a persecuted national

12 See Holtzmann & Kristjansdottir, supra note 9, at 232, 237, 243, 290.

13 IOM, supra note 3, at 1. See also Norbert Wühler, Claims for Restitution and Compensation, in INTERNATIONAL

MIGRATION REVIEW: DEVELOPING PARADIGMS AND KEY CHALLENGES 204 (Ryszard Cholewinski, Richard Perruchoud & Euan Macdonald eds., 2007).

14 For example, the compensation fund foreseen under Article VII of the Dayton Peace Agreement was never established due to a lack of funding; restitution and confirmation of rights were the only available options for claimants. Scott Leckie, New Directions in Housing and Property Restitution, in RETURNING HOME: HOUSING AND

PROPERTY RESTITUTION RIGHTS OF REFUGEES AND DISPLACED PERSONS 38 (Scott Leckie ed., 2003).

15 Principles on Housing and Property Restitution for Refugees and Displaced Persons (“Pinheiro-Principles“), art. 21.2, UN Doc. E/CN.4/Sub.2/2005/17 (June 28, 2005), http://www.ohchr.org/Documents/Publications/pinheiro_principles.pdf. See also Agnès Hurwitz, Kaysie Studdard, & Rhodri Williams, Housing, Land, Property and Conflict Management: Identifying Policy Options for Rule of Law Programming 20 (International Peace Academy, Policy Report, October 2005).

16 The Tribunal differed from later mass claims proceedings mainly in that it operated with traditional arbitral procedures and failed to provide timely justice for many claimants. Cf. Crook, supra note 9, at 44.


minority.17

The right of the individual persons to reclaim their property as part of the German reparation effort was another major step in the progressive development of international law. With the exception of a few mixed claims commissions established after World War I, international legal practice at the time only allowed states access and standing before international claims processes.

18 Therefore, Buxbaum observed that

“German reparations have . . . been at the center of the single most critical and controversial evolution of public international law in the past century; namely, the movement from state-centered to societal- and individual-centered rights and obligations.”

19 The German case is also an early precedent for the introduction of a

claimant-friendly presumption of proof that the property in question was indeed taken as a result of persecution by the Nazis. This article focuses on the measures and procedures established by post-reunified Germany for the restitution and compensation of victims of Nazi persecution. As the post-1990 legislation in part refers back to the reparation legislation by the Western Allies, this article will first give a brief historical overview of the Nazi persecution of the Jews from 1933 to 1945 and then shortly outline the post-war restitution and compensation measures in West Germany. A brief description of the treatment of Jewish properties in the Soviet-occupied zone and after 1949 in the GDR will follow. The subsequent sections will describe the legislative history and core provisions of the relevant post-reunification legislation, particularly the Law on the Regulation of Unresolved Property Issues (Vermögensgesetz, hereinafter the Property Act), i.e. the central piece of legislation relating to the resolution of property issues in the post-socialist East German territories,

20

as well as on the Law on the Compensation of Victims of Nazi Persecution (NS-Verfolgtenentschädigungsgesetz, hereinafter referred to as the Nazi Compensation Act).

21

Special emphasis will be put on the claimant-friendly presumption of proof and on the applied standards of compensation for properties impossible to return. The article will also

17 This was noted by the British Foreign Office, which unsuccessfully tried to find historical precedents. See FOREIGN OFFICE RESEARCH DEPARTMENT, REPORT ON HISTORICAL PRECEDENTS RELEVANT TO THE QUESTION OF THE COMPENSATION

OF GERMAN NATIONALS (Feb. 28, 1956) (available in the Secretariat of the Chief of Staff British Zone, Advanced Headquarters Berlin, Public Record Office, FO 1046/901). See also Leopold von Carlowitz, The Human Right to Property for Refugees and Displaced Persons?: On the Progressive Development of Customary Law by the International Administrations in the Balkans, 1 IRISH Y.B. INT’L L. 227 (2006).

18 Rudolf Dolzer, Mixed Claims Commissions, in 3 ENCYCLOPEDIA OF PUBLIC INTERNATIONAL LAW 438 (Rudolf Bernhardt ed., 1997).

19 Buxbaum, supra note 2, at 314.

20 GRUNDGESETZ FÜR BUNDERSREPUBLIK DEUTSCHLAND [GRUNDGESETZ] [GG] [BASIC LAW], July 22, 1992, BGBl. I at 1257 (Ger.) (Property Act art. 1(VI), sentence 2).

21 GRUNDGESETZ FÜR BUNDERSREPUBLIK DEUTSCHLAND [GRUNDGESETZ] [GG] [BASIC LAW], Sept. 27 1994, BGBl. I at 2632 (Ger.) (Law on the Compensation of Victims of NS Persecution).


analyze the claims process and describe the main claims constellations. The concluding remarks will draw some lessons learned for modern mass claims proceedings and pose the question whether the restitution and compensation process contributed to the reconciliation between Jews and (non-Jewish) Germans. B. Nazi Persecution and West-German Property Restitution and Compensation A typical example: A Jewish doctor owned an apartment house in Leipzig, which had a market value of 500,000 Reichsmark in 1935. Following the Nuremburg laws, he was unable to continue treating his “Aryan” patients and earn enough to support his family. Following the Reichskristallnacht and mounting pressure by the Nazis in 1938, the proprietor decided to emigrate. In order to finance the family's departure, he had to sell the house. The Aryan purchaser paid 100,000 Reichsmark, of which over 90% was kept by the Reich for the Tax on Fleeing the Reich (Reichsfluchtsteuer) and the Jewish property tax. A special example: The Wertheim family was one of the most famous Jewish department store owners in Germany. In 1885, Georg Wertheim opened his first textile business in Berlin-Mitte, and in 1892, the first department store on Leipziger Strasse. The banker Emil Georg von Staus, who was a member of the Nazi Party as of 1931, played an important role in the aryanization of the Wertheim business. In 1932, he was representative of Goering as vice president of the Reichstag. For the construction of Hitler’s new Reich Chancellery, a plot of the Wertheim department store group was needed. Georg Wertheim trusted von Staus as his banker. Following his advice, Wertheim sold the shares and also land in Berlin-Mitte. Gradually, Wertheim was ousted from management and forced to transfer the remaining business capital to his “Aryan” wife. In return, he received confirmation of being a “German business,” which meant the department store group was considered “aryanized” and was able to continue. Von Staus further convinced Wertheim to have his mixed marriage annulled so that he could continue to live unmolested in Berlin.

22

I. Nazi Persecution of Jews from 1933 to 1945 The discrimination and persecution of Jewish citizens in Nazi Germany was based on approximately 430 laws, regulations, directives, and decrees introduced over time, which extended to all parts of Jewish life, including the deprivation of all Jewish private property.

23 Immediately following the seizure of power on 30 January 1933, the Nazi

government introduced discriminatory measures against persons considered to be racially or politically inferior. The year 1935 marked the first peak of legal persecution with the

22 For a comprehensive overview, see SIMONE LATWIG-WINTERS, WERTHEIM-EIN WARENHAUSUNTERNEHMEN UND SEINE

EIGENTÜMER: EIN BEISPIEL DER ENTWICKLUNG DER BERLINER WARENHÄUSER BIS ZUR ‘ARISIERUNG’ (1997).

23 BRUNO BLAU, DAS AUSNAHMERECHT FÜR DIE JUDEN IN DEUTSCHLAND 1933 – 1945 7 (3d ed. 1954).


adoption of the German Citizen Act (Reichsbürgergesetz) and the Law on the Protection of German Blood and Honor (Gesetz zum Schutze des deutschen Blutes und der deutschen Ehre). These so-called “Nuremberg Laws” distinguished between “pure” Germans and Jews and deprived the latter of their citizen rights. Consequently, many Jewish citizens felt pressed to sell their property to finance the costs for their emigration, as in the typical example above. They were regularly exploited by buyers and forced to accept inappropriately low prices. Often, Jewish property was confiscated on legal grounds for the benefit of the state. Moreover, the persecuted were subjected to special taxes and fees, which they were only able to meet through the sale of their property or the handover of stocks and bonds. The next peak of Jewish persecution took place in 1938. In April, German authorities issued a Regulation on the Declaration of Jewish Assets (Verordnung über die Anmeldung des Vermögens von Juden) that stipulated that all Jews had to declare and evaluate all of their domestic and international property, including the property of non-Jewish spouses.

24 The

Regulation provided that an inventory of assets had to be produced and submitted to the municipal administration by 30 June 1938; non-compliance was sanctioned with prison sentences. In July 1938, the Trade Law was amended so that Jewish citizens and companies were de facto precluded from carrying out a trade and prevented from engaging in real estate business.

25 Of course, the amendments did not foresee any compensation for

personal or economic losses that were suffered as a consequence of the implementation of this law. On 12 November 1938—3 days after the Reichskristallnacht, a pogrom in the course of which many Jewish businesses, community buildings, and synagogues were burnt or destroyed—the Government adopted the Regulation Regarding the Elimination of All Jews from German Economic Life (Verordnung zur Ausschaltung der Juden aus dem deutschen Wirtschaftsleben).

26 It banned Jewish citizens from running retail and mail-order

businesses as of 1 January 1939 and prohibited any Jewish self-employed craftsmanship. Moreover, the law prohibited Jews from visiting fairs and markets and from working in leading business positions. A few days later, an implementing regulation required that any Jewish-owned business would have to be closed and liquidated, or if in the public interest,

24 GRUNDGESETZ FÜR BUNDERSREPUBLIK DEUTSCHLAND [GRUNDGESETZ] [GG] [BASIC LAW] 1992 BGBl. I at 414 (Ger.) (Regulation on the Declaration of Jewish Assets, art. 1).

25 Gesetz zur Änderung der Gewerbeordnung für das Deutsche Reich [Law Amending the German Reich Trade Law], art. 34(b) GERMAN REICH OFFICIAL GAZETTE, July 6, 1938, RGBl. I at 823 (Ger.).

26 Regulation on the Exclusion of Jews from German Economic Life, GERMAN REICH OFFICIAL GAZETTE, Nov. 12, 1938, RGBl. I at 1580 (Ger.).


transferred into non-Jewish ownership.27

Additional legislation determined that the government could set particular deadlines for Jewish owners to liquidate or sell their businesses, including agricultural and forestry enterprises and real estate.

28 All Jewish-

owned shares, bonds, and other fix-income securities had to be deposited with an exchange control bank. While an initial mass deportation of Jews was carried out in the fall of 1938, further deportations remained sporadic for some time.

29 However, as of 1941, the Jewish

population was deported to concentration camps as a general policy, with Hitler declaring in September 1941 that Germany be cleared of Jews by the end of the year and that the Gestapo should seize their property in favor of the German Reich.

30 The law required that

Jews whose deportation was imminent had to submit the aforementioned inventory of assets to the Gestapo.

31 Overall, the aryanization and confiscation of Jewish property

during thirteen years of Nazi rule belong to the most extensive property transfers in German history. It comprised movable and immovable property including real estate, businesses, securities, bank accounts, insurance policies, works of art, and other valuables. II. Restitution of Identifiable Property Following Germany’s unconditional surrender on 8 May 1945, the Allied Powers took over executive and legislative powers. The German territory was subdivided into four occupied zones with each occupying power issuing its own legislation.

32 In November 1947, the

United States was the first to issue restitution legislation, the Military Government Law No.

27 Verordnung zur Durchführung der Verordnung zur Ausschaltung der Juden aus dem deutschen Wirtschaftsleben [Regulation Implementing the Regulation on the Exclusion of Jews from German Economic Life], GERMAN REICH OFFICIAL GAZETTE, Nov. 23, 1938, RGBl. I at 1642 (Ger.).

28 Verordnung über den Einsatz des jüdischen Vermögens [Regulation on the Use of Jewish Property], GERMAN

REICH OFFICIAL GAZETTE, Dec. 3, 1938, RGBl. I at 1709 (Ger.).

29 Christopher R. Browning, Deportations, in 1 ENCYCLOPEDIA OF THE HOLOCAUST 365 (Israel Gutman ed., 1990).

30 Id. at 367.

31 Letter from German Reich Minister of Finance, Schnellbrief (Nov. 4, 1941), reprinted in 6 BUNDESAMT ZUR

REGELUNG OFFENER VERMÖGENS, SCHRIFTENREIHE DES BUNDESAMTES ZUR REGELUNG OFFENER VERMÖGENSFRAGEN 230 (1994).

32 That Jewish property lost or taken as a consequence of persecution should generally be returned to its owners was a claim not only made by victim groups but also by the Allies as well as—to a lesser extent—by relevant German political and economic circles. No consensus could, however, be reached concerning the extent and underlying principles of the property restitution regime. As a consequence, the remaining German Länder refused to establish restitution regimes themselves with their legislative competence granted without prejudice to the powers of the Allies. The latter were thus forced to take on the lead and to carry regulatory responsibility for the reparations program. Yet, the Allies were unable to find a common approach but adopted, with the exception of the Soviet Union, slightly different restitution legislation for their own occupied zones.


59 on the Restitution of Identifiable Property (Militärregierungsgesetz Nr. 59 über die Rückerstattung feststellbarer Vermögensgegenstände).

33 This law included many principles

advocated by American Jewish interest groups that were not necessarily shared by the other Allies or by German stakeholders.

34 Given the lack of financial resources in the post-

war environment, the reparations system was based on restitutio in integrum of identifiable property—compensation was only to be paid if confiscated or alienated property could not be returned, such as for destruction or transformation.

35 The law

aimed:

[T]o effect to the largest extent possible the speedy restitution of identifiable property (tangible and intangible and aggregates to tangible and intangible property) to persons who were wrongfully deprived of such property within the period from 30 January 1933 to 8 May 1945 for reasons of race, religion, nationality, ideology or political opposition to National Socialism.

36

In general, the principle of territoriality applied to the restitution process, meaning that either the property loss or seizure had to have taken place within the borders of the German Reich or, if the reclaimed property was lost or taken in the Nazi-occupied territories outside the Reich, claimants had the difficulty of proving that the property was now located in the American sector.

37

The restitution system comprised aryanized property sold under duress to individuals or private companies as well as property formally confiscated by the state and its organs. The law stipulated objective restitution of lost or taken property irrespective of whether the property had been sold to third parties or was in the hands of the state.

38 As will be

outlined in more detail in section C.I below, persecuted individuals or members of a

33 Military Government Law no. 59 [Restitution of Identifiable Property], MILITARY GOV’T GAZETTE, GERMANY UNITED

STATES AREA OF CONTROL, ISSUE G (Nov. 10, 1947) (Ger.).

34 Constantin Goschler, Zwei Wellen der Restitution: Die Rückgabe jüdischen Eigentums nach 1945 und 1990, in RAUB UND RESTITUTION: KULTURGUT AUS JÜDISCHEM BESITZ VON 1933 BIS HEUTE 105 (Inka Bertz & Michael Dorrmann eds., 2008).

35 Schwerin, supra note 6, at 490.

36 Military Government Law no. 59, art. 1, para. 1. [Restitution of Identifiable Property], MILITARY GOV’T GAZETTE, GERMANY UNITED STATES AREA OF CONTROL, ISSUE G, Nov. 10, 1947 (Ger.).

37 HANS-JÖRG GRAF, RÜCKGABE VON VERMÖGENSWERTEN AN VERFOLGTE DES NATIONALSOZIALISTISCHEN REGIMES IM

BEITRITTSGEBIET 53 (1999).

38 Cf. Military Government Law no. 59, supra note 36.


persecuted group—such as the Jews—were presumed to have lost their property as a consequence of Nazi persecution. This approach stood in sharp contrast to the position held by the German Länder, which preferred any restitution regime to follow principles of the German Civil Code including the provisions of a bona fide acquisition.

39

U.S. law recognized a collective Jewish claim that involved the transfer of heirless Jewish property to Jewish successor organizations that could use their resources for Jewish interests worldwide. Shortly after the adoption of the U.S. Military Law No. 59, the French administration issued its own restitution law that differed from the U.S. position and determined that heirless Jewish property would be used to finance a compensation fund.

40

In May 1949, the British administration followed and adopted restitution legislation that used a simplified version the U.S. approach.

41 In July 1949, a similar regulation was

introduced for West Berlin by Order of the Allied Kommandantura.42

From the outset of Allied occupation, German authorities were required to implement the Allied property-related legislation and directives.

43 Claims for restitution had to be

submitted to newly-established reparation offices at the competent regional courts. 44

If the current owner objected to the claim, the court reviewed the case in civil law proceedings. Final appeals fell under the jurisdiction of the Supreme Court of Restitution Appeals established by the Western Allies for their occupied zones and West Berlin. During

39 Restitution could have been based on the unjust enrichment clauses of the German Civil Code (para. 812 et seq.). However, applying this legal regime would have entailed the intolerable consequence that the German Treasury would inherit the claims in those cases where whole families had perished under the Nazi Regime (compare para. 1936 of the German Civil Code). Moreover, restoring the pre-war situation based on a private law regime would have been extremely time-consuming, inexpedient, and unacceptable for the victims. Civil law proceedings require that every lawsuit must identify an opponent who is procedurally available and solvent. Further, the provisions on tort oblige the victim claiming damages to carry the burden of proof for all facts. These provisions would have made it impossible for many victims to make their case.

40 Ordinance No. 120 [Restitution of Property Which Has Been Subjected to Acts of Theft], Nov. 10, 1947, MILITARY

GOV’T GAZETTE, FRENCH AREA OF CONTROL (Ger.).

41 Military Government Law no. 59 [Restitution of Identifiable Property to Victims of Nazi Oppression], May 12, 1949, MILITARY GOV’T GAZETTE, BRITISH AREA OF CONTROL (Ger.).

42 Allied Kommandatura Berlin Order [Restitution of Identifiable Property to Victims of Nazi Oppression], Feb. 16, 1949, BK/O (49), 26 (cited in Restitution of Identifiable Property to Victims of Nazi Oppression: Allied Kommandatura Berlin Order, 44 AM. J. INT’L L. 39–67 (1950)).

43 WALTER SCHWARZ, DIE WIEDERGUTMACHUNG NATIONALSOZIALISTISCHEN UNRECHTS DURCH DIE BUNDESREPUBLIK DEUTSCHLAND, in 1 RÜCKERSTATTUNG NACH DEN GESETZEN DER ALLIIERTEN MÄCHTE 27 (1974).

44 For the purposes of this article, the term “claim” will be used for the allegation of the right to restitution or compensation, whereas the term “claim application” will be used for the written submission, requesting confirmation of the claimed right.


the first few years, the bench was entirely composed of Allied judges, but successively opened to German judges with a neutral chairman, usually of Scandinavian nationality.

45

The Allied-German Treaty on the Settlement of Problems Resulting from War and Occupation of 26 May 1952 as amended by the “Paris Protocol” of 23 October 1954 stipulated that the Allied restitution laws remained valid for the newly established Federal Republic of West Germany as part of its legislation.

46 It was also determined that these

laws could not be changed to the detriment of the claimants. However, the differing restitution laws in the various zones made the restitution proceedings very complex and difficult. Moreover, while the U.S. and British legislation generally provided for compensation claims, it did not spell out detailed proceedings and evaluation modalities. Bound to implement the Allied restitution legislation, the West German government improved the situation with the adoption of the German Federal Restitution Law (Bundesrückerstattungsgesetz) in July 1957.

47 This law provided a uniform restitution

system for all of West Germany based on the existing Allied laws. The Restitution Law also determined that, in principle, full compensation was to be paid for property that was destroyed or that could not otherwise be returned on the basis of a replacement value of 1 April 1956.

48 Notwithstanding the principle of complete

indemnification, the Restitution Law included a ceiling for compensation claims against the Republic of West Germany of 1.5 billion Deutschmark with the provision that all claims were to be satisfied up to at least 50%.

49 Only in 1964, with the Law’s third amendment,

was the ceiling dropped and the promise of full compensation realized.50

III. Compensation for Victims of Nazi Persecution In the 1952 Settlement Treaty, Germany acknowledged an obligation to ensure adequate compensation for injuries not covered by the Restitution laws, such as bodily harm or


46 See GRUNDGESETZ FÜR DIE BUNDESREPUBLIK DEUTSCHLAND [GRUNDGESETZ] [GG] [BASIC LAW], Oct. 23, 1955, BGBl.II at 69 (Ger.).

47 GRUNDGESETZ FÜR DIE BUNDESREPUBLIK DEUTSCHLAND [GRUNDGESETZ] [GG] [BASIC LAW], July 19, 1967, BGBl. I at 734 (Ger.) [Federal Restitution Law].

48 Id. at para. 1.

49 Id. at para. 31. Cf. Schwerin, supra note 6, at 491.

50 Report on the Reparation and Compensation for Nazi Injustice and on the Situation of Sinto and Roma in Germany, DEUTSCHER BUNDESTAG: DRUCKSACHEN UND PROTOKOLLE [BT] 10/6287 (Ger.).


damage of professional advancement.51

Subsequently, Germany adopted a Federal Supplementary Law for the Compensation of Victims of National Socialist Persecution (Bundesergänzungsgesetz zur Entschädigung für Opfer der nationalsozialistischen Verfolgung) that was amended several times in the following years to expand the compensation coverage and to improve its provisions.

52 The final outcome was the 1965

Final Federal Compensation Law (Bundesentschädigungsschlussgesetz), which provided compensation to Nazi victims residing in Germany who had lived within the borders of the German Reich in 1937 for damages relating to life, health, liberty, property, and possessions, as well as to vocational and economic pursuits. With regards to property, the persecuted could claim the replacement value (not exceeding 75,000 Deutschmark) for any object that belonged to him or her and that was destroyed or left to be looted within the borders of the German Reich in 1937. For a claim to qualify, the loss had to have occurred because the claimant migrated or fled Nazi oppression, was deprived of his or her liberty, lived “underground,” or was expelled or deported in connection with his or her persecution.

53

IV. Equalization of Burdens (“Lastenausgleich”) The Federal Republic of Germany also provided property-related compensation to Germans “damaged by the war and its consequences.” The Law on the Equalization of Burdens (Lastenausgleichsgesetz) entitled individuals who suffered bomb and currency damages, politically-persecuted persons, or expellees from East Germany as well as from formerly German or German-inhabited territories in Central and Eastern Europe to non-welfare assistance.

54 Guided by social justice considerations, the Equalization of Burdens

Fund was filled both with public revenues and with compulsory contributions over a thirty-year period from wealthy Germans with considerable remaining property and assets.

55


52 For a more detailed overview of the various amendments, see Colonomos & Armstrong, supra note 6, at 402 et. seq.

53 See Article 51 of the Final Federal Compensation Law in: GRUNDGESETZ FUR DIE BUNDERSREPUBLIK DEUTSCHLAND

[GRUDNGESETZ] [GG] [BASIC LAW], June 29, 1956, BGBl. I at 570 (Ger.).

54 Gesetz über den Lastenausgleich [LAG] [Law on the Adjustments of Burdens], Aug. 14, 1952, BGBL. I at 446 (Ger.). See also MICHAEL L. HUGHES, SHOULDERING THE BURDENS OF DEFEAT: WEST GERMANY AND THE RECONSTRUCTION OF

SOCIAL JUSTICE 77 (1999).

55 See LUTZ WIEGAND, DER LASTENAUSGLEICH IN DER BUNDESREPUBLIK DEUTSCHLAND 1945 BIS 1985, at 138 et seq. (1992) (providing a detailed description of the system financing the adjustment funds).


Many German victims of Nazi persecution were also eligible to receive Lastenausgleich. These compensation payments were later deducted from their compensation payments under the Property Act and the Nazi Compensation Act.

56

C. Reparations After German Reunification Since 1990 Unlike West Germany, East Germany did not establish a large-scale property restitution or compensation system. The GDR saw itself in the tradition of Communist anti-fascism and recognized the need for rehabilitation of its Jewish population as “victims of fascism.” However, East German rehabilitation was provided through housing, medical care, and special pensions. Moreover, Jewish communities could reclaim their communal properties, such as synagogues and social centers.

57

After the war, only Thuringia—which was initially occupied by U.S. forces before it was handed over to the Soviet military administration in the summer of 1945—adopted a restitution law for victims of Nazi persecution.

58 But the law’s ratio ran contrary to the

negative Socialist stance towards private property rights. Like many other Socialist countries at the time, the Soviet-occupied zone sought to abolish private property and nationalize larger scale properties by means of a Land Reform between 1945 and 1949.

59

Newly-created “socially owned property” was not to be restituted to private persons, including former Jewish right holders. Thus, the Thuringian restitution initiative led to only a few proceedings before the law was abolished in 1952. The Soviet zone and, beginning in 1949, the GDR, de facto perpetuated the confiscation and aryanization of Jewish property in East German territories. Any property restitution scheme was rejected as it was seen to be “conducive to the reestablishment of the American monopoly capitalism.”

60 In a similar tone, the GDR’s state organ Neues

56 See infra Part C.III.

57 See Jan Philipp Spannuth, Rückerstattung Ost: Der Umgang der DDR mit dem ‘arisierten’ Vermögen der Juden und die Gestaltung der Rückerstattung im wiedervereinigten Deutschland, in “ARISIERUNG” UND RESTITUTION: DIE

RÜCKERSTATTUNG JÜDISCHEN EIGENTUMS IN DEUTSCHLAND UND ÖSTERREICH NACH 1945 UND 1989, at 253 (Constantin Goschler & Jürgen Lillteicher eds., 2002).

58 Id.at 250.

59 See Rainer Frank, Privatization in Eastern Germany: A Comprehensive Study, 27 VAND. J. TRANSNAT’L L. 812 (1994) (describing, in more detail, how nationalization concerned industrial, commercial, agricultural, and residential property).

60 SCHWARZ, supra note 43 at 327.


Deutschland coined the West German reparations scheme agreed upon in the Luxemburg Agreement as a “business between West German and Israeli big capitalists.”

61

After the fall of the Berlin wall, the situation changed when the East German Länder

62

acceded to the Federal Republic of Germany in 1990. Germany accepted its historical responsibility for Nazi injustice and entered into an international legal obligation in a 1992 agreement with the U.S. to provide comprehensive reparations for victims of Nazi persecution in accordance with the applicable restitution laws.

63 Due to negotiations with

the Allies and the Conference on Jewish Material Claims against Germany (JCC) and the obligations of the Reunification Treaty, Germany needed to institute a restitution and compensation process for victims of Nazi persecution for property located in the East German territory similar to the process it had previously undertaken for West Germany. However, forty-five years of Socialist rule had made property issues much more complex in comparison to the early days of West German property restitution. Nearly all industrial and agricultural property had been expropriated and re-organized as nationalized property, and socially-owned enterprises were characterized by a complex system of use, occupancy, and control rights.

64 Moreover, from 1945 to 1989, approximately 3.5 million East Germans

had left their homes and resettled mainly in West Germany, leaving their property to be appropriated by the GDR. Additionally, there were also numerous expropriations and infringements by the State authorities on property rights of Germans who stayed in the GDR.

65

Property issues belonged to the most controversial topics that the East and West German governments had to tackle in their negotiations of the terms of reunification. Property

61 Bernhard Rürup, Einleitung, in “ARISIERUNG” UND RESTITUTION: DIE RÜCKERSTATTUNG JÜDISCHEN EIGENTUMS IN

DEUTSCHLAND UND ÖSTERREICH NACH 1945 UND 1989, at 193 (Constantin Goschler & Jürgen Lillteicher eds., 2002). See also Colonomos & Armstrong, supra note 6 at 397 et seq. (providing more explanation on the Luxemburg Agreement).

62 The Länder were abolished by the GDR in 1952 and re-established in 1990 as Brandenburg, Mecklenburg-Vorpommern, Saxony, Saxony-Anhalt, and Thuringia.

63 Gesetz zu dem Abkommen vom 13. Mai 1992 zwischen der Regierung der Bundesrepublik Deutschland und der Regierung der Vereinigten Staaten von Amerika über die Regelung bestimmter Vermögensansprüche [Act of the 13 May 1992 Agreement between the Government of the Federal Republic of Germany and the Government of the United States of America concerning the settlement of Certain Property Claims] Dec. 21, 1992, BGBL. II at 1225, art. 3, para. 6 (Ger.).

64 See D.B. Southern, Restitution or Compensation: The Land Question in East Germany, 42 INT’L & COMP. L.Q. 692 (1993).

65 Gerhard Fieberg, Legislation and Judicial Practice in Germany: Landmarks and Central Issues in the Property Question, in CONFRONTING PAST INJUSTICES: APPROACHES TO AMNESTY, PUNISHMENT, REPARATION AND RESTITUTION IN SOUTH

AFRICA AND GERMANY 81 et seq. (Medard R. Rwelamiera & Gerhard Werle eds., 1996).

http://en.wikipedia.org/wiki/Brandenburg

http://en.wikipedia.org/wiki/Mecklenburg-Vorpommern

http://en.wikipedia.org/wiki/Mecklenburg-Vorpommern

http://en.wikipedia.org/wiki/Saxony

http://en.wikipedia.org/wiki/Saxony-Anhalt

http://en.wikipedia.org/wiki/Thuringia


claims by victims of Nazi persecution were not settled by reviving the old West German restitution scheme. Instead, the two governments decided to address them in the course of an overall settlement of all relevant property issues. They tried to avoid creating pluralist restitution regimes, and the GDR in particular was guided by the notion of a socially acceptable balance of interests between the persecuted and present occupants. Nearly fifty years after Nazi rule, the governments found the strict West German restitution laws based on Allied legislation inappropriate, as they did not allow for a bona fide acquisition by third parties.

66

The post-1989 property settlement was first stipulated in a Joint Declaration of 15 June 1990 that became binding by incorporation into the Unification Treaty between the Federal Republic of Germany and the GDR.

67 While the Joint Declaration set out the

general principles of property restitution and compensation, the Property Act determined the circumstances and procedure for restitution in more detail.

68 The principle of

restitution before compensation governed the process for property confiscated by the GDR between 1949 and 1989 and for property lost as a result of religious, political, and racial persecution during Nazi rule between 1933 and 1945. However, any property nationalized in the course of the Land Reform under Soviet occupation from 1945 to 1949 could not be reclaimed. Irrespective of the principle of restitution before compensation, claimants had the right to opt for either restitution or compensation of their confiscated or lost property.

69

At the outset of the property settlement negotiations, regulatory focus was on property issues that had arisen in connection with the previous Socialist regime(s). Property losses suffered under the Nazi regime were only introduced at the end of the legislative process as an additional category for which the negotiated restitution system was to apply. Consequently, a series of systematic problems occurred that required specialized follow-up legislation and clarification. For example, in 1992, the Property Act was amended to

66 Christian Meyer-Seitz, Die Entwicklung der Rückerstattung in den neuen Ländern: Eine juristische Perspektive, in “ARISIERUNG” UND RESTITUTION: DIE RÜCKERSTATTUNG JÜDISCHEN EIGENTUMS IN DEUTSCHLAND UND ÖSTERREICH NACH 1945 UND

1989, at 84 (Constantin Goschler & Jürgen Lillteicher eds., 2002) (discussing more generally a socially practicable resolution of the property question).

67 See Verordnung zu dem Übereinkommen zur Regelung bestimmter Fragen in bezug auf Berlin vom 25. September 1990 [Joint Declaration for the Regulation of Open Property Issues], June 15, 1990, BGBL. II at 1273 (Ger.); Vertrag zwischen der Bundesrepublik Deutschland und der Deutschen Demokratischen Republik über die Herstellung der Einheit Deutschlands [Einigungsvertrag] [Unification Treaty], Aug. 31, 1990, BGBL. II at 889 (Ger.).

68 Mostert, supra note 5, at 4–5.

69 Gesetz zur Änderung des Vermögensgesetzes und anderer Vorschriften [Zweites Vermögensrechtsänderungsgesetz] [Second Amendment to the Property Act], July 22, 1992, BGBL. I at 1257, art. 8, para. 1 (Ger.).


improve effective redress for victims of Nazi persecution.70

The lawmaker clarified that Nazi victims would be entitled to restitution even if their property, aryanized under Nazi rule, was later nationalized under Soviet occupation.

71 The amendment also inserted a

claimant-friendly presumption of proof referring to previous Allied legislation.72

The Property Act only provided the legislative framework for restitution claims. Compensation claims needed to be based on the comprehensive Compensation and Adjustment Payments Act (Entschädigungs- und Ausgleichsleistungsgesetz), which contains separate compensation laws for property-related injustices for each of the relevant three time periods (from 1933 to 1945, from 1945 to 1949, and from 1949 to 1990).

73

Compensation claims of victims of Nazi persecution are regulated in the Nazi Compensation Act, which is Article 3 of the Compensation and Adjustment Payments Act. Compensation claims are, however, accessory to the Property Act. In other words, a compensation claim can only be successful if a restitution claim has previously been established on the basis of the Property Act. Compensation is paid out of a Federal Compensation Fund established in 1991.

74

70 Id.

71 Id. at art. 1, para. 8a, sentence 2.

72 Id. at art. 1, para. 6, sentence 2. See infra Part C.I.

73 Gesetz über die Entschädigung nach dem Gesetz zur Regelung offener Vermögensfragen und über staatliche Ausgleichsleistungen für Enteignungen auf besatzungsrechtlicher oder besatzungshoheitlicher Grundlage [Entschädigungs- und Ausgleichsleistungsgesetz – EALG] [Compensation and Adjustment Payments Act], Sept. 27, 1994, BGBL. I at 2624 (Ger.).

74 The Compensation Fund was first mentioned in the Joint Declaration by the East and West German Governments. It is a special federal fund without legal personality whose assets are accounted for separately from any other assets of the Federal Republic of Germany. This construction ensures that the Fund is not affected by any budget freezes and continuous liquidity is guaranteed. Unlike compensation arrangements for other categories of claimants, which usually consist of bonds or privileges in property purchases, victims of Nazi persecution could cash in their compensatory entitlements directly. Gesetz über die Entschädigung nach dem Gesetz zur Regelung offener Vermögensfragen und über staatliche Ausgleichsleistungen für Enteignungen auf besatzungsrechtlicher oder besatzungshoheitlicher Grundlage [Entschädigungs- und Ausgleichsleistungsgesetz – EALG] [Law on the Compensation of Victims of NS Persecution], Sept. 27, 1994, BGBL. I at 2632, art. 1(1) (Ger.). The Compensation Fund is administered by the Federal Open Property Office and funded with contributions from the German Privatization Agency (Treuhand) and its successor organizations, former GDR State property, income generated from the Law on the Adjustment of Burdens, and to the largest extent by taxes. Cf. Hermann-Josef Rodenbach, Das Entschädigungs- und Ausgleichsleistungsgesetz, 5 ZEITSCHRIFT FÜR OFFENE VERMÖGENSFRAGEN 9 (1995).


D. Right to Restitution Article 1, paragraph 6 of the Property Act provides that the Act’s provisions are applicable mutatis mutandis for losses of citizens and associations who lost their property because of forced sales, confiscation, or otherwise between 30 January 1933 and 8 May 1945 due to racial, political, religious, or ideological persecution. The following sections describe the burden of proof with respect to the property loss, typical claimant constellations, relevant principles relating to the scope, filing and assessment of restitution and compensation claims, and the applicable administrative and judicial proceedings. I. Presumption of Loss To ensure equal treatment with the above-mentioned West German restitution scheme, sentence 2 of Article 1, paragraph 6 of the Property Act resorts to the presumption of loss in favor of the claimant, as stipulated in the Decree of the Allied Kommandantura Berlin Decree on the Restitution of Identifiable Property (REAO).

75 Article 3 paragraph 1 of this

Decree presumes that all those transactions listed under items (a) and (b)—the loss by someone who was directly subject to persecution according to Article 1 of the REAO or the loss by someone who belonged to a group of people who, as a whole, the Nazis intended to exclude, on the grounds of Article 1, from the cultural and economic life of Germany—were wrongful property losses. As of 30 January 1933, this group was deemed to be collectively persecuted and included all persons of Jewish descent, even if they were not German citizens or resided outside of the territory of the German Reich. The German Administrative Court confirmed in 1993 that all Jews who owned property within the Reich had to expect persecution with regard to their property.

76 This presumption of wrongful

loss aimed to ease the burden of proof for the claimant with regard to his background as the persecuted. The claimant only had to prove that he belonged to the Jewish faith at the time of the transaction during the period of 30 January 1933 to 8 May 1945 and he could claim that he sold his property for this reason.

77

However, the current right holder may present evidence to the contrary. For the level of proof for the rebuttal of the claim, it matters whether or not the allegedly involuntary transaction took place before or after 15 September 1935, the adoption date of the Nuremberg Laws described in Section A.I above. These laws significantly worsened the

75 Gesetz zur Regelung offener Vermögensfragen [Vermögensgesetz – VermG] [Decree of the Restitution of Identifiable Property], July 26, 1949, VOBL. I at 221 (Ger.), available at http://norm.bverwg.de/jur.php?VermG,1.

76 See Bundesverwaltungsgericht [BVerwG] [Federal Administrative Court], Case No. 7 C 64/02 (Oct. 23, 2003), http://www.bverwg.de/entscheidungen/pdf/231003U7C64.02.0.pdf.

77 See Oberlandesgericht München [OLG München] [Higher Regional Court Berlin], NJW/RzW 1954, 252–253; Oberlandesgericht München [OLG München] [Higher Regional Court Berlin], NJW/RzW 1956, 301–302.


plight of Jewish citizens, eliminating any doubt concerning the racial persecution of Jews. Thus, any transaction after 15 September 1935 was automatically considered to be involuntary.

78 Hence, the respondent needed to present the exacerbated proof that the

property loss did not occur as a consequence of racial persecution.79

If the loss had occurred prior to 15 September 1935, the respondent had to demonstrate that the vendor had received an adequate price that he could freely dispose.

80 For losses

that took place following the Nuremberg Laws, the rebuttal further requires the respondent to prove that the transaction—in its essential content—would also have occurred without the National Socialist Regime or that the buyer took particular care of the vendor’s financial interests, such as by transferring the purchase price abroad.

81

II. The Claimants Besides individual claimants, companies, or heirs, a major claimant was the Jewish Claims Conference (JCC). Founded in 1951, the JCC was set up to support Israel’s claim for reparation and to represent the claims of Nazi persecution victims who living outside the State of Israel.

82 The JCC is an umbrella organization whose members include twenty-five

of the world’s largest Jewish organizations, including the Jewish World Congress and the Central Council of Jews in Germany. The JCC played a central role in the negotiations with the German Government concerning the reparations legislation and created the conditions for the restitution of Jewish property. It also serves as the successor organization for

78 Oberlandesgericht Hamm [OLG Hamm] [Higher Regional Court Hamm], 1951, NJW/RzW, 326.

79Compare Gesetz zur Regelung offener Vermögensfragen [Vermögensgesetz – VermG] [Decree of the Restitution of Identifiable Property], July 26, 1949, VOBL. I at 221, art. 3, para 1, item (b), available at http://norm.bverwg.de/jur.php?VermG,1. (Ger.), with SCHWARZ, supra note 43, at 159.

80 See Gesetz zur Änderung des Vermögensgesetzes und anderer Vorschriften [Zweites Vermögensrechtsänderungsgesetz] [Second Amendment to the Property Act], July 22, 1992, BGBL. I at 1257, art. 1, para. 6, sentence 2; Gesetz zur Regelung offener Vermögensfragen [Vermögensgesetz – VermG] [Decree of the Restitution of Identifiable Property], July 26, 1949, VOBl. I at 221, art. 3, para. 2; Oberlandesgericht München [OLG München] [Higher Regional Court Berlin], NJW/RzW 1954, 104, 253 (providing extra information on what constitutes an adequate price and the free disposal).

81 See Oberlandesgericht München [OLG München] [Higher Regional Court Berlin], NJW/RzW 1949, 143, 206, 234; Oberlandesgericht München [OLG München] [Higher Regional Court Berlin], NJW/RzW 1956, 316; Oberlandesgericht München [OLG München] [Higher Regional Court Berlin], NJW/RzW 1953, 93; Oberlandesgericht München [OLG München] [Higher Regional Court Berlin], NJW/RzW 1952, 48; Bundesverwaltungsgericht [BVerwG] [Federal Administrative Court], Case No. 7 C 64/02 (Oct. 23, 2003), http://www.bverwg.de/entscheidungen/pdf/231003U7C64.02.0.pdf.

82 See generally MARILYN HENRY, CONFRONTING THE PERPETRATORS: A HISTORY OF THE CLAIMS CONFERENCE (2007) (providing a comprehensive account of the history of the JCC); RONALD W. ZWEIG, GERMAN REPARATIONS AND THE JEWISH WORLD: A

HISTORY OF THE CLAIMS CONFERENCE (2001) (same).


Jewish communal property and associations, and represents the interests of heirless and unclaimed property.

83 With the fall of the Berlin Wall, the JCC’s mandate was extended to

also cover restitution claims for property located on GDR territory—an extension that the organization had been striving to achieve for many years. Similar to the West German restitution scheme, the scope of East German property restitution is not limited to individuals, entities, or companies who suffered persecution-related injustice directly. Rather, the Property Act also allows for restitution claims from their legal successors, particularly their heirs and heirs to an heir.

84

As mentioned above, post-reunification restitution mainly focuses on property issues in relation to prior East German nationalization policies and other property-related injustices of the former Socialist regime in the years following 1949. Property claims of victims of Nazi persecution date back further, which makes their resolution more complicated. Unlike in the earlier West German restitution process, it could be assumed in the new Länder that the property in question was in the possession of third parties. The Property Act accommodates this fact in a number of provisions regulating the relationship between claimant and third parties.

85 In the case of restitution or the

annulment of public administration, property rights and obligations may be enjoyed or borne by the claimant or by a caretaker nominated by the claimant. This includes in rem rights of others relating to the use of property.

86

83 See Dieter Gräf, e an n er erm ensrec t ic en ns r c e der NS-Verfolgten, 6 SCHRIFTENREIHE DES

BUNDESAMTES ZUR REGELUNG OFFENER VERMÖGENSFRAGEN [Federal Open Property Office] 89 (1994) (demonstrating that the succession clause is anchored in art. 2 of the Registration regulation for the Property Act, as well as art. 2, para. 1 of the law itself and that from these two clauses, the JCC’s right derives to register/claim communal property, that of associations, as well as heirless and unclaimed property).

84 See Adelhaid Brandt & Horst-Dieter Kittke, Rechtsprechung und Gesetzgebung zur Regelung offener Vermögensfragen [RGV] 1 BUNDESMINISTERIUM DER JUSTIZ [Federal Ministry of Justice], Instruction B(2)(a) (1992); Gesetz zur Änderung des Vermögensgesetzes und anderer Vorschriften [Zweites Vermögensrechtsänderungsgesetz] [Second Amendment to the Property Act], July 22, 1992, BGBL. I at 1257, art. 2.

85 Cf. Gesetz zur Änderung des Vermögensgesetzes und anderer Vorschriften [Zweites Vermögensrechtsänderungsgesetz] [Second Amendment to the Property Act], July 22, 1992, BGBL. I at 1257, art. 16.

86 See id. art. 16, para. 5, (allowing that the claimant also takes over all legal rights and obligations that exist in relation to the asset); see id. art. 18 (describing that the restitution decision also has to determine what happens to the in rem rights of use, which exist in relation to the asset). Continuing legal relationships can be modified or terminated only on the basis of the applicable legislation for these kinds of transactions. The Property Act further regulates how to proceed with mortgages and similar liens that exist with regard to the asset.


Article 17 of the Property Act provides that—in the interest of social peace—the restitution and re-privatization process do not affect existing leases or user rights, unless the tenant or user did not act in good faith when concluding the contract.

87 In case of bad faith, the

contract is annulled in the course of the restitution. Tenants or users of homes for one or two families or of plots used for recreational purposes are granted a preferential right of purchase upon request, provided the lease or usage agreement was concluded before 29 September 1990 and continued to exist at the time of the decision on restitution.

88 For

those plots that cannot be returned, the claimant may in turn be granted a preferential right of purchase.

89

In the West German post-war scheme, properties had to be reclaimed in civil law proceedings similar to the adversarial system prevalent in common law countries. In contrast, the post-reunification restitution scheme for the East German Länder was governed by administrative law proceedings characterized by the state’s ex officio obligation to investigate all relevant facts of the case.

90 For this reason, claims concerning

East German property are characterized by a tripartite relationship. While the restitution claim is directed to the current right holder, the claimant has to assert his right vis-à-vis the competent Open Property Office at the municipal, regional, or federal level (Amt or Landesamt oder Bundesamt zur Regelung offener Vermögensfragen).

91

III. The Claim Unlike in most modern day claims processes, no standardized claims form was introduced to the application process. Claimants could submit their claims to the competent Open

87 See id. art. 17.

88 See id. art. 20.

89 See id. art. 20a.

90 Spannuth, supra note 57, at 258.

91 See Gesetz zur Änderung des Vermögensgesetzes und anderer Vorschriften [Zweites Vermögensrechtsänderungsgesetz] [Second Amendment to the Property Act], July 22, 1992, BGBL. I at 1257, art. 23 (detailing that the Länder established Municipal and Regional Open Property Offices). See id. arts. 6, 6a, 6b (showing that the latter level is competent for decisions regarding claims for restitution of businesses); see id. art. 6, para. 7 (showing that in the case restitutio in rem is impossible and the claimant has filed his claim within the deadline, is also competent regarding the decision on the right to compensation as well as the amount).

To ensure that the Law would be applied coherently within this federal structure, the Federal Open Property Office was founded. It was supported by an advisory board, which was composed of a representative of each of the five Law-implementing Länder, four representatives of lobby groups, as well as four experts. The new Länder therefore originally ruled on all restitution claims according to id. art. 30, para. 1, sentence 1; art. 30a, para. 1, sentence 1.


Property Office by formless letter. All restitution claims concerning movable property had to be received by 30 June 1993, while the deadline for claims for the restitution of immovable property was 31 December 1992. These deadlines constituted preclusive periods, so that the claim expired post terminum.

92 Once a claim was filed on time, the

Property Act restricted the disposal of the claimed asset.93

The exclusion periods were intended to ensure legal clarity and certainty as quickly as possible to avoid an undue delay of highly needed investments and economic development in the East German territory. However, this objective conflicted with the claimants’ difficulties in obtaining the required facts and details for their applications in due time. Particularly for the JCC—as “global successor” to all heirless and unclaimed assets—it was almost impossible to research all details necessary for the application. Therefore, the JCC filed three “blanket applications” shortly before the expiry of the claims deadline.

94

The blanket applications led to numerous disputes concerning the minimum content of an application of those applicants whose claims were superseded by the JCC claims. Because the Property Act did not provide sufficient specification for the application’s content, the Federal Administrative Court developed respective case law.

95 The Court emphasized the

92 Given that potential claimants were spread all around the globe, advertisements were published in all relevant newspapers and journals to make the possibility to claim most widely known.

93 See Second Amendment to the Property Act, July 22, 1992, BGBL. I, art. 3, para. 3.

94 In blanket application (1), the JCC globally claimed restitution of all identifiable property, which would arise out of files and archives to which it not yet had access to, and which would confirm a loss according to article 1, paragraph 6 of the Property Act and where the JCC was eligible according to article 2. With blanket application (2), the JCC globally requested return of all assets that were claimed by third parties, where during the process it would become clear that the asset was subject to a loss according to article 1, paragraph 6 and where the JCC is the legal successor. With blanket application (3) the JCC globally claimed the return of such assets, which would be ascertainable from certain archives, their stocks and files. Attached to this application was a 77-paged annex with numerous data from national archives in Germany, Israel and the former Soviet Union annexed from regional German archives and national sources. In many claims processes the JCC is referring to these applications, which then concretized and substantiated after the expiry of the exclusions periods. See Philipp Holtmann, Reine Verhandlungssache: Die Jewish Claims Conference steht in der Kritik, JÜDISCHE ZEITUNG, July 2008 (regarding these blanket applications critically).

95 First, it was decided that an application to claim restitution of an asset had to contain sufficient details that (at least in the way of interpretation) the claimed asset could be identified. The application has to at ensure that the asset can at least be individualized, as to not confront it unjustified with the prohibition of disposal. Bundesverwaltungsgericht [BVerwG] [Federal Administrative Court], Case No. 7 C 8.00 (Oct. 5, 2000). In view of the blanket applications of the JCC, the Federal Administrative Court further concretized that the documents submitted with the application would need to directly lead to the claimed asset, meaning that the claimed asset would need to emerge from referenced specific records. Bundesverwaltungsgericht [BVerwG] [Federal Administrative Court], Case No. 8 C-15/03 (Nov. 24, 2004). So the crucial question is what constitutes this “lead?” According to the Federal Administrative Court, this can at best be considered, if the documents listed in the blanket application provide a hint to a confiscation or forced sale of Jewish property. In addition, details have to emerge from the file that the records relate to the territorial jurisdiction of the respective Open property office.


original purpose of the exclusion period and only confirmed the admissibility of the third blanket application, which relates to property claims ascertainable from certain archives, stocks, and files. The Federal Administrative Court challenged the administrative practice that had been established up to this point, which was based on the assumption that the three blanket applications were effective.

96 According to the Court, the Open Property Offices should

have rejected numerous claims by the JCC that had been filed past the deadline. The required reference to certain documents annexed to a blanket application was only included in a few cases, and, thus, led to a timely application. Following the Court decisions, almost all parliamentary groups submitted a bill to resolve the issue of effectiveness of the application. Instead of restitution, this bill offered the alternative of compensation.

97 The political parties argued that, by failing to recognize the JCC’s special

position, the Federal Administrative Court’s decisions undermined the Property Act’s intended purpose of providing effective reparations and redress. They contended that the Federal Republic of Germany had accepted its historical responsibility for Nazi injustice and had assumed an international legal obligation in a 1992 agreement with the three former Western Allies to provide comprehensive reparations for victims of Nazi persecution in accordance with the Allied restitution laws.

98 This initiative led to an amendment of the

Property Act that ensured that the successor organizations mentioned in the Act, most notably the JCC, would be compensated if restitution could not be granted because the asset was claimed by means of an invalid blanket application.

99

IV. The Assets Article 2, paragraph 2 of the Property Act stipulates that recoverable assets are present or former ownership of land and buildings, other rights in rem (such as the right of use or easement on real estate), rights to exploit (such as lease or tenure), and ownership of movable assets, credit balances, and accounts receivable. Furthermore, assets within the meaning of the Act are current or former ownership rights of business assets of enterprises seated in the GDR, including rights of shareholders residing outside of GDR territory.

100

96 See Gräf, supra note 83, at 90 (issuing a communication based on this legal opinion regarding the blanket application, which had been published in its series).

97 DEUTSCHER BUNDESTAG: DRUCKSACHEN UND PROTOKOLLE [BT] 15/5576 (Ger.).

98 See id.

99 See id. (describing the particulars of the regulation and decreeing that the law went into effect on 8 September 2005).

100 See Adelhaid Brandt & Horst-Dieter Kittke, Rechtsprechung und Gesetzgebung zur Regelung offener Vermögensfragen [RGV] 1 BUNDESMINISTERIUM DER JUSTIZ [Federal Ministry of Justice], Instruction B(2)(c) (1992).


V. Denial of Restitution While the fundamental decision had been taken to return aryanized or confiscated real property to its former owners or their heirs, considerable exceptions were made to create a socially acceptable and politically workable system for the resolution of outstanding property claims. To some extent different to the immediate post-war period, the German population did not question Nazi wrongs in the 1990s. But concerns were raised with respect to the revitalization of the East German economy, which found itself in a dilapidated state after forty years of Socialist rule. The post-1989 property settlement needed to take into account the necessity of promoting economic investments requiring policies that tend to conflict with comprehensive restitution systems.

101

The policy of promoting economic investments is why the Property Act excludes the repossession of properties—or the enjoyment of in rem rights associated with the property—if this is impossible due to the nature of the matter. In particular, the restitution of a business is no longer possible if the operation was terminated and the conditions for a resumption of its operations are no longer viable given sound business practice.

102

Moreover, laws were adopted that allowed for the sale of businesses—thus precluding restitution—to accelerate investment in the new Länder.

103

Restitution is also precluded in case of a bona fide acquisition of ownership or use rights in rem of land and buildings by individuals, religious communities, or non-profit organizations after 8 May 1945.

104 However, to avoid a large-scale sale of assets after the collapse of the

GDR, the Property Act introduces a number of criteria that need to be met by those claiming a purchase in good faith from 18 October 1989 onwards, the date when the GDR’s long-serving Head of State, Honecker, stepped down. From this date on, property could only be acquired in good faith with the consent of the claimant, unless the acquisition was

101 See generally GERHARD FIEBERG ET AL., VERMÖGENSGESETZ: VERMG (2007).

102 See Gesetz zur Änderung des Vermögensgesetzes und anderer Vorschriften [Zweites Vermögensrechtsänderungsgesetz] [Second Amendment to the Property Act], July 22, 1992, BGBL. I at 1257, art. 4, para. 1.

103 Article 4, paragraph 1 of the Property Act makes reference to the Regulation on the Foundation and Activities of Companies with Foreign Shares in the GDR (Verordnung über die Gründung und Tätigkeit von Unternehmen mit ausländischer Beteiligung in der DDR) (January 1990), the Privatization Law (Treuhandgesetz) (June 1990), or the Law on the Foundation and Activities of Private Companies and on Company Shares (Gesetz über die Gründung und Tätigkeit privater Unternehmen und über Unternehmensbeteiligungen) (March 1990).

104 Gesetz zur Änderung des Vermögensgesetzes und anderer Vorschriften [Zweites Vermögensrechtsänderungsgesetz] [Second Amendment to the Property Act], BGBL. I at 1257, art. 4, para. 2 (July 22, 1992).


requested in writing or otherwise put on record before 1 October 1989; if the transaction was based on the Law on the Sale of Nationally-Owned Buildings (Gesetz über den Verkauf volkseigener Gebäude); or if the purchaser had made substantial investments to the property prior to 19 October 1989.

105 Good faith cannot be assumed in case the purchase

was generally not in line with the applicable GDR legislation or good business practice, provided that the purchaser knew or should have known this. Bad faith is also assumed if the transaction involved corruption or the abuse of personal power, particularly with regard to the date or the completion of the acquisition or the selection of the purchase item. Furthermore, no good faith can be claimed if the former owner sold the property under duress or was deceived by the purchaser or a third party.

106 These provisions stand

in stark contrast to the German Civil Code, according to which a purchaser can in principle claim good faith acquisition if the property rights register lists the seller as owner.

107

Finally, property rights to land and buildings cannot be returned if restitution interfered with urban planning or community use. The Property Act clarifies that such is the case if the claimed land and buildings were significantly altered in their usage or purpose and if there is public interest in upholding this situation. Restitution is further excluded if the land or building is bestowed for public use, utilized for housing developments, or was provided for commercial use or incorporated into a corporate entity and cannot be returned without significant impairment to the company.

108

VI. Compensation of Equal Value and Quid Pro Quo In its attempt to reverse existing legal relationships with regard to an asset, the Property Act also specifies in great detail how to compensate for measures that enhance the asset’s value.

109 In case of a successful restitution claim, the claimant is held to pay compensation

to the current right holder for the increased value through measures that the latter can account for, such as development, construction, refurbishment, or maintenance of the property.

110 Value-enhancing measures affected prior to 2 October 1990 are to be

105 Id.

106 Id. art. 4, para. 3.

107 BÜRGERLICHES GESETZBUCH [BGB] [CIVIL CODE], Aug. 18, 1896, REICHSGESETZBLATT [RGBL.] 195, § 892.

108 Vermögensgesetz [Property Act], July 22, 1992, BGBL. I art. 5.

109 The Property Act regulates the compensation of equal value and set-off of considerations in significant detail, and the following explanations will limit themselves to the essential, necessary for this article. Id. arts. 7, 7(a).

110 Id. art. 7, para. 1. Should the proof no longer be possible, article 7, paragraph 1, sentence 2 opens the possibility to use estimation. Id.


compensated with the objective value given at the time of the restitution decision.111

With the exception of emoluments from rental or other contracts earned after 1 July 1994, restitution does not generally entail a restitution of gains drawn from the asset prior to the decision. With respect to the mentioned emoluments, the claimant is entitled to recovery as of the date when the decision on restitution is final.

112

In case of restitution, the claimant has to surrender to the respondent any payments received for the loss of the asset, such as a refund for the purchase price. Payments made in Reichsmark are to be converted into Deutschmark in the ratio of 20:1.

