Strasbourg, 19 September 2011 CDLR(2011)31 prov.
Item B.4. of the agenda
EUROPEAN COMMITTEE ON LOCAL AND REGIONAL DEMOCRACY
(CDLR)
REPORT ON THE IMPACT OF THE LISBON TREATY ON THE
EUROPEAN CHARTER OF LOCAL SELF-GOVERNMENT
For information and instruction
Secretariat Memorandum
prepared by the Directorate General of
Democracy and Political Affairs
Directorate of Democratic Institutions
 |
European Charter of Local Self-Government and impact of Community law on local authorities in the member states
By
Gérard MARCOU and Jean-François AKANDJI-KOMBÉ,
Professors at the Sorbonne Law School, Paris I Panthéon-Sorbonne University
Report for the European Committee on Local and Regional Democracy
and the Congress of Local and Regional Authorities
Introduction
The extension of Community powers and the proliferation of European Union policies have resulted in steady expansion of the norms of Community law,[1] which apply in the member states to all subjects of law under their jurisdiction. This involves regulations of the Parliament and the Council, which are directly enforceable; directives whose provisions are sufficiently precise to generate rights for nationals of member states and be relied on in domestic courts; decisions by the Commission, which may concern decisions or conduct of those subjects of law in the areas where it has the power to act, eg in the field of competition; and the many communications which pave the way for the development of secondary law.
As is true of all other subjects of law within European Union member states, local authorities must abide by Community law in areas where its norms apply to them and may also rely on it to their benefit or in their defence in domestic or Community courts, for instance with regard to state aid. Local authorities are not the same as other subjects of law, however. In view of the obligation of loyalty which requires states to ensure the uniform application of Community law throughout their territory, local authorities are public authorities in respect of whose acts member states may be held liable in Community courts and which, like all administrative bodies, are required to give the application of Community law precedence over conflicting domestic provisions. As the Court of Justice has ruled, when a provision in a directive is unconditional and sufficiently precise to be relied on by individuals, not only domestic courts but also “all organs of the administration, including decentralised authorities such as municipalities, are obliged to apply it”, in other words, “administrative authorities, including municipal authorities, are under the same obligation as a national court to apply” it (ECJ 22 June 1989, “Fratelli Costanzo Spa v. Comune di Milano”, Case C-103/88, paras 32 and 33). Community law does not therefore make any distinction between local authorities and other authorities within state administrative bodies. This position is explained by the nature of the European Union, which is a union of states, or a “Staatenverbund”, to use the term employed by the German Constitutional Court; only member states have obligations under the treaty towards the Union and the other member states.
All the member states of the European Union have, however, also signed and ratified the European Charter of Local Self-Government of 15 October 1985 within the context of the Council of Europe. The Charter is an international treaty under which the signatory states undertake to abide by a number of fundamental principles concerning the status and powers of their local authorities. They entered into these undertakings because they believe that “local authorities are one of the main foundations of any democratic regime” (Preamble to the Charter, para 3). These undertakings tie in with the principles on which the European Union is founded. According to the preamble to the Treaty on European Union, the signatory states declare that they draw inspiration from the “universal values of the inviolable and inalienable rights of the human person, freedom, democracy, equality and the rule of law”. In this context, within the European Union, it is therefore entirely legitimate for the member states to ensure compliance with their commitments regarding local self-government, which is seen as “one of the main foundations of any democratic regime”.
It should be noted here that the Charter of Local Self-Government does not in any way set out an organisational model for states or local government which states parties must follow. The principles which it lays down may be implemented in constitutional and administrative systems which vary greatly but which share common values. Even only superficial comparison of the reforms which have affected local government systems in the signatories to the Charter in recent decades suffices to show that its application has not resulted in harmonisation of the systems.
