The concept of the essence of a fundamental right—set out in Article 52(1) of the Charter of Fundamental Rights of the European Union (the “Charter”)—operates as a constant reminder that our core values as Europeans are absolute. In other words, they are not up for balancing. As the seminal judgment of the Court of Justice of the European Union (the “CJEU”) in Schrems shows, where a measure imposes a limitation on the exercise of a fundamental right that is so intense and so comprehensive that it calls into question that right as such, that measure is incompatible with the Charter, as it deprives the right at issue of its essence. This is so without the need for a balancing exercise of competing interests, because a measure that compromises the very essence of a fundamental right is automatically disproportionate. Therefore, the present contribution supports the contention that in order for the concept of essence to function in a constitutionally meaningful way, both EU and national courts should apply the “respect-for-the-essence test” before undertaking a proportionality assessment.

On 22 November 2005 the European Court of Justice (hereafter, the Court) rendered its Mangold-ruling on Council Directive 2000/78/EC of 27 November 2000 establishing a general framework for equal treatment in employment and occupation (hereafter, Directive 2000/78). The most striking part of this judgment, rendered in a private dispute, was the following conclusion:

Community law and, more particularly, Article 6(1) of (…) Directive 2000/78/EC (…) must be interpreted as precluding a provision of domestic law such as that at issue in the main proceedings (…) It is the responsibility of the national court to guarantee the full effectiveness of the general principle of non-discrimination in respect of age, setting aside any provision of national law which may conflict with Community law, even where the period prescribed for transposition of that directive has not yet expired.

The judgment evoked a great amount of criticism from the media, academia, several advocates general and the member states.

This paper seeks to provide an analysis of Commission v. Netherlands, a judgment handed down by the First Chamber of the European Court of Justice (hereinafter, ECJ) on 28 September 2006. Although this is the eighth ruling in the increasing series of so-called Golden Share judgments, it too raises interesting questions concerning the relationship between the holding of special rights or golden shares by the state in a privatised company and the EC Treaty provisions on the free movement of capital.

The first issue which is analysed is the application of Article 56 EC to the situation where golden shares are not created by legislation but within the framework of domestic company law. The ECJ decided that even in such a situation the member state concerned is acting, not as a private shareholder, but as a public authority whose actions fall within the scope of application of Article 56 EC. This approach by the ECJ is applauded firstly because it prevents member states from escaping the reach of Article 56 EC by having recourse to mechanisms of general company law and secondly because it allows the ECJ to avoid the thorny issue of whether Article 56 EC is capable of horizontal direct effect.

The holding of golden shares as a restriction on the free movement of capital is then examined. In this context the expansive interpretation given by the ECJ to the concept of restriction is criticised. Attention is then focused on the justification ground invoked by the Dutch state with regard to the golden share in TPG NV, namely the need to guarantee a universal postal service.