Negative integration

Andrew Johnston

doi:10.1017/CBO9780511770753.005

5 - Negative integration

from PART 2 - Supranational regulatory techniques

Published online by Cambridge University Press: 04 August 2010

Andrew Johnston

Show author details

Andrew Johnston: Affiliation:
University of Queensland

Book contents

Get access

Summary

Resolving the political deadlock: direct effect and mutual recognition

In the previous chapter we saw that political agreement on common rules became impossible, effectively blocking the ambitious company law and corporate governance harmonisation programme. Corporate governance regulation was far from the only area to be faced with this problem, leaving the market integration programme – and therefore the EEC's achievement of its goals – in the balance.

As is well known, the European Court of Justice (ECJ) put the market integration process back on track with a series of key decisions. First, it declared freedom of establishment to be directly effective, allowing it to be invoked before the national courts, despite the fact that the programme of measures anticipated by the Treaty had not been introduced. This represented a considerable extension of its 1962 Van Gend en Loos decision, which had given direct effect to ‘a clear and unconditional prohibition, which is not a duty to act, but a duty not to act’. As Craig explains, ‘Article 52 [now Article 43], and the provisions on freedom of establishment, expressly contemplate further action by the legislative organs of the Community and by the Member States in order to effectuate the social and economic aims of this part of the Treaty. The very regime of freedom of establishment involves a complex array of legislative norms in order that these aims can be achieved.

Type: Chapter
Information: EC Regulation of Corporate Governance , pp. 146 - 213

DOI: https://doi.org/10.1017/CBO9780511770753.005 [Opens in a new window]

Publisher: Cambridge University Press

Print publication year: 2009

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Craig, P., ‘The Evolution of the Single Market’, in Barnard, C. and Scott, J. (eds.), The Law of the Single European Market: Unpacking the Premises (Oxford: Hart Publishing, 2002) at 6Google Scholar

Craig, P., ‘Once Upon a Time in the West: Direct Effect and the Federalisation of EEC Law’ (1992) 12 Oxford Journal of Legal Studies453 at 464CrossRef Google Scholar

Alter, K. and Meunier-Aitsahalia, S., ‘Judicial Politics in the European Community: European Integration and the Pathbreaking Cassis de Dijon Decision’ (1994) 26 Comparative Political Studies535 at 539CrossRef Google Scholar

Gerstenberg, O., ‘Expanding the Constitution Beyond the Court: the Case of Euro-constitutionalism’ (2002) 8 European Law Journal172 at 175CrossRef Google Scholar

Weiler, J., ‘The Constitution of the Common Market Place: Text and Context in the Evolution of the Free Movement of Goods’, in Craig, P. and Búrca, G. (eds.), The Evolution of EU Law (Oxford University Press, 1999) at 367Google Scholar

Barnard, C., The Substantive Law of the EU, 2nd edn. (Oxford University Press, 2007) at 114–15Google Scholar

Noriega, A. Estella, The EU Principle of Subsidiarity and Its Critique (Oxford University Press, 2002)Google Scholar

Syrpis, P., EU Intervention in Domestic Labour Law (Oxford University Press, 2007)CrossRef Google Scholar

Búrca, G., ‘Reappraising Subsidiarity's Significance after Amsterdam’ (1999) 7/99 Harvard Jean Monnet Working Paper at 6Google Scholar

Bergh, R., ‘Towards an Institutional Legal Framework for Regulatory Competition in Europe’ (2000) 53 Kyklos435CrossRef Google Scholar

Oates, W., ‘An Essay on Fiscal Federalism’ (1999) 37 Journal of Economic Literature1120 at 1134CrossRef Google Scholar

Davies, G., ‘Subsidiarity: the Wrong Idea, in the Wrong Place, at the Wrong Time’ (2006) 43 Common Market Law Review63 at 78Google Scholar

Bermann, G., ‘Taking Subsidiarity Seriously: Federalism in the European Community and the United States’ (1994) 94 Columbia Law Review at 386–8CrossRef Google Scholar

