‘The judgment of the Court of Justice in Tobacco Advertising (Case C-376/98, Germany v European Parliament and Council  ECR I-8419), although an important milestone for the definition of the boundaries of the internal market, has since been undercut by subsequent jurisprudence’. Discuss with reference to the applicable law, including case law.
The main focus of this essay will be placed on competence and harmonisation of the EU to form the Internal Market. The essay will look at Treaty Articles 3 and 26 of the TFEU, it will then examine integration, competence and harmonisation and why those elements are significant elements for forming an internal market. It will study the case Tobacco Advertising (Case C-376/98, Germany v European Parliament and Council  and the developments since the case for the European Unions Internal Market.
Article 26(2) of the TFEU states; ‘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’1 and article 3 of the Treaty states that the Union will establish an internal market. The benefits of free trade in an internal market are summarised as follows ‘free trade allows for specialization, specialization leads to comparative advantage and comparative advantage leads to economies of scale which maximize consumer welfare and ensure the most effective use of world-wide resources’.2 There have been different levels of intensity of market integration, and each one introduced in their own right, as a way of trying to end up with a ‘full union’. The different states of integration are as follows; Free trade area (FTA)- Member States will remove all impediments to free movement of goods among themselves but each state retains the autonomy to regulate its trading relations with non-member states. Customs Union (CU)- FTA plus common external policy in respect of non-member state for example a single customs tarrif. Common Market (CM)- CU plus the free movement of persons, services and capital. Monetary Union (MU)- CM plus single currency. Economic Union- MU plus single monetary and fiscal; policy controlled by a central authority. Political Union (PU)- Economic Union plus a central authority sets not only monetary and fiscal policies but it also responsible to a central parliament with the sovereignty of a nations government. Then lastly having integrated all the above stages this would hopefully end up as a full union which would include the complete unification of the economies involved and a common policy on matters such as social security and income tax.3
By the 1980’s ‘Euro-sclerosis’ had set in and the failings of the common market were very apparent. It was a period of stagnation of European Integration as unemployment was high but job creations were slow. The President of the European Commission Jacques Delors responded to Euro-Sclerosis with ambitious plans for a Single Market, plans were set out in the Commission White Paper; ‘Completing the Internal Market’. The White Paper outlined three obstacles which needed to be overcome in order to complete the notion of a single market; physical, technical and fiscal barriers to trade. The White Paper identified 300 measures necessary to achieve the single market and the Single European Act 1986 came into force on 1st July 1987 and provided the means to achieve the objectives set out in the White Paper. The SEA contained procedures designed to facilitate legislation in order to complete the internal market. It introduced two major legislative innovations for the single market found in Articles 26 and 114 of the TFEU. Article 26 obligation states; 26(1) ‘the Union shall adopt measures with the aim of establishing or ensuring the functioning of the internal market, in accordance with the relevant provisions of the Treaties’, 26(2) states ‘The internal market shall comprise an area without...
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