Tuesday

18th Jun 2019

Opinion

Ratifying CETA after 'Achmea scandal' is anti-European

  • Anti-CETA campaigners may take solace from a seemingly-obscure ruling from the European Court of Justice (Photo: Campact)

Keeping the European project alive requires EU members to abide by the principle of loyalty to European institutions.

With the Achmea decision, any EU country that ratifies the EU-Canada Comprehensive Economic and Trade Agreement (CETA) before the decision of the European Court of Justice on CETA's investment provisions compliance with the European treaties, will be breaking the principle of loyalty to European Union institutions.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

Although few people in Europe have heard about the ECJ's 'Achmea ruling', the case will have far-reaching consequences and it is important for member states to understand the implications of the case quickly, especially those states that are considering ratifying CETA.

In 2008, Achmea, a Dutch financial insurance company, using its privilege as a foreign investor under the Slovakia-Netherlands Bilateral Investment Treaty (BIT), succeeded in winning an arbitration award that required Slovakia to pay for the costs to the company from the health insurance reform.

Slovakia challenged the award in a German court, which asked the ECJ to give its opinion as to whether the BIT was compatible with EU law.

The fundamental problem with investor-state arbitration, in the court's view, is that they "remove from the jurisdiction of their own courts, and hence from the system of judicial remedies which [EU law] requires them to establish in the fields covered by EU law, disputes which may concern the application or interpretation of EU law".

The ECJ decided that because arbitration tribunals set up through investor-state dispute settlement are not part of the EU judicial system, because such tribunals may resolve disputes that relate to the application or interpretation of EU law, and because the awards of the tribunal are not subject to review by member state courts, the decisions of these tribunals are not compatible with EU law.

The immediate effect of the ECJ decision was that the people of Slovakia will not have to pay €22m to Achmea simply because their government decided that health insurance should not be for profit.

But more broadly, this monumental decision casts a shadow on the legality of investor protection clauses in Europe's many free trade agreements, including CETA, currently in national ratification phase.

Belgium had already requested the ECJ to determine whether the investment provisions in CETA are in compliance with the EU Treaties, but the court's reasoning in Achmea strongly suggests that the answer will be no.

As an earlier decision by the ECJ clarified, the general duty of loyalty resulting from the Treaty of the EU is that member states have an obligation to "have recourse to the [Union] judicial system and to respect the court's exclusive jurisdiction, which is a fundamental feature of that system."

As part of this duty of loyalty, member states are under a legal obligation not to ratify agreements that are contrary to EU law.

As professor of European law at the University of Amsterdam and director of the Amsterdam Centre for European Law and Governance Christina Eckes puts, "In the light of the foreseeable risk that CJEU declares the CETA investment chapter to be capable of undermining the autonomy of the EU legal order, member states are required by the principle of EU loyalty to halt ratification."

The Lithuanian Parliament ratified CETA last week, becoming the second country (after Sweden) to do so after Achmea scandal, and thus endangering European principles.

Lithuania's decision to ratify CETA before the ECJ's decision not only violated the state's duty of loyalty to the EU, but is also contrary to the pro-European nature of Lithuania, whose institutions typically embraced EU law wholeheartedly.

In support of their loyalty to the EU, other countries should not proceed with ratifying CETA until the ECJ has reached its ruling.

In order to save the European project, a respect to EU law must be shown.

Layla Hughes is Senior Attorney at the Center for International Environmental Law, Laura Gintalaite is a freelance trade campaigner

Disclaimer

The views expressed in this opinion piece are the author's, not those of EUobserver.

Ceta and pesticides: A citizens' rights issue

The trade agreement with Canada will begin to apply on 21 September. But there is still a potential conflict on the right to data protection vs. the right to access information.

Belgium green lights unchanged Ceta

Wallonia and Brussels have voted to give the federal government the power to sign the EU-Canada trade deal, whose content is not altered by the new documents attached.