In the functioning of the European Union, however, it seems that the member states have not paid sufficient attention to the effects of Community policies and norms on local self-government, ie on the commitments they entered into upon ratifying the Charter of Self-Government. Yet according to the Committee of the Regions, 50% of the legislative acts of the European Union affect local authorities. This concern is not entirely new. It should be noted that it was at the time of the Single European Act that the subsidiarity principle was brought to the fore again – at the behest of the German Länder, which were worried about their constitutional rights being weakened by the process of European integration. The same question arises today concerning local authorities.
The concept of local self-government is defined in Article 3 of the Charter:
“1 Local self-government denotes the right and the ability of local authorities, within the limits of the law, to regulate and manage a substantial share of public affairs under their own responsibility and in the interests of the local population.
2 This right shall be exercised by councils or assemblies composed of members freely elected by secret ballot on the basis of direct, equal, universal suffrage, and which may possess executive organs responsible to them. This provision shall in no way affect recourse to assemblies of citizens, referendums or any other form of direct citizen participation where it is permitted by statute.”
The concept therefore comprises both freedom of action and institutional autonomy based on the democratic principle. The Charter also defines the scope of local self-government (Article 4, paras 2 to 4):
“2 Local authorities shall, within the limits of the law, have full discretion to exercise their initiative with regard to any matter which is not excluded from their competence nor assigned to any other authority.
3 Public responsibilities shall generally be exercised, in preference, by those authorities which are closest to the citizen. Allocation of responsibility to another authority should weigh up the extent and nature of the task and requirements of efficiency and economy.
4 Powers given to local authorities shall normally be full and exclusive. They may not be undermined or limited by another, central or regional, authority except as provided for by the law”.
Paragraph 2 corresponds to what is often called the “general competence clause” and paragraph 3 to the principle of subsidiarity. The purpose of paragraph 4 is to protect local powers; however, the paramount nature of Community law can have the effect of resulting in limits of this kind which are outside the forms laid down by the Charter.
Article 9 of the Charter concerns the financial requirements for local self-government. Under paragraph 2, the financial resources of local authorities must be “commensurate” with their responsibilities and, under paragraph 4, the financial systems on which these resources are based must be of a sufficiently diversified and buoyant nature to keep pace with “the real evolution of the cost of carrying out their tasks”. Yet the implementation of Community law often results in increased costs for local authorities.
Member states’ obligations under the Charter of Local Self-Government necessarily therefore are relevant in the functioning of the European Union and the new provisions introduced by the Lisbon Treaty provide a new basis for this interpretation. These are obligations of the states, not of the European Union as such, as the principle of the institutional autonomy of the member states means that they have sole competence as regards the system and the functions of local government (I). The European Union also does not have international competence concerning local authorities in the member states, which again have sole competence here, meaning that the European Union could not itself undertake to abide by the Charter; member states’ obligations to comply with Community law do not therefore detract from their obligations to comply with the Charter of Local Self-Government (II). To improve the protection of local self-government within the European Union, monitoring by the Council of Europe of the application of the Charter by states must be extended to the policies of the European Union; that is the aim of the recommendations which will be made (III).
III. Proposals for ensuring compliance with the Charter of Local Self- Government in the policies of the European Union
The following proposals are intended to strengthen the guarantees for application of the European Charter of Local Self-Government on the basis of the convergence in values that exists between the Charter and European Union law. They include both legal measures and also a political dimension.
1) Exclusion of the EU’s accession to the Charter
Consideration has sometimes been given to seeking the accession of the EU to the European Charter of Local Self-Government, in the same way as the Lisbon Treaty provides for in the case of the European Convention for the Protection of Human Rights and Fundamental Freedoms (Article 6.2, TEU). However, this precedent cannot be transposed here. The area covered by the treaties clearly does extend to fundamental rights and, once again, the Lisbon Treaty confirmed that the EU Charter of Fundamental Rights has the same legal value as the treaties (Article 6.1).
