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The Lisbon Treaty - What Really Matters (in under three minutes)

December 2, 2009

The Lisbon Treaty (the “Treaty”) came into force on 1 December 2009 (although certain provisions will take effect at a later date). The Treaty was signed on 13 December 2007 by the 27 Member States of the European Union (the “EU”) and was finally ratified on 3 November 2009, with the Czech Republic completing the process.

 

Immediately noticeable effects of the Treaty include:

  • The competition provisions of the EC Treaty are renumbered: Articles 81 and 82 are now Articles 101 and 102 respectively (although the substance is not altered); and
  • The European Court of Justice is now the “Court of Justice” and the Court of First Instance is now the “General Court”.

 

What is the Lisbon Treaty?

The Treaty amends, but does not replace, the EU’s two main Treaties, the “Treaty on European Union” and the “Treaty Establishing the European Community”. The former retains its title while the latter becomes the “Treaty on the Functioning of the European Union” (the “TFEU”). The Treaty develops the existing legal framework and enables a larger EU to operate more effectively, while providing the tools necessary for the EU to meet current and future challenges.

 

The key changes introduced by the Treaty are summarised in the following table and are further explained in more detail below:

 

 

Key changes

The European Courts:

The Courts are renamed and the Court of Justice acquires an extended general jurisdiction, gaining competence to give preliminary rulings in the area of Freedom, Justice and Security.

The Council of Ministers

(the “Council”):

A new system of “double” qualified majority voting is introduced for the Council.

The European Parliament

(the “Parliament”):

The co-decision procedure (between the Parliament and the Council) becomes the default procedure for adopting EU legislation across a wider range of areas, giving the Parliament more power.

The European

Council:

The European Council is formally recognised as an EU institution and the position of a permanent “President of the European Council” is introduced.

The European Commission

(the “Commission”):

The number of Commissioners will be reduced - only 2/3 of Member States will have a Commissioner at any one time, although this is set to be amended by the Council. The President of the Commission has the power to dismiss fellow Commissioners.

National Parliaments:

EU legislative proposals by the Commission are subject to the scrutiny of, and are capable of challenge by, national parliaments, for the first time.

Citizens’ Initiatives:

EU citizens can invite the Commission to take action where they consider that a legal act of the EU is required in order to implement the Treaty.

General:

  • The EU gains its own legal personality, allowing the EU as an entity to enter into international agreements in its own right;
  • All references to Community and European Community are replaced by “Union”; and
  • The Articles contained in the previous Treaties are renumbered.
 

Competition

As mentioned above, the substantive competition provisions under the Treaty Establishing the European Community remain unchanged, although Articles 81 and 82 have now been renumbered as Articles 101 and 102 respectively.

 

One controversial issue, which arose at the drafting stage, related to the removal of “competition policy” as one of the EU’s objectives from the draft Treaty. Instead, a legally binding “Protocol on Internal Market and Competition” was compiled, stating that “the internal market as set out in Article 3 of the Treaty on European Union includes a system ensuring that competition is not distorted”. However, the European Council’s Legal Service also provided an opinion confirming that the fact such reference is omitted from the EU’s objectives would not, in any case, prevent the EU legislator from acting under Article 308 to ensure competition is not distorted.

 

The Judiciary

  • European Courts Renamed: The Court system of the EU is now known as the “Court of Justice of the European Union” comprising (i) the “Court of Justice” (previously the European Court of Justice); (ii) the “General Court” (previously the Court of First Instance); and (iii) the “Specialised Courts” attached to the General Court (previously the Judicial Panels).
  • Jurisdiction of the Court of Justice: The Court of Justice acquires a greater general jurisdiction to give preliminary rulings in the area of Freedom, Justice and Security (with the exception of Common Foreign and Security policy).
  • Panel for Judicial Appointment: The appointment of judges will take place following consultation by a new panel responsible for giving an opinion on candidates’ suitability to perform the duties of Judge and Advocate General of the Court of Justice and General Court. The panel will comprise of 7 individuals chosen from among former members of the Courts, national courts and lawyers of recognised competence (with at least 1 proposed by the Parliament).
  • Advocate Generals: On request from the Court of Justice, the numbers of Advocate Generals are to be increased from 8 to 11.
  • Access to the Courts: The Treaty softens the applicable conditions for the admissibility of actions brought by individuals against decisions of the institutions, bodies, offices or agencies of the EU. Individuals may now bring proceedings against a regulatory act if they are “directly affected” by it and it does not entail implementing measures. Consequently, individuals no longer have to show that they are individually concerned by the act in question.

