ETHICS IN THE EUROPEAN UNION


SAFWAN NASER

Fakulta mezinárodních vztahů, Vysoká škola ekonomická v Praze



Abstrakt

Proces harmonizace v rámci Evropské unie je bezpochyby doprovázen mnoho komplexnostmi. Navzdory
tomu, že proces integrace je složitý a musí nevyhnutelně zahrnovat sladění celé škály zákonů
členských států a ačkoliv některé oblasti práva vyžadují úzkostlivě podrobné definice, zdá se, že
etika hraje mnohem méně významnou roli v celém procesu než by bylo nutno.


Klíčová slova

Etika, Evropská unie, právo, harmonizace, ekonomie


Abstract

There are undoubtedly many complexities which accompany the process of harmonization in terms of
the European Union. Although the process of integration is complicated and must inevitably include
a reconciliation of a range of laws of member states, and although some areas of law require
meticulously detailed definitions, it seems that ethics play a much less significant role in the
whole process than necessary.


Key words

Ethics, European Union, law, harmonization, economics.


Introduction


There have indeed been many prolific thinkers throughout the history of mankind who have focused on
the significance of ethics from various perspectives. The aim of this paper is to consider the
extent to which ethics are taken into account in the process of legislation in the European Union.


While it is irrevocably true that at least in terms of its historical origin, law as such stems
from ethical concepts, it is highly questionable whether modern legislation has remained faithful
to the ethical heritage. It is indisputable that the practical applicability of ethics is hampered
by the ambiguity of the concept and the scope of definition that it is susceptible to. The
difficulties related to defining ethics as a concept are still extant in spite of the numerous
previous attempts to explain the premise of the term. It is sufficient for the purpose of
argumentation in this paper to only very briefly mention the intellectual contribution of John
Locke and Immanuel Kant pertaining to ethics as a philosophical point of departure.

To put it quite simply, John Locke asserted that the mind is born a tabula rasa, therefore
repudiating the concept of innate ideas. Consequently, whatever definition of ethics we arrive at,
it will only be a construct of the human mind. It is therefore rather difficult to define ethics in
terms of conventional terms such as morality, honesty, integrity etc., and yet it is simultaneously
and paradoxically intuitively obvious that precisely these terms are most apt, albeit they require
definition themselves. Conversely, Immanuel Kant attempted to synthesize rationalism and empiricism
and in his Critique of Practical Reason (1788) and put forward a system of ethics based on the
notion of what he termed “categorical imperative”. Although the principle of categorical imperative
is very helpful, it does not truly provide a definition of ethics. Nevertheless, it is a concept
which is heavily referred to and indeed proves very useful even if looked at solely from a legal
perspective. Whether we wish to refer to it as Kant’s categorical imperative or basic principles of
Christianity, few would disagree that the notion of reciprocity is crucial for any viable
definition of ethics. Nevertheless, it is clear that despite having used generally known
philosophical concepts only in a very simplified manner, the definition of ethics is still very
challenging and indeed perhaps unattainable.


The entire matter becomes even more complex when cultural differences are factored into the
definition of ethics. It is obviously possible to identify perceptible differences in the approach
to morality, honesty and integrity when we compare such different approaches as that of Japan and
the Czech Republic for example. However, although it is relatively fairly straightforward to
identify the differences between to countries in terms of the approach to ethics, it is difficult
to define the span and nature of different cultures per se. Furthermore, even if we were to content
ourselves with a simplified approach and ignore the intricate aspects of the historical development
of individual countries and presume that there exists such a thing as “European culture”, it would
be merely a geographical approach and even then it would be an intrinsically flawed premise.
Consider the consequences if Turkey were to become a member state of the European Union. Would it
still be viable to speak of a “European culture”? Consequently, it would be desirable to define
ethics independently of cultural differences, which obviously greatly complicates the whole
process. Nevertheless, for the purpose of this paper, it is not desirable to go into greater depth
regarding the complexity of defining ethics. It is sufficient at this point to emphasize the
existence of the problem of defining ethics in general terms as a concept and recourse to the
simplified interpretation of Kant’s categorical imperative as the premise for argumentation in this
paper.

