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than the original intentions of the legislator, especially if the provision in question is particularly old.
4.The so-called ‘teleological interpretation’(teleologische Auslegung) is based on the notion of legal rules as instruments to realize certain legal, social or economic goals and values. When utilizing the teleological approach, the judge will analyze the provision as to its underlying purpose and will adapt its application to the facts of the case accordingly. Teleological interpretation often plays a crucial role in the interpretation of statutory provisions either by justifying a choice between two possible alternatives of interpretation (found according to the other methods of interpretation), as well as by supporting less obvious interpretations by reference to the injustice entailed by an alternative, and prima facie more obvious interpretation.
5.Finally, judges are bound to interpret a statutory provision in such a way that its application is in line with the principles and provisions of higher-ranking law, in particular the German Constitution and EU law. Therefore, statutes always have to be interpreted in such a way that they are in conformity with the Grundgesetz
(verfassungskonforme Auslegung) and with EU law (gemeinschaftsrechtskonforme Auslegung).
1.2.2 Increasing Importance of European Law
With the increasing importance of European Union institutions and EU law, it is not surprising that European sources of law have become more relevant in the national context.
1.2.2.1 European Legal Instruments
European law is typically divided into so-called primary EU law and secondary EU law. The sources of primary legislation are the Founding Treaties and the Accession Treaties, including the various attached annexes and protocols. The Treaties are agreed upon by the EU Member States. Primary legislation lays down the basic policies of the Union, establishes and defines its institutional structure, legislative procedures and the powers of the Union vis-à-vis the EU Member States. The most significant change in the recent past has been brought about by theTreaty of Lisbon, which entered into force on 1 December 2009. The Treaty of Lisbon amended the Treaty on the European Union (Treaty of Maastricht) and the Treaty Establishing the European Community (Treaty of Rome), the latter having been renamed in the process to Treaty on the Functioning of the European Union (TFEU ).
The term ‘secondary legislation’is used for the legal sources enacted by the EU institutions based on the powers conferred to them under the Treaties. Legislative instruments available to the EU institutions comprise EU Regulations, EU Directives, EU Decisions and Recommendations, which differ as to their binding force for the EU Member States.24
24 SeeArt. 288 TFEU.
1.2 Key Aspects of German Business Law |
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•EU Regulations have general application in all Member States. They are binding in their entirety and they are directly applicable in all EU Member States. EU Regulations are self-executing, i.e. they do not need to be transposed into national law by national implementation measures. EU Regulations automatically override national legislation dealing with the same subject matter. Nevertheless, it is common for national legislation to be passed dealing with consequential matters arising from the legal framework of a regulation.
•In contrast to EU Regulations, EU Directives are generally not self-executing but require that each Member State pass special implementing legislation. As such, EU Directives are binding only as to the result to be achieved. Thus, they typically leave a certain amount of leeway to the Member States as to the exact rules to be adopted. However, EU Directives may become directly applicable in specific circumstances, e.g. if a Member State fails to adopt implementing measures in a timely manner.
•EU Decisions are legal instruments aimed at dealing with certain, individual aspects of European law, typically having a specific addressee. Important examples are those decisions, whereby the European Commission formally concludes an inquiry in relation to a certain undertaking of a Member State in the areas of competition law or state aids. EU Decisions are binding only on the addressed Member State.
•EU Recommendations and Opinions have no binding force. They are, however, of considerable political importance and may be utilized in order to prepare future (binding) legislation for the Member States.
1.2.2.2 Supremacy of European Law
One reason for the great importance of EU law is the doctrine of supremacy of European law in relation to national legislation. This doctrine of supremacy is not stated in the founding Treaties but has been established by the ECJ. The ECJ stated in its famous decision Costa v. ENEL25 that
the law stemming from the treaty, an independent source of law, could not, because of its special and original nature, be overridden by domestic legal provisions, however framed, without being deprived of its character as community law and without the legal basis of the community itself being called into question.
While it is common consensus today that European legal acts take precedent over national acts of parliament and legislative measures inferior to them, the question as to what extent this doctrine of supremacy also applies to provisions of the national constitutions (e.g. the fundamental rights under the Grundgesetz) has not yet been finally settled.
The ECJ generally regards the conclusion of the founding Treaties as being a transfer of sovereignty from the Member States to the European institutions leading
25 ECJ, case C-6/64 Falminio Costa v ENEL [1964] ECR 585, at p. 593.
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to an absolute supremacy of European law. Accordingly, in its decision of the case
Internationale Handelgesellschaft26 the ECJ ruled that
[r]ecourse to the legal rules or concepts of national law in order to judge the validity of measures adopted by the institutions of the Community would have an adverse effect on the uniformity and efficacy of Community law. The validity of such measures can only be judged in the light of Community law […] The validity of a Community measure or its effect within a Member State cannot be affected by allegations that it runs counter to either fundamental rights as formulated by the constitution of that state or the principles of a national constitutional structure.
Similarly, the Constitution of Ireland states inArt. 29.4.5 that
no provision of this Constitution invalidates laws enacted, acts done or measures adopted by the State which are necessitated by the obligations of membership of the European Union or of the Communities.
In contrast, the German Federal Constitutional Court emphasizes the position of the EU Member States as ‘Master of the Treaties’and recognizes a general supremacy of EU law over the Grundgesetz only subject to the limitation, that the European laws and institutions providing for an effective protection of fundamental rights of German citizens largely equivalent to that of the German constitution.27
Supremacy of EU law is secured in three ways:
First, the European Commission is authorized to take infringement procedures against Member States found to be in breach of their duties under EU legislation (Art. 258 et seq. TFEU). Second, national courts have a duty to apply EU law and to test national measures as to their compatibility with European legislation. Third, if a national court comes to the conclusion that its decision of a case raises a specific question as to the application of a European legislative act, it is obliged under Art. 267 TFEU to refer this question to the ECJ for a preliminary ruling. Such referral to the ECJ is mandatory for questions regarding the interpretation of provisions of the EU Treaties, the validity and interpretation of acts of institutions of the EU and for the interpretation of statues of bodies established by an act of the Council. Where the case is clear, however, national courts may apply European law directly, without the need of prior reference (so-called ‘acte claire’ doctrine). Preliminary rulings have become the principal vehicle for the development of European law.
1.2.2.3 Fundamental Freedoms
One of the key functions of the European Union is to establish an internal market. It is, therefore, a fundamental task of the EU institutions to abolish obstacles to intra-community trade, e.g. custom duties and charges, barriers to free movement of products or factors of production. Accordingly, Art. 26 TFEU states that “the internal market shall comprise an area without internal frontiers in which the free
26 ECJ, case C-11/70 Internationale Handelsgesellschaft v. Einfuhrund Vorratsstelle für Getreide und Futtermittel [1970] ECR 1125.
27 BVerfGE 73, 339, 22 October 1986, 2 BvR 197/83—Solange II.