Agenda

Spanish vote and EU court's Airbnb ruling in focus This WEEK

Spanish voters are heading to the polls, while in other EU member states campaigning for the European elections is picking up after Easter. The EU's top court will issue important rulings on both the EU-Canada free trade agreement and Airbnb.

Catalonia MEPs are a judicial, not political, issue

Carles Puigdemont and Toni Comin currently live outside Spain. They were prosecuted for the serious crimes, and they have fled justice. It is not possible to judge in absentia in Spain, where the justice system protects the rights of defendants.

News in Brief

  1. New socialist group leader to push for Timmermans
  2. Romanian ex-PM frontrunner to head new liberal group
  3. France, Germany and Spain in fighter jet deal
  4. Tusk grilled in Poland over role as PM
  5. Italy is 'most credible' US partner in EU, says Salvini
  6. EU blames Sudan junta for killings and rapes
  7. Report: EU may suspend Turkey customs union talks
  8. Swiss stock exchange could lose EU access in July

Six takeaways on digital disinformation at EU elections

For example, Germany's primetime TV news reported that 47 percent of political social media discussions were related to the extreme-right AfD party, when in fact this was the case only for Twitter - used by only four percent of Germans.

Stakeholders' Highlights

  1. Nordic Council of MinistersNo evidence that social media are harmful to young people
  2. Nordic Council of MinistersCanada to host the joint Nordic cultural initiative 2021
  3. Vote for the EU Sutainable Energy AwardsCast your vote for your favourite EUSEW Award finalist. You choose the winner of 2019 Citizen’s Award.
  4. Nordic Council of MinistersEducation gets refugees into work
  5. Counter BalanceSign the petition to help reform the EU’s Bank
  6. UNICEFChild rights organisations encourage candidates for EU elections to become Child Rights Champions
  7. UNESDAUNESDA Outlines 2019-2024 Aspirations: Sustainability, Responsibility, Competitiveness
  8. Counter BalanceRecord citizens’ input to EU bank’s consultation calls on EIB to abandon fossil fuels
  9. International Partnership for Human RightsAnnual EU-Turkmenistan Human Rights Dialogue takes place in Ashgabat
  10. Nordic Council of MinistersNew campaign: spot, capture and share Traces of North
  11. Nordic Council of MinistersLeading Nordic candidates go head-to-head in EU election debate
  12. Nordic Council of MinistersNew Secretary General: Nordic co-operation must benefit everybody

Latest News

  1. EU urges Swiss to move on talks or face sanction
  2. Frontex transparency dispute goes to EU court
  3. Commission goes easy on scant national climate plans
  4. Macron and Mogherini decline to back US accusation on Iran
  5. EU summit must give effective answer on migration
  6. Spain's Garcia set to be next Socialist leader in parliament
  7. Erdogan mocks Macron amid EU sanctions threat
  8. The most dangerous pesticide you've never heard of

Stakeholders' Highlights

  1. Platform for Peace and JusticeMEP Kati Piri: “Our red line on Turkey has been crossed”
  2. UNICEF2018 deadliest year yet for children in Syria as war enters 9th year
  3. Nordic Council of MinistersNordic commitment to driving global gender equality
  4. International Partnership for Human RightsMeet your defender: Rasul Jafarov leading human rights defender from Azerbaijan
  5. UNICEFUNICEF Hosts MEPs in Jordan Ahead of Brussels Conference on the Future of Syria
  6. Nordic Council of MinistersNordic talks on parental leave at the UN
  7. International Partnership for Human RightsTrial of Chechen prisoner of conscience and human rights activist Oyub Titiev continues.
  8. Nordic Council of MinistersNordic food policy inspires India to be a sustainable superpower
  9. Nordic Council of MinistersMilestone for Nordic-Baltic e-ID
  10. Counter BalanceEU bank urged to free itself from fossil fuels and take climate leadership
  11. Intercultural Dialogue PlatformRoundtable: Muslim Heresy and the Politics of Human Rights, Dr. Matthew J. Nelson
  12. Platform for Peace and JusticeTurkey suffering from the lack of the rule of law

Join EUobserver

Support quality EU news

Join us