113

E. Right to Compensation As described above, the Property Act only covers restitution claims. Compensation claims of victims of Nazi persecution are regulated in separate legislation—the Nazi Compensation Act—but can only be granted once the damage is ascertained according to Article 1 paragraph 6 of the Property Act.

114 Until 2004, the Regional Tax Office Berlin

(Oberfinanzdirektion Berlin) determined the compensation amount following a decision on the merits by the competent Open Property Office.

115 Aiming to speed up the decision-

making process, the authority to determine the compensation amount was transferred to the Federal Open Property Office in 2004.

116

The Nazi Compensation Act is part of a comprehensive Compensation and Adjustment Payments Act that foresees various bases for the calculation of compensation amounts depending on the type of property in question.

117

111 Id. art. 7, para. 2. If the activities of article 7, paragraphs 1 and 2 have been financed by mortgages, the indemnity rights do not exist. Id.

112 Id. art. 7, para. 7. The right holder has the right to set-off expenses. Id. at art. 7, para. 3.

113 Id. art. 7(a), para. 2.

114 Cf. Caroline Dostal, Comment on the Ruling of the Administrative Court of Berlin (Verwaltungsgericht Berlin), in 6 RECHTSPRECHUNGSÜBERSICHT 29, 29 (Fed. Open Prop. Office ed., 2005).

115 NS-Verfolgtenentschädigungsgesetz [Law on the Compensation of Victims of Nazi Persecution], BGBL. I art. 1, para. 1 (Sept. 27, 1994).

116 The Regional Tax Office Berlin still housed the central archive of the 1930s, which was used as the basis for the calculation of compensation. The Office had played a central role in the aryanization. In January 2004, the competence regarding claims pursuant to article 1, paragraph 6 of the Property Act was transferred to the Federal Office for the Regulation of Open Property Issues, which now decides the merits as well as the compensation amounts. The competence was changed due to the pressure of the JCC, which demanded faster decision making and hoped this measure would accelerate the proceedings.

117 See supra Part B (discussing the Compensation and Adjustment Payments Act in greater detail).


I. Real Estate The assessment base for compensation of real estate, including buildings, agricultural, and forest property, derives from a multiplication of the standard tax value, the substitute tax value, or an auxiliary value to be determined.

118 According to Article 2 of the Nazi

Compensation Act, compensation is calculated at four times119

the last standard tax value that was established prior to the loss, which, in many cases, relies upon the real estate valuation operation in 1934. In other words, a first step in determining the compensation amount is to verify the last standard tax value. Primary sources of evidence are old records, information received by the claimant in the claims form for real estate that is verified by the Open Property Office in a special template, and data provided by fiscal or building authorities.

120 In case the standard tax value cannot be determined, or it is

evidently incorrect, a substitute tax value is used that might have been established in the above-mentioned compensation proceedings according to the 1952 Law on the Equalization of Burdens. Indications that the claimant benefited from this compensation scheme are found in the completed claims form for which the Open Property Office had designed a verification template. If neither the historical standard tax value nor the substitute tax value from previous compensation proceedings are available, the Federal Open Property Office will determine an auxiliary value following the provisions of the 1934 Real Estate Valuation Act (Reichsbewertungsgesetzes).

121

The Compensation and Adjustment Payments Act provides the general rule that long-term liabilities in connection with the property are deducted at half their value from the assessed amount of loss-related damage.

122 Recognizing the special situation of Jewish

victims of Nazi persecution, the Nazi Compensation Law alters this rule and foresees that no liabilities that arose between 15 September 1935 and 8 May 1945 are taken into

118 The German tax system bases its valuation on the periodic assessment of tax values for real estate, businesses, etc. The last periodic assessment prior to most losses under the Nazi regime occurred in 1934–1935, which—if it is available—is the value being used for these compensation claims. For the Equalization of Burdens, detailed lists were established that would determine the substitute tax value for businesses. Therefore, if it is known that a mechanic had between 2.9 and 3.3 employees, the substitute tax value for his business was 6000 RM.

119 This figure differed from the multiplier in post-1949 compensation.

120 NS-Verfolgtenentschädigungsgesetz [Law on the Compensation of Victims of Nazi Persecution], Sept. 27, 1994, BGBL. I art. 2.

121 Id. art. 2, paras. 2, 3.

122 Entschädigungs—und Ausgleichsleistungsgesetz [Compensation and Adjustment Payments Act], Sept. 27, 1994, BGBL. I art. 3, para. 1, sentence 2.

http://dict.leo.org/ende?lp=ende&p=5tY9AA&search=surrogate

http://dict.leo.org/ende?lp=ende&p=5tY9AA&search=auxiliary


account at all.123

Moreover, to avoid unfair double taxation of the claimant, the Federal Constitutional Court decided in 2000 that purchase price payments are taken into account when determining the compensation amount if they were made after the property loss. II. Corporations, Receivables, and Trademark Rights As with real estate, compensation for loss of corporations is based on the standard tax value, the substitute tax value, or the auxiliary value of the business, namely the net assets or the appraised value.

124 The value of the net assets is calculated from the difference

between capital and liquid assets on the one hand and all liabilities on the other.125

Relevant in this context is the company’s balance sheet prior to the property loss. Should this balance sheet be missing, comparable documents with sufficient reliability have to be produced. Similar to the procedure applicable for real estate, old records, information provided by the claimant on the claims form for corporations, and information provided by fiscal authorities are the primary sources of evidence in addition to other archives, such as the trade register. If none of these sources are available, the value of the company’s assets must be appraised. In these circumstances, the provisions of the Law on the Equalization of Burdens concerning the appraisal of an auxiliary value serve as a useful indicator.

126 This

appraisal value can be determined according to its tabulations on guiding values (such as for handcraft, retail, and whole sale). The tabulations list auxiliary values per type of enterprise according to number of employees, business volume, debts, and so on. A private monetary entitlement, such as account balances or secured liabilities, are exchanged 2:1 into Deutschmark according to the book value at the time of loss.

127

123 NS-Verfolgtenentschädigungsgesetz [Law on the Compensation of Victims of Nazi Persecution], Sept. 27, 1994, BGBL. I art. 2, sentence 2.

124 Id. See also Caroline Dostal, Die Anrechnung von dinglichen Belastungen bei Betriebsgrundstücken nach VermG, EntschG und NS-VEntschG, 55 INFORMATIONSDIENST FÜR LASTENAUSGLEICH [IFLA], 61–64 (2006) (providing further differentiation).

125 NS-Verfolgtenentschädigungsgesetz [Law on the Compensation of Victims of Nazi Persecution], Sept. 27, 1994, BGBL. I art. 4, para. 2.

126 BUNDESAUSGLEICHSAMT [PRESIDENT OF FEDERAL ADJUSTMENT OFFICE], RICHTZAHLEN FUER DIE ERMITTLUNG DER

ERSATZEINHEITSWERTE DER GEWERBLICHEN BETRIEBE DES HANDWERKS, DES EINZELHANDELS, DES GROSSHANDELS SOWIE DES

GASTSTAETTEN- UND BEHERBERGUNGSGEWERBES [GUIDING FIGURES FOR DETERMINING THE REPLACEMENT VALUE OF COMMERCIAL

CRAFTS, RETAIL, WHOLESALE, CATERING AND HOTEL BUSINESSES] (1958).

127 NS-Verfolgtenentschädigungsgesetz [Law on the Compensation of Victims of Nazi Persecution], Sept. 27, 1994, BGBL. I art. 5, para. 1. In case the private monetary entitlement was accounted for in Reichsmark (and the property was lost prior to 24 June 1948), the exchange calculation differed. The first 100 Reichsmark were exchanged at 50%, the remainder up to 1000 Reichsmark at 10%, and anything above 1000 Reichsmark at 5%. The result of this calculation would then be the basis for the compensation determination.


III. Set-off of Considerations and Deduction of Equalization of Burden Payments According to the Compensation and Adjustment Payments Act, considerations or earlier (partial) compensation payments are to be set off against the compensation claim. Considerations are primarily the purchase price for the property, including black money, as long as proof exists of the payment and of the transfer of the money.

128 If the vendor was

released of liabilities or obligations, the Open Property Office verifies whether and to what extent the payments were used to pay off liabilities or obligations.

129

In determining the compensation amount for property losses of Nazi victims, the Open Property Office also takes into account compensatory payments received by the claimant or his legal predecessor relating to the respective property pursuant to the Equalization of Burdens Act.

130

F. Claims Process According to the Property Act and the Nazi Compensation Act, claims proceedings were originally designed as mass claims processes. German regulators attempted to standardize the proceedings significantly. The Open Property Offices produced standardized decisions using pre-fabricated text modules for various case categories. In addition, verification templates and requests were designed with a view to ensure that cases could be decided expeditiously. Unlike most mass claims processes today, the proceedings lacked standardized claims forms and allowed applications to be filed by informal letter. I. Administrative Proceedings Irrespective of the intent to streamline the proceedings considerably, the reparation process is taking much longer than originally expected.

131 To a certain extent, as with many

128 Entschädigungs—und Ausgleichsleistungsgesetz [Compensation and Adjustment Payments Act], Sept. 27, 1994, BGBL. I art. 6.

129 FED. MINISTRY OF FIN., FED. OPEN PROP. OFFICE & REG’L OPEN PROP. OFFICES OF BERLIN, BRANDENBURG, MECKLENBURG-VORPOMMERN, SAXONY, SAXONY-ANHALT, AND THURINGIA, GEMEINSAME ARBEITSHILFE ZUM ENTSCHÄDIGUNGSGESETZ UND

AUSGLEICHLEISTUNGSGESETZ [JOINT GUIDANCE NOTE ON THE COMPENSATION AND ADJUSTMENT PAYMENTS ACT], in SCHRIFTENREIHE DES BUNDESAMTES ZUR REGELUNG OFFENER VERMÖGENSFRAGEN 32, 329 (Fed. Open Prop. Office ed., 2005).

130 Entschädigungs—und Ausgleichsleistungsgesetz [Compensation and Adjustment Payments Act], Sept. 27, 1994, BGBL. I art. 8. See supra Part A.IV (providing additional information on the Act).

131 An interesting comparison in approach, results, speed, and costs to the post-reunification reparation process is the Property Claims Commission under the German Forced Labour Compensation Programme. See IOM, supra note 3.


other property restitution and compensation processes, the process is lengthy because ownership questions or actual property losses are so complex that the desired standardization was unable to meet the needs of many individual cases. Possibly because of a lack of precedent, German lawmakers did not establish a specialized mass claims process and instead reverted to regular administrative proceedings that they attempted to accelerate by inserting standardized parts of the claims and decision-making procedure. Thus, it does not come as a surprise that in German reparations, the balance between individual justice taking due regard of case detail and a speedy and expedient mass claims procedure shifted towards the former. As mentioned above, German administrative law contains an ex officio obligation of the appropriate authorities to investigate the relevant facts of a case. At the same time, it places a duty on the claimant to cooperate with the State in resolving the case, a principle reinforced by the Property Act.

132 In case an application does not sufficiently specify the

claimed asset, the Open Property Office usually sets a deadline for the claimant to provide more explanation and detail. To ensure that the authorities live up to their obligations to investigate ex officio, the Property Act grants the claimant a right to demand information if he has been able to provide prima facie evidence of his property right.

133 If the claimant

fails to respond, the Office may reject the claim. 134

Upon receipt of the claim, the Open Property Office registers each application, assigns a claims number, and sends an acknowledgement of receipt to the claimant. Restitution and Compensation proceedings follow the same procedures as other administrative proceedings in Germany, meaning that they are in writing. However, unlike some other mass claims processes, which did not foresee any hearing in person, the claimant has the opportunity to appear before the Open Property Office. Lawyers make use of this opportunity again and again and appear in person before at the office. The fact that claimants themselves make less use of it stems from the fact that they are scattered all over the world and are often reluctant to appear before German authorities. In principle, reparations proceedings—including the appeals procedure—are free of charge.

135 The claimant does, however, have to bear the charges for his legal

representation. Should the lawyer’s service be deemed necessary for expedient pursuit of the claim, and should the claimant’s appeal be successful, the claimant will get the lawyer’s expenses reimbursed.

132 Vermögensgesetz [Property Act], July 22, 1992, BGBL. I art. 31, para. 1.

133 Id. art. 31, para. 3.

134 Id. art. 31, para. 1(b).

135 Id. art. 38.


II. Legal Remedy Decisions made by the first level Municipal Open Property Office can be appealed, but decisions made by the Regional Open Property Office after 2004 do not offer this remedy.

136 An earlier version of the Compensation and Adjustment Payments Act foresaw

a higher-level administrative appeals procedure, but the relevant provision was abolished to speed up the process.

137

Once all administrative remedies are exhausted, the parties are entitled to file administrative court proceedings against the decisions of the Regional Open Property Office or, for compensation claims, directly against decisions of the relevant department.

138 Notwithstanding regular recourse to the administrative courts, in some

cases, an appeal can also be lodged before the Federal Administrative Court complaining against a denial of the right to appeal. Needless to say, many reparation cases are also resolved by judicial and extrajudicial settlement. As previously stated, many cases involve three or more parties to the restitution process. The multiparty character of the proceedings leads to an increased use of remedies both on the administrative level and the judicial level. Parties receiving a negative decision often doubt its legality—a situation that prolongs the overall reparation process for many years. Without legal clarity following a final decision, the property can neither be returned to the claimant nor attract adequate investment leading to a loss of value over time.

139

Over the years, it became evident that both the Property Act and the Nazi Compensation Law left a number of loopholes and open legal questions. These questions often become subject to litigation involving the JCC as plaintiff. In particular, following the above-mentioned abolition of the possibility to file an administrative objection in 2004, the number of court cases, especially relating to compensation issues, rose dramatically. The high caseload that often concerned the same legal questions made the Open Property

136 Id. art. 36, para. 1.

137 Vermögensgesetz [Property Act], July 22, 1992, BGBL. I art. 36, para. 4 (as amended in 2005).

138 Vermögensgesetz [Property Act], July 22, 1992, BGBL. I art. 37.

139 Compare with, for example, the prominent case of Ms. Gabriele Hammerstein; the JCC appealed the decision for the restitution of a plot in Schwerin, which led to a considerably lengthened procedure, during which the condition of the house deteriorated further and further and the property lost its value. Ms. Hammerstein sued the JCC in the United States, however, the court decision referred to the German jurisdiction. See Hammerstein v. Conference on Jewish Material Claims Against Ger., No. 100767/2007, 2008 N.Y. Misc. LEXIS 8918 (N.Y. Sup. Ct. April 2, 2008). Cf. Holtmann, supra note 93 (listing a number of similar such cases). Cf. Christoph Scheuermann, Die Vergessene, 52 DER SPIEGEL 44–46 (2010) (citing the most recent examples of these cases).


Offices file model law suits aiming to create precedents, to achieve legal clarity, and to speed up the process.

140

III. Burden of Proof Section C.I described the claimant-friendly presumption of proof relating to the loss of property as a result of Nazi persecution from 1933 to 1945. The claimant nonetheless carries the burden of proof for the actual ownership of the property claimed to have been lost under these circumstances.

141 This means that the regular rules concerning the burden

of proof are also applicable for the Property Act, as well as for the Nazi Compensation Act. The basic judicial rule is that the party claiming certain facts in its favor must also prove their existence.

142 In the context of the Property Act, this means that restitution or

compensation can only be granted if the claimant is able to provide evidence that he or his predecessor did indeed own the property in question. Sixty years after the loss, it does not come as a surprise that claimants, in particular the JCC, heavily criticized this rule because they had serious difficulties producing the required proof of ownership. Called to judge the issue, the Federal Administrative Court argued that the regular evidentiary rules pay due respect to such difficulties by allowing the judiciary to ease the burden of proof, such as by admitting circumstantial evidence.

143

G. Implementation of Restitution and Compensation Cases Restitution of East German properties started immediately after East Germany’s accession to the Federal Republic of Germany in 1990. In total, by the end of 2013, claims for

140 It was also in the interest of the State not to promote increasing costs because, on the one hand, interest must be paid on compensation claims by the month prior to the announcement of the ruling as of 1 January 2004 according to article 2 of the Nazi Compensation Act. NS-Verfolgtenentschädigungsgesetz [Law on the Compensation of Victims of Nazi Persecution], Sept. 27, 1994, BGBL. I art. 2. The interest is set at a monthly rate of 0.5% and was implemented so as to expedite the processing of claims. On the other hand, court costs represented a significant expense.

141 Cf. Dostal, supra note 113, at 29.

142 Bundesverwaltungsgericht [BVerwG-Federal Administrative Court], Case No. 7 C 16/05 (Aug. 31, 2006), available at http://www.bverwg.de/entscheidungen/entscheidung.php?ent=310806U7C16.05.0 (outlining the above-mentioned ruling of the Administrative Court Berlin, which is hereby confirmed). See also Bundesverwaltungsgericht [BVerwG-Federal Administrative Court], Case No. 7 B 21/05 (July 29, 2005), available at http://www.bverwg.de/entscheidungen/entscheidung.php?ent=290705B7B21.05.0.

143 BVerwG, Case No. 7 C 16/05 (Aug. 31, 2006). See also Bundesverwaltungsgericht [BVerwG-Federal Administrative Court], Case No. 8 B 5/08 (Apr. 8, 2008), available at http://www.bverwg.de/entscheidungen/entscheidung.php?ent=080408B8B5.08.0 (discussing the shift in burden of proof).

http://dict.leo.org/ende?lp=ende&p=5tY9AA&search=evidence


215,627 assets were filed in the scope of Article 1 paragraph 6 of the Property Act.144

The successor office of the Federal Open Property Office, the Federal Office for Central Services and Open Property Issues (BADV), reported that claims for 171,832 assets (approximately eighty percent) were resolved in first instance.

145 Regarding compensation claims, BADV

statistics for 2013 mention 22,111 settled cases of a total number of 23,036 compensation claims.

146 The authors were unable to research, however, how many compensation

proceedings followed restitution proceedings, particularly how many cases were finally settled by now. In a 2012 report on indemnification provisions, the German Ministry of Finance lists 1.928 billion EUR in compensation payments transferred until 2011 pursuant to the Nazi Compensation Act, 2.023 billion EUR as compensation payments transferred until 2011 pursuant to the Federal Restitution Law, and 46.726 billion EUR as compensation payments transferred until 2011 pursuant to the Final Federal Compensation Law.

147 Of

the latter amount, 491 million EUR were paid as compensation for damages to property and assets.

148 An additional 591 million EUR were marked for the 2012 Federal budget.

149

Approximately seventeen percent of the payments according to the Final Federal Compensation Law and the Federal Restitution Law are made to German residents, approximately forty percent to Israeli residents, and the remaining forty-three percent to claimants in other countries.

150

H. Final Remarks Twenty-four years after reunification, the reparations process for East German property is still not completed. Besides the magnitude of the concerned assets, the slow process can be explained with the design of the German reparations proceedings. In weighing the need to resolve open property issues quickly with the desire to provide accurate justice on a case by case basis, the German reparations process stands in some contrast to modern

144 This number contains claims for 149,752 plots of land, for 45,805 enterprises, and for 20,070 movable properties. Approximately 88 percent of the immovable property claims were settled. FED. OFFICE FOR CENTRAL

SERVICES AND UNRESOLVED PROP. ISSUES [BADV], STATISTICAL OVERVIEW (2013).

145 Id.

146 Id.

147 FED. MINISTRY OF FINANCE, COMPENSATION FOR NATIONAL SOCIALIST INJUSTICE—INDEMNIFICATION PROVISIONS 29 (2012).

148 Id. at 32.

149 Bundesministerium der Finanzen [Federal Ministry of Finance], The Structure of the Federal Budget, http://www.bundeshaushalt-info.de (last visited Sep. 12, 2014).

150 FED. MINISTRY OF FINANCE, supra note 147, at 30.


mass claims processes. Generally set up in the immediate aftermath of conflict, the latter emphasize the speedy resolution of property disputes because they need to provide quick solutions to pending displacement issues and ensure immediate reconstruction and renewed investments. In post-conflict settings, it is often found that rough “quick” justice is more helpful than lengthy individualized claims resolution aiming at 100% accuracy in its assessment and decision-making.

151

Although claims collection, case management, and decision-making involve, as shown above, a number of standardized procedures similar to modern mass claims processes, Germany’s post-reunification restitution scheme remained a regular administrative process at its core. Without a standardized claims form, the process was not designed to facilitate large-scale computer processing and analysis. Claimants’ right to seek judicial review of the administrative decisions of the Open Property Offices further slowed down the process. Post-reunification restitution took place over six decades after the persecution of Jews during the Nazi regime. The passage of time made restitution or compensation factually and legally more difficult in the West German predecessor system. That the socialist authorities had added yet another layer of property-related injustice after 1945 added to the complexities of the restitution process. Post-reunification restitution of properties lost, or “aryanized,” during the Nazi regime took place at a time of transition involving multiple socio-political changes in post-socialist East Germany. Regulating multiple property claims in connection with three different previous political regimes led to an extremely complex and intricate body of law requiring a vast amount of administrative and judicial resources and time. A number of other differences between the West German restitution system after 1945 and its East German counterpart in 1990 are worth noting. Although factually and legally more complicated, procedurally the East German process went much smoother in general, and the competent administrative authorities and courts adopted a reconciliatory approach.

152 While post-1945 restitution concerned many businesses still operating, the

post-1990 system often involved claims for the compensation of properties that had been destroyed or were impossible to return, such as because they were now used for social or educational purposes. Previous nationalization of larger properties meant that claims in post-socialist East Germany were mostly directed against the state, whereas in post-war West Germany, they mainly concerned individuals. As a consequence, East German proceedings tend to be more technical and standardized, whereas the West German experience was more controversial and emotional. The West German restitution process

151 IOM, supra note 3, at 1.

152 Christian Meyer-Seitz, Entwicklung der Rückerstattung in den neuen Bundesländern seit 1989, in “ARISIERUNG”

UND RESTITUTION: DIE RÜCKERSTATTUNG JÜDISCHEN EIGENTUMS IN DEUTSCHLAND UND ÖSTERREICH NACH 1945 UND 1989, at 276 (Constantin Goschler & Jürgen Lillteicher eds., 2002); Goschler, supra note 34, at 41.


has been criticized for obstruction at the administrative level, although many cases were undisputed.

153 While judicial review generally ensured that claimants eventually could

claim their rights, the process was complicated and slow. Moreover, that claimants and “aryanizers,” who often contested having acquired the disputed property in good faith, met face-to-face in the adversarial court proceedings, thus making the process a very painful personal experience in many cases.

154

In particular, in the post-reunification proceedings, the complexity of the reparations regime in general did not allow non-lawyer claimants to file their case without recourse to legal counsel. As a consequence, a new and lucrative area of work opened up for lawyers and other relevant professionals. In some cases, law firms might even have encouraged claimants to pursue their case even though they were based on doubtful merits. Criticism was also launched toward the JCC for taking a life of its own and not always serving the interests of individual victims.

155

German reparations have been called impressive and a success by most accounts.

156 But

was it all worthwhile? Did these efforts foster a spirit of reconciliation between Germans and persecuted Jews, their heirs, and Jewry in general, as well as between Germany and Israel, the proclaimed homeland of all Jews? Answering these questions in detail would exceed the scope of this article focusing on legal and institutional history of German reparations. A sound analysis would require assessing all complementing German reparation schemes, including the Luxemburg Agreement, the slave labor compensation scheme, and the restitution programs discussed in this article. The German Ministry of Finance states that all public-sector compensation payments made until 2011 amounted to 69.039 billion EUR.

157

153 Cf. Jürgen Lillteicher, Rechtsstaatlichkeit und Verfolgungserfahrung: “ risier n ” und fiskalische Ausplünderung vor Gericht, in “ARISIERUNG” UND RESTITUTION: DIE RÜCKERSTATTUNG JÜDISCHEN EIGENTUMS IN DEUTSCHLAND UND ÖSTERREICH

NACH 1945 UND 1989, at 156 (Constantin Goschler & Jürgen Lillteicher eds., 2002). See also CHRISTIAN PROSS, PAYING

FOR THE PAST: THE STRUGGLE OVER REPARATIONS FOR SURVIVING VICTIMS OF THE NAZI TERROR 165 et seq. (1998) (observing various health damages).

154 Cf. Spannuth, supra note 56, at 58; Colonomos & Armstrong, supra note 6, at 410–11 (addressing the issue of compensation).

155 Hammerstein v. Conference on Jewish Material Claims Against Ger., No. 100767/2007, 2008 N.Y. Misc. LEXIS 8918 (N.Y. Sup. Ct. April 2, 2008).

156 Colonomos & Armstrong, supra note 6, at 408; Roy L. Brooks, A Reparations Success Story?, in WHEN SORRY ISN’T

ENOUGH: THE CONTROVERSY OVER APOLOGIES AND REPARATIONS FOR HUMAN INJUSTICE 17 (Roy Brooks ed., 1999). See also Buxbaum, supra note 2.

157 FED. MINISTRY OF FINANCE, supra note 146, at 29. This figure includes payments made under the Federal Compensation Act, the Federal Restitution Act, the Compensation Pension Act, the Nazi Compensation Act, the Luxemburg Agreement, and the comprehensive bilateral compensation agreements; it also includes compensation payments by the Länder made outside the Federal Compensation Act, the Hardship Compensation


The German reparations scheme did help Germany to rejoin the international community after World War II and the Holocaust, and it significantly contributed to the gradual establishment of good relations between Germany and Israel.

158 But to what extent did

reconciliation happen on the individual level? It is generally assumed that individual reparations systems, if well-designed, support post-conflict reconciliation in various ways.

159 Returning property or making respective compensation payments intend to satisfy

victims’ needs or to improve their living conditions. Reparations arrangements also include a public recognition of past injustices and promote the same recognition of individuals. However, the experiences of many victims of Nazi persecution might have been different. Reconciliation is unlikely for traumatized claimants having to face an overwhelming and complex claims process implemented by the successor institutions of those originally responsible for the property loss. This feeling of mistrust tended to be magnified in compensation proceedings pursuant to the Nazi Compensation Act because its provisions were too complicated for a layperson to follow. Neither is reconciliation likely to be fostered by lawyers who portray the Federal Republic of Germany as the opposing party to their clients. Previous research emphasized the re-traumatizing experience of victims having to prove their damages to body or health before a cold bureaucracy.

160 Property

rights restitution might be less complicated because objective evidence may more easily be available to support the case, but property restitution or compensation also tends to revive possibly repressed memories of traumatizing past events in connection with forced migration and other mass crimes.

161 Irrespective of the factors described concerning the

parties and the design of the claims process, the inherent linkage between restitution and memorization may make restitution processes as such an extremely painful experience for victims. Germany is generally well-respected for its official recognition of and remorse for the crimes committed during the Nazi regime. The reparation programs discussed in this article

Fund, the Foundation for Remembrance, Responsibility and the Future as well as other payments. See Pierre D’Argent, Reparations after World War II, in 8 THE MAX PLANCK ENCYCLOPEDIA OF PUBLIC INTERNATIONAL LAW 893–98 (Rüdiger Wolfrum ed., 2012) (giving a more comprehensive overview of the wider German reparations scheme).

158 Colonomos & Armstrong, supra note 6, at 409–410.

159 Elin Skaar, Siri Gloppen & Astri Suhrke, ROADS TO RECONCILIATION 8 (Elin Skaar, Siri Gloppen & Astri Suhrke eds., 2005); Pablo de Greiff, Introduction to Repairing the Past: Compensation for Victims of Human Rights Violations, in THE HANDBOOK OF REPARATIONS, supra note 1, at 2; Pablo de Greiff, Justice and Reparations, in THE HANDBOOK OF

REPARATIONS, supra note 1, at 469.

160 Colonomos & Armstrong, supra note 6, at 410–11.

161 Dan Diner, Der Holocaust in den politischen Kulturen Europas: Erinnerung und Eigentum, in AUSCHWITZ: SECHS

ESSAYS ZU GESCHEHEN UND VERGEGENWÄRTIGUNG 68 (Klaus-Dietmar Henke ed., 2001).


are complemented by numerous commemoration initiatives in and outside Germany. However, it is doubtful how far the official admission on German responsibility actually led individual Germans to recognize that many of their families benefited from large-scale “aryanization” of Jewish property and other injustices. Research demonstrates significant differences between the public discourse and inner-family remembrance and storytelling.

162 Moreover, the Friedrich Ebert Foundation recently published two studies

with the disconcerting finding that anti-Semitism in Germany, as in other parts of Europe, is on the rise again.

163

More systematic psycho-sociological research would be required to assess the impact of the German reparations on the attitudes of individual Germans. One possible outcome of such research might be that the majority of Germans took limited notice of the reparations programs despite the considerable financial, administrative, and judicial resources applied. This might be a result of an overly complex reparations regime as well as the cautious disclosure by the German Government of the payments made in their totality.

162 HARALD WELZER, SABINE MOLLER & KAROLINE TSCHUGGNALL, “OPA WAR KEIN NAZI”: NATIONALSOZIALISMUS UND HOLOCAUST

IM FAMILIENGEDÄCHTNIS 248 (2002).

163 ANDREAS ZICK, BEATE KÜPPER & ANDREAS HÖVERMANN, INTOLERANCE, PREJUDICE AND DISCRIMINATION: A EUROPEAN REPORT (2011), http://library.fes.de/pdf-files/do/07908-20110311.pdf; OLIVER DECKER, JOHANNES KIESS & ELMAR BRÄHLER, DIE

MITTE IM UMBRUCH: RECHTSEXTREME EINSTELLUNGEN IN DEUTSCHLAND 2012 (2012), http://www.fes-gegen-rechtsextremismus.de/pdf_12/mitte-im-umbruch_www.pdf.

Articles

Incomplete Data Protection Law By Kunbei Zhang*

A. Introduction The European legal system governing data protection issues is widely regarded as an adequate blueprint for late developers to follow. According to this position, host countries will benefit from receiving the ready-made data protection law because it has already gone through a process of trial and error in Europe. For example, China follows the traditional civil law measures on data protection, such as contractual and tort liability. No Chinese legislation deals specifically with the right to protection of personal data. In China, researchers paid attention to the European legal system, which is regarded as the milestone for data protection. Some vigorously suggest that China should quickly move to enact data protection law based on the model provided by European law. When Chinese researchers strongly promote the European legal system over data protection issues, they send an underlying message that the quality of European laws is good enough to sufficiently deter violations: Individuals would be prohibited from carrying out harmful actions as soon as the expected law is transplanted to China. From a Chinese perspective, our country could quickly move to enact a similar law following the tone of Europe in order to enhance the efficiency of data protection. But is this a compelling position? Will European data protection laws indeed regulate unambiguously and prospectively? Will European data protection laws provide clear guidance to Chinese judges for resolving data protection-related cases? And will the court-enforced laws sufficiently solve the broad spectrum of problems on data use? Understanding the European enforcement mechanism covering data protection issues, and thereby assessing its efficacy on deterrence, is vital to answering these questions. In this paper, I attempt to answer these issues from the incomplete law perspective. I focus on the development of the European legal system governing data protection issues and its enforcement system. I deploy an analytical tool from “The Theory of Incomplete Law,” contributed by Katharina Pistor and Chenggang Xu, in order to complete this examination. This theory provides a framework for “analyzing the relation between basic features of statutory and case law and the design and functioning of institutions that enforce this

* Ph.D. student at eLaw@Leiden, Leiden University’s Centre for Law in the Information Society. This paper is part of the author’s Ph.D. research at Leiden University. Its title is: “Can Chinese Legislation on Privacy Benefit from Western Experience?” and it is currently under review.

1 0 7 2 G e r m a n L a w J o u r n a l [Vol. 15 No. 06

law.”1 Pistor and Xu developed the theory when analyzing the regulation on financial

markets and the need for optimal levels of regulation. They suggest:

Law is intrinsically incomplete, which implies that it is impossible to write a law that can unambiguously specify all potentially harmful actions. Because law is incomplete, law enforcement by courts may not always effectively deter violations. Rather than attempting the impossible task of completing the law, the effectiveness of law enforcement may be enhanced by reallocating lawmaking and law enforcement powers.

2

Through the lens of incomplete law theory, I argue that European data protection law is highly incomplete, and its deterrence effect weakens as the development of technology increases the level of incompleteness. When these occasions arise, courts step in to reduce the incompleteness while resolving new cases. But courts can only react to cases that are brought to them, and potential litigants often lack the initiative and resources to effectively address new problems. Therefore, the European legal system regarding data protection issues remains highly incomplete as new and “nasty surprises”

3 continue to challenge Directive 95/46/EC. However, the Regulator, a unique agent in Europe, has emerged to improve law enforcement, and thereby mitigates its incompleteness. I suggest that the construction of a “regulatory agent,” beyond legislators and courts, is the “secret recipe” to make the European legal system covering data issues the best practice for data governance. In this paper, I begin to apply the incomplete law theory to data protection regulations. This paper is organized as follows: First, I will outline the characteristics of incomplete law theory in Section B. In Section C, I will apply the framework to the European legal system over data protection issues. I attempt to analyze the legislative responses to challenges posed by the development of technology. Then, in Section D, I explore the European regulatory framework governing data protection, as it added proactive law enforcement by

1 Katharina Pistor & Chenggang Xu, Incomplete Law, 35 N . Y . U . J. INT’L L. & POL. 931, 931 (2002–2003).

2 Katharina Pistor & Chenggang Xu, Beyond Law Enforcement: Governing Financial Markets in China and Russia, in BUILDING A TRUSTWORTHY STATE: PROBLEMS OF POST-SOCIALIST TRANSITION 167, 176 (Janos Kornai et al. eds., 2004).

3 I take this phrase from Jeff Howard’s paper, Environmental Nasty Surprise, Post-Normal Science, and the Troubled Role of Experts in Sustainable Democratic Environmental Decision Making, 43 FUTURES 182, 182 (2011). The phrase is rather commonly used in papers exploring environmental law issues such as Daniel Farber, Probabilities Behaving Badly: Complexity Theory and Environmental Uncertainty, 37 U.C. DAVIS L. REV. 145, 146 (2003). Although there are differences, the surprises happening in data protection are equally nasty as what happens in environmental law.

2014] Incomplete Data Protection Law 1073

regulators to the classic reactive law enforcement by the courts. Finally, I draw conclusions about the efficacy of European data protection laws and the possibility of their legal transplantation to China. B. The Incomplete Law Theory

The incomplete law theory is inspired by the incomplete contract theory. Xu and Pistor believe that: “[N]ot only contracts but law is inherently incomplete—indeed that the incompleteness problem is more profound for law than for contracts.”

4 In fact, the claim

that law is incomplete is not a novelty to most lawyers.5 It has long been recognized in

legal literature. The main task of the theory is to address the problems brought by incomplete law, rather than to establish that laws are inherently incomplete. The incomplete law theory is used primarily in assessing governance functions in financial markets. Xu and Pistor wrote several companion papers analyzing the role of the Regulator in the financial market in order to illustrate the incompleteness of the law.

6 In my analysis, I

extend the application of the theory into a new field: Data protection law. First, I will amplify the analytical framework of incomplete law theory. Most of this section’s content is concluded from a paper series written by Xu and Pistor. My aim is to draw a picture of the theory, explaining why law is inherently incomplete, and arguing, given incomplete law, how legal institutions intended to reduce enforcement problems may be designed. I. Law Is Intrinsically Incomplete Since the theory is called incomplete law, naturally the first questions to arise are: What is a complete law, and what is an incomplete law? To Xu and Pistor, completeness means that obligations “are unambiguously stipulated in the law and the law can be enforced literally provided that evidence is established.”

7 In the enforcement process, completeness

requires that “the law is self-explanatory, i.e., that every addressee agrees to the meaning of the law and, by implication, that there is no need for interpreting the law.”

8 If not, the

law is incomplete.

4 Pistor & Xu, supra note 1, at 937.

5 The phenomenon that law is incomplete has been long recognized. For instance, Hart argues that law is indeterminate. In fact, indeterminacy of law and incomplete law are different in expression, but equal in argumentation. See HERBERT HART, THE CONCEPT OF LAW 128 (1994); Xu & Pistor, supra note 1, at 957.

6 See, e.g., Katharina Pistor & Chenggang Xu, Fiduciary Duty in Transitional Civil Law Jurisdictions: Lessons from the Incomplete Law Theory (ECGI Law, Working Paper No. 01/2002, 2002); Katharina Pistor & Chenggang Xu, Law Enforcement Failure Under Incomplete Law: Theory and Evidence from Financial Market Regulation (LSE STICERD, Working Paper No. TE/02/442, 2002).


8 Id.


Nevertheless, Xu and Pistor argue that laws cannot be complete since they have in their “genes” characteristics that make them designed to “serve a large number of addressees for long periods of time and to cover a great variance of cases.”

9 For legislation, incompleteness is the norm. Precluding bad drafting, most of the time incompleteness is caused by this “gene” in the law-making process, which universally contributes to its intrinsic incompleteness. Normally, legislators give their best effort in designing a law: An extensive amount of time is spent on consultation, appraisal, assessment, preparation, modification, and so on. However, “Even the best, social welfare maximizing, lawmaker cannot write law that is fully complete, because lawmakers cannot foresee all future contingencies,” nor can they correctly predict their probabilities.

10

Of course, I cannot definitely preclude the possibility of writing more complete law when legislators are well equipped with the necessary resources and render their best efforts. For instance, legislators can be asked to provide legislative changes in order to make an incomplete law more complete. Indeed, a thus-modified law may remain complete for some time when sufficient expertise is assembled.

11 Nevertheless, it is difficult for an even

carefully designed law to remain complete for a long time. The reason is simple but fundamental (and implied in the foregoing): Legislators can neither predict nor shape the future. As legal philosopher H.L.A. Hart argues, “it is a feature of the human predicament that we simply cannot regulate, unambiguously and in advance, some sphere of conduct by means of general standards to be used without further official direction on particular occasions.”

12 The world is simply too complex.

13 This determines the “destiny” of any law:

Incompleteness cannot be escaped. As time goes on, new conditions that revise the law’s efficacy, which the legislator did not, or could not, contemplate will undoubtedly arise, increasing its incompleteness once more.

14

9 Id. at 938–39.


11 See id. at 175.

12 HART, supra note 5, at 128.

13 In the words of Hart:

If the world in which we live were characterized only by a finite number of features, and these together with all the modes in which they could combine were known to us, then provision could be made in advance for every possibility. He adds, plainly this world is not our world.

Id.

14 See Pistor & Xu, supra note 2, at 175.


Moreover, some incomplete laws are enacted to be incomplete by the legislator’s “deliberate design.”

15 In order to provide general guidance for helping others to “structure

their relations,” or to remain applicable to future disputes, laws may be created in a way that can “serve a large number of addressees for long periods of time and to cover a great variance of cases.”

16

The positive side of the strategy is that a law can apply “equally all conditions described in the law, irrespective of the class, social status, or other attributes of individuals subject to the law.”

17 Yet on the other hand, this contributes to incomplete law, since law becomes

too general to provide specific standards and procedures for each case. This can “affect the outcome for a variety of cases that may arise in the future.”

18

II. Two Types of Incompleteness Xu and Pistor classify incomplete laws into two categories based on the motives that triggered incompleteness. They stipulate that categorizing laws based on types of incompleteness brings forth new ideas for legal study.

19

1. Type I

Type I incomplete law refers to one that “broadly circumscribes outcomes without identifying particular actions, or enumerates only a few actions.”

20 The most representative

incomplete law in Type I, according to Xu and Pistor, is tort law. The authors state:

General tort principles typically stipulate that damage to property, life, and liberty gives rise to a liability claim against the person responsible. Note that no single action is defined, only the broad outcome of damages to life, liberty, and property. Requiring intent or negligence or imposing strict liability can further circumscribe the scope of liability, but this still leaves


16 Id. at 938–39.

17 Id. at 939.

18 Id.

19 See id. at 941.

20 Id.


open the question of what form actions might take that will trigger liability under the law.

21

2. Type II

Type II incomplete law refers to one that “specifies the actions that shall be prevented but fails to capture all relevant actions.”

22 As Xu and Pistor state, criminal laws “usually contain

a number of provisions aimed at protecting property rights, but each designed to cover a particular action, such as theft, embezzlement, damage to property, and the like. Closer inspection of these provisions reveals that the law has not captured all possible actions that could violate property rights.”

23

III. Different Institutional Mechanisms Respond to the Incompleteness When a law is incomplete, it is required to interpret and develop existing laws in order to deal with new, not yet covered cases. According to Xu and Pistor, in this situation, new powers must arise, such as “residual lawmaking and law enforcement powers,”

24

(hereinafter residual LMLEP). Xu and Pistor further suggest that incompleteness can, to a large extent, be reduced when the residual LMLEP is appropriately allocated.

25

The residual lawmaking power (hereinafter residual LMP) is “power to interpret existing law, to adapt it to changing circumstances, and to extend its application to new cases.”

26

The original lawmaking power (hereinafter original LMP) is “the power to make new law from scratch.”

27 Universally, original LMP is granted to legislators, while original LEP is

granted to courts. Xu and Pistor argue that it is sufficient to allocate original LMLEP to legislators and courts if law is complete.

28 This is because legislators made a law

permanently efficient enough to guide conduct and deter violations. In such a case, courts could decide any case by just following the contents in the permanently complete law. However, Xu and Pistor have proven that law is permanently incomplete, rather than

21 Id.

22 Id.

23 Id.

24 Id. at 938.

25 See id. at 935.

26 Id. at 933.

27 Katharina Pistor & Chenggang Xu, The Challenge of Incomplete Law and How Different Legal Systems Respond to It, in BIJURALISM: AN ECONOMIC APPROACH 71, 78 (Andre Breton & Anne des Ormeaux, eds., 2006).



complete. When law is incomplete, it is insufficient to merely allocate the original LMLEP. Residual LMLEP arises and must be allocated explicitly. In most cases, residual LMLEP can be allocated to two different agents: Courts and regulators.

29 In fact, agencies qualified to exercise residual LMLEP are not limited to

regulators. For instance, self-regulators may be allocated to exercise residual LMLEP. In the realm of data protection, it is widely believed that self-regulators, from the Theory of Incomplete Law’s perspective, are allocated with these residual powers in the United States. But when the theory was first established, the authors limited their analysis to regulators generically defined. In the following years, Xu and Pistor also analyze the efficacy of the approach to grant residual powers to agencies beyond courts and regulators. In my research, I limit my analysis to regulators generically defined. These two institutions both have merits and demerits. How can policymakers decide which institution to choose? Herein lies a significant contribution of the theory. The incomplete law framework helps us determine which institution is to be preferred, under certain conditions and constraints.

30

1. Courts Courts are allocated with substantive residual LMLEP. When law is incomplete, courts step in to clarify the incompleteness while addressing a case. Through interpretation and further development of existing laws, courts decide how to enforce “old” law to new cases, thus exercising residual LMLEP. Each case decided reflects effort by courts to optimize the relative completeness of the law. In fact, there is a significant difference between the two major legal families in the world concerning how residual LMLEP has been allocated to courts.

31 In Common Law countries, “[J]udges not only hold extensive residual lawmaking

powers; they are also vested with original lawmaking powers,”32

while in Civil Law countries, courts are constrained to exercising residual LMLEP.

33 Yet overall, and traditionally, courts

are the natural institutions to hold and exercise residual LMLEP. However, as an enforcement agent, courts have a weakness, which leads to inefficient enforcement; courts

29 See id.

30 See id. at 961.

31 See id. at 946.

32 Id. at 947. The two authors mentioned that there is a substantial debate on whether common law judges actually make law or whether they find the law based on legal principles. See, e.g., Jack G. Day, Why Judges Must Make Law, 26 CASE W. RES. L. REV. 563, 563–65 (1976). Incomplete law theory remains neutral to the debate. The authors consider that what judges in common law countries do is to make legally binding precedents, which fill in some gaps in the law. This lawmaking power is one of their major functions. See Pistor & Xu, supra note 1, at 947.



do not “have the power to take action sua sponte even when such an intervention might be desirable.”

34 Shortly, courts enforce laws reactively. Thus, their range of action is

insufficient to ensure optimal law enforcement of incomplete laws, and the insufficiency worsens as the expected damages from harmful actions increase.

35

2. Regulators A regulator represents an alternative institutional approach to addressing problems brought on by incomplete law. The manner in which regulators exercise residual LMLEP is very different from the way courts do: Regulators can adapt and enforce the completeness of laws proactively through various means,

36 including, but not limited to, “controlling entry,

monitoring activities, initiating investigations, enjoining actions, and initiating the administration of sanctions against violators.”

37 Police officers, as illustrated by Xu and

Pistor, are an example of regulators. Police can “monitor behavior and seek to prevent damages by enjoining actions that are likely to cause harm.”

38 It is better for police to

intervene before harm has occurred, for they need not wait until harm has actually occurred in order to act.

39 Supervisory authorities in stock markets and the banking

industry are also regulators that exercise substantive LMLEP. They are the main objects for observation by Xu and Pistor. Xu and Pistor argue: When law is highly incomplete and violations of the law may result in substantial harm, it is optimal to allocate law enforcement rights to regulators rather than courts.

40 This argument is based on the fact that regulators can exercise the powers both ex

post and ex ante, unlike courts, which in most cases “make and enforce the law ex post, that is, after harm has occurred.”

41 Also, judges must wait for parties to bring motions.

Otherwise, judges cannot take action at all.42

34 Id. at 948.

35 See id. at 949; Paul R. Milgrom, Douglass C. North & Barry R. Weingast, The Role of Institutions in the Revival of Trade: The Law Merchant, Private Judges, and the Champagne Fairs, 2 ECON. & POL. 1, 5–6 (1990).


37 Id.

38 See id.

39 This relates to the problem of legitimate pro-active regulatory behavior, which is resolved in the practice in politics (both Europe and China), a topic beyond this paper’s scope.

40 See Pistor & Xu, supra note 1, at 951–952.

41 Id. at 949.

42 The two authors note that courts can also be asked to prevent harmful actions from taking place: For example, to file a motion for preliminary injunction. However, this procedure is still based on another party’s motion. See id.


In contrast, regulators can trigger enforcement processing ex ante and can exercise residual LMP to respond to observed changes more directly (within the scope of their lawmaking rights),

43 and thereby, an incomplete law’s efficacy can be enhanced. Therefore, some

believe that regulators can exercise residual LMLEP more flexibly and in a wider range of situations than courts are able to.

44 Regulators also can “correct for past errors on their

own initiative and in a flexible and responsive manner.”45

Based on the foregoing comparison, it is more advantageous to let the Regulator as an institution hold and exercise residual LMLEP than the court. But are these advantages visible in all situations? In fact, regulators may make mistakes by either over- or under-enforcing the law. “Over-regulation occurs when a regulation imposes costs that outweigh the benefits of proactive law enforcement [by courts].”

46 Over-

regulation also occurs when it chills “too many potentially beneficial actions or when well-intended regulation stifles economic activities in other ways.”

47 According to Xu and Pistor,

“Regulators may also under-enforce because they face resource constraints, misallocate their resources, or fail to detect [risks of] harmful actions.”

48 Thus, regulators are relatively

superior to courts only under certain conditions and constraints.49

We then turn to the issue of under which conditions it may be optimal to allocate the exercise of residual LMLEP to courts, and under which conditions to allocate them to regulators. Xu and Pistor suggest two important factors for consideration: Standardization and the level of expected harm (externality). These concepts support the analytical framework of incomplete law theory.

43 See id. at 950.

44 See id. at 1012.

45 Id. at 951.

46 Id. The two authors illustrate that the direct costs of regulation include the funds needed to hire monitors and investigators, to maintain filing systems, and to launch lawsuits. The indirect costs of regulation are comprised of the costs market participants incur because they have to comply with regulations and the costs society incurs when regulators either over- or under-enforce the law. See id.

47 Id.

48 Id.

49 See id. at 961. On the tradeoff between monitoring and investigating, and the cost implications of these regulatory enforcement mechanisms, see Dilip Mookherjee & Ivan P. L. Png, Monitoring vis-á-vis Investigation in Enforcement of Law, 82 AM. ECON. REV. 556, 557 (1992). Using a formal model to compare the tradeoffs, Mookherjee and Png conclude that the use of these alternative enforcement devices should be tailored to the severity of the offense. Smaller offenses should not be investigated, but merely monitored. Larger offenses should be investigated in accordance with their severity, and fines should be maximized. See id.


Standardization:

[R]efers to the ability to describe actions and outcomes at reasonable cost so that regulators can exercise their proactive law enforcement powers effectively. The effectiveness of proactive law enforcement hinges on the ability of regulators to monitor the market and identify types of actions and outcomes that reasonably may be expected to result in harmful outcome. The assessment of which actions or outcomes fulfill these conditions may change over time. Yet it is essential that regulators be able to identify and standardize in order to use their resources effectively and avoid the pitfall of over-enforcing.

50

The level of expected harm:

The constraints of ex post lawmaking and reactive law enforcement may be tolerable when the expected level of harm is low, for example, when the harm victims might suffer is small or when only a few victims are affected by harmful actions . . . . If, however, the level of expected harm is substantial, . . . court enforcement will not be effective. It will typically come too late, after harm has been done. Shifting to a proactive law enforcement regime that seeks to prevent the occurrence of harm through entry barriers, continuous monitoring, and investigation, will therefore be superior.

51

According to Xu and Pistor, regulators are only the superior option to allocate residual LMLEP when these two factors are considered and their conditions are met. The cost of proactive law enforcement by regulators can be justified only when actions can be standardized, and when these actions are likely to create substantial harm which cannot be fully remedied by reactive law enforcement.

52


51 Id. at 953–54.

52 Of course (yet, off-topic for my research), the deployment of residual LMLEP competencies must be monitored and exercised within the constraints as set by the legal system that erect the regulator, as all powers have to respect checks and balances.


IV. Summary The Incomplete Law Theory can be summarized in three propositions: (1) All law is intrinsically incomplete; (2) the optimal approach to incompleteness is to allocate residual LMLEP; and (3) regulators conditionally have advantages over courts for holding and exercising residual LMLEP—for example, when actions can be standardized, and when substantial harm is likely to occur. The first proposition lays the foundation of the theory, and the following two supply an analytical framework that can help researchers to assess the design of legal institutions, as well as the efficacy of law enforcement. Xu and Pistor believe their theory is of wide interest to legal research. They stipulate that it can be used to compare legal systems (such as the authors’ comparison of courts’ residual LMLEP in the Civil Law and Common Law systems) and to analyze lawmaking and law enforcement in diverse jurisdictions (as demonstrated in their companion paper “Beyond law enforcement-governing financial markets in China and Russia,” through which the theoretical framework is employed to analyze the financial regulation mechanism in Russia and China).

53

In the remaining section of this paper, I will analyze the European legal system governing data protection issues through the lens of the Incomplete Law Theory. I seek to explore the effectiveness of lawmaking and law enforcement in the data protection field—a field that was, and remains, highly susceptible to technological changes. This assessment aims to discover whether the European legal arrangement indeed provides the high level of protection widely attributed to it. C. Incomplete Law Theory and the Data Protection Field: Examples from Directive 95/46/C In this section, I take the “Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data” (hereinafter “Directive 95/46/EC”) as a representative piece of law-making that assesses resilience to incompleteness.

54 I do not select this Directive to illustrate the quality of the Directive’s

drafting, but to illustrate the European legal system’s abilities to deal with “unforeseen contingencies.”

53 See Pistor & Xu, supra note 2.

54 Council Directive 95/46, 1995 O.J. (L 281) 31 (EC).


I. Directive 95/46/EC Is Intrinsically Incomplete Since it was released, Directive 95/46/EC has been long assumed an engine for the emergence of a global data protection regime.

55 This Directive addresses the protection of

personal data from a number of different perspectives and covers multiple situations. Nevertheless, it has not captured “all possible actions” that can violate a data subject’s rights. The Directive is incomplete. Fundamentally, the incompleteness of Directive 95/46/EC does not mean the European legislators have drafted the law badly. Rather, the intrinsic feature of this Directive causes it: It is a general law. A general law means this Directive was designed to “serve a larger number of addressees and to cover a much greater variance of cases,” and typically have much longer duration.

56 Directive 95/46/EC was not a “single-case-law,” which aimed to

apply to a specific case in a short time.57

As I analyzed above, the feature of generality determined that this Directive, from the first beginning, has been accompanied with “incompleteness.” Moreover, Directive 95/46/EC tries to regulate a field which is closely linked with technology. According to Incomplete Law Theory, data protection law may be more incomplete than others, since it is affected by a high pace of technological change:

58 “The

reason is that such change constantly challenges legal solutions designed to solve ‘old’ problems and thus requires frequent adaptations of the law if it is to remain effective.”

59

Consequently, it is even more incomplete than other areas that are not featured by continuously “exogenous changes.” When a Directive is incomplete, it cannot effectively deter all situations not encompassed within it. This may trouble both individuals and law enforcers to determine—as the two authors pointed—“whether these actions fall within the scope of the relevant laws.”

60 For

example, data-users may find it difficult to determine punishments or to foresee the level of punishments when contemplating actions. If they are too careless, and proceed on the assumptions that the law will not apply to them, actions resulting in harm, similar to the harm that the incomplete law aims to protect against, may occur. Alternatively, they may

55 See Michael Birnhack, The EU Data Protection Directive: An Engine of a Global Regime, 24 COMPUTER L. &

SECURITY REP. 508 (2008).


57 See id. at 939.

58 See id. at 933.

59 Id.

60 Id. at 949.


worry their actions fall within the scope of Directive 95/46/EC and refrain from doing what otherwise would be considered perfectly legitimate business. In either case, the deterrence effect of the law is not optimal. In the first case, the law under-deters;

61 in the

second, it over-deters.62

To law enforcers, the trouble is to decide whether Directive 95/46/EC can be applied to a specific “new” case. In fact, the worries about the incompleteness of Directive 95/46/EC include uncertainties about some of its particulars remaining in force in a world where their enjoinment could concern potential harmful actions (and not their prevention). Under such conditions, it becomes important to address incompleteness in order to ensure clear levels of punishments. Courts have to step in and fill the gaps left by incomplete Directive 95/46/EC. I will also do some research based on cases that were decided by the European Court of Justice in Luxembourg (hereinafter ECJ)

63 that are also referring to

Directive 95/46/EC. The analysis of the case law is to answer the question: Can the courts reactive enforcement adequately remedy this incompleteness? II. Legal Enforcement by Courts Cannot Achieve Optimal Levels The case law created by the ECJ plays an important role in shaping the character of data protection in Europe.

64 The ECJ tries to cope with challenges of rapid technological changes,

since a major part of judicial reasoning is to determine whether Directive 95/46/EC, and its companion directives or cases law, could extend to new cases. From the perspective of Incomplete Law Theory, substantial LMLEP has been allocated to the ECJ; it can interpret and adapt community laws to make sure they are applied in the same way in all EU countries. The ECJ exercises these powers when settling legal disputes or answering prejudicial questions addressed to it by member-state courts. It establishes the standardized interpretation of Directive 95/46/EC that member state’s courts must take into account when applying national law. I now explore how courts exercise their LMLEP, which is at the center of our analysis. The background and legal contents are cited from the ECJ’s judgment.

61 See id.

62 See id.

63 The information about the ECJ is harvested from its official website. See European Union, Court of Justice of the European Union, http://europa.eu/about-eu/institutions-bodies/court-justice/.

64 According to a European data protection officer, case law decided by ECJ is a significant building block of the legal framework for data protection law in Europe. See European Comm’n, Data Protection Officer (Nov. 4, 2012), http://ec.europa.eu/dataprotectionofficer/legal_framework_en.htm.


1. Joined Cases C-465/00, C-138/01 and C-139/01: Rechnungshof v. Österreichischer Rundfunk and Others and Christa Neukomm and Joseph Lauermann v. Österreichischer Rundfunk

65

(a) Directive 95/46/EC includes a provision that its purpose is to ensure free personal data flow from one Member State to another.

66 The dispute referring to the prejudgment sent

to the ECJ questioned whether Directive 95/46/EC is applicable to issues that have no relation with the issue of internal market harmonization.

67

(b) In this judgment, the ECJ held that Directive 95/46/EC should apply to cases, even those that have no link with the issue of harmonizing internal market.

68

(c) The outcome of the preliminary ruling reduced Type I incompleteness. ECJ’s judgment extended the scope of the applicability to cover any actions, which differs from the expression of principles and criteria laid down in the Directive 95/46/EC.

