European Business Law, the fourth volume in our series, shows how the European authorities simultaneously abolish all restrictions on access to and exercise of economic activities and support the growth of domestic markets, through the harmonization the internal legislation or the enactment of genuinely unified regulations.

European Business Law

Treaties which govern the EU are more than an agreement which merely creates mutual obligations between the contracting States. They have an authority which can be invoked by nationals of the Member States before their national courts . In effect, by creating a Union of unlimited duration, having its own institutions, its own personality, its own legal capacity and capacity of representation on the international plane and, more particularly, real powers stemming from a limitation of sovereignty or a transfer of powers from the States to the Union, the Member States have limited their sovereign rights and have thus created a body of law which binds both their nationals and themselves . European law not only imposes obligations on individuals but is also intended to confer upon them rights which arise not only where they are expressly granted by the Treaty, but also by reason of obligations which the Treaty imposes in a clearly defined way upon individuals as well as upon the Member States and the European authorities. 

According to the Court of Justice , “it is the Courts of the Member States which are entrusted with ensuring the legal protection which subjects derive from the direct effect of the provisions of Community law”. Direct applicability means that European rules are fully and uniformly applied in all the Member States from the date of their entry into force and for so long as they stay in force. A national court, as a European court of general law, is thus under a duty to give full effect to European rules, if necessary by refusing of its own motion to apply any conflicting provision of national legislation, even if adopted subsequently, and it is not necessary for the court to request or award the prior setting aside of such provision by legislative or other constitutional means . 

The direct effect has a dual nature. It is “vertical” where the individual may rely on the European rule against the State, and “horizontal” where the individual or the undertaking is empowered to rely upon it against another individual or undertaking. Depending on the rule relied upon, the Court of Justice has retained the existence of a full or partial direct effect. The direct effect of European law is however not automatic. Several conditions must be met for the direct effect of a European rule to be recognized: the provision must be clear, precise and unconditional. The assessment of the direct effect of a rule is made for each provision since the same provision may include rules which have direct effect and others which do not .

Case 26/62 Van Gend en Loos v Administratie der Belastingen [1963] ECR 1, LawLex200900001785JBJ.

Case 6/64 Costa v E.N.E.L. [1964] ECR 1194, LawLex200500005402JBJ.

Case 68/79 Just [1980] ECR 501, LawLex200900002032JBJ.

Case 106/77, Amministrazione delle finanze dello Stato v Simmenthal [1978] ECR 629, LawLex200700001337JBJ.

Case 43/75 Defrenne v SABENA [1976] ECR 455, LawLex200900001987JBJ: regarding Article 141 EC; Case 8/81 Becker [1982] ECR 53, LawLex200900002146JBJ; C-10/92 Balocchi v Ministero delle finanze dello Stato [1993] ECR I-5105, LawLex200900000284JBJ; and C-346/97 Braathens [1999] ECR I-3419, LawLex200900000427JBJ: a directive may include a varying degree of latitude in implementing certain of its provisions therefore without direct effect, and others provisions which, owing to their particular subject-matter, are capable of being severed from the general body of provisions and applied as such.

175. Direct effect doctrine