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The European Council and the Multiannual Financial Framework

  • Richard CROWE (a1)
Abstract

The European Council emerged as the dominant institution in the special legislative procedure that led to the adoption of the European Union’s Multiannual Financial Framework (MFF) Regulation for 2014–20, even though it is not mentioned in Article 312(2) TFEU as an actor in the procedure and Article 15(1) TEU states that it ‘shall not exercise legislative functions’. This article assesses the role played by the European Council in the MFF process for 2014–20 in light of the post-Lisbon Treaties and draws attention to the legal ambiguities that persist, as well as the practical challenges that will face the other Union institutions, notably the European Parliament, in seeking to counter that dominance in future MFF procedures.

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The author would like to thank Ricardo Passos for comments on an earlier draft and Evelyn Waldherr for many interesting discussions on the role of the European Council. Particular thanks are due to three anonymous reviewers for their stimulating comments and suggestions. All views expressed are entirely personal to the author and may not be attributed to the European Parliament or its Legal Service.

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1 See ‘Speech by Federal Chancellor Angela Merkel at the opening ceremony of the 61st academic year of the College of Europe’, Bruges, 2 November 2010 (available online). See also Editorial, ‘In Search of the Union Method’ (2015) 11(3) European Constitutional Law Review 425. On the notion of the legal ‘toolkit’, see De Witte, B, ‘The European Union as an International Legal Experiment’ in G de Búrca and JHH Weiler (eds) The Worlds of European Constitutionalism (Cambridge, 2012) pp 1956 ; De Witte, B, ‘Euro Crisis Responses and the EU Legal Order: Increased Institutional Variation or Constitutional Mutation (2015) 11(3) European Constitutional Law Review 434 .

2 European Council Decision 2011/199/EU of 25 March 2011 amending Article 136 TFEU with regard to a stability mechanism for Member States whose currency is the Euro, [2011] OJ L91/1.

3 See, notably, the European Council Conclusions of 29 June 2012 (EUCO 76/12) and 18 December 2014 (EUCO 237/14).

4 Treaty establishing the European Stability Mechanism, concluded at Brussels on 2 February 2012.

5 Concluded at Brussels on 2 March 2012.

6 On the institutional role of the European Council post-Lisbon, see Wessels, W, The European Council (Palgrave Macmillan, 2015); Fabbrini, F, ‘States’ Equality v States’ Power: the Euro-crisis, Inter-State Relations and the Paradox of Domination’ (2015) 17(1) Cambridge Yearbook of European Legal Studies 3 ; Puetter, U, The European Council and the Council: New Intergovernmentalism and Institutional Change (Oxford University Press, 2014); Foret, F and Rittelmeyer, Y-S (eds) The European Council and European Governance: The Commanding Heights of the EU (Routledge, 2013); Eggermont, F, The Changing Role of the European Council in the Institutional Framework of the Union (Intersentia, 2012); de Schoutheete, P, The European Council and the Community Method (Notre Europe, 2012), Policy Paper 56; Michea, F, ‘Le role du Conseil européen après Lisbonne: lecture critique des traités modifiés’ (2012) 555 Revue de l’Union européenne 76 . On the history of the European Council, see Van Middelaar, L The Passage to Europe: How a Continent Became a Union (Yale University Press, 2013); Werts, J, The European Council (Harper Publishing, 2008).

7 In the pre-Lisbon context, see Editorial Comments, ‘An Ever Mighty European Council – Some Recent Institutional Developments’ (2009) 46 Common Market Law Review 1383 .

8 The relationship between the European Council’s agenda-setting and impetus-giving powers and the Commission’s power of initiative in the pre-legislative phase is beyond the scope of this article. See Bocquillon, P and Dobbels, M, ‘An elephant on the 13th Floor of the Berlaymont? European Council and Commission Relations in Legislative Agenda Setting’ (2014) 21(1) Journal of European Public Policy 20 ; Ponzano, P et al, ‘The Power of Initiative of the European Commission: A Progressive Erosion?’ (Notre Europe, 2012), Studies & Research 89 .