Having established the working definition of ethics and having addressed the problems related to
the ambiguity of the term, let us now look into the links between ethics and law from the
perspective of the European Union.


The Intricacies of Ethics


Before we elaborate on the specificities of the connection between laws and ethics in the framework
of the European Union, it is useful to at least briefly consider the significance of economics in
this matter, even if it were only for the purpose of contrast. Although it might not appear so at
first glance, the origins of economics are not entirely free of considerations on the relevance of
ethics. In fact, Adam Smith himself believed that economics and ethics were inseparable, although
his terminology was perhaps a little different, the concepts remain unaltered. The mere fact that
his famous work An Inquiry into the Nature and Causes of the Wealth of Nations was preceded by his
unfortunately less know The Theory of Moral Sentiments shows that Smith was not oblivious to the
concept of ethics and certainly did not consider economics independent of it. It is therefore clear
that the explicit connection between ethics and economics was made at least as early as the latter
half of the eighteenth century, but this by no means represents the most distant historical
connection that can be traced. Nonetheless, the aim of this brief diversion was not to determine
the roots of this connection but rather to point out what alteration this connection has undergone,
because the general preoccupation of economics nowadays is not linked so closely to ethics as could
be expected. One would certainly have to try very hard to find a mention of ethics in the vast
majority of economic axioms. Ethics are at best only mentioned as something that must be taken into
consideration, but one would hardly find any link to ethics in maximizing utility under conditions
of scarcity and under the constraints of a specific budget line…

However, although the link between ethics and economics might not be obvious at all times, it is
safe to assert that the connection is not a case of wishful thinking. The need for relentless
precision and the overwhelming role of numbers in economics perhaps only overshadow the link
between ethics and economics, yet at least on a theoretical level, the link still exists.

It is important to bear this in mind because it is quite difficult to separate economics and law,
if not on a theoretical level, then at least in terms of the recent history of mankind. Many laws
are being devised with their economic purpose in mind (this is most obvious in the case of laws
related to issues such as taxes and other financial matters). With respect to the aforementioned
connection between ethics and economics, it can be said, with a certain degree of simplification
obviously, that even though law and ethics are not entirely independent of economics, the aspect of
ethics remains relevant and is not overridden by the role of economics.


Law and ethics on the other hand enjoy an intrinsically much closer connection. This connection
between law and ethics is undoubtedly more apparent than that between economics and ethics, and yet
even this relationship is not absolute and despite the inherent link between law and ethics, the
two are certainly not interchangeable. While there is a tacit presupposition in many societies that
illegal actions are usually unethical, this certainly does not imply that all unethical actions are
necessarily illegal. Indeed, it is not out of the ordinary to be legally unassailable but ethically
at fault and it is not infrequent that the capabilities of a lawyer are assessed in terms of his
ability to find a way around legal constraints in order to achieve a particular end. It would be
interesting to consider why it is not uncommon for precisely those lawyers who are most adept at
finding a way around legal constraints to be financially rewarded the most. However, we will not
delve deeper into this economic intermission as the complicated nature of the relationship between
law, ethics and economics is already patent at this point. All of these aspects of the relationship
between law and ethics, economics and ethics and the influence of economics on the connection
between law and ethics must be taken into account when we assess the significance of ethics in
terms of the European Union.


In spite of the fact that the connection between ethics and law is indisputable, it would seem that
the importance of ethics in the legislative process is diminishing, if indeed ethics were ever a
major and conscious concern beyond the level of the aforementioned intrinsic link which undoubtedly
exists between law and ethics. While it is true that ethics as an abstract concept is not
susceptible to a clear-cut and unequivocal definition free of terms which are themselves beset by
ambiguities, this certainly does not justify the subordinate position of ethics in the legislation
process within the European Union.

Even if we were to consider laws as a manifestation of traditions and ethical concepts which have
been evolving since the existence of mankind, it is simply not possible to rely on this
theoretically perpetual link and take no notice of the potential of ethics as a unifying element in
the process of legislation in the European Union. It is only a matter of time until the sheer bulk
of laws intertwining the relationships between the member states of the European Union becomes
perplexing beyond repair. There are obviously many areas of legislation that can be taken into
consideration and not all of them are in the same condition, but it is the general approach which
must be considered alarming. The problem consists mainly in the unnecessary and rather
counterproductive depth and detail of legislation, especially in some areas of law. Opinions will
certainly differ on the specific areas, but it is beyond any doubt that excessive regulation is not
a desirable trend.

