A Towards a critical legal history of European law

We are still lacking a full-fledged history of European law. This may be attributed to the facts that (1) only recently have legal historians started to pay attention to EU law and (2) so far they have tended to concentrate, to a large extent, on the ‘forging moment’ of EU law, ie on the time period in which the key structural doctrines of direct effect and primacy emerged and consolidated, and as a result, Community law became a distinct academic field or discipline. Less attention has been paid to the development of substantive normsFootnote ⁵ and to more recent periods. Like Minerva’s owl, history seems to spread its wings only after the coming of dusk. But the ahistorical character of EU law as a discipline is also the result of the fact that the very making of Community law as a scholarly field was premised on the denial of its actual historical character. In the very precise sense that the evolution of Community law would be said to have consisted in the seamlessly unfolding of the economic cum political project which is reputed to have been enshrined in the founding Treaties. An unfolding which may have occasionally accelerated or slowed down, but which would have not been marked by breaks and discontinuities. In that sense, EU law is assumed to be beyond history. This is particularly the case of the case law of the ECJ, including its most openly transformative rulings. The affirmation of the direct effect and primacy of European legal norms in 1963/1964 (Van Gend/Costa), the acknowledgment of the direct effect of directives in 1974 (Van Duyn) or the new understanding of economic freedoms in Cassis de Dijon in 1979, are generally appraised as acts which were at the same time (and rather paradoxically) brave and fully due (and not as decisive turning points caused by a specific set of social and economic circumstances and forces, and which may have the potential of reconfiguring the project). Such rulings were fully due because they were required by the founding Treaties (something which preempts any discussion about the legitimacy of the ECJ taking such decisions). Still, they were brave because the Court of Justice (with the Commission on the wings) dared stick to what was already decided by the Member States when the latter were prone not to respect their own foundational commitments.

The groundwork of a wider critical history of European law could be developed with the help of the two concepts at the core of The Redress of Law, namely, political constitutionalism and market constitutionalism.Footnote ⁶ Instead of the usual narrative in which the forging of the EU would be a process of constitutionalisation of Community law, we could distinguish different types of constitutionalisation, reflecting the wider social, economic, political and cultural transformations. These two conflicting visions of the role of law and politics in society are, admittedly, contrasting ideal types, the outcome of an effort of theorization. But a good case can be made that the ideas that are captured by these two concepts have actually influenced the development of EU law and EU politics. If we go down that road, we could test three possible working hypotheses.

First, the Treaties through which the European Communities were established reveal themselves to be deeply ambivalent, influenced by both political constitutionalism and market constitutionalism. Second, the development of the Communities from the fifties to the seventies seems to have been largely influenced by political constitutionalism. Third, from the late seventies, however, it would have been market constitutionalism that shaped and molded the development of the projects of the single currency and the single market.

Let us elaborate such hypotheses in some more detail.

First, we could start by highlighting the ambivalence of the founding Treaties of the European Communities. The negotiation of the Treaties was an arduous process not only because there were different national interests at stake, as is usually highlighted, but also because there were different socio-economic visions in contrast. There was wide agreement on the need of creating common institutional structures, decision-making processes and substantive norms to complete the process of reconstructing and ‘modernizing’ the (Western) European economies and societies. But there were deep divergences regarding what this should entail, how public power should be wielded, and for what purposes. Simplifying only a bit, the result was that the Treaties had, at the very least, two different souls, which we could label as those of democratic interventionism and of ordoliberalism, which would largely correspond to the visions of political constitutionalism and market constitutionalism. Different actors managed to plant in the founding Treaties seeds of the two visions, here and there. The result was a compromise, under which the European Communities, and with them European law, were open to be developed in different directions.Footnote ⁷ The Communities were, so to say, suspended between political constitutionalism and market constitutionalism.Footnote ⁸

Next, we could notice that for the three first decades of their existence, the development of the European Communities was largely shaped by political constitutionalism. The dominant constitutional grammar at the national level was also the constitutional grammar which governed the development of Community law. True, the conflicts between political and market constitutionalism were largely postponed due to the conditions prevailing in the early postwar period. In particular, the making of the common market and the launching of the key common policies (not least agricultural policy) provided the occasion for ‘overlapping consensuses’ between the democratic interventionists and the ordoliberals. Still, if one vision prevailed, it was the one of political constitutionalism. The common market (and the very embryonic but still relevant attempts at creating a common currency) ostensibly aimed at increasing the growth potential of national economies. But this was to be achieved in a very concrete and specific way, namely retaining (even reinforcing) the capacity of member states to articulate autonomous social and economic policies. Such policies would in their turn guarantee the adequate distribution and redistribution of the resulting increased wealth. In other words, the European Communities were expected to serve as enablers of the national Democratic and Social States. European integration was about the managed opening of national economies, as Alan Milward stressed.Footnote ⁹ A process in which national economic borders were rendered selectively porous but remained solidly in place. This allowed Member States to tailor their socio-economic policies to the historical trajectories of the political community and to the political preferences of the democratic general will.

There were many dark sides in the postwar (Western, and only selectively Western) European constellation. From its first issue, ELO has showed a commitment to explore and confront that dark past, including imperialism and post-imperialism, the persistence of patriarchal domination and homophobia, or the spreading of unsustainable consumeristic lifestyles. But the direction in which the societies of the Member States moved in the fifties and the sixties, and with them the Communities, was one which could be regarded as realizing, to a relevant extent, the ideals of political constitutionalism. The optimism which European societies exuded in those decades was not just a matter of false consciousness.

