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Legal Europe
F R E E D OM O F E S T A B L I S HME NT A N D F R E E D OM TO P ROV I DE S ERV I CES IN
T H E E . E .C. AS I L L U S T R A T ED BY TWO R E C E NT J U D G E M E N TS O F T HE C O U RT
O F J U S T I CE
by
GERALD FITZGERALD, SOLICITOR, BRUSSELS
Part I
Introduction
The EEC Treaty, reduced to its bare bones, is based
on four fundamental freedoms, namely the free move-
ment of goods, of persons, of services and of capital.
It also provides for the establishment of a common
agricultural policy, a common transport policy and a
common commercial policy, and of rules to ensure
that competition is not distorted within the Common
Market.
The Court of Justice of the European Communities
recently delivered two Judgements which lealt with
two of the fundamental freedoms referred to above,
namely free movement of persons (specifically, the
freedom of the establishment) and the freedom to
provide services. Although the conclusions of .the
Court were predictable enough, the Judgements have
clarified a number of points and should give some
stimulus to the detailed implementation of these
freedoms, particularly in relation to the liberal
professions.
The Reyners Case—Freedom of Establishment
The first Judgment, which dealt with freedom of
establishment, was delivered on 21st June 1974 in
Case 2/74 Reyners v. Belgium (1974 E.C.R. 631).
The right of establishment, with which Articles
52-58 of the EEC Treaty are concerned, may be briefly
defined as the right of a national of one Member State
to work as a self-employed person in any other Mem-
ber State on the same terms as nationals of that
Member State. The concept of establishment, as
opposed to the provision of services on a temporary
basis, implies an intention of setting up business in •
the host Member State on a long-term, though not
necessarily, permanent, basis. The right also extends
to companies as defined in Article 58 of the Treaty,
but since only natural persons were involved in the
case under consideration, the implications of the
right for companies will not be considered here.
The first sentence of Article 52, which sets out the
basic right, reads as follows:
"Within the framework of the provisions set out
below, restrictions on the freedom of establish-
ment of nationals of a Member State in the
territory of another Member State shall be
abolished by progressive stages in the course of
the transitional period."
The transitional period ended on 31st December,
1969.
The details of the measures to be adopted for the
abolition of restrictions in accordance with Article 52
are set out in Articles 54 and 57.
Article 54 requires the Council of Ministers, after
consultation with the Economic and Social Committee
and the European Parliament, to draw up a General
Programme for the progressive abolition of such
restrictions. This Programme, which was drawn up in
December 1961, specified, in general terms, the bene-
ficiaries of the right, the restrictions to be removed,
and in detail, the stages during the transitional period
by which specified activities were to be liberalised.
Article 54 further provides that the General Pro-
gramme should be implemented by means of Council
Directives.
Article 57 requires the Council to issue directives
for the mutual recognition of qualifications and for
"the co-ordination of the provisions laid down by
law, regulation or administrative action in the Member
St tes concerning the taking up and pursuit of
activities as self-employed persons". The provisions of
this Article are particularly relevant for the liberal
professions, for which effective freedom of establish-
ment can be achieved only through the co-ordination
of qualification requirements in the different Member
States and
the
mutual
recognition
of
such
qualifications.
Articles 55 and 56 contain exemption provisions.
The first, which was particularly relevant in the
Reyners Case, states that the provisions relating to
the right of establishment
"shall not apply, so far as any given Member
State is concerned, to activities which in that
State are connected, even occasionally, with the-
exercise of official authority."
Article 56 allows Member States to deny the right
of establishment to nationals of other Member States
on the grounds of public policy, public security or
public health, and provides for the co-ordination of
national measures relating to these matters.
The facts of the Reyners Case have already been
set out in the Gazette (June 1974 p. 164) and there-
fore do not require repetition here.
The official translation of the questions posed by
the Belgian Conseil d'Etat reads:
"1) What is to be understood by "activities
which in that State are connected, even occasion-
ally, with the exercise of official authority" within
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