Verbatim report of proceedings

Monday, 10 December 2007 - Strasbourg

21. European Contract Law (debate)

  President. – The next item is the debate on the oral question to the Commission on a common frame of reference for European contract law by Mr Gargani, on behalf of the Committee on Legal Affairs (O-0073/2007 - B6-0386/2007).

  Rainer Wieland, author. − (DE) Mr President, Commissioner, ladies and gentlemen, it is no secret that we have already failed once with just such an ambitious and necessary project: a European Civil Code. This is also most certainly connected with the fact that some legal systems here in the European Union have difficulty with written law. It is also most certainly connected with some others having difficulty with the idea that substantive rules on related themes are combined to some degree and administered conclusively and comprehensively enough and that ground rules are set outside the parentheses. The difficulties are also related to the fact that we in the European Union have common roots, yet these go way back, some having developed differently, some being buried and some being sacrificed to an arbitrary interpretation for the sake of the politics of the day.

As the first President of the Federal Republic of Germany, Theodor Heuss, so aptly put it in 1956 – and please note that he was a Liberal – Europe is built on three hills: Golgotha, the Acropolis in Athens and the Capitol in Rome. The Acropolis is the symbol here for Greek scholarship, which with its great philosophers and political thinkers established the core of our democracies and state-building. Golgotha stands for Europe’s social and moral values, spreading widely across every area of our lives, from an understanding of family to human rights. The Capitol typifies Roman law, which helps us on the way to the rule of law and a sense of justice.

As stated, however, our legal practices, while originating from the same roots, have grown apart – often so far apart that these roots are no longer recognisable. The sole foundation of this European Union appears to be the internal market. Some would say that all legal traditions of the nation states can continue to exist. However, this is far removed from any reality and also incidentally from any experience of life, when we live in an increasingly smaller, faster moving and more communicative world. The better we spell out the four Gospels of the Internal Market – the free movement of people, goods, capital and services – the more perfectly we can express them democratically and against a background of European moral concepts, and the clearer it becomes that all this is of no value if we cannot put its form on the test bench of the rule of law and justice, between individuals themselves as well as between individuals and state control.

We have already failed once, when the Iron Curtain fell in Europe and countries were asking: do you have a law for us? Perhaps this was understandable against a background of belief that any ramification of national legal traditions could survive, at any rate in a Union only able to negotiate unanimously. We must not fail a second time, however. This is perhaps the most serious challenge alongside the issue of language. The clearer we are in spelling out our internal market, the clearer the basic need for the unity of the law, not just vertically, but also horizontally over the entire geography of the continent.

We have moved forward. We already have competition now in the legal systems. It would be good, and we would have enough time, if this were not the external reality. Conflict among Europeans can benefit only those who are powerful and already have redundant legal systems. We are not a family with brothers and sisters who quarrel with one another so that sparks fly, but are united in the face of outside challenges. We do not allow ourselves to be fazed by outside challenges. Oblivious to the world – self-obsessed. People’s desire for unity is therefore there, even though it subsequently creates a problem in individual regulations. Fears are created on the basis of the powers of national policies to cultivate doctrines of self-interest – a strategy that threatens the collapse of the historical dimensions on a continental scale.

We have to come to an agreement because otherwise we ourselves will ultimately not hold on to anything. Since the grand plan has not succeeded, we need to agree on what is possible. The toolbox is therefore good, the reference framework is therefore good, and so it is good to sort out what is possible and a little bit more perhaps as well. The European Parliament is therefore largely in agreement and has also repeatedly expressed this in its resolutions. We therefore want to know from the Commission how ambitious it is in wanting to tackle this aim. This is why we are asking questions the way we have.

The Continent and its people require a uniform rule of law, at least in the form … at any rate in what the legal practitioner calls the general part. We can build on this; we need justice in terms of a balanced compromise of legitimate interests, we need speed, law in the public domain and law intelligible to everyone. Even if it is only contract law that is up for debate today, the need for action in other fields is evident: family law, inheritance law, administrative law – yes, even criminal law. It is the method that is on the test bench in what the Commission is now starting. The method will essentially be the determining factor when answering the question of how much, how quickly and how well we are able to react to the obvious challenges. Many of us throughout the world are waiting for a successful example and many are simply expecting us to fail.

  Meglena Kuneva, Member of the Commission. − Mr President, it comes as no surprise that this question attracts such attention, because this is a really pivotal and very important issue.

The Commission, as a whole, welcomes wholeheartedly the interest that Parliament is taking in the Common Frame of Reference (CFR).

In its second progress report, the Commission announced that, after the academic CFR has been provided by the researchers, the Commission will carefully select the parts of this draft that correspond to the common legislative objectives. As we know from the decision, this academic CFR is due by the end of this year.

The selection process will be done in consultation with the other institutions, including Parliament and stakeholders, and I think that Parliament, which has many experts here, will play an important role as usual.

The Commission has not yet decided how to proceed in selecting those parts of the academic CFR which will be incorporated into the final Commission CFR, as this decision also depends on the content of the draft CFR that the researchers will deliver. Also, the Commission has not yet decided which topics of the EU contract law acquis the CFR should cover.

