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Cite as: Peers, Book Review, 'Constantin Stefanou and Helen Xanthaki, A Legal and Political Interpretation of Articles 224 and 225 of the Treaty of Rome: The Former Yugoslav Republic of Macedonia Cases'

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Constantin Stefanou and Helen Xanthaki, A Legal and Political Interpretation of Articles 224 and 225 of the Treaty of Rome: The Former Yugoslav Republic of Macedonia Cases, Aldershot: Ashgate/Dartmouth, 146 pp; ISBN 1-85521-894-1, Hb £42.50.

Reviewed by Steve Peers,

Senior Lecturer in Law,
Director of Centre for European Commercial Law,
University of Essex.

First Published in Web Journal of Current Legal Issues in association with Blackstone Press Ltd.

Stefanou and Xanthaki have written a short but very interesting book on two important but little-known Articles of the EC Treaty, focussing almost entirely on a putative case which was ultimately removed from the European Court of Justice (ECJ) registry. However, the importance of the Treaty Articles and the case easily justifies the lengthy treatment. Article 224 is the general "national security" exemption of the EC Treaty, apparently allowing a Member State to justify a breach of any or all of its obligations under the EC Treaty or secondary legislation under specified (but vague) conditions. Article 225 allows a Member State or the Commission to sue a Member State which has used the national security exception, on the grounds that the latter has misused the exemption. The importance of the Former Yugoslav Republic of Macedonia (FYROM) cases is that they are the only issues to date in which the Article 225 procedure has been invoked - although Article 224 EC Treaty has been an issue in several cases referred to the ECJ from national courts. In particular, the FYROM cases concerned a ban which the Greek government imposed for some months upon trade with FYROM, where the Commission sued the Greeks for breaching EC law, losing first an interim measures hearing in Summer 1994, then facing an unfavourable Opinion from Advocate-General Jacobs in early 1995, before deciding to withdraw the case after a settlement between Greece and FYROM in Autumn 1995 - although the ECJ ultimately ordered the Commission to pay the Greek government's costs in early 1996.

The book is divided into seven chapters. Chapter 1 is a brief introduction. Chapter 2 is a very thorough summary of the earlier cases addressing Article 224. The authors correctly point out that the ECJ has been very reluctant to give a definitive interpretation of Article 224, even when national courts have asked pointed questions on the topic; that the Court has indicated that the Article must have a strict interpretation; and that the Article can only apply when no other Treaty Article is applicable. The authors do not hide their disappointment that the ECJ has avoided the issue for so long, but do not discuss until later chapters the possible reasons for the ECJ's approach.

Although chapter 2 is clear and incisive, I do have misgivings about two points made by the authors. First, they describe as "doubtful" the "legal basis" of the Commission's decision to withdraw the case before the judgment of the Court. They do not give detailed reasons to support their argument, and it may be doubted whether they are correct. After all, the Commission withdraws dozens of pending cases every year during the Article 169 procedure, and it is a basic principle of litigation in most legal systems that a plaintiff can discontinue an action at any time (at the risk of being ordered to pay the defendant's costs, as happened in the FYROM cases). True, it is unusual for this to happen after an Advocate-General's Opinion, but not impossible: the Greek courts recently withdrew a reference on the same day as an Opinion was delivered (Canadene Cheese Trading, in June 1997). The Greek government had a legitimate interest in seeing a final judgment in this dispute, in order to determine whether it owed liability to persons affected by the embargo; but a national court could later refer a question on that point if need be.

Secondly, the authors cast doubt on the Court's apparent finding in earlier Article 224 cases that Article 225 can only apply in the absence of other exceptions, arguing that "parallel applicability" of different Treaty Articles has "become part of the legal tradition of the Court" (p. 26). That is true in many cases, but there are important exceptions (Arts. 6 and 8a, not to mention Art. 223, the "security information" and "arms trade" exception also subject to Article 225) where the Court will look for more specific rules or exceptions in the Treaty and apply them in place of (not in addition to) the general clauses. Are there not sound policy reasons for treating Article 224 the same way, since it is an exception from the entire Treaty?

Chapter 3 details the actual FYROM case, from the political manoeuvrings prior to the Greek embargo on FYROM, to the interim measures hearing, Opinion and political settlement. The complex legal and political issues are very clearly explained. This chapter is essentially intended to supply the necessary background to the subsequent analysis of Article 224, and succeeds in this task.