69

2. Case C-101/01: Criminal Proceedings Against Lindqvist

70

(a) Directive 95/46/EC has provisions referring to the scope of its applicability (Article 3), prohibited processing categories (Article 8), restrictions and exemptions of its applicability (Article 13), and cross-border data flow (Article 25). The disputes referred to the preliminary rulings include whether “the act of referring, on an Internet page, to various persons and identifying them by name or by other means” falls into the scope of the Directive’s applicability, whether processing data such as “giving their telephone number, or information regarding their working conditions and hobbies” is covered by one of the exceptions in Article 3(2), what kind of information concerns health, whether a transfer of data to a third county includes the occasion that load personal data onto a page stored on a server…established in a Member State and thereby making those data accessible to anyone who connect the Internet including people from third country, whether the provisions in Directive 95/46/EC bring about a restriction which conflicts with the general

65 Joined Cases Rechnungshof v. Rundfunk, CJEU Case C-465/00, Neukomm v. Rundfunk, CJEU Case C-138/01, and Lauermann v. Rundfunk, CJEU Case C-139/01, 2003 E.C.R. I-04989 [hereinafter Joined CJEU Cases C-465/00, C-138/01, and C-139/01].

66 See Council Directive 95/46, supra note 54, at para. 3.

67 See Joined CJEU Cases C-465/00, C-138/01, and C-139/01, supra note 65, at paras. 31–47.

68 Id. at paras. 48–101.

69 See id. at para. 100.

70 Lindqvist, CJEU Case C-101/01, 2003 E.C.R. I-12971. Reference for a preliminary ruling from the Göta hovrätt in the criminal proceedings against Bodil Lindqvist.


principle of freedom of speech, whether it is permissible for the Member State to provide for greater protection for personal data than required by Directive 95/46/EC.

71

(b) The ECJ ruled: (1) information on an Internet page which could identify data subjects by any means falls into the scope of the Directive; (2) the information about “injured foot” is information concerning health; (3) there is no transfer of data to a third country within the meaning of Article 25 of Directive 95/46/EC by loading personal data onto an internet page which is stored in a server hosted by legal or natural persons in another Member State, even though it is accessible by people from third country; (4) there is no restriction on the principle of freedom of speech and it is the national authorities and courts’ responsibilities to balance these general principles; and (5) a member state could extend the scope of data protection law.

72

(c) The outcome of the preliminary ruling largely reduced Type I incompleteness, but increased Type II incompleteness. Each new extended scope will eventually give rise to new litigation, as technological development will go beyond the scope of its applicability. Since courts are limited by its reactive and ex post features, they cannot easily and quickly adjust laws in response to observed changes. Before they catch up with new developments via exercising LMLEP, there is always sharp learning and waiting curve.

3. Joined Cases C468/10 and C469/10: Asociación Nacional de Establecimientos Financieros de Crédito (ASNEF) (C468/10), Federación de Comercio Electrónico y Marketing Directo (FECEMD) (C469/10) v. Administración del Estado

73

(a) Directive 95/46/EC has a provision (Article 7(b)-(f)) referring to conditions relating to legitimate interest in data processing without the data subject’s consent. The dispute referred for preliminary rulings concerns whether Member States’ national laws are entitled to add extra conditions to those required by Directive 95/46/EC.

71 Id. at paras. 12–17.

72 Id. at paras. 19–99.

73 Joined Cases Asociación Nacional de Establecimientos Financieros de Crédito v. Administración del Estado, CJEU Case C-468/10, and Federación de Comercio Electrónico y Marketing Directo v. Administración del Estado, CJEU Case C-469/10, 2011 E.C.R. I-12181. In the case, Spain’s Royal Decree 1720/2007 was believed to impose the extra conditions relating to the legitimate interest in data processing without the data subject’s consent, which does not exist in Directive 95/46, to the effect that the data should appear in public sources. The Tribunal Supremo (Supreme Court, Spain) asked the ECJ to interpret Article 7(f) of Directive 95/46. The contents in this section are cited from the judgment.


(b) The ECJ responded:

Article 7(f) of Directive 95/46 must be interpreted as precluding national rules which, in the absence of the data subject’s consent, and in order to allow such processing of that data subject’s personal data as is necessary to pursue a legitimate interest of the data controller or of the third party or parties to whom those data are disclosed, require not only that the fundamental rights and freedoms of the data subject be respected, but also that the data should appear in public sources, thereby excluding, in a categorical and generalised way, any processing of data not appearing in such sources.

74

(c) The outcome of the preliminary ruling reduced the Type I incompleteness of Directive 95/46/EC.

4. C-518/07 European Commission Supported by European Data Protection Supervisor v. Federal Republic of Germany

75

(a) Directive 95/46/EC includes a provision (Article 28) that the data protection authorities must be able to exercise their entrusted functions independently.

76 The dispute in the case

is how “independent” independent agencies should be. (b) The ECJ ruled:

[B]y making the authorities responsible for monitoring the processing of personal data by non-public bodies and undertakings governed by public law which compete on the market (öffentlich-rechtliche Wettbewerbsunternehmen) in the different Länder subject to State scrutiny, and by thus incorrectly transposing the requirement that those authorities perform their functions ‘with complete independence,’ the Federal Republic of Germany failed to fulfill its

74 Id. at para. 49.

75 European Comm’n v. Fed. Republic of Ger., CJEU Case C-518/07, 2010 E.C.R. I-01885.

76 See Council Directive 95/46, supra note 54.


obligations under the second subparagraph of Article 28(1) of Directive 95/46.

(c) The outcome reduced the Type I incompleteness of Directive 95/46/EC.

5. C-553/07 College van burgemeester en wethouders van Rotterdam v. M.E.E. Rijkeboer Netherlands

77

(a) Directive 95/46/EC includes a provision (Article 12) to entrust data subjects the right to access.

78 However, the provision does not indicate “any time period within which it must

be possible for those rights to be exercised.”79

The dispute referred to the preliminary ruling concerns whether member states could impose a time restriction in their national law.

80

(b) The ECJ ruled that it is not in proportional for Member States to fix a time limit for storage of that information and to provide for access to that information.

81 Nevertheless,

the storage period must consider both a data subject’s interests and the burden on data controllers for storage.

82

(c) The outcome of the preliminary ruling ruled the Type II incompleteness of the Directive, but increased Type I incompleteness.

6. C-524/06 Heinz Huber v. Bundesrepublik Germany

83

(a) Directive 95/46/EC has a provision (Article 7 (e)) that requires data processing for a task carried out in the public interest or in the exercise of official authority.

84 The dispute

77 College van burgemeester en wethouders van Rotterdam v. Rijkeboer, CJEU Case C-553/07, 2009 E.C.R. I-03889 [hereinafter Rijkeboer, CJEU Case C-553/07].

78 Council Directive 95/46, supra note 54.

79 Rijkeboer, CJEU Case C-553/07, supra note 77, at para. 28.

80 See id.

81 Id. at para. 70.

82 See id.

83 Huber v. Bundesrepublik Deutschland, CJEU Case C-524/06, 2008 E.C.R. I-09705 [hereinafter Huber, CJEU Case C-524/06].



referred to in the preliminary ruling concerns whether the provision could be enforced on the grounds of nationality.

85

(b) The ECJ ruled:

[Article 7(e) is] interpreted in the light of the prohibition on any discrimination on grounds of nationality, unless: 1) it contains only the data which are necessary for the application by those authorities of that legislation, and 2) its centralized nature enables the legislation relating to the right of residence to be more effectively applied as regards Union citizens who are not nationals of that Member State.

86

(c) The outcome of the preliminary ruling reduced the Type I incompleteness of Directive 95/46/EC, but may increase Type II incompleteness. 7. C-73/07 Tietosuo javaltuutettu v. Satakunnan Markkinapörssi Oy, Satamedia Oy

87

(a) Directive 95/46/EC provides exemptions for processing personal data for journalistic purposes.

88 The dispute referred to in the preliminary rulings concerns which

circumstances the activities at issue may be regarded as the processing of data carried out solely for journalistic purposes and thus exempt or derogate from data protection.

89

(b) The ECJ ruled that the notion of journalistic activities should encompass all activities whose “object is the disclosure to the public of information, opinions or ideas, irrespective of the medium which is used to transmit” the processed data (a traditional medium such as paper or radio waves or an electronic medium such as the internet) and of the nature (profit-making or not) of those activities.

90

(c) The way the ECJ ruled concerning Type I incompleteness might increase Type II incompleteness of Directive 95/46/EC. The interpretation broadly encompassed all

85 See Huber, CJEU Case C-524/06, supra note 83, at para. 2.

86 Id. at para. 82.

87 Tietosuojavaltuutettu v. Oy, CJEU Case C-73/07, 2008 E.C.R. I-09831 [hereinafter Tietosuojavaltuutettu, CJEU Case C-73/07].


89 See Tietosuojavaltuutettu, CJEU Case C-73/07, supra note 87, at para. 2.

90 Id. at para. 61.


journalistic activities, but each of the conditions the ECJ designed covered a particular situation, such as medium, format of data, nature of those activities. 8. Joined Cases C-317/04 and C-318/04 (judgment of 30 May 2006/European Parliament v. Council of the European Union)

91

(a) Directive 95/46/EC has a provision (Article 26) referring to non-Member States’ data protection level.

92 The dispute in the case concerns whether the Commission could validly

adopt the decision on adequacy on the basis of Directive 95/46/EC.93

(b) The ECJ ruled: “The transfer falls within a framework established by the public authorities that relates to public security.” The Court thus concluded that the decision on adequacy does not fall within the scope of the directive because it concerns processing of personal data that is excluded from the scope of the directive. Consequently, the Court annulled the decision on adequacy.

94

(c) The outcome of the judgment did not reduce the Type I incompleteness of the Directive 95/46/EC.

If compared with solely depending on legislators to update law, the ECJ’s efforts enhanced the efficiency of lawmaking. Still, do the ECJ’s reactive enforcements adequately remedy this incompleteness? My reading of the case law does not suggest that the problems of incomplete law can be adequately remedied through the courts’ reactive enforcement. Rather, I found that in some cases, the recoveries offered by the ECJ even lead to further incompleteness. Additionally, technological innovations challenge court enforcement. I analyze this below. III. The Weakness of the Courts’ Enforcements: Challenges Brought by Cloud Computing From the analysis above, courts’ efforts largely reduced the incompleteness of Directive 95/46/EC. Nevertheless, courts present a weak exercise of residual LMLEP. Particularly, problems may arise with the invention of new technologies. At the time, cloud computing strongly challenged courts’ enforcement.

91 Joined Cases European Parliament v. Council of the European Union, CJEU Case C-317/04, and European Parliament v. Comm’n of the European Cmtys., CJEU Case C-318/04, 2006 E.C.R. I-04721 [hereinafter Joined CJEU Cases C-317/04 and C-318/04].


93 See Joined CJEU Cases C-317/04 and C-318/04, supra note 91, at para. 2.

94 Id. at para. 57.


The challenges are mainly brought by the premise underlying the Directive’s focus. The obligations established by the Directive mainly apply to the “controller,” who “determines the purposes and means of processing personal data.”

95 In the Directive, “processing” is

defined as “any operation or set of operations which is performed upon personal data, whether or not by automatic means, such as collection, recording, organization, storage, adaptation or alteration, retrieval, consultation, use, disclosure by transmission, dissemination or otherwise making available, alignment or combination, blocking, erasure or destruction.”

96

The premise underlying this definition, as Ursula Widmer identified, is that there is always a clear location of where personal data presents itself, by whom it is processed, and who is responsible for the processing.

97 As formed by Article 4 of Directive 95/46/EC, data

controllers are the ones who process personal data on the territory of the Member State or the territory of several Member States; or in a place where member states’ “national law applies by virtue of international public law,” or who are not “established” in any member state but, for purposes of processing personal data, make use of equipment (or “means,” in some languages) situated in the member state.

98 The definition was

sufficiently complete to cover data controllers that existed at the time of the Directive’s enactment. When facing the technology of the time, the Directive’s technological horizon, based on location, fitted business practices and the environment it generated for personal data-processing, which was featured by relational databases and “island” computing. However, Directive 95/46/EC’s perspective has proven to be technologically quite narrow, particularly, from the perspective of cloud computing that emerged later. Cloud computing strongly challenges Directive 95/46/EC. As International Association of Privacy Professionals’ announcement described, “Cloud computing involves data and data applications stored and processed remotely, often in places far away, sometimes in multiple places, and in places with differing legal regimes.”

99 This feature blurs the

demarcation lines between data users, collectors and processors. As stated, “Generally, cloud users who process personal data in the cloud will be controllers unless an exemption

95 Council Directive 95/46/EC, art. 2(d), 1995 O.J. (L 281) (EC).

96 Id. at 2(b).

97 See Ursula Widmer, Cloud Computing and Data Protection, LAW BUSINESS RESEARCH LTD. (July 2009), http://whoswholegal.com/news/features/article/18246/.

98 See Council Directive 95/46/EC.

99 Upcoming EU Cloud Strategy Announced: Application of Local Privacy Laws Remain an Issue, To Be Explored at IAPP Navigate on September 14, HOGAN LOVELLS CHRONICLE OF DATA PROTECTION (Sept. 1, 2011), http://www.hldataprotection.com/2011/09/articles/international-eu-privacy/upcoming-eu-cloud-strategy-announced-application-of-local-privacy-laws-remain-an-issue-to-be-explored-at-iapp-navigate-on-september-14/ [hereinafter Upcoming EU Cloud Strategy Announced].

http://whoswholegal.com/news/features/article/18246/


applies, e.g. private use only, as with purely personal webmail. Cloud service providers are generally treated as processors.”

100 But the roles taken by cloud service providers are not

limited to being processors, they may also and concurrently, in some situations, turn into controllers.

101

Second, the operational principles of cloud computing fundamentally conflict with the premise formed by Article 4. As described, “If a customer uses an e-mail service based on cloud computing, the customer’s data can be stored anywhere in the world, depending on where the servers are located,”

102 and without an explicit chain of contractual transfers of

data-protection responsibilities. In the cloud-computing era, it is no longer possible to say where the data is at a certain moment, and by whom and how it is being processed. Thus, distinctions can be made between the technologies regulated by law and the technologies are not—and that need to be regulated. These distinctions cause problems for Directive 95/46/EC to provide clear formulations. Incompleteness of both types comes to the forefront. As a matter of fact, the emergence of new technology like cloud-computing services has set the EU legislature buzzing. According to the types of incompleteness as categorized by Xu and Pistor, Type II incompleteness results. This leaves open the question of the scope of applicability. Naturally, cloud computing should not become a technology that can evade data protection requirements. However, Directive 95/46/EC does not include any statement about the irrelevance of location. Indeed, the European Commission, which is vested with substantial original LMP, proclaimed that an essential pillar of EU citizens’ privacy rights is “protection regardless of location” which has obvious implications for the cloud.

103 Still,

messages from the European Commission stated that it would take more time for the legislatures to complete current laws.

104 The message inherently signaled to the ECJ that it

should reconsider the applicable scope of the Directive 95/46/EC in a preliminary ruling,105

as it is not to be expected that the legislature will fill the gap by quickly promulgating a more complete law. Therefore it is provisionally left to the ECJ to determine whether the

100 For example, when they determine the “means” of processing. W Kuan Hon & Christopher Millard, Cloud Computing and EU Data Protection Law, Part One: Understanding the International Issues, COMPUTERWORLDUK (Sept. 28, 2011), http://www.computerworlduk.com/blogs/cloud-vision/-cloud-computing-and-eu-data-protection-law--3570958/.

101 For example, when they determine the “means” of processing. See id.

102 Widmer, supra note 97.

103 See Viviane Reding, Vice-President, Eur. Comm’n & EU Justice Comm’r, Review of the EU Data Protection Framework (Mar. 16, 2011).

104 See Windmer, supra note 97. See also, Upcoming EU Cloud Strategy Announced, supra note 99.

105 See Windmer, supra note 97.


existing standards of conduct formed by Directive 95/46/EC can be understood so as to support a more adequate realization of data protection under cloud computing.

106

This highlights significant limitations of courts for exercising LMLEP. As a neutral arbiter, the ECJ is passive and can only exercise its LMLEP after a motion has been filed. Judges in the ECJ are aware of the data-protection problems under cloud-computing business models, but they do not have the power to take action, since no case has been brought to the ECJ (until now). ECJ has to remain passive until others bring actions, even though judges may have designed a strategy on how to exercise LMLEP. Thus, although it is possible that the ECJ would stretch the scope of Directive 95/46/EC to encompass cloud-computing, uncertainties remain about what actions would lead to liability. This situation does, in fact, undermine the deterring effects of the law. IV. Summary: Neither Legislators nor Courts Offer Fully Satisfactory Solutions in this Area The case studies show us that the scope of Directive 95/46/EC’s applicability has changed over time. This is the natural result of continuous, exogenous innovations and related changes in the availability and ubiquity of ICT functionality. In fact, prior to the current “big” developments in ICT technology (e.g., cloud computing, mobile internet, and telephony converging, etc.), the concept of data protection had been well-defined and was relatively complete. But along with the exogenous changes that happened in the environment, the existing law lost its clarity on some relevant issues and became ambiguous. This demonstrates that, as Xu and Pistor argued, “[t]echnological change may render incomplete laws that were fairly complete before.”

107

This incompleteness, as in Directive 95/46/EC, does not serve to illustrate errors or poor drafting by the legislature. In fact, legislators have made and are making significant efforts to prevent and to remedy incompleteness. Nevertheless, from the perspective of Incomplete Law Theory, data protection law exists prior to the developments of—and changes in—the highly volatile, exogenous environment in the ICT sector, independent of when or how it is drafted. It is highly unlikely that it will always offer clear answers to new cases and highly probable that it will increasingly become incomplete with the life cycles of technological innovations becoming shorter, while the mechanisms that prepare adaptations of the law still require more time. In this situation, the ECJ steps in and tries to offset the incompleteness. As the discussed cases show, courts proved quite capable of, as the Incomplete Law Theory expected, “adapting existing legal principles to the changing environment.”

108 In each case, courts—

106 See id.


108 Id. at 979.


as the theory worried—“faced the dilemma of adhering to well-established legal principles or changing them to fit the needs of the new types of cases before them.”

109 In most cases,

judges re-identified the scope of laws to include the new issues. Thus, the scope of the Directive becomes more extensive than previous. Nevertheless, the analysis above also demonstrates the limitation of courts when exercising the residual LMLEP. As the theory stated, the courts only can respond ex post and to the specific exogenous change within the bandwidth provided by a reasonable interpretation of a law.

110 The recoveries provided by courts always come, as the theory

pointed, when “the alleged actions have taken place and resulted in harmful outcomes.”111

In some cases, the recoveries even lead to new incompleteness, as each new development creates new questions. In some other cases, for example in the case of cloud-computing, if no case is brought, the ECJ cannot help but watch harmful actions damaging the right to personal data protection, supposedly established in accordance with Directive 95/46/EC. The above discussion signaled that courts do not offer fully satisfactory solutions in the ICT-related area, as is subject to considerable exogenous changes in very limited time spans. It also signaled that the resulting ambiguities in the law would decrease its deterring effect. Thus, it is very difficult, perhaps even impossible, to address incompleteness solely based on the courts. D. The Alternative Strategy to Overcome Deterrence Failure: Data Regulators

112

I found that the data protection area is subject to continuously-occurring technical changes. It is difficult to get rid of incompleteness despite efforts to adjust. The discussion above has shown that neither legislators nor courts offer satisfactory solutions to incompleteness. In response to the problem, rather than frequently changing laws or solely depending on courts’ reactions, European policymakers created a unique institutional mechanism, the ”data protection authority,” to take up the functions required. From the vantage point of the Incomplete Law Theory, the most important contribution of the Directive 95/46/EC is the creation of a multiple-layered regulatory system that combines ex ante rule-making with proactive enforcement powers. This is a unique phenomenon in Europe. This does not

109 Id. at 989.

110 Id.

111 Id. at 949.

112 In this paper, what seems to me to be the most important aspect of the “data regulator” concept is that parts of the regulatory powers as identified in incomplete law theory are delegated by the legislator and the administration to institutions that have thus gained regulatory agency that allows them to react more adequately, quickly, and with expertise to emerging (mal)practices.


mean that regulators have replaced court enforcement. Instead, regulators are vested with residual LMLEP to complement court enforcement. In the subsequent analysis, I will analyze the European data regulator’s responses to the challenges posed by the incompleteness of Directive 95/46/EC. I seek to explore the effectiveness of lawmaking and law enforcement in the hands of regulators in an area highly susceptible to exogenous changes. I. The Multi-Layered Regulators’ System A multi-layered regulators’ system that combines ex ante rulemaking with proactive enforcement powers was created in order to ensure the compliance of data protection law in both European level and national level. At the European level, regulators include European Data Protection Supervisor (EDPS).

113 It

is an independent regulatory body and responsible for making sure compliance of the EU institution and bodies with data protection law.

114 According to the EDPS, its general

objective is to ensure that the European institutions and bodies respect the right to privacy when they process personal data and develop new policies. Generally, the EDPS’s main fields of work include supervision,

115 consultation,

116 and cooperation.

117 The EDPS is significant to cooperate national data authorities. The central platform for the cooperation is the Article 29 Working Party (hereinafter Article 29 W.P.) The Article 29 W.P. was established in accordance with Article 29 of Directive 95/46/EC. It is an independent advisory body comprised representatives of national data protection authorities.

118 The

Article 29 W.P. publishes a large amount of opinions and recommendations on various data protection topics. Although the documents published by Article 29 W.P. do not have legal binding forces, the documents tend to be quite influential and in effect represent a

113 The position was set up according to the Article 286 of the Treaty of Amsterdam and Regulation (EC) No 45/2001 of the European Parliament. See Treaty of Amsterdam Amending the Treaty on European Union, the Treaties Establishing the European Communities and Certain Related Acts, Oct. 2, 1997, 1997 O.J. (C 340) art. 286.; Commission Regulation 45/2001, 2001 O.J. (L 8/1).

114 See Christopher Kuner, Regulation of Transborder Data Flows under Data Protection and Privacy Law: Past, Present and Future 7, OECD (Dec. 8, 2011), http://www.oecd-ilibrary.org/science-and-technology/regulation-of-transborder-data-flows-under-data-protection-and-privacy-law_5kg0s2fk315f-en.

115 See Members & Missions, EUROPEAN DATA PROTECTION SUPERVISORS (Sept. 15, 2014) https://secure.edps.europa.eu/EDPSWEB/edps/EDPS/Membersmission.

116 See id.

117 See id.

118 See Kuner, supra note 114, at 9.


sort of “crystallization” of legal opinion.119

The Article 29 W.P. congregates the Member state data protection authorities and seeks to harmonize the application of data protection rules throughout the EU, and publishes opinions and recommendations on various data protection topics.

120

Moreover, at the European level, there are some other institutions which play the role of supervisory authority. For instance, the Data Protection Officer of the EU (DPO) is also a position set up by the Regulation No. 45/2001.

121 According to the Regulation, every EU

institution must appoint a DPO to independently ensure the internal application of the Regulation in close cooperation with the EDPS.

122

At the national level, a Data Protection Authority (DPA) must be established and responsible for monitoring the application within its territory of the provisions adopted by the Member States pursuant to this Directive.

123 These authorities shall act with complete

independence in exercising the functions entrusted to them. The DPA must be granted several tools with which to exercise its powers within member-state jurisdiction: Investigative powers, intervention powers, powers to engage in legal proceedings, powers of audit, and so on.

124

II. Regulators Exercise LMLEP to Enhance the Efficacy of Incomplete Law This section explores the functions of data regulators in Europe. I am mainly interested in regulatory functions, in particular in the deployment of residual LMLEP, both at the European and at the national levels. 1. The Regulators at the European Level In the multi-layered regulatory system, Article 29 W.P. is significant for exercising LMLEP.

125 The Article 29 working group was set up under Directive 95/46/EC.

126 It is

119 See id.

120 See Article 29 Working Party, EUROPEAN COMM’N (Aug. 6, 2014) http://ec.europa.eu/justice/data-protection/article-29/index_en.htm.

121 See Commission Regulation 45/2001, 2001 O.J. (L 8/1).

122 See Data Protection Officer of the EU, EUROPEAN COMM’N (July 16, 2013), http://ec.europa.eu/justice/data-protection/bodies/officer/index_en.htm.

123 See Council Directive 95/46/EC, art. 28, 1995 O.J. (L 281) (EC).

124 See id.

125 The Article 29 working group has a well-organized website: Article 29 Working Party, supra note 120.

126 See Council Directive 95/46/EC, art. 29.

http://ec.europa.eu/justice/data-protection/bodies/officer/index_en.htm

http://ec.europa.eu/justice/data-protection/bodies/officer/index_en.htm


composed of representatives of different national DPAs, representatives from the authorities established for the EU institutions and bodies, and a representative of the European Commission.

127 The Article 29 W.P. cooperates with the European Commission,

but acts independently.128

The Article 29 W.P.’s responses are expressed in the form of advice and recommendations to the European institutions on specific data protection issues.

129 Its domain is identified by

Directive 95/46/EC stating in which situations the Article 29 W.P. can issue its opinions, recommendations, and solutions, for instance by giving advice to any new proposal related to data-protection issues submitted by European Commission.

130 The Directive gives

substantive discretion to the working group for issuing opinions on any matters or topics related to data protection.

131 In fact, the opinions, recommendations, and solutions reflect

the views only of the Article 29 W.P. They do not reflect the position of the European Commission. In short, the materials created by Article 29 W.P. do not formally have legal effect.

132 Nevertheless, based on the Article 29 W.P.’s Rules of Procedure, any of its issued

documents will be forwarded to EU Commission, to the European Parliament, and other related institutions. The documents adopted by the Article 29 W.P. have strong influence on European legislators and on Member State DPAs. Thus the Article 29 W.P. is de facto granted with residual LMLEP. Instead of amending rules, these powers allow the Article 29 W.P. to regularly adapt the understanding and application scope of rules in Directive 95/46/EC in response to technological changes they observe. The Article 29 thereby enhances law enforcement, both proactive and reactive. The Article 29 W.P. working group can consequently be seen as a unique institution within the European institutional landscape because at the European level, no similar institution has been established—or has established itself.

133

127 See id.

128 See id. art. 30.

129 As Pollute concluded, “Since 1996, more than 120 documents on different but important topics have been issued by the Art 29 W.P., which testifies tremendous and intense activities.” Yves Poullet & Serge Gutwirth, The Contribution of the Article 29 Working Party to the Construction of a Harmonized European Data Protection System: An Illustration of “Reflexive Governance”? in CHALLENGES OF PRIVACY AND DATA PROTECTION LAW 570, 575 (Verónica Perez Asinari & Pablo Palazzi eds., 2008).


131 See id. The Working Party may, on its own initiative, make recommendations on all matters relating to the protection of persons with regard to the processing of personal data in the Community. As Pollute and Gutwirth analyzed, this provision could be “underlined insofar that the Article 29. W.P. could not only advise, but also could intervene and de facto intervenes very freely and broadly about any topic related to data protection. Even the matters that are not covered by data protection directive may be included.” Pollute & Gutwirth, supra note 129, at 576.

132 See Kuner, supra note 114, at 7.

133 See Poullet & Gutwirth, supra note 129.


The Article 29 W.P. has an efficient working mechanism. It develops a comprehensive set of rules for compliance toward different topics. Of course, these rules are strictly construed according to Directive 95/46/EC. Take Article 25 as an example.

134 The Article contains general principles, which are highly

ambiguous, open-ended provisions. The Article suffers from Type I incompleteness. In practice, it is difficult to predict whether and how involved actors will exercise the principles in Article 25. Therefore, further interpretation is required. Article 29 W.P. stepped in to interpret the provision in order to, as Incomplete Law Theory described, record legislators’ intentions in a more precise manner.

135 Article 29 W.P. delivered the

Working Paper 12 Working Document Transfers of Personal Data to Third Countries: Applying Articles 25 and 26 of the EU Data Protection Directive (WP12).

136

The Article 29 W.P. has devised a comprehensive and well-articulated testing system for “evaluating and ensuring the requirement of ‘adequate protection’ in trans-border data flow,”

137 which is suggested by Pollute as the major contribution of the Article 29 W.P.

138

The standards imposed by Article 29 W.P. surpass Directive 95/46/EC, since they are based both on the content of the protection afforded by the third country’s substantive or procedural system in a legal sense and upon the efficacy of these principles enacted.

139

From the perspective of Incomplete Law Theory, the Article 29 W.P. exercised its LMLEP order to mitigate the incompleteness of existing law. With the help of the Article 29 W.P., enforcers can easier decide how to deal with new cases. Since 1997, several such countries have been tested by the Working Party on the issues of data protection. These tests included New Zealand,

140 the Eastern Republic of Uruguay,

141 the Principality of Andorra,

142



136 See Article 29 Data Protection Working Party, Transfers of Personal Data to Third Countries: Applying Articles 25 and 26 of the EU Data Protection Directive (European Comm’n, Working Paper No. 12, DG XV D/5025/98, 1998).

137 Poullet & Gutwirth, supra note 129, at 585.

138 See id.

139 See id.

140 See Article 29 Data Protection Working Party, Opinion 11/2011 on the Level of Protection of Personal Data in New Zealand (European Comm’n, Working Paper No. 182, 2011).

141 See Article 29 Data Protection Working Party, Opinion 6/2010 on the Level of Protection of Personal Data in the Eastern Republic of Uruguay (European Comm’n, Working Paper No. 177, 2009).

142 See Article 29 Data Protection Working Party, Opinion 7/2009 on the Level of Protection of Personal Data in the Principality of Andorra 2009 (European Comm’n, Working Paper No. 166, 2009).


Israel,143

Faroer Islands,144

Jersey,145

the Isle of Man,146

Guernsey,147

Argentina,148

Australia,

149 Canada,

150 Hungary,

151 and Switzerland.

152

Regarding challenges brought by continuously changing technology, the Working Party has not hesitated to frequently intervene on topics directly related to issues linked to the growth of the technology.

153 The Article 29 W.P. exercises its residual LMLEP to adapt rule-

interpretation in response to these technological changes. For example, both legislators and the Article 29 W.P. have observed the privacy risks brought by social networking.

154

However, legislators face higher procedural constraints and costs in changing the law and therefore cannot easily adjust, or extend the rules in response to observed changes.

143 See Article 29 Data Protection Working Party, Opinion 6/2009 on the Level of Protection of Personal Data in Israel (European Comm’n, Working Paper No. 165, 2009).

144 See Article 29 Data Protection Working Party, Opinion 9/2007 on the Level of Protection of Personal Data in the Faroe Islands (European Comm’n, Working Paper No. 142, 2007).

145 See Article 29 Data Protection Working Party, Opinion 8/2007 on the Level of Protection of Personal Data in Jersey (European Comm’n, Working Paper No. 141, 2007).

146 See Article 29 Data Protection Working Party, Opinion 6/2003 on the Level of Protection of Personal Data in the Isle of Man (European Comm’n, Working Paper No. 82, 2003).

147 See Article 29 Data Protection Working Party, Opinion 5/2003 on the Level of Protection of Personal Data in Guernsey (European Comm’n, Working Paper No. 79, 2003).

148 See Article 29 Data Protection Working Party, Opinion 4/2002 on Adequate Level of Protection of Personal Data in Argentina (European Comm’n, Working Paper No. 63, 2002).

149 See Article 29 Data Protection Working Party, Opinion 3/2001 on the Level of Protection of the Australian Privacy Amendment (Private Sector) Act 2000 (European Comm’n, Working Paper No. 40, 2000); See Article 29 Data Protection Working Party, Opinion 1/2004 on the Level of Protection Ensured in Australia for the Transmission of Passenger Name Record Data from Airlines (European Comm’n, Working Paper No. 85, 2004).

150 See Article 29 Data Protection Working Party, Opinion 2/2001 on the Adequacy of the Canadian Personal Information and Electronic Documents Act (European Comm’n, Working Paper No. 39, 2001); Article 29 Data Protection Working Party, Opinion 1/2005 on the Level of Protection Ensured in Canada for the Transmission of Passenger Name Record and Advance Passenger Information from Airlines (European Comm’n, Working Paper No. 103, 2005); Article 29 Data Protection Working Party, Opinion 1/97 on Canadian Initiatives Relating to Standardization in the Field of Protection of Privacy (European Comm’n, Working Paper No. 2, 1997).

151 See Article 29 Data Protection Working Party, Opinion 6/99 Concerning the Level of Personal Data Protection in Hungary (European Comm’n, Working Paper No 24, 1999).

152See Article 29 Data Protection Working Party, Opinion 5/99 on the Level of Protection of Personal Data in Switzerland (European Comm’n, Working Paper No 22, 1999).

153 See Poullet & Gutwirth, supra note 129, at 580.

154 In 2009, the Article 29 W.P. published Opinion 5/2009 on Online Social Networking to clarify SNS issues. See Article 29 Working Party, Opinion 5/2009 on Online Social Networking (European Comm’n, Working Paper No. 163, 2009).


Conversely, the Working Party can exercise its LMLEP more flexibly. In 2009, the Article 29 W.P. delivered “Opinion 5/2009 on online social networking,”

155 to react to the social-

network issues at stake. The opinion sets up very general standards for social networking service providers to comply with. Then the standards are employed by national data regulators to assess different cases. According to the Irish Data Protection Commissioner’s audit report,

156 the national regulators can adapt these rules and shape them to their

special needs.157

This reflects the flexibility of regulators on exercising LMLEP at multiple levels. As Xu and Pistor argue, regulators “need not go through a lengthy lawmaking process, but may, within the scope of their lawmaking rights, adapt and change the law in a simplified procedure . . . . [They may do this] independent of whether violations have occurred, or when others have brought problems to their attention.”

158

Based on the above analysis, I conclude that the Article 29 W.P. adopts an active enforcement policy. The findings also confirmed Poullet’s statement that the agency “has an unique role to play in the process of ensuring the acquis of Directive 95/46/EC.”

159 And the agency develops

into an active regulator “when it comes to progressively adapt the legislation framework and its effective application to the real needs of society in a changing context which still creates new privacy threats.”

160 The Working Party’s operations do not render Directive

95/46/EC more onerous, but improve its clarity. In the light of this performance, Article 29 W.P. has adapted the ‘dying’ principles in Directive 95/46/EC to get alive again. 2. National Data Protection Authority The problem of under-enforcement is partly mitigated by national data protection authorities too. According to Article 28 of the Data Protection Directive, the national DPA is endowed with the powers to investigate, to intervene, to hear claims, and to engage in legal proceedings, and so on.

161

155See id.

156 See Irish Data Protection Commission, Facebook Ireland Ltd. Report Audit, 2011 O.J. (EC).

157 The Irish Data Protection Commissioner adopted the standards set by the Article 29. W. P. to evaluate Facebook’s data protection level.

158 Pistor & Xu, supra note 1, at 950 to 954.

159 Poullet & Gutwirth, supra note 129, at 572.

160 Id.

161 See Council Directive 95/46/EC, 1995 O.J. (L 281) (EC).


It is not difficult to find cases in which national DPA exercises its LEP. For instance, in Germany:

On November 23, the data protection authority (DPA) of the German Federal State of Hamburg imposed a €200,000 fine against the Hamburg-based savings & loan Hamburger Sparkasse due to violations of the German Federal Data Protection Act (the BDSG) for, among other reasons, using neuromarketing techniques without customer consent. The case – which attracted much negative publicity in Germany, including page 1 headlines and "top spots" in television news – may very well influence the assessment of neuromarketing techniques under data protection laws beyond Germany.

162

Through the enforcement of LMLEP, national regulators link the standards and responsibilities for data protection compliance with provisions of Directive 95/46/EC in practice. The national regulators also exercise extensive residual LMLEP. These powers allow the national regulators to regularly adapt rules in incomplete Directive 95/46/EC when it deems necessary. Normally, national regulators engage in lawmaking activities proactively and promulgated industrial guidelines. For instance:

The German data protection authorities on September 26, 2011 adopted an “Orientation guide – cloud computing.” The guide sets out mandatory and recommended content for any agreement between German users of cloud computing services (“customers”) and cloud computing service providers. It highlights the customer’s responsibility for full compliance with German data protection requirements for the cloud. Based on this orientation guide, customers and providers will have to review existing agreements in the German market.

162 Stefan Schuppert, German Data Protection Authority Imposes 200000 Euros Fine for Targeted Advertising Without Adequate Consent, HOGAN LOVELLS (Dec. 7, 2010). http://www.hldataprotection.com/2010/12/articles/international-compliance-inclu/german-data-protection-authority-imposes-a200000-fine-for-targeted-advertising-without-adequate-consent/index.html.


Privacy and data protection compliance has been a challenging and unclear issue for cloud computing customers and service providers. The new German “orientation guide,” adopted by the Munich conference of the German data protection authorities gives clear guidance to cloud computing service providers and their customers in the German market. Privacy practitioners can expect that German DPAs will refer to this guide when addressing situations that raise close questions about the application of data protection laws to cloud computing.

163

The lawmaking activities of national regulators can enhance overall protection for citizens and increase the visibility of national authorities in society. Therefore, the substantial residual LMLEP are taken up by the national DPAs, as the Incomplete Law Theory expected: “[I]n response to the problem of existing law’s under-deterrence.”

164

III. Summary This current brief overview demonstrates that data regulators are given extensive residual LMLEP. The story in Europe offers important insights into the benefits of a system that offered not only reactive but also proactive enforcement. Similar to regulators in financial, environmental, and other areas, data regulators work differently than legislators and courts. Data regulators react to technical development much more quickly than legislators, who are constrained by procedures. Data regulators also exercise their residual LMLEP proactively rather than courts who can only apply their residual LMLEP reactively. Generally, data regulators exert the flexibility of the rules in Directive 95/46/EC. Although the original reason of the emergence of data regulators was not in response to the functional problems of incomplete law, the introduction of regulators can be seen as a successful shift from reactive to proactive law enforcement and a reallocation of some lawmaking powers to regulators.

165

163 Stefan Schuppert, German DPAs Issue Rules for Cloud Computing Use, HOGAN LOVELLS (Oct. 13, 2011), http://www.hldataprotection.com/2011/10/articles/international-eu-privacy/german-dpas-issue-rules-for-cloud-computing-use/.


165 See id. at 968.


E. Limitations of this Study In this paper I have analyzed the problems that confront data protection laws, using the European legal system over data protection issues as example. The analysis used the established framework of incomplete law theory because in data protection law the frequency of technical innovations has a serious effect on its completeness. The most obvious limitation of the study is its cross-sectorial application of the Incomplete Law Theory. In fact, the Incomplete Law Theory was created to explain and address the legal problems in the financial market. The result of my experimental application thus was difficult to foresee. Indeed, Xu and Pistor believe their theory’s basic principles are not limited to financial issues, but do apply to any field that “needs to consider the allocation of lawmaking and law enforcement powers.”

166 Nevertheless, the framework has never

been applied beyond corporate-law and financial-market regulations. Moreover, the uncertainties of our results increase because this theory is basically derived from the study of the legal economy. Incomplete law theory is exploratory in itself. The theory is equally incomplete as incomplete laws are. First, when they established and analyzed the theory, Xu and Pistor “[downplay] incentive problems different lawmakers and law enforcers may face, including problems of regulatory capture or corruption.”

167 The two authors recognize that these issues are of

great importance, but they do not analyze them and their relations to incomplete law theory. Second, Xu and Pistor’s study used samples of UK, US, and German experiences of financial market development.

168 However, this selection led to a generalization problem, which

may be limited by contextual differences in policy, governance, culture, and history, as well as other potential differences in regime, which were not selected in this study.

169 For

instance, the analysis in Beyond Law Enforcement-Governing Financial Markets in China and Russia shows that the intervention by financial regulators, which is recommended by incomplete law theory, works less well in transition economies.

170 Moreover, incomplete

law theory cannot explain the divergent experiences of Russia and China in developing

166 The two authors illustrate that environmental, safety, food, and drug regulation are fitting fields to adopt this analytical framework. See id. at 936.

167 Id. at 935.

168 See id. at 966–1011.

169 See id.

170 See id.


financial markets.171

These findings show that incomplete law theory is not always relevant—or complete. In fact, further work is needed to validate the applicability and relevance of the theory and the implications it carries for different legal regimes. Here, I will leave these questions open. Methodologically, I argue that the theory provides a conceptual analysis model for my research where it concerns EU data protection regulation. It produces a useful model for the design of effective enforcement. It also offers a fresh perspective to peer into the European legal system regarding data protection issues. My analysis suggests that the theory is both appropriate and useful as a framework for guiding our analysis. F. Conclusion: Regulatory Agencies are Necessary to Enhance Law Enforcement This paper analyzes the Incomplete Law Theory created by Xu and Pistor. The theory includes three propositions: (1) Law is intrinsically incomplete because lawmakers are unable to foresee all future contingencies and thereby they cannot write a complete law; (2) when a law is incomplete, law enforcement that relies exclusively on courts which enforce laws reactively is not sufficient; (3) regulators, who are vested with proactive law enforcement and residual lawmaking powers, are the optimal solution in an incomplete legal world in order to achieve optimal deterrence effects, given specific conditions.

172 Xu

and Pistor focus on the functions performed by regulators. Regulators can better respond to the problem of ineffective enforcement caused by incomplete law because they perform their functions ex post and reactively.

173 As the two authors conclude, “While the scope of

their lawmaking rights is limited, they are more flexible in adapting law over time than legislatures are. As proactive law enforcers, they can initiate actions and exercise enforcement rights in situations where courts, by design, must be passive and wait for others to bring action.”

174

In this paper, I applied the theory to the European legal system with respect to data protection issues. The analysis shows that, even in Europe where a jurisdiction with a well-recognized legal system over data protection issues, (1) lawmakers cannot formulate all relevant issues in data protection laws and (2) courts face severe problems in ensuring effective enforcement of data protection. But the problems of incompleteness and under-deterrence are largely mitigated by a unique European creation: Data protection regulators. They assume residual LMLEP. Article 29 W.P. and national data authorities—DPAs—play significant roles in keeping the regulation in step with technological innovation. Normally,

171 See id.

172 See id.

173 See id. at 1012.

174 Id.


the emergence of data regulators in Europe is regarded as a requirement for harmonization. But my analysis suggests that this kind of argument cannot fully explain the functions that the regulators have taken on. My finding is that data regulators are vested with substantial LMLEP. As agents granted with limited LMLEP regulators are more flexible in adapting law over time than legislatures are. Many challenges brought by technical developments do not require the legislator to modify laws because regulators preemptively try to fill the gaps. Regulators determine the flexibility of these rules by clarifying the conditions that companies should comply with in order to respect the right to personal data while keeping up with exogenous changes. As proactive law enforcers, they can initiate actions and exercise enforcement rights in situations where courts, by design, must be passive and wait for others to bring action. Many potentially harmful actions do not make it to the ECJ because regulators catch them preemptively. Regulators enforce laws to recover or prevent injuries caused by harmful actions. Therefore, the substantial residual LMLEP has to be taken up by the multi-layered regulators in response to the problem of the laws under-deterrence and the resulting danger of widespread violations of data subject’s right to personal data. The story in Europe offers important insights into the benefits of a system that not only offers reactive but also proactive enforcement. Based on the findings in this paper, it is urgently suggested that introducing a regulator may improve law enforcement of incomplete law. No attempt, however, will be made to propose any well-organized road map for legal arrangements to that effect because it is too complicated and big a question for a single person to address. But, the fundamental principle is this: In the data protection field, not only is a legal system addressing data protection issues required to deter violations, but a data regulatory institution is also necessary.

Developments

The FRAPORT Case of the First Senate of the German Federal Constitutional Court and its Public Forum Doctrine: Case Note By Livia Fenger* & Helena Lindemann** A. Introduction and Facts of the Case The application of constitutionally granted communication-related rights assumes the existence of public space as a basic requirement for human encounters. Mass media, such as television, internet, radio, or journals, does not completely satisfy people’s general communicative needs. Instead, people need actual places where they have the opportunity to confront other individuals face to face with their opinion. Indeed, some forms of communication require a more spacious area than is owned by individuals, or can only fulfill their purpose at specific locations. Protest marches or rallies, for example, are important in raising public awareness and encouraging a broader exchange of opinions with a wider circle of recipients. Public space is the site to exchange ideas and opinions and thus the location for individuals to confront the public with political disputes, societal conflicts, and other matters. Traditionally, market places, pedestrian areas, public streets, and squares offered such sites. They are not only seen as places for consumption and means of transportation, but also as places of communication and human encounters. Hence, in this capacity, public space is the prerequisite for the actualization of the freedom of assembly and general communication-related rights, which on their part—and thereby also the existence of public forums—are the foundations of democratic decision-making and can be seen as a constituting element of a free democratic basic order.

1

Due to the objectively legal dimension of fundamental rights, the State is obliged—within a wide margin of appreciation—to ensure the continued existence of the prerequisites to exercise fundamental rights. The question is, however, what happens if the State privatizes the places where an exchange of opinions is traditionally carried out. Increasingly, pedestrian areas in the inner city are replaced or supplemented on a large scale by roofed, privately-held shopping arcades or shopping malls on the outskirts of the city. Further,

* Livia Fenger is a legal trainee at the Landgericht Frankfurt am Main, Hesse.

** Dr. Helena Lindemann is a lawyer in Frankfurt am Main, Hesse. Prior to this she worked as a research assistant at the Institute of Public Law of the Goethe-University in Frankfurt am Main with Professor Günter Frankenberg. He was one of the complainant´s representatives in the Fraport case.

1 Bundesverfassungsgericht [BVerfG – Federal Constitutional Court], Case No. 1 BvR 233/81, 1 BvR 341/81, BVerfGE 69, 315, 344 et seq. (May 14, 1985).


train stations, airports, and other places2 are no longer operated by the State but by

private companies. New urban centers arise, such as the envisioned district “Gateway Gardens” in Frankfurt am Main: The so called “prototypical city of tomorrow”

3 whose management consists of

three privately-financed partners in cooperation with the city of Frankfurt am Main.4 The

phenomenon of privately held districts and even cities is also not foreign to other legal systems. In particular the United States has a long tradition of privatizing public spaces as demonstrated in the concept of the company town.

5 Company towns initially seem like

ordinary cities because of their infrastructural and architectural commonalities; they both have, for example, streets, sidewalks, post offices, libraries, housing, schools, churches, and shops. Regardless of these commonalities, a company town is entirely held by an individual, normally a private company. Thus, even the Sheriff is paid by the owning company.

6

Through privatization the whole legal regime changes. Instead of public law, private law is applicable. Specifically, the Assemblies Act (Versammlungsgesetz), the Public Road Law (Straßen- und Wegerecht), and the Police Law (Polizei- und Ordnungsrecht) are replaced by proprietary rights and house rules as well as general civil law rules. These let the owners generally rule freely about their property. Instead of police officers, who are only allowed to act within their legal competence and against whom specific legal remedies are available, private security firms govern the safety and order. Private law also includes the right to refuse entry to disagreeable “users” who do not fit into the owners marketing concept of traffic and consumption.

7 But is it indeed possible that through privatization of

public places the constitutionally granted communication-related rights are no longer applicable?

2 For example, the Sony Center at Potsdamer Platz, Berlin.

3 See FRANKFURTRHEINMAIN, http://www.frankfurt-rhein-main.net/en/node/465 (last visited Aug. 28, 2014).

4 See GATEWAY GARDENS, http://www.gateway-gardens.de/?p=projektpartner (last visited Aug. 28, 2014).

5 In 1645, the company Braintree Iron Works established the first company town in the United States. See MARGARET CRAWFORD, BUILDING THE WORKINGMAN’S PARADISE: THE DESIGN OF AMERICAN COMPANY TOWNS 2 (1995). At the height of company towns, 2,500 were owned privately and inhabited by approximately 3% of the population in the United States. HARDY GREEN, THE COMPANY TOWN: THE INDUSTRIAL EDENS AND SATANIC MILLS THAT SHAPED THE

AMERICAN ECONOMY 3, 6 (2010); Marsh v. Alabama, 326 U.S. 501, 508 (1946) [hereinafter Marsh].

6 Marsh, 326 U.S. 501, set a precedent for the right to exercise communication rights on the sidewalk of privately owned company. The Supreme Court ruled that a privately owned company town is a functional equivalent to a public town and thus this distribution of leaflets cannot be prohibited.

7 See Carsten Gericke, “Territorien des Wohlfühlens” durch sozialen Ausschluss, FORUM RECHT (2002), available at http://www.forum-recht-online.de/2002/302/302gericke.htm.

2014] The FRAPORT Case and its Public Forum Doctrine 1107

The First Senate of the Federal Constitutional Court (FCC) (Bundesverfassungsgericht – BVerfG) examined this question in the Fraport case. The complainant, an activist of the “Initiative against Deportations,” intended to protest in front of the check-in counter of Deutsche Lufthansa in the departure hall of the Frankfurt am Main Airport. The protest was aimed against concrete imminent deportations and the German practice of deportation in general. The operating company of Frankfurt am Main Airport, Fraport AG, is an incorporated company and is also the owner of the airport premises. At the time of the protest, the State Hesse, the City of Frankfurt am Main, and the Federal Republic of Germany together owned approximately 70% of the shares, while the rest were privately held.

8 The operating

company regulates the use of the airport premises by air passengers and other customers through its regulations for the use of the airport. The regulations contained, among other provisions, the following provision: “Collections, advertisements and the distribution of leaflets and other printed matter require the consent of the airport operator.”

9 Later

regulations also expressly prohibited assemblies in the airport buildings.10

The complainant, together with five other activists, entered Terminal One of the airport to speak to some Lufthansa employees and to distribute leaflets regarding a forthcoming deportation. Employees of the defendant and federal border guards terminated the activities. Fraport AG imposed an “airport ban” on the complainant and informed her that it would initiate a criminal complaint against her for unlawful entry in accordance with §

123 of the German Criminal Code (Strafgesetzbuch – StGB), should she “again be found to be on the airport premises without justification.”

11

The complainant brought an action before the Civil Court, aiming to remove the ban on expressions of opinions and demonstrations. The Local Court, as a court of competent jurisdiction and first instance, dismissed the action. It reasoned that Fraport AG, as owner of the airport, was entitled to undisturbed possession, which is regulated in §§ 858 et seq.,

903, and 1004 of the German Civil Code (Bürgerliches Gesetzbuch – BGB).12

It did not consider Fraport AG to be directly bound by the fundamental rights, so Fraport AG did not have to tolerate expressions of opinion or demonstrations on its premises.

13

8 At the time of the decision the federal shares of the company had been sold and the State Hesse and the City of Frankfurt am Main together owned 52% of the shares.

9 Bundesverfassungsgericht [BVerfG – Federal Constitutional Court], Case No. 1 BvR 699/06, BVerfGE 128, 226, para. 6 (Feb. 22, 2011).

10 Id. at para. 7.

11 Id. at para. 10.

12 BVerfG, Case No. 1 BvR 699/06, at para. 11.

13 Id.


The appeal was dismissed as unfounded in all instances.

14 In response, the complainant

lodged a constitutional complaint before the FCC and alleged a violation of her fundamental rights, namely freedom of assembly

15 and freedom of expression,

16 through

the civil courts’ appellate judgment. B. Reasoning of the FCC The FCC was confronted with fundamental issues which had not been addressed by the constitutional jurisdiction and which had been controversially discussed within constitutional doctrine. Until then, a high court had not made a decision concerning whether or not enterprises owned both by private shareholders and the state (gemischtwirtschaftliche Unternehmen) are directly bound by fundamental rights. Furthermore, the scope of the freedom of assembly had to be specified regarding geographical terms. I. Binding Force of Fundamental Rights Article 1 Section 3 of the Grundgesetz (hereinafter: Basic Law)

17 determines that only the

state is directly bound by the fundamental rights. The citizen herself, in contrast, is merely bound by an indirect third-party effect (mittelbare Drittwirkung der Grundrechte), which is based on the further development of the law by judges (richterliche Rechtsfortbildung).

18

An indirect third-party effect is implied when the scope of application of general civil law leaves room for interpretation in terms of the fundamental rights to assure a balance of the colliding civil liberties. In the case of assemblies on private premises, the proprietor can exercise her right of undisturbed possession in accordance with §§ 858 et seq., 903, and 1004 of the German Civil Code. In fact, § 1004 (2) of the German Civil Code offers the

14 Id. at para. 13.

15 Article 8.1 of the Grundgesetz (hereinafter Basic Law) reads: “All Germans shall have the right to assemble peacefully and unarmed without prior notification or permission.” GRUNDGESETZ FÜR DIE BUNDESREPUBLIK

DEUTSCHLAND [GRUNDGESETZ] [GG] [BASIC LAW], May 23, 1949, BGBl. I (Ger.).

16 Article 5.1, first clause, of the Basic Law reads: “Every person shall have the right freely to express and disseminate his opinions in speech, writing, and pictures and to inform himself without hindrance from generally accessible sources.” Id.

17 Article 1.3 of the Basic Law reads: “The following basic rights shall bind the legislature, the executive, and the judiciary as directly applicable law.” Id.

18 See the seminal decision in the Lüth case, Bundesverfassungsgericht [BVerfG – Federal Constitutional Court], Case No. 1 BvR 400/51, BVERFGE 7, 198, 205 et seq. (Jan. 15, 1958); Bundesverfassungsgericht [BVerfG – Federal Constitutional Court], Case No. 2 BvR 487/80, BVERFGE 73, 261, 269 (Apr. 23, 1986). See also Jacco Bomhoff, Lüth’s 50th Anniversary: Some Comparative Observations on the German Foundations on Judicial Balancing, 9 GERMAN L.J. 121–124 (2008), available at http://www.germanlawjournal.com/article.php?id=900.


opportunity to balance colliding fundamental rights.19

In contrast to the state, the citizen has the right to claim an infringement on Article 14 of the Basic Law—the fundamental right to property—in order to inhibit the use of her private property by others. Then, through practical concordance, a balance between Article 14 of the Basic Law and Article 8 of the Basic Law has to be established. Thus far, though, the assumed indirect third-party effect between citizens led to the result that Article 14 of the Basic Law prevailed against Article 8 of the Basic Law. Hence, the private owner did not have to tolerate an assembly on her property. The state, in contrast, cannot invoke fundamental rights such as the right to property, which are first and foremost civil defensive rights against state interference. Therefore, the indirect third-party effect of fundamental rights towards private law subjects is weaker in its result than the direct binding force in relation to the state. In conclusion, in principle, the state has to tolerate assemblies in public places. A private owner is not subject to such an obligation, which in turn means that privatization of a public place inevitably leads to a restriction of the ability to exercise fundamental rights. Should the court in the Fraport case indeed only apply an indirect third-party effect on private law subjects? Or is it more appropriate to apply a direct binding force? To be able to assess the problem, three different possibilities have to be distinguished. Initially the state can solely organize public enterprises in the forms of private law, which are completely in public ownership but with the operational responsibilities remaining on the side of the state. This case recognizes that both the state authorities responsible for the respective enterprise and also the enterprise itself are directly bound by the fundamental rights.

20 This recognition ensures an effective binding force of the

fundamental rights irrespective of the state’s organizational choice. No refuge can be sought in private law by obtaining private entity treatment and an exemption from the application of the fundamental rights. However, there are also numerous public-private entities, which are organized in the forms of private law and owned both by private shareholders and the state. The FCC set a precedent with the Fraport case regarding the cases in which the state is the majority shareholder: It ruled that an enterprise which is owned both by private shareholders and the state—as it was the case with Fraport AG—is directly and entirely

19 Philipp-L. Krüger, Versammlungsfreiheit in privatisierten öffentlichen Räumen, in DÖV 837, 842 (2012).

20 BVerfG, Case No. 1 BvR 699/06, at para. 50; Bundesverwaltungsgericht [Federal Administrative Court – BVerwG], Case No. 1 D 88/97, BVERWGE 113, 208, 211 (Mar. 18, 1998); Horst Dreier, Commentary on Article 1.3 BL, in 1 GRUNDGESETZ KOMMENTAR, para. 69 (Horst Dreier ed., 2013).


bound by the fundamental rights if it is controlled by its public shareholders.21

Also, it is acceptable for an effective fundamental rights protection to inhibit the state to seek refuge in private law. The FCC reasons that the direct binding of the enterprise itself applies in addition to the binding force of the fundamental rights on the public owners of the companies. This view corresponds to the enterprise’s nature as a single operating entity.