Búrca, G., ‘Proportionality in EC Law’ (1993) 13 Yearbook of European Law105 at 110CrossRef Google Scholar

Weatherill, S., ‘Why Harmonise?’ in Tridimas, T. and Nebbia, P. (eds.), European Law for the Twenty-first Century (Oxford: Hart Publishing, 2004) at 30Google Scholar

Dammann, J., ‘Freedom of Choice in European Corporate Law’ (2004) 29 Yale Journal of International Law477 at 488–9Google Scholar

Gelter, M., ‘The Structure of Regulatory Competition in European Corporate Law’ (2005) 5 Journal of Corporate Law Studies247CrossRef Google Scholar

Hopt, K., ‘Concluding Remarks 1st ECFR Symposium in Milan, 2006’ (2007) 4 European Company and Financial Law Review169 at 171Google Scholar

Lowry, J., ‘Eliminating Obstacles to Freedom of Establishment: the Competitive Edge of UK Company Law’ (2004) 63 Cambridge Law Journal331CrossRef Google Scholar

Kieninger, E.-M., ‘The Legal Framework of Regulatory Competition Based on Company Mobility: EU and US Compared’ (2004) German Law Journal at 750Google Scholar

Seibert, U., ‘Close Corporations – Reforming Private Company Law: European and International Perspectives’ (2007) 8 European Business Organization Law Review83 at 90CrossRef Google Scholar

Schindler, C., ‘Cross-Border Mergers in Europe – Company Law is Catching Up!’ (2006) 3 European Company and Financial Law Review109 at 116CrossRef Google Scholar

Siems, M., ‘SEVIC: Beyond Cross-Border Mergers’ (2007) 8 European Business Organization Law Review307 at 309CrossRef Google Scholar

Enriques, L. and Gelter, M., ‘Regulatory Competition in European Company Law and Creditor Protection’ (2006) 7 European Business Organization Law Review417CrossRef Google Scholar

Lombardo, S., Regulatory Competition in Company Law in the European Community: Prerequisites and Limits (Frankfurt am Main: Peter Lang, 2002)

Tiebout, C., ‘A Pure Theory of Local Expenditures’ (1956) 64 Journal of Political Economy416CrossRef Google Scholar

Olson, M., The Logic of Collective Action: Public Goods and the Theory of Groups (Cambridge, Mass.: Harvard University Press, 1965) at 14–16Google Scholar

Esty, D. and Geradin, D. (eds.), Regulatory Competition and Economic Integration: Comparative Perspectives (Oxford University Press, 2001)

Siebert, H. and Koop, M., ‘Institutional Competition Versus Centralization: Quo Vadis Europe?’ (1993) 9 Oxford Review of Economic Policy15 at 18CrossRef Google Scholar

Buchanan, J., ‘Federalism as an Ideal Political Order and an Objective for Constitutional Reform’, Publius (Winter 1995) at 21Google Scholar

Rodden, J. and Rose-Ackerman, S., ‘Does Federalism Preserve Markets?’ (1997) 83 Virginia Law Review1521 at 1531CrossRef Google Scholar

Weingast, B., ‘The Economic Role of Political Institutions: Market-Preserving Federalism and Economic Development’ (1995) 11 Journal of Law, Economics and Organization1 at 6Google Scholar

Sinn, H.-W., ‘The Selection Principle and Market Failure in Systems Competition’ (1997) 66 Journal of Public Economics247 at 248CrossRef Google Scholar

Scharpf, F., Governing in Europe: Effective and Democratic? (Oxford University Press, 1999) at 92CrossRef Google Scholar

Akerlof, G. ‘“The Market for Lemons”: Quality Uncertainty and the Market Mechanism’ (1970) 8 Quarterly Journal of Economics488CrossRef Google Scholar

Sinn, H.-W., The New Systems Competition (Oxford: Blackwell, 2003)CrossRef Google Scholar