9 These situations are: where the balance of a Member State’s social security system may be threatened (Article 48 TFEU); where a proposal concerning judicial cooperation in criminal matters may affect fundamental aspects of a national criminal justice system (Articles 82(3) and 83(3) TFEU); where the establishment of a European Public Prosecutor’s office is proposed (Article 86(1) TFEU); and where proposals are made in the area of police cooperation (Article 87(3) TFEU). Article 86(4) TFEU also makes the European Council responsible for any decision to extend the powers of the European Public Prosecutor’s office.

10 For example, the Conclusions of 26 June 2015 state that ‘the Data Protection package must be adopted by the end of this year’ (EUCO 22/15, point 12(a)), while the Conclusions of 18 December 2015 call ‘on the Parliament and the Council to reach rapid agreement’ on the first proposals aimed at establishing a Capital Markets Union (EUCO 28/15, point 16).

11 An unusual, one-off, example is found in the Conclusions of 29 June 2012 relating to the Unitary Patent Package, where the European Council suggested to the Parliament and the Council that specific paragraphs of the pending legislative proposal should be deleted (EUCO 76/12, point 3).

12 Council Regulation (EU, Euratom) No 1311/2013 of 2 December 2013 laying down the MFF for the years 2014-2020, [2013] OJ L347/884.

13 European Commission, European Union Public Finance, 5th ed (EU Publications Office, 2014), p 159 .

14 For an account of the historical development of the MFF, see ibid, Chapters 1–7.

15 On pre-Lisbon MFF negotiations, see Eggermont, note 6 above, pp 195–209; Werts, see note 6 above, pp 117–122; Baas, A, ‘25 Ans d’accords interinstitutionnels budgétaires’ (2007) 18 (6) European Business Law Review 1283 .

16 Monar, J, ‘The European Union’s Institutional Balance of Power after the Treaty of Lisbon’ in The European Union after the Treaty of Lisbon (European Commission, 2011), p 86, as quoted by W Wessels, above note 6, p 88.

17 IIA of 17 May 2006 between the Parliament, the Council and the Commission on budgetary discipline and sound financial management, [2006] OJ C139/1.

18 Proposal for a Council Regulation laying down the MFF for the years 2007–13, COM (2010) 72 of 3 March 2010.

19 The Parliament had already called for a mid-term revision in its resolution of 25 March 2009 on the Mid-Term Review of the 2007-2013 Financial Framework, P6_TA(2009)0174 [2010] OJ CE117/95.

20 The text of Article 312 TFEU originates in the deliberations of the Convention on the Future of Europe’s Discussion Circle on the budgetary procedure. The Discussion Circle envisaged a ‘conciliation mechanism’, which would ‘facilitate negotiation and agreement between the Council and the Parliament’. This paragraph may be understood as a concession to those members of the Convention who would have preferred to see the MFF adopted under the ordinary legislative procedure. See Final report of the Discussion Circle on the budgetary procedure, CONV 679/03, 14 April 2003, p 5.

21 European Parliament resolution of 22 September 2010 on the proposal for a Council regulation laying down the Multiannual Financial Framework for the years 2007-2013, [2012] OJ CE50/64, points 1(xvi–xvii).

22 Draft Council Regulation laying down the multiannual financial framework for the years 2007-2013, 16973/3/2010, 21 December 2010.

23 European Parliament legislative resolution of 6 July 2011 on the draft Council regulation laying down the Multiannual Financial Framework for the years 2007-2013, [2013] OJ CE33/362. Vote: + 581, − 27, o 74.

24 Ibid Rec D.

25 Ibid Rec E.

26 Ibid Point 1.

27 Council v Parliament (Budget signature), C-77/11, EU:C:2013:559.

28 Council of the European Union, Multiannual financial framework – organisation of work in the Council, 12184/11, 28 June 2011.

29 Ibid, point 3. These sectoral acts would provide the legal bases for the MFF expenditure, as required by Article 310(3) TFEU.

30 Letter from Viktor Orbán, Prime Minister of Hungary, to Jerzy Buzek, President of the European Parliament, Budapest, 6 June 2011 (recorded at the European Parliament as document PE 466.147/CPG).

31 The special role played by the presidents in budgetary matters can be traced back to the Treaty of Paris of 1951, which provided in its Article 78 for a ‘Commission of Presidents’ to deliberate on the administrative budget of the Coal and Steel Community. In accordance with Article 324 TFEU, the Presidents continue to bear a special responsibility to ‘promote consultation and reconciliation of the positions’ of their respective institutions in budgetary matters.

