EU intervention

2. Circumstances Justifying EU Intervention: Harmonization, Subsidiarity, and Proportionality

EU intervention in the internal market is justified when national disparities create barriers to trade or distort competition between Member States. Harmonization allows the EU to approximate national laws to ensure consistent standards — for instance, through Directives (e.g., Directive 2017/1132 on company law) and Regulations (which apply directly). The principle of subsidiarity (Article 5(3) TEU) ensures that the EU acts only when objectives cannot be sufficiently achieved by Member States acting alone — meaning the EU should intervene only when cross-border action adds clear value. Proportionality (Article 5(4) TEU) requires that EU measures do not go beyond what is necessary to achieve their goals. Together, these principles justify EU action in areas such as consumer protection, digital services, and company mobility, ensuring a balance between market unity and national autonomy. For example, harmonization through the Digital Services Act (2022/2065) demonstrates proportionate EU intervention to ensure a safe, competitive online environment across all Member States.

3. Implications of Free Movement Law for the Internal Market

The four freedoms — free movement of goods, services, persons, and capital — are the backbone of the internal market, ensuring the free circulation of economic activity across Member States. These freedoms reflect the institutional legal order of the EU, requiring both Member States and the CJEU to uphold non-discrimination and market access principles. The free movement of goods (Articles 34–36 TFEU) prohibits measures that restrict imports or exports, as shown in Cassis de Dijon, where the Court struck down a German rule requiring a higher alcohol content because it hindered trade in goods lawfully produced in another Member State. The freedom of establishment (Articles 49–54 TFEU) guarantees companies and self-employed persons the right to set up and manage businesses in any Member State. The CJEU case Centros (1999) confirmed that companies may establish themselves in one Member State and operate in another, even to take advantage of more favorable rules. Thus, free movement law operationalizes the internal market’s core goal — removing national barriers and fostering an integrated European economy.