The Several Internal Markets

The 'four freedoms' in EU law are locked together by Article 26 TFEU, which declares that the internal market ‘shall comprise an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured in accordance with the provisions of the Treaties’. But those freedoms are divisible. More than that: they are divided. In truth the EU has several internal markets. Its market for goods is different from its market for services and different again from its market for people. I have written elsewhere of the ambiguous character of the internal market (Weatherill, The Internal Market as a Legal Concept (OUP, 2016): this paper is more concerned to focus on the points of heterogeneity that attend the law of the internal market.

It shows (in Section III) that the Court of Justice has refused to adopt an overtly common approach to the determination of when a measure that applies equally in law and in fact is properly placed beyond the reach of the free movement provisions – the Keck conundrum – and it has adopted an inflated reading of the incursion of EU law into practices that do not arise in the context of an obstruction of cross-border mobility in the particular case of dependent children of third country nationals. Moreover the personal scope of the free movement provisions is not aligned: those concerning goods do not bind private parties, those concerning persons and services do. Section IV explores the pattern of legislative harmonisation, and it demonstrates that across the many sectors that have been the subject of harmonisation the precise patterns according to which primary and secondary law combine reveal myriad different models. Moreover the acquis is marked by a great many instances of sanctioned variation of many different types – geographical, material, personal, temporal and so on. Section V looks to legislative activity beyond the programme of harmonisation. It reveals a number of legal bases which are explicitly tied to the internal market, most of which are simply sector-specific iterations of the basic assumptions associated with market-making harmonisation, but it finds other legal bases such as social policy and cohesion which are not declared to operate in the service of the internal market yet which plainly have some (contested) connection to it. This shows that the EU’s internal market, as a bargain or a package deal, is surprisingly lacking in precise legal definition or boundary. Section VI examines provisions which place off limits activities that are apt to harm the internal market but finds that this may have little relevance in practice: the treatment of enhanced co-operation by the legislative institutions and by the Court is emblematic. The internal market also has a presence beyond the EU’s external frontiers. The EEA, examined in Section VII and sometimes – though without legal foundation – termed the ‘single market’, takes on most, though not all, of the baggage of the internal market, and the political and judicial institutions of EFTA seek normally, but not inevitably, to bring EEA law into conformity with EU law. Section VIII considers the EU’s Association Agreements. These are less ambitious than the EEA and their scope typically excludes matters such as the free movement of persons, but even where their provisions replicate those familiar within the EU legal order, they are not always interpreted to mean the same thing. The rules of the internal market are exported but diluted.

So there is a broad band of possible internal markets, ranging from one which is radically decentralized as a result of a choice in favour of unrestricted inter-jurisdictional competition to, at the other extreme, one which is radically centralized in the sense that lawmaking competence has been completely stripped away from the constituent units in favour of the central authority. From one extreme to another there exists a huge range of options, and the many internal markets found across the globe are far from homogenous. But even within the EU itself one can find heterogeneity - one finds several internal markets.

The paper is not about Brexit: it is about the definition of the internal market. But Brexit has brought into focus that troublingly imprecise definition, and some of the confusion about hard and soft versions of Brexit stems from the absence of a secure anchor for the debate, while confusion too (in the UK in particular) stems from failure to grasp that the key to the EU attitude is that the internal market may well display a degree of legal heterogeneity which serves to distinguish the four freedoms from each other, but that politically there is implacable determination to resist a Brexit that leads to degradation of homogeneity as a matter of principle.

Stephen Weatherill is the Jacques Delors Professor of European Law at the University of Oxford.