32 COM (2011) 398 final, Proposal for a Council Regulation laying down the Multiannual Financial Framework for the years 2014-2020, 29 June 2011; subsequently amended to take account of Croatian accession by COM (2012) 388 of 6 July 2012.

33 See European Commission, note 13 above, pp 101–106.

34 Chairman Alain Lamassoure (EPP, France) was accompanied by MFF co-rapporteurs Reimer Böge (EPP, Germany) and Ivailo Kalfin (S&D, Bulgaria) and own resources co-rapporteurs Jean-Luc Dehaene (EPP, Belgium) and Anne Jensen (ALDE, Denmark).

35 See Vitrey, A, ‘Le budget de l’UE et la négociation du prochain cadre financier pluriannuel, vus du Parlement européen’ in S Saurel, Le budget et la négociation du prochain cadre financier de l’Union européenne (2012) Revue études européennes (études européenes) Dossier thématique: http://www.etudes-europeennes.eu

36 EU Multiannual Financial Framework 2014-2020: Brussels, 20–21 October 2011, A conference with national parliamentarians co-sponsored by the Polish Presidency of the Council, the European Parliament and the European Commission. Follow-up events would be organised in 2012 under the auspices of the Danish and Cypriot Presidencies.

37 Council of the European Union, Multiannual Financial Framework (2014-2020) - Report on progress of work within the Council in the second semester 2011, 17448/1/11, 1 December 2011.

38 European Council, Conclusions of 9 December 2011, EUCO 139/1/11, point 20.

39 Council of the European Union, Multiannual Financial Framework (2014-2020) - Organisation of work within the Council in the first semester 2012, 5032/12, 6 January 2012, para 2.

40 See A Gillissen, ‘La négociation du cadre financier pluriannuel 2014-2020 au sein du Conseil’ in Saurel, see note 35 above.

41 To trace the development of the Negotiating Box texts during the Danish Presidency, see Council of the European Union, Multiannual Financial Framework (2014-2020) - Sections of Negotiating Box relating to Headings 1 (except cohesion and CEF), 3, 4, 5 and to horizontal issues, 8057/12, 22 March 2012; Council of the European Union, Multiannual Financial Framework (2014-2020) - Section of the Negotiating Box relating to Heading 1 (cohesion and CEF) - Section of the Negotiating Box relating to Heading 1 (cohesion and CEF), 8285/12, 30 March 2012; Council of the European Union, Multiannual Financial Framework (2014-2020) - Section of the Negotiating Box relating to Heading 2 (Sustainable growth: natural resources), 8641/12, 16 April 2012; Council of the European Union, Multiannual Financial Framework (2014-2020) - Section of the Negotiating Box relating to Headings 1 (cohesion and CEF), 2 and provisions relating to the funds under the Common Strategic Framework, 8966/12, 20 April 2012; Council of the European Union, Multiannual Financial Framework (2014-2020) - Section of the Negotiating Box relating to the revenue side, 9627/12, 8 May 2012.

42 Council of the European Union, Multiannual Financial Framework (2014-2020) - Negotiating Box, 10753/12, 6 June 2012.

43 Council of the European Union, Multiannual Financial Framework (2014-2020) - Negotiating Box, 11539/12, 19 June 2012.

44 See European Parliament resolution of 8 June 2011 on Investing in the future: a new Multiannual Financial Framework (MFF) for a competitive, sustainable and inclusive Europe (2010/2211(INI)), [2012] OJ CE380/89.

45 On the ‘bottom-up’ and ‘top-down’ approaches, see N-J Brehon, ‘Le budget européen: quelle négociation pour le prochain cadre financier de l’Union européen?’ (Fondation Robert Schuman, 25 May 2010, 31 May 2010) Questions d’Europe, 170 & 171, http://www.robert-schuman.eu

46 European Parliament resolution of 13 June 2012 on the Multiannual Financial Framework and own resources, P7_TA(2012)0245.

47 On the different ‘camps’ of Member States, see Chaffin, J, ‘EU budget: the trillion euro split’ (Financial Times, 20 November 2012); Marzinotto, B, ‘The long-term EU budget: size or flexibility?’ (Bruegel, November 2012) Bruegel Policy Contribution 2012/20; Petit, Y, ‘Les oppositions entre États membres et institutions de l’Union européenne’ (2014) 125 Revue française de finances publiques 3 .