Tjiong, H., ‘Breaking the Spell of Regulatory Competition: Reframing the Problem of Regulatory Exit’ (2000) MPI Collective Goods PreprintGoogle Scholar

Kay, J. and Vickers, J., ‘Regulatory Reform: an Appraisal’, in Wheeler, S. (ed.), A Reader in the Law of the Business Enterprise (Oxford University Press, 1994) at 422Google Scholar

Enriques, L., ‘Company Law Harmonization Reconsidered: What Role for the EC?’ in Bartman, S. (ed.), European Company Law in Accelerated Progress (The Hague: Kluwer Law International, 2006) at 65–6Google Scholar

Coase, R., ‘The Problem of Social Cost’ (1960) 3 Journal of Law and Economics1CrossRef Google Scholar

Revesz, R., ‘Federalism and Regulation: Some Generalizations’, in Esty, D. and Geradin, D. (eds.), Regulatory Competition and Economic Integration: Comparative Perspectives (Oxford University Press, 2001) at 17 and 29Google Scholar

Trachtman, J., ‘Regulatory Competition and Regulatory Jurisdiction’ (2000) Journal of International Economic Law331 at 332CrossRef Google Scholar

Hayek, F., ‘Competition as a Discovery Procedure’ (2002) 5 Quarterly Journal of Austrian Economics at 10Google Scholar

Hayek, F., The Constitution of Liberty (Abingdon: Routledge Classics, 2006)Google Scholar

Choper, J., Coffee, J. and Gilson, R., Cases and Materials on Corporations, 5th edn. (Aspen Law & Business, 2000) at 235Google Scholar

Romano, R., The Advantage of Competitive Federalism for Securities Regulation (Washington, DC: AEI Press, 2002) at 63Google Scholar

Tung, F., ‘Before Competition: Origins of the Internal Affairs Doctrine’ (2006) 32 Journal of Corporation Law33Google Scholar

Mitchell, L. E., The Speculation Economy: How Finance Triumphed over Industry (San Francisco, Calif.: Berrett Koehler, 2007) at 31–54Google Scholar

Romano, R., The Genius of American Corporate Law (Washington, DC: AEI Press, 1993)Google Scholar

Bebchuk, L. and Hamdani, A., ‘Vigorous Race or Leisurely Walk: Reconsidering the Competition over Corporate Charters’ (2002) 112 Yale Law Journal553 at 556CrossRef Google Scholar

Romano, R., ‘Law as a Product: Some Pieces of the Incorporation Puzzle’ (1985) 1 Journal of Law, Economics and Organization225 at 244Google Scholar

Romano, R., Foundations of Corporate Law (New York: Oxford University Press, 1993) at 90Google Scholar

Kahan, M. and Kamar, E., ‘The Myth of State Competition in Corporate Law’ (2002) 55 Stanford Law Review679CrossRef Google Scholar

Cary, W., ‘Federalism and Corporate Law: Reflections Upon Delaware’ (1974) 83 Yale Law Journal663CrossRef Google Scholar

Winter, R., ‘State Law, Shareholder Protection, and the Theory of the Corporation’ (1977) 6 Journal of Legal Studies251CrossRef Google Scholar

Bebchuk, L., ‘Federalism and the Corporation: the Desirable Limits on State Competition in Corporate Law’ (1992) 105 Harvard Law Review1435CrossRef Google Scholar

Bebchuk, L. and Ferrell, A., ‘Federalism and Takeover Law: the Race to Protect Managers from Takeovers’, in Esty, D. and Geradin, D. (eds.), Regulatory Competition and Economic Integration: Comparative Perspectives (Oxford University Press, 2001)Google Scholar

Wallman, S., ‘The Proper Interpretation of Corporate Constituency Statutes and Formulation of Directors’ Duties' (1991) 21 Stetson Law Review163 at 163Google Scholar

Robilotti, M., ‘Codetermination, Stakeholder Rights, and Hostile Takeovers: a Reevaluation of the Evidence from Abroad’ (1997) 38 Harvard International Law Journal536 at 542Google Scholar