Chapter 4 is a detailed legal analysis of Articles 224 and 225, necessarily relying on several academic interpretations and AG Jacobs' Opinion in these proceedings, because the ECJ's comments on the Article have been terse or evasive. This is a very thorough and comprehensive analysis, breaking both Articles down into their constituent legal elements. First of all, there is a very cogent discussion of the requirement imposed by Article 224 for a Member State to consult other Member States. Does this mean that Member States are estopped from taking unilateral decisions which other Member States disapprove of, or merely that they must consult before taking them? The authors convincingly argue for the latter interpretation.

Unfortunately, after this thoughtful discussion, the authors then appear (at p. 57) to accept two problematic additional points made by other academics, without any analysis of the arguments. First, they accept the argument that Article 224 allows unilateral measures because, after all, other Member States can always retaliate against a Member State which invokes the Article. This conclusion is clearly wrong, in light of nearly forty years of case-law from the ECJ precluding other Member States from relying on "self-help" and suspending their obligations to another Member State which violates EC law. To suggest that self-help might apply when another Member State has not even breached its obligations, but merely validly exercised a derogation provided for in the Treaty, is not tenable. Secondly, the authors accept an argument that the Council, by a qualified majority vote, can always force a Member State invoking Article 224 to relinquish use of the exception. The authors do not indicate which Treaty Article allows the Council to do this; such a possibility is not even hinted at in the text of Articles 224 and 225.

From here, the authors move in the rest of Chapter 4 to examine the conditions in which Article 224 might apply. Article 224 specifies three circumstances in which a Member State might suspend its EC obligations: internal disorder; war or threat of war; and the need to fulfill international obligations to assist in restoring international peace and security. The authors give sound reasons for accepting AG Jacobs' very strict interpretation of the first of these circumstances. They also accept his interpretation of the second circumstance as including serious international tension, and suggest extension to cover conflicts entirely between non-Member States. Finally, they argue for an interpretation of the third circumstance which includes the UN, NATO and the WEU. All of these interpretations are well-argued.

Next, the authors examine the core issue of how to determine whether the measures which a Member State uses when invoking Article 224 are "suitable". They apparently adopt AG Jacobs' view that "suitability" incorporates the EC law principles of necessity, proportionality and equality. The discussion of each point is interesting, especially the discussion of the "equality" criterion where the authors go further than AG Jacobs and argue (surely rightly) that the principle must include covert discrimination and possible justifications, just as it does in other areas of EC law. There are several problems with this discussion though. The first is the assertion (p. 62) that the "proportionality" principle derives from Article 3b EC Treaty, when this Article is only a confirmation of the existing principle. Furthermore, Article 3b only applies the proportionality principle to the Community, not the Member States. The second is the absence of discussion of the critical point that EC law appears to allow for different versions of the proportionality test, with the more stringent version applying in most cases to Member States' derogations from EC law rules. AG Jacobs' approach to this issue is crucial to his Opinion in these poceedings. Thirdly, the authors suggest that proportionality means that Member States must always take the option which least damages the EC rule, but there is case-law qualifying this (Alpine Investments BV v Minister van Financien (case C 384/93) [1995] ECR I-1141). The final problem is the ready acceptance of AG Jacobs' view that the test for proportionality under Article 224 is the subjective view of the Member State. No reasons are given for the authors' view and no analysis is made of possible counter-arguments.

The potential counter-arguments are quite strong. First, Article 224 makes no reference to a subjective test, when the preceding exception clause (Article 223) does so twice. Secondly, Article 224 was clearly based on GATT Article XXI, which explicitly does include a subjective test, but this wording was not reproduced in the EC Treaty. Finally, a subjective test would be a problematic policy, defeating the purpose of shifting the burden of proof to a Member State claiming a Treaty derogation by rendering Court of Justice supervision of such exercise nugatory.