48 European Council, Conclusions of 28–29 June 2012, EUCO 76/12, point 6.

49 European Parliament resolution of 23 October 2012 in the interests of achieving a positive outcome of the Multiannual Financial Framework 2014-2020 approval procedure, [2014] OJ C68E/1. The resolution was adopted by a vote of + 517, − 105, o 63. After Croatian accession, the seventh legislature of the Parliament had 766 Members, so a majority of 384 Members would be required to grant consent for the MFF Regulation.

50 See note 44 above, points 129 and 163.

51 Above note 49, point 18.

52 Ibid point 79.

53 Ibid point 78.

54 Council of the Eurpean Union, Multiannual Financial Framework (2014-2020) – Negotiating box, 15599/12, 29 October 2012.

55 See ‘Cameron gives no ground before budget summit’ (Euractiv, 22 November 2012) http://www.euractiv.com/

56 Statement by the Members of the European Council, Brussels, 23 November 2012.

57 Remarks by Herman Van Rompuy following the European Council, 23 November 2012, EUCO 228/12, PRESSE 490.

58 Ibid p 2.

59 Alain Lamassoure, speaking at the public meeting of the Committee on Budgets of 20 February 2013.

60 Alain Lamassoure, speaking during the public closing session of the European Parliamentary Week on the European Semester for Economic Policy Coordination, Brussels, 28–30 January 2013.

61 European Council, Conclusions of 7–8 February 2013 on the MFF, EUCO 37/13. On cohesion, see points 20–60 and 76–92 of the Conclusions. On agriculture, see points 61–75.

62 Remarks by President Herman Van Rompuy following the European Council, 8 February 2013, EUCO 36/13, PRESSE 48, p 2. For a detailed breakdown of the figures decided by the European Council compared to the figures for 2007–13, see European Commission, see note 13 above, pp 111–113.

63 See note 61 above, point 11.

64 See note 62 above, p 2.

65 Speech by President of the European Council Herman Van Rompuy at the European Parliament, Brussels, 18 February 2013, EUCO 41/13, PRESSE 60, p 4.

66 Ibid.

67 Speech by Herman Van Rompuy, President of the European Council, to the European Parliament, Strasbourg, 3 July 2012, EUCO 129/12, PRESSE 312, p 3.

68 Speech by President Barroso on the outcome of the European Council meeting on the Multiannual Financial Framework of 7-8 February 2013, Brussels, 18 February 2013, SPEECH/13/130. The European Council minutes, with the Commission’s declaration annexed, are contained in document EUCO 4/13, PV/CO EUR 1 of 6 March 2013.

69 Ibid.

70 Verhofstadt, G, ‘Verhofstadt on EU budget: not a budget for the future’ (ALDE party press release, 18 February 2013).

71 See Fox, B, ‘MEPs attack carpet seller budget deal’ (EU Observer, 18 February 2013). On the significance of compensation by side payments in the MFF negotiations, see Stenbæk, J and Jensen, M Dagnis, ‘Evading the Joint Decision Trap: the Multiannual Financial Framework 2014–20European Political Science Review, doi: 10.1017/S175577391500020X [first published online 23 July 2015].

72 European Parliament resolution of 13 March 2013 on the European Council Conclusions of 7/8 February 2013 concerning the Multiannual Financial Framework, [2016] OJ C36/49. Vote: + 506, − 61, o 23.

73 Ibid point 1.

74 See Press Release on the 3235th meeting of the GAC, Luxembourg, 22 April 2013, 8577/13, PRESSE 153.

75 See Council of the European Union, New Multiannual Financial Framework – State of play, 9486/13, 14 May 2013.

76 Vogel, T, ‘MEPs threaten to derail budget deal’ (European Voice, 14 February 2013); Hennessy, M, ‘Cameron rejects idea of secret vote by MEPs’ (Financial Times, 12 February 2013).

77 ‘Editorial: Parliament caught between a rock and a hard place’ (European Voice, 7 March 2013), p 10.

78 Now found in Article 2 of the MFF Regulation 1311/2013, see note 12 above.

79 Further to a Joint Statement of the institutions adopted with the MFF Regulation, the High Level Group would be established under the chairmanship of Mario Monti on 25 February 2014.

