The Four Freedoms of the European Union: A Comprehensive Guide
The Four Freedoms of the European Union
Free Movement of Workers
EU citizens’ right to move freely within the EU is central to the European project. Initially established as a freedom designed exclusively for workers (Article 48), the free movement of persons is nowadays enshrined as one of the EU citizenship rights in Article 21 TFEU. Therefore, “every citizen”, irrespective of his/her age, professional activity, or status as a salaried worker, has the “right to move and reside freely within the territory of the Member States, subject to the limitations and conditions laid down in the Treaty and by the measures adopted to give it effect”.
The importance of the free movement provisions has also been highlighted in Article 45 of the Charter of Fundamental Rights of the EU. Nevertheless, the challenges currently confronting Europe have put this cornerstone of the EU construction under attack, primarily in dealing with local unemployment and pressure on social security systems.
The right of persons to move freely within the European Communities is one of the essential components of the common market. The rules on this topic are considered by the Court of Justice of the European Communities to be of fundamental importance. The principle of non-discrimination is fundamental to the treaties. The free movement rules have direct effect.
There is a distinction made in the rules between workers who are employed and earn a wage and non-wage earners such as tradesmen and professionals. Wage earners’ freedom is protected by rules on non-discrimination on the ground of nationality. Non-wage earners are protected by provisions on freedom of establishment and the right to provide services. Thus, a typist should be able to go and work in France without hindrance, and a lawyer should be able to represent his client before the courts in Germany.
Workers have the right to accept job offers and also have the right to free movement if they seriously want to work as an employed person. The rules protect certain part-time workers. The worker may stay in another member state and may take his family with him. Indeed, extensive rights are given to the worker’s family to give substance to the worker’s right to move. A worker may stay after having been employed.
Rules have been laid down to make sure that workers do not lose social security rights. This is done by making sure that time periods can be fulfilled regardless of which state the worker was in: see De Moor v. Caisse de Pension [1967] ECR 197. Free movement of workers can be restricted on the basis of public policy, public security, or public health as seen in Van Duyn v. Home Office; Adoui and Cornuaille v. Belgium; Sotgiu v. Deutsche Bundespost.
Free Movement of Goods
This means that member states have removed customs barriers between themselves and introduced a common customs policy towards other countries. The overall purpose of the duties is “to ensure normal conditions of competition and to remove all restrictions of a fiscal nature capable of hindering the free movement of goods within the Common Market.”
Article 30 TFEU prohibits member states from levying any duties on goods crossing borders, both goods produced within the EU and those produced outside. Once a good has been imported into the EU from a third country and the appropriate customs duty paid, Article 29 TFEU dictates that it shall then be considered to be in free circulation between the member states.
Article 110 of the TFEU provides:
- Removal of all obstacles to trade between Member States.
- Common policy towards third countries.
The free movement of goods has been described as the “cornerstone” of the internal market. The advantages and disadvantages of FMG are as follows:
Advantages
- Transparent pricing
- More consumer choice
- Better quality
- More potential consumers for businesses
- Mutual recognition – harmonized standards
Disadvantages
- Too much competition
- Monopolies may dominate
- Economies may shrink
- Ability to regulate?
Key Articles related to the Free Movement of Goods:
- Article 26 TFEU – aims for a single market on the basis of the freedoms
- Article 34 TFEU – Quantitative Restrictions and Measures Equivalent to Quantitative Restrictions shall be prohibited between Member States. Has direct effect (both horizontal and vertical as it is a Treaty Article)
- Article 35 TFEU – Similar prohibition as Art 34, on exports
- Article 36 TFEU – Justifications for Article 34 and 35
- Article 37 TFEU – State monopolies must be compatible with free movement of goods
- Article 30 TFEU – prohibits custom duties on imports
- Article 28(1) TFEU – common customs tariff
- Article 110 TFEU – discriminatory taxation is prohibited
Free Movement of Capital
Free movement of capital is intended to permit the movement of investments such as property purchases and buying of shares between countries. Until the drive towards Economic and Monetary Union, the development of the capital provisions had been slow. Post-Maastricht, there has been a rapidly developing corpus of ECJ judgments regarding this initially neglected freedom.
The free movement of capital is unique in that it is a goal of the EU to pursue a liberal capital regime with third countries. Capital within the EU may be transferred in any amount from one country to another. All intra-EU transfers in euro are considered as domestic payments and bear the corresponding domestic transfer costs. This includes all member States of the EU, even those outside the eurozone, providing the transactions are carried out in euro.
Credit/debit card charging and ATM withdrawals within the Eurozone are also charged as domestic; however, paper-based payment orders, like cheques, have not been standardized, so these are still domestic-based. The ECB has also set up a clearing system, TARGET, for large euro transactions.
Free Movement of Services
Established in Article 56 TFEU, with further guidance in Articles 57 – 62 TFEU. Exceptions are found in Articles 51-55 TFEU (common with Freedom of Establishment). The freedom prohibits restrictions on the free circulation of services within Member States.
Services are defined in the negative, “they are normally provided for remuneration, insofar as they are not governed by the provisions relating to freedom of movement for goods, capital, and persons.” (Art. 57 TFEU)
The services are distinguished from freedom of establishment based on their temporary rather than permanent nature and from the free movement of workers based on the fact that the freedom affects corporate entities and individuals outside of the relationship of employment.