The ECJ has been the most relevant factor
The European Court of Justice, along with the European Commission, the Council of the European Union and the European Parliament constitute a core institutional body of the EU. Its activities have been of great importance to the process of European integration. The Court has used its limited functions and arising opportunities in order expand its autonomy and authority. Scholars representing different theories argue however, on the extent of this expansion. In the first place an introduction of the Court of Justice of the European Union with its roles is presented.
This essay by a close analysis of theoretical perspective regarding constitutions, functioning and powers of courts, principal-agent theory, Neo-functionalism and Neo-realism tries to critically evaluate usefulness of these theories. The application of these theoretical perspective helps understand the reasons responsible for the process of expansion of the ECJ competences.
Throughout the use of some examples of case studies of the ECJ judgements, such as Van Gend en Loos (1963) and Costa v. ENEL (1964), this essay analyses the real importance of the ECJ in the process of European integration and the expansion of its competences.
The Court of Justice of the European Union (ECJ), one of the five major institutions of the EU, was established in its first form in 1951 as the Court of Justice of the European Coal and Steel Communities  . The Court encompasses the whole judiciary system within the European Union. Three limited roles were assigned to the ECJ when it was created. A first role was to ensure ‘that the Commission and the Council of Ministers did not exceed their authority’, subsequently extended on the other EU institutions  . A second role of the Court was related to the dispute resolution by interpreting and filling in vague aspects of disputed EC laws, in other words the Court is ‘filling in the [incomplete] contract through its legal decisions’  . And finally, the ECJ was also designed to ‘decid[e] of charges of noncompliance raised by the Commission or by member states’  .
It is important to be aware of general political theories of constitutions and the role and power of courts. The main purpose of constitutions is a resolution of collective action problems  . However, in the absence of a formal constitution of the EU, treaties between member states establishing this organisation serve as an alternative solution to tackle these problems. It is also known that ‘no treaty, constitution, piece of legislation, or executive decision can account for all possible developments – they are always incomplete contracts  . To overcome collective action problems the signing agreement parties, have to establish a rule of law, which makes the agreements binding on participants. In order to achieve that, a mechanism for punishing non compliance (judiciary system) with common agreed rules is put in place. The European Union is characterised by an existence of a rule of law, and therefore the EU system of governance can be described as quasi-constitutional system, which was gradually established by progressive constitutionalisation of the treaties through rulings of the ECJ. Some scholars argue (eg. neo-functionalists), that in order to produce the incentive for parties to abide by the law it is necessary that the institutions enforcing law are independent from legislature, which means that a separation of powers between judiciary and legislature need to be present. This theoretical model assumes ‘that the separation of powers works because judges are neutral political actors: they exercise judgement instead of will’, it can be said with whole certainty that ‘judges do have will’ (preferences)  .
The phenomenon described above is defined by political scientists as “judicial politics" and it is clearly visible in the EU  . The EU’s judiciary is able to exercise its preferences and have a high degree of discretion and influence over the legislation process within the European Union because of flexibility of EU’s quasi-constitution and laws. ‘As a result, the actors responsible for enforcing these contracts in democratic polities – the courts – can often use their discretion and thereby shape policy outcomes beyond the intention of the legislators’  .
It is also important to explain the reason why the ECJ was willing to escape member states control, and how it was possible that from a court with limited functions it became one of the key actors having an important impact on the European integration. Principal-agent theory explains why the ECJ would want to extend its authority. It assumes that agents (eg. the ECJ), created by principals (eg. member states) in order to perform for them some tasks, have different interest than principals  . The agent is interested in escaping principal’s control and increasing its autonomy and authority, which is opposite to what principals want, namely to maintain their control over the agent.
Two main reasons explain how it was possible for the Court to escape member states control: ‘the different time horizons of politicians and judges and the lack of a credible political threat’  . The different time horizons thesis assumes that politicians and judges have different interests in each court decision. Politicians are characterised by having shorter time horizons. In order to be re-elected politicians aim at delivering goods to electorate, which means that they prefer to avoid court decisions that could have negative impact on public policies or create financial costs. Judges on the other hand, do have the same constraints as politicians and have longer time horizons. ‘Following a well-known judicial practice, the ECJ expanded its jurisdiction authority by establishing legal principles but not applying the principles to the case at hand’  . Although the Court decisions were bearing minimal political and material impact for governments the legal rhetoric systematically were building the ECJ doctrine. The short-term focus on material impact of legal decisions favoured by politicians over the long-term effect of ECJ doctrine allowed the ECJ expand its authority without arousing major concerns among politicians.