The authors conclude this chapter with a thoughtful review of Article 225, the special judicial review procedure. They also provide an interesting and convincing discussion of what "misuse" of the Article 224 derogation might consist of. Again, they canvass important issues not discussed in AG Jacobs' Opinion, notably the problems facing the Commission if a Member State refuses to obey an Article 225 ruling against it, and the prospect of Francovich (Francovich v Italy (cases C/6 and 9/90) [1991] ECR I-5357) damages liability for a Member State which abuses the derogation. The authors miss the opportunity to expand on the latter point in light of the further damages case-law of 1996. One final argument in this Chapter is less convincing. The authors raise the possibility that the Commission might incur liability (possibly concurrently with Member States) for failure to sue a Member State which has improperly invoked Article 224. But this seems improbable in light of the highly stringent test for EC institutions' liability (which the authors do not discuss) and the Commission's inability to control or authorize a Member State's use of Article 224.

In Chapter 5, the authors discuss the political context of Articles 224 and 225. They rightly discuss the Articles in the context of residual national security. There is a clear, but not very detailed, discussion of the development of European foreign policy coordination from the beginning of "European Political Cooperation" (EPC) of the 1970s up to the Maastricht Treaty. This chapter achieves the goal of setting the relevant Treaty Articles in context, but I have two misgivings. The first is the highly inaccurate statement (on p. 80) that EPC was established under Article 235 EC and moreover that "all Community policies agreed under Article 235" are "intergovernmental...outside the jurisdiction of the ECJ and the Commission's right of initiative". The EPC was de facto started in 1970 and was indeed intergovernmental, but was certainly not based on Article 235; and acts based on that Article are undoubtedly subject to the normal roles of the ECJ and the Commission. The second misgiving concerns the authors' analysis of the ECJ's approach to Article 224 (on which see my comments on Chapter 7 below).

Chapter 6 is a detailed analysis of the application of Articles 224 and 225 in the FYROM cases, divided into separate legal and political analyses. The legal analysis addresses three separate issues, starting with the consultation requirement. Here the authors make a convincing argument that the Commission was wrong to block Greece from consulting other Member States, and that since Greece's failure to consult was therefore not its own fault, it should not be held liable for a breach of Article 224 on such grounds.

Secondly, the authors address the difficult legal issue of assessing the circumstances to see whether the invocation of the derogation was valid. They make a valiant effort to argue that the Greek belief that a threat of war existed was objectively justified. The problem with the authors' approach is that they do not address any contrary arguments. Was there any form of military mobilization by FYROM? Had any violent act by FYROM taken place? Is an attack by a poor landlocked state surrounded by enemies against a far larger and wealthier member of NATO plausible? The criteria for finding an objective "threat of war" suggested by the authors (a land claim stemming from historical events and supported by constitutional assertions) would, applied more widely, mean that the UK and Ireland were also at "threat of war" until the recent referenda. However, the authors' subsequent arguments that Greece had a subjective belief that a threat of war existed are far more convincing. The authors conclude their legal analysis with a straightforward application of the various "suitability" tests for the embargo.

The political analysis concentrates upon the position of the Commission and the Court of Justice, on the assumption that the latter, in light of its interim measures ruling, would have followed the Opinion of AG Jacobs. The authors ask some very interesting questions about why the Commission decided to bring the case, in light of its great political sensitivity and the Commission's frequent reluctance to bring infringement proceedings in politically sensitive cases. They ultimately conclude that the Commission initially hoped for a radical "pro-integration" judgment from the Court that would strengthen the construction of the Common Foreign and Security Policy. One problem here is the assertion (p. 108), with evidence from 1992, that other Member States backed the Greek position; but the authors' earlier discussion of events indicated clearly (at p. 34) that by 1993-94, the Greek position had little support.

The remainder of the political analysis in Chapter 6 concentrates upon the perceived minimalist approach of the Court. It is appropriate to consider this together with the authors' general analysis of the Court and Article 224 in Chapter 5, and their final analysis of the Court's role in the concluding Chapter 7. The analysis in Chapter 5 reaches two conclusions that the authors re-iterate throughout the book: first that the ECJ's treatment of Article 224 has been "minimalist", and secondly, that Article 224 shows the "omnipotent role of the nation-state" in the original Treaty. Chapter 6 then attempts to explain the supposed minimalist position of the Court, suggesting that there may be a "new dogma" of the Court accepting the pre-eminence of the nation-state. Chapter 7 then tries to set the debate over legal minimalism and judicial activism in context.

