The economic dimension of the rule of law

Background

Europe needs to increase its competitiveness in the face of current global challenges. Investment protection within the EU Members States plays an important role in this and needs to be encouraged, eliminating any potential protectionist measures and discriminatory practices that could represent a breach of the rule of law.

Yet there have been cases in EU Member States where special taxes – affecting mostly foreign investors – have been introduced by linking the tax base to levels of net turnover or excess profit that only foreign companies tend to exceed. Large fines have been levied for minor infringements, and takeovers banned at short notice using emergency decrees. This undermines investment, trade and trust in the functioning of the single market.

Respect for the rule of law ensures legal certainty and a level playing field for business initiatives, innovation and investments, and fair competition across the internal market, benefitting consumers and citizens.

This EESC opinion deals with the protection of investments as an essential part of the economic dimension of the rule of law. Highlighting the fact that this dimension is not adequately reflected in the European Commission’s Rule of Law Report, the opinion addresses gaps in the current mechanism and underscores the role that the rule of law plays in fostering a fair and competitive economic environment. The EESC flags concrete examples of actions that erode legal certainty and investor confidence, and puts forward practical steps to tackle these breaches head-on.

Key points

The EESC:

• highlights that respecting and enforcing fundamental rights and the rule of law are crucial for mutual trust between Member States. For investment and trade within the internal market to function properly, all economic operators must follow the law and trust that public authorities will do the same. This respect for the rule of law is essential for economic activity and makes a location more appealing to businesses. Protectionist measures that favour domestic companies over those from other EU countries violate the principle of equal treatment;
• calls for the addition of a fifth pillar to the European Commission’s Rule of Law Report to better reflect the economic aspects of the rule of law;
• recommends improving existing tools for addressing internal market infringements and using more EU pilot procedures. It stresses that a strong and independent judiciary, well-resourced public services, and bodies for monitoring and reporting legal breaches are essential for ensuring effective legal protection and upholding the rule of law.

Read the opinion.

Additional Information

Section: Single Market, Production and Consumption

Opinion number: INT/1076

Opinion type: own-initiative opinion

Rapporteur: Christa Schweng

Reference: Rule 52(2) of the Rules of Procedure

Date of adoption by section: 8/4/2025

Result of the vote: 70 in favour / 9 against / 2 abstentions

Date of adoption in plenary: 29/4/2025 – 30/4/2025

Result of the vote: 189 in favour / 6 against / 3 abstentions

Contacts:

Press officer: Joanna Harnett / Laura Lui

Tel.: 00 32 2 546 9189

Email: joanna.harnett@eesc.europa.eu / laurairena.lui@eesc.europa.eu

Administrator: Jana Valant

Tel.: 00 32 2 546 8924

Email:  Jana.Valant@eesc.europa.eu