But the history of European integration is not the history of political constitutionalism triumphans. This moves us to the third hypothesis that emerges when we apply Christodoulidis’s concepts of political constitutionalism and market constitutionalism to the history of European integration, namely the rise of market constitutionalism, which by the late 1970s started to replace political constitutionalism as the public philosophy underpinning the legal systems of the Member States of the European Communities, and of the European Community itself. Indeed, a major discontinuity started to take shape in the late sixties and imposed itself with full force in the following decade. These were years marked by crises, first monetary (the collapse of Bretton Woods) then economic (with the two downturns of 1973 and 1979). With the benefit of hindsight, it may be pertinent to characterize such overlapping and mutually self-reinforcing crises as the first ‘policrisis’, which opened an era of economic turbulence which has lasted till this day. From Christodoulidis’s perspective, what matters is that the said policrisis was the midwife of the success of market constitutionalism at the European level of government. The project of the common market was replaced by that of the single market (and of the single currency). The implications can be appraised by considering what was now expected to happen to economic borders. Contrary to what was the case in the era of the common market, they are not to be redefined, but simply eliminated. The Communities were transformed into the enforcers of a series of prohibitions (most famously, those stemming from the four economic freedoms, the ideal of free competition as articulated in competition law and sound money, which was part of the fabric of the Exchange Rate Mechanism of late 1978, and a foundational commitment in EMU), which precluded Member States from any form of active economic intervention. The powers lost by the states were however not ‘moved upwards’; ie they were not acquired by the Union. The economic power till then wielded by democratic institutions was transferred to ‘markets’ and to public institutions which were by design freed from democratic control (such as the ECB). As a result, public power was first fragmented and then pulverized. This process is usually captured by characterizing integration as ‘negative integration’. Perhaps an even better conceptualization is achieved if we state that the European Communities, and later the European Union, became an external constraint on national governments and parliaments. This translates into English the concept of vincolo esterno, paradoxically coined by the advocates of such limitations in the Italy of the 1980s (a place and a period still to be researched in full depth).

True, many of those who favored the Single European Act and the Maastricht Treaty did so on the expectation that in the fullness of time, a fully-fledged supranational level of government would be created, and that a federal Europe could play even better than the Member States the role of shaper and regulator of economic activity in the whole European area.Footnote ¹⁰ But while the intentions of the authors are essential to understand how events unfolded, and also for the purpose of writing biographies, the fact of the matter is that it seems hard to contest that the last forty years of the history of the EU have been marked by the coming of age of market constitutionalism.Footnote ¹¹

B The Legal Technology of the European Shift from Political Constitutionalism to Market Constitutionalism

In the previous section, we concluded that there are very good reasons to consider that during the seventies, a major discontinuity emerged in the history of Community law, corresponding to the substitution of political constitutionalism by market constitutionalism as the vision and regulatory ideal underpinning Community law. This is, however, not registered by mainstream theories of European law. Rather the contrary is the case. The eighties and the nineties are identified with the ‘completion’ of the internal market and the consequent ‘relaunch’ of European integration. Not a break but a joyous continuation.

This can be said to be another manifestation of the ahistorical proclivity of European legal scholarship. However, the theoretical tools sharpened by Christodoulidis could provide us with a different explanation. If the break from political constitutionalism to market constitutionalism is not usually registered it is because it resulted from the reverse engineering of political constitutionalism. This was a break en douceur because forms were preserved, at the very same time that they were voided first, and then refilled with a radically different substance.

Think for example of constitutional review. In the postwar period, it can be said that constitutional review played an important role in the consolidation of the Democratic and Social state as a constitutional state in Italy and Germany. It was essential in that regard that review proceeded on the basis of a wide definition of the yardstick of constitutionality, one premised on the indivisibility of political, civil and social rights (not by chance, still reflected in the preamble of the Charter of Fundamental Rights on the initiative of Stefano Rodotà). This created the conditions under which the respective constitutional courts did not play the mere role of enforcers of a capitalist socio-economic order, as was the case with courts in general in the prewar period, but of guardians of the new constitutions of the Democratic and Social states, which were explicitly open to different socio-economic visions.

While the founding Treaties did not assign to the Court of Justice the mandate of reviewing the validity of national norms by reference to the basic normative contents of Community law, that function emerged in an evolutionary fashion as the European Court of Justice vindicated the primacy of Community law and national courts addressed the Court of Justice preliminary questions in which they basically posed such validity questions. There is thus a form of ‘functional’ constitutional review, a constitutional review of sorts, in EU law, which becomes extremely powerful once primacy of EU law is actually constructed as supremacy of EU law. At first the European Court of Justice seemed to replicate not only the form of judicial review developed at the national level, but also the substantive content of national yardsticks of constitutionality. Thus, the Costa judgement endorsed the nationalization of electricity in Italy, while the judgement in Internationale Handelsgesellschaft declared that the collective good of a common agricultural policy justified introducing considerable limits on the right to private property of farmers. Things changed, though, from the moment in which the ECJ opted for an innovative interpretation of what economic freedoms entailed (indeed a key step in the coming of age of market constitutionalism in European integration). First the free movement of goods, and then the other three economic freedoms, ceased being regarded as operationalisations of the principle of non-discrimination and became the concretization of a neoliberal or ordoliberal understanding of private property and entrepreneurial freedom. This resulted in major inroads in the powers of Member States to shape their socio-economic orders, as the ECJ started, step by step, and most intensively after the entry into force of the Maastricht Treaty, to set limits to key national economic powers, from the design of national direct taxes to the definition of the ownership regime of public utilities, ending with the grand finale of Viking and Laval.

As a matter of form, the ECJ has been merely replicating the way in which national constitutional courts undertook constitutionality reviews, not least making of proportionality judgements the core of its rulings. As a matter of substance, however, the yardstick of European validity has been defined largely at odds with the parameters of national constitutionality, putting an end to the open character, in socio-economic terms, of national constitutions.