Unfortunately this discussion is somewhat disappointing. Even if the ECJ's approach to Article 224 does represent legal minimalism (and we cannot be certain that the Court would have followed AG Jacobs in FYROM, it seems doubtful that one case, or even a line of case-law on a single topic, can be used to prove that the ECJ has made a jurisprudential U-turn. Of course, the authors do not have space in a case study to examine recent ECJ jurisprudence as a whole; but they might at least have summarized or referred to other cases or analyses which might help to prove their point (for example, the literature on Keck and Mithuard (case C 267/91 [1993] ECR I-6097] or Opinion 1/94). What they do offer is unconvincing: on p. 110 the evidence for the Court's new deference to Member States is an article in the Wall Street Journal and cases in which private companies (not Member States) succeeded in claims against the Commission. On p. 124, the authors quote a 1986 academic article which suggested that the Court might soon embark upon a period of deference. Surely, writing ten years later, the authors should make at least a brief assessment of whether this indeed proved to be the case? Whatever the position since 1992, it is hard to see the case law of 1986-1991 as deferential (Marleasing SA v La Commercial Internacional de Alimentacion SA (case C 106/89) [1990] ECR I-4135]t, Factortame v Secretary of State for Transport (case C 213/89 [1990] ECR I-2433, Parliament v Council [Chernobyl] (case C 70/88) [1991] ECR I-2041 and Barber v Guardian Royal Exchange Assurance Group (case C 262/88) [1990] ECR I-1889). Furthermore, the authors' definition of judicial activism (p. 123) as judges seizing power over social policy is questionable: surely a radical approach to the powers of different levels of government (cf the ECJ and the early US Supreme Court) can also be described as activist?

A second problem is that the analysis could be more nuanced. Surely a court is rarely simply either activist or minimalist? Rather, is there not a spectrum of judicial approaches falling in between these two extremes, with a court taking different places on the spectrum depending upon the subject-matter? At the very end of the book (pp. 125-27), the authors discuss a more flexible model, but do not follow up the implications of this for their preceding discussion.

Furthermore, a continuing problem with the book is its continuing focus solely upon Articles 224 and 225 EC. Of course, in a short book, the authors are quite right to focus their analysis on particular Treaty Articles, but there is little or no discussion, even briefly, of closely related issues which might spread some light upon the main topic. Some of the authors' arguments would be affected if they had taken a broader approach. The possible relevance of GATT to interpreting Article 224 has been noted above. Additionally, the Court is usually inclined to interpret other, more specific, Treaty exceptions narrowly. Coupled with the Court's apparent conclusion that Article 224 can only be used where no other security exception from the Treaty exists, this suggests a cunning tactic by the Court to move the battleground before opening fire. A pro-integration ruling against a national security measure which is classified as a judgment about exceptions from sex discrimination or free movement of goods rules is surely less jarring to Member States than an attack on the sacred national security exception, even if the result is the same. It may be best to let the sleeping dog of Article 224 lie.

Furthermore, it is unfortunate that the authors do not examine the ECJ case law on dual-use goods and economic sanctions, apart from the aspects specifically concerning Articles 224 and 225. These important judgments show that the Court's exclusion from foreign policy issues is not absolute in effect, and that it is not necessarily deferential to Member States when adjudicating on this sensitive subject-matter. Finally, even a brief survey of national court approaches to national security issues might have shown (as AG Jacobs hinted in his FYROM Opinion) that national courts are more reticent than usual when addressing cases with a national security component. This weakens the authors' thesis that we can draw general conclusions about judicial activism or deference from national security cases.

Taken as a whole, the book has many strengths as well as weaknesses. The FYROM cases are particularly well-suited to an interdisciplinary analysis and the authors have bridged the divide between their disciplines very well. It is well-organized, clear and readable and should be accessible to international relations scholars or legal academics relatively unfamiliar with Community law. Many of the authors' arguments are very convincing, but some arguments are not fully developed or do not attempt to refute obvious objections. The "case study" approach of the authors is well-conceived, but there are problems with its execution, since the authors seem reluctant either to acknowledge that their case might be exceptional, or to examine issues (even briefly) that are technically outside their topic but which are closely related to it. The book is well worth reading for all those interested in the threshold between law and foreign policy, or the activism of the ECJ, but its flaws should be kept in mind.