Davids, R., ‘Constituency Statutes: an Appropriate Vehicle for Addressing Transition Costs?’ (1995) 28 Columbia Journal of Law and Social Problems145 at 158Google Scholar

Roe, M., ‘Takeover Politics’, in Blair, M. (ed.), The Deal Decade (Washington, DC: Brookings Institution, 1993) at 337Google Scholar

Cheffins, B. R., Company Law: Theory, Structure, and Operation (Oxford: Clarendon Press, 1997) at 423Google Scholar

Jensen, M., ‘Takeovers: their Causes and Consequences’ (1988) 2 Journal of Economic Perspectives21 at 45–6CrossRef Google Scholar

Roe, M., Political Determinants of Corporate Governance: Political Context, Corporate Impact (Oxford University Press, 2003) at 45Google Scholar

Roe, M., Strong Managers, Weak Owners (Princeton, NJ: Princeton University Press, 1994) at 160–1Google Scholar

Orts, E., ‘Beyond Shareholders: Interpreting Corporate Constituency Statutes’ (1992) 61 George Washington Law Review14 at 25Google Scholar

Heine, K. and Kerber, W., ‘European Corporate Laws, Regulatory Competition and Path Dependence’ (2002) 13 European Journal of Law and Economics at 51CrossRef Google Scholar

Kübler, F., ‘A Shifting Paradigm of European Company Law?’ (2005) 11 Columbia Journal of European Law219 at 220Google Scholar

Grundmann, S., European Company Law: Organization, Finance and Capital Markets (Antwerp: Intersentia, 2007) at 507–8Google Scholar

Enriques, L., ‘EC Company Law and the Fears of a European Delaware’ (2004) European Business Law Review1259 at 1262Google Scholar

Kirchner, C., Painter, R. W. and Kaal, W. A., ‘Regulatory Competition in EU Corporate Law after Inspire Art: Unbundling Delaware's Product for Europe’ (2005) 2 European Company & Financial Law Review159 at 168CrossRef Google Scholar

Drury, R., ‘The “Delaware” Syndrome: European Fears and Reactions’ (2005) Journal of Business Law709 at 732–3Google Scholar

Siems, M., ‘The Impact of the European Company on Legal Culture’ (2005) 30 European Law Review431 at 434Google Scholar

Ogus, A., ‘Competition between National Legal Systems: a Contribution of Economic Analysis to Comparative Law’ (1999) 48 International and Comparative Law Quarterly405 at 408CrossRef Google Scholar

Armour, J., ‘Who Should Make Corporate Law? EC Legislation Versus Regulatory Competition’ (2005) 58 Current Legal Problems369CrossRef Google Scholar

Deakin, S., ‘Regulatory Competition Versus Harmonization in European Company Law’, in Esty, D. and Geradin, D. (eds.), Regulatory Competition and Economic Integration: Comparative Perspectives (Oxford University Press, 2001) at 204Google Scholar

Rickford, J., ‘Reforming Capital: Report of the Interdisciplinary Group on Capital Maintenance’ (2004) European Business Law Review at 1011Google Scholar

Wymeersch, E., ‘Is a Directive on Corporate Mobility Needed?’ (2007) 8 European Business Organization Law Review161 at 164CrossRef Google Scholar

Becht, M., Mayer, C. and Wagner, H., ‘Where Do Firms Incorporate?’ (2006) European Corporate Governance Institute Law Working Paper No. 70/2006 at 3Google Scholar

Noack, U. and Beurskens, M., ‘Modernising the German GmbH – Mere Window Dressing or Fundamental Redesign?’ (2008) 9 European Business Organization Law Review97 at 110CrossRef Google Scholar

Baums, T., ‘European Company Law Beyond the 2003 Action Plan’ (2007) 8 European Business Organization Law Review143 at 155–6CrossRef Google Scholar

