Bolstering European civil society! Making the case for a European Association Statute

The EU currently offers no legal framework for European associations. Given the enormous range of pan-European societal activities and the attendant bureaucratic and legal hurdles they encounter, this is astonishing. There are many good reasons to plug this gap and create a European Association Statute.

1. Strengthening European democracy

The European Union describes itself as a “union among the peoples of Europe, in which decisions are taken as openly as possible and as closely as possible to the citizen” (Art. 1 Treaty on European Union - TEU). It has adopted its own democratic principles, makes explicit provision for the involvement of citizens and associations and supports them (Art. 11 TEU). Civil dialogue at European level is thus a constituent part of the EU. The fact that at the same time, no European civil-society organisations can be set in place as there is no specific legal form for them, is a glaring incongruity and leads to difficulties, injustices and a lack of transparency in effectively implementing Article 11. This has serious democratic and political implications and is hard to justify, given the very little effort it would take to remedy this democratic deficit.

Beyond the political involvement of European civil society networks in the political process in Brussels, civil society’s framework for political action has changed beyond all recognition in recent years. Shrinking Space describes the increasing squeeze on the sphere of action available to civil society, the Civic Space. The term refers firstly to the restriction of fundamental rights such as the right of assembly, association and opinion by the government or judiciary of a given country. Secondly, however, it also covers the prevailing mood in the country or region towards public civil society engagement. In other words, it refers to more than just direct state repression such as discreditation, defamation, threats, intimidation and violence towards NGOs, their activists and the issues they represent.

Every year, the network CIVICUS publishes a global analysis of the Civic Space situation. 109 countries have a civil society space that is narrowed and just 3% of the world’s population lives in countries in which this space can be described as open. But what the analysis also illustrates is that the phenomenon of Shrinking Space is by no means the preserve of autocracies on other continents or the handful of cases in Europe that get very little media attention. The negative global trends flagged up by the monitor can be seen throughout Europe. Creating a European legal form for civil society engagement would send the many affected organisations in the EU Member States an important political signal that values and fundamental rights are strengthened and accessible across the whole of Europe and would offer effective legal protection for the organised pan-European civil society.

2. Bolstering European civil society

Civil society and civic engagement are pillars of social cohesion and healthy democracy in our societies. Citizens come together and engage for their concerns, they network and organise themselves in initiatives and associations and make demands to their government. The social and political importance of civil society is recognised in all European countries and governed by a law on associations. This gives civil society a framework to act and organise itself. Non-profit status* is also enshrined in the law of many EU countries.

Citizenship, however, is no longer a nation state construct. European Union citizenship was introduced with the Treaty of Maastricht of 1992: nationals of an EU Member State of the European Union automatically became EU citizens at the same time. Their citizens’ engagement, moreover, no longer stops at the borders: they support and promote the development of a European public space of voluntary engagement, for instance in pan-European transnational organisations, in bilateral or multilateral urban partner associations, within the regional EUREGIOs associations supported by the EU or in other cross-border organisations. EU support programmes such as “Europe for Citizens” or ERASMUS+ expressly support this engagement.

The political participation of civil society is also becoming increasingly European. Many major thematic areas of civil society exceed the ability of individual nation states to resolve them, such as climate change, migration or mobility. The European Citizens’ Initiative (Art. 11/4 TEU) introduced additional far-reaching opportunities for participation. At the same time, the scope of action of civil society engagement came under more and more pressure, while democracy and the rule of law came under threat from inside and outside with the rise of the far-right in Europe and, scarcely less so, by the consequences of the Covid-19 pandemic. Cross-border co-operation offers the most effective ways of overcoming these challenges. The landscape of European civil society networks has developed accordingly in recent decades and has seen many new actors coming along, organising their discourse and activities digitally.

National regulations, however, continue to place boundaries on the self-organisation of European citizens: European civil society is legally fragmented along national borders. This fragmentation prevents the citizens of the union from speaking with a loud and clear European voice. The lack of a single European legal framework prevents a feeling of community, the ability to see ourselves not just as citizens of an EU Member State but as citizens of the EU, as Europeans, in everyday life and to be able to act with the support of a legal framework. A legal foundation for European associations is therefore desperately needed to underpin a feeling of ‘Europeanness’ and to increase the visibility of European citizenship. Without a European Association, a “Europe for Citizens” cannot be a European reality.

3. Ending restrictions on European freedoms and discrimination against non-profit activities

As long as civil society organisations can only act under national law, civil society engagement will continue to be divided along national borders. By way of contrast, the EU has made far more progress of this kind in the economic field: there has been the legal form of the European Economic Interest Grouping (EEIG) for lobby associations since 1989, the European Public Limited Liability Company (Societas Europaea – SE) since 2004, the European Cooperative Society (Societas Cooperativa Europaea – SCE) since 2006 and the European Grouping of Territorial Cooperation (EGTC) since 2007. However, there is no simple “European Association” for cross-border civil-society activities. This situation corresponds to an interpretation of the EU as a European single market that lags a conspicuously long way behind the state of European integration and its legal interpretation.

For one thing, the freedom of association is explicitly guaranteed in Article 12, paragraph 1 of the EU Charter of Fundamental Rights “at all levels” – meaning that European level is included. This right is, however, effectively meaningless if it is not, as lawyer Tim Wöffen puts it, “possible simply and unbureaucratically to create a European association”. Admittedly, the freedom of association does not in itself guarantee the right to a specific legal form. The current state of play, however, is unsustainable in that there is absolutely no pan-European legal form available to citizens’ engagement.[1]

For European civil society, the need to come together at European level in an association is closely associated with the question of recognising the non-profit status of its cross-border citizens’ engagement, which is currently lacking. Just like the right of association, non-profit status remains based solely on traditional nation-state templates. This makes the cross-border engagement of the non-profit sector difficult within the EU Single Market. Even though most of EU Member States’ laws on non-profit status and charitable donations do not exclude transnational civil-society activities, foreign organisