Case T‑44/14

Bruno Costantini and Others

v

European Commission

‛Law governing the institutions — European citizens’ initiative — Social policy — Service of general economic interest — Article 352 TFEU — Refusal of registration — Manifest lack of powers of the Commission — Article 4(2)(b) of Regulation (EU) No 211/2011 — Principle of sound administration — Obligation to state reasons’

Summary — Judgment of the General Court (First Chamber), 19 April 2016

EU institutions — Exercise of powers — Compliance with the principles of equal treatment and sound administration — Obligation to take account of decisions already taken in relation to similar applications — Limits — Respect for legality

Judicial proceedings — Application initiating proceedings — Formal requirements — Identification of the subject-matter of the dispute — Brief summary of the pleas in law on which the application is based

Competition — Undertakings entrusted with the operation of services of general economic interest — Definition of services of general economic interest — Member States’ discretion — Limits — Control by the Commission limited to cases of obvious error — Commission not able to submit a proposal for an act intended to classify long-term care as a service of general economic interest, exempt from the application of internal market rules

Citizenship of the Union — Rights of the citizen — Presentation of the citizens’ initiative — Regulation No 211/2011 — Conditions for registration — Proposal to be within the Commission’s competence

In accordance with Article 5 TEU, the limits of EU competences are governed by the principle of conferral and, under Article 13(2) TEU, each institution is to act within the limits of the powers conferred on it in the Treaties. It is in that context that Article 4(2)(b) of Regulation No 211/2011 on the citizens’ initiative lays down the condition that the proposed citizens’ initiative must not manifestly fall outside the framework of the Commission’s powers to submit a proposal for a legal act of the European Union for the purpose of implementing the Treaties. It follows from the wording of that provision that the Commission must carry out an initial examination of the information available to it in order to determine whether the proposed European citizens’ initiative does not manifestly fall outside the framework of its powers, while provision is made for a more comprehensive examination to be carried out if the proposal is registered. (see paras 16, 17)

Member States are entitled, while complying with EU law, to define the scope and the organisation of their services of general economic interest. They have a wide discretion to define what they regard as services of general economic interest and the definition of such services by a Member State can be questioned by the Commission only in the event of manifest error. That prerogative of the Member State concerning the definition of services of general economic interest is confirmed by the absence both of any competence specially attributed to the European Union and of a precise and complete definition of the concept of such services in EU law. In the light of those factors, the Commission was fully entitled to conclude that it was manifestly unable to submit a proposal for an act where the proposal was founded on Article 14 TFEU and had the aim that long-term care be classified as a service of general economic interest. As regards the exemption of such care from the application of internal market rules, it is clear from Article 14 TFEU that the specific rules which it lays down are applicable to services of general economic interest without prejudice to Article 106 TFEU. Under Article 106(2) TFEU, even undertakings entrusted with the operation of such services are to be subject to the rules contained in the Treaties, in particular to the rules on the internal market and on competition, a principle which can be derogated from only under strict conditions, the presence of which depends on the legal and factual circumstances prevailing in each Member State and must be demonstrated in each specific case by the Member State or undertaking which relies on them. It follows that the Commission cannot propose generally to exempt from the application of internal market rules services whose classification as a service of general economic interest depends on the national policy pursued by each Member State. (see paras 24-26)

Article 153 TFEU covers only in part the scope of the measures awaited in a proposal for a European citizens’ initiative concerning the right to long-term care, because that provision, which expressly and exclusively concerns workers, does not enable legal acts relating to other categories of persons to be adopted. Accordingly, Article 153 TFEU cannot constitute in itself a legal basis for the purpose of adopting an act intended to guarantee the universal provision of long-term care in the European Union. (see para. 39)

See the text of the decision. (see para. 46)

Article 352 TFEU, which is an integral part of an institutional system based on the principle of conferred powers, cannot serve as a basis for widening the scope of EU powers beyond the general framework created by the provisions of the Treaty as a whole and, in particular, by those that define the tasks and the activities of the European Union. On any view, it cannot be used as a basis for the adoption of provisions whose effect would, in substance, be to amend the Treaty without following the procedure which the Treaty provides for that purpose. It follows that recourse to that provision is subject to certain conditions in order to observe the demarcation of powers that is established in the Treaties and to prevent it from being called into question by the adoption of an act of secondary legislation. Moreover, neither Article 352 TFEU nor Regulation No 211/2011 precludes recourse to Article 352 TFEU in the context of European citizens’ initiatives. Nevertheless, the objective of democratic participation of Union citizens underlying the mechanism of the European citizens’ initiative cannot frustrate the principle of conferred powers and authorise the European Union to legislate in a field for which no power has been accorded to it, so that the conditions set out in Article 352 EC must also be complied with in the context of a proposed European citizens’ initiative. Thus, the Commission has the task of establishing whether, in relation to a proposed ECI, it is manifest that it will be unable to make a proposal for a legal act founded on that provision. That is without prejudice, however, to the institutions’ assessment of the necessity of such a legal act inasmuch as that assessment may be carried out after the proposed European citizens’ initiative has been registered and be set out, as the case may be, in the communication provided for in Article 10(1)(c) of Regulation No 211/2011. (see paras 51-53)

The institutions must exercise their powers in accordance with general principles of EU law, such as the principle of equal treatment and the principle of sound administration, and, regard being had to those principles, they must take into account the decisions already taken in respect of similar applications and consider with especial care whether they should decide in the same way or not. The way in which the principle of sound administration is applied must nevertheless be consistent with respect for legality. (see para. 60)

See the text of the decision. (see paras 65, 67)