In contrast, as has been shown, the treaties do not grant the European Union any powers concerning territorial organisation or the system and functions of local authorities. As underlined in Articles 4 and 5 of the Treaty on European Union, the European Union exercises only those powers conferred upon it in the treaties, while all other powers remain with the member states. The European Union cannot therefore accede to a treaty whose purpose lies outside its area of competence.
2. Recourse to Article 351 TFEU
European Union bodies could not invoke member states’ obligation of loyalty to the Union against their undertaking to apply the principles of the European Charter of Local Self-Government in the functioning of the European Union. On the one hand, the Charter is outside the area of competence of the European Community (European Union); it cannot therefore be regarded as a subsequent treaty within the meaning of Article 351 TFEU. On the other, it was only the Lisbon Treaty which introduced (in Article 4.2 TFEU) a provision that affects the area covered by the Charter. In relation to this new provision, the Charter is an earlier treaty and the states parties are required to reconcile their undertakings under the Charter and in the European Union and cannot give precedence to the imperatives of the European construction process, eg the Single Market.
While European Union member states are required to ensure compliance with their commitments under the European Charter of Local Self-Government in the functioning of the European Union, the Committee of Ministers and the CDLR need to play a larger part in monitoring application of the Charter principles. Only the ministers representing the states parties to the Charter will have the necessary authority to alert their governments if necessary and make appropriate representations at European Union bodies.
To this end, an annual or biennial report prepared by the CDLR on the development of Community law and its impact on local authorities would enable the problems and risks to be highlighted. Such a report should be based on the main areas of responsibility of local authorities in the member states and focus on an in-depth study of the problems identified so as to put forward convincing arguments to the ministers.
If appropriate, the Committee of Ministers could adopt joint positions on the issues submitted to it. In that case, they would probably have more impact if changes in the Committee Ministers’ rules of procedure allowed separate voting by ministers representing the member states of the European Union.
At present, monitoring of the Charter’s application is probably too widely dispersed between the Congress of Local and Regional Authorities and the CDLR. Above all, however, it only concerns compliance with the Charter at domestic level. As has been shown, states’ legal obligation extends into the area of the functioning of the European Union. Monitoring activities concerning states parties which are also members of the European Union should therefore take account of the relevant states’ action in the functioning of the European Union and in implementing Community law from the angle of compliance with the principles of the Charter.
This measure would be all the more important since it is not unusual for Community law to be exploited for political purposes, with national governments blaming the European Union for measures which they fear they would be unable to push through themselves. It would also be a means of interesting the Commission in this Council of Europe activity, as it could be to its benefit.
Drawing on the new wording of the Lisbon Treaty which gives it anterior status, the Charter could be used as a basis for prior evaluation of planned regulations or directives of the Parliament or the Council of the European Union from the angle of their possible impact on the principles of local self-government.
The best arrangement here would be a memorandum of understanding between the European Union and the Council of Europe, as that would require the Commission to take part and would involve Council of Europe thinking in the drafting process from the outset.
However, as draft Community legislation is published, it would be possible to monitor proposals and prepare evaluation reports even without such a memorandum. The Congress of Local and Regional Authorities could be involved here and adopt recommendations. For the reasons stated earlier, it would be desirable for recommendations also to be adopted by the Committee of Ministers.
The Congress of Local and Regional Authorities should have a major role to play in the efforts to be made to ensure compliance with the Charter in the functioning of the European Union.
On the one hand, it has experienced elected representatives and great administrative capability within its services, both of which should be used to produce high-quality reports that catch the attention of governments and MEPs.
On the other, the Congress could give political weight to the work carried out.
There could be some division of labour between the Committee of the Regions and the Congress of Local and Regional Authorities. The former would focus on the involvement of local and regional authorities in the drafting of Community policies, while the latter would have to ensure compliance with the principles of the European Charter of Local Self-Government both in the states parties and also in the functioning of the European Union.
[1] This traditional term will be used here to refer to the law of the European Union since the Lisbon Treaty.