 

Charter of Fundamental Rights

The Treaty results in the Charter of Fundamental Rights (the “Charter”) becoming legally binding and the fundamental rights which it contains becoming operational. The Charter now has the same legal status as the EU Treaties and the Court of Justice will ensure that the Charter is applied correctly. This means that for the first time, the EU has set out in one place the existing fundamental rights from which every EU citizen can benefit. The rights are drawn essentially from other international instruments such as the European Convention on Human Rights (the “ECHR”) and are given legal embodiment in the EU.

 

European Convention on Human Rights

The Treaty also allows for the future accession of the EU to the ECHR. This means that the EU and its Institutions could be accountable to the European Court of Human Rights for issues concerning the ECHR in the future.

 

The Legislature

  • New Positions Created: An elected President of the European Council is appointed for a fixed-term (2½ years) providing greater continuity and stability to the work of the European Council. Herman van Rompuy, the former Belgian Prime Minister was named for this position. A second post of High Representative of the Union for Foreign Affairs and Security Policy has been created. Catherine Ashton, the European Commissioner for Trade, was named for this role. She also becomes Vice-President of the Commission and President of the Foreign Affairs Council.
  • Extension of the Co-decision Procedure between the Parliament and the Council: The co-decision procedure is extended to over 40 new areas. It is also renamed “the ordinary legislative procedure”, since it becomes the default procedure whereby the Parliament and the Council must agree on proposed legislation. As a result, the Parliament is now on an equal footing with the Council in some areas where it used to be merely consulted or not involved at all. However, a unanimous decision by the Council is still required for decisions in the areas of tax, foreign policy, defence and social security.
  • Double QMV for Council votes: Where the Council takes a decision by qualified majority voting (“QMV”), a new system is applicable from 1 November 2014 which aims at achieving a balance between small and large Member States. The calculation of QMV will be based on the double majority of Member States and people, and represents the dual legitimacy of the EU. A double majority is achieved when a decision is taken by 55% of the Member States (15 out of 27) representing at least 65% of the EU’s population.
  • National Parliaments: For the first time, the Treaty gives national parliaments the right to challenge a piece of European legislation in accordance with the principle of subsidiarity. The Commission must send draft legislation directly to national parliaments, who have 8 weeks to examine the legislative proposals. Each national parliament is granted 2 votes. Where 1/3 or more of national parliaments object to a proposal, the proposed legislation will be sent back to the Commission for review. If a majority of national parliaments oppose a Commission proposal and they have the backing of the Parliament or Council, then the proposal must be abandoned.
  • Citizens’ Powers: Citizens are entitled to invite the Commission to take action in one of the areas covered by the Treaty if at least 1 million citizens from a “significant number” of Member States put forward such a proposal. This is referred to as a “Citizen’s Initiative”.

 

Renumbering

The Treaty has amended the numbering of material Articles under the Treaty Establishing the European Community as follows:

 

Previous numbering

Nature of provisions

New numbering under the TFEU

Article 23

Free Movement of Goods

Article 28

Article 39

Free Movement of Workers

Article 45

Article 43

Right of Establishment

Article 49

Article 49

Freedom to Provide Services

Article 56

Articles 81 and 82

Competition

Articles 101 and 102

Articles 87 and 88

State Aid

Articles 107 and 108

Article 230

Legality of Acts of an EU Institution

Article 263

Article 232

Failure to Act

Article 265

Article 234

Preliminary References

Article 267

 

Consolidated Text

The full consolidated text of the Treaty can be accessed at:

http://eur-lex.europa.eu/JOHtml.do?uri=OJ:C:2008:115:SOM:EN:HTML