80 The idea of a Global Margin had initially been presented in the Parliament’s SURE resolution, see note 44 above, point 149.

81 See Council documents 11295/13, 11298/13 and 11307/13 of 20 June 2013.

82 ‘Statement Reimer Böge on MFF’ (EPP Group press release, 20 June 2013); H Mahony, ‘Deal on EU budget in doubt’ (EU Observer, 20 June 2013).

83 The Presidents were Martin Schulz for the Parliament, Enda Kenny for the Council and Manuel Barroso for the Commission.

84 See European Commission MEMO/13/625, Elements of the political agreement on the European Union’s future budget 2014-2020, 27 June 2013.

85 See a presentation of the package in the Council’s press release ‘Council approves MFF agreement’, 11732/13, PRESSE 307, 28 June 2013.

86 European Parliament resolution of 3 July 2013 on the political agreement on the Multiannual Financial Framework 2014-2020, P7_TA(2013)0304. Vote: + 474, − 193, o 42.

87 European Parliament legislative resolution of 19 November 2013 on the draft Council regulation laying down the multiannual financial framework for the years 2014–2020, P7_TA(2013)0455. Vote: + 537, − 126, o 19.

88 See note 12 above. See Dintilhac, F, ‘Le nouveau cadre financier pluriannuel des dépenses de l’Union pour la période 2014-2020’ (2014) 2 Revue du droit de l’Union européenne 315 ; Potteau, A, ‘Le cadre financier pluriannuel 2014-2020 ou l’austérité mâtinée de flexibilité’ (2014) Revue trimestrielle de droit européen 795 .

89 P7_TA(2014)0378.

90 Author’s translation from the French text: ‘Il est d’usage dans l’Union que les trois questions principales – quelle est la taille du pot? D’où vient l’argent? Où vont les dépenses? – soient tranchées par les chefs d’État ou de gouvernement.’ Van Rompuy, H, L’Europe dans la tempête: Leçons et défis (Racine, 2014), p 68.

91 See note 9 above.

92 On the exclusion of this possibility post-Lisbon, see Jacqué, J-P, ‘Le traité de Lisbonne: Une vue cavalière’, (2008) 44 (3) Revue trimestrielle de droit européen 439483 , p 456.

93 Article 15(3) TFEU provides that ‘[t]he European Parliament shall meet in public, as shall the Council when considering and voting on a draft legislative act.’

94 Lenaerts, K and Verhoeven, A, ‘Institutional Balance as a Guarantee for Democracy in EU Governance’, in C Joerges and R Dehousse (eds) Good Governance in Europe’s Integrated Market, Collected Courses of the Academy of European Law (Oxford University Press, 2002), p 44 . See also Jacqué, J-P, ‘The Principle of Institutional Balance’ (2004) 41 Common Market Law Review 383 ; Craig, P, ‘Institutions, Power and Institutional Balance’ in P Craig and G de Búrca (eds), The Evolution of EU Law (Oxford University Press, 2011).

95 United Kingdom v Council, 68/86, EU:C:1988:85, para 38; and Parliament v Council, C‑133/06, EU:C:2008:257, para 54; Commission v Council, C-28/12, EU:C:2015:282, para 42.

96 Articles 4(3) and 11 of the European Council’s Rules of Procedure [2009] OJ L315/52.

97 French Republic v European Parliament (Plenary calendar case), Joined Cases C-237/11 and C-238/11, EU:C:2012:796, para 68.

98 On the European Council President’s relationship with the European Parliament, see de Waele, H and Broeksteeg, H, ‘The Semi-Permanent European Council Presidency: Some Reflections on the Law and Early Practice’ (2010) 49 Common Market Law Review 1039 .

99 Sweden and Turco v Council, Joined Cases C-39/05P and C-52/05P, EU:C:2008:374, para 46; Access Info Europe, C-280/11P, EU:C:2013:671, para 33.

100 On the difficulties of parliamentary oversight of the European Council, see Curtin, D, ‘Challenging Executive Dominance in European Democracy’ (2014) 77 (1) Modern Law Review 1 ; Sánchez-Barrueco, ML, ‘El control des Consejo Europeo por el Parlamento Europeo (2009-2014): marco jurídico y práctica interinstitucional’ (2015) 1 Revista Española de Derecho Europeo 19 ; Boucher, M Papi, ‘Las relaciones entre el Parlamento Europeo y el Consejo Europeo durante el mandato de Van Rompuy (2010-2014)’ (2015) 51 Revista Catalana de Dret Públic 122 .