In adopting this decision, the Commission will also take into account the content of the academic CFR – which we have not had so far – the outcome of the new CFR workshops, and the position of Parliament and the Council.

The Commission has, however, clearly stated several times that the CFR will not be a large-scale harmonisation of private law or a European civil code. The future framework directive, as a result of the review of the consumer contract law acquis, is not dependent on the outcome of the CFR, which is a longer-term project and run separately.

The Commission will ensure that the parts of the research draft selected for the CFR – and possibly modified – are coherent with each other and with the future framework directive.

All this preparatory work will be carried out by all the Commission directorates-general involved, in close coordination.

In respect of consumer issues, my services have already carried out the respective workshops and analysed the outcome. The results already serve as a starting point for the review of the consumer contract law acquis, and it was very helpful.

My fellow Commissioner, Mr McCreevy, recently held two workshops on information requirements in financial services legislation and on unfair competition rules for business-to-business (‘B-to-B’) contracts.

Concerning general contract law, the services of Vice-President Frattini plan to organise several workshops during next year.

The Commission fully understands that Parliament wants to be kept informed of, and involved in, the ongoing work on the CFR. We welcome Parliament’s involvement in the CFR process. In addition to the consultation which I mentioned earlier, the Commission will continue to keep Parliament informed of developments in the most appropriate way, in particular through the Parliament working group dedicated to the CFR.

I would like to conclude by thanking Parliament for its support of the Commission’s work on this important dossier. I know that one of the major events in 2006 – if I am not mistaken – took place in Vienna, and the outcome of that conference was very inspiring for our work.

  Klaus-Heiner Lehne, on behalf of the PPE-DE Group. – (DE) Mr President, Commissioner, ladies and gentlemen, first of all I should like to thank you most sincerely for your commitment to this matter. It has brought with it great progress in the development of this project in past months. I should say at this juncture that I regard this project as the most important in the entire legislative term, although it is actually a pre-legislative rather than a legislative project.

Of course, we as Parliament do have an enormous interest – and this is also the key reason why this oral question was tabled again today – in the fact that we are very consciously keeping up the suspense and keeping the discussion going not only at the level of the working group we have set up and at committee level, but also here with you in plenary. It is therefore also important that we have put this on the agenda today.

We also want to find something out from you – you are still not able to say much about the definite schedule – because from Parliament’s point of view it is also significant, of course, in view of the upcoming elections in 2009, for our strategy as to how we continue to deal with the Frame of Reference. Over the coming year there will be a preliminary draft, but there will not be a final text until April 2009. In any case it will be so late that it will presumably no longer be possible to deal with the content in depth in this legislative term and the next Parliament will therefore have to do so in the next term of office.

I wish to emphasise very clearly once again that we think the Frame of Reference, if it is adopted by the Commission and inserted into the consultation document, must not to refer to subjects of contract law alone, and Parliament has continually made it clear by an outsize majority that this must go beyond the framework of pure contract law in order to have the desired effect.

We also want specifically to be able to consider the option of whether we can subsequently solve the many problems we have in the internal market in the shape of an optional instrument for cross-border businesses.

At the moment we have a situation in which we are having to live in a happy coexistence of the country of origin principle and country of destination principle alongside the many directives and European legislative decisions with up to 28 legal systems, all of which have also to be simultaneously applied – depending on the circumstances. This is not right in practice because nobody – no solicitor, judge or barrister – is in a position to know 28 European legal systems.

Against this background one optional instrument could be an instrument that actually opens up the internal market, particularly for small and medium-sized enterprises, as well as for the consumer, and throws open every kind of possibility in the internal market. All the activities of the Commission and Parliament should be aimed at keeping this option open so that a final decision can be made on this in the next legislative term.

  Manuel Medina Ortega, on behalf of the PSE Group. – (ES) Mr President, the fact that we are here, at this late hour, discussing the common frame of reference, is an indication that at least those of us who are here have a strong interest in this issue, and the Commissioner herself has indicated the interest that she and other Commissioners have in the matter.

I think, as we all do, that the procedure being adopted by the Commission is the correct one. Before launching into a codification project, it is important that we understand its elements from an academic point of view, and we think that the initiative is a magnificent one: not just launching into legislative proposals without having considered them first. I think that the result could be quite good.

With regard to the second phase, however, with which we are concerned, as some MEPs are working on or taking part in the parliamentary group that is monitoring the common frame of reference, what we are finding is that apparently so much material has now been accumulated that selection seems to be difficult. My fellow Member, Mr Lehne, referred to the temporary framework; in other words, although the codification project is a long-term project, it is nevertheless helpful for us to at least start to look at the guidelines for the project.

The idea of a framework directive on this issue seems to be a good starting point. In any case, it is clear that what we have done in recent years towards harmonisation through procedures, legislation and the recognition and enforcement of sentences is useful, but does have huge limitations.