22 According to the

court, the controlling influence as a criterion is regularly met if more than half of the shares of the enterprise in question are held by public shareholders.

23 In this context, the court

stressed that the state cannot withdraw from its duty to serve the public interest. Any additional criteria to the controlling influence—for instance any specific public functions the company in question is entrusted with or its duty to act in public interest—cannot be obtained from the Fraport decision.

24 Moreover, in the court’s opinion it is

irrelevant if and how far the actual influence of the public shareholder ranges on the day-to-day management.

25 Fraport AG is thus directly bound by the fundamental rights, with

more than 50% of the shares held by public owners, according to the court’s decision. Because the FCC assumed a controlling influence of the state over Fraport AG, it did not have to answer the rather complex question if it is also applicable to assume a direct binding force of the fundamental rights for enterprises, the majority of whose shares are privately held. In accordance with the hitherto existing dogmatic principles of Article 1 Section 3 of the Basic Law, a direct binding force of the fundamental rights for privately operated forums would be excluded and only the indirect third-party effect of the fundamental rights could be considered. However, in an obiter dictum the court remarks that under specific circumstances an extension of the scope of the indirect third-party effect may be required. Following this statement, the indirect binding force of the fundamental rights on private persons can be reinforced to the point that it may come closer to or even be the same as the binding force of the fundamental rights on the state. That should be the case when the state itself—as a consequence of privatization—cannot provide sufficient environmental conditions for the citizen to exercise her fundamental rights of communication, which in turn means that the exercise of the fundamental rights depends on the possibility to recourse to privately operated public premises.

26 In these


22 Id.

23 Id. at para. 53.

24 See Horst Dreier, Commentary on Article 1.3 BL, in 1 GRUNDGESETZ KOMMENTAR, para. 72 (Horst Dreier ed., 2013).

25 Cf. BVerfG, Case No. 1 BvR 699/06, at paras. 113 et seq. (Schluckebier, J., dissenting).



cases, the appreciation of values between freedom of assembly and the fundamental right to property shifts in favor of the former. II. Public Forum Just because Fraport AG is directly bound by the fundamental rights due to its public-private organizational form does not necessarily lead to the result that the complainant may gather together with other people for the purpose of a rally at terminal 1 of the Frankfurt am Main Airport. Article 8 Section 1 of the Basic Law not only covers the right to assemble but also, in principle, the general right of choice of location. This applies in particular if the topic of the assembly has a specific relation towards the actual location of the gathering.

27 The freedom to assemble, however, does not constitute a right to

generally access places that serve purposes other than public traffic.28

Whether a specific location organized by public authority may be used is traditionally determined by designating that exact location with a purpose (Widmungszweck). The state thereby determines for what purpose a specific location may be used. The use for the purpose of an assembly in accordance with Article 8 of the Basic Law may in principle not be prohibited, when it is a place that is designated for general traffic. This generally holds true for public street space (streets, pedestrian areas, squares, etc.):

Public street space is the natural forum that citizens have used historically to express their concerns especially effectively in public and to thus prompt communication. Local streets and places in particular are regarded today as locations where people may exchange information and views and cultivate their personal contacts. This applies even more so in the case of pedestrian precincts and reduced-traffic areas; the allowance of general traffic for communication purposes is the main purpose of such domains . . . . The law of assembly is based on this function . . . . It provides public assemblies and marches with the conditions they need for voicing their demands publicly and quite literally carrying their protests or dissatisfaction “to the streets”.

29

27 Bundesverfassungsgericht [BVerfG – Federal Constitutional Court], Case No. 1 BvR 233/81, 1 BvR 341/81, BVERFGE 69, 315, 343 (May 14, 1985).


29 Id. at para. 67.


However, if, from the beginning, the use has been limited to a specific purpose, then the individual has no right to access that space for the purpose of a gathering. Therefore, conducting of assemblies in buildings used for administrative purposes, hospitals, and swimming pools is not permitted, as the use of these locations is limited to a specific purpose.

30 For the first time, the FCC recognized in its Fraport decision the right to

assemble at locations outside of general traffic, at so called public forums. The FCC includes within the term public forums any locations other than public street space that are similarly open to public traffic and where places of general communication develop:

If today the communicative function of public streets and places is supplemented to an increasing extent by other forums such as shopping centres, shopping malls or other meeting places, the traffic areas of such facilities cannot be exempted from freedom of assembly insofar as the fundamental rights are directly binding or private persons can be burdened through the indirect effect of the fundamental rights between private parties.

31

The question is: When exactly can a public space of communication be deemed as such in order for the freedom of assembly to apply? In order to get a general picture of the terminology used, the FCC explicitly broadened its isolated, purely national perspective to an international context to be inspired by the public forum doctrine drafted by the U.S. Supreme Court.

32 “A public forum is characterized by the fact that it can be used to pursue

a variety of different activities and concerns leading to the development of a varied and open network,” where through a combination of different services, shops, and recreational services, a place for people to spend time and meet is created.

33 By being made available

for the coexistence of different uses, including communicative uses, these places become a public forum where political debate in the form of collective expression of opinion through public debate cannot be prohibited.

34 Especially when public life no longer primarily takes

place in public traffic but increasingly shifts towards the above-described places, the right to rely on the fundamental freedom of assembly has to shift in the same way.

35

30 Bundesverwaltungsgericht [Federal Administrative Court – BVerwG], Case No. 7 C 34/91, BVERWGE 91, 135 (Oct. 29, 1992).


32 Id. at 70 (quoting the Supreme Court of the United States, Int’l Soc’y for Krishna Consciousness (ISKON) v. Lee, 505 U.S. 672 (1992)).

33 See BVerfG, Case No. 1 BvR 699/06, at para. 70.

34 Id.

35 Id.


Nevertheless, this does not apply for locations, which, due to external circumstances, are only available to the general public for specific purposes and which are designed accordingly.

36

In addition to the criterion of the coexistence of different usage possibilities for the means of communication, the FCC adopted the view that places of general traffic can be used for conducting assemblies if they are open and accessible to the general public. But, locations that are restricted by an individual entry control are to be excluded from the scope of the definition of a public forum.

37

Based on these assumptions, the court concluded that the terminal of the Frankfurt am Main airport, besides the traffic function, also fulfills the criteria of a public forum.

38 It

should be noted, however, this is not assumed for the airport in its entirety. The court suggested organizing the space available into different “zones.” There may be a differentiation between a “land side,” which is open to the public as multi-functional traffic area, and an “air side,” which serves as special operational area and is primarily accessible for airline passengers.

39 The air side includes safety areas such as security gates leading to

the departure halls. Each individual is checked upon entry to assure only passengers with valid tickets are granted access to their departure gates as well as to areas that are designated for specific purposes, such as the baggage claim areas. Consequently, such areas are not open to general traffic and thus the fundamental right of freedom of assembly cannot be invoked in such places.

40 Then, the court found that the airport has

large land sides, which are open to the general public and thus can be qualified as places for strolling and socializing. The court not only pointed to the variety of different activities and services offered, but primarily to the advertising statements of Fraport AG. Fraport AG views itself as the “City in the City” and advertises on the internet “Airport shopping for all!”

41 According to the court, this shows that airports can be operated beyond their

original traffic function and can also be operated as shopping malls.42

Fraport AG cannot exempt itself from its own decision to open space to the public and then prohibit use of


37 Id. at paras. 69 et seq.

38 Id. at para. 72. But see BVerfG, Case No. 1 BvR 699/06, at para. 120 (Schluckebier, J., dissenting).


40 Id. at paras. 69, 72.

41 Id. at para. 72. Meanwhile, the wording is more cautious. See FRANKFURT AIRPORT, http://www.frankfurt-airport.com/content/frankfurt_airport/en/shop_enjoy0/Shopping-Areas/Public-Area/airport-city-mall.html (last visited Aug. 28, 2014).



the public space for communication.43

If airport areas have been made available to the general public in such a manner, they qualify as public forums and as such are open to the conduct of assemblies.

44

In the context of the specific threats and risks accompanying assemblies in the area of an airport, the court focused on the question if limitations to the right of assembly are permitted. “Outdoor assemblies” can be restricted due to a law reservation within Article 8 Section 2 of the Basic Law, whereas other assemblies only find their limitations through evident barriers within the constitution. It should be noted that, even prior to the Fraport decision, the term “outdoor assembly” could not be construed narrowly as a reference to a place not covered by a roof.

45 Instead Article 8 Section 2 of the Basic Law allows the

legislature to ward off the less controllable potential dangers that come along with a collective expression of opinion in public which—in contrast to assemblies held shielded from the public—necessitate a direct confrontation with uninvolved members of the public.

46 Correspondingly, the proviso of legality of Article 8 Section 2 of the Basic Law is

also true for assemblies held at the terminal of the airport—or any other public forum for that matter—as the assemblies are not intended to be conducted in separate areas which are shielded from the other passengers, despite the existence of a roof and lateral boundaries. Another fundamental stand is taken on by the court in its examination of the proportionality of the airport ban. The court views an airport as a complex logistics system with a particular set of challenges and a specific susceptibility to failure. On this basis, it approves the possibility to apply less stringent conditions to measures taken that restrict freedom of assembly than would be the case for a similar assembly in public street space.

47

The court does not subject assemblies to a general proviso that permission by Fraport AG is required. An imposition of a notification duty not only to the administrative authority but also to the operator of the premises is appropriate. The notification duty, though, will only be appropriate if its applications allow for exceptions such as spontaneous assemblies or ones that have to be held urgently, and a breach of the notification does not automatically result in a ban on the assembly.

48

43 Id. at para. 68.

44 Id. at para. 72.

45 See, e.g., H. Schulze-Fielitz, Commentary on Article 8 BL, 1 Grundgesetz Kommentar, para. 66 (H. Dreier ed., 2013).



48 Id. at para. 89.


Based on these considerations, an airport owner is permitted to combat the special danger, assemblies in an airport harbor, by restricting the right of freedom of assembly based on the right of the owner to undisturbed possession. To ensure the safety and operability of the air traffic, the owner can consider the specific territorial setting and the functionality of an airport.

49 It might be possible, for example, to limit the number of

participants due to the confined space of the terminal, to exclude big demonstrations, or to generally prohibit assemblies in the check-in areas. Furthermore, assemblies with a certain noise level can be more easily restricted due to the necessity of important announcements. In conclusion, in general the right to freedom of assembly applies to all areas that are available to the general public as long as the operability of the airport is ensured. In this specific case, the court affirmed that the airport ban issued by the defendant encroached on the complainant’s freedom of assembly. As far as places were opened for the purpose of public communication, Fraport AG was not allowed to generally prohibit the use of communication rights.

50

The court also noted that Article 5 Section 1 of the Basic Law—freedom of expression—does not grant an individual a right of access to places to which she may otherwise not have access, but indeed applies to all places where citizens actually have access. Thus, citizens can rely on the right of freedom of expression on the premises of the Frankfurt airport:

For in contrast to freedom of assembly which is a right exercised collectively, the exercise of freedom of expression as the right of an individual does not as a general rule imply a particular need for space, and also does not initiate traffic of its own that usually results in a nuisance. Instead freedom of expression and the right to disseminate opinions that derives from it have no specific geographical connection. As a right of the individual, citizens are fundamentally entitled to it wherever they happen to be at a given moment.

51

In this case the freedom of expression cannot be countered by a public interest, especially not “the wish to create a ‘feel-good atmosphere’ . . . which is strictly reserved for consumer purposes and which remains free from political discussions and social conflicts . .


50 Id. at para. 68.

51 Id. at para. 98.


. . The state may not restrict fundamental rights in order to ensure that the carefree mood of citizens is not disturbed by the misery of the world.”

52

Hence, the airport ban against the complainant was also an infringement of Article 5.1, first clause, of the Basic Law. C. Comment Seminally, the FCC decided in the Fraport case not only that an enterprise which is owned both by private shareholders and the state is directly bound by the fundamental rights if it is controlled by its public shareholders, but it also decided to extend the scope of protection of the freedom of assembly to those places where space is opened for the purpose of public communication. Through the introduction of “public forum” as a new concept, the court emphasizes the democratic function of such places as it is implicated in the historic forums Agora and Allmende. This deviates from the previous geographically/objectively used term “public space” by the German legal system. In reference to the public forum doctrine of the Anglo-American legal system, the judges of the FCC show that they are aware of the fact that they are not alone in this world, but rather know about the high level of importance of judicial interaction. To resolve difficult and novel conflicts, inspiration is sought from other legal systems and accordingly teachings and experiences of foreign legal systems are adopted and implemented with the aim to make these effective for the national law.

53 The practice of a comparative law

approach is not new; for example, in the Lüth decision dating from 1958, the FCC developed the pioneering theory of the indirect third party effect for the German judicial doctrine on fundamental rights underpinned by the reasoning of the U.S. Supreme Court.

54

The FCC appears to seek assurance in other legal systems for its reasoning, particularly whenever new judicial solutions or changes in the constitutional dogmatic conception are evaluated.


53 With regards to judicial globalization and increasingly global constitutional jurisprudence, see ANNE-MARIE

SLAUGHTER, Judges: Constructing a Global Legal System, in A NEW WORLD ORDER 65 et seq. (2004). She suggests—among other things—that these principles are explicitly written down in newer constitutions. For example, Section 9 (Interpretation of Bill of Rights) of the new South African Constitution requires the South African Constitutional Court to “consider international law” and permits the Court to consult foreign law in its human rights decisions. Id.

54 See Bundesverfassungsgericht [BVerfG – Federal Constitutional Court], Case No. 1 BvR 400/51, BVERFGE 7, 198, 205 et seq. (Jan. 15, 1958). Here, the FCC reasoned with the frequently cited formulation from Justice Cardozo in Palko v. State of Connecticut in order to demonstrate the special significance of the freedom of opinion for a free and democratic state: “Of that freedom one may say that it is the matrix, the indispensable condition, of nearly every other form of freedom.” Palko v. State of Connecticut, 302 U.S. 319, 327 (1937)


It is to be welcomed that the FCC has clarified that public-private entities are directly bound by the fundamental rights if they are controlled by their public shareholders, and that it has extended the scope of protection of the freedom to assembly to public forums. The prospected strengthening of the direct binding force of the freedom to assembly in relation to private persons for public forums is also promising. It may be possible that henceforth the freedom of assembly prevails against the right to undisturbed possession if the place is privately organized. The Fraport decision was not exclusively met with approval. It received strong criticism in the dissenting opinion of Justice Schluckebier. He observed, among other things, the lack of differentiation in regard of the criterion of controlling influence as an attribute for enterprises owned both by private shareholders and the state being directly bound by the fundamental rights. He queried if indeed a controlling influence can be assumed when the controlling shares are held by several holders of public authority at various state levels—as it was the case in the Fraport decision—which themselves may pursue divergent, possibly even opposite, interests, especially since they may be influenced by politically different majorities.

55 Controlling influence can then only be justified if a synchronization of

interests is ensured. Although these preconditions are fulfilled in the Fraport case through the consortium agreement between the Federal Republic of Germany, the State Hesse, and a holding company of the City of Frankfurt, the necessity for a legally binding agreement to coordinate influence potential should, according to Schluckebier, have been specified.

56

While Justice Schluckebier criticizes the Fraport decision as too far-reaching with regards to the extension of the scope of protection of the freedom of assembly into the terminals of the airport as a public forum, remaining issues and unanswered questions may be articulated diametrically: Yet even after the Fraport decision, it may be suspected that the protection of communication rights in the context of privatization of public space is not adequately secured. There are already signs of insecurities and ambiguities shown by the lower courts on how to use the concept of public forum developed by the FCC. The Administrative Court of Stuttgart (Verwaltungsgericht Stuttgart – VG), for instance, had to rule on a provisional relief (Einstweiliger Rechtsschutz) if it is permitted to form a rally at Stuttgart Central Station, which is operated by the 100% state-owned company DB Station&Service AG. The central station offers a variety of shops and cafés and the DB Station&Service AG also advertises the central station as a “vibrant market place” where public events such as concerts, exhibitions, and theater performances take place on a regularly basis.

57

55 BVerfG, Case No. 1 BvR 699/06, at paras 113 et seq.

56 The FCC seems to have been aware of the fact that the criterion of controlling influence might not be sustainable: “Whether or not this criterion should be expanded on in special cases does not need to be decided here.” See BVerfG, Case No. 1 BvR 699/06, at para. 53.

57 STUTTGART HAUPTBAHNHOF, http://www.einkaufsbahnhof.de/de/stuttgart/erleben/ (last visited Aug. 28, 2014).


Nevertheless, although the Administrative Court of Stuttgart concerned itself specifically with the Fraport case, in its decision it expresses strong reservations regarding the central station being a public forum. The court reasons that the space has not been opened to the general public but for the designated purpose of traveling.

58 The activities of the operating

company of the train stations, though, include not just the operation of the train stations as traffic hubs but, according to their own admission, also the development and marketing of station facilities. This goes hand in hand with the extensive modernization of larger railway stations to transform existing railway stations into profitable “malls and urban entertainment centers with a rail connection”

59 which in turn compete directly with

pedestrian areas and shopping arcades of the inner city. The character of train stations gravitates more and more towards the character of a public place in the inner city, thus exceeding its original function as a traffic hub. There is substantial evidence that, through the creation of a varied open network where people spend time and meet, railway stations, privately owned by the DB Station&Service AG, can also be recognized as a place for general traffic. The doubts expressed by the Administrative Court of Stuttgart regarding the character of a public forum do not seem to be justified in the light of the Fraport case.

60

Above all, another challenge, which due to the lack of relevance has only been discussed as a secondary matter in the Fraport case, requires a more specific elaboration for the future: The binding force of fundamental rights—especially the scope of the freedom of assembly—when public forums are owned and operated by a private majority or are exclusively private, such as shopping malls. The FCC noted that in the present case an indirect binding force of fundamental rights equivalent or similar to the direct binding force applied to the State may be conceivable. It remains uncertain what that means regarding a specific individual situation, and how far the indirect binding force should in fact reach. It is even more difficult to answer when

58 Verwaltungsgericht Stuttgart [VG – Administrative Trial Court], Case No. 5 K 691/12 (Mar. 2, 2012). Also assumed for Frankfurt am Main airport. BVerfG, Case No. 1 BvR 699/06, at para. 120 (Schluckebier, J., dissenting) (Feb. 22, 2011).

59 Carsten Gericke, “Territorien des Wohlfühlens” durch sozialen Ausschluss, FORUM RECHT (2002), available at http://www.forum-recht-online.de/2002/302/302gericke.htm.

60 Recently other administrative courts have started to use the term public forum but without further specifying the concept. See Verwaltungsgericht Braunschweig [VG – Administrative Trial Court], Case No. 5 A 100/10 (Oct. 6, 2011) (stating that the area Federal Research Institute for Rural Areas, Forestry and Fisheries is not accessible for general traffic); Verwaltungsgericht Berlin [VG – Administrative Trial Court], Case No. VG 1 L 102.12, (May 19, 2012) (stating that public green areas are only available for limited designated purposes); Verwaltungsgericht Augsburg [VG – Administrative Trial Court], Case No. Au 1 S 13.1314 (Sept. 2, 2013) (stating that Park & Ride parking lots are not a forum for communication).


exactly the preconditions for such an extension of the scope of an indirect binding force are met. This applies especially for the decisive question, in which situation the exercise of the fundamental rights depends on the recourse to privately operated public forums. The criterion contains the potential for considerable conflict as indicated by the dissenting opinion of Justice Schluckebier. In Justice Schluckebier’s opinion the required preconditions are undoubtedly not met at the present time.

61

There is an urgent need for specified criteria in order to determine when private owners are obligated by an extension of scope of the indirect binding force of fundamental rights. Additionally, it would be necessary to clarify in which area the lack of availability of publicly operated places made accessible for general traffic has to be demonstrated (e.g., the area of a specific city? State?). Finally, it needs to be considered if an extension of the scope of the freedom of assembly to public forums could not indeed result in an overall realignment of the German judicial doctrine on fundamental rights regarding Article 8 Section 1 of the Basic Law. In light of the importance of such forums as space for communication and the basis of a democratic society, it may be possible to accept an absolute binding force beyond the conventional fundamental rights doctrines regarding Article 1 Section 3 of the Basic Law. In other words, a direct binding force of fundamental rights could be applied for public forums irrespective of the fact of the owner’s public or private legal status.

62

It also remains to be seen how the FCC will handle the public forum doctrine in the future and how the lower courts will incorporate the constitutional decision-making practice. There is no simple answer to the outstanding questions. The Fraport case rather emphasizes the need for an appropriate constitutional handling in regards of public space, a thorough consideration of legal principles, and careful conception of new approaches.


62 This argument was brought up by the complainant´s representatives in the Fraport case.

Developments

The Future of Europol’s Parliamentary Oversight: A Great Leap Forward? By Vigjilenca Abazi* Abstract Secrecy profoundly challenges democratic oversight. Law enforcement cooperation, however, requires some space for discretion and confidentiality. This classical paradox within the context of the European Union is central in the current legislative debate on Europol’s revision. The reform is initiated by the Commission’s proposal in March 2013 and, for the first time in its history, the European Parliament has direct power to decide over the future of the intelligence agency. This article argues that we should not overestimate European Parliament’s post-Lisbon prerogative for oversight, and particularly its access to Europol Classified Information, due to the architecture of intelligence exchange. The foundational principle of intelligence cooperation confers absolute discretion to the originators of information and Europol’s “secrets” in almost all cases originate from the member states or third parties. The article offers a new legal and empirical perspective on the tensions of secrecy and oversight in the EU, and especially in the Area of Freedom Security and Justice. It discusses the internal information structure of Europol and suggests options for more plausible oversight arrangements.

* Ph.D. Researcher, Amsterdam Centre for European Law and Governance, University of Amsterdam; Fulbright Visiting Scholar at Columbia Law School. I would like to thank Deirdre Curtin and Christina Eckes for valuable comments. The paper also benefited from the suggestions of Kathleen Clark, Päivi Leino-Sandberg, Ernst Hirsch Ballin, and Annette Schrauwen. Earlier versions of the paper were presented in lectures at Bocconi University, Italy and Tilburg University, the Netherlands, which I sincerely thank for the invitation and support. The paper attempts to state the law and factual context in the Europol legislative process as it existed in September 2014. Usual disclaimers apply.


A. Introduction Oversight of security agencies is traditionally a challenging task. Following the Lisbon Treaty innovations, the European Parliament for the first time since Europol’s establishment has direct impact on how this crucial agency in law enforcement cooperation should function, in light of the ongoing ordinary legislative procedure for Europol Regulation.

1 Another significant novelty is the European Parliament’s oversight

prerogative, and hence privileged access to Europol Classified Information.2 The latter is

being flagged as a major achievement considering the recent fierce but lost struggle to gain access to Europol’s classified inspection Report on implementation of the Terrorist Finance Tracking Programme Agreement with the US, which allows for financial messaging data to be transferred to the transatlantic partner.

3

Yet, celebration is premature. This article argues that the de facto oversight position of the European Parliament regarding access to Europol Classified Information will not drastically change because of Europol’s unique institutional and information design. Europol’s main structural characteristics are the dependency on the member states for information and lack of discretion regarding how such information should be later exchanged. Due to lack of trust, the member states keep absolute control over the information shared with Europol, mainly through the so-called principle of originator control.

4 This principle is the core of the information architecture exchange not merely in

Europol, but also in the wider system of European Union Classified Information, supported

1 See Treaty on the Functioning of the European Union, Dec. 13, 2007, 2012 O.J. (C 326) 88(2) [hereinafter TFEU]; see also Proposal for a Regulation of the European Parliament and of the Council on the European Union Agency for Law Enforcement Cooperation and Training (Europol) and Repealing Decisions 2009/371/JHA and 2005/681/JHA, Mar. 27, 2013, 2013 O.J. (COM 0173) [hereinafter Europol Regulation Proposal].

2 See TFEU, supra note 1, art. 88(2); Europol Regulation Proposal, supra note 1, art. 54.

3 See Agreement Between the European Union and the United States of America on the Processing and Transfer of Financial Messaging Data from the European Union to the United States for the Purpose of the Terrorist Finance Tracking Program, Jan. 13, 2010, 2010 O.J. (L 195/5); see also Letter from Rob Wainwright, Europol Director, to Juan Fernando López Aguilar (May 24, 2012), http://www.statewatch.org/news/2012/jun/eu-usa-tftp-europol-ep-letter.pdf (denying access to the European Parliament’s LIBE Committee); see generally Elaine Fahey, Law and Governance as Checks and Balances in Transatlantic Security: Rights, Redress, and Remedies in EU-US Passenger Name Records and the Terrorist Finance Tracking Program, YEARBOOK OF EUROPEAN LAW (2013).

4 See Council Decision 2009/968/JHA of 30 November 2009, Adopting the Rules on the Confidentiality of Europol Information, 2009 O.J. (L 332/17); Council Decision 2009/934/JHA of 30 November 2009, Adopting the Implementing Rules Governing Europol’s Relations with Partners, Including the Exchange of Personal Data and Classified Information, 2009 O.J. (L 325/6); James I. Walsh, Intelligence-Sharing in the European Union: Institutions Are Not Enough, 44 J. COMMON MKT. STUD. 625 (2006).

2014] The Future of Europol’s Parliamentary Oversight 1123

strongly by the Council and accepted as an international standard.5 What is unique for

Europol, however, is the high applicability of the rule because the vast majority of information is received from the member states.

6

In the wider context of the EU, both the European Parliament and the Court of Justice of the European Union have faced the negative consequences of the originator rule, that is they have ended up empty-handed because the originator refused to allow access to their classified documents, regardless of the fact that EU executive institutions had the documents or they were significant for EU fundamental rights.

7 Furthermore, it made no

difference which route was followed to request the documents. Both the public disclosure regime under Regulation 1049/2001, otherwise known as the Transparency Regulation, as well as privileged access as part of oversight or investigative prerogatives are strictly bound by the originator’s consent.

8 Therefore, public and privileged access to classified

information can be denied if the originator of the information refuses to give consent for disclosure. The European Parliament should be aware of the implications for oversight arising from member states’ information dominance in Europol and in that matrix the supremacy of the originator consent. Ignoring the internal functioning of Europol’s classification system leads the European Parliament to have the impression that it could access Europol classified information when, in fact, originators of that information could block it. What remains for the European Parliament, beyond the principle of originator control, which is perhaps irrevocable, is to focus on certain feasible arrangements not merely to gain access, but also to give credibility to its new oversight tasks, the details of which should be central in the establishment of Working Arrangements with Europol in the near future. This article will show that a neglected dimension, the classified information policy, is necessary in understanding the structure of Europol, while building upon the scholarly

5 See Council Decision 2013/488/EU of 23 September 2013 on the Security Rules for Protecting EU Classified Information, 2013 O.J. (L 274); see Alasdair Roberts, OCRON Creep: Networked Governance, Information Sharing, and the Threat to Government Accountability, 21 GOV’T INFO. Q. 249 (2003).

6 Interview with Europol Official in Charge of Classified Information, in The Hague, Netherlands (Mar. 19, 2012).

7 See Deirdre Curtin, Official Secrets and the Negotiation of International Agreements: Is the EU Executive Unbound?, 50 COMMON MARKET L. REV. 423 (2013); see also Christina Eckes, Decision‐Making in the Dark?—Autonomous EU Sanctions and National Classification, in LEGAL ASPECTS OF EU SANCTIONS 177 (Iain Cameron ed., 2013).

8 See Regulation 1049/2001 of the European Parliament and of the Council of 30 May 2001 Regarding Public Access to European Parliament, 2001 O.J. (L 145/43); EUROPEAN PARLIAMENT, RULES OF PROCEDURE Annex IX (Feb. 2013); see generally PATRICK BIRKINSHAW, FREEDOM OF INFORMATION: THE LAW, THE PRACTICE AND THE IDEAL (2010).


discussion on the agency.9 Moreover, it provides some of the insider views taking into

account the semi-structured interviews conducted with former and current practitioners in Europol, and also relevant institutions such as the Council.

10

The article reflects on oversight challenges and prospects of the European Parliament. Significantly, suggestions are made to possibly improve oversight arrangements. The reform of Europol is a test case and could serve as an example for European Parliament’s oversight functions in the Area of Freedom Security and Justice. The article is structured as follows: Section B introduces Europol’s organization and functions in view of classified information, paying special attention to its specificities. Section C discusses the significance of oversight and provides a broad view of both the background and future parliamentary oversight. In light of the above, Section D addresses the main challenges of oversight, and especially access to classified information. For sake of clarity and moderation, it also lays out possible objections that might be raised to the view presented here, followed by counterarguments. In addition, considerations for the future oversight arrangements are set forth. The very last section brings together the conclusions. B. Europol I. Information Broker in European Law Enforcement European law enforcement depends on efficient cooperation. Europol, an agency of the European Union, plays a crucial role to that end, mostly through the analysis and exchange of confidential information related to various crimes. Since its creation, Europol has undergone many changes due to the shifting context of security threats and also the

9 See Florian Trauner, The European Parliament and Agency Control in the Area of Freedom, Security and Justice, 35 WEST EUR. POL. 784 (2012); see also Stephen Rozée, Christian Kaunert & Sarah Léonard, Is Europol a Comprehensive Policing Actor?, 14 PERSPECTIVES ON EUR. POL. & SOC’Y 372 (2013); Herwig C.H. Hofmann, Constitutional Aspects of the Pluralisation of the EU Executive Through “Agencification,” 37 EUR. L. REV. 419 (2012) (explaining Europol’s position and significance in the broader context of EU executive power); Valsamis Mitsilegas, The Third Wave of Third Pillar Law. Which Direction for EU Criminal Justice?, 34 EUR. L. REV. 523, 553 (2009) (noting that Europol’s “transparency and accountability leaves much to be desired”).

10 In terms of methodology, the interviewees were part of semi-structured qualitative interviews with questions based on the applicable legal framework and their personal practice. For the broader European Union Classified Information system (EUCI), almost thirty high-level EU officials have been interviewed, of which five officials have direct connection with Europol, and others form part of the Council, the Commission, and the European External Action Service. The selection of the interviews is based on their professional link with the EUCI. The overall interviews are part of a broader research on the EUCI. Due to protection of privacy, the identity of the officials is not revealed publicly in the article and remains on file with the author.


development of the European Union legal order. 11

Most reforms have been of a reactive nature and aimed to make Europol fit for its purpose: To support and strengthen member states’ efforts in preventing and combating security threats. Despite the lack of coercive powers, Europol is a significant actor in the fight against terrorism and other serious crimes, through its threat assessment and analytical reports. Europol’s establishment was a result of a political idea as opposed to a police enforcement need. Hence, national local authorities have generally been skeptical in acknowledging Europol’s added value, resulting in a tendency not to share information with the agency.

12

This in turn has been particularly problematic because Europol has a specific information architecture, conditioned by member states’ collaboration. On the one hand, member states are supposed to provide most of the sensitive information for Europol to analyze, while on the other, member states are supposed to receive the “end product”: Reports about future crime trends. The duality creates a situation for Europol in which if the first part of the cycle is not successful it directly impacts the second part and decreases the chances of successful work.

13 Some exchanges of information take place informally and

bilaterally between liaison officers of member states without involving Europol at all in matters that fall within its competence.

14 The UK House of Lords even noted that “up to

80% of bilateral engagement occurs this way” and “the main loser is Europol.”15

11 Europol’s origin can be traced back to the so-called TREVI group of the 1970s, when the member states’ interior ministries and security services aimed to co-ordinate national counter-terrorism efforts that had cross-border implications. See JOHN D. OCCHIPINTI, THE POLITICS OF EU POLICE COOPERATION: TOWARDS A EUROPEAN FBI? 32 (2003); Rachel Woodward, Establishing Europol, 1 EUR. J. ON CRIM. POL’Y & RESEARCH 7 (1994).

In the Treaties, Europol was first mentioned in Article K1 (9) of the EU Treaty as a “Union-wide system for exchanging police information.” It was established in 1993 by a Ministerial Agreement in order to fight drug trafficking. This Agreement was later replaced by a Joint Action to establish the Europol Drug Unit with a mandate wider than only drug trafficking, as it also covered trafficking in radioactive and nuclear substances, clandestine immigration networks, and vehicle trafficking. The Joint Action was replaced by the 1995 Europol Convention, which entered into force in 1998. Since the Amsterdam Treaty, there were attempts to build a legal and institutional framework in order for Europol to be fully operational for fighting cross-border crime. See Council Decision 2009/371/JHA of 6 April 2009, Establishing the European Police Office (Europol), May 15, 2009, 2009 O.J. (L 121/37); see also Mathieu Deflem, Europol and the Policing of International Terrorism: Counter-Terrorism in a Global Perspective, 23 JUST. Q. 336 (2006).

12 See HOUSE OF LORDS, AFTER MADRID: THE EU’S RESPONSE TO TERRORISM (2005), http://www.publications.parliament.uk/pa/ld200405/ldselect/ldeucom/53/53.pdf

13 See Madalina Busuioc & Martijn Groenleer, Beyond Design—The Evolution of Europol and Eurojust (Amsterdam Centre for European Law and Governance, Research Paper No. 2011-03, 2011); see also Alexandra De Moor & Gert Vermeulen, The Europol Council Decision: Transforming Europol into an Agency of the EU, 47 COMMON MKT. L. REV. 1089, 1099 (2010).

14 See HOUSE OF LORDS, EUROPOL: COORDINATING THE FIGHT AGAINST SERIOUS AND ORGANIZED CRIME (2008), http://www.publications.parliament.uk/pa/ld200708/ldselect/ldeucom/183/183.pdf.

15 See id., para. 50.


The reluctance to share confidential information is also due to member states’ fear that their information could be “leaked.”

16 Therefore, Europol has prioritized the protection of

information and secure channels of communication in order to gain the trust of member states. Trust is central to ensuring reciprocity in sharing secrets.

17 Practitioners at Europol

also stress its importance:

We need to maintain high level of trust that we can actually protect their information . . . . If they just decide that [we] are not trustworthy enough then they can use the system of the liaison bureau to work again on a bilateral bases. We can just be out of the picture.

18

[emphasis added].

More importantly, the exchange is only made possible by ensuring that member states maintain absolute control throughout the life of a classified document, through the so-called “principle of originator control.” According to the originator control principle, the actor who provides information retains complete control over its dissemination by the actor who receives it. No rules oblige the originator to justify its decision to refuse a request for declassification or release of information.

19 The originator rule is intertwined in

the system of the EU. It is found in all rules regarding secrecy regulation since their very inception.

20 The current form of the originator rule in the EU was first stipulated in the

Council’s Decision on security of classified information in 2001.21

The Council insisted that the exchange of sensitive information would “work only if the originator of such

16 Interviews with Several Europol Officials, in The Hague, Netherlands (Mar. 29, 2012, Apr. 10, 2012 & Aug. 30, 2012). See also Björn Müller-Wille, The Effect of International Terrorism on EU Intelligence Co-operation, 46 J. COMMON MKT. STUD. 49, 57 (2008).

17 See SISSELA BOK, SECRETS: ON THE ETHICS OF CONCEALMENT AND REVELATION (1982); Monica de Boer, Claudia Hillebrand & Andreas Nolkehillebrand, Legitimacy Under Pressure: The European Web of Counter-Terrorism Networks, 46 J. COMMON MKT. STUD. 101 (2008) (explaining intelligence cooperation).

18 See supra note 6.

19 See Alasdair Roberts, OCRON Creep: Networked Governance, Information Sharing, and the Threat to Government Accountability, 21 GOV’T INFO. Q. 249 (2003); EUROPOL MANAGEMENT BOARD, DECISION LAYING DOWN THE

RULES CONCERNING ACCESS TO EUROPOL DOCUMENTS (2009), https://www.europol.europa.eu/sites/default/files/public_access_to_europol_documents.pdf

20 Protection for classified documents in the EU has existed since 1958 in the form of Regulation No. 3, the scope of which was limited to defense information for measures exercised under the supervision of the Commission. A form of the originator rule is found in Article 6(1) where the “original security grading” of the information in question is retained. See Hans Ragnemalm, The Community Courts and Openness within the European Union, in THE CAMBRIDGE YEARBOOK OF EUROPEAN LEGAL STUDIES 19, 22 (1999).

21 See Council Decision 2001/264 of 19 March 2001 Adopting the Council’s Security Regulations, 2001 O.J. (L 101/1).


information can be confident that no information put out by him will be disclosed against his will.”

22 This reasoning was later reflected in the adoption of Regulation 1049/2001 on

Public Access to Information, whereby pursuant to Article 9(3) the originator has a guaranteed discretion regarding classified information. The European Court of Justice has also interpreted originator consent regarding classified documents as an absolute condition for public disclosure.

23 The Court has been explicit that any action regarding such

documents can take place “only with the consent of the originator.”24

II. Europol’s Specific Information Architecture In Europol, the principle of originator control in terms of content and function is merely a reflection of the broader legal matrix of the EU. What is specific to Europol, is that the majority of information is classified at the national level. The drafting process of sensitive information or their assemblage starts at the national level.

25 The vast majority of

Europol’s secrets originate from the member states.26

Europol is still merely a “clearing house for information” facilitating “different cultures of secrecy with some member states having a tendency to overclassify.”

27

The position of control from national authorities can be seen in two ways. First, when the member states provide already classified information to Europol, they are responsible for deciding if the information should have been classified, at which level, and for how long, and make these choices under their national regulations. The current Europol Confidentiality Decision does mention the requirement that Europol’s operational

22 See Council Decision 2000/527 of 14 August 2000 Amending Decision 93/731 on Public Access to Council Documents, 2000 O.J. (L 212/9); Council Decision 2000/23 on the Improvement of Information on the Council’s Legislative Activities and the Public Register of Council Documents, Dec. 6, 1999, 2000 O.J. (L 212/9) (emphasis added).

23 See Sweden v. Comm’n, CJEU Case C-64/05, 2007 E.C.R. I-11389, para. 47 (explaining the difference between Art. 9 and Art. 4 Regulation 1049/01). The CJEU has had a few occasions to adjudicate upon issues of access to information regarding security and international relations and the role of the originator control. The court appears to be restrained in its review of the information not granting access to documents classified under the exception of security under Article 4(1a). See Päivi Leino-Sandberg, Case C-64/05 P, Kingdom of Sweden v. Commission, 45 COMMON MKT. L. REV. (2008); Dariusz Adamski, Approximating a Workable Compromise on Access to Official Documents: The 2011 Developments in the European Courts, 49 COMMON MKT. L. REV. 521 (2012).

24 See Jose Maria Sison v. Council, CJEU Case C-266/05, 2007 E.C.R. I-1233, para. 95.

25 See Hugo Brady, Europol and the European Criminal Intelligence Model: A Non-State Response to Organized Crime, 2 POLICING 103 (2008).

26 See supra note 6. Also, interviews with Several Europol Officials, in The Hague, Netherlands (Mar. 29, 2012, Apr. 10, 2012 & Aug. 30, 2012) as well as the Council Officials, in Brussels, Belgium (9 Nov. 2012, 20 Nov. 2012).

27 See Madalina Busuioc & Martijn Groenleer, supra note 13; Interview with Europol Official, in the Hague, Netherlands (30 Aug. 2012).


flexibility should be taken into account.28

However, in practice that would mean that a national police officer must know what level of operational flexibility Europol needs for a certain investigation and take this into account before classifying information—despite the fact that recent empirical findings point out “most police officers still think and act nationally or locally.”

29

Second, in addition to information that originates from national authorities, when Europol uses information in the new context, that document receives a so-called “derivative classification,” that is, the newly created document is categorized at the same level of protection as the original document and the discretion for the newly created document remains at the national level because of the national information it consists. Thus, to a large extent, member states make the final decision as to whether the information should be classified and all the consequences that follow. Europol may advise a member state that a classification decision should be reconsidered, yet in practice this happens rarely due to Europol’s need for member states’ input.

30 The process is similar with regard to third

parties. Europol has direct discretion only when information comes from open and private sources, as a result of a very recent trend of police cooperation with actors from the private sector.

31 Practically, this category of information remains small.

32

In summary, the originator rule is a rigid principle recognized at the EU level. Most importantly, it forms the core of information architecture exchange in Europol. Due to Europol’s manner and purpose—which is to receive information from member states and third parties, assemble it, and provide a new overview in return—the scope of the originator rule encompasses the vast majority of classified information at Europol. In addition to national authorities providing Europol with information, they are also significant in that Europol’s work is carried out and implemented by assigned employees of member states and national authorities, respectively. Also, these activities are primarily regulated by national law.

33 In light of Europol’s function and information architecture, the

following section looks at oversight of the agency, with the aim to discuss its future institutional design.

28 See for example arts. 3, art. 10, and art. 11 of the Council Decision 2009/968/JHA of 30 November 2009, Adopting the Rules on the Confidentiality of Europol Information, 2009 O.J. (L 332/17).

29 See Busuioc & Groenleer, supra note 13, at 16.

30 See Interview with Europol Official in Charge of Classified Information, in The Hague, Netherlands (Mar. 19, 2012); Interview with Council Official, in Brussels, Belgium (Nov. 20, 2012).

31 See Nicholas Dorn, The End of Organised Crime in the European Union, 51 CRIME L. SOC. CHANGE 283, 283 (2009).

32 Interviews with Several Europol Officials, in The Hague, Netherlands (Mar. 29, 2012, Apr. 10, 2012 & Aug. 30, 2012).

33 See Aidan Wills & Mathias Vermeulen, Parliamentary Oversight of Security and Intelligence Agencies in the European Union, EUROPEAN PARLIAMENT DIRECTORATE GENERAL FOR INTERNAL POLICIES 80 (2011).


C. Oversight in Europol Scholars have mixed opinions about the present Europol oversight arrangements.

34 Some

have pointed out that “Europol is perhaps the most controlled police agency in Europe” while others have warned that there is an underuse of the existing arrangements.

35 At the

EU level, oversight arrangements so far have been mostly executive institution based. Institutions like the Council and the Commission are involved more directly. The Council lays down the strategic priorities for Europol whereas the Commission proposes the agency’s annual budget and has voting rights within Europol’s Management Board. The Europol Joint Supervisory Body, an independent body, ensures compliance with the data protection regime. In general, parliamentary oversight at the EU level has been limited. However, in line with the Lisbon reforms, particularly Article 88(2) of the Treaty on the Functioning of the EU (TFEU), the position of Europol is set to change in two very significant regards. First, the Treaty stipulates a new legal basis for the agency pursuant to a Regulation adopted in an ordinary legislative procedure, placing for the first time the European Parliament on an equal footing with the Council, a formerly dominant actor in shaping Europol’s structure and organization. Second, Article 88(2b) TFEU empowers the European Parliament, together with national Parliaments, to scrutinize Europol’s activities. I. Parliamentary Oversight Parliamentary oversight of Europol has been fragmented between national and EU levels. Article 88 TFEU stipulates a change for this setting by laying out that future oversight must be conducted by the European Parliament in cooperation with national parliaments in order to ensure democratic legitimacy of the agency.

34 Oversight generally refers to an actor scrutinizing an organization’s activities with the aim of evaluating its compliance with particular criteria and on this basis, issuing recommendations or orders to the organization concerned. See id. at 41. Some authors define control in a similar manner. For example, Hood defines control as “the periodic checking and examination of the activities of public officials by external actors possessed of formal or constitutional authority to investigate, to grant quietus or to censure, and in some cases even to punish.” See Christopher Hood, The Hidden Public Sector: The “Quangocratization” of the World, in GUIDANCE, CONTROL AND

EVALUATION IN THE PUBLIC SECTOR 766–67 (G. Majone & V. Ostrom eds., 1986). The aim and scope here is not to draw clear distinctions and discuss these terms, but it must be noted that they are not significantly different and mostly differ in terms of the level and importance of consequences as well as the rigidity of the evaluation process. One of the key differences is if they are focused retrospectively or through the decision-making process as well. See CAROL HARLOW, ACCOUNTABILITY IN THE EUROPEAN UNION 10 (2002).

35 See Cyrille Fijnaut, Police Cooperation and the Area of Freedom, Security, and Justice, in EUROPE’S AREA OF

FREEDOM, SECURITY AND JUSTICE 241, 255 (Neil Walker ed., 2004); EUROPEAN PARLIAMENT, THE EU INTERNAL SECURITY

STRATEGY 17 (2011).


For national parliaments, the supervision has been mainly indirect and exercised through the control of their governmental representatives on Europol’s Management Board.

36

National oversight is also narrower because the authority for scrutiny only extends within the state jurisdiction and is often limited due to lack of access to information originating from bodies other than the national contact point. This is an incomplete scrutiny considering that Europol assembles information from many different national intelligence and police agencies, which results in reports containing new and more informed perspectives of the investigations taking place. The European Parliament’s empowered position for oversight, together with national parliaments, hence has an added value because of its larger jurisdictional scope.

37

Moreover, as a representative of EU citizens and guarantor of their interests,38

the European Parliament should be informed about one of the EU’s most significant agencies and the work it does in preserving security. In addition, the increased parliamentary involvement is seen as a positive step not merely for Europol as such, but also more broadly as contributing to the democratic legitimacy of the EU.

39 Finally, Europol does not

have coercive powers, hence there is no direct risk of infringement of human rights by investigations or arrests. However, Europol might be granted authority to participate in joint investigations teams in the future.

40 In this regard, parliamentary scrutiny is necessary

to ensure compliance with and awareness of human rights as well as public debates regarding these issues. The relationship between the European Parliament and Europol has evolved constantly. The following sub-section takes a look back at the main stages of this relationship, which gives the background of the changes to be introduced by the current legislative debate on Europol Regulation. II. The Evolving Role of the European Parliament Since the initial establishment of Europol by the Europol Convention, under which the European Parliament was limited to receiving an annual report, the role European Parliament has evolved, allowing it greater involvement and extending democratic oversight. The relation between the actors changed as a result of the Council’s Europol

36 See European Commission, The Commission Paves the Way for Increased Transparency and Parliamentary Scrutiny of Europol (Dec. 17, 2010), http://europa.eu/rapid/press-release_IP-10-1738_en.htm.

37 See Wills & Vermeulen, supra note 33, at 126.

38 See TFEU, supra note 1, art. 10(2).

39 See European Commission, supra note 36; EUROPEAN COMMISSION FOR DEMOCRACY THROUGH LAW (VENICE

COMMISSION), REPORT ON THE DEMOCRATIC OVERSIGHT OF THE SECURITY SERVICES (2007) [hereinafter Venice Commission].

40 See Europol Regulation Proposal, supra note 1, art. 5.


Decision in 2009, which incorporated Europol as an EU agency within the EU legal system, and the enhanced position of the European Parliament in the broader institutional make-up of the EU. More specifically, three stages can be identified in the European Parliament’s relationship with Europol. In the early stage, between 1995 and 2009, the European Parliament was supposed to receive Special Reports about the work of Europol though the Council Presidency. The Special Report was subject to “obligations of discretion and confidentiality,” which implies that the European Parliament did not receive classified information but was informed about the general work.

41 During this stage, the role of national parliaments was more

prominent. The Council’s Europol Decision in 2009 marks the second stage in the development of Europol’s relationship with the European Parliament. Adopted only a few days before the Lisbon Treaty, which stipulates a clear role of scrutiny for the European Parliament, came into force, the Decision was controversial and highly disputed because of the limited oversight function it afforded the European Parliament.

42 According to this legal

framework, there are a few mechanisms through which the European Parliament plays an oversight role. Formal and direct oversight tools include the adoption of the budget and the obligation of the Europol Director to appear before the European Parliament at its request.

43 A less direct manner of communication is the European Parliament’s prerogative

to raise questions to the Commission regarding Europol. In practice, informal visits and exchanges also take place.

44

The third stage is marked by a legislative proposal for a Europol Regulation, submitted by the Commission in mid-March 2013, which aims to make Europol “more accountable, effective, and efficient.”

45 The proposal was followed by a debate in the Council while the

41 See The Europol Convention, Jul. 26 1995, art. 34.

42 See EUROPEAN PARLIAMENT, DRAFT RESOLUTION ON THE DRAFT COUNCIL DECISION ADOPTING THE IMPLEMENTING RULES

GOVERNING EUROPOL'S RELATIONS WITH PARTNERS, INCLUDING THE EXCHANGE OF PERSONAL DATA AND CLASSIFIED INFORMATION (2009).

43 See Council Decision 2009/371/JHA of 6 April 2009, Establishing Europol, art. 48; see also TFEU, supra note 1, arts. 310–24 (explaining European Parliament’s budgetary authority). 44 See Interviews with Several Europol Officials, in The Hague, Netherlands (Mar. 19, 2012, Apr. 10, 2012 & Aug. 30, 2012); Interview with Commission Official in Charge of Classified Information, in Brussels, Belgium (Mar. 22, 2013).

45 Martin Banks, Commission Calls for More Accountability of EU Police Agency, THE PARLIAMENT (May 8, 2013), http://www.theparliament.com/latest-news/article/newsarticle/commission-calls-for-more-accountability-of-eu-police-agency/.


first plenary reading for the European Parliament took place in February 2014.46

On the basis of Article 88(2) TFEU, Europol’s revision should lead to a new stage in the involvement of the European Parliament. Terminology in this regard is also revealing, because both primary law and the proposed Europol Regulation by the Commission refer to scrutiny, which implies a more direct and critical inquiry as well as possibilities for consequences.

47 The role of the European Parliament is enhanced and encompasses

different stages of Europol’s work, especially in comparison to the previous stages. Oversight revolves around receiving certain information, some of which will also be classified. In this respect, for the first time since the creation of Europol, it is expected that the European Parliament would have privileged access to Europol classified information. III. Oversight and Europol’s Revision The Commission’s legislative proposal regarding Europol’s revision is not specific about the oversight body and leaves an open door for future concrete arrangements. The proposal to a large extent is merely a repetition of the wording of Article 88 TFEU. The European Parliament’s intention is to form a so-called Parliamentary Scrutiny Unit. This Scrutiny Unit is supposed to be comprised of both European and national members of parliament.

48 The

Scrutiny Unit is proposed as a small and specialized structure of parliamentary scrutiny. The text is clear that there should be one representative from each member state and comprising the full members of the competent committee of the European Parliament. Reactions from national parliaments about the joint parliamentary scrutiny thus far have shown an interest in making the arrangements in accordance with Article 9 of Protocol 2 on the role on national parliaments.

49 The aim is not to create duplication of oversight at

the EU and national level but to ensure cooperation. This cooperation would only add value and would not prejudice the national oversight mechanisms as stipulated by national constitutional arrangements. The new oversight role of the European Parliament is multifaceted and highly dependent on receiving information, either in the form of reports or through direct questions and statements. First, the European Parliament is foreseen as having consultative prerogatives. For example, Article 15(4) of the proposed regulation stipulates that the multi-annual work

46 See European Parliament, Procedure File 2013/0091(COD), http://www.europarl.europa.eu/oeil/popups/ficheprocedure.do?lang=en&reference=COM(2013)0173.

47 For an overview of scrutiny, terminology and background, see LUCINDA MAER & MARK SANDFORD, THE DEVELOPMENT

OF SCRUTINY IN THE UK: A REVIEW OF PROCEDURES AND PRACTICE (2004).

48 See European Parliament Draft Report on the Proposal for a Regulation of the European Parliament and of the Council on the European Union Agency for Law Enforcement Cooperation and Training (Europol) and Repealing Decisions 2009/371/JHA and 2005/681/JHA, COM (2013) 0173 (Feb. 7, 2014) [hereinafter European Parliament Draft Report].

49 EUROPEAN UNION COMMITTEE, THE UK OPT-IN TO THE EUROPOL REGULATION, 2013-2 H.L. 16 (U.K.).


program is to be adopted after consultation with the Parliamentary Scrutiny Unit. Second, obligations are foreseen to report directly to the Scrutiny Unit and share reports produced by other supervisory actors, according to Article 19 and Article 46 respectively. Third, the European Parliament will be directly involved in the Executive Director’s appointment procedure, because it foresees an obligation of the executive director to appear before the Parliamentary Scrutiny Unit in order to provide a statement and answer the questions of MEPs. In this respect, the amendments of the European Parliament differ from the Commission’s proposal because the proposed Regulation initially foresees the questioning session as a possibility but not a binding obligation for the Executive Director.

50 The

European Parliament has proposed the same procedure in case of an extension of term in office. As to possible removal from office, the European Parliament here too seeks to be directly involved by requesting an explanation if such action is to take place. However, the formulations of the proposal and the amendments do not clarify from whom the Scrutiny Unit should receive the explanation. Fourth, and a crucial aspect of oversight, the European Parliament is involved in the approval of Europol’s budget and is supposed to receive reports regarding the estimate of Europol’s revenue and expenditure. In addition to such reports being sent to the Parliamentary Scrutiny Body, the national parliaments will also receive them directly. This procedure would result in a large number of representatives being involved in the financial scrutiny. Finally, the European Parliament will take part in the overall evaluation of Europol as envisaged in Article 70. Every five years an external review by the Commission is supposed to take place and thereafter report to the European Parliament. In other words, the role of the European Parliament, through the Parliamentary Scrutiny Unit, is structured around appointment procedures, Europol’s finances, and Europol’s substantive work exemplified by the European Parliament being either consulted or receiving reports.

51 To fulfill its oversight role overall, the European Parliament will receive

a variety of information: Threat assessments, strategic analysis, general situation reports, results of studies, and evaluations commissioned by Europol. As was mentioned, the European Parliament for the first time is seen as having privileged access to classified information. Privileged access does not, however, erode all questions regarding effective oversight. Particularly, questions arise about the practice of the new right. Although the European Parliament will have a clear mandate to access Europol classified information, the right is conditioned by “obligations of discretion and confidentiality,” i.e. the principle

50 Compare Europol Regulation Proposal, supra note 1, art. 56, with European Parliament Draft Report, supra note 48.

51 Regarding the last point, curiously, the amendments of the European Parliament exclude the possibility of Europol to draw reports on the quantity and quality of information shared by the member states on the basis that such reports would mean an imposition on the national authorities. Such reports could indeed be seen from that perspective, but the intention rather is to create a higher awareness and more cooperative culture between the national authorities and Europol, which in the past has continually been identified as an issue.


of originator control.52

Therefore, situations of tension, considering the originator principle discussed above, between privileged access to classified information and the need for confidentiality will be unavoidable. D. Institutional Design for the Future I. The Main Challenge Ahead: Points of Tension A key provision on parliamentary oversight in the proposed Europol Regulation is Article 53, which also reveals two possible points of tension between oversight and originator control: Appearance before the Scrutiny Unit and transmission of information. The wording of the proposed provision as used in the current legislative documents—“obligation of discretion and confidentiality”—differs from the more common and direct usage—“subject to originator consent.” The former resembles the text of the Europol Convention, while the latter is mostly referred to in European Union security rules on classified information and international confidentiality agreements concluded specifically for classified information exchange. Also, Article 53 of the proposed Europol Regulation should be read in conjunction with Article 54 and 69 of the same legislative proposal. These articles together make it clear that the access regime will take place within the context of the broader arrangements of classified information exchange in the EU. For the latter, the rules as set by the Council in Decision 2013/488/EU represent the minimum standards and common denominator, which encompass principles of originator control and other principles for security of information.

53

1. Obligation to Appear Before the Parliamentary Scrutiny Unit According to the proposed Regulation and the foreseen amendments, the Executive Director will have an obligation to appear before the Parliamentary Scrutiny Unit at its request for questions regarding Europol’s work. As such, this mechanism of scrutiny is not new, current practice also includes visits of the Europol Director to the LIBE Committee. In line with the current rules, the Europol Director has the discretion or at times is under an obligation not to answer questions that would possibly reveal classified information.

54 This

caveat is also included in the current legislative proposal.55

Consequently, despite having privileged access, the Executive Director will not be obliged to provide answers revealing

52 Europol Regulation Proposal, supra note 1, arts. 53, 54.

53 Council Decision 2013/488/EU on the Security Rules for Protecting EU Classified Information, Sept. 23, 2013, 2013 O.J. (L 274).