This situation is made worse by the nature of the legislative process itself. One would have to
look very leniently at the laws of individual member states of the European Union to arrive at the
conclusion that they are entirely free of inaccuracies. Whether we take into consideration the
Anglo-Saxon tradition which in its essence relies heavily on judges, or the tradition akin to the
Napoleonic Code which is based at large on the legislative prerogative of a political authority, we
inexorably reach the conclusion that laws devised in individual member states of the European Union
cannot possibly aspire after perfection and will inevitably be flawed, regardless of the particular
law at hand. The differences between statutory law and common law (unwritten law) are not of major
significance because the European Union has evidently decided not to rely on common law and work
with statutory law instead, yet it is interesting to realize that regarding only the origin of a
law from the perspective of ethics, the two traditions do not differ to a major extent, as laws are
propounded by an authority of some type which certainly cannot be deemed an infallible source.
Since the laws of individual member states of the European Union unquestionably display a certain
degree of imperfection, it is rather improbable that the laws passed in the framework of the
legislative process in the European Union will be free of imperfections.


It is precisely for this reason, if not for any other, that ethics merit a more decisive function
in the legislative process, at least with respect to the European Union. Even if one were to pay no
attention to the moral aspect and look at this issue purely form a point of view of practicality
and reasonableness, the inevitable conclusion would be that ethics are an indispensable factor if
the European Union is to function effectively. It is clear that even a simple summation of the laws
of individual member states of the European Union would be a complicated process and it would
certainly not be a wise approach. While there undoubtedly exist many similarities connecting laws
passed in individual member states of the European Union prior to the laws passed in the framework
of the legislative process of the European Union, it would be difficult to achieve a summation
which would not discriminate any of the member states, if any such summation would indeed be at all
possible and desirable. It is therefore quite evident, even on an intuitive level, that the
reconciling of the laws of individual member states in the framework of integration within the
European Union requires a broader perspective.

Any process of integration of such magnitude is inevitably susceptible to imperfection, especially
when there is a certain level of intrinsic deficiency in all the individual elements which are a
part of the integration. It is therefore extremely important to constantly take the origins of the
creation of the European Union into consideration. One of the debatable and less relevant
motivations behind the creation of what today is known as the European Union was the desire to
prevent another war in Europe reaching or even surpassing the scale of the Second World War.
Although this is also an interesting issue from an ethical point of view, let us concentrate on the
more pertinent reason – increasing market accessibility. Although one should not diminish the
importance of cultural and political cooperation in terms of the European Union (especially in view
of the consequences of a possible full ratification of the Treaty of Lisbon), it is more than
obvious that the endeavor was in essence driven by economic factors. If we take this notion even
further, we arrive at the conclusion that the motivation behind the European Union of today was
primordially one of enabling a greater degree of freedom, of facilitating economic cooperation and
overcoming the tediousness of having to reconcile individual laws of the parties wishing to engage
in business together. However, it would seem that somewhere along the path of providing greater
freedom in general and simplifying economic cooperation in particular, the process took a wrong
turn and backfired in the sense that what is happening now is actually getting in the way of the
original intention of increasing market efficacy.

Incidentally, this is precisely why to ensure a sound relationship between law and ethics, it is
absolutely essential to constantly have in mind the economic basis of the origin of the European
Union. It would appear that this has been forgotten to some extent, for the process of reconciling
the laws of individual member states of the European Union has been wavering between the necessity
to endow each member state with a certain level of autonomy while simultaneously ensuring that
individual member states do not digress disproportionately from the will of the majority in the
framework of the European Union. This process of legal harmonization has become so engulfed by
resolving the above-mentioned predicament of sovereignty that the original intention of providing
greater freedom and facilitating economic cooperation has been almost forgotten.