The credible threat thesis assumes that member states usually are not able to create a credible political threat to alter the Court’s role. An inability to pose a political threat to the ECJ is mainly caused by the decision-making rules of the EU with requirement of unanimity. An existence of many “veto-players" (27 member states) makes it more likely that changes to the Court’s interpretations can be blocked which gives the ECJ a greater space for maneuver. Even though it is really hard to reverse or change entrenched policies in the EU it is still possible to do so. ‘The British challenge to the ECJ’ at the 1996-97 Intergovernmental Conference ‘was the most serious to date because it went beyond rhetoric to articulate and specify an anti-ECJ policy’  . Although the British proposals did not directly attack the ECJ or any of its previous rulings they were all rejected by the other member states. However, member states being aware of the ECJ tendency to expand its authority significantly restricted the Court’s powers in the new areas of jurisdiction.
Hix, points out that a model of the strategic interaction between legislators and courts implies that ‘as the ease of adoption new legislation and acquiring information about the likely action of the court goes up, the discretion of the court goes down’ which means that ‘the court has most potential power when there is little information about its likely actions, as at the birth of the European Community’ when the most important changes to EU legal system were introduced  . This analysis implies that with passage of time the ECJ has become more constrained in its actions. During the 1996-97 ICG where the negotiations to the Amsterdam Treaty were held, attempts to restrict the ECJ’s powers were taken, however they failed. Furthermore, in the 2009 Lisbon Treaty the jurisdiction of the Court was extended to new policy areas.
However, it needs to bore in mind that member states and the other EU institutions are also very important actors as a driving forces of European integration. Neo-realism argues that states have sufficient control over the ECJ, furthermore it lacks the autonomy and authority to act against the member state interests. In fact the six founding began the whole process of integration and they still posses the power to change or even reverse the decision of the ECJ by amending the treaties. The Court is not included in the legislative process in the EU, it also have to rely on other institutions, member states or individuals to rise infringement, which further constrain its powers.
The case study of a landmark judgement from 1963 (Van Gend en Loos) establishing the principle of ‘direct effect’ shows that the ECJ decision drove the process of European integration in a not intended by member states direction  . The case, concerned a dispute in regards to customs fees between the Netherlands customs agency and a Dutch import firm, was referred to the ECJ judgement in 1962. ‘The treaties founding the EU were international law, binding on nation states and holding those states as their objects. Individuals and their rights under and vis-à-vis the European institutions were barely mentioned [...] The Court was essentially created in order to adjudicate disputes between member states, rather than citizens.  ’ By establishment of the concept of direct effect the first step towards the constutionalisation of EU law was taken. The transformation of the preliminary ruling system enhanced the power of the Court by allowing it to decrease its ‘dependence on member states and the Commission to rise infringement cases by allowing individuals to rise challenges to national law, and it decreased the Court’s need to craft decisions to elicit voluntary compliance by making ECJ decisions enforceable’  .
The other key case which had a further impact on constutionalisation of the treaties and seriously affected member states sovereignty is Costa v. ENEL (1964)  . In this case ‘the ECJ ruled that EU law always trumps national law in conflicts between them two, establishing the supremacy of EU law and a clear hierarchy of norms’  . In other words, the EU law could not be overridden by any domestic law, even constitutional. The ECJ, by asserting the principle of supremacy, was elevated to the position of constitutional court and marked another milestone in the process of European integration.
The history of the European integration shows that the ECJ has developed the institutional and political capacity to make decisions that go against member state interests and seriously influence the direction and speed of the integration process. Theoretical perspectives of constitutions, functioning and powers of courts, principal-agent theory, Neo-functionalism and Neo-realism no always agree with each other on the extent to which the Court is driving the integration process. However, empirical evidences seem to support the argument of increasing influence of the ECJ and its significant role on the direction and speed of integration. The case studies of the Court’s judgements Van Gend en Loos  and Costa v. ENEL  prove that they were against member state interests because their sovereignty was restricted. Even though the ECJ is not the most relevant actor in driving European integration, because other institutions and member states also have proven to be extremely important in the integration process, it can be said with whole certainty that the Court has influenced it in a highly significant way.