54 See Wills & Vermeulen, supra note 33, at 180.

55 See Europol Regulation Proposal, supra note 1, art. 53(1).


confidential information. Therefore, privileged access as such would not change the factual balance and the possibility of discussing classified information in meetings between the Parliamentary Scrutiny Unit and the Executive Director. 2. Obligation to Transmit Information All scrutiny mechanisms depend on the transmission of information, be that finance reports or strategic reports about crime prevention. Particularly, it is important for the Parliamentary Scrutiny Unit to receive information that enables it to be familiar with the long-term goals and objectives of the agency in order to contribute to the priorities of the agency with a clear idea of citizens’ interests in mind. The proposed regulation clarifies the significance of such an approach by affirming that, in addition to obligations of information and consultations, the agency must also submit the following: Threat assessment, strategic analysis, and general situation reports.

56 Information presented in the form of reports

provides a crucial reflection of what Europol does. Thus far, these reports have been transmitted to the European Parliament in the public version. Namely, Europol formulates reports containing threat assessment or strategic analysis in two versions. The public version contains general information and provides a broad picture of security developments. As such, it is intended for familiarizing the general public with what Europol does. The classified version of the report, which is a detailed analysis, is merely shared within the executive community, i.e. the intelligence and security actors. This situation is supposed to be improved in the future because the legislative proposal explicitly foresees such reports as part of the obligation to inform the European Parliament. The question still remains, however, to what extent this practice would differ from the current one of having public access by the European Parliament, considering that the confidentiality and discretion prerequisite is included. Should such a provision be adopted, it might be expected that a more detailed version of the reports could be shared with the European Parliament than in the past, but that information that originators would not want to be shared will remain inaccessible. If the Parliamentary Scrutiny Unit were to have more questions regarding such reports or would like to clarify the information missing, it could call the Executive Director. In this case, the Unit could also use the mechanism foreseen in Article 54 in a similar fashion. However, these two mechanisms will not supplement each other by filling the missing gaps because classified information that originators do not give consent to be revealed will remain undisclosed in both cases. Finally, these obligations for information do not mention operational information that Europol uses. Operational information, relating specifically to investigations, is excluded from the scope of access. It remains unclear to what extent the right of the Parliamentary Scrutiny Unit will include information that relates to Europol’s possible future participation

56 Europol Regulation Proposal, supra note 1, art. 53(3a).


in joint investigation teams.57

Such information could be categorized as operational, but the proposed Regulation is silent on the matter. II. Much Ado About Nothing? Privileged access to classified information is in tension with principles of confidentiality and discretion. The latter is very important for actors in intelligence cooperation to be assured that they retain control over highly sensitive information; the former is an essential condition for parliamentary oversight. Nevertheless, the question remains: To what extent is it a serious tension? In other words, is the issue overstated? Some potential objections could be raised in order to show the tension is not as problematic as it is claimed to be here. The principle of confidentiality could be considered an exception rather than the rule regarding how the exchange should take place. In this respect, and drawing an analogy with the access to public information regime under Regulation 1049/2001, the application of the exception should be as narrow as possible and enable the European Parliament to exercise privileged access to Europol classified information.

58 However, some reservations persist. First, the exercise of the originator

principle is predominant because, as was elaborated above, the number of documents received from member states or third parties constitute the vast majority of documents received.

59 Even if the principle of confidentiality is interpreted as narrowly as possible and

regarded as an exception, the results would not differ in practice due to the high number of documents to which the originator rule applies. Second the originator principle enjoys support in the classification system practice but also in the interpretation of the Court. Despite being seen as an exception to the general access regime, the rule remains rigid in its application. Another objection could be that, in line with the principle of sincere cooperation, the member states will be bound to show a greater willingness to cooperate.

60 Again, however,

two reservations arise. First, the principle of sincere cooperation in relation to access to classified information has not been interpreted in a manner that would oblige the member states to share their classified documents. Perhaps due to the area of security, which after

57 To clarify, despite possible participation in joint investigation teams, Europol will not apply coercive measures; see TFEU, supra note 1, art. 88(3).

58 See Svenska Journalist forbundet v. Council, CJEU Case T -174/95, 1998 ECR II-2289.

59 Either in direct form as an original document that is used by Europol, or the so-called derivative documents that are produced by Europol, but on the basis of member-state or third-party information. See supra Part B.II.

60 Treaty on European Union, 1992 O.J. (C191) 1, art. 4(3) [hereinafter TEU]. But see TFEU, supra note 1, art. 346(1a).


all does remain a “sole responsibility of each Member State,”61

sincere cooperation has not been sufficient in the past to allow access for scrutiny purposes. This argument is illustrated in the case of France v. OMPI, regarding sanctions (asset freezing) as counter-terrorism measures set out in the Common Position 2001/931/CFSC.

62 Albeit not related to

Europol directly, the case does concern the confidentiality principle in the field of security exercised by a member state. Specifically, the Council was unable to produce the requested documents to the Court “since these were classified as confidential by the French Republic and could not be made available.”

63 The Court itself was not granted

access due to the lack of consent from the originator member state. The second reservation, which partly gives an insight into the reason why member states are reluctant to share their classified information, has to do with the subjective perception of the risk that parliamentarians might leak the information. Due to this fear, the member states and others partaking in the intelligence exchange would not voluntarily open their secrets to a scrutiny agent. Examples of parliamentary leaks of classified information in the EU are hard to find, and the leaks that have taken place were actually caused by members of the intelligence network.

64 Moreover, research into the functioning of parliamentary

intelligence oversight committees in other countries has indicated that parliamentarians rarely leak classified information.

65 Nevertheless, fears persist that leaks would be

unavoidable because “politicians get involved with their own agenda, [and] they do not always need to protect the classified information of another state.”

66 Europol practitioners

show concern that:

The member states [will] actually [be] asking if Europol starts releasing information to the European Parliament will it happen maybe at some stage that someone at the European Parliament will come up with classified information that we classified in the first

61 TEU, supra note 60, art. 4(2).

62 Common Position 2001/931/CFSC, Dec. 28, 2001, 2001 O.J. (L 344), 93.

63 France v. People’s Mojahedin Organization of Iran, CJEU Case C-27/09 P, 2011 ECR 00000, para. 42. For more in-depth discussion, see sources cited supra note 8.

64 See Andrew Rettman, Intelligence Chief: EU Capital is “Spy Capital,” EUOBSERVER (Sept. 17, 2012), http://euobserver.com/secret-ue/117553.

65 Hans Born & Loch K. Johnson, Balancing Operational Efficiency and Democratic Legitimacy, in WHO’S WATCHING

THE SPIES? ESTABLISHING INTELLIGENCE SERVICE ACCOUNTABILITY 225–39 (Hans Born & Ian Leigh eds., 2005); see also HANS

BORN & IAN LEIGH, MAKING INTELLIGENCE ACCOUNTABLE: LEGAL STANDARDS AND BEST PRACTICE FOR OVERSIGHT OF INTELLIGENCE

AGENCIES (2005).

66 Interviews with Europol Officials at Europol Headquarters (Mar. 19, 2012).


place and will they start showing it to the public or the internet? That can easily happen.

67

It remains to be seen if these possible objections would indeed be taken into account in practice. It might be the case that the originator principle would be interpreted very narrowly and that member states would be under the duty of sincere cooperation or willing to share classified information. Nevertheless, other concrete steps could be considered that would address the tension more directly and potentially expunge some of the current fears and the mistrust between the actors. Besides other questions they raise or issues regarding their feasibility, these steps could offer the potential to build a better working relation between the actors involved. The relation between the actors, those who have the information and those who want to know, is a critical element for the exchange of information.

68

III. Future Working Arrangements on Oversight The clash between requirements of security and confidentiality on the one hand, and the need for democratic oversight on the other, is traditionally an issue in the area of law enforcement.

69 Although the clash itself is problematic, and structurally possibly inevitable,

certain arrangements could be considered feasible. The question is whether these arrangements would result in a “quick fix” that does not address broad and long-term concerns. The answer is not straightforward, but the claim can be made that the underlying assumption of the arrangements is to create trust between an enlarged circle of secret keepers, which is essential for the sharing of classified information.

70 The aim should

be to create a framework for access to classified information that enables consistency, predictability, and trust between the actors to attain constructive oversight relations. The framework might not specifically address the limitations imposed by the principle of originator control, but extends beyond such margins and, crucially, depends on steps the oversight body can take. Subsequent to an adoption of a Europol Regulation in the future, it is foreseen that the European Parliament together with Europol will establish working

67 Id. Similar views were expressed in interviews with several Europol officials done at Europol Headquarters on March 19, 2012, April 10, 2012, and August 30, 2012, as well as interviews with Council officials in Brussels on October 22, 2012.

68 Eva Horn, Logics of Political Secrecy, 28 THEORY, CULTURE & SOC’Y 103, 109 (2011).

69 See also INTERNATIONAL INTELLIGENCE COOPERATION AND ACCOUNTABILITY (Hans Born, Ian Leigh & Aidan Wills eds., 2011); see also Anne Peters, Transparency, Secrecy, and Security, in RULE OF LAW, FREEDOM AND SECURITY IN EUROPE 183 (Julia Iliopoulos-Strangas, Oliver Diggelmann & Hartmut Bauer eds., 2010).

70 See Marieke de Goede & Mara Wesseling, Clashing Cultures of Secrecy: Tracking Terrorism Financing and the Paradox of Publicity, CULTURAL POL. (SPECIAL ISSUE) (forthcoming 2014).


arrangements on access to classified information.71

In this respect, the following theoretical and practical issues could be considered. 1. Systematic and Timely Access In principle, oversight relies on systematic and timely accessibility of information.

72 Ideally,

accessibility should not be fully dependent on the discretion of the scrutinized agent, if the oversight body is to be able to ensure the prior requirement of systematic and timely access.

73 Systematic accessibility means that information should be shared regularly and

not in a selective manner.74

Such an obligation implies not merely a responsibility on the scrutinized actor to grant access, but importantly, it requires that the oversight body engage in an active and direct manner at its own initiative. In other words, such model of oversight coined as “police-patrol” oversight, implies that an agency’s activities are checked regularly “by any of a number of means.”

75 The second crucial question is whether

the information is shared at the time the oversight body requests it or while the action is ongoing. The temporal factor becomes difficult to fulfill for policies or decisions whose very revelation or existence might be harmful. In such situations ex post oversight is exercised, although oversight bodies might remain doubtful whether the level of secrecy is indeed necessary for security reasons as it is claimed. Such situations are difficult to assess externally by the oversight body considering that the choice is made by the agency under scrutiny. Consequently, mechanisms should be considered to ensure that there is some level of limited discretion and that access would not be denied or manipulated. 2. Prospects in Practice One of the key elements of oversight, as was mentioned, is the temporal dimension—having the right information at the right time. Often the information may be accessed, but at a later point in time. Consequently, the European Parliament may consider an approach

71 Europol Regulation Proposal, supra note 1, art. 69.

72 For systematic information, see Stephen Schulhofer, Oversight of National Security Secrecy in the United States, in SECRECY, NATIONAL SECURITY AND THE VINDICATION OF CONSTITUTIONAL LAW 22 (David Cole et al. eds., 2013); Heidi Kitrosser, Congressional Oversight of National Security Activities: Improving Information Funnels, 29 CARDOZO L. REV. 1049 (2008). For the notion of timely access, see Dennis Thompson, Democratic Secrecy, 114 POL. SCI. Q. 181 (1999).

73 When the discretionary element is not eliminated, there could be fear of possible abuse or manipulation. See Rahul Sagar, Who Holds the Balance?: A Missing Detail in the Debate over Balancing Security and Liberty 41(2) POLITY 166, 179 (2009).

74 Kathleen Clark, Congressional Access to Intelligence Information: The Appearance of a Check on Executive Power (Wash. U. in St. Louis Legal Stud. Res. Paper No. 12-07-02, 2012).

75 Mathew D. McCubbins & Thomas Schwartz, Congressional Oversight Overlooked: Police Patrols Versus Fire Alarms, 28(1) AM. J. POL. SCIENCE 165 (1984).


of complementary steps. First, the Scrutiny Unity should have the option of ex post review of the information. In this manner, while the Unit will perhaps not be able to have a fully informed debate at the very time of the possible operations or activities of Europol, the Unit could nevertheless benefit from having seen the information after the event and form future questions to the Executive Director. In addition, ex post review could lead to invoking the originator rule not merely out of subjective—non-security related—issues, considering that the Scrutiny Unit would actually receive the document at a later stage. The key question here is at what point that information could be made available and to what extent should the good faith of the actors involved be assumed so as not to create a possibility for obstruction. Moreover, ex post review to a large extent does not change the equilibrium of who holds the discretion—it would still be the originator that would actually decide to grant access. To possibly remedy such limitation, a complementary mechanism would be a direct exchange between the Scrutiny Unit and national parliaments. Through coordination with national parliaments, the Scrutiny Unit could be more informed. This is not to imply that the Scrutiny Unit should surpass the originator consent principle by directly addressing national parliaments, which could actually lead to mistrust and not a cooperative relation between the Scrutiny Unit and the originator, which is the main aim. However, it would make it possible for the national members of the Scrutiny Unit to consult with their colleagues at the national level and provide a more informed input at the EU level. The caveat is that not all national parliaments have the same relationship with their national executive authorities. In some EU member states, the national parliaments have prerogative to receive all information, regardless of the originator principle.

76 Such

national parliaments hence have the ability to be fully informed and must receive the information they request from national authorities. Another aspect is the organization of access. Classified information is often not shared due to the perceived lack of a secure environment whereby the owners of the information would actually feel confident sharing.

77 For example, the Council for a long time claimed to

be unable to share information with the European Parliament due to the latter’s lack of appropriate security arrangements as judged by the Council.

78 Without disregarding less

76 See Wills & Vermeulen, supra note 33Error! Bookmark not defined..

77 It is not ignored that the different—possibly divergent—interests involved in knowing the information between actors that might have opposed interests play a significant role in what information is or is not shared. But practitioners do admit that the security arrangements for the actor with whom they would share information matters to a very large extent.

78 See David Galloway, Classifying Secrets in the EU (paper presented at Transparency and Access to the Records and Archives of the EU Institutions Seminar, the European University Institute, Jan. 25, 2013); see also Guri Rosén, Can You Keep a Secret? How the European Parliament Got Access to Sensitive Documents in the Area of Security and Defense (RECON Online Working Paper No. 2011/22).


transparent motives for not sharing, the security arrangements of the actor who aims to gain access to classified information are indeed highly salient. For instance, in international confidentiality agreements, the parties make sure that they afford equal and similar protection to secret information and would not conclude an agreement if such protection did not exist despite the clear will to cooperate.

79 Consequently, the European Parliament

could consider three issues for its future working arrangements. First, the European Parliament must ensure that sufficient and equivalent protection of information can be given to classified information. In this regard, the European Parliament can actually use the cooperation with Europol to its advantage to learn from a more established practice on issues of information security both for technological and physical security measures. It must be noted that the European Parliament has made a progress in this regard and has both the legal framework and the practical arrangements in place for receiving classified information.

80 Second, the practice of scrutiny will not merely depend on the cooperation

by the scrutinized actor, but it will also be highly dependent on the level of continuous interest of the parliamentarians in familiarizing themselves with the work of Europol in order to be able to establish the necessary expertise to provide scrutiny. Hence, it is important that oversight does not become a tool utilized haphazardly or only focused on more extreme cases of abuse of power or other infringements of law.

81 The continuous

interest and knowledge about the work of the agency is supposed to circumvent the issue of “amateur investigator.”

82 Specifically, the possibility for the security agency to withhold

or conceal information from an amateur investigator means that parliamentary questions or ad hoc parliamentary commissions of inquiry are usually only of limited efficacy in this field. Third, and very much connected to the previous point, is the question of resources. This is indeed one of the most challenging aspects of the role of oversight, because most parliaments committees have limited resources—such as time and staff—with which to conduct systematic and thorough oversight. However, considering the relevance of the issues in question, matters of security and citizens’ liberties, the organization of oversight merits thoughtful deliberation by the European Parliament in its future working arrangements.

79 Such agreements in regard to Europol can be seen in the case with the western Balkans, whereby Europol made sure in advance that the countries would correspond to security arrangements. Similar action took place with countries that aimed to join NATO and be part of its classified information network. For the latter, see ALASDAIR

ROBERTS, BLACKED OUT: GOVERNMENT SECRECY IN THE INFORMATION AGE (2006).

80 See Decision of the Bureau of the European Parliament of 15 April 2013, 2014 O.J. (C 96) 1.

81 See McCubbins & Schwartz, supra note 75; see also Gareth Griffith, Parliament and Accountability: The Role of Parliamentary Oversight Committees (New Parliamentary Library Research Service, Briefing Paper No. 12/05, 2005).

82 See Venice Commission, supra note 39, at 6.


E. Conclusions Europol plays an important security role in the European Union as an agency in law enforcement cooperation, supporting more than ten thousand cases per year.

83 Currently,

it is undergoing a legal revision, and for the first time, this is being done not through executive decisions, but through European legislative process, whereby the European Parliament has direct influence over the reform of this relevant security agency. Moreover, the reform is an opportunity for the European Parliament to extend its oversight prerogative, in accordance with primary law. In respect to the latter, the European Parliament faces one of the key challenges: Arranging access to Europol classified information in a manner that ensures effective oversight. Technical at first sight, rules on classified information actually mirror the structure of power and control within an organization. In Europol’s case, this article argues that to a large extent the agency relies on information provided by national authorities. Moreover, such reliance is tied to a rigid European Union principle—the originator control. The principle of originator control is both necessary and antithetical: Necessary for ensuring information exchange in the intelligence community; antithetical to parliamentary access to classified information.

84 At the core, this principle reveals the lack of trust of member

states towards Europol and their clear intention to keep utmost control of information. In this respect, this article revealed two implications: First, Europol is not autonomous in its information architecture. Second, the originator control principle significantly limits access to classified information both because of its numerical application as well as its rigid legal interpretation. Based on the current EU legal matrix and practice, this article adopts the position that the principle is here to stay and might not be negotiable during legislative discussions on Europol’s revision, as can be noticed in the current legislative documents. This article aimed to raise awareness that, despite the European Parliament’s privileged access, de facto access to classified information could be limited, and consequently, the position set out in the legislative proposal would not be a drastic change from the current practice. In other words, the discretion of the originator could prove decisive, which in turn implies a case-by-case response to parliamentary access requests. Instead of defeatist claims on future oversight arrangements, however, the secondary purpose was to elaborate other means and considerations that the European Parliament could take into account in order to organize oversight towards more systematic and timely access. Importantly, most of the suggestions are dependent on the oversight actor itself and in this respect could make oversight more effective despite external challenges. An active and regular use of

83 EUROPOL REVIEW, EUROPEAN POLICE OFFICE (2013).

84 For issues of secrecy more generally, see Note, Keeping Secrets: Congress, the Courts, and National Security Information, 103 HARV. L. REV. 906 (1990).


oversight, combined with appropriate security arrangements for classified information, could make the European Parliament a credible actor both toward the citizens as protector of their rights, but also towards the intelligence community. For the latter, it shows that the parliamentarians are interested in effective oversight and security of information. Overall, in comparison to the European Parliament’s past position towards Europol, the current proposal for privileged access to Europol Classified Information, albeit conditioned by the principle of originator control, gives the appearance of being a great success. Seen from the perspective of the internal functioning of Europol, however, triumph seems modest if not followed by more serious reflections on the modality of oversight.

Articles Special Section Europe and the Lost Generation

Austerity and European Social Rights: How Can Courts Protect Europe’s Lost Generation? By Anastasia Poulou* A. Introduction The European financial crisis has called many of the assumptions of the constitutional structure of the European Union (EU) into question. The market-based model of the European Monetary Union (EMU) led to an improper assessment of the borrowing capacity of the euro-area Member States and a mispricing of their default risk.

1 Another design flaw

of the EMU that has been exposed by the crisis was the weakness of the existing framework for economic policy coordination. The factual interdependence of the participating economies in the monetary union was so strong that the denial of some form of assistance to the debt-distressed countries triggered a domino effect in the Eurozone as a whole. The quest for instruments to address the sovereign debt crisis brought a European constitutional crisis to the forefront: the EU did not possess the appropriate mechanisms to help the states in need and to guarantee financial stability in the EMU. The urgent need to overcome this impasse led to a number of initiatives at the political and legal level that eventually led to a mutation of EU’s constitutional order.

2 New instruments

strengthening European economic governance were introduced, leading to a more structured and stricter surveillance of domestic policies.

3 The country-specific economic

* PhD Candidate, Heidelberg University, Ruperto Carola. The author would like to thank Michael Ioannidis for his invaluable suggestions. This paper develops ideas of the author’s ongoing PhD project and was presented at the IXth IACL World Congress "Constitutional Challenges: Global and Local" in Oslo.

1 See Paul De Grauwe & Yuemei Ji, Mispricing of Sovereign Risk and Macroeconomic Stability in the Eurozone, 50 J. COMMON MKT. STUD. 866 (2012) (discussing a systematic mispricing of sovereign risk in the Eurozone, that leads to bubbles in good years and excessive austerity in bad years).

2 See KAARLO TUORI & KLAUS TUORI, THE EUROZONE CRISIS: A CONSTITUTIONAL ANALYSIS 117 (2014); Edoardo Chiti, Agustín José Menéndez & Pedro Gustavo Teixeira, The European Rescue of the European Union, in THE EUROPEAN RESCUE OF

THE EUROPEAN UNION? THE EXISTENTIAL CRISIS OF THE EUROPEAN POLITICAL PROJECT 391 (Edoardo Chiti, Agustín José Menéndez & Pedro Gustavo Teixeira eds., 2012); Agustín José Menéndez, Editorial: A European Union in Constitutional Mutation?, 20 EUR. L.J. 127 (2014).

3 See generally Edoardo Chiti & Pedro Gustavo Teixeira, The Constitutional Implications of the European Responses to the Financial and Public Debt Crisis, 50 COMMON MKT L. REV. 683 (2013); Mark Dawson & Floris De Witte, Constitutional Balance in the EU After the Euro-Crisis, 76 MOD. L. REV. 817 (2013); Matthias Ruffert, The European Debt Crisis and European Union Law, 48 COMMON MKT. L. REV. 1777 (2011).


governance that was applied to the Eurozone states that accepted financial assistance was subject to strict conditionality, which pressed for reforms, not only in recipient countries’ economies, but also in their healthcare and pension systems, education and labour sectors. So far this constitutional mutation has mainly been conceived as a change of EU’s economic constitution. Yet, it has important repercussions also for other constitutional dimensions, mainly that of social policy and social rights. This paper aims to consider this social dimension of the constitutional change, using the so-called “lost generation” as an example of how austerity policies impact on the social rights of vulnerable social groups. The term lost generation describes, young, educated Europeans from the countries in financial distress, who face unprecedented levels of unemployment, poor social security coverage, and cuts in public expenditure for their education. In the aftermath of the Eurozone crisis, the notion of the lost generation is increasingly used in the public dialogue.

4 The 2012 Joint EU Youth Report of the Council and the Commission underlined

that the financial crisis threatens to transform Europe’s youth into a lost generation.5 OECD

Secretary-General, Angel Gurría, warned in his speech at the Council of Europe on the real danger of a lost generation.

6 Recent reports on intergenerational justice document that

austerity has had a different impact on the various generations: children and youth have been disproportionately more strongly affected and disadvantaged by the negative developments of recent years.

7

The lost generation offers a good example for the questions investigated in this paper for two reasons. Firstly, the particularly severe and long-lasting intrusion in the social rights of young people shows that austerity cuts were not carefully targeted and not administered in a balanced way throughout the population. Secondly, the example of the lost generation best illustrates the democratic deficit of austerity measures. Due to its young age, the lost generation did not have a say in the making of the decisions that contributed to the crisis and cannot therefore be held responsible for the maladministration of their economies. At the same time, this particular social group appears to have been totally marginalized in the making of austerity policies.

4 For a Portuguese insight in the lost generation, see MIGUEL SZYMANSKI, ENDE DER FIESTA: SÜDEUROPAS VERLORENE

JUGEND (2014).

5 See EUR. COMM’N, 2012 EU YOUTH REPORT, 2, 144 (2012), http://ec.europa.eu/youth/library/reports/eu-youth-report-2012_en.pdf.

6 See Remarks by Angel Gurría, OECD Secretary-General, delivered at the Enlarged Debate of the Parliamentary Assembly of the Council of Europe (PACE) on the Activities of the OECD, http://www.oecd.org/about/secretary-general/debate-council-of-europe.htm.

7 Daniel Schraad-Tischler & Christian Kroll, Social Justice in the EU – A cross-national comparison, Bertelsmann Stiftung, 85 (2014), http://www.bertelsmann-stiftung.de/cps/rde/xbcr/SID-3D2360DC-BAA13673/bst/xcms_bst_dms_40361_40362_2.PDF.

2014] Austerity and European Social Rights 1147

The paper proceeds in the following three steps. Firstly, it explains why financial assistance conditionality is not just a developed form of European economic governance, but also a means of European social governance. Secondly, it assesses the compatibility of the crisis-born social governance with the Charter of Fundamental Rights of the EU (CFR or Charter), the legal document guaranteeing social rights within the EU legal order. The measures affecting the young generation are explicitly underlined. Thirdly, it discusses the arguments against the interference of courts with social policies, claiming that in times of crisis a more active stance of courts in protecting social rights of marginalized groups – such as the lost generation – would be legitimate. Finally, the paper questions the recent case law of European and domestic courts in adjudicating austerity measures, arguing that courts did not leave up to the expectations of providing a remedy to the lost generation. B. European Social Governance in Times of Crisis I. Financial Assistance Conditionality as a New Means of European Governance Financial assistance to Eurozone countries facing severe financial difficulties gave the Union the opportunity to interfere, in sweeping and incisive ways, with the financial and macroeconomic policies of the recipient Member States. Common to all adjustment programmes was the use of strict conditionality: all loans awarded were made dependent on the recipient state’s compliance with strictly monitored economic policy conditions.

8

From the first bilateral assistance package to Greece, to the EFSF and EFSM, and finally to the ESM, a similar scheme was followed. Domestic authorities and officials from the Commission, the European Central Bank (ECB), and the International Monetary Fund (IMF)—the so-called Troika—negotiated macroeconomic adjustment programmes containing the conditions of financial support. The adjustment programmes

9 were detailed

in Memoranda of Understanding (MoU) and their most important elements were also included in Council Decisions directed to the respective recipient state.

10

The assistance conditions focus primarily on economic targets regarding public spending, but are at the same time accompanied by detailed prescriptions for the measures to be taken to achieve them. These relate to wage moderation, decentralization of collective bargaining, cuts in pensions and social security benefits, reforms in public healthcare and

8 See Michael Ioannidis, EU Financial Assistance Conditionality After "Two Pack," 72 ZEITSCHRIFT FÜR AUSLÄNDISCHES

ÖFFENTLICHES RECHT UND VÖLKERRECHT 61 (2014).

9 The terms “adjustment programme,” “economic adjustment programme,” and “macroeconomic adjustment programme” are used interchangeably in the legal documents regulating the granting of financial assistance in the euro-area.

10 This pattern has so far been adopted for Greece, Ireland, Portugal, and Cyprus. Spain signed a MoU restricted, though, to measures concerning its financial sector.


education. For example, the Portuguese and the second Greek adjustment programmes prescribe the reduction of pharmaceutical spending and the reallocation of human resources in the healthcare sector with the aim of reducing public healthcare expenditure.

11 With regard to the labour market, assistance was made contingent upon

the reduction of the minimum wage and the suspension of collective bargaining agreements.

12

In sum, the adjustment programmes regulate an extremely wide spectrum of social relations within the recipient Member States. According to the ESM Treaty, conditionality may range “from a macro-economic adjustment programme to continuous respect of pre-established eligibility conditions,”

13 with the only requirement that it “should reflect the

severity of the weakness to be addressed and the financial assistance instrument chosen.”

14 And following EU Regulation 472/2013,

15 adjustment measures “shall aim at

rapidly re-establishing a sound and sustainable economic and financial situation and restoring the Member State's capacity to finance itself fully on the financial markets.”

16

These rules neither set specific requirements or limits on the Troika nor do they exclude any social policy fields from the scope of conditionality. II. Why Financial Assistance Conditionality Goes Beyond Economic Governance The new approach to coordination of economic polices motivated by the Eurozone crisis, including the specific measures addressed to euro-area Members under financial assistance, has so far been subsumed under the label “new economic governance.”

17 This

11 See EUR. COMM’N, DIRECTORATE-GENERAL FOR ECONOMIC AND FINANCIAL AFFAIRS, THE ECONOMIC ADJUSTMENT PROGRAMME

FOR PORTUGAL 74, 79 (June 2011), http://ec.europa.eu/economy_finance/publications/occasional_paper/2011/pdf/ocp79_en.pdf [hereinafter ECONOMIC ADJUSTMENT PROGRAMME FOR PORTUGAL]; EUR. COMM’N, DIRECTORATE-GENERAL FOR ECONOMIC AND FINANCIAL

AFFAIRS, THE SECOND ECONOMIC ADJUSTMENT PROGRAMME FOR GREECE 135, 138 (Mar. 2012), http://ec.europa.eu/economy_finance/publications/occasional_paper/2012/pdf/ocp94_en.pdf [hereinafter SECOND ECONOMIC ADJUSTMENT PROGRAMME FOR GREECE].

12 See SECOND ECONOMIC ADJUSTMENT PROGRAMME FOR GREECE, supra note 11, at 147.

13 Treaty Establishing the European Stability Mechanism, art. 12, para. 1, http://www.esm.europa.eu/ [hereinafter ESM Treaty].

14 Id. art. 13, para. 3, subpara. 1.

15 Regulation 472/2013, of the European Parliament and of the Council of 21 May 2013 on the Strengthening of Economic and Budgetary Surveillance of Member States in the Euro Area Experiencing or Threatened with Serious Difficulties with Respect to Their Financial Stability, 2013 O.J. (L 140), 1 [hereinafter Regulation 472/2013]. The Regulation was set into force as part of the so-called “Two Pack” set of reforms.


17 After the onset of the financial crisis, economic governance prevails in the European discourse, both in EU documents and in the literature. See, e.g., Communication from the Commission to the European Parliament, the


principle describes the new procedures and instruments with which the EU seeks to more closely coordinate and control European economies. These include instruments and procedures of different legal character, such as the European Semester, the Six-Pack regulations, and the Fiscal Compact.

18

The most advanced mechanism of European economic governance is financial assistance conditionality. This is how it works: Pressured by the need for timely lending the recipient states are forced to undertake profound changes in their domestic economic and social policies. These go so far as to touch upon what one would call the core of social policy, namely employment policy, social security, public healthcare, and education. Intervention through financial assistance conditionality is indeed far more than a developed form of European economic governance. Setting upper limits to the prescription of non-generic medicine by Greek physicians,

19 for example, defies classification as economic governance.

It is a deep form of regulation of the provision of a public good as important as healthcare. The umbrella concept “economic governance,” even if qualified as “new,” “stricter,” or “strengthened,”

20 is insufficient to describe this novelty in European governance. There is,

Council, the European Central Bank, the European Economic and Social Committee and the Committee of the Regions, Enhancing Economic Policy Coordination for Stability, Growth and Jobs, Tools for Stronger EU Economic Governance, COM (2010) 376 final; Conclusions of the European Council, Brussels, EUCO 10/1/11 REV 1 (2011). See Stefan Pilz & Heidi Dittmann, Perspektiven des Stabilitäts—und Wachstumspakts—Rechtliche und ökonomische Implikationen des Reformpakets "Economic Governance," 15 ZEITSCHRIFT FÜR EUROPARECHTLICHE STUDIEN 53 (2012); Christophe Degryse, The New European Economic Governance (ETUI Working Paper 2012); Kenneth Armstrong, The New Governance of EU Fiscal Discipline, 38 EUR. L. REV. 601 (2013); Amy Verdun, The Building of Economic Governance in the European Union, 19 TRANSFER 23 (2013). Nevertheless, economic governance does not constitute a new concept. It actually describes what in the past fifty years has been called “economic integration.”

18 The European Semester is the first phase of the EU's annual cycle of economic policy guidance and surveillance. The “Six Pack” is a set of five Regulations and one Directive adopted to reinforce budgetary discipline in the EU and to introduce a form of macroeconomic surveillance. The Fiscal Compact is an intergovernmental agreement which requires contracting parties to abide by reinforced budget rules. In detail on these instruments, see Carlino Antpöhler, Emergenz der Europäischen Wirtschaftsregierung—Das Six Pack als Zeichen Supranationaler Leistungsfähigkeit, 72 ZEITSCHRIFT FÜR AUSLÄNDISCHES ÖFFENTLICHES RECHT UND VÖLKERRECHT 353 (2012); Walter Obwexer, Das System der "Europäischen Wirtschaftsregierung" und die Rechtsnatur ihrer Teile: Sixpack—Euro-Plus-Pakt—Europäisches Semester—Rettungsschirm, 67 ZEITSCHRIFT FÜR ÖFFENTLICHES RECHT 209 (2012); Peter Hilpold, Eine Neue Europäische Finanzarchitektur—Der Umbau der Wirtschafts—und Währungsunion als Reaktion auf die Finanzkrise, in NEUE EUROPÄISCHE FINANZARCHITEKTUR: DIE REFORM DER WWU 3 (Peter Hilpold ed., 2014).

19 See EUR. COMM’N, DIRECTORATE-GENERAL FOR ECONOMIC AND FINANCIAL AFFAIRS, THE SECOND ADJUSTMENT PROGRAMME

FOR GREECE, FIRST REVIEW 93 (Dec. 2012), http://ec.europa.eu/economy_finance/publications/occasional_paper/2012/pdf/ocp123_en.pdf [hereinafter SECOND ECONOMIC ADJUSTMENT PROGRAMME FOR GREECE, FIRST REVIEW].

20 See, e.g., Sonja Bekker, The EU's Stricter Economic Governance: A Step Towards More Binding Coordination of Social Policies? (WZB Discussion Paper 2013), http://bibliothek.wzb.eu/pdf/2013/iv13-501.pdf; Armstrong, supra note 17.


of course, no bright line between the coordination of economic and social policies. Such a strict distinction is not only theoretically unattainable but also foreign to EU law itself. Labour costs and pension schemes are, for example, parameters taken into account when discussing economic and budgetary problems within the Union.

21

Nevertheless, at this point in the history of European integration, the EU is undertaking a paradigm shift in the field of social policy. Without any formal change of its competences the EU has begun to intrude upon salient areas of domestic social policy, portraying its intervention as an inevitable part of financial condition-setting. The qualitative difference between economic and social policy requires a conceptual differentiation of the governance methods to which they are related. Allowing the EU to enter sensitive social domains via the backdoor of “economic governance” would permit the Union to escape necessary political and legal scrutiny. Although the imprecise and wide-ranging use of the phrase “economic governance” has been criticized,

22 no alternative concept has been put

forward as yet to describe country-specific governance applied through financial assistance conditionality. III. The Emergence of European Social Governance During the Crisis In this paper, the concept of European social governance is suggested to describe the newly introduced, indirect way the Union has found to dictate national social policy, portraying its intervention as a financial assistance prerequisite. In this governance pattern the social policy of Member States receiving financial assistance is not directly assigned to the competences of the Union, but is indirectly defined through the emergence of an extra-regulatory European institutional framework operating above national structures. Domestic arenas are treated as spaces to be regulated and supranational arenas as processes engaged in regulating.

23 Decisions at the European level have such a profound

and widespread impact on the national level of governance that domestic decisions on social policy matters cannot be assessed separately.

21 This has been made explicit in several EU documents. See, e.g., Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: Towards a Job-Rich Recovery, COM (2012) 173 final, where the Commission argues that “Better EU employment governance and coordination has become essential for at least two reasons. First, labour market participation, unemployment and labour cost play a role in macroeconomic stability . . . Second, the crisis has further revealed the interdependence of EU economies and labour markets, underscoring the need to accompany the new economic governance with strengthened coordination of employment and social policies . . . ” .

22 See, e.g., Desmond Dinan, Governance and Institutions: Impact of the Escalating Crisis, 50 J. COMMON MKT. STUD 85 (2012) (observing that the term economic governance ranges “from fiscal federalism, at one extreme, to loose intergovernmental co-ordination of various socio-economic policies, at the other”).

23 See Damian Chalmers, The European Redistributive State and a European Law of Struggle, 18 EUR. L.J. 667, 669 (2012).


European financial assistance conditions can be labelled as means of social governance mainly for three reasons. Firstly, due to the breath of the intervention, since the adjustment programmes regulate almost the whole spectrum of social relations within the recipient Member States. Secondly, due to the depth of the intervention, since the regulation in minute detail of social policy issues severely limits the discretion of recipient states in implementing the conditions. Thirdly, due to the duration of the intervention, since financially assisted countries are under surveillance not only during the implementation of the adjustment programme, but also under post-programme surveillance as long as a minimum of 75 % of the financial assistance received has not been repaid.

24 In fact, according to statistical data, adjustment programmes of euro area

Member States last at least 2.5 years longer than similar programmes of the IMF.25

Labelling part of European condition-setting as European social governance has a number of advantages. Importantly, it conceptualizes the dismantling of national social guarantees as a problem with European origins and reveals the actual power exercised by European institutions in the field of social policy. At the same time, it shifts the discussion about the conformity of austerity measures with social principles from the national to the European level, opening space for critique through instruments of EU constitutional law. In this context, it brings to the foreground the Charter of the Fundamental Rights and in particular the social rights guaranteed therein as a potential counterweight to the questionable expansion of the Union in the field of social policy. IV. The Doubtful Legality and Legitimacy of Crisis-Born European Social Governance The crisis-born European social governance has been questioned both for its legality and its legitimacy. First of all, the question of competence is a contested one. It is doubtful whether the legal bases brought forward by the Council and the Court of Justice of the European Union (CJEU) in order to support the compatibility of macroeconomic adjustment programmes with primary EU law are sufficient.

26 Even the new paragraph 3 of

24 Regulation 472/2013, art. 14, para. 1.

25 Jean Pisani-Ferry, André Sapir & Guntram B. Wolff, EU-IMF assistance to euro-area countries: an early assessment, 19 Bruegel Blueprint 30 (2013).

26 The CJEU reads “strict conditionality” as a necessary requirement for financial assistance packages arising from Article 125 of the Treaty on the Functioning of European Union [hereinafter TFEU]. See Pringle v. Government of Ireland, Ireland and the Attorney General, CJEU Case C-370/12, paras. 136-37, 142 (Nov. 27, 2012), http://curia.europa.eu/. The Council Decisions containing the financial assistance conditions invoke as their legal basis: (1) Council Regulation 407/2010, 2010 O.J. (L118) for the countries that received assistance through this mechanism, namely Ireland and Portugal; (2) art. 126 paras. 6, 9, 136 TFEU for the countries that received loans through international mechanisms (like the EFSF or the ESM), namely Greece and Cyprus; and (3) Regulation 472/2013 for the cases of assistance given after 21 May 2013, date of adoption of the latter Regulation, for example Cyprus, Portugal and Ireland.


Article 136 TFEU, which refers to “strict conditionality” as a financial assistance prerequisite, does not necessarily provide an adequate legal basis.

27

Beyond the competence question, European social governance also displays profound shortcomings in terms of democratic legitimacy. It has been observed that executive power pushes aside the institutions of representative democracy in times of crisis.

28 This

has been the experience also in the Eurozone crisis.29

Decision-making is concentrated in supranational (Commission) and national (Eurogroup) executives at the European level. This is reinforced with the input of expert bodies (ECB and IMF). The big shift towards executive politics is reflected by the simultaneous decrease in power of both the European Parliament (EP) and national parliaments, which traditionally serve as checks on executive power.

30 As a result, the making of financial assistance conditions is insulated from public

debate and parliamentary scrutiny. All phases of the adjustment programme-drafting were indeed lacking in transparency and democratic oversight. From the preparatory phase of negotiations, to the development of mandates and the formulation of specific measures the European Parliament was completely marginalized until 2013.

31 On the national level, it is doubtful whether formal

documents were clearly communicated to and deliberated in due time by the respective domestic parliaments.

32 Negotiations where held behind closed doors, without the

presence of social partners, a deficiency explicitly criticized by the International Labour Organization (ILO).

33 In fact, the absence of prior consultation with trade union

organizations has been officially admitted by the Greek government and has been ascribed to the complexity of economic and political issues and the conditions under which the

27 There are two main reasons for these doubts: Firstly, the binding character of conditionality, and secondly, the detailed character of its prescriptions. On the problematic legal basis of conditionality, see also Ioannidis, supra note 8, at 89.

28 Deirdre Curtin, Challenging Executive Dominance in European Democracy, 77 MKT. LAW REV. 1, 2 (2014).

29 On a general assessment of executive dominance in the contemporary EU, see id.

30 See Dawson & De Witte, supra note 3, at 832.

31 This observation is reaffirmed by the EP itself. See Resolution on Employment and Social Aspects of the Role and Operations of the Troika (ECB, Commission and IMF) with Regard to Euro Area Programme Countries, EUR. PARL. INI 2014/2007, para. 2 (2014). Generally on the EP’s position in the new economic governance, see Cristina Fasone, European Economic Governance and Parliamentary Representation. What Place for the European Parliament?, 20 EUR. L.J. 164 (2014).

32 See Resolution on the Enquiry on the Role and Operations of the Troika (ECB, Commission and IMF) with Regard to the Euro Area Programme Countries, EUR. PARL. INI 2013/2277, para. 30 (2014).

33 See INTERNATIONAL LABOUR OFFICE, 365TH REPORT OF THE COMMITTEE ON FREEDOM OF ASSOCIATION, CASE NO. 2820

(GREECE), REPORTS IN WHICH THE COMMITTEE REQUESTS TO BE KEPT INFORMED OF DEVELOPMENTS, conclusions, para. 1002 (2012).


European support mechanism for Greece was formulated.34

The adoption of EU Regulation 472/2013 does not bring adequate change in this regard, because the rights to information and discussion awarded to the EP and the domestic parliaments do not amount to rights to participation in the decision-making process.

35

During the crisis even more intense distrust was shown towards forms of direct popular participation. The unpredictable announcement of the Greek Prime Minister, George Papandreou, to call a national referendum on the second Greek bailout programme in October 2011 took national and international actors by surprise. Pressured by the French and German Prime Ministers to change the referendum’s wording to “in or out” of the euro, Papandreou withdrew his plan. Killing the referendum idea meant also the end of Papandreou himself, since European actors favored a technocrat to take over from Papandreou in a national unity government.

36

The loss of democratic oversight is also evident in the increasing tendency towards informal governance.

37 The outcome of staff-level meetings was often decided beforehand

in bilateral meetings of the most important players. Even more strikingly, national authorities seem to have received the implementation guidelines on conditions included in the MoU through simple email exchange with the Troika.

38 Such opaqueness and

informality excludes the transparency and consultation necessary for the genuine involvement of citizens and social partners in EU social policy-making. Therefore, the EP has repeatedly called for transparency in the MoU negotiations.

39

In sum, the institutional framework for awarding financial assistance shows profound structural shortcomings in terms of democratic legitimacy. By the expansion of democratically questionable supranational decision-making, social interests are extremely marginalized and certain views, such as those of social partners, are profoundly underrepresented.


35 For a description and a critical appraisal of the parliamentary involvement after the adoption of Regulation 472/2013, see Ioannidis, supra note 8, at 100.

36 For a detailed recreation of these events, see the first of a series of Peter Spiegel, How the Euro was Saved, FINANCIAL TIMES (May 11, 2014), http://www.ft.com/indepth/how-euro-was-saved.

37 On general patterns, see Thomas Christiansen & Christine Neuhold, Informal Politics in the EU, 51 J. COMMON

MKT. STUD. 1196 (2013).

38 See Ioannidis, supra note 8, at 99.

39 See Resolution on Constitutional Problems of a Multitier Governance in the European Union, EUR. PARL. INI 2012/2078, paras. 36, 72 (2013); EUR. PARL. Resolution INI 2013/2277, supra note 32, paras. 37, 48, 66, 94, 107 (2014).


The emergence of European social governance and the opaqueness through which it is practiced challenges basic assumptions of European constitutional law. The critique of the Union’s democratic deficit is not new.

40 The nexus between that critique and the

marginalization of the “social question” at the European level suggests that we revisit the concept of EU social rights.

41 The initial exclusion of social policies from the Union’s field of

influence and the alleged limited direct interference with redistributive policies were the main arguments put forward to justify the marginalization of social-justice considerations in the Union’s operation. The Union’s hesitation towards the recognition of social rights was based on similar grounds. It was regarded as superfluous to award to the EU citizen rights (read social rights) in a field where the Union had limited or no competence at all (read social policy).

42 Even if they finally found their place in an EU legal document, namely

the Charter of Fundamental Rights, social rights were regarded as having a weak legal character. In the following, the paper presents two central issues relating to rethinking social rights in the differentiated constitutional environment triggered by the crisis. Firstly, the doctrinal argument is made that the Charter of Fundamental Rights is applicable to the EU institutions partaking in the making of austerity measures. Secondly, the normative argument follows, that a more active stance of domestic and European courts in adjudicating social rights in times of crisis is also desirable. C. EU Social Rights in the Context of Austerity I. The Relevance of the Charter of Fundamental Rights Since the Charter was made formally binding by the Lisbon Treaty in 2009, it has been given prominence in a growing number of cases before the CJEU, gradually developing into the main human rights instrument within the Union.

43 At the same time, the Charter is the

40 Distrust to the Union’s ability to address the social question range from the critical appraisal of the side-lining of social justice considerations in the operation of the common market, see Giandomenico Majone, The European Community Between Social Policy and Social Regulation, 31 J. COMMON MKT. STUD. 153 (1993); to the exclusion of the possibility of the EU to become a social market economy, see Fritz Scharpf, The Asymmetry of European Integration, or Why the EU Cannot be a ‘Social Market Economy, 8 SOCIO-ECONOMIC REV. 211 (2010).

41 On the depoliticization of the social question in the process of European integration, see Floris De Witte, EU Law, Politics and the Social Question, 14 GERMAN L.J. 581 (2013).

42 This argument was put forward in the discussions held within the European Convention, the body confined with the drafting of the Charter of Fundamental Rights.

43 See Gráinne De Búrca, After the EU Charter of Fundamental Rights: The Court of Justice as a Human Rights Adjudicator?, 20 MAASTRICHT J. EUR. & COMP. L. 168 (2013). The normative quality of the Charter reaches even beyond the EU legal order because it gradually influences the interpretation of the European Convention on Human Rights (ECHR). See Jörg Gundel, Der Wachsende Einfluß des EU-Rechts auf die Auslegung der EMRK—und


main legal document guaranteeing social rights in the EU legal order. The question of the applicability of the Charter in the context of austerity measures is not adequately studied.

44 So far the major focus has been on the conformity of domestic austerity-

implementing legislation with national constitutional rights.45

But holding only the national authorities responsible for implementing austerity policies does not respond to the lending reality.

46 Attempting to fill this gap, this paper will attempt to appraise the assistance

conditions from the perspective of EU constitutional law and EU social rights in particular. The first issue to be considered when questioning the conformity of financial assistance conditions with EU social rights is whether the Charter is applicable. Article 51 paragraph 1 CFR addresses the Charter’s provisions to the institutions and bodies of the Union, and to the Member States, when they are implementing Union law. Hence, the Charter establishes a fundamental rights commitment for both European and domestic actors. The legal responsibility of domestic actors and the related question, whether national austerity legislation can be interpreted as implementation of EU law in the meaning of the Charter,

47

is outside the scope of this paper. Instead, this paper is concerned with the appraisal of European social governance. In order to assess the legal responsibility for the observance of the Charter at a European level, one has to distinguish out of the complicated practice of financial assistance the EU institutions and the acts that are legally relevant. The institutional framework of assistance to Eurozone members, gradually developed during the crisis, is based on two parallel sets of rules. Firstly, it is based on the

Seine Strukturellen Grenzen, in EUROPÄISCHES RECHT ZWISCHEN BEWÄHRUNG UND WANDEL: FESTSCHRIFT FÜR DIETER H. SCHEUING 58 (Peter-Christian Müller-Graff, Stefanie Schmahl & Wassilios Skouris eds., 2011).

44 Apart from ANDREAS FISCHER-LESCANO, HUMAN RIGHTS IN TIMES OF AUSTERITY POLICY: THE EU INSTITUTIONS AND THE

CONCLUSION OF MEMORANDA OF UNDERSTANDING (2014) and Kostas Chryssogonos & Triantafyllos Zolotas, Excessive Public Debt and Social Rights in the Eurozone Periphery: The Greek Case (2014), http://www.jus.uio.no/english/research/news-and-events/events/conferences/2014/wccl-cmdc/wccl/papers/ws4/w4-chryssogonos&zolotas.pdf, no significant studies in this field have been made.

45 See for example for the Greek case, Dimitris Travlos-Tzanetatos, Die Tarifautonomie in kritischer Wende. Das Beispiel Griechenlands, in FESTSCHRIFT FÜR FRANZ JÜRGEN SÄCKER ZUM 70. GEBURTSTAG 325 (Detlev Joost, Hartmut Oetker & Marian Paschke eds., 2011); Aristea Koukiadaki & Lefteris Kretsos, Opening Pandora’s Box: The Sovereign Debt Crisis and Labour Market Regulation in Greece, 41 INDUS. L.J. 276 (2012).

46 On a critical appraisal of the alleged domestic ownership of austerity measures, see Ioannidis, supra note 8, at 91.

47 The legal assessment of national legislature implementing the adjustment programmes as to its conformity with CFR is an understudied and open question as well. CJEU Case C-128/12, Sindicato dos Bancários do Norte and Others v BPN - Banco Português de Negócios, SA (Mar. 7, 2013), http://curia.europa.eu/, where the Court, in response to the reference of a Portuguese court, ordered that the Charter is not applicable because the national law in question was not implementing EU law, cannot serve as a negative precedent for this question, since the Portuguese court failed to demonstrate the relation between the Portuguese MoU and the national law.


intergovernmental framework of the ESM and the EFSF Agreements.48

Secondly, it is based on the EU framework of the Regulation 472/2013.

49 EU institutions are involved in two

ways in this institutional architecture. Firstly, the Commission and the ECB are entrusted by both frameworks with formulating and monitoring the conditions of loan arrangements as constituent parts of the Troika.

50 In particular the Commission has the additional role of

signing the MoU on behalf of the lenders, in which the conditions are set out.51

Secondly, the adoption of a Council Decision containing the conditions to financial assistance was made obligatory by Article 7 paragraph 2 of EU Regulation 472/2013. Thus, the Council is obliged to approve the macroeconomic adjustment programme, prepared by the recipient state and the Troika, in the form of a Council Decision. 1. The Applicability of the Charter to the Commission and the ECB The role of the fundamental rights in financial assistance programmes has received increased attention both in the political and legal discourse. Indicative is the 2013 European Parliament investigation about the role of the Troika in euro-area programme countries. Both the ECB and the Commission were explicitly questioned whether they assess the consistency of the measures negotiated with the Member States with EU fundamental rights obligations referred to in the Treaties.

52 Interestingly, their answers

differ. The ECB responded that, “it remains the responsibility of the Member State concerned to ensure the compliance of its national law and administrative practices with EU law. By the same token it is the responsibility of the Commission to initiate an infringement procedure against a Member State which it considers has failed to fulfil its obligations under EU law.”

53 With this response the ECB renounces for itself and the Commission any

48 The ESM has replaced the EFSF since October 8, 2012.

49 See Regulation 472/2013, supra note 15.

50 ESM Treaty art. 13, para. 3, 7; Regulation 472/2013, art. 7, para. 1 subpara. 1, para. 4, subpara. 1.

51 ESM Treaty art. 13, para. 4; Regulation 472/2013, art. 7, para. 2, subpara. 2.

52 Questionnaire supporting the own initiative report evaluating the structure, the role and operations of the 'troika' (Commission, ECB and the IMF) actions in euro area programme countries, No. 18, http://www.europarl.europa.eu/document/activities/cont/201401/20140114ATT77313/20140114ATT77313EN.pdf. The same question addresses the conformity of decisions arising out of the MoU with the national law of the Member States concerned. In this paper, reference is being made only to the part of the question addressing EU law fundamental rights obligations.

53 ECB’s Replies to the Questionnaire of the European Parliament Supporting the Own Initiative Report Evaluating the Structure, the Role and Operations of the ‘Troika' (Commission, ECB and the IMF) Actions in Euro Area Programme Countries, 7, http://www.europarl.europa.eu/document/activities/cont/201401/20140114ATT77317/20140114ATT77317EN.pdf.


responsibility to ensure the consistency of conditionality with EU law, recognizing the role of the Commission as the sole guarantor of the Treaties against the Member State concerned. The Commission, however, expressed a more positive approach, responding that “[w]hen negotiating the conditionality, the Commission [also] has a role in ensuring that the ‘acquis communautaire’ is respected. It has also made sure that fundamental rights were complied with.”

54 Thus, the involved EU institutions seem to have different

understandings of their commitments under the Charter in the context of financial assistance. In legal discourse, the relevance of the Charter for the MoU concluded with Member States in financial distress may be questioned for two reasons. Firstly, on the ground that the Commission and the ECB generally did not act under the mandate of the Treaties.

55

With the exception of the EFSM,56

EU institutions acted under powers conferred on them by intergovernmental agreements. Secondly, because the character of the MoU as binding legal agreements is disputed. If the MoU are not binding legal documents, how could they be subsumed under the Charter? However, as will be shown, none of these reasons suffice to rule out the commitment of the Commission and the ECB to EU fundamental rights. Firstly, the scope of the Charter is defined in Article 51 paragraph 1 CFR. This reads as follows:

The provisions of this Charter are addressed to the institutions, bodies, offices and agencies of the Union with due regard for the principle of subsidiarity and to the Member States only when they are implementing Union law.

From the text of the provision follows, that the condition of implementing EU law applies only to Member States. On the contrary, EU institutions are bound by the Charter regardless of whether they are acting under Union law or fulfilling tasks delegated to them by international organizations. The obligation to respect fundamental rights stems from their legal system of origin

57 and therefore is relevant for all forms of their action, even

beyond the EU legal system. Therefore the Commission and the ECB need to abide by the

54 Questionnaire supporting the own initiative report evaluating the structure, the role and operations of the 'troika' (Commission, ECB and the IMF) actions in euro area programme countries, 12, http://www.europarl.europa.eu/document/activities/cont/201401/20140114ATT77315/20140114ATT77315EN.pdf.

55 See KAARLO TUORI & KLAUS TUORI, supra note 2, at 237.

56 See Council Regulation 407/2010, 2010 O.J. (L 118) 1.

57 Art. 6 para. 1 Treaty on the European Union, [hereinafter TEU] reads “The Union recognises the rights, freedoms and principles set out in the Charter of Fundamental Rights of the European Union of 7 December 2000, as adapted at Strasbourg, on 12 December 2007, which shall have the same legal value as the Treaties”.


Charter when participating in drafting the MoU, even if in the context of the ESM, the EU institutions are lawfully “borrowed” and the Union itself is not an ESM member. This interpretation was indeed followed by Advocate General Kokott in her opinion on Pringle. Kokott emphasized that “[T]he Commission remains, even when it acts within the framework of the ESM, an institution of the Union and as such is bound by the full extent of European Law, including the Charter of Fundamental Rights.”

58

Moreover, even if it is generally claimed that no conclusions can be drawn from Pringle on the pertinence of the Charter to EU institutions’ action,

59 in this case the CJEU ruled that:

By its involvement in the ESM Treaty, the Commission promotes the general interest of the Union. Further, the tasks allocated to the Commission by the ESM Treaty enable it, as provided in Article 13(3) and (4) of that treaty, to ensure that the memoranda of understanding concluded by the ESM are consistent with European Union law.

60

Since the Charter is clearly part of EU law, it would be safe to conclude that the Court entrusts the Commission with the responsibility of ensuring the consistency of the MoU with the Charter. Moreover, the CJEU observed that “[T]he Member States are not implementing Union law, within the meaning of Article 51(1) of the Charter, when they establish a stability mechanism such as the ESM . . . ”.

61 This finding assesses the

applicability of the Charter only in relation to the Member States actions within the ESM. Therefore, is does not preclude the relevance of the Charter for the EU institutions and their action within the ESM.

Moreover, the adoption of EU Regulation 472/2013 creates a direct link between financial assistance mechanisms und EU law. EU Regulation 472/2013 codifies the preparation and the procedure of providing financial assistance to Member States in distress. Hence, even though the ESM itself still falls outside the EU legal order, the assignment of specific tasks to EU institutions is explicitly spelled out in secondary EU law.