Although the aim of the process of harmonization is to guarantee a certain level of equality in
terms of the sound functioning of the market and just competition, it would appear that the concept
of competition was misunderstood. To put it quite simply, allowing market access freely and without
selective impediments is an entirely satisfactory precondition which ensures that all those
involved have equal opportunities. However, the process of harmonization has unfortunately resulted
in excessive regulation which resulted in an overwhelming of the market with legal constraints
which in turn actually discourages competition. This is a direct economic consequence of the
insufficient role of ethics in the process of legislation.


Although it might not seem so at first, it is not so important whether directives or regulations
are used as a means of granting ethics a more decisive role in the legislative process. The obvious
advantage of directives is that they usually leave a certain amount of leeway as to the particular
rules to be adopted as long as the desired result is achieved. Regulations on the other hand
require absolutely flawless wording because they are self-executing and cannot be altered by
implementing measures, which significantly decreases the danger of misinterpretation. However, the
legal basis for the enactment of directives and regulations is article 249 of the Treaty
establishing the European Community, which means that they only apply within the European Community
pillar of the European Union. Furthermore, in view of the possibility that the Treaty of Lisbon
will be fully ratified, there might be a problem with the cancellation of the pillar system.  This
only supports the argument that ethics as an underlying principle in legal harmonization is more
valuable than the approach of meticulously defining every thinkable aspect of a particular legal
area. Take for instance the recent problems related to corporate governance in banking[1] and the
United States housing bubble connected to foreclosures which underpinned the subprime mortgage
crisis. The automatic reaction in both the United States and Europe was to emphasize the necessity
to further tighten legal regulation of the market to ensure that similar problems do not repeat
themselves. It is obvious that in such specific matters a sufficient degree of precision is
unavoidable and indeed advisable. However, it is clear that all complications in such convoluted
matters cannot be fully accounted for unless a more general approach is also applied. The ultimate
aim should be to find the right balance between ethical prerequisites and detailed descriptions of
how to achieve them. It is indeed much easier to define such aspects of business as marketing and
advertisement in general terms, but ethics should be considered more closely even in such intricate
matters as financial services. “Hyping” stocks is a good example of the synthesis of ethics and
law. Not only is “hyping” unethical, but it is also illegal. The general ethical principle behind
this is quite simply that “hyping” constitutes unfair behavior, but it requires a fairly detailed
definition of what actually constitutes this unfair behavior.


Conclusion


The main aim of this paper was to point out the unsatisfactory role of ethics in the framework of
the European Union. It is obvious that some areas of law require meticulous definition, but even in
such cases, it is necessary to constantly have in mind that the ultimate aim of a law is to ensure
reciprocal ethical behavior. The problem of the European Union seems to be that this concept has
been forgotten in the process of excessively detailed legislation and redundant harmonization. The
premise of ensuring equal opportunities and conditions on the market for all members of the
European Union is undoubtedly correct. However, it is clear that the aim of law cannot be to fully
describe and regulate every aspect of human interaction, but rather ensure a certain minimum of
justice – to ensure a certain level of ethical standards if you will. To reconcile this notion
across several sovereign states, harmonization is certainly a plausible approach. However, it is
important to opt for the appropriate method of harmonization while taking into consideration the
scale of integration and the underlying aim of a market free of unnecessary constraints.

Each market and the laws governing it would have to be analyzed in great detail in order to
pinpoint the imperfections resulting from the insufficient role of ethics, but the ambition of this
paper was simply to draw attention to the existence of the problem of the inadequate role of ethics
in the legislative process of the European Union and the consequential excessive restrictions and
counterproductive regulations.


Bibliography:

[1]   Ondřej, J., Plchová, B., Abrhám, J., Pulgret, M.: Ekonomické a právní aspekty podnikání v
Evropské unii, Praha: C.h. Beck, 2007, s. 366, 978-80-7179-558-2

[2]   Benton, E. C. et al: Corporate Governance in Banking (A Global Perspective), Massachusetts:
Edward Elgar Publishing, 2007, s. 297, 978 1 84542 940 9

[3]   Kant, I.: Critique of Practical Reason, Indianapolis: Hackett Publishing, 2002, s. 284,
0872206173

[4]

Kontaktní údaj na autora – email

safwan.naser@cnb.cz
________________________________

[1] Société Générale in Europe most recently.