Caretaker Prodi team is warned of ‘legal limbo’

By Peter Chapman

Date: 04/11/04

ROMANO Prodi's caretaker European Commission has been instructed by his legal experts not to take sensitive decisions that could be open to court challenges, as lawyers divide over the risks facing the interim EU executive.

The warning from Michel Petite, the head of the Commission's legal service, is contained in a paper explaining the potential pitfalls faced while Prodi's designated successor José Manuel Barroso regroups.

Petite said that "it would seem prudent to minimize the eventual legal risk of appeals against decisions taken by the Commission during the interim period".

The Frenchman advises the interim team to restrict itself to "current affairs" - basically decisions within the Commission's "ordinary and habitual" remit, not requiring "any new initiative or politically delicate choice".

Petite says that there is scope to oversee sensitive decisions, provided they are "urgent affairs" that cannot be put off.

Although there have been interim administrations before, in 1995 and 1999, the complication in this case is that the Treaty of Accession of the ten new states specifically stated that the mandate of the Prodi Commission "shall expire on 31 October" and that the number of commissioners would match the number of states.

The US law firm White & Case has alerted its clients that any decisions taken by Prodi's 30-strong College of commissioners are vulnerable to challenge.

"If the situation is not clarified, theoretically any act of the Prodi Commission could be challenged on the basis that the composition of the Commission is unconstitutional. There might, for example, be serious consequences for state aid or merger decisions that have to be taken by the Commission within deadlines," it warned.

The firm's warning was attacked by competition experts within the Commission and lawyers in other firms, who said that the European Court of Justice had upheld controversial decisions taken by former competition commissioner Karel Van Miert during the limbo period after the Santer Commission resigned en masse in 1999.

These included a controversial move challenging state aid to German regional bank WestLB taken just days before Santer handed over the reins.

Linklaters partner Johan Ysewyn said: "The court has said in the past that the Commission can, within its powers to deal with 'current affairs', continue to take decisions in anti-trust cases. If it weren't able to do that, that would in itself create legal uncertainty, for example in mergers, where the Commission is required to take decisions within very strict deadlines."

A Dutch presidency source said that the presidency had taken legal advice and was convinced there was no alternative to the current situation. He added that it was very unlikely a court would support a legal challenge against the Commission on the grounds cited by White & Case.

Thomas Tindemans, counsel at White & Case, said that the situation was different from 1999. He said the EU Treaty of Accession clearly stated that a new 25-member College of commissioners should take over on 1 November 2004, with one member from each country of the EU.

"The point we want to make is that the situation is different from anything in the past. It opens up a lot of room for legal questions."

A spokesman for the employer's union UNICE said that the delay had created "legal uncertainty" in the decision-making process.

"No one knows where we stand legally at present," he said.

"What is the legal basis for decisions taken in these circumstances?"

Michel Petite, the head of the Commission's legal service, released a paper explaining the potential pitfalls faced while acting European Commission President Prodi's designated successor José Manuel Barroso regroups his team. He warned the 'caretaker' Commission not to take any delicate decisions in the interim phase in order to minimise the risk of legal appeal until the Barroso Commission was in office.

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