62 Therefore, the Commission

58 See Opinion of Advocate General Kokott at para. 176, Pringle v. Government of Ireland, Ireland and the Attorney General, CJEU Case C-370/12 (Oct. 26, 2012), http://curia.europa.eu/.

59 See KAARLO TUORI & KLAUS TUORI, supra note 2, at 238.

60 Pringle, CJEU Case C-370/12, at para. 164.

61 Id. at para. 180.

62 See Regulation 472/2013, art. 7, 13.


and the ECB may act on behalf of the ESM, at the same time though, they do implement secondary EU law. The second objection, regarding the binding character of the MoU, is also not enough to reject the applicability of the Charter. In view of the absolute and unconditional fundamental rights commitment of the EU institutions, the Charter applies regardless of the particular legal character of their actions.

63 In the scope of the Charter do fall both

formal legal acts as well as non-binding or real acts of the EU institutions.64

Once it is established that an act is promulgated by an EU institution it is incontrovertible that it must comply with the Charter. The classification of the act is indifferent. Hence, regardless of the classification of the MoU as international agreement, gentlemen’s agreement, or real act,

65 the participation of EU institutions in formulating and signing them allows for

the applicability of the CFR. The fundamental rights commitment of the EU institutions irrespective of discrete contexts was also stressed by the European Parliament in its resolution following the investigation on the role of the Troika. The EP noted that “[T]he European institutions need to respect Union law, including the Charter of Fundamental Rights of the European Union, under all circumstances.”

66

Having accepted the applicability of the Charter, the next question that arises is: what does the commitment to the Charter consist of in the context of austerity measures? In Pringle the CJEU explicitly instructed the Commission to “ensure that the memoranda of understanding concluded by the ESM are consistent with European Union law.”

67 This

requirement can effectively be met only if it is given both a positive and a negative dimension. When participating in the drafting of the MoU, the Commission and the ECB should not propose any condition that does not conform to the Charter provisions

63 See WALTER FRENZ, EUROPÄISCHE GRUNDRECHTE para. 217 (2009); THORSTEN KINGREEN, EUV/ AEUV KOMMENTAR, CFR, art. 51, para. 5 (Christian Calliess, Matthias Ruffert & Hermann-Josef Blanke eds., 2011); ARMIN HATJE, EU-KOMMENTAR, CFR, art. 51, para. 12 (Jürgen Schwarze ed., 2012); MARTIN BOROWSKY, CHARTA DER GRUNDRECHTE DER

EUROPÄISCHEN UNION, art. 51, para. 12 (Jürgen Meyer ed., 2014).

64 WALTER FRENZ, EUROPÄISCHE GRUNDRECHTE para. 218 (2009).

65 Thorough research has been done on the legal character of the MoU in the context of the IMF. See Joseph Gold, The Legal Character of the Fund's Stand-By Arrangements and Why it Matters, (IMF Pamphlet Series 1980). After the conclusion of MoU in the context of the Eurozone crisis, a similar discourse was launched, especially in states receiving financial assistance. See, e.g., Antonis Manitakis, The Constitutional Aspects of the Memorandum, 51 DIKAIOMATA TOU ANTHROPOU 689 (2011) [in Greek]; George Katrougalos, Memoranda sunt servanda? The Constitutionality of the Law No. 3845/2010 and of the Memorandum for the Application of the Agreements with the IMF, EU and ECB, 2 EFIMERIDA DIOIKITIKOU DIKAIOU 151 (2010) [in Greek]. From the English literature, see FISCHER-LESCANO, supra note 44, at 56; Roberto Cisotta & Daniel Gallo, The Portuguese Constitutional Court Case Law on Austerity Measures: A Reappraisal, in SOCIAL RIGHTS IN TIMES OF CRISIS IN THE EUROZONE: THE ROLE OF FUNDAMENTAL

RIGHTS’ CHALLENGES 85, 88 (EUI WORKING PAPER LAW 2014/05) (Claire Kilpatrick & Bruno De Witte eds., 2014).

66 See EUR. PARL. Resolution INI 2013/2277, supra note 32, para. 81 (2014).

67 Pringle, CJEU Case C-370/12, at para. 164.


(negative dimension). Furthermore, the EU institutions should also refuse to consent to any condition put forward by other actors participating in the negotiations, for example the IMF, that undermines the EU fundamental rights standards (positive dimension).

68

Acting in this way, the Commission would further live up to its declared dedication to the effective implementation of the Charter and to the promotion of a “fundamental rights culture” in the Union.

69

2. The Applicability of the Charter to the Council of the EU The adoption of Council Decisions reproducing the backbone of the lending conditions, and their amendments according to the outcome of the monitoring, was the consistent practice of the Union in all cases of financial assistance during the Eurozone crisis.

70 Given

the fact that these Decisions are adopted by an EU institution and, thus, indisputably fall under EU Law, it is surprising how little attention they have attracted in the European financial-assistance discourse.

71 Their adoption subsequent to the conclusion of the

respective MoU, and their shorter length in comparison to the latter, may account for them being overlooked. In any case, the Decisions of the Council are unilateral EU decisions and, as such, fall under the scope of the Charter.

72 The fact that their content

arguably reflects a negotiated agreement between different actors, does not impact their legal character as secondary EU law. The relevance of the Charter and in particular of its social rights provisions in the context of EU financial assistance conditionality, is further demonstrated by EU Regulation 472/2013, which explicitly requires that adjustment programmes are drafted with respect given to some basic social standards. The Regulation requires that the Council and the Commission, in applying this Regulation, and the draft macroeconomic adjustment programme shall fully observe Article 152 TFEU and Article 28 of the CFR (right of collective bargaining and

68 Considering the positive and the negative dimension of the fundamental rights commitment, it is a shortcoming of the EP to stress, on the one side, the obligation of the EU institutions to respect the Charter and, on the other side, to exclude the adjustment programmes from the scope of the Charter. See id. at paras. 80 and 81.

69 Communication from the Commission, Strategy for the effective implementation of the Charter of Fundamental Rights by the European Union, at 3, COM (2010) 573/4 final (Oct. 19, 2010).

70 The initial Council Decisions addressed to the recipient state concerned are the following: Council Decision 2010/320/EU, 2010 O.J. (L 145/6); Council Implementing Decision 2011/77/EU, 2011 O.J. (L30/34); Council Implementing Decision 2011/344/EU, 2011 O.J. (L 159/88); Council Decision 2013/236/EU, 2013 O.J. (L 141/32). Amending Decisions to incorporate changes in the assistance conditions followed.

71 In the thorough and systematic research of FISCHER-LESCANO, supra note 44, the Decisions of the Council are remarkably absent.

72 On the decision as a legal form of EU law, see MATTHIAS VOGT, DIE ENTSCHEIDUNG ALS HANDLUNGSFORM DES

EUROPÄISCHEN GEMEINSCHAFTSRECHTS (2005).


action).73

Moreover, the draft macroeconomic adjustment programme should take into account the practice and institutions for wage formation and the national reform programme of the Member State concerned in the context of the Union’s strategy for growth and jobs,

74 as well as the need to ensure sufficient means for fundamental policies,

such as education and health care.75

In sum, financial assistance conditions included in the MoU and/or in the respective Council Decisions fall under the scope of Article 51 paragraph 1 CFR, and have thus to be assessed as to their compliance with the social rights premises set out in the Charter. II. Social Rights in Peril—The Making of a Lost Generation Since the Charter is indeed applicable in the context of financial assistance conditionality, the next step is to identify whether the social rights provisions of the Charter are affected. This seems likely because some financial assistance conditions are not only broad in scope, but also go deep into regulating details of economic and social activity in the recipient states.

76 The following investigation will use the “lost generation” as an example of a social

group composed of persons who are particularly vulnerable and face many simultaneous challenges in their social rights, such as cuts in their social benefits and severe difficulties to enter the labour market. 1. Labour and Trade Union Rights Financial assistance conditionality contains detailed provisions relating to labour market and working conditions. In particular, assistance was made contingent upon reductions in the minimum wage level,

77 cuts in the monthly wages of employees in the public sector,

78

and the restriction on collective bargaining autonomy through the introduction of

73 Regulation 472/2013, art. 1, para. 4; art. 7, para. 1, subpara. 5.



76 For a descriptive and factual account of the threat on social rights during the Eurozone crisis, see the various contributions in CLAIRE KILPATRICK & BRUNO DE WITTE, SOCIAL RIGHTS IN TIMES OF CRISIS IN THE EUROZONE: THE ROLE OF

FUNDAMENTAL RIGHTS’ CHALLENGES (EUI Working Paper LAW 2014/05, 2014).

77 See EUR. COMM’N, DIRECTORATE-GENERAL FOR ECONOMIC AND FINANCIAL AFFAIRS, THE SECOND ADJUSTMENT PROGRAMME

FOR IRELAND 63 (Feb. 2011). (“Reduce by €1.00 per hour the nominal level of the current national minimum wage.”), http://ec.europa.eu/economy_finance/publications/occasional_paper/2011/pdf/ocp76_en.pdf [hereinafter SECOND ECONOMIC ADJUSTMENT PROGRAMME FOR IRELAND]; SECOND ECONOMIC ADJUSTMENT PROGRAMME FOR

GREECE, supra note 11, at 147 (“The minimum wages established by the national general collective agreement (NGCA) will be reduced by 22% compared to the level of 1 January 2012.”).

78 See SECOND ECONOMIC ADJUSTMENT PROGRAMME FOR GREECE, FIRST REVIEW, supra note 19, at 250.


temporal, spatial, and personal restrictions on collective bargaining agreements.79

According to OECD data, Greece experienced one of the largest falls in real wages across OECD countries (more than 5% per year on average) since the first quarter of 2009.

80 The

private sector was hit by wage cuts of -3.4% per year and the public sector of -1.9% per year. Furthermore, the ILO Committee on Freedom of Association expressed concern about repeated and extensive interventions into free and voluntary collective bargaining, as well as an extensive deficit of social dialogue in austerity measures taken in Greece.

81 At

the same time recipient states were obliged to lower the protective standards against unfair dismissal,

82 to reduce the unemployment benefit,

83 and to introduce sanctions for

beneficiaries not complying with job-search conditionality.84

Moreover, in the case of Greece, a series of financial assistance conditions were especially addressed to the labour rights of the young generation, introducing differentiated treatment on the ground of age. In both the first and the second economic adjustment programmes, the Greek government assumed the responsibility to introduce sub-minima wages for groups at risk such as the young people.

85 Minimum wages established by the

national general collective agreement had to be reduced by 22%, for youth though—namely for ages below twenty-five—wages had to be reduced by 32%.

86

The formal justification of these measures and in particular of the differentiated treatment of the young generation was to boost competitiveness and productivity. The empirical

79 See SECOND ECONOMIC ADJUSTMENT PROGRAMME FOR GREECE, supra note 11, at 147. For a general overview of the impact of the MoU on the collective bargaining agreements in the different countries, see BERND WAAS, Tarifvertragsrecht in Zeiten der Krise, in ANFORDERUNGEN AN EIN MODERNES KOLLEKTIVES ARBEITSRECHT – FESTSCHRIFT FÜR

OTTO ERNST KEMPEN 38 (Jens M. Schubert ed., 2013).

80 See OECD EMPLOYMENT OUTLOOK 2014, HOW DOES GREECE COMPARE? (2014).

81 See ILO, 365TH REPORT OF THE COMMITTEE ON FREEDOM OF ASSOCIATION, supra note 33, paras. 995, 1003.

82 See SECOND ECONOMIC ADJUSTMENT PROGRAMME FOR GREECE, FIRST REVIEW, supra note 19, at 223; ECONOMIC

ADJUSTMENT PROGRAMME FOR PORTUGAL, supra note 11, at 78.

83 See SECOND ECONOMIC ADJUSTMENT PROGRAMME FOR GREECE, supra note 11, at 78.

84 See SECOND ECONOMIC ADJUSTMENT PROGRAMME FOR IRELAND, supra note 77, at 63.


FOR GREECE 68 (May 2010), http://ec.europa.eu/economy_finance/publications/occasional_paper/2010/pdf/ocp61_en.pdf. The same clause was also included in art. 2 para. 3 lit. d. Council Decision 2010/320/EU.

86 See SECOND ECONOMIC ADJUSTMENT PROGRAMME FOR GREECE, supra note 11, at 147. This further 10% reduction of the minimum wage of young Greek people was presented as a means to reduce the gap in the level of the minimum wage relative to peers (Portugal, Central, and Southeast Europe), to help address high youth unemployment, as well as employment of individuals on the margins of the labour market, and to encourage a shift from the informal to the formal labour sector.


depiction, though, was the spike in seasonally adjusted unemployment, and particularly in youth unemployment in countries under financial assistance programmes. According to the latest Eurostat statistics, in May 2014 the highest unemployment rates were recorded in Greece (27.2%) and Spain (24.5%).

87 In these countries, this situation has additionally

developed into an extremely high rate of long-term unemployment (Greece 18.6% and Spain 13%).

88 This is particularly worrisome given that long term unemployment figures

among the greatest risk factors for poverty and social exclusion.89

The highest rates of youth unemployment (people under twenty-five) were also observed in crisis-hit countries, namely Spain (53.8%), Greece (53.1%), and Italy (42.9%).

90 Strikingly,

the risk of unemployment has affected mostly higher educated young people. Especially in Greece, Italy, Cyprus, and Portugal graduates are at a greater risk of unemployment than young people with lower qualifications, including those who have not completed secondary education.

91 The main difficulty for those who are better qualified is the

mismatch between skills and jobs. In fact many young people entering the labour market are “overqualified” in the sense that their acquired level of education or skills is higher than required. The highest proportions of overqualified young people are in Spain, Cyprus, and Ireland, in which almost one in three young are employed in a position which does not require their tertiary qualifications.

92

At the same time young people are more likely to be employed involuntarily on part-time or temporary basis. In Greece, Spain, Italy, and Cyprus over half of young people under twenty-five work part-time because they cannot find full-time employment.

93 Temporary

employment has also been growing among people of young age. From 2008 to 2011, the percentage of young people in the EU with temporary employment contracts rose to 42.5%.

94 Temporary contracts may serve as stepping-stones to permanent jobs; however,

they are also indicative of insecure jobs. Temporary employees face a worse social security coverage and more precarious working conditions. Young people also more commonly

87 See Euro Area Unemployment Rate at 11.5%, EUROSTAT NEWS RELEASE (Aug. 29, 2014).

88 Daniel Schraad-Tischler & Christian Kroll, supra note 7, at 47.

89 Id. at 11.

90 See EUROSTAT NEWS RELEASE, supra note 87. On the definition and the methods of measuring youth unemployment, see Hans Dietrich, Youth Unemployment in the Period 2001-2010 and the European Crisis—Looking at the Empirical Evidence, 19 TRANSFER 305 (2013).

91 EUR. COMM’N, 2012 EU YOUTH REPORT, supra note 5, 169 (2012).

92 Id. at 178.

93 Id. at 174.

94 Id.


have jobs with atypical and unusual schedules, including shifts and weekend or night-time work. In 2011, 42.9% (almost twice the EU-27 average) of young employees in Greece worked in the evening and 54.9% of them worked on Saturdays.

95

These measures obviously touch upon the EU “labour constitution”

96 and, in particular, the

right of collective bargaining and action (Article 28 CFR), the right to protection in the event of unjustified dismissal (Article 30), and the right to fair and just working conditions (Article 31 CFR). Furthermore, the differentiated treatment of young workers only on the ground of age infringes the provisions protecting young people at work (Article 32 CFR) and the rule of non-discrimination (Article 21 CFR).

97

Article 28 CFR establishes both an individual and a collective right, guaranteeing the freedom of collective bargaining. It provides protection against direct and indirect infringements of collective agreement guarantees.

98 Article 30 CFR recognizes the right of

workers against unfair dismissal, including employment relationships in the private sector.

99 According to this right, the Union is not allowed to hinder the Member States in

providing adequate protection against unfair dismissal. Article 31 CFR guarantees a minimum level of fair working conditions, which include a minimum level of job security, a fair wage, the minimisation of work-related risks, and the entitlement to rest periods and paid annual leave. Article 32 CFR requires that young people admitted to work enjoy working conditions appropriate to their age and are protected against economic exploitation and any work likely to harm their safety, health or physical, mental, moral or social development. These norms do not change the EU system of competences (Article 51 paragraph 2 CFR). And the EU itself has limited powers in those areas under Article 153 TFEU. But the EU institutions are prohibited by the provisions of the Charter from undermining efforts of domestic legal orders to establish minimum guarantees of labour and trade union rights. The European Committee of Social Rights (ECSR) ruled in its decision 66/2011 that the differentiated reduction of the minimum wage of people under 25 constitutes a violation of Article 4§1 (right to a fair remuneration) of the European Social Charter (ESC) read

95 Id. at 176.

96 On the concept, see Florian Rödl, The Labour Constitution, in PRINCIPLES OF EUROPEAN CONSTITUTIONAL LAW 623

(Armin von Bogdandy & Jürgen Bast eds., 2010).

97 The differentiated treatment of the younger generation is also incompatible with secondary EU law, like the Council Directive 2000/78/EC, 2000 O.J. (L 303) establishing a general framework for equal treatment in employment and occupation.

98 HANS D. JARASS, CHARTA DER GRUNDRECHTE DER EUROPÄISCHEN UNION art. 28 CFR, para. 3 (2013).

99 Id. at para. 8.


together with the non-discrimination clause of the Preamble to the ESC, which correspond to Article 31 and 21 CFR. In that case, the ECSR found a disproportionate discrimination against young employees, whose minimum wage were reduced below the poverty level.

100

2. Education Assistance conditions include further structural reform measures in the educational systems of the recipient states, especially involving the reduction of public expenditure. The relevant provisions prescribe the reduction in the number of teachers,

101 the

streamlining of educational grants,102

and the increase in student contributions.103

Public expenditure on education was reduced in all countries receiving financial assistance. In 2011, there was a decrease of over 19% in Greece and around 5% in Portugal and Ireland.

104 In 2012, Cyprus experienced a budget decrease of almost 15%, mostly due to

cuts in tertiary education of almost 30%.105

In the same year, Greece had a subsequent decrease of almost 10% and Italy and Portugal displayed a decrease of around 5%. Reductions were achieved, through cuts in the salaries of teachers, but also through the reorganisation of schools with mergers and closures. Teachers’ salaries were significantly affected in Greece, Ireland and Spain. In Greece, various reductions in teachers’ benefits and allowances reduced teachers’ fell by 17%, in real terms, between 2009 and 2011.

106 In

Ireland, teachers’ salaries were reduced as part of a public service-wide reduction in pay. In addition, young teachers who entered the profession after 2011 are paid according to a new salary scale which is 10% lower than the one applied to those recruited prior to that.

107 Moreover, in Greece, successive budget cuts threatened the survival of scientific

100 EUR. COMM. SOC. RIGHTS, Decision on the Merits: General Federation of Employees of the National Electric Power Corporation (GENOP-DEI) and Confederation of Greek Civil Servants’ Trade Unions (ADEDY) v. Greece, Complaint No. 66/2011 para. 65, 68–69 (May 23, 2012).


FOR CYPRUS 80 (May 2013), http://ec.europa.eu/economy_finance/publications/occasional_paper/2013/pdf/ocp149_en.pdf [hereinafter ECONOMIC ADJUSTMENT PROGRAMME FOR CYPRUS].

102 See id. at 102.

103 See SECOND ECONOMIC ADJUSTMENT PROGRAMME FOR IRELAND, supra note 77, at 54.

104 See EUR. COMM’N, FUNDING OF EDUCATION IN EUROPE 2000-2012: THE IMPACT OF THE ECONOMIC CRISIS 32 (2013), http://eacea.ec.europa.eu/education/eurydice/documents/thematic_reports/147EN.pdf.

105 Id. at 34.

106 OECD, EDUCATION AT A GLANCE 2013: OECD INDICATORS 385 (2013).

107 Id.


and technological institutions, causing a remarkable call for financial support from renowned international scientists.

108

While public expenditure on education is decreasing significantly, the young generation of the countries under financial assistance choose to prolong their stay in education. Discouraged by extremely high rates of youth unemployment, young people between twenty and twenty-four increasingly devote a longer time to education and training exclusively.

109 Hence, the economic stagnation exacerbated the situation of “overqualified”

graduates, who then have difficulties in finding good working positions in their field of expertise. Indeed, around half (47%) of the young Greeks, Italians, Spaniards and Portuguese who have completed tertiary education are indicating a lack of good job opportunities in their field of study.

110

In response, vast numbers of them have left for other countries, notably Germany, UK, the Netherlands, Sweden, and Belgium.

111 This loss of human capital, usually referred to as

brain drain, deprives the countries in financial distress of taking advantage of their skilled and educated young generation. It is also devastating in economic terms, since these countries educate highly qualified professionals, providing them with costly tertiary education, who then immigrate to countries offering them better career prospects. In this way, the return on this investment, namely educating highly qualified professionals, realises in other countries. All in all, cuts in the funding of the educational sector affect the right to education, provided by Article 14 CFR, which guarantees non-discriminatory access to education, free compulsory education, and vocational training. This right provides for unhampered access to educational establishments and protects against interference with access to education. The Union’s obligation under this right is not to raise obstacles to the Member States guaranteeing the right to education. 3. Social Security Financial assistance was also made dependent on reductions of social benefits in the recipient states. The conditions require drastic cuts in pensions

112 and the reduction or

108 See Harald Zur Hausen, Support for Greece, 336 SCIENCE 978 (2012).


110 Id. at 171.

111 For precise migration statistics, see OECD, INTERNATIONAL MIGRATION OUTLOOK 2013.

112 See SECOND ECONOMIC ADJUSTMENT PROGRAMME FOR GREECE, supra note 11, at 133; SECOND ECONOMIC ADJUSTMENT

PROGRAMME FOR IRELAND, supra note 77, at 60, 66.


even removal of family benefits, unemployment benefits, and other welfare payments.113

In Greece, for example, the UN expert on foreign debt and social rights, Cephas Lumina, noted cuts in pensions on the basis of the MoU that resulted in a reduction up to 60% of the higher pensions and between 25-30% of the lower pensions.

114 The young generation

is also affected, since high rates of temporary employment among youngsters are combined with poor social security coverage.

115

These conditions affect the entitlement to social security and social assistance protected by Article 34 CFR. Article 34 paragraph 1 CFR recognises the entitlement to social security benefits and social services providing protection in case of maternity, illness, industrial accidents, dependency or old age, and in the case of loss of employment. Article 34 paragraph 2 CFR guarantees the non-discriminatory access to these benefits. Article 34 paragraph 3 CFR declares the respect to social assistance, as a means to combat social exclusion and poverty. These norms require a minimum level of social security and protect participation in social security schemes.

116 Even if the EU lacks the power to fulfil these commitments, it is

obliged to respect and protect the structures guaranteeing them. Therefore the Union, should abstain from impelling the Member States to dismantle their social security and assistance facilities by hindering citizens’ access to social security systems. 4. Healthcare Financial assistance conditionality obliges the recipient states to implement health sector reforms with the objective of reducing public expenditure. In this regard the conditions impose reductions of the number of employees in the health sector,

117 restrictions on

exemptions for treatment costs,118

and restrictions on the introduction of extra payments for hospital visits and medication.

119


114 See United Nations, Independent Expert on the Effects of Foreign Debt and Other Related International Financial Obligations of States on the Full Enjoyment of All Human Rights, Particularly Economic, Social and Cultural Rights, Mr. Cephas Lumina: Mission to Greece 22–26 April 2013 (Apr. 26, 2013).


116 See JARASS, supra note 98, art. 34 CFR.


118 See ECONOMIC ADJUSTMENT PROGRAMME FOR CYPRUS, supra note 101, at 83.



Recent academic research has indicated that there is a causal link connecting developed public healthcare systems and high expenditure to high levels of citizens’ health.

120 UN

human rights expert Cephas Lumina was very critical of the consequences of the Greek MoU with respect to the right to health, observing that “the public health system has become increasingly inaccessible, in particular for poor citizens and marginalized groups, due to increased fees and co-payments, closure of hospitals and health care centres and more and more people losing public health insurance cover, mainly due to prolonged unemployment.”

121 Weakened mental health, substance abuse, and swelling suicide rates

have also been strongly connected with economic crises.122

According to WHO, hardest hit are vulnerable groups, such as young and unemployed people. Unemployment contributes to depression and suicide, and young unemployed people have a higher risk of getting mental health problems than young people who remain employed.

123

At the EU level, the right to healthcare is protected by Article 35 CFR, which guarantees the right of access to preventive healthcare and the right to benefit from medical treatment under the conditions established by national laws and practices.

124 The Union is thus

obliged not to impede access to healthcare facilities ensured by the Member States.125

In sum, the EU assistance conditions outlined above prompt justifiable concern regarding their compliance with the social rights secured by the Charter. A valid assessment of this question would require a detailed study of each right, including the application of the proportionality doctrine, which is outside the scope of this paper.

126

In any case, in order to allow the expression of social groups most affected by the austerity measures, such as the young generation, it is especially important that the Charter is made applicable. The institutions primarily responsible to fulfil this task would be domestic and European courts assessing financial assistance conditions. This is easier said than done. In fact, assigning to courts the legal appraisal of complex financial assistance conditions

120 See DAVID STUCKLER & SANJAY BASU, THE BODY ECONOMIC: WHY AUSTERITY KILLS (2013) (pointing out a correlation between austerity and bad health).

121 See United Nations, Independent Expert on the Effects of Foreign Debt and Other Related International Financial Obligations of States on the Full Enjoyment of All Human Rights, Particularly Economic, Social and Cultural Rights, Mr. Cephas Lumina: Mission to Greece 22–26 April 2013 (Apr. 26, 2013).

122 See WHO, REGIONAL OFFICE FOR EUROPE, IMPACT OF ECONOMIC CRISES ON MENTAL HEALTH (2011).

123 Id. at 6.

124 For recent developments on the right to healthcare, see Scott L. Greer & Tomislav Sokol, Rules for Rights: European Law, Health Care and Social Citizenship, 20 EUR. L.J. 66 (2014).

125 See JARASS, supra note 98, art. 35 CFR.

126 For a detailed legal appraisal, see FISCHER-LESCANO, supra note 44, at 42.


resulting from long and tedious negotiations raises one major question. Are courts the appropriate fora to be entrusted with the power to review such decisions? Can they provide for a conduit of democratic participation for the lost generation? The reasons why adjudicating social rights can raise legitimacy concerns will be presented in Section D.I. Then Section D.II argues that in the special context of financial assistance conditionality courts may legitimately claim a more active role in adjudicating social rights and giving voice to the lost generation. Finally, it is argued in Section D.III that, until now the lost generation has been absent from the courts litigation: courts were reluctant to review conditionality-driven decisions over social policy issues and thus shied away from providing an adequate counterweight to the democratically questionable constitutional mutation that occurred in the EU due to the Eurozone crisis. D. Courts and Crisis Management: The Unheard Voice of the Lost Generation I. Adjudicating Social Rights as a Question of Legitimacy The tension between judicial enforcement of fundamental rights and democracy is old and well-researched.

127 The claim is that by adjudicating fundamental rights, politically

unaccountable judges enjoy the power to overrule majoritarian decisions of democratically elected representatives.

128 These general concerns about courts competing with other

decision-making institutions for the ultimate say are intensified when it comes to protection of social rights, due to alleged inherent characteristics of social rights. Courts, the argument goes, should refrain from encroaching upon the power of political bodies to decide questions of social policy, such as the proper level of public healthcare. The first conceptual peculiarity attributed to social-rights adjudication relates to the association of the fulfilment of social rights with positive and costly state action. Social rights cases are perceived as having greater implications for national budgets than civil and political rights cases.

129 Secondly, given the finite nature of public budget, recognizing

social rights’ claims to a social group, may result in depriving another from receiving public funding. Judicial decisions that have complex and unpredictable repercussions, which extend beyond the parties to an unknown number of actors, were described by Lon Fuller

127 See, e.g., Michael J. Perry, Protecting Human Rights in a Democracy: What Role For the Courts?, 38 WAKE FOREST

L. REV. 635 (2003); Jeremy Waldron, Can There Be a Democratic Jurisprudence?, 58 EMORY L.J. 675 (2009).

128 On the counter-majoritarian concern, see Barry Friedman, The Counter-Majoritarian Problem and the Pathology of Constitutional Scholarship, 95 NW U. L. REV. 933 (2001).

129 This longstanding assumption that only social rights are costly to implement has been meanwhile rejected, see, e.g., STEPHEN HOLMES & CASS R. SUNSTEIN, THE COST OF RIGHTS: WHY LIBERTY DEPENDS ON TAXES (1999); Etienne Mureinik, Beyond a Charter of Luxuries: Economic Rights in the Constitution, 8 S. AFR. J. HUM. RTS. 464, 465 (1992); Frank I. Michelman, The Constitution, Social Rights, and Liberal Political Justification, 1 INT’L J. CONST. L. 13, 16 (2003).


as polycentric.130

Building on this concept, disputes concerning the allocation of financial resources, like social rights cases, are regarded as predominately polycentric.

131

Perceived as a resource-related and polycentric task,

132 decision-making over social issues

is thought to be little suitable for judicial determination. The legitimacy of courts to deliberate over social rights is questioned because judges seem to be lacking two essential qualifications: expertise and political accountability. Firstly, enforcing social rights may entail the discretion to choose among several policy options of public expenditure allocation. Judges seem to be ill-suited to discharge this overwhelming task, because they do not possess the epistemic qualities to decide in matters with complex budgetary consequences. Besides, even if judges would try to go into the assessment of the macroeconomic impact of their decision, the limited evidence before a court may inadequately reflect the many competing interests implicated by a polycentric issue.

133

Secondly, especially when courts review parliamentary decisions, their lack of political accountability raises much more substantial legitimacy concerns than in other cases. The fact that courts’ authority cannot be traced back to processes to which the affected subjects can participate and influence, challenges a central premise of democratic accountability. Judges are therefore warned against interfering with collective social policy decisions, which are better suited for politically accountable fora, such as parliaments, which are equipped with a better capacity to consider the affected interests. II. Adjudicating Social Rights in Times of Crisis: Potential Remedy for the Lost Generation? The general rule of task-distribution between constitutional institutions, courts and parliaments, applies, however, in times of proper functioning of democracy. During the current Eurozone crisis though, the constitutional balance between the different institutions has been significantly altered. As noted above, financial assistance conditionality resulted in intrusive social governance, left at the discretion of executives, and insulated from public debate and parliamentary scrutiny. Traditional fora of deliberation, such as parliaments, where social policies could be defended, are substantially weakened. In this context, the basic premise of democratic legitimacy, that

130 Lon Fuller, The Forms and Limits of Adjudication, 92 HARV. L. REV. 353, 395 (1978).

131 Marius Pieterse, Coming to Terms With Judicial Enforcement of Socio-economic Rights, 20 S. AFR. J. HUM. RTS. 383, 393 (2004); PAUL O'CONNELL, VINDICATING SOCIO-ECONOMIC RIGHTS: INTERNATIONAL STANDARDS AND COMPARATIVE

EXPERIENCES 13 (2012).

132 This perception is not confined to the social rights adjudication, but can apply also to the adjudication of civil and politic rights. For a detailed defence of this claim, which exceeds the scope of this paper, see id.; Mureinik, supra note 129.

133 See Pieterse, supra note 131, at 393.


binding collective decisions should result from procedures that allow for the effective and equal participation of the largest possible number of the actors affected, is frustrated.

134

The democratic deficit is even more intense with regard to the young generation due to its age. Firstly, as shown above, the repercussions of austerity measures for younger people are much more important than for other segments of the population. They face higher obstacles entering the labour market and reduced public expenditure regarding their education. Secondly, they did not have a say in the making of the decisions that contributed to the crisis, such as high public spending, over-indebtedness, and corruption, and they cannot be held responsible for the maladministration of their economies. Thirdly, they did not partake to the benefits accruing from the unsustainably high public spending of the past. Previous generations did sometimes benefit from finding a position in the oversized public sector of some of the crisis countries or enjoying high transfer payments. But not the lost generation. Under these circumstances, applying the general rule that courts should not interfere with choices of political bodies regarding social policy and resource allocation, would mean that the exclusion of subjects affected and the eventual violation of their social rights, would be left without any effective remedy. In a situation where the conduits of democratic participation are blocked or ineffective, courts should thus actively undertake the task to review the procedural conditions of the decisions that, originating from financial assistance conditionality, drastically interfere with social rights. That is, whether these decisions emerged from deliberative and inclusive procedures, which included the views of those affected.

135 Courts should particularly provide a remedy for the concerns of the excluded

and muted lost generation. This role of courts should not be understood as simply a scrutiny of procedural conditions of bare majoritarianism. Through this scrutiny, courts ensure that rights of minorities and politically marginalised groups, such as the young generation, are not violated by majoritarian decision-making. The relevance for the legal assessment of the participation or not of the affected actors is further reflected in five decisions of the ECSR concerning pension schemes in Greece. The ECSR explicitly included the democratically questionable procedures to a factor that contributed to the violation of the Social Charter, noting that the Greek government has not discussed the pension reforms with the organisations concerned, despite the fact that they represent the interests of many of the groups most affected by the measures at issue.

134 On the understanding of legitimacy as a democratic process for the genesis of law, see ROBERT A. DAHL, DEMOCRACY AND ITS CRITICS 106 (1989); JÜRGEN HABERMAS, FAKTIZITÄT UND GELTUNG: BEITRÄGE ZUR DISKURSTHEORIE DES

RECHTS UND DES DEMOKRATISCHEN RECHTSSTAATS 321 (1997).

135 On the democratic legitimacy of judicial review, see JOHN H. ELY, DEMOCRACY AND DISTRUST: A THEORY OF JUDICIAL

REVIEW (1980); DAHL, supra note 134, at 188; CHRISTOPHER F. ZURN, DELIBERATIVE DEMOCRACY AND THE INSTITUTIONS OF

JUDICIAL REVIEW 236 (2007).


Thus the ECSR ruled that, even though the controversial restrictions would under certain conditions not breach the Charter, “due to the cumulative effect of the restrictive measures and the procedures adopted to put them into place,” they do amount to a violation of the right to social security (Article 12 paragraph 3 ESC).

136

Moreover, EU Regulation 472/2013 explicitly requires the involvement of social partners and relevant civil society organisations in the preparation of the adjustment programmes, with a view to contributing to building consensus over its content.

137 In view of the many

austerity measures affecting the young generation, student unions or youth-based NGOs could make use of these provisions to press for more active participation in the preparation of reforms affecting them. III. What Courts Didn’t Do: The Lost Generation’s Omitted Voice Turning now to courts actual practice, the question arises: Did courts live up to the expectations of providing a corrective to the democratic deficit and a counterweight to the economic rationale dominating the post-crisis social economic governance? Austerity measures have been brought before both European and domestic courts. The courts of the Union have been confronted with the substantive assessment of austerity measures in two types of cases: after the launch of actions of annulment against Council Decisions containing financial assistance conditionality

138 and after the quest for preliminary rulings

on national law implementing EU conditionality.139

In both sets of cases both the CJEU and

136 See EUR. COMM. SOC. RIGHTS, Decision on the Merits: Federation of employed pensioners of Greece (IKA-ETAM) v. Greece, Complaint No. 76/2012 para. 83 (Dec. 7, 2012); EUR. COMM. SOC. RIGHTS, Decision on the Merits: Panhellenic Federation of Public Service Pensioners (POPS) v. Greece, Complaint No. 77/2012 para. 79 (Dec. 7, 2012); EUR. COMM. SOC. RIGHTS, Decision on the Merits: Pensioners’ Union of the Athens-Piraeus Electric Railways (I.S.A.P.) v. Greece, Complaint No. 78/2012 para. 79 (Dec. 7, 2012); EUR. COMM. SOC. RIGHTS, Decision on the Merits: Panhellenic Federation of pensioners of the Public Electricity Corporation (POS-DEI) v. Greece, Complaint No. 79/2012 para. 79 (Dec. 7, 2012); EUR. COMM. SOC. RIGHTS, Decision on the Merits: Pensioners’ Union of the Agricultural Bank of Greece (ATE) v. Greece, Complaint No. 80/2012 para. 79 (Dec. 7, 2012).

137 Regulation 472/2013, art. 8.

138 The Greek Civil Servants’ Confederation ADEDY launched an action for annulment against Council Decisions 2010/320/EU and 2011/57/ΕU including financial assistance conditionality (art. 263 TFEU). The General Court held that the challenged provisions were indeterminate and left a margin to the Greek state as to the way of their implementation and thus could not themselves directly affect the applicants. As a result both actions were rejected as inadmissible. See ADEDY et al. v. Council, GC Case T-541/10 (Nov. 27, 2012), http://curia.europa.eu/; ADEDY et al. v. Council, GC Case T-215/11 (Nov. 27, 2012), http://curia.europa.eu/.

139 Two Portuguese courts referred to the CJEU, asking whether radical reforms in national labour law where compatible with the Charter of Fundamental Rights. The inadequately drafted order for reference failed to express the links between national reforms and EU conditionality. As a result, the CJEU did not perceive domestic austerity measures as part of a European assistance package and declined to go into the merits of the case. See Sindicato dos Bancários do Norte and Others v. BPN - Banco Português de Negócios, SA, CJEU Case C-128/12 (Mar. 7, 2013), http://curia.europa.eu/; Sindicato Nacional dos Profissionals de Seguros e Afins v. Fidelidade Mundial, CJEU Case C-264/12 (Jun. 26, 2014), http://curia.europa.eu/.


the General Court (GC) declined to go into the merits and thus abstained from taking a clear stance on the conformity of austerity measures with fundamental social values of the Union and from protecting vulnerable social groups affected, like the young generation. Domestic courts have obviously dealt more often than the courts of the Union with the legal assessment of austerity measures launched in the wake of the public debt crisis. Nevertheless, their decisions display two important shortcomings. Firstly, they do not assess domestic austerity legislation as implementing EU law. Secondly, in their rulings they do not seem to accommodate the lost generation’s concerns. Although the challenged national laws were adopted in order to meet budget deficit targets set in the adjustment programmes, domestic courts did not explicitly address them as implementing EU law. The Greek Supreme Administrative Court denied the application of the CFR on the ground that the challenged laws were allegedly purely domestic policy measures, enforced by institutions of the Greek state on the basis of national law. According to the court, the participation of the Commission and the ECB in the preparation of the economic programme of the Greek government did not trigger the applicability of the Charter.

140

The Portuguese Constitutional Court, which had from the beginning a more active stance regarding austerity measures,

141 failed to efficiently connect in its case law the national

with the European legal orders. Even if it affirmed the binding character of the Portuguese Memorandum and the fact that domestic cuts in public expenditure resulted from the need for compliance with that,

142 it missed to the opportunity to address the national

measures as implementing EU law. In the absence of a connection between national and European measures, the legal appraisal was restricted to the ambit of the national law and the social rights included in the Charter of Fundamental Rights found no entrance in the courts’ reasoning. Both courts did neither invoke EU social rights, nor attribute responsibility to EU institutions.

140 See Symboulio tis Epikrateias [StE] [Supreme Administrative Court] 1285/2012 and 1286/2012, para. 21 (Greece).

141 On the Portuguese constitutional court, see Christina Akrivopoulou, Striking Down Austerity Measures: Crisis Jurisprudence in Europe, BLOG INT’L J. CONST. L. (June 25, 2013), http://www.iconnectblog.com/2013/06/striking-down-austerity-measures-crisis-jurisprudence-in-Europe/; Gonçalo de Almeida Ribeiro, Judicial Activism Against Austerity in Portugal, BLOG INT’L J. CONST. L. (Dec. 3, 2013), http://www.iconnectblog.com/2013/12/judicial-activism-against-austerity-in-portugal/; Roberto Cisotta & Daniel Gallo, The Portuguese Constitutional Court Case Law on Austerity Measures: A Reappraisal in Social Rights in Times of Crisis in the Eurozone: The Role of Fundamental Rights’ Challenges 85 (EUI Working Paper No. 2014/05).

142 See Acordão No. 396/2011 (Portugal); Acordão No. 353/2012, July 5, 2012 (Portugal); Acordão No. 187/2013, Apr. 5, 2013 (Portugal).


Courts challenging austerity measures seem unwilling to successfully indulge with the lost generation’s concerns. In fact the lost generation is either absent or even impaired from the courts’ rulings both in procedural and substantive terms. Looking at the cases that came before domestic courts, one finding is evident: the lost generation is not among the litigants. The Portuguese litigants were MPs or Bank Workers Unions. The Greek applicants were mainly trade unions, such as the Greek Civil Servants’ Confederation ADEDY, the Athens Bar Association, and the Retired Officers Association. All of them represent groups with vested interests in the existing system of power. No student union or youth-based NGO did address their concerns to the courts. Not interested in restoring the old balance of powers, the young generation chose to exit rather than voice itself in traditional institutional fora.

143 Youngsters from countries under financial

assistance prefer to migrate to other countries offering them better quality of life and job opportunities rather than stay in their own countries, where their prospects are limited. As to the substantive concerns of the young generation, domestic courts did not manage to provide an adequate counterweight to the democratically questionable exclusion of the lost generation. After a period of judicial self-restraint, the Greek Supreme Courts recently launched a more active jurisprudence. The Greek Supreme Administrative Court ruled that the cuts in the wages and pensions of officers and policemen were incompatible with the Greek constitution.

144 The same decision, regarding cuts in the wages and pensions of

judges, was taken by the Greek Supreme Court of Audit.145

The main justification was that these social groups belong to the “core of the state” and therefore deserve a higher pay. On the other hand, the Greek Supreme Administrative Court held the cuts in wages of university faculty members as compatible with the Greek constitution.

146 The reason was

that university faculty members do not belong to the “core of the state,” like judges or officers, even though they are public servants according to Greek law.

147 In view of this

case law, the Greek Supreme Courts seem to prioritise the budget allocation to national security and the judiciary rather than to education. This deeply affects the possibility of the young generation to enjoy an educational system of high quality and even accentuates the before mentioned brain drain phenomenon.

143 For the classical argument on the alternatives of voice and exit, see ALBERT O. HIRSCHMAN, EXIT, VOICE, AND

LOYALTY: RESPONSES TO DECLINE IN FIRMS, ORGANIZATIONS, AND STATES (1970).

144 See Symboulio tis Epikrateias [StE] [Supreme Administrative Court] 2192-96/2014 (Greece).

145 See Elegktiko Synedrio [ES] [Court of Audit] 2/2013 (Greece).

146 See Symboulio tis Epikrateias [StE] [Supreme Administrative Court] 2705/2014 (Greece).

147 See also Symboulio tis Epikrateias [StE] [Supreme Administrative Court] 574/2014 and 575/2014 (Greece).


Another decision of the Greek Supreme Administrative Court was also rather hostile towards the young generation. The reduction of 32% of the minimum wage of employed persons under the age of twenty-five and their differentiated treatment on the ground of age was challenged before the Court as incompatible with the Greek constitution. In its decision the Greek Supreme Administrative Court held that this provision is part of a reform package that aims at restoring the public finances. Due to the technical and high political character of the reform package the Court deferred to the decision of the legislature and found the challenged provision to be constitutionally bearable.

148 Hence, in

the sole case directly connected to austerity measures violating the labour rights of young employees the Court failed to protect the young generation. The stance of the Court is even more striking considering ECSR decision 66/2011 mentioned above, which found that the differentiated reduction of the minimum wage of people under 25 constitutes a violation of Article 4§1 ESC (right to a fair remuneration) read together with the non-discrimination clause of the Preamble to the ESC.

149

E. Outlook: The Case for More Active Courts and Effective Social Rights Although some courts may be more active than others, the general pattern in times of crisis is that courts shy away from the difficult task to review conditionality-driven decisions over social policy issues. Even worse, most courts fail to protect deeply affected social groups, such as the young generation. It is here argued that the reluctance of courts to review such decisions does not take proper account of the constitutional mutation that occurred in the EU due to the Eurozone crisis. The weakening of parliamentary controls and the marginalization of big segments of the society, such as the young generation, constitutes an extraordinary development of the European constitutional architecture that calls for a new positioning of social rights and courts adjudicating them. In this new context, the character of social rights as a “weak” constitutional regime and the ordinary arguments against the interference of courts with social policies do not hold anymore. Courts should embrace a more active role that makes a connection between the doubtful democratic credentials of austerity measures and more intrusive control on the basis of social rights of the social groups affected. This would require them to delve into the complex procedures though which austerity measures are produced and calibrate their standard of review accordingly. The assessment of non-adequate compliance with procedural requirements, would entitle courts to proceed with the stricter substantial review of the financial assistance conditions. Courts would ask the decision-maker responsible for a tolerable justification of the measures adopted and of the discarding of alternative, less intrusive options.

148 See Symboulio Epikrateias [StE] [Supreme Administrative Court] 2307/2014, para. 23 (Greece).

149 EUR. COMM. SOC. RIGHTS, supra note 100, para. 65.


This could have a double effect that might counterbalance the executive-expertise bias of the constitutional mutation described in Part B.IV above. Firstly, it might induce the actors preparing and enforcing adjustment programmes to adopt more inclusive and responsive procedures, actively engaging civil society actors and social partners. Secondly, courts would thus function as fora where arguments of the lost generation and other marginalised groups can be voiced that are muted in the processes of conditionality negotiations, where points of economic expediency take precedence. In this way, decisions on substantive social issues would in principle remain at the disposal of the respective political institution, which would bear the weight of defending them before the judiciary. Courts would be reviewing social policy choices, not making them.

Articles Special Section Europe and the Lost Generation

Collective Bonapartism – Democracy in the European Crisis

By Hauke Brunkhorst* A. Introduction My paper has two parts. In the first part I will outline an evolutionary model for analyzing the relation of democracy, cosmopolitanism and conflict. In the second part I will apply it to the case of European constitutionalization, and its failure. B. Two Mindsets – Opposed and in Need of Each Other A couple of years ago Martti Koskenniemi introduced the important distinction between two different constitutional mindsets: the Kantian and the managerial.1 The differentiation between the Kantian and the managerial mindsets is one of the many variants in the eternal struggle between Mr. Hyde and Dr. Jekyll that has been fought throughout the whole of Koskenneimi’s work. This epic struggle began with Kantian utopia vs. managerial apologia.2 He followed that effort with his outstanding Gentle Civilizers of Nations, which theorized a number of struggles, including those between Kelsen and Schmitt, Lauterpacht and Morgenthau, and finally the Dr. Jekyll embodied by Wolfgang Friedmann—the last hero of the gentle civilizers—and the many Mr. Hydes who were the embedded jurists from the American State Department.3 These Hyde-like lawyers from the State Department justified the invasion and replacement of a democratically elected government in the Dominican Republic in the spring of 1965.4 The fight between Dr. Jekyll and Mr. Hyde was renewed in Koskenniemi’s 2003 essay “What can International Lawyers Learn from Karl

* Universität Flensburg, Internationales Institut für Management. Email: [email protected]. This text originally appeared as Hauke Brunkhorst, Collective Bonapartism: Democracy in the European Crisis (June 24, 2014), available at http://www.resetdoc.org/story/00000022418. It is reprinted here with changes and edits with the author’s permission.

1 Martti Koskenniemi, Constitutionalism as Mindset: Reflections on Kantian Themes About International Law and Globalization, 8 THEORETICAL INQUIRIES IN LAW 9 (2006).

2 MARTTI KOSKENNIEMI, FROM APOLOGIA TO UTOPIA: THE STRUCTURE OF INTERNATIONAL LEGAL ARGUMENT (1989). The German Law Journal published a special issue marking the re-issue of the book by Cambridge University Press in 2006. See Morag Goodwin & Alexandra Kemmerer, Editorial: The Same Performance, and so Different: Marking the Re-publication of From Apology to Utopia, 7 GERMAN LAW JOURNAL 977 (2006).

3 MARTTI KOSKENNIEMI, THE GENTLE CIVILIZER OF NATIONS 413-415, 494-509 (2002).

4 ID..


Marx?”5 At that time the good Dr. Jekylls of the world had said “No” to the infringement of international law by the Americans (and their willing coalition of states and international lawyers)—again playing the part of Mr. Hyde—who were determined to wage a second war in Iraq War.6 I begin with a rough juxtaposition of the meaning of the two mindsets: The Kantian mindset’s key-words are autonomy, egalitarian self-determination, representative government and universal rights. Law shall enable government of and by the people, and that means the emancipation from any law to which we have not given our assent.7 The language of the Kantian mindset is the normative language of the constitutional revolution, the pouvoir constituant, and the rhetoric of radical change. The Kantian mindset is, as Marx put it, the “legislature” that “produced the French Revolution.”8 At the center of the Kantian mindset is the internal relation of law and democracy. By contrast, the managerial mindset is more about law and economics. Keywords are rule of law, judicial review, possessive individualism, and—in the ironic formulation of Marx—the “peaceful competitive struggle.”

9 This mindset is superintended by a competition

commissioner and some judges, such as in the EU (or in the WTO-IMF-World Bank regime of global economic governance). This, of course, is the approach that has been taken to Europe’s debt and banking crises. The managerial mindset is performed by incremental decision making, gradual change, muddling through a jungle of hegemonic opinions, negotiating a complex mix of ideal and material class-interests, and the mitigation of unexpected evolutionary hazards and coincidences. The managerial mindset’s language is the technical language of courts, committees, conferences and all kinds of agencies that are implementing and stabilizing the pluralized powers of the pouvoir constitué. Managerial government—from Lenin to Angela Merkel—is government for or against the people. The Kantian and Marxist (and American presidents’) rhetoric of changing the world is displaced by negotiation, diplomacy, compromise, new public management, and the noiseless implementation of “structural reform.” In the world of the managerial mindset public contestation is, as Angela Merkel dryly put it “just not helpful.” In the same way, parliamentary rule is restricted to its lesser-self, including “market-conformity” and

5 Martti Koskenniemi, What Should International Lawyers Learn from Karl Marx, 17 LEIDEN JOURNAL OF

INTERNATIONAL LAW 229, 245 (2004).

6 Id.

7 Alexander Somek, Europe: From Emancipation to Empowerment (unpublished manuscript, 2012).

8 Karl Marx, Kritik des Hegelschen Staatsrechts, in 1 Karl Marx/ Friedrich Engels - Werke 203, 260 (1976) (English quoted from Karl Marx, Critique of Hegel's Philosophy of Right 57 (Joseph O’Malley ed., 1970)).

9 KARL MARX, DER 18. BRUMAIRE DES LOUIS BONAPARTE 97 (1852) (English quoted from: http://www.marxists.org/archive/marx/works/1852/18th-brumaire/ch01.htm).

2014] Collective Bonapartism 1179

“parliamentary participation.”10 Again, these are the words of Angela Merkel, who has emerged as the mastermind of the present European managerial class of politicians, bankers, chief-economists, jurists and embedded journalists. These are the masters of the crisis. If you want paradigms, then you cannot do better than the European South today. The Troika-enforced replacement of elected governments by technocrats and bankers such as Mario Monti or Lucas Papademos is a paradigmatic case of the functioning of the managerial mindset. By contrast, the Italian elections in February 2012, which ended technocratic government, are a paradigmatic case of the functioning of the Kantian mindset. In both cases the results can be catastrophic. Mr. Hyde, who wants the bad, can be the trigger for the good, but without any Mandevillean metaphysical guarantees. And Dr. Jekyll, who is the bearer of the Kantian Good Will, can be the trigger for the bad. But it need not turn out this way. Both mindsets have different meanings. They also have different socio-linguistic extensions. Whereas the Kantian mindset speaks the universal language of everybody, the extension of the managerial language is the exclusive medium of understanding between professional experts and the political and economic class. The specialization of their language allows them to draw a sharp distinction between the internal systemic discourse and the human beings out there in the environment of the system. The “Lost Generation” might be better characterized as the “Absent Generation” or the “Overlooked Generation” or the “Neglected Generation.” The borderline between system and environment is watched and observed by simple codes (such as legal/ illegal) and complicated programs (such as EU-laws, ESM-norms, Troika soft-law etc.). For the human beings out there—the young, unemployed Spaniards in their hundreds of thousands—the programs are translated into the hopelessly under-complex language of the kitchen-morality of the “Swabian housewife” and her “housekeeping money.” This is how Angela Merkel has sought to explain the new, harsh economic conditions to the Greeks.11 From the point of view of his own Kantian mindset, Kant himself would have called the members of the managerial class sorry comforters.

12

From the point of view of the managerial mindset, however, the opposite is true. As Niklas Luhmann (a true Mr. Hyde) argues, the Kantian constitutional mindset is just another empty signifier offering little more than “Illusions of manageability,” “solemn

10 See Angela Merkel, Über die Marktkonforme Parlamentarische Demokratie (Sept. 3, 2011), available at https://www.youtube.com/watch?v=VLfQn7vie6c&noredirect=1.

11 See Patrick Bernau, Die Schwäbische Hausfrau, Frankfurter Allgemeine Zeitung (May 16, 2010), available at http://www.faz.net/aktuell/wirtschaft/schulden-die-schwaebische-hausfrau-1979097.html.

12 IMMANUEL KANT, Zum ewigen Frieden, in XI WERKE 191, 210 (1977).


declarations,” and “revolutionary chants.”13

And he’s right about this, at least as far as declarations and constitutions are only legal texts and not yet legal norms.14 Luhmann’s thesis is this: That legal and constitutional concepts have become evolutionary advances with a certain cash-value it is a consequence of adaptive cognitive learning that is performed by the managerial class, or independently by social systems that have completed their self-referential closure to become learning or Turing machines.15 Legal and constitutional advances are good examples of this. A functionally differentiated, hence self-referentially closed legal system produces itself (autopoiesis) through the combination of normative closure with cognitive openness.16 From the perspective of cognitive or systemic learning, normative expectations and moral points of view are merely learning blockades that are used for the functional purpose of reducing environmental complexity. Constitutions fulfil the functional requirements of structural coupling and thereby contribute to the enhancement of the adaptive capacities of modern society through cognitive learning alone. This, however, is a categorical turning-away from the Kantian mindset. All that has to be done must be performed by managerial incrementalism, legal experts, career politicians and bureaucrats. I agree and I disagree with this part of Luhmann’s program. Let me begin with my disagreement. Social evolution is not only characterized by cognitive learning that enhances adaptive capacities. It is also characterized by normative learning that is not adaptive but instead channels and constrains systemic adaptation.17 In particular, the normative closure of the legal system through constitutional law is not just functionally adjusted to adaptive cognitive and systemic learning, it is also an embodiment of normative

13 Niklas Luhmann, Verfassung als evolutionäre Errungenschaft, 8 RECHTSHISTORISCHES JOURNAL 176 (1990) (using the German phrases “Machbarkeitsillusionen,” “feierliche Erklärungen,” und “Gesänge”.).

14 On the distinction see, FRIEDRICH MÜLLER, “RICHTERRECHT” – ELEMENTE EINER VERFASSUNGSTHEORIE IV 13, 34, 38, 47, 88 (1986); FRIEDRICH MÜLLER, “DEMOKRATIE ZWISCHEN STAATSRECHT UND WELTRECHT. NATIONALE, STAATLOSE UND GLOBALE

FORMEN MENSCHENRECHTSGESTÜTZTER GLOBALISIERUNG” – ELEMENTE EINER VERFASSUNGSTHEORIE VIII 52-53 (2003); FRIEDRICH

MÜLLER & RALPH CHRISTENSEN, II JURISTISCHE METHODIK: EUROPARECHT 170, 185, 198-199, 363, 437-438 (2007).