101 On the dominant influence of the European Council in the MFF negotiations, see Stenbæk and Dagnis Jensen, see note 71 above; Hagemann, S, The EU Budget and Balance of Powers Between the European Parliament and the EU Governments (Swedish Institute for European Policy Studies, 2014), Policy Analysis No 3.

102 The competence of the Court to review the validity of a European Council decision was confirmed in Pringle v Ireland, C-370/12, EU:C:2012:756, para 31.

103 The Parliament itself maintained throughout the negotiations that the Conclusions were political in nature only. Nevertheless, the Court of Justice gives precedence to content over form in deciding whether an act may be reviewed under Article 263 TFEU and it cannot be excluded that a future challenge to the validity of European Council Conclusions might, depending on the circumstances, be ruled admissible. The Court has, for example, held that a Commission Communication (France v Commission, C-57/95, EU:C:1997:164) and an ECB Policy Framework (UK v ECB, T-496/11, EU:C:2015:400) could constitute challengeable acts, while in the Gauweiler preliminary reference the Court reviewed the validity of OMT decisions that the ECB itself argued were merely preparatory in nature (Gauweiler, C-62/14, EU:C:2015:400). On the notion of a reviewable act, see Lenaerts, K et al, EU Procedural Law (Oxford University Press, 2014), pp 257302 .

104 European Parliament v Council (Chernobyl), 70/88, EU:C:1990:217, para 21.

105 Decision (EU) 2015/435 of the European Parliament and of the Council of 17 December 2014 on the mobilisation of the Contingency Margin [2015] OJ L72/4.

106 Commission Decision of 10 December 2014 establishing a the ‘Madad’ Regional Trust Fund in response to the Syrian Crisis, C(2014) 9615; Commission Decision of 20 October 2015 establishing an Emergency Trust Fund for stability and addressing root causes of irregular migration and displaced persons in Africa, C(2015) 7293.

107 See Commission Decision of 10 February 2016 on the Facility for Refugees in Turkey amending Commission Decision C(2015) 9500 of 24 November 2015, [2016] OJ C60/3; as well as the Common Understanding establishing a governance and conditionality framework for the Refugee Facility for Turkey, Council document 5845/16, 5 February 2016.

108 Bickerton, C et al, The New Intergovernmentalism: States, Supranational Actors, and European Politics in the Post-Maastricht Era (Oxford University Press, 2015).

109 See Strasser, D, The Finances of Europe (Office for Official Publications, 1992), pp 9394 .

110 See First Assessment Report of the High Level Group on Own Resources, European Commission, Brussels, 17 December 2014, which estimates at p 13 that 83% of Union revenue is derived from contributions from the national budgets through the GNI or VAT-based resources.

111 Ibid. For a German contribution to the reflections, see Buettner, T and Thöne, M, The Future of EU-Finances: Research Project for the Federal Ministry of Finances (FIFO Köln, 2016). See also Benedetto, G and Milio, S (eds), European Union Budget Reform: Institutions, Policy & Economic Crisis (Palgrave Macmillan, 2012).

112 Article 25 of the MFF Regulation 1311/2013, see note 12 above.

113 This position could take the form of an Interim Report under Rule 99(3) of the Rules of Procedure.

114 As suggested in general terms in García, N Peñalver and Priestley, J, European Political Parties: Learning from 2014, Preparing for 2019, (Notre Europe, 2015) Policy Paper 132.

115 Thus also avoiding a repeat of the situation where the eighth legislature of the European Parliament is bound for the entirety of its term of office, from 2014–2019, by an MFF Regulation on which it did not deliberate.

116 Weiler, JHH, ‘In the face of Crisis: Input Legitimacy, Output Legitimacy and the Political Messianism of European Integration’ (2012) 34 (7) European Integration 825 , p 829.

* The author would like to thank Ricardo Passos for comments on an earlier draft and Evelyn Waldherr for many interesting discussions on the role of the European Council. Particular thanks are due to three anonymous reviewers for their stimulating comments and suggestions. All views expressed are entirely personal to the author and may not be attributed to the European Parliament or its Legal Service.

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