Bergh, R., ‘The Subsidiarity Principle in European Community Law: Some Insights from Law and Economics’ (1994) 1 Maastricht Journal of International and Comparative Law337 at 344–5CrossRef Google Scholar

Houtum, H. and Velde, M., ‘The Power of Cross-Border Labour Market Immobility’ (2004) 95 Tijdschrift voor Economische en Sociale Geografie100 at 101Google Scholar

Aglietta, M. and Berrebi, L., Désordres dans le Capitalisme Mondial (Paris: Odile Jacob Economie, 2007)Google Scholar

Streeck, W., ‘Beneficial Constraints: On the Economic Limits of Rational Voluntarism’, in Hollingsworth, J. Rogers and Boyer, R. (eds.), Contemporary Capitalism: the Embeddedness of Institutions (Cambridge University Press, 1997) at 210Google Scholar

Maduro, M. P., We, the Court: the European Court of Justice and the European Economic Constitution (Oxford: Hart, 1998) at 137Google Scholar

Burwitz, G., ‘Tax Consequences of the Migration of Companies: a Practitioner's Perspective’ (2006) 7 European Business Organization Law Review589 at 590CrossRef Google Scholar

Grundmann, S., ‘Regulatory Competition in European Company Law – Some Different Genius?’ in Ferrarini, G., Hopt, K. and Wymmeersch, E. (eds.), Capital Markets in the Age of the Euro – Cross-Border Transactions, Listed Companies and Regulation (The Hague: Kluwer Law International, 2002) at 587Google Scholar

Roth, W.-H., ‘From Centros to Überseering: Free Movement of Companies, Private International Law, and Community Law’ (2003) 52 International and Comparative Law Quarterly177 at 207CrossRef Google Scholar

Plessis, J. du, Großfeld, B., Luttermann, C., Saenger, I. and Sandrock, O., German Corporate Governance in International and European Context (Berlin: Springer, 2007) at 52–4CrossRef Google Scholar

Sadowski, D., Junkes, J. and Lindenthal, S., ‘Labour Co-determination and Corporate Governance in Germany: the Economic Impact of Marginal and Symbolic Rights’ (1999) 60 Quint-Essenzen at 3.1.3Google Scholar

Windbichler, C., ‘Cheers and Boos for Employee Involvement: Co-determination as Corporate Governance Conundrum’ (2005) 6 European Business Organization Law Review507CrossRef Google Scholar

Kulms, R., ‘Employee Representation on Supervisory Boards – a German Perspective’ (2007) 44 Pravo i Prevreda3 at 21–24Google Scholar

Enriques, L., ‘Silence is Golden: the European Company Statute as a Catalyst for Company Law Arbitrage’ (2003) European Corporate Governance Institute Law Working Paper7/2003 at 6Google Scholar

Vossestein, G.-J., ‘Transfer of the Registered Office: the European Commission's Decision not to Submit a Proposal for a Directive’ (2008) 4 Utrecht Law Review53CrossRef Google Scholar

Edwards, V., EC Company Law (Oxford University Press, 1999) at 392Google Scholar

Siems, M., ‘The European Directive on Cross-Border Mergers: an International Model?’ (2004) 11 Columbia Journal of European Law167 at 171Google Scholar

Plessis, J. du and Sandrock, O., ‘The Rise and Fall of Supervisory Co-determination in Germany’ (2005) 16 International Company and Commercial Law Review67 at 75Google Scholar

Kenner, J., ‘Worker Involvement in Societas Europaea: Integrating Company and Labour Law in the European Union?’(2005) 25 Yearbook of European Law223 at 254CrossRef Google Scholar

Davies, P., Gower and Davies' Principles of Modern Company Law, 7th edn. (London: Sweet & Maxwell, 2003) at 125Google Scholar

Triebel, V. and Horton, C., ‘Will More English Plcs Take Off in Germany?’ (2006) 25 International Financial Law Review34Google Scholar

Book contents

5 - Negative integration

Summary

Access options

References

Save book to Kindle

Save book to Dropbox

Save book to Google Drive