15 See Luhmann, supra note 13.

16 NIKLAS LUHMANN, DAS RECHT DER GESELLSCHAFT 78-95, 555 (1993).

17 For the sociology of rationalization, law and religion, see JÜRGEN HABERMAS, ZUR REKONSTRUKTION DES HISTORISCHEN

MATERIALISMUS (1976); JÜRGEN HABERMAS, II NACHMETAPHYSISCHES DENKEN 7-53 (2012); WOLFGANG SCHLUCHTER, DIE

ENTWICKLUNG DES OKZIDENTALEN RATIONALISMUS (1979); Klaus Eder, Collective Learning Processes and Social Evolution: Towards a Theory of Class Conflict in Modern Society, 1 TIDSKRIFT FÖR RÄTSSOCIOLOGI 23 (1983); Klaus Eder, Learning and the Evolution of Social Systems – An Epigenetic Perspective, in EVOLUTIONARY THEORY IN SOCIAL SCIENCE 101 (M. Schmid & F. M. Wuketits eds., 1987); ROBERT BELLAH, RELIGION IN HUMAN EVOLUTION – FROM THE PALEOLITHIC TO THE

AXIAL AGE (2011); HAUKE BRUNKHORST, CRITICAL THEORY OF LEGAL REVOLUTIONS – EVOLUTIONARY PERSPECTIVES (forthcoming 2014). For social history, see BARRINGTON MOORE, INJUSTICE – THE SOCIAL BASES OF OBEDIENCE AND REVOLT (1978). For the social-cognitive development of individual human beings, see JEAN PIAGET, THE MORAL JUDGMENT OF THE CHILD (M. Gabain trans., 1968); LAWRENCE KOHLBERG, ESSAYS ON MORAL DEVELOPMENT (1981/1984).


learning processes that have a lasting internal relation to the minds, actions and bodies of all individual addressees of legal norms. Because legal norms cannot evade their internal connection with the colloquial language and the moral self-understanding of their addressees, normative closure does not only enable cognitive and systemic adaptation but also the continuation of normative learning. All public law is opened cognitively to its environment. But public law is also normatively opened to the general and diffuse public sphere. For example, normative learning (or unlearning) is instance possibility in landmark parliamentary or legal debates and decisions that will affect the general public.18 Normative learning is at stake when new social movements emerge.19 Normative learning is at stake in the public conflicts and struggles that involve assembling and uprising crowds that question the validity and the right interpretation of the law. Normative learning is at stake when words and cobblestones strike back, and discourses fly-off like sparks.20 What appears as a learning blockade from the perspective of systems theory is itself the result of evolutionary learning that consists in an increase and the categorical progress of moral insight, measured in categories of social inclusion, moral universality, political egalitarianism, reciprocal understanding, justice as fairness and societal individualization (e. g. Kant’s enthusiasm of moral progress, or Durkheim’s modern cult of the individual).21 The results of normative learning take root and spread throughout the whole system of positive law, in particular in constitutional rights and principles such as public and private autonomy, democracy, checks and balances, due process, social equality, human and civil rights. This, of course, is the whole list of solemn declarations and revolutionary chants: “The International unites the human race.”22 These are holistic statements and empty legal signifiers that everybody understands. Revolutionary declarations such as the declarations of 1776, 1789 or 1948 are seldom significant for professional jurists but they are often very significant for philosophers. And they are also significant for the people, especially when it comes to social conflicts that are structural. Why? Because they express a better, or at least presumably better, justified (or better interpreted) idea of freedom that seems to be more universal, more inclusive, more individualized and decentred than all former ideas of

18 See, e.g., HELMUT DUBIEL, NIEMAND IST FREI VON DER GESCHICHTE. DIE NATIONALSOZIALISTISCHE HERRSCHAFT IN DEN DEBATTEN

DES DEUTSCHEN BUNDESTAGES (1999).

19 See KLAUS EDER, GESCHICHTE ALS LERNPROZEß? ZUR PATHOGENESE POLITISCHER MODERNITÄT IN DEUTSCHLAND (1985).

20 BRUNKHORST, supra note 17.

21 I am thankful for a controversial discussion with Rudolf Stichweh on this point at a conference that Marcelo Neves organized in Brasilia in September, 2013.

22 See https://www.marxists.org/history/ussr/sounds/lyrics/international.htm. The German text refers directly to human rights: “Die Internationale erkämpft das Menschenrecht.” This translates in English into: “The Intenationale fights for human rights.” (https://de.wikipedia.org/wiki/Die_Internationale#Deutscher_Text_.28Emil_Luckhardt.2C_1910.29).


freedom. Hegel has called the historical sequence of these ideas, complete with their corresponding public discourses, progress in the consciousness (or understanding) of freedom.23 Constitutions are not only evolutionary. They are also revolutionary advances. Revolutionary advances, such as human rights and democracy, are neither designed as improvements of adaptation nor can they be explained as improvements of adaptation.24 For the latter purpose they emerge far too rapidly, in the same was as bursts in the evolution of living systems.25 Instead of improving adaptation, revolutionary advances constrain the morally neutralized adaptive mechanisms of society normatively. As normative constraints they limit adaptation in a similar way as the construction plans (Baupläne) of animals limit the adaptation of living organisms to their environment. The “role of historical and structural constraints” consists in “channelling directions of evolutionary change.”

26 The same must be said about the role of normative constraints in

social evolution. Constraints that are normative do not only close a legal system for the purpose of adaptive improvements. Normative constraints also disclose new evolutionary paths for cognitive and normative learning. As products of successful normative learning, the normative constraints of systemic adaptation contain the whole emancipatory potential of a respective society.27 The emancipatory potential that is embodied in constitutional textbooks and legal practices “can be halted and inhibited” by selective pressures, such as: (a) functional (and in particular economic) imperatives, (b) dominating (and dominated) class-interests, and (c) hegemonic (and counter-hegemonic) mindsets. But the emancipatory potential “cannot be eliminated.”

28 Because they are normative, the

constraints of blind evolutionary adaptation can be violated, neglected, derogated. These offenses can happen again and again. The violation of a legal norm is the proof of its existence. But, if they “will not be forgotten,”29 then they can “strike back.”

30 This

23 G. W. F. HEGEL, 12 WERKE 32 (1970).

24 To be sure, all revolutionary advances are existing only because they are adapted. Nothing that is not adapted, exists. To be adapted, modern constitutions must fulfil functional requirements of structural coupling.

25 See Steven Jay Gould, Darwinian Fundamentalism, 44 NEW YORK REVIEW OF BOOKS 10 (1997); Steven Jay Gould & Richard C. Lewontin, The Spandrels of San Marco and the Panglossian Paradigm (April 4, 2012), available at: http://www.aaas.org/spp/dser/03_Areas/evolution/perspectives/Gould_Lewontin_1979.shtml.

26 STEVEN JAY GOULD, THE STRUCTURE OF EVOLUTIONARY THEORY 26 (2002); Steven Jay Gould, A Developmental Constraint in Cerion, with Comments of the Definition and Interpretation of Constraint in Evolution, 43 EVOLUTION 516, 517 (May, 1989). For an application to legal evolution, but without recognizing the normative character of constraints in the social evolution, see MARC AMSTUTZ, EVOLUTORISCHES WIRTSCHAFTSRECHT 267-270 (2001).

27 See BRUNKHORST, supra note 17.

28 Somek, supra note 7, at 8.

29 IMMANUEL KANT, Streit der Fakultäten, XI WERKE 361 ( 1977) (author’s translation of the German phrase “vergessen sich nicht“).


distinguishes all revolutionary documents—beginning with the Dictatus Papae from 1075—from mere words, celebrations and chants.

31 It is the emancipatory progress of

revolutionary advances that made Kant’s “enthusiasm” and “moral rapture” vis-à-vis the French Revolution enduring, even at the height of Jacobean terror.32 Once revolutionary advances have become a “Sign of History,”33 once they are implemented in constitutional law (its legal practice and mindset), then revolutionary advances are no longer empty signifiers but Hegel’s existing Notions.

34

To this point, I am more or less in agreement with Koskenniemi. But now comes my disagreement with him and my partial agreement with Luhmann. This is where the managerial mindset seems convincing to me. Kant’s enthusiasm vis-à-vis the hot search-light of the revolution led him to marvel that revolution makes “men and things seem set in sparkling diamonds” and “ecstasy (…) the order of the day.”35 But the euphoria is regularly followed by “a long Katzenjammer [hangover].” What remains is a “sober reality,” managed by “its own true interpreters and spokesmen.”36 Thus, “the Says, Cousins, Royer-Collards, Benjamin Constants, and Guizots”

37 managed in the aftermath of the French

Revolution in the same way as Europe today is managed with the Method Monet.38 In a

30 FRIEDRICH MÜLLER, “WER IST DAS VOLK? EINE GRUNDFRAGE DER DEMOKRATIE” – ELEMENTE EINER VERFASSUNGSTHEORIE VI 56 (1997).

31 HAROLD BERMAN, LAW AND REVOLUTION. THE FORMATION OF THE WESTERN LEGAL TRADITION (1983).

32 Pauline Kleingeld has argued in a recent essay, in the middle of the last decade of the 18th century Kant became more radical, cosmopolitan, egalitarian and republican than in his earlier writings. Pauline Kleingeld, Kant, Conflict, and Colonialism (paper presented at John Cabot University (Conference on Cosmopolitanism and Conflict), Rome, Oct. 13, 2013). The reasons seem to be (1) theoretical and (2) historical. First, in that time Kant worked out the consequences of his theoretical and practical philosophy for a theory of public and republican law, and he developed his ever more republican but modern (hence individualistic) theory of popular sovereignty. See INGEBORG MAUS, ZUR AUFKLÄRUNG DER DEMOKRATIETHEORIE (1992). Second, only after the victory of the Jacobean troops over the reactionary European coalition (1792), and after Jacobean rule and the beheading of the king (1792-1794), it became historically evident all over Europe that a modern republican regime (that is no longer monarchic) was empirically possible. Therefore, only then, after the final triumph of the revolution, did it become evident that the French Revolution was a Sign of History (Geschichtszeichen) that never ever will be forgotten. This was due to Jacobean rule and the trial against citoyen Louis Capet, and despite the moral and legal injustice of the trial against the sovereign who counterfactually represented the people (in a provisional state of law).

33 KANT, supra note 29, at 361.

34 G. W. F. HEGEL, WISSENSCHAFT DER LOGIK II 424 (1975). See Hegel, Lectures on the History of Philosophy, available at http://www.marxists.org/reference/archive/hegel/works/hp/hparistotle.htm.

35 HEGEL, supra note 34.

36 MARX, supra note 9, at 101.

37 Id. at 97.

38 Jaques Delors, Entwicklungsperspektiven der europäischen Gemeinschaft, B1 AUS POLITIK UND ZEITGESCHICHTE 3-9 (1993); Möller, Die Europäische Sozialunion, Lexikonartikel (manuscript 2013).


long period of managerial incrementalism and gradual adaptation society learned (after Napoleon’s final defeat as well as after the Treaty of Rome) “to assimilate the results of its storm-and-stress period soberly.”39 This means that the managerial mindset of law and economics had to be legally implemented and soberly assimilated. It also means that the Kantian mindset of individual and public self-determination also had to be assimilated. Cognitive and systemic adaptation never stops. But neither does normative learning., Therefore, there is a revolutionary normative discourse and there is a continuing normative discourse that operates in the aftermath of revolutionary change. This is exemplified by the practical discourses that found a voice after the French Revolution. These discourses were interested in “absolute freedom and terror,” in the wide spread and long-lasting public debate and praxis of “socialism and communism,” or in the powerful scientific, legal and popular controversies concerned with “constitutions and representative government.” During the long Katzenjammer Mr. Hyde’s evil genius was needed to stabilize Dr. Jekyll’s high-flying plans for a just society.40 But Dr. Jekyll was also forced to defend against his other self, his Mr. Hyde. The enduring struggle between Dr. Jekyll and Mr.Hyde leads to several monstrous outcomes: the reduction of socially related human emancipation giving way to professionally specialized political emancipation,

41 egalitarian mass-democracy

giving way to facade democracy,42

constitutional advances in the consciousness of freedom giving way to constitutionalism as kitsch and cliché.

43 Still, Mr. Hyde has not always had the

last word of history. In the technical language of Systems Theory one can say that during the process of managerial adaptation and stabilization that follows revolutionary advances, the difference between Mr. Hyde and Dr. Jekyll again had to be copied into the character of Mr. Hyde.44

39 MARX, supra note 9, at 101.

40 JÜRGEN HABERMAS, II THEORIE DES KOMMUNIKATIVEN HANDELNS 228 (1981); ARMIN NASSEHI, DER SOZIOLOGISCHE DISKURS

DER MODERNE 126-127 (2006).

41 KARL MARX, Zur Judenfrage, in I MARX-ENGELS STUDIENAUSGABE 31-60 (1966).

42 Peter Bofinger, Jürgen Habermas & Julian Nida-Rümelin, Kurswechsel für Europa. Einspruch gegen die Fassadendemokratie, FRANKFURTER ALLGEMEINE ZEITUNG (August 3, 2012), available at http://www.faz.net/aktuell/feuilleton/debatten/europas-zukunft/kurswechsel-fuer-europa-einspruch-gegen-die-fassadendemokratie-11842820.html.

43 Martti Koskenniemi, International Law in Europe: Between Tradition and Renewal, 16 EUROPEAN JOURNAL OF

INTERNATIONAL LAW 113, 122 (2005).

44 The functionalist language of reflection, copy, projection, recursion, system, code, program, and so on is philosophically problematic and philosophically much less advanced than those terms use in sociology. It still depends on the optical metaphor (see, e.g., RICHARD RORTY, PHILOSOPHY AND THE MIRROR OF NATURE (1980)). In comparison the language of reciprocal, intersubjective and interactive understanding, of reciprocal role-taking and generalizing significant others that constitutes the social relation between Dr. Jekyll and Mr. Hyde, is much more


Mr. Hyde cannot just get rid of the revolutionary established normative constraints of the Kantian constitutional mindset because he must interact and argue with Dr. Jekyll from within a shared holistic frame of inferential, normative and discursive relations.45. Mr. Hyde has to cope with Dr. Jekyll whether he wants to or not. They are becoming effective as his own existing contradiction (“daseiender Widerspruch”).

46 Here we can see that – in

accordance with the reading of negative dialectical logic by Marcuse, Adorno or Theunissen – Hegel’s existing notion only exits as contradiction and conflict within and against that which exists, and that the existing Notion only as existing contradiction can become the driving force of normative learning, and evolutionary as well as revolutionary progress. This, in fact, is the reason why normative learning – different from Luhmann – does not end with the hangover after the revolutionary job has been done. A good example is the global popular protest against the Iraq War of 2003. In his essay “What Should International Lawyers Learn from Karl Marx?” Koskenniemi implicitly argued that the cleavage between the international lawyers from the US-State Department and elsewhere (who justified the intervention with legal expertise) and the global peoples’ lound “No!” indicates a learning process that was anticipated more than 150 years ago by Karl Marx when he criticised the bourgeois reduction of national constitutional law from socially related human emancipation to de-socialized and functionally specialized political emancipation. In taking the “emancipatory promise” of international law serious the “peoples” – We, the Peoples of the United Nations (Preamble UN) – “condemned” the American war of aggression univocally as a “universal violation” of international law. The socially related constituent voice of the peoples silenced the functionally specialized, constituted voices of political leaders, of “diplomats and academics” – demanding the inclusion of all human beings in international legal discourse and decision-making, to enable a radical and democratic reinterpretation of international law.47 The normative learning process here was twofold: one from politically specialized to socially related human emancipation, and one from national to transnational constitutional law (and constituent power). C. Combining Two Finish Mindsets In my second part I will try to combine the Kantian mindset of the Finish jurist Martti Koskenniemi with the managerial mindset of another Finish jurist, Kaarlo Tuori. I will apply the combined lessons they have to teach to the evolution of European constitutional law.

compatible with modern pragmatist and linguistic philosophy (see ERNST TUGENDHAT, SELBSTBEWUSSTSEIN UND

SELBSTBESTIMMUNG (1979)).

45 See ROBERT BRANDOM, MAKING IT EXPLICIT: REASONING, REPRESENTING & DISCURSIVE COMMITMENT (1994).

46 HEGEL, supra note 34, at 59.

47 Koskenniemi, supra note 5, 245. See MARX, supra note 41.


Tuori has proposed a highly plausible schema of a general and incremental development of a plurality of European constitutions.48 Koskenniemi constructs a non-dialectical, unbridgeable, and therefore too fundamentalist opposition between the two mindsets that only allows for a gestalt switch between closed linguistic universes (and not for contradictory but inferential relations such as in Hegel’s normative logic). As a complement to Koskenniemi’s position, Tuori neglects and represses the action of the Kantian mindset within the managerial praxis, and in particular he ignores the Kantian constitutional and cosmopolitan mindset that prevailed at the outset of the European unification process. I will try to combine both in a way that avoids the blind spots with respect to the other’s position. The European Union was founded on the battle fields of the Second World War.49 It was founded by the Kantian constitutional mindset of peoples and social classes who emancipated themselves from fascist rule over Europe, or at least participated in their emancipation (which quickly became new dependence on the two super-powers). The battles and struggles were fought in the name of comprehensive democracy and social self-determination. Liberating violence was transformed into the constituent power of a new foundation and the unification of Europe.

50 It was the new foundation that replaced

the classical Peace Treaty that was no longer possible after the European and Asian atrocities of the former Axis Powers. European unification did not begin with the Treaties of Paris and Rome in 1951 and 1957, and it did not begin with the Method Monet. European unification began with the new constitutions that all the founding members (France, Belgium, Italy, Luxemburg, the Netherlands, and West-Germany) gave themselves between 1944 and 1948.

51 The

constitutions of all of the founding members strongly emphasized human rights and opened the rejuvenated and liberated post-war states (explicitly or implicitly) to

48 Kaarlo Tuori, The Many Constitutions of Europe, in THE MANY CONSTITUTIONS OF EUROPE 3 (Kaarlo Tuori & Suvi Sankari eds., 2010).

49 I use European Union as a notion that covers both the former European Communities and the present European Union.

50 See Somek, supra note 7. Even the present President of the European Commission, José Manuel Barroso of Portugal, owes his job to a late effect of the emancipation of Europe from fascism.

51 Chris Thornhill, A Sociology of Constitutions. Constitutions and State Legitimacy in Historical-Sociological Persppective 327-71 (2011); JOHN ERIK FOSSUM & AUGUSTÍN JOSÉ MENÉNDEZ, THE CONSTITUTION’S GIFT – A CONSTITUTIONAL

THEORY FOR A DEMOCRATIC EUROPEAN UNION (2011). On the two basic ideas of a constitution (power-foundiung vs. power-limiting), see HAUKE BRUNKHORST, SOLIDARITY – FROM CIVIC FRIENDSHIP TO THE GLOBAL LEGAL COMMUNITY 67 (2005); Christoph Möllers, Pouvoir Constituant – Constitution – Constitutionalization, in Developing a Constitution for European 131 (Erik O. Eriksen et al. eds., 2004).


international law.52

They were committed to the egalitarian project of mass-democracy and social welfare. Even the programmes of conservative parties advocated ideas of democratic socialism. Already in 1941, in the Manifesto of Ventone,

53 the communist or

socialist freedom fighters Spinelli, Rossi and Colorn outlined the project of a European federal social welfare state that preceded the later foundation of the national welfare states.

54 At the end of the war, and immediately after the war, there was strong

intellectual support for European unification and the project of a United States of Europe. This notion spanned the full spectrum of European elites, from Churchill to Arendt and Sartre to Helmut Kohl. Finally, and most crucially for the foundation of the European Union, all founding members of the European Communities bound themselves by the constituent powers of their peoples to the project of European Unification. Only Luxemburg had no explicit commitment to Europe in its constitution but their constitutional court decided that it was implicit. With this in mind Fossum and Menendez appropriately speak of Europe’s synthetic constitutional moment.

55

52 For the German case, which was not exceptional, see RAINER WAHL, VERFASSUNGSSTAAT, EUROPÄISIERUNG, INTERNATIONALISIERUNG (2003); UDO DI FABIO, DAS RECHT OFFENER STAATEN. GRUNDLINIEN EINER STAATS- UND RECHTSTHEORIE (1998).

53 Ernesto Rossi & Altieri Spinelli, Manifesto von Ventotene (August, 1941), available at http://www.europarl.europa.eu/brussels/website/media/Basis/Geschichte/bis1950/Pdf/Manifest_Ventotene.pdf (Das Manifest bringt “den Kern einer Zeitdiagnose zum Ausdruck, die damals die meisten politischen Kräfte des antifaschistischen Widerstands teilten.” Kolja Möller, Die Europäische Sozialunion (April 24, 2012), available at http://www.europa-in-bremen.de/fileadmin/user_upload/henmue/pdfs/EUDEinladung20120202_Moeller.pdf. But see ALTIERO SPINELLI: FROM VENTOTENE TO THE EUROPEAN CONSTITUTION (Menéndez ed., Arena Report 1/2007).

54 But see Möller, supra note 53. Lutz Leisering hat ähnliche Beobachtungen generalisiert und gezeigt, daß der international welfarism der Entstehung des modernen Wohlfahrtsstaats vorhergegangen ist. See Lutz Leisering, Gibt es einen Weltwohlfahrtsstaat?, in WELTSTAAT UND WELTSTAATLICHKEIT 185 (Mathias Albert & Rudolf Stichweh eds., 2007). But see Ulrike Davy, The Rise of the Global “Social” – Origins and Transformations of Social Rights under UN Human Rights Law, 3 INTERNATIONAL JOURNAL OF SOCIAL QUALITY (2013). Die Bindung des Verfassungsgedankens an den Staat ist neueren Datums, unterschlägt aber die weit zurückreichende und auch noch für die Herausbildung von protodemokratischem National- (19. Jhd.) und demokratischem Sozialstaat (20. Jhd.) konstitutive Co-Evolution von kosmopolitischer und nationaler Konstitutionalisierung, wie neuere Studien zeigen. See Thornhill, supra note 51; Brunkhorst, The Co-evolution of Cosmopolitan and National Statehood – Preliminary Theoretical Considerations on the Historical Evolution of Constitutionalism, 47 COOPERATION AND

CONFLICT 176 (2012); BRUNKHORST, supra note 17.

55 FOSSUM & MENÉNDEZ, supra note 51, at 80, 175. The only instance of a constitution of a founding member that made no declaration about Europe, the Constitution of Luxemburg, is of itself a revealing case. In this case, the Luxemburg Conseil d’Êtat decided in 1952 that the Constitution implicitly committed the representatives of the people to join the European Coal and Steel Community, and to strive for further European unification. It is argued that, even if the constitution of Luxemburg did not contain anything vaguely resembling a proto-European clause, the Conseil d’Êtat constructed its fundamental law along very similar lines. When reviewing the constitutionality of the Treaty establishing the Coal and Steel Community, the Conseil affirmed that Luxembourg, not only could, but also should, renounce certain sovereign powers if the public good so required. See Report on the 1952 judgment of the Conseil d’Êtat.


All of this suggests that, from the very outset, the European Union was not founded as an international association of states. On the contrary, it was – speaking in legal terms – founded as a community of peoples who legitimated the project of European unification directly and democratically through their combined, but still national, constituent powers. At the same time and with the same founding act, these peoples, acting in plural, constituted a single European citizenship. Therefore, from the very beginning, the Treaties were not just intergovernmental. They were legal documents with a constitutional quality. But the long Katzenjammer of gradual incrementalism and the Method Monet followed in the wake of this revolutionary achievment. Following Tuori, the evolutionary narrative is structured by a sequence of evolutionary stages. I. Stage I The Kantian mindset of emancipation from fascism was repressed by the rhetoric of peace, reconciliation and anti-communism. The first stage of the constitutional evolution was triggered by the invention of the economic constitution of Europe that consisted in the structural coupling of law and economics.56 In 1957 treaty negotiations German Ordoliberals – then strongly backed by the conservative American government – took the chance to realize their old dream of a mere technical constitution without government and legislator.57 The economic constitution was centered in competition law that was to be watched over by the Court. If we look back from today, the beheading of the legislative power that once produced the French Revolution, exactly represented the overlapping consensus between (otherwise very different) German-Austrian Ordoliberals from the Freiburg-school and the later Neoliberals from the Chicago-school of economics. In the words of Ernst-Joachim Mestmäcker, the leading legal theorist of the Freiburg-school, “The most important powers in economic concerns should be reserved for the judiciary, and taken away from legislation and government.”58

56 German Ordoliberals already in the early 1930s had “hijacked” the idea of an economic constitution from the political left, from Hugo Sinzheimer and Franz Neumann. See Kaarlo Tuori, Multi-Dimensionality of European Constitutionalism: The Many Constitutions of Europe, in THE MANY CONSTITUTIONS OF EUROPE 3, 16 (Kaarlo Tuori ed., 2010). The hijacking was organized by Franz Böhm.

57 See Wolfgang Streeck, Zum Verhältnis von sozialer Gerechtigkeit und Marktgerechtigkeit 8 (unpublished e-manuscript of a lecture, Verona September 20, 2012).

58 Ernst-Joachim Mestmäcker, Einführung, in Wettbewerb und Monopolrecht 5, 9 (Franz Böhm ed.) (author’s translation). The same argument seems to fit the present crisis. See Mestmäcker, Ordnungspolitische Grundlagen einer politischen Union, FRANKFURTER ALLGEMEINE ZEITUNG (Nov. 9, 2012), at 12. In the same way Milton Friedman and the Chicago School argues that the main threat to political and economic freedom “arises out of democratic politics” and must be “defeated by political action.” See Gabriel A. Amond, Capitalism and Democracy, 24 POLITICAL SCIENCE AND POLITICS 467 ( September 1991).


Retrospectively the program of economic constitutionalization appears as an immunization of free market capitalism against democratic control in two great steps. First, Ordoliberals took Europe, then Neoliberals took the rest of the world. First, the transnational constitution of Europe had to be conquered, then the transnational constitution of the WTO was detached from national political constitutions. The basic constitutional idea that finally unites Ordo- and Neoliberalism is the idea that law should be changed from functioning as the immunity system of society into law that functions as the immunity system of transnational capitalism, triggering an autoimmune disease by declaring civil war against the rest of the societal body and its legislative organs.

59 The immune system of the

many stakeholders and their clients should become an immune system of the few shareholders.60 Hans Kelsen was the first who made the democratically catastrophic, legal and constitutional implications of Ordo- and Neoliberalism evident in his 1954 critique of Hayek.61 It is here (by the way) where Luhmann’s fear of a loss of freedom through de-differentiation and Habermas’ fear of a loss of freedom through colonization of the life-world coincide. In 1957 Mr. Hyde had won the first round against Dr. Jekyll. But, until the 1980

s the national social welfare regimes were strong enough to cope with the slowly

emerging, transnational liberalization machinery of Marx’s “peaceful competitive struggle.” A quick knock out of Dr. Jekyll seemed impossible. II. Stage II The early ordoliberal hegemony was not without contestation. Mr. Hyde had to cope with the copy of Dr. Jekyll within himself. Caused by a growth of legal conflicts over newly created European law, the second stage of European constitutionalization was reached. It consisted in the establishment of a rule-of-law constitution (or rights-constitution) that – in a reflexive manner – coupled law and rights structurally.62 The growth of European norms and legal conflicts urged European and national courts to construct, apply and implement European rights, to give European law direct effect, and to give force to European

59 Thanks to Willis Guerra Filho for this hint (in a discussion on a conference “Problemas Juridicos e Constitucionais da Sociedale Mundial,” Brasilia, September 18, 2013). For comparative points of view (investment law, Latin-America), see David Schneidermann, Compensating for Democracy’s “Defects”: The Case of International Investment Law (paper given at the Workshop Conflict-Law Constituionalism v. Authoritarian Managerialism, Loccum October 7, 2013).

60 See COLIN CROUCH, THE STRANGE NON-DEATH OF NEOLIBERALISM (2011); Harm Scheppel, Free Movement of Capital and so called “Finacialism” (paper given at the Workshop Conflict-Law Constitutionalism v. Authoritarian Managerialism, Loccum October 7, 2013).

61 HANS KELSEN, Demokratie und Sozialismus, in DEMOKRATIE UND SOZIALISMUS – AUSGEWÄHLTE AUFSÄTZE 170 (Norbert Leser ed., ). For an old but still brillant analysis and representation of Kelsens position, see Peter Römer, Die reine Rechtslehre Hans Kelsens als Ideologie und Ideologiekritik, 11 POLITISCHE VIERTELJAHRESSCHRIFT 579 (1971).

62 Tuori, supra note 56 (discussing a juridical constitution and the structural coupling of law and law).


citizenship. At the end of this process European and national law became one single (albeit fragmented or pluralized) legal order.63 The counter-hegemonic Kantian point here is that subjective rights no longer can be normatively neutralized by law that is technical, such as competition law, and all the other branches of law and economics. To implement European subjective rights for mere economic purposes of private autonomy it was necessary – at least counterfactually and anticipatorily – to construct a full-fledged European citizenship. There is no private autonomy without public autonomy, which Rousseau rightly argued. The opposite view was the great illusion of classical, ordo- and neoliberalism.64 In a famous essay on Eros and the civilization of European citizenship Joseph Weiler once argued that “you could create rights and afford judicial remedies to slaves” because “the ability to go to court to enjoy a right bestowed on you by the pleasure of others does not emancipate you, does not make you a citizen.”

65 I think, Weiler is wrong, even if there are many empirical cases of rights

bearers who are denied full citizenship. He is wrong because once I go to a public court I must – if I want it or not – participate in Kelsen’s judicial “concretization” of the respective legal norms. That means that I must participate in a procedure of creating and changing law. For this purpose I must make myself an active citizen. Therefore, the legislative power of the people does not end once a statuary law is ratified by parliament, and therefore on every level of concretization there is need of direct democratic legitimization and further public contestation. Christoph Möllers rightly speaks of individual legitimization through legal actions that are part and parcel of the whole procedure of democratic legitimization. Thus, the existing notion of European rights contradicts (as an “existing contradiction”) the status of slavery once the slave makes use of them (if he or she has any right, however fragile and partial it is, such as the right of Dred Scott to go to court in Missouri in 1847, and who’s case became one of the triggers of the Civil War). Thus, the European Court in Van Gent en Loos rightly interpreted the Treaties as an “agreement between the peoples of Europe that binds their governments and not simply as an agreement between the governments that binds the peoples.“

66 The construction of

63 TANJA HITZEL-CASSAGNES, ENTGRENZUNG DES VERFASSUNGSBEGRIFFS. EINE INSTITUTIONENTHEORETISCHE REKONSTRUKTION (2012); see Karen J. Alter, The European Court’s Political Power, 19(3) WEST EUROPEAN POLITICS 458 (1996); Karen J. Alter, Who are the Masters of the Treaty?: European Governments and the European Court of Justice, 52 INTERNATIONAL ORGANIZATION 121 (1998). On the perpective dependence of evaluating a legal system as fragmented or pluralized, see Christoph Möller, Fragmentierung als Demokratieproblem?, in STRUKTURFRAGEN DER EUROPÄISCHEN

UNION 150 (Claudio Franzius, Meyer, Franz C. Meyer, Jürgen Neyer eds., 2010).

64 See MAUS, supra note 32; JÜRGEN HABERMAS, FAKTIZITÄT UND GELTUNG (1997).

65 J. H. H. Weiler, To be a European citizen – Eros and civilisation, 4 JOURNAL OF EUROPEAN PUBLIC POLICY 495, 503 (1997).

66 EUROPEAN UNION LAW, 5677 (Damian Chalmers, Gareth Davies, Giorgio Monti eds., 2010); see CLAUDIO FRANZIUS, RECHT UND POLITIK IN DER TRANSNATIONALEN KONSTELLATION 87 (2012); Claudio Franzius, Besprechung von “Habermas,


European citizenship by the Court, thus, must be derived from the synthetic constituent power of the peoples of Europe. This brings the Kantian mindset back in for a simple reason. Once European rights and citizenship are created, a single people can no longer quit membership alone, out of its sovereign will. Not only must all other peoples, but also the European citizens as a whole must have a say in such a case. If Denmark quits the Union, then I (as a German and European citizen) lose my European rights in Denmark. This would include active citizenship rights such as voting for the Danish contingent of the EU-Parliament (if I live in Denmark). Therefore today the Treaty of Lisbon allows withdrawl of a nation only due to European procedural rules.67 Habermas rightly has called this a civilization of state power by overcoming state-sovereignty and individualizing popular sovereignty.68 Thus, there is not only existing justice of the national state at stake once it comes to a transfer of sovereign rights from the national state to the European Union. There is also the already existing justice of the European Union at stake once it comes to a return of powers of the Union to the national state. There is not only a requirement of solidarity between national states and their different demoi but also a requirement of solidarity between the individual European citizens as bearers of European rights.69 This could be called the European cosmopolitan moment. What is so interesting with the two judgments (van Gent en Loos 1963 and Costa 1964) that marked the beginning of European citizenship and the direct effect and European law supremacy, is that the construction of citizenship clearly was progressive and democratic, even if the specific decisions were in favor of big money and in the interest of the economic ruling class. So, because of the construction of EU-citizenship and European civil rights it seems that the second round goes to Dr. Jekyll. The growing audience of European lawyers applauds. The two decisions of the Court (van Gent en Loos in 1963) and (Costa in 1964) emphatically have been described by jurists as “the declaration of independence of Community law.”

70 Maybe a bit premautrely – because as long as there was no full-fledged

political constitution of Europe, active citizenship remained virtual and arbitrary. Individual, or better, private legitimization without public legitimization remains structurally incomplete on the level of the rule-of-law constitution. Round two between Dr. Jekyll and Mr. Hyde is drawn, and the hegemony of the economic constitution prevails.

Die Verfassung Europas“, 52 DER STAAT 317, 318 (2013); CLAUDIO FRANZIUS & ULRICH K. PREUß, DIE ZUKUNFT DER

EUROPÄISCHEN DEMOKRATIE 16 (2012).

67 The example is from BRUNKHORST, supra note 51, at 168.

68 JÜRGEN HABERMAS, ZUR VERFASSUNG EUROPAS – EIN ESSAY57 (2011).

69 See Sabine Frerichs, Gold or Guilt? Reconstructing the Moral Economy of Debt (paper given at the Workshop Conflict-Law Constituionalism v. Authoritarian Managerialism, Loccum October 7, 2013).

70 Tuori, supra note 56.


III. Stage III and Crisis We have arrived at the third round with impressive progress towards European parliamentarization.71 In the third stage of constitutionalization the political constitution couples law and politics structurally, and even the beginnings of a European social-welfare and security constitution – a fourth and fifth stage of constitutionalization – can now be observed.72 Again Dr. Jekyll is earnestly contesting the hegemony of the economic constitution and its liberalization machinery. The Czech Constitutional Court, in its judgment on the Lisbon-Treaty, very properly stated that the European Union today forms a complete and gapless system of democratic legitimization.

73 The Kantian mindset of

comprehensive democracy now is legally articulated in many single articles and legal norms of primary and secondary European law, such as the famous Art. 6 of the Treaty of Maastricht, or the Articles 9-12 of the Lisbon Treaty. Von Bogdandy has correctly argued that these Articles contain the democratic substance of the Lisbon Treaty as well as a cosmopolitan project. I would not argue that they are “developing the democratic credentials not just of the EU, but of public authority beyond the state in general,” as von Bogdandy has. He claims that this state of affairs shows “what lessons can be learnt for international organizations.”

74 If one changes from this international lawyer’s participant

perspective, which is not completely free from Eurocentrism, to an evolutionary perspective, it is possible to argue that Articles 9-12 are not so much credentials and lessons for other global regions but manifestations of an evolutionary universal or an evolutionary advance (such as the brain, the eye, bureaucracy or constitutions) that probably has been realized elsewhere, and not only in Europe, and already long ago. An example might be the constitutional order that was established after the Papal Revolution of the 11

th Century. Be that as it may, it seems as if the third round has been won by Dr.

Jekyll.

71 See Phillip Dann, Looking Through the Federal Lens: The Semi-Parliamentary Democracy of the EU, 5 JEAN-MONNET WORKING PAPER (2002); Jürgen Bast, Europäische Gesetzgebung – Fünf Stationen in der Verfassungsentwicklung der EU, IN STRUKTURFRAGEN DER EUROPÄISCHEN UNION, supra note 63, at 173.

72 See Tuori, supra note 56; SONJA BUCKEL, ‘WELCOME TO EUROPE’ – JURIDISCHE AUSEINANDERSETZUNGEN UM DAS

STAATSPROJEKT Europa (2013).

73 Isabelle Ley, Brünn betreibt die Parlamentarisierung des Primärrechts. Anmerkungen zum zweiten Urteil des tschechischen Verfassungsgerichtshofs zum Vertrag von Lissabon vom 3.11.2009, 65 JURISTEN-ZEITUNG 170 (2010).

74 Armin von Bogdandy, The European Lesson for International Democracy: The Significance of Articles 9–12 EU Treaty for International Organizations, 23 EUROPEAN JOURNAL OF INTERNATIONAL LAW 315, 317, 321-25, 333 (2012). With respect of the Maastricht-Amsterdam Treaty, and in particular the Constitutional Treaty that failed in 2005 but to a large extent is identical with the Lisbon Treaty, see Christian Callies, Das Demokratieprinzip im Europäischen Staaten- und Verfassungsverbund, in Internationale Gemeinschaft und Menschenrechte 399, 402-404 (Jürgen Bröhmer et al. eds., 2005).


Unfortunately, just at the moment when the hard issues of unequal distribution of wealth, unequal life conditions, and unequal life-chances have came to the fore, the bodyguards of Dr. Jekyll – the European Council, the German hegemon, and the hastily established Troika – have reached for their guns. The economic state of siege has been declared.75 This is the moment in Koskeinnemi’s historic struggle that looks like a technical knockout in Hyde’s advantage. And the winner takes all. What happened? The economic constitution (stage I) was at the beginning of a long, and for a long time democratically open process of a transformation from nationally restricted democratic class struggle

76 to Marx’s “peaceful

competitive struggle” between nations for location advantages such as low taxes, low wages, and flexible jobs.

77 From the beginning there was ordo-, then neoliberal hegemony,

but it was challenged by counter-hegemonic powers that constitutionalized more and more Kantian legal constraints, organs and competencies. Europe’s liberalization machinery was one of many alternative programs. This trajectory changed, first after the global epochal watershed of the 1980s and finally after the unique introduction of a common currency without legislator and government. Especially this last achievement reinforced the ECB’s priority on price-stability over pursuit of full-employment.78 This was the best thing that could have happened to the transnational social class of investors, bankers and big business. They benefited from a bad political compromise that none of the political actors of the early 1990s ever wanted.79 In the effect democratically organized, national class struggle (based on strong trade unions and strong parliaments) was replaced with the international struggle between nations (based on weak and disempowered trade unions, and weak and disempowered parliaments). It has again become evident that there were two (and only two) generalizing mechanisms that enabled the establishment of a democratically controlled market economy in parts of the world of national states after World War II. For the first time in history egalitarian mass-democracy – now called democratic (meaning democratically controlled) capitalism – was successfully established. These generalizing mechanisms were,

75 See Mung-Sung Kuo, The Moment of Schmittian Truth: Conceiving of the State of Exception in Global Governance in the Waken of the Cyprus Bailout Crisis (paper given at the Workshop Conflict-Law Constitutionalism v. Authoritarian Managerialism, Loccum October 7, 2013).

76 WALTER KORPI, THE DEMOCRATIC CLASS STRUGGLE (1983).

77 Claus Offe, Europe Entrapped – Does the EU have the Political Capacity to Overcome its Current Crisis? (unpublished manuscript 2013).

78 Wolfgang Streek, Zum Verhältnis von sozialer Gerechtigkeit und Marktgerechtigkeit (unpublished manuscript of a Lecture Verona Sept. 20, 2012). See Kerry Rittich, Fragmented Work: Informality, Uneven Austerity and an Expanded Law of Work (paper given at the Workshop Conflict-Law Constitutionalism v. Authoritarian Managerialism, Loccum October 7, 2013).

79 Henrik Enderlein, Grenzen der europäischen Integration? Herausforderungen an Recht und Politik, DFG-RUNDGESPRÄCH IN ZUSAMMENARBEIT MIT DER FRIEDRICH-EBERT-STIFTUNG BERLIN (unpublished manuscript November 25, 2011).


roughly speaking, strong unions and strong parliaments, backing each other reciprocally. They are no longer. What we now have is weak unions and weak parliaments within a system of capitalist democracy, and that means capitalist controlled democracy, or democracy that is “conforms to the market” and therefore rightly reduced to Merkel’s “parliamentary participation.” The neo-liberal deconstruction of unions and parliaments has reduced the binding power of solidarity to a level that is best expressed by an ironic line from one of Madonna’s songs: “Hold me like your money!” A European sentiment, indeed! After the transformation of the national states “into debt-collecting agencies on behalf of a global oligarchy of investors, compared to which C. Wright Mills’s ‘power elite’ appears a shining example of liberal pluralism,”80 the race to the bottom became unavoidable, and the cold war between the Northern and the Southern States of the Union began. The austerity regime with constitutionalized debt breaks became the prerogative constitution of Europe.81 The European constitutional situation now resembles that in of the Monthy Python sketch: “If you have guests, you can make games. All guests are divided in two teams, A and B. And A are the winners. (…) Well you can make it more complicated if you want to.” The younger generation in the so-called crisis countries knows the team to which it has been assigned. The unemployment numbers and devastated education budgets make it pretty straightforward. The problem of democracy and cosmopolitanism today is how to make it more complicated again. But for this we need a renewal and transnationalization of democratic class struggle, no matter how unlikely that is. There will be no democratic cosmopolitanism without a turn from international economic differences to transnational social differences, from national identity politics to transnational redistributive politics.82 At least a first step has been taken. The cold war between North and South, between lost and found, has made the emergence of a European mass-public unavoidable.83 It already exists. And that will bring democratic alternatives back in, such as the alternative between keeping the Euro with government and legislator vs. returning to national currencies. One need not be a prophet to predict that, at the price of a comprehensive and deep crisis of legitimization, such a decision can no longer be made behind closed doors, bypassing the

80 Wolfgang Streeck, Crises of Democratic Capitalism, 51 NEW LEFT REVIEW 71 (2011). As a consequence, popular sovereignty has been fragmented and marginalized, beyond and within the national state, see THORE PRIEN, FRAGMENTIERTE VOLKSSOUVERÄNITÄT (2010).

81 See Wolfgang Streek & Daniel Mertens, Politik im Defizit. Austerität als fiskalpolitisches Regime, MPIfG Discussion Papers 10/5, Köln 2010.

82 But now a European public exists, and we can observe first changes of opinion that are going in the direction of the following last sentence. See Paul Statham & Hans-Jörg Trenz, Understanding the Mechanisms of EU Politicization: Lessons from the Euro-zone Crisis (electronic paper, Kopenhagen 2013).

83 For early observations, see Hauke Brunkhorst, Zwischen internationaler Klassenherrschaft und egalitärer Konstitutionalisierung – Europas zweite Chance, in ANARCHIE DER KOMMUNIKATIVEN FREIHEIT 32-25 (2007).


European public sphere. In such a case the national peoples and the European citizens must have a say, and that means voice and vote.

Articles

Special Section Europe and the Lost Generation

Lost at Sea

By Daniela Caruso* A. Introduction This essay aims to expand the definitional contours of the “lost generation” discussed in this special section of the German Law Journal. A reflection on the existential loss experienced by many young Europeans must also acknowledge, for the record and for reasons of relative salience, those who have literally drowned in the waters of southern Europe in their quest for a better future. Their youth has been lost in a true—not just metaphorical or metaphysical—sense. The per-day death toll reached its peak on 3 October 2013, when over three hundred bodies were retrieved off the coast of Lampedusa by Maltese and Italian rescue forces.

1 The just-concluded summer brought another tragic

surge in Mediterranean migration, including more deadly shipwrecks.2

The law of the European Union (EU) colors only a part of the backdrop against which these deaths have occurred. Others share the responsibility. On one hand, member states’ immigration policies and nationality laws remain in large part un-harmonized. On the other hand, international law regulates, among other things, the threshold of rescue obligations. Nonetheless, the EU project itself is related to these deaths in many ways—both legal and political—and cannot disown them. A second goal of this contribution is to rethink, for a moment, the relation between the increasing permeability of internal borders and the obstacles that third country nationals (TNCs) encounter at the EU’s external frontiers. Normally one thinks of the two as structurally opposed. Within its boundaries the EU dismantles checkpoints and fosters the bonding of its citizens. But precisely in order to enable the communal experience of the EU’s insiders, Europe reinforces its external borders, digging an ever deeper chasm

* Professor of Law, Boston University. Special thanks to Fernanda Nicola, Francesca Strumia, and the editors of the German Law Journal for comments on earlier drafts. Errors remain mine.

1 See Frances Webber, The Cradle or the Grave? EU Migration Policy and Human Rights, 23 STATE WATCH J. 3, 4 (2014) (providing details of the tragedy).

2 Migrants Drown as Libya Boat to Italy Sinks, BBC NEWS (May 12, 2014), http://www.bbc.com/news/world-europe-27379493; Tidal Wave, THE ECONOMIST (July 5, 2014), http://www.economist.com/news/europe/21606301-more-horrific-deaths-mediterranean-tidal-wave; Nuova tragedia a Lampedusa. Affonda gommone, diciotto morti, IL CORRIERE DELLA SERA (Aug. 24, 2014), http://www.corriere.it/cronache/14_agosto_24/nuova-tragedia-lampedusa-affonda-barcone-diciotto-morti-282e2882-2b5c-11e4-9f19-fba1b3d7cb6f.shtml.


between the European “self” and the TNC “other.” There are, indeed, plenty of EU activities that match exactly this dichotomous pattern.

3

Yet, by way of a thought experiment, this essay sets aside the usual conceptual frame, and proposes to characterize the internal and external EU attitudes as aligned and even chronologically parallel. With Lampedusa as an illustration,

4 these pages posit that a link

exists between the lost at sea and the particular juridical discourse that has characterized the EU’s response to the Euro-zone crisis. This discourse, enshrined in primary and secondary legislation as well as judicial opinions, has managed to lock in, bless, and codify a principled resistance to sharing finite resources. The dominant mantra of these years has been the non-renounceable independence of states’ budgets. No matter how deeply intertwined by the flow of people, things, and money, the economies of member states have remained distinct, in their own “silos.” The no-bailout clause of the Treaty on the Functioning of the European Union (TFEU) has been crucial to the unfolding of the Euro-zone crisis.

5 Like a watershed, it has allowed the EU, as

a supranational legal system, to detach itself both morally and materially from the collapse of local economies. By the same token, the most difficult aspect of migration—the flow of persons who have no access to preauthorized channels—has been handled in such a way as to leave states ultimately in charge and individually responsible. Of course, given the unity of external borders, there has been a great deal of EU-level coordination to prevent and combat illegal immigration, as well as significant harmonization of asylum laws.

6 Nevertheless, no agile

EU law mechanism exists to weave those who make it ashore into the socio-economic fabric of the Union as a whole. To the contrary, a complex set of rules and incentives often

3 See Daniel Thym, EU Migration Policy and Its Constitutional Rationale: A Cosmopolitan Outlook, 50 COMMON MKT

L. REV. 709 (2013) (“Europe’s mission of promoting transnational freedom is not replicated in the Area of Freedom, Security and Justice. Instead of dismantling borders, EU activities re-confirm the relevance of borders towards third States.”).

4 By focusing on the subset of migrants that reach the coast of Lampedusa by means of make-shift boats, this essay excludes from its scope visa-based or otherwise pre-authorized immigration. It is meant to reflect on short and medium term reception policies, as opposed to the possibilities for inclusion that open up for some TCNs in the long term. See, e.g., Council Directive 2003/109, 2003 O.J. (L 16/44) (EC) (concerning the status of third-country nationals who are long-term residents); Council Directive 2003/86, 2003 O.J. (L 251/12) (EC) stating the right to family reunification).

5 See Consolidated Version of the Treaty on the Functioning of the European Union art. 125, Oct. 26 2012, 2012 O.J. (C 326) 47 [hereinafter TFEU].

6 See TFEU art. 79, paras. 1, 2(c); Directive 2008/115/EC, of the European Parliament and of the Council of 16 December 2008 on Common Standards and Procedures in Member States for Returning Illegally Staying Third-Country Nationals, 2008 O.J. (L 348).

2014] Lost at Sea 1199

confines these persons to the state of first entry for a long time.7

The material costs of short and medium term reception are shared only minimally.

8 Border states pay the

consequences of poor policing measures on the EU perimeter. Within this discourse, both the shipwrecks and the troubles of those who survive them can somehow be archived as unfortunate byproducts of an otherwise normal, and necessary, exercise in boundary drawing. The plight of Sicilian mayors, even when heard in Rome, finds no sympathetic ear in Brussels. The EU system has already exhausted all plausible avenues for redistribution within the constraints of the law. As a result, local problems are confined to their geography. In what counts as ordinary parlance in post-crisis Europe, the fate of those in transit to our shores can be downgraded from scandal to technical error, and from systemic problem to peripheral glitch. There is, perhaps, a more than tenuous nexus between the particular mode of the Euro-zone crisis management and the EU public’s habituation to an inherently anti-redistributive discourse in matters of irregular migration across the Mediterranean. To be sure, in many other corners of EU law the interdependence of states’ finances is the norm. Since the days of Gravier, for instance, it has been clear that the benefit of state-funded vocational education must be extended, at no additional cost, to students from other member states.

9 Furthermore, in cases like Viking and Laval, the Court of Justice has

had no trouble imposing redistributive obligations on workers of some states to the alleged benefit of workers from other states, with immediate consequences for national welfare policies.

10 The topic of migrants’ reception, by contrast, has been grafted onto a

pattern of ultimate fiscal independence—a pattern most obvious in the law of monetary union, and also visible in certain rules of EU citizenship.

11 The reasons for this choice, often

self-evident, run deep into the fabric of both history and contemporary politics. Its wisdom, however, remains questionable, and must be questioned.

7 See FRANCESCA STRUMIA, SUPRANATIONAL CITIZENSHIP AND THE CHALLENGE OF DIVERSITY 105 (2013) (highlighting the fact that EU law promotes the internal mobility of citizens but at the same time “immobilizes” migrants). Notably, even if granted refugee status, immigrants must often remain in the state of first entry if they care to obtain long-term residence permits.

8 See infra Part C. Minimum standards of reception have recently been specified in greater detail. See Directive 2013/33/EU, of the European Parliament and of the Council of 26 June 2013 Laying Down Standards for the Reception of Applicants for International Protection, 2013 O.J. (L 180) 96.

9 Gravier v. City of Liege, CJEU Case C-293/83, 1985 E.C.R. 593.

10 See Alexander Somek, From Workers to Migrants: Exploring the Changing Social-Democratic Imagination, 18

EUR. L. J. 711 (2012).

11 Alopka v. Ministre du Travail, de l’Emploi et de l’Immigration, CJEU Case C-86/12, 2013 (not yet reported).


B. The Commonality of Discourse in EMU and Immigration Law EU asylum and immigration rules have developed in a way that bears interesting analogies to early monetary law and recent Euro-zone reforms. Just as in the case of monetary union, the creation of supranational institutions for the management of immigration began as a response to business’s antipathy for internal borders. The Sarrebruck Accord of 1984 between France and Germany—a precursor to the larger agreement reached in Schengen in 1985—was a political response to a demonstration of truck drivers, angered by the length of checks at the Franco-German border.

12

The genealogic parallel continues. The plan to communitarize monetary policy, building on the provisions on monetary capacity of the Single European Act, was launched into reality with a decision of the European Council in December 1991 and soon thereafter enshrined in the Maastricht Treaty. It was with Maastricht, as well, that immigration policy began to move past domestic confines.

13 The reform had to work around a number of

intergovernmental premises—most importantly states’ exclusive grip on nationality laws, steeped in highly specific experiences of colonialism, imperialism, and migration. Under the aegis of a new pillar, the Schengen Agreement and Convention

14 evolved into a Borders

Code for the Union.15

The 1990 Dublin Convention16

morphed into the Dublin System.17

Thanks to a stronger foundation in the Treaty of Amsterdam, the EU finally equipped itself with Frontex, a supranational agency set up in Warsaw to manage and police external borders.

18 Notably, the Treaty of Amsterdam also gave prominent status to the idea of

12 BARBARA MARSHALL, THE NEW GERMANY AND MIGRATION IN EUROPE 119 (2000).

13 Bruno de Witte, Institutional Variation across Policy Fields in the Evolution of European Union Law, 20 MAASTRICHT J. EUR. & COMP. L. 465, 467–68 (2013).

14 Convention Implementing the Schengen Agreement of 14 June 1985 between the Governments of the States of the Benelux Economic Union, the Federal Republic of Germany and the French Republic on the Gradual Abolition of Checks at Their Common Borders, 2000 O.J. (L 239) 19.

15 Commission Regulation 562/2006, of the European Parliament and of the Council of 15 March 2006 Establishing a Community Code on the Rules Governing the Movement of Persons Across Borders (Schengen Borders Code), 2006 O.J. (L 105/1).

16 Convention Determining the State Responsible for Examining Applications for Asylum Lodged in One of the Member States of the European Communities, 1997 O.J. (C254/1).

17 The pillars of the Dublin System were, and still are (in revised form), Council Regulation 343/2003, Establishing the Criteria and Mechanisms for Determining the Member State Responsible for Examining an Asylum Application Lodged in One of the Member States by a Third-Country National, 2003 O.J. (L 50/1) [Dublin Regulation]; Council Regulation 2725/2000, Concerning the Establishment of “Eurodac” for the Comparison of Fingerprints for the Effective Application of the Dublin Convention, 2000 O.J. (L 316) [Eurodac].

18 Council Regulation 2007/2004, Establishing the European Agency for the Management of Operational Cooperation at the External Borders of the Member States of the European Union, 2004 O.J. (L 349/1) [Frontex].

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32006R0562:EN:NOT

http://frontex.europa.eu/assets/About_Frontex/frontex_regulation_en.pdf


variable geometry —a concept and set of instruments essential to the realization of both shared immigration policies and the EMU. Analogies abound not only in the origins of current mechanisms, but also in the respective roles played by various member states in their onset and operation. In the 1980s, before reunification, Germany already experienced a high rate of inbound migration. It was in German political circles that the idea of Europeanizing immigration policies was born. An explicit reason for this shift to the supranational plane was the need to externalize a German problem. The goal was to redirect some migratory flows to other EU states.

19

Today, accounts of German virtue, so central to the politics of the Euro-zone crisis, are also common in the literature on the Europeanization of mixed migration policy. Indeed, according to the UNHCR, in 2013 Germany was the recipient of the largest number of asylum applications in the region.

20 The villains of the story of reception are found, instead,

among the PIIGS. In 2011, as the interest rates on Greek bonds took to the sky, the European Court of Human Rights famously held that Greece had subjected an Afghani migrant to inhuman and degrading treatment.

21 Thus Greece, already the portrait of

laziness and dishonesty in some quarters,22

became also the epitome of European xenophobia. Italy fared no better in 2012, when the Strasbourg court condemned its unceremonious refoulement of intercepted migrants back to Libya.

23

When the crisis hit, the EMU system notoriously burst at the seams. The straight jacket of the Treaty made urgent measures to save the Euro impossible. Any real strategy of survival had to be at least partly outsourced to non-EU institutions, such as the International Monetary Fund, or nested in the interstices of the system. Creatively, Euro-experts devised a number of ad hoc solutions, ranging from conditional loans, austerity pledges, and haircuts to new supervisory bodies and banking rules, but emphatically not including Eurobonds or direct forms of financial risk pooling. The Outright Monetary Transactions (OMT) decision of 2012, allowing the European Central Bank (ECB) to purchase sovereign bonds on the secondary market, was the closest the system got to shoring up the finances of one state with the strength of the whole Euro-zone. Notably, in reaction to the

19 See MARSHALL, supra note 12, at 119.

20 United Nations High Commissioner for Refugees, 2014 UNHCR regional operations profile—Northern, Western, Central and Southern Europe, http://www.unhcr.org/cgi-bin/texis/vtx/page?page=49e48e5f6.

21 M.S.S. v. Belgium and Greece, ECHR App. No. 30696/09 (Jan. 21, 2011), http://hudoc.echr.coe.int/.

22 See Philomila Tsoukala, Narratives of the European Crisis and the Future of (Social) Europe, 48 TEXAS INT’L L.J. 241–66 (2013) (analyzing and critiquing the common depiction of Greece as a profligate and immoral country in the context of the Euro-zone crisis).

23 Hirsi Jamaa and Others v. Italy, ECHR App. No. 27765/09 (Feb. 23, 2012), http://hudoc.echr.coe.int/ [hereinafter Hirsi].


redistributive flavor of the OMT decision, the German Federal Constitutional Court took pains to clarify the boundaries the ECB is not allowed to cross.

24

Over the same time span, a surge in migration to the southern and eastern flanks of Europe required similarly creative efforts.