European law in general and contractual law in particular can only be developed by establishing certain principles. I think that Parliament as an institution could be a magnificent instrument for the Commission to use, because the different legal systems and different national legislations are represented here, and it could be an excellent framework of reference in order to see the extent to which the harmonising proposals are ultimately going to clash with the national legal systems.

The harmonisation of the European Union is quite difficult for reasons that we are all aware of, but the correct procedure is the one undertaken by the Commission, with this initial academic phase and a second legislative phase.

What we are saying to the Commission at the moment is that, in Parliament, we feel a certain amount of time pressure, because European integration is already happening: European citizens are facing practical problems every day that can only be resolved through legal harmonisation. These practical problems were considered by the Commissioner herself when she presented her proposals for the harmonisation of contractual law on consumer protection, which is just one of the aspects, but quite an important one, because, in short, in the European Union we are all consumers and to some extent it is an excellent principle for taking action.

I do not think that it is a question of creating a common frame of reference that is purely theoretical. As far as possible, specifics are the most useful thing. My fellow Member Mr Lehne referred to establishing some type of optional document. The model would be something like the United States Uniform Commercial Code, which has been described as the least uniform code of all, giving the least possibility of unification. This is a possibility, but perhaps the most important thing may be to see which principles can be recognised by all the legal systems, and we will really only have this information once we have studied and taken into account what the academics give us.

Therefore, Commissioner, I think that Parliament will be a good collaborator in the subsequent development of this legislation and here we already have a degree of impatience to get to work, so that, in the year and a half that remains of the legislature, we can contribute positively to the development of this legislation.

  Diana Wallis, on behalf of the ALDE Group . – Mr President, I would like to thank the Commissioner for her answer, and indeed for her commitment to this subject, which has been mentioned by other colleagues.

However, I have to express a little surprise. This morning and yesterday evening I was in Munster, at the University of Munster, on the occasion of the presentation of an honorary degree to the President of the Court of Justice. Taking place at the same time was a meeting of the acquis group on the common frame of reference. They told me that they were discussing, amongst other things, those bits of the academic Common Frame of Reference (CFR) that might be used by your services. So this exchange is already going on, and I would point out that, clearly, Parliament wants to know what is happening at any moment, so that it can see how the process is developing.

The Commissioner will know how keen this Parliament is on this whole issue, and how much it has tried to champion it. Indeed, the Committee to which I and my colleagues belong will, in the new year, be hosting a reception with the Slovene Presidency to celebrate the arrival of the academic CFR. So we really want to make something of this and continue the work.

But we need to be included along the way. We have felt for a long time that this is an essential part of the whole better legislation agenda. I do not know how many times I have risen, in relation to this, to talk about coherence. We know that the CFR is almost there, is almost usable, and yet still we are proceeding with various bits of legislation that contain contract law, without looking at some of the basic ground rules which we are already beginning to formulate in the CFR. We are looking at the consumer acquis review, and separately we are looking at time share. There are other colleagues dealing with payments or with issues to do with passenger transport. We have a tremendous tool here in the making. We need it, and we need it urgently.

We accept and are grateful for the work the Commission as a whole has done in trying to get this matter dealt with in all the different directorates-general. That is good news.

I can only finish with the plea that I have already made, Commissioner, which is to please keep us involved. We know there is ongoing work. We can be at your side. We know this is a difficult issue vis-à-vis the Council. Please use our voices along with your own in order to give this project as much push and drive as it deserves in order to best serve our citizens through the internal market.

  Meglena Kuneva, Member of the Commission. − Mr President, this is not just a courtesy: it is always a great pleasure to listen to such distinguished lawyers talking about one of the most important things to have happened in recent years in the area of civil law.

However, I know that you want me to be as practical as possible. So let me just tell you that in 2008 the Commission needs to decide on the scope – in respect of the time schedule, content and form – of the CFR, and how to carry out the above work in terms of methodology, human and financial resources and distribution of work amongst the DGs concerned: Justice, Freedom and Security, the Internal Market and Services, Enterprise and Industry, the Secretary-General, and Health and Consumer Protection. A meeting of director-generals or their representatives will take place on the 11 December – which means tomorrow – and the intention is to prepare a college decision in 2008 on the scope, contents and form of the CFR.

As you know, and I kept you informed, I asked the College of Commissioners about the CFR and sent them a note on the subject this year. On optional instruments, the Commission has announced in the single market review that it will look at the merits of such an initiative in the area of financial services, and I think that this is a good sign.

All of you referred to the framework directive relating to the consumer acquis. I believe that this is a very good exercise and, whatever we are doing with consumer credit or with the timeshare, we are trying to avoid this concentration on the horizontal instrument because I believe that we currently need a discussion on the timeshare in Parliament. But we need to define the framework scope, and I believe that we will have an excellent test of how united we are when we harmonise the main pillars of contract law as a backbone during the framework directive. I will, of course, gladly undertake to keep you personally informed of what is going on in this very important field.

  President. – I have received, in accordance with Rule 108(5) of the Rules of Procedure, a motion for a resolution to wind up the debate⁽¹⁾.

The debate is closed.

The vote will take place on Wednesday, 12 December 2007.

(1) See Minutes