25 Frontex was not adequately present in the

Mediterranean. The national governments of the EU’s south were proving particularly ill-equipped to police the influx of asylum seekers from Africa and the middle east—and in light of the sovereign debt crisis, things could only get worse. Moreover, with the unfolding of the Arab Spring, these governments found it ever more difficult to enforce repatriation treaties with non-EU countries.

26 The EU therefore again rethought its immigration policy.

Building on the legacies of Tampere and the Hague,27

in 2009 the European Council developed the Stockholm Programme, which emphasized enhanced cooperation in border management, the importance of an EU external security strategy, and strengthened cooperation with non-EU countries.

28 While the Stockholm Action Plan identified solidarity

among member states as essential in the present migratory context, its implementation largely consisted of reinforcing existing mechanisms, all based on states’ individual responsibility in border management and in handling mixed migration flows.

29

24 Bundesverfassungsgericht [BVerfG - Federal Constitutional Court], Case No. 2 BvR 2728/13, para. 41 (Jan. 14, 2014), https://www.bundesverfassungsgericht.de/en/decisions/rs20140114_2bvr272813en.html (“[F]iscal redistribution [is] not entailed in the integration programme of the European Treaties. On the contrary, independence of the national budgets, which opposes the direct or indirect common liability of the Member States for government debts, is constituent for the design of the monetary union.”). See Dagmar Schiek, The German Federal Constitutional Court’s Ruling on Outright Monetary Transactions (OMT) – Another Step towards National Closure?, 15 GERMAN L.J. (2014).

25 Commission Communication Examining the Creation of a European Border Surveillance System (Eurosur), COM (2008) 68 final (Feb. 13, 2008).

26 Italy, for instance, was no longer able to enforce its bilateral agreements with Libya, concerning prevention of clandestine immigration, following the Libyan revolution which broke out in of 2011. Hirsi Jamaa, ECHR App. No. 27765/09 at para. 19–21.

27 PEO HANSEN & SANDY BRIAN HAGER, THE POLITICS OF EUROPEAN CITIZENSHIP 162–64 (2010) (comparing the Tampere Program of 1999 and the Hague Programme of 2004).

28 The Stockholm Programme—An open and secure Europe serving and protecting the citizens, 2010 O.J. (C 115/1). See also Communication on Delivering an Area of Freedom, Security and Justice for Europe's Citizens: Action Plan Implementing the Stockholm Programme, COM (2010) 171 final (Apr. 20, 2010) [Stockholm Action Plan].

29 The Stockholm Program yielded two revised regulations (Dublin III and Eurodac) and two revised directives (Conditions of Reception and Asylum Procedures, 2013 O.J. (L 180) and the revised Qualification Directive, 2011 O.J. (L 337)).


To be sure, two significant forms of EU resource pooling have stemmed from the Stockholm strategy. One is the recent establishment of Eurosur

30—a coordinated system of

high-tech border surveillance that allows for real-time exchange of operational information among the member states as well as between them and Frontex. The point of this initiative is to “reduce the number of irregular migrants entering the EU undetected.”

31 The other

example of cooperation has been the attempt to deepen the member states’ common relations with the EU’s neighbors. This is known as the European Neighborhood Policy (ENP).

32 It includes, among its recent yields, a couple of “mobility partnerships,” and aims

to lighten migratory pressure at the southern flanks of Europe.33

Yet, even these EU-level initiatives remain anchored to the paradigm of states’ individual responsibility. Eurosur, like many instruments of economic policy, is mostly a tool for coordination of member states’ actions, not a wholesome assumption of the substantive task of policing irregular immigration. In a statement attached to the Eurosur Regulation, the Council of Ministers carefully dispels any belief to the contrary.

34 Italy, for instance, must shoulder its

own policing operation, relying on spontaneous aid from other member states.35

This operation—known as “Mare Nostrum” (our sea!)—has proven so taxing that it casts doubts on the value of maintaining barriers to immigration.

36 And, of course, the alphabet

soup of reception centers in Italy (CIE, SPRAR, CARA) is put together with national and international funds, not with direct EU contributions. The mobility partnership agreements, by the same token, only aim at the numerical reduction of undocumented migrants, and do so in ways that do not align with the

30 Commission Regulation 1052/2013, of the European Parliament and of the Council of 22 October 2013 Establishing the European Border Surveillance System (Eurosur), 2013 O.J. (L 295/11) [hereinafter Eurosur].

31 COUNCIL EUR. UNION, COUNCIL ADOPTS REGULATION ESTABLISHING THE EUROSUR SYSTEM (2013), http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/jha/139099.pdf.

32 EUR. COMM’N, IMPLEMENTATION OF THE EUROPEAN NEIGHBOURHOOD POLICY IN 2013, REGIONAL REPORT: A PARTNERSHIP FOR

DEMOCRACY AND SHARED PROSPERITY WITH THE SOUTHERN MEDITERRANEAN PARTNERS (2014), http://eeas.europa.eu/enp/pdf/2014/regional/pdsp_en.pdf.

33 See the EU mobility partnership agreements signed with Morocco (June 2013) and Tunisia (March 2014).

34 See Eurosur, supra note 30 (“Eurosur will contribute to improving the protection and the saving of lives of migrants. The Council recalls that search and rescue at sea is a competence of the Member States which they exercise in the framework of international conventions.”).

35 Giovanni Caprara, L’Operazione Mare Nostrum, EURASIA (Nov. 4 2013), http://www.eurasia-rivista.org/loperazione-mare-nostrum/20335/ (noting that assistance has come from Finland first, and then France and the Netherlands).

36 Gianandrea Gaiani, Mare Nostrum, una nave da guerra da mezzo miliardo per i soccorsi, IL SOLE 24 ORE (June 7, 2014), http://www.ilsole24ore.com/art/notizie/2014-06-07/mare-nostrum-nave-guerra-mezzo-miliardo-i-soccorsi-101032.shtml?uuid=ABXMFoOB&fromSearch.


international rights of asylum seekers.37

The ENP, within which the mobility partnerships are framed, aims to strengthen democracy in the neighborhood so as to decrease the future flow of Europe-bound migration. By design, it contributes nothing to the fortunes of those TNCs who cannot be pushed back due to member states’ international obligations. These persons remain where they first landed, waiting for their legal status to be determined by the relevant state authorities. Even if not detained, they are locked into a system that worsens their prospects if they leave the state of first arrival. They are “immobile migrants”

38—a local problem by definition.

If a state does not manage to keep its borders clean, it becomes, in EU law, the polluter that must naturally pay or—in Euro-crisis parlance—the one to blame for Europe’s loss of status in the eyes of the world. Thus it becomes normal for border states to pour whatever money is available into coastal policing, leaving as little as necessary for immigrants’ reception and inclusion efforts. Gatekeeping, like austerity in the PIIGS zone, acquires an aura of necessity, crowding out the economic and political space for alternative social strategies. C. Solidarity vs. Redistribution Besides emphasizing states’ responsibility to treat asylum seekers according to EU-approved standards, the EU Commission makes the case for “increased solidarity . . . among EU States, and between the EU and non-EU countries”

39 (emphasis

added). The notion of solidarity, as outlined in 19

th century catholic social thought, is meant to bind

the faithful, but only in foro conscientiae. Interestingly, in its early formulation, solidarity did not involve an enforceable legal duty to contribute one’s resources to common causes, and was in fact at odds with any open redistributive command. In Pope Leo XIII’s encyclical of 1891, solidarity was only one of the guiding principles.

40 The document also featured

subsidiarity, which in the EU works as a bulwark against communitarization, and private property, which stands in tension with redistribution.

37 EURO-MEDITERRANEAN HUMAN RIGHTS NETWORK, TUNISIA-EU MOBILITY PARTNERSHIP: A FORCED MARCH TOWARDS THE

EXTERNALIZATION OF BORDERS (2014), http://www.euromedrights.org/eng/wp-content/uploads/2014/03/PR_Tunisia_17-03_EN.pdf.

38 STRUMIA, supra note 7, at 105.

39 EUR. COMM’N, Common European Asylum System, http://ec.europa.eu/dgs/home-affairs/what-we-do/policies/asylum/index_en.htm.

40 Leo XIII, Rerum Novarum (1891): Leonis XIII P. M. Acta, XI, 97 (1892).


In the context of EU immigration law and policy—as well as the policies aimed at resolving the banking and sovereign debt crises—solidarity seems equally confined to the realm of voluntary sharing. The bulk of the EU’s contribution to the handling of irregular migration inflows consists of facilitating spontaneous solidarity gestures among member states. It is in this frame that the EU has devised such programs as the European Resettlement Network,

41 the Temporary Protection Directive (in the wake of the Kosovo crisis),

42 and

Eurema (a pilot project of intra-EU relocation intended to provide relief to Malta).43

As the Council of Europe remarks, “[b]oth resettlement and relocation depend entirely on the good will and voluntary participation of the receiving States.”

44

When it comes to receiving and including irregular migrants into the EU society—an essential component of today’s broader “social question”—redistribution is structurally difficult.

45 There are, of course, some truly redistributive inclusion programs, consisting not

just of coordination mechanisms but of EU funds, duly earmarked in the budget and weighing on member states’ finances in proportion to their fortunes.

46 But as in the case

of the European Refugee Fund, such efforts remain materially and systemically marginal. In a different political climate, one could aspire to transform the current system into one that embraces irregular migration as a natural, timeless phenomenon, to be owned fully at EU level so as to take seriously both the rights and the moral claims of the excluded. To begin with, one could conceive of not just minimum reception standards, but also fully coordinated—and binding—relocation schemes, as well as paths towards legal

41 See most recently the joint IOM, UNHCR and ICMC project entitled “Strengthening the response to emergency resettlement needs,” available at http://www.resettlement.eu/page/emergency-resettlement-project.

42 Council Directive 2001/55/EC, of 20 July 2001 on Minimum Standards for Giving Temporary Protection in the Event of a Mass Influx of Displaced Persons and on Measures Promoting a Balance of Efforts between Member States in Receiving Such Persons and Bearing the Consequences Thereof, 2001 O.J. (L 212/12). Chapter VI of this directive, under the heading “Solidarity,” contemplated the possibility for member states to volunteer as receivers in the event of a mass influx of displaced persons. This would imply that immigrants would not be confined to the port of first entry. However, as the DG Home Affairs states on its website, http://ec.europa.eu/dgs/home-affairs/what-we-do/policies/asylum/temporary-protection/index_en.htm, the provisions within this Directive have not been triggered so far.

43 UNCHR, EUREMA I AND II: PILOT PROJECT FOR INTRA-EU RE-ALLOCATION FROM MALTA, http://unhcr.org/4ef338859.pdf.

44 Eur. Parl. Ass., Resettlement of Refugees: Promoting Greater Solidarity, Doc. 13460 (2014).

45 Floris De Witte, EU Law, Politics, and the Social Question, 14 GERMAN L.J. 581, 588 (2013) (“Answers to the social question that presuppose different, or more stringent regulatory or redistributive commitments, are structurally less likely to be implemented successfully in Europe.”).

46 Council Decision 2000/596/EC, of 28 September 2000 Establishing a European Refugee Fund, 2000 O.J. (L 252/12) (subsequently renewed). See also Council Decision 2007/435/EC, of 25 June 2007 Establishing the European Fund for the Integration of Third Country Nationals for the Period 2007 to 2013 as Part of the General Programme Solidarity and Management of Migration Flows, 2007 O.J. (L 168).


employment that direct recently documented immigrants towards those corners of Europe where unemployment rates are relatively less dire and the welfare system relatively less burdened. Even within the current legal architecture, the EU could make room for “mutual recognition of belonging,” i.e. for the idea that those who have duly obtained permits in one state be immediately allowed to move across internal borders with no loss of status or resident seniority.

47

But at present there is no sign of convergence on such goals. Urgent humanitarian measures, while legally possible and definitely not radical, are proving hard to trigger. The recast Dublin Regulation has indeed cast again, with only cosmetic alteration, the principle that asylum applications must be filed in the country of first entry—a feature of the system that creates undue pressure on southern member states, fills up their reception centers, and toughens the stance of coastal patrols.

48 Even with the leeway of the ordinary

legislative procedure, upon which the recasting exercise was based, the EU legislature has kept the Dublin silos separate.

49 In a climate that is structurally hostile to the mutualization

of reception burdens, it is difficult to summon political consensus towards gate lifting. Concerted efforts have therefore remained oriented towards Eurosur’s drones and Eurodac’s fingerprinting. The rest is left to good will. Over time, the lines that separate areas of shared obligation from zones of local concern acquire an aura of eternal wisdom and inevitability. These lines are of course the arbitrary result of historical accidents and political bargains. They have been, however, written into law, and now determine with apparent objectivity the most entangled questions of our time.

50

D. A Way Forward Pushing for EU-level redistribution in matters of irregular migration reception might very well be sheer folly in the current post-election climate. Things can always get worse, and often do. Redistribution often implies fuller integration. And if deeper federalism (as per Mr. Juncker’s program) were to combine with nationalist sentiment (as per Mme. Le Pen’s emboldened vision), one might soon look back with nostalgia at the days in which

47 STRUMIA, supra note 7, at 291–300.

48 Regulation 604/2013, of the European Parliament and of the Council of 26 June 2013 Establishing the Criteria and Mechanisms for Determining the Member State Responsible for Examining an Application for International Protection Lodged in One of the Member States by a Third-Country National or a Stateless Person (Recast), 2013 O.J. (L 180/31).

49 TFEU art. 78(2)(e).

50 Duncan Kennedy, A Semiotics of Legal Argument, in 3 COLLECTED COURSES OF THE ACADEMY OF EUROPEAN LAW

(YEARBOOK) 1992, VOL. III – BOOK 2: THE PROTECTION OF HUMAN RIGHTS IN EUROPE 309 (Academy of European Law ed., 1994).


spontaneous solidarity was at least an option. It is, in any case, beyond the ambition of this essay to chart the course of future immigration reforms or the path of budgetary and social welfare integration. What the foregoing sections have, more modestly, attempted to produce is a map of a pervasive discourse that normalizes tragedy and localizes problems, even when, for structural reasons, solutions at the local level are simply non-existent. In opposition to this discourse, which the experience of the Euro-zone crisis has somehow fortified, it is today particularly important to rethink the lines we have drawn between matters of common budgetary concern and states’ exclusive worries. When these lines are revisited, the arbitrariness of current resource silos—both within the EU and in Europe’s dealings with its neighbors—may become easier to detect. An essential part of this reflection depends on building narratives of openness and continuity between Europe and the lands whence desperate migration journeys originate. This much can certainly be done in the forum of public opinion, as well as in the realm of academic work. History, as always, lends much needed perspective, and may help us situate the burning question of migrants’ inclusion in a larger and deeper context. As recently pointed out, the coming to life of the European Communities (EC) was no virgin birth,

51 and the past sins of

member states in what we now call the global south would cast long shadows on the novel supranational enterprise.

52 Archival research has recently unearthed important details on

the EC’s role in (post)colonial affairs. This work duly revisits the traditional understanding of the early Community ethos, and even posits that the goal of managing colonial affairs was as central to post-WWII federalism as the Iron Curtain problem.

53 It has also been

documented that during the interwar period, Europe looked at Africa as a place that could and should welcome as many migrants as necessary to cure Europe’s own demographic problems.

54 Against this background, the fact that “today’s EU does as it pleases to prevent

African migrants from entering Europe” acquires a darker tone.55

Even something as contemporary as the ENP has much to gain from historical inquiry. For instance, the EU’s agreements with neighboring countries are often advertised as rescue measures offered to ever-struggling economies around the Mediterranean. But with closer

51 Kalypso Nicolaïdis, ‘Southern Barbarians’? A Postcolonial Critique of EUniversalism, in ECHOES OF EMPIRE: MEMORY, IDENTITY, AND COLONIAL LEGACIES 247, 249 (Kalypso Nicolaïdis, Berny Sèbe & Gabi Maas eds., 2014).

52 Id. at 249–53.

53 Peo Hansen & Stefan Jonsson, Building Eurafrica: Reviving Colonialism through European Integration, 1920-1960, in ECHOES OF EMPIRE: MEMORY, IDENTITY, AND COLONIAL LEGACIES 184, 185 (Kalypso Nicolaïdis, Berny Sèbe & Gabi Maas eds., 2014).

54 Id. at 185 (“[I]t was widely agreed that Europe was overpopulated, an imbalance that could be resolved by the emigration and resettlement of surplus population in the ‘empty’ territory south of the Mediterranean.”).

55 Id. at 195.


analysis, one retrieves stories of once flourishing industries in the north of Africa, crushed by the very market forces that the Common Market unleashed and nurtured.

56 It is also

essential to carry such insights to the present world trade context, and pay special attention to the negative externalities of both internal commerce and external EU deals. The plight of irregular migrants at Europe’s gate may then acquire higher salience. As Europe reflects inwardly on its own struggles and its inner inequities, a redistributive concern—the raw idea that past and present wrongs call for redressing—must remain firmly at the center of the debate. Historicized and contextualized redistributive arguments may prove more useful than identity politics,

57 more convincing than liberal

egalitarianism,58

more prescriptive than cosmopolitan outlooks,59

and perhaps more apt to question, in the long term, the stonewalling practice that insulates Brussels from Lampedusa’s mourning.

56 The case of the rise and fall of the wine industry in pre- and post-independence Algeria is very much on point. See Daniela Caruso & Joanna Geneve, Trade and History: Commerce between the EU and Algeria in the Wake of Camus’s Centennial (Boston Univ. School of Law, Public Law Research Paper No. 14-49; Boston Univ. School of Law, Law and Econ. Research Paper No. 14-49, 2014).

57 See NANCY FRASER & ALEX HONNETH, REDISTRIBUTION OR RECOGNITION?: A POLITICAL-PHILOSOPHICAL EXCHANGE (2013).

58See, e.g., THOMAS POGGE, WORLD POVERTY AND HUMAN RIGHTS (2002) (arguing that affluent societies are at least partly responsible for others’ poverty). Cf. JOHN RAWLS, THE LAW OF PEOPLES (1999).

59 Thym, supra note 3.

Articles

Special Section Europe and the Lost Generation

Spain and the Lost Legal Generation: Spain’s Dysfunctional University System is Also to Blame By Katia Fach Gómez* A. Spanish Law Faculties and Their Students—An Unhealthy Symbiosis For the last fifteen years I have taught final year law students at a Spanish state university on a regular basis. While it is extremely difficult to generalize about matters such as the following, I believe that the typical profile of the different groups of students I have taught over the years has been relatively homogenous in terms of quality and performance. Along with a minority of highly motivated and able students, at the beginning of every academic year the classes are mostly made up of silent students who are a priori reluctant to accept individual responsibilities in the learning process. Having presented this seemingly harsh appraisal with no preamble, one of the aims of this essay is to set out a series of arguments that enable us to go beyond the glib self-righteousness of blaming the students for all their woes. In my opinion, it is the Spanish higher education system that is the mainly to blame for many of the factors currently holding law students back. The following factors contribute to this outcome. First, the low mark required for admission to legal higher education deflates the expectations of both students and faculty. In Spain, students who finish secondary education and wish to pursue university degrees have to sit for an exam called selectividad. Students’ mark in this exam is combined with their mark for the last two years of secondary school (bachillerato) to determine which degree they are permitted to pursue at the university because every university offering degrees with limited numbers of available seats sets a minimum admission mark for each discipline. An essential factor here is that the minimum mark for admission to a law faculty at many Spanish universities in academic year 2013–2014 was five out of a possible ten.

1 The mark needed for admission to other

* Professor of Private International Law at the University of Zaragoza (Spain); admitted to the Spanish bar; European Ph.D. summa cum laude in International Environmental Law, University of Zaragoza (in German); LL.M. summa cum laude, Fordham University-New York. Member of the Spanish research groups DER 2012-36806 (Subprograma JURI) y e-Procofis S 14/3 DGA. [email protected]. Disclaimer: Katia Fach Gómez has been recently appointed national expert at the European Research Council. The views expressed are purely those of the writer and may not in any circumstances be regarded as stating an official position of the European Commission.

1 UNIVERSIDAD DE ZARAGOZA, NOTAS MÍNIMAS DE INGRESO. GRADOS (2013–2014), http://wzar.unizar.es/servicios/acceso/admisgrado/corte/grados13_14.pdf (explaining, for example, the

mailto:[email protected]


degree programs, such as nursing, medicine and physiotherapy, was around nine out of a possible ten.

2 The fact that such a poor mark is enough to study law in Spain entails a

series of significant implications. In the first place, many students who fail to obtain a high enough mark to enroll in the degree program of their choice end up choosing the law degree as a fall-back option. This means that law lecture rooms contain a hotchpotch of students, many of whom are not there for reasons of vocation or convinced interest in the subject. In the second place, Spain currently has neither more nor less than eighty-one university institutions,

3 the vast majority of which offer law degrees.

4 Taken in tandem

with the low admission mark, this means that most students stay in their hometowns and carry on living with their parents while they are at university. This state of affairs, which is very different from that in Germany,

5 may impact negatively on Spanish students’ degree

of maturity. Second, the Spanish legal academy is burdened with the legacy of dysfunctional faculties. Although this is a sweeping generalization that needs very careful qualification, the academic abilities of students embarking on law degrees with an admission mark of around five usually leaves something to be desired.

6 If this is a matter for concern, then the fact

that after four years studying law many of them will have failed to overcome their shortcomings and poor study habits is even more worrying. These barriers to learning remain because of a series of highly questionable and long-ingrained characteristics to be found in the university environment. When I reflect on my years as a student in a Spanish

minimum admission mark at the University of Zaragoza in the academic year 2013–2014 was 5/10 for the Law School, 9.54/10 for nursing, and 8.75/10 for medicine).

2 See Las notas de entrada para las facultades de todas las universidades públicas españolas, EL PAIS, http://www.elpais.com/especial/universidades/.

3 Elisa Silio, Las autonomías desoyen al Gobierno y aprueban campus con su oposición, EL PAIS (Apr. 25, 2014), http://sociedad.elpais.com/sociedad/2014/04/25/actualidad/1398457119_096004.html (explaining this high number is still increasing despite the economic crisis).

4 See generally Universidades de España, FOUNDATION UNIVERSIDAD (2014), http://www.universidad.es/es/en-espana/estudiar-en-espana/universidades-de-espana.

5 See Eurostat, Average Age of Young People When Leaving the Parental Household, By Sex, EUROPEAN COMMISSION (Dec. 9, 2010), http://epp.eurostat.ec.europa.eu/statistics_explained/index.php?title=File:Average_age_of_young_people_when_leaving_the_parental_household,_by_sex,_2007.png&filetimestamp=20101209133941; see also ALESSANDRA

RUSCONI, LEAVING THE PARENTAL HOME IN WEST GERMANY AND ITALY: OPPORTUNITIES AND CONSTRAINTS, http://www.demogr.mpg.de/Papers/workshops/000906_paper02.pdf (comparing Germany with another southern European country such as Italy).

6 OECD, PROGRAM FOR INTERNATIONAL STUDENT ASSESSMENT 2012 RESULTS IN FOCUS (2014), http://www.oecd.org/pisa/keyfindings/pisa-2012-results-overview.pdf (The Spanish results are clearly lower that the results of the OECD countries: Germany—16th position and Spain—33rd position.); Cristina Cadenas Sánchez & Francisco Javier Huertas Delgado, Informe PISA en España: un análisis al detalle, 17 PROFESORADO: REVISTA DE

CURRÍCULUM Y FORMACIÓN DEL PROFESORADO 243 (2013).

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2014] Spain and the Lost Legal Generation 1211

law faculty (this was in the nineties) I remember that my lecture notes were much appreciated by my fellow students because my handwriting—which was enormous, rounded and girlish—meant they could study in relative comfort the content of the lectures they had not attended despite of the fact that it did mean that they had to spend a small fortune on photocopies! In those days skipping lectures was very common, at times because the students’ true vocations lay with sport, playing cards, falling in love or drinking coffee—universal and timeless distractions for university students. And, in any case, because being an amanuensis could become extremely boring. The truth is that in most classes, the only voice to be heard was the lecturer’s, while we, the learners, spent the time compulsively and mutely taking notes. The lecturers, for their part, rarely improvised, but came to class with notes from unknown sources which they read or commented on with varying degrees of feeling and conviction. I remember perfectly that, without a hint of irony, we awarded glowing marks in the student satisfaction questionnaires to a lecturer who taught her entire course by improvising summaries of the contents of a handbook that she had borrowed from the library and brought to class with her. I suppose that at that time the fact that our lecture notes had an established doctrinal source gave us the impression that this was a very professional modus docendi. Additionally, in none of the twenty-five subjects making up my course of study did I ever have to do an oral exam or set foot in a court, law firm or government building as part of my legal education. With hindsight, I now realize how few legal textbooks I had to read as part of my academic program and, unfortunately, I realized some time ago how little I remember of the different courses in which I obtained high marks. Third, against the bleakness of this scenario, the Bologna Process letter of introduction could not have looked more hopeful to Spanish universities. The fact that, at the turn of the century, the EHEA was going to foster the development of a host of student abilities and skills as well as the classic gathering of knowledge was little short of marvelous. Likewise, what a fantastic novelty a restructuring of the Spanish university system around continuous assessment and active learning would mean! Reflecting on this process in the year 2014, to say that Bologna has not introduced a single improvement into Spanish law faculties would be an act of disloyalty to the many lecturers who have honestly and conscientiously involved themselves in the reform of the study of law in Spain. It is more reasonable to conclude that the Bologna Process is still a work in progress in many Spanish law faculties.

7 To put it another way, all that has been achieved is that a “Spanish-style

Bologna”—a “low-profile” Bologna—has been established.8 Several aspects of the teaching

7 See Jürgen Enders & Harry De Boer, The Mission Impossible of the European University: Institutional Confusion and Institutional Diversity, in EUROPEAN INTEGRATION AND THE GOVERNANCE OF HIGHER EDUCATION AND RESEARCH 159 (A. Amaral et al. eds., 2009) (National differences make it difficult to harmonize universities in the European Union.); see also Jeroen Huisman & Frans van Vught, Diversity in European Higher Education: Historical Trends and Current Policies, in MAPPING THE HIGHER EDUCATION LANDSCAPE 17 (F. van Vught ed., 2009).

8 See SERGIO LLEBARÍA SAMPER, EL PROCESO BOLONIA: LA ENSEÑANZA DEL DERECHO A JUICIO. ¿ABSOLUCIÓN O CONDENA? (2009); Luis Cazorla González Serrano, Breves reflexiones sobre los primeros años de aplicación del plan Bolonia y su

http://www.marcialpons.es/autores/llebaria-samper-sergio/1011628/




of law have indeed improved in recent years—lectures and practical approaches have become more important, there are more opportunities for students to study abroad and to have their studies officially recognized by other European universities, there are work-experience opportunities that bring students into contact with professional practice. But, as previously mentioned, one of the aims of this article is precisely to emphasize the fact that Spanish law students deserve more than they get from many current aspects of their legal education. By way of reinforcing one of the ideas put forward in the introductory paragraphs (a snapshot of the profile of Spanish law students is misleading because it fails to sufficiently reflect the shortcomings of the Spanish university system),

9 I now wish to

raise a series of key issues regarding current law degrees in Spain, which in my opinion are in need of a thorough overhaul. The more my career has taken me outside the academic sphere, the more strongly I feel that the current content of Spanish law degrees fails to respond to the demands that society legitimately makes on universities. These demands are not only made by the voracious capitalism embodied by large law firms and multinationals. The demands also come from the judiciary, the executive, and civil society, including NGOs.

10 Spain needs a

type of young legal expert that we academics are not presently fully capable of educating. Legal English is a prime example of this. It is an essential tool in many working environments. Yet, it is a skill that is currently very difficult to acquire to an adequate extent in many Spanish state university law faculties.

11 In the same vein, why are Spanish

syllabuses unable to attach the same importance to new and diverse areas of law—investment arbitration, non-state law, bioethics—that they have acquired in legal practice?

12 Giving our students the opportunity to learn about these exciting subjects is

almost always linked with titanic efforts on the part of specific lecturers, such that even if the subject finally becomes “institutionalized” in the curriculum, it is highly possible that

nuevo proceso de transmisión de conocimientos en la universidad española: luces y sombras derivadas de una experiencia personal docente, in LA EVALUACIÓN E INNOVACIÓN DOCENTE EN EL GRADO DE DERECHO 99 (Ignacio Calatayud Prats et al. eds., 2013).

9 Manuel Trillo, Los males crónicos de la universidad española: Politización, endogamia, exceso de centros y títulos y escasa investigación de calidad, entre los grandes lastres, DOMINGO (May 4, 2014), http://hemeroteca.abc.es/nav/Navigate.exe/hemeroteca/madrid/abc/2014/05/04/018.html.

10 See UNIVERSITY OF MANCHESTER POST-CRASH ECONOMICS SOCIETY, http://www.post-crasheconomics.com/ (In the economics field, a group of economics students at Manchester University have recently created the Post-Crash Economics Society, arguing that “the content of the economics syllabus and teaching methods could and should be seriously rethought.”).

11 Katia Fach Gómez, Why Does Legal English Sound Like Gibberish to Many Spanish Law Students?, 43 A.B.A. INT’L

LEGAL NEWS (2014).

12 Nicholas Kristof, Professors, We Need You!, NEW YORK TIMES (Jan. 2, 2014), http://www.nytimes.com/2014/02/16/opinion/sunday/kristof-professors-we-need-you.html?_r=0 (dealing with the use of the expression “That´s academic” in a pejorative way).


http://dialnet.unirioja.es/servlet/libro?codigo=549712




the legal vanguard will already have moved in other directions. While good lawyers are constantly immersed in an agile continuous learning process, university structures sometimes look like beached whales. The teaching methodologies presently used in law faculties in Spain leave something to be desired. The fact that academic subjects are still sometimes presented as watertight compartments hampers the student from training to resolve the kinds of mixed and intermingled cases he or she will have to deal with in professional practice.

13 If the average

student in the final year of a law degree has no natural inclination to participate actively in class, maybe it is because he or she has not been sufficiently trained in such activities from the beginning of the course. The shortcomings shown by many Spanish students in the area of verbal skills suggest that activities such as debate leagues, moots and clinics have not yet been given the importance that they deserve in Spanish state universities. Generally speaking, students normally flourish when their needs are sensed and addressed.

14 It is essential that teaching staff make a special effort to plan their courses in

a way that makes use of the many and varied teaching methodologies that encourage participative learning in law students.

15

Finally, the news that there has been a fall of approximately 10% in the number of students enrolling for master’s degrees at Spanish state universities in academic year 2013-2014 comes as no surprise whatsoever.

16 The 69% average increase in specialized

postgraduate degree fees has effectively dealt the deathblow to many of these master’s courses, which will not manage to attract the minimum number of students required for them to operate. The current economic crisis doubtlessly furnishes a partial explanation for this startling fall in enrolment figures. But I feel that critical reflection as to how this type of postgraduate specialization has become established in some Spanish law faculties is also necessary. When the curricula for the new master’s degrees in law were designed, priority was not always given only to scientific considerations, but faculty power groups made use of this new teaching opportunity to voice their grievances about quotas for participation. Moreover, there is the unpleasant impression that part of the teaching staff

13 Laura Carballo Piñeiro, Legal Education in Spain: Challenges and Risks in Devising Access to the Legal Professions, 19 INT’L J. LEGAL PROFESSIONS 339 (2012).

14 Alexandra Rengel & Katia Fach, The Transformative Potential of Technology in Higher Education: The Shortcomings of MOOC’s, the Benefits of Face-to-Face Learning and the Hybrid Model as a Possible Optimal Solution (A 2013 Spanish Case Study) (Aug. 6, 2014), available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2476854.

15 Katia Fach Gómez, Ventajas del Problem Based Learning (PBL) como método de aprendizaje del Derecho Internacional, BORDÓN 5 (2012) (providing an example of this kind of experience carried out in my International Law classes).

16 Ivanna Vallespín & J. A. Aunión, El alumnado de master cae por primera vez tras la subida de tasas, EL PAIS (Mar. 9, 2013), http://sociedad.elpais.com/sociedad/2013/03/09/actualidad/1362857369_438513.html.

http://ssrn.com/abstract=2476854




participating in these master’s degrees would need more incentives (reductions in teaching obligations or financial inducements) to give these courses the scientific importance they deserved. I frequently hear students in master’s degree programs complaining bitterly, not only about the administrative disorganization of these initial years, but also that it is the same degree course lecturers that come to the master’s classes to dictate the same notes they dictated on the undergraduate degree. Given such a state of affairs—which doctoral students also claim—it is entirely logical for our students to spend their desperately limited resources on master’s degrees in private institutions in Spain or in foreign universities. Of course, the reduction in the number of grants in both areas referred to above simply compounds Spanish state law faculties’ loss of competitiveness. As I predicted, “the economic crisis has become the mantra that will enable government bodies in Spain to justify their inaction and erect a shield to hide behind for many years.”

17 As the next section

of this essay argues, this austerity, advocated by the European Union and magnificently applied by Spain in some essential sectors like education, has created a lost generation. The sad truth is that we are forcing our young people to pay an exceptionally high human toll, which is the sorry consequence of Spain’s past excesses and, in a more general sense, is one outcome of the country’s never having achieved a political and social consensus

18

that would enable it to implement a first class stable and lasting education and science policy.

19

B. The Economic Crisis: Amplifier of the Shortcomings of Spanish Law Faculties One of the many attractions of being a lecturer in international law is that anyone seeking to forge a minimally solid scientific career has to leave their cushioned microcosm as early as possible and “expose” themselves to other legal systems and universities.

20 My own

experience outside Spain—as a student and also as a lecturer—has mainly been in Germany and the United States. My personal impression of German law students, in a nutshell, is that they are proud to be studying law. The demanding Staatsexamen and an internationally renowned university system

21 means that the German lawyers of the future

17 Katia Fach Gómez, Why Does Legal English Sound Like Gibberish to Many Spanish Law Students?, 43 A.B.A. INT’L

LEGAL NEWS 16 (2014).

18 The 2014 Spanish Parliamentary Agreement on I+D+I R&D&I is promising in this sense, see CARTA POR LA CIENCIA (Dec. 19, 2013), http://conimasdmasihayfuturo.com/2013/12/19/firma-del-acuerdo-parlamentario-por-la-idi-un-compromiso-historico-por-el-futuro/.

19 Juan Ignacio Cirac, Para salir de la crisis hay que invertir en los mejores cerebros, EL MUNDO (Aug. 28, 2014), http://www.elmundo.es/ciencia/2014/08/28/53fe1548ca4741233a8b4580.html (The statements made by a Spanish scientist now based at a prestigious European institution are symptomatic in this sense.).

20 See E. García de Blas & A. J. Mora Caballero, La endogamia enferma al campus, EL PAIS (Mar. 23, 2014), http://sociedad.elpais.com/sociedad/2014/03/23/actualidad/1395604536_271638.html (revealing that professors who change university are more productive scientifically).

21 See Academic Ranking of World Universities 2013, http://www.shanghairanking.com/ARWU2013.html.


are aware of the privileged position they will enjoy in society. For their part, and to simplify matters once again, law students in the United States have a boldness and freshness that is the natural consequence of their highly competitive university system, in which the Socratic approach to learning combined with numerous extra-curricular activities educates future lawyers to conquer the world. In comparison with these two profiles, typical law students in Spain do not seem to possess such bright auras. First and foremost, this is because it is highly likely that Spanish students will never actually find work in the legal field after graduating. This is undoubtedly a tragedy at an individual level, as well as being a clear symptom that higher education policy in Spain is less than ideal. I ask my students about their career aspirations every year in an introductory lecture and it is truly disheartening to observe the unease created by a question of this type and the limited extent of their ambitions. Some students hope that their parents will not be hit by the economic crisis so that they can continue to support them through postgraduate studies—not necessarily in the law field—which will go on for long enough for the crisis to have abated, or so that they can prepare for the civil service exams—for which a university degree is frequently not required— without even knowing whether the current recruitment freeze will be lifted. In general, my students simply hope not to form part one of the categorizations with which young people’s aspirations are being corralled in Spain (these days, being a mileurista—earning a thousand euros a month—has become a luxury, and so students are condemned to be Generation NEET—Not in Education, Employment, or Training).

22 A not inconsiderable number of students have made up their minds to go

abroad for a time and subsist by doing any work they can find so as to be able to learn English and thus increase their chances of finding a “decent” job – very possibly outside Spain. The most prestigious international press has echoed the personal experiences of young Spaniards who have emigrated (sociology graduates hoping to find supermarket work, trained nurses doing hard physical work in wholesale clothing warehouse), the sad manifestation of the suffering of a genuine lost generation.

23 With regard to this forced

exodus, I can only say, without mincing words, that I am ashamed and it makes me wonder constantly about my share of the responsibility for this harsh reality, which can be described as nothing but a national failure. In spite of the cynicism shown by some Spanish politicians in their praise for our young people’s current high “external mobility,” the vast majority of society is capable of appreciating the huge differences between voluntarily leaving one’s own country and being forced to do so.

24 Fortunately, both the Spanish

public and the media have thus adopted a highly belligerent position towards political

22 Steve Tallantyre, Spain’s “Lost Generation” Give up Work and Study, THE LOCAL (June 26, 2013), http://www.thelocal.es/20130626/study-shows-surge-in-spains-lost-generation.

23 Young and Educated in Europe, but Desperate for Jobs, NEW YORK TIMES (Nov. 16, 2013), http://www.nytimes.com/2013/11/16/world/europe/youth-unemployment-in-europe.html?pagewanted=all&_r=0.

24 See Fátima Báñez llama a la fuga de cerebros movilidad exterior, PUBLICO (Apr. 17, 2014), http://www.publico.es/espana/453846/fatima-banez-llama-a-la-fuga-de-cerebros-movilidad-exterior.


decisions (such as the reduction of funding for Spanish Erasmus students) that will have negative repercussions on our young people’s academic and personal futures.

25 This

appalling reality also explains why under- and postgraduates are one of the main groups of voters for “Podemos,”

26 a Spanish political party created just a few months ago that won

five seats in the last European elections,27

becoming the fourth political force in Spain. Its election manifesto, in favour of “decent jobs” and against the traditional political classes,

28

is undoubtedly very appealing to the current generation of young Spaniards, who, in spite of being repeatedly referred to as “the highest-educated generation in the history of Spain,”

29 have to face the harsh realities of everyday life as part of a lost generation.

Given the arguments set out above as to why enforced separation is not an optimum solution for our young people, I believe that the dialectical solution of solidarity will provide more edifying outcomes. The lost generation of students deserves solidarity from its university professors. From the academic sphere, solidarity with students means striving for a genuine reinvention of Spanish universities.

30 That is, it means standing up for a high-

quality university sector that is truly “useful,” in both intellectual and professional terms, for our students and for society as a whole. Of course, re-founding our education and research system is a far from simple task, as will be pointed out in the following paragraphs, due to the fact that if the future for Spanish university students looks less than promising, then it seems to be no exaggeration to classify the scenario facing Spanish researchers as apocalyptic.

31 Although there is the inevitable dancing around the numbers

that goes on in relation to all hot topics, the adverse set of economic circumstances has

25 See Noticias en los medios sobre la presentación de Erasmus+ y los cambios introducidos, CONFERENCIA DE

RECTORES DE LAS UNIVERSIDADES ESPANOLAS (Jan. 23, 2013), http://www.crue.org/PrensaYComunicacion/SalaPrensa/Documents/Apariciones%20medios/2014/Noticias%20Erasmus.pdf.

26 See Pablo Iglesias, El perfil del votante de Podemos: joven urbano con estudios, RTVE (Aug. 11, 2014), http://www.rtve.es/noticias/20140811/perfil-del-votante-podemos-joven-urbano-estudios-pero-tambien-tan-jovenes/991043.shtml.

27 J. J. Gálvez & M. Kadner, Podemos se convierte en la sorpresa y logra cinco escaños en Estrasburgo, EL PAIS (May 26, 2014), http://politica.elpais.com/politica/2014/05/25/actualidad/1401009854_060215.html.

28 See generally PODEMOS, http://podemos.info/wordpress/wp-content/uploads/2014/05/Programa-Podemos.pdf.

29 See Antonio Jiménez Barca, La generación de los mil euros. Retrato de unos jóvenes

hipercualificados, que pasaron por la Universidad pero están condenados a vivir con unos sueldos precarios, EL PAIS (Oct. 23, 2005), http://elpais.com/diario/2005/10/23/domingo/1130038892_850215.html.

30 Noa De La Torre, Así se reinventa la Universidad, EL MUNDO (June 7, 2014), http://www.elmundo.es/comunidad-valenciana/2014/07/06/53b9669622601de71c8b456f.html.

31 CLARA EUGENIA NÚÑEZ, UNIVERSIDAD Y CIENCIA EN ESPAÑA (2013) (interesting in this sense, this book is written by a university professor who has also held political positions in the education field in Spain).


unquestionably given rise to a very substantial reduction in the budget allocated to funding research in Spain.

32 This is creating serious consequences on numerous fronts:

33 budding

scientific careers cut short; lack of job security for researchers; the closing of research centers; a brain drain.

34 In spite of the fact that in other countries such as Germany the

new generation of scientists is also demanding more career stability,35

I believe that in many European countries the macropillars underpinning research fortunately still exist.

36

That is not the case in Spain where we are shocked and saddened to witnesses a genuine demolition of the economic and educational bases that make it possible to carry-out high-quality scientific work. The specific field of legal sciences also provides numerous causes for gloom: law library new acquisition budgets are smaller all the time, even resulting in the cancelling of subscriptions to regularly used journals; calls for research group funding vanish, are delayed, or appear in depleted form; and the same can be said of financial assistance for teaching staff to spend time in other research centers. The grants to support pre- and post-doctoral research have been cut with extremely harmful effects on the regeneration of the pool of researchers in law faculties. All of this is happening just as the unbending application of the replacement rate in the legal-academic field means a reduction in the number of lecturers, and consequently in the time that the rest of the teaching staff can devote to research activities. In recent months Spanish scientists have put forward appealing proposals for the future of research, such as no longer counting investment in R&D in Spain’s budget deficit figures for the purposes of fulfilling the

32 See Elisabeth Pain, Research Cuts will Cause Exodus from Spain, SCIENCE (Apr. 13, 2012), http://www.sciencemag.org/content/336/6078/139 (In this sense, this article published in Science acquired great notoriety in Spain.).

33 See Alicia Rivera, El éxito científico de España ha caído por la falta de financiación, EL PAIS (Apr. 22, 2014), http://sociedad.elpais.com/sociedad/2014/04/22/actualidad/1398192507_757284.html (The words of Dr. Bourguignon, President of the European Research Council are paradigmatic in this sense.).

34 See Amaya Moro-Martin, Despedida de una científica que está hacienda las maletas, EL PAIS (Aug. 19, 2013), http://sociedad.elpais.com/sociedad/2013/08/19/actualidad/1376935600_483731.html; see also, Alicia Rivera, El sistema de ciencia español no responde a las necesidades del siglo XXI, EL PAIS (Feb. 11, 2014), http://sociedad.elpais.com/sociedad/2014/02/11/actualidad/1392154716_227536.html (A letter addressed to the President of Spain written by a Spanish scientist who left the country and went to the United States acquired great relevance.).

35 See Von Martin Spiewak, Forschung aus fairer Produktion, ZEIT ONLINE (2014), http://www.zeit.de/2014/11/universitaeten-wissenschaftlicher-nachwuchs/komplettansicht; see also Tomasz Mroczkowski, From Breakthrough to Incremental Innovation Leadership: Lessons from Germany, 5 J. KNOWLEDGE

ECON. 409 (2014) (highlighting some of the problems of the German scientific environment).

36 See generally EXZELLENZINITIATIVE (Jan. 19, 2009), www.exzellenz-initiative.de/start (A good example of this is the German Excellence Initiative, where “politics and science joined together to promote outstanding research projects and institutions at Germany’s universities.”).

http://sociedad.elpais.com/sociedad/2013/08/19/actualidad/1376935600_483731.html


commitment to stability established by the European Union.37

It is important to be aware, however, that even were proposals of this type agreed to, they could sadly not yield positive results in such a pressingly short time period. Everything outlined above shows that for a group as seriously wounded as the Spanish scientific community, there will be nothing but hurdles when the time comes to show effective and urgent solidarity with another injured group, that of the lost generation of their esteemed students. C. Carrying Out Legal Research in a Spain in the Midst of the Crisis. A Pipe Dream? A re-reading of everything that has been argued throughout this essay will show that the shortcomings and failings of teaching staff are a cross-cutting element evoked in many of the factors that help to justify law faculties’ current ills.

38 A common complaint among

lecturers in Spanish universities is that the system takes the teaching facet of academic staff for granted, conceding incentives for professional development only to staff who develop their research facet and fulfill the government-set objectives. It is claimed that those who make an effort with the teaching aspect of the profession do so only for reasons of vocation and in the knowledge that they are wasting valuable research time. This approach and its implementation clearly have dire consequences for education in Spanish universities. Although it may seem utopian to raise such desiderata in times of crisis, I feel that the Spanish university system has to introduce whatever changes are necessary so that the teaching facet is also given due weight in the professional advancement of law faculty staff.

39 The point made, it is now time to focus on the effects of the economic crisis

on the research facet of law faculty staff, and a number of ideas will be put forward as to how the effects of the economic crisis on this field of the social sciences can be mitigated. In the face of a situation as complicated as that outlined in the preceding paragraphs, it would seem logical for Spanish researchers in law to seek the support they need to carry out their scientific activities from bodies other than Spanish regional or central government, opting instead for the international sphere as the best focus for their research grant applications and efforts. Various institutions outside Spain (Fulbright, for example) offer prestigious fellowship programs for university lecturers. The European

37 See Alicia Rivera, Los científicos piden que la inversión en I+D no compute como déficit, EL PAIS (May 21, 2014), http://sociedad.elpais.com/sociedad/2014/05/21/actualidad/1400682593_233247.html.

38 Hector G. Barnes, Los ocho males del profesor universitario: es uno de los trabajos más tóxicos que existen, EL

CONFIDENENCIAL (July 7, 2014), http://www.elconfidencial.com/alma-corazon-vida/2014-07-07/los-8-males-del-profesor-universitario-es-uno-de-los-trabajos-mas-toxicos-que-existen_156018/.

39 The solution could be the creation of “teaching awards”—similar to the “sexenios de investigación”—granted by the Spanish Ministry of Education, or the option to allow teachers to choose between carrying out predominantly teaching or research activities. This question is controversial, however, since the report referred to in footnote 44 suggests just the opposite; that is, that the importance of the teaching facet should be reduced when assessing the curricula of university staff in order to grant a possible promotion.


Union has recently launched its multiannual Horizon 2020 program, which also provides numerous funding opportunities for research groups and individual scientists from the legal sciences field,

40 and in more general terms, the European Research Area is becoming

an increasingly tangible reality.41

Put like this, the problems of researchers in law in Spain would seem to have simple solutions, but the reality is that in most cases this is not true.

42 There are a variety of

reasons for this. I do not feel that it would be constructive at this point to rail against the many and highly reprehensible modus operandi that are unfortunately still to be found in the field of legal research in Spain. It might suffice to mention just a few of these intractable issues. For example, some lecturers shield themselves behind their irrevocable government employee status to allow themselves the luxury of not undertaking any type of research activity.

43 A recent report supported by the Spanish Ministry of Education

concluded that more than half of the civil servants working at the University do not perform any or almost no research activity!

44 Another example is the tradition of awarding

research positions to local candidates.45

This still takes place despite ANECA’s efforts to promote transparency.

46 Yet another exemplifications are the endogamy and petty

40 Social Sciences and Humanities Scientific Committees, Humanities and Social Sciences in Horizon 2020 Societal Challenges: Implementation and Monitoring, SCIENCE EUROPE (Nov. 2013), http://www.scienceeurope.org/uploads/PublicDocumentsAndSpeeches/SSH_Horizon2020_WEB_fin.pdf (advocating a more prominent role for the Social Sciences and Humanities in Horizon 2020, an opinion paper).

41 Report from the Commission to the Council and the European Parliament: European Research Area Progress Report 2013, COM (2013) 637 final (Sept. 20, 2013). In this sense, article 17 of the Regulation 1291/2013 states that: “Researchers’ careers: Horizon 2020 shall be implemented in accordance with Regulation (EU) No 1290/2013, which shall contribute to the reinforcement of a single market for researchers and attractiveness of researchers’ careers across the Union in the context of the ERA, by taking into account the transnational character of the majority of the actions supported under it.” Commission Regulation 1291/2013, of The European Parliament And of the Council of 11 December 2013 establishing Horizon 2020 - the Framework Programme for Research and Innovation (2014–2020) and Repealing Decision No. 1982/2006/EC, 2013 O.J. (L 347/104).

42 Ignacio Fariza & Elisa Silió, Ningún campus español entre el centenary con más impacto investigador, EL PAIS (May 13, 2014), http://sociedad.elpais.com/sociedad/2014/05/13/actualidad/1399976549_650954.html (pointing out the poor results of Spanish Universities in international research rankings).

43 SIXTO SÁNCHEZ LORENZO, DE BESTIIS UNIVERSITATIS (ESOS TIPOS UNIVERSITARIOS) (2004) (dealing with the—sometimes pathological—profiles of law professors).

44 Propuestas para la reforma y mejora de la calidad y eficiencia del sistema universitario español (Feb. 12, 2013), http://www.usc.es/export/sites/default/gl/web/descargas/propuestas-reforma.pdf (This report was prepared in 2013 by a committee of scholars selected by the Minister of Education Jose Ignacio Wert.).

45 Antonio Jesús Mora Caballero, El TSJA anula una plaza de catedrático que favorecía a uno de los candidatos, EL

PAIS (Mar. 3, 2014), http://ccaa.elpais.com/ccaa/2014/03/03/andalucia/1393849120_949640.html.

46 See generally NATIONAL AGENCY FOR QUALITY ASSESSMENT AND ACCREDITATION OF SPAIN (ANECA), http://www.aneca.es/eng/ANECA (explaining ANECA is a Foundation whose aim is to provide external quality assurance for the Spanish Higher Education System and to contribute to its constant improvement through the evaluation of the CVs of applicants willing to access Spanish civil servant academic staff bodies).


squabbles that go on when accepting or rejecting articles in scientific journals, as well as the fact that gender equality has yet to be achieved in the scientific field in Spain.

47 I could

go on.48

It is clear that these deviations from science are diametrically opposed to what a university should be. My final points, should they be of some use, are therefore addressed to young Spanish legal experts who aspire to build a sufficiently solid scientific career step by step to enable them to develop their research vocation regardless of the political and economic vicissitudes that may continue to affect Spain in the future. A key idea in this regard is that excellence is very difficult to achieve. But it has the great virtue of being unquestionable. Therefore, from the very moment that law students take the decision to work towards a doctoral thesis, scientific quality has to take priority over convenience and collective habits.

49 On a day-to-day basis this may entail preferring to try

to have a paper accepted at a high-profile conference in a foreign country over the certainty that a friend will accept your paper at a local conference. Likewise, publication in journals with a scrupulous scientific peer review system is essential, even though the total time invested in the process of writing and improving the article would have been enough to write a number of articles that doubtlessly would have been accepted by journals that do not feature in international rankings of quality.

50 Naturally, conducting high quality

scientific activities should not prevent scientists from also conducting dissemination activities that allow the broader public to be involved in the beneficial results of their scientific work.

51 Moreover, while Spanish is certainly the optimal language for doing

science in certain subject areas and academic environments, English is unquestionably the lingua franca of the scientific-legal field today. Spanish researchers have to make the effort

47 Eva Mosquera Rodriguez, Las mujeres científicas siguen sin romper el techo de cristal, EL MUNDO (Oct. 10, 2014), http://www.elmundo.es/ciencia/2014/07/10/53beb7d3ca4741f8298b4586.html.

48 See generally Carlos Hidalgo, Imputada la cúpula de la Escuela de Medicina Legal de la Complutense, ABC (June 5, 2014), http://www.abc.es/madrid/20140506/abci-imputada-cupula-escuela-medicina-201405052139.html (providing more bloodcurdling cases where law professors seem to be involved); see also Imputados por injurias el exrector Abril y el exsecretario general de la Uva Calonge, ULTIMERO CERO (Feb. 20, 2014), http://www.ultimocero.com/articulo/imputados-por-injurias-el-exrector-abril-y-el-exsecretario-general-la-uva-calonge.

49 See generally Next Generation of Young Scientist: Towards a Contemporary Spirit of R&I - Sci-GENERATION, EUROPEAN COOPERATION IN SCIENCE AND TECHNOLOGY (May 15, 2014), http://www.cost.eu/about_cost/strategy/targeted_networks/sci-generation (An interesting initiative in this sense is the creation of Sci-Generation, an initiative “that aims at elaborating contemporary scientific thought and thereby disseminating a new Spirit of Research and Innovation in Europe.”).

50 María Matesanz del Barrio, Los retos de la publicaciones científicas españolas en el desarrollo de la Europa del conocimiento, @TIC. REVISTA D'INNOVACIÓ EDUCATIVA 20 (2010) (pointing out the shortcomings of many Spanish journals).

51 Mme Maud Olivier & M. Jean-Pierre Leleux, Faire connaître et partager les cultures scientifiques, techniques et industrielles: un imperative, ASSEMBLÉE NATIONALE (Jan. 9, 2014), http://www.senat.fr/rap/r13-274/r13-2741.pdf (In this sense, this recent French political initiative is highly interesting.).


to master this essential tool in both its written and spoken forms. Stays at prestigious foreign universities and research centers are essential, and frequently go hand-in-hand with the need to provide a competitive curriculum vitae when applying for grants at international level. By way of a further suggestion, it is often useful to find out about the standards imposed on other scientific disciplines so as to be able to anticipate what may be required in the future in the legal field. A good example in this respect is the statement made by the Spanish Ministry of Education regarding the way scientific contributions made by Spanish academics are assessed. With reference to the legal field it states in a generalized fashion that “in assessing the work, attention will be paid to the medium used, and publication by prestigious journals and publishing companies will be accepted as an indication of quality.” For most other scientific disciplines it is much more specific, saying that “among the contributions preference will be given to work published in journals of recognized worth, accepting as such those in leading positions in the scientific fields lists in the Subject Category Listing in the Journal Citation Reports of the Web of Knowledge (WoK).”

52 I do not mean this as an argument in favor of the unfettered establishment of a

utilitarian audit culture.53

I know very well what that entails in the field of legal research.54

I only mean to acknowledge the following reality: the legal-scientific world is getting flatter all the time. Spanish legal scientists can thus protect themselves from the impact of the economic crisis by making an effort to ensure that their scientific careers revolve around global excellence (excellence; there’s really nothing to it!).

52 RESOLUCIÓN DE 15 DE NOVIEMBRE DE 2013, DE LA COMISIÓN NACIONAL EVALUADORA DE LA ACTIVIDAD INVESTIGADORA, POR LA

QUE SE PUBLICAN LOS CRITERIOS ESPECÍFICOS APROBADOS PARA CADA UNO DE LOS CAMBIOS DE EVALUACIÓN, BOLETÍN OFICIAL DEL

ESTADO (Nov. 21, 2013), http://www.boe.es/boe/dias/2013/11/21/pdfs/BOE-A-2013-12234.pdf.

53 Elizabeth Dzeng, How Academia and Publishing Are Destroying Scientific Innovation: A Conversation with Sydney Brenner, KING’S REVIEW (Feb. 24, 2014), http://kingsreview.co.uk/magazine/blog/2014/02/24/how-academia-and-publishing-are-destroying-scientific-innovation-a-conversation-with-sydney-brenner/ (pointing out some of the risks of this trend).54 Rafael Argullol, La cultura enclaustrada. La Universidad se ha replegado sobre sí misma como consecuencia de un nuevo antiintelectualismo favorecido por una sacralización del paper cuya confección obliga a renunciar a toda creatividad y riesgo, EL PAIS (Apr. 5, 2014), http://elpais.com/elpais/2014/03/25/opinion/1395742979_031566.html.

54 Rafael Argullol, La cultura enclaustrada. La Universidad se ha replegado sobre sí misma como consecuencia de un nuevo antiintelectualismo favorecido por una sacralización del paper cuya confección obliga a renunciar a toda creatividad y riesgo, EL PAIS (Apr. 5, 2014), http://elpais.com/elpais/2014/03/25/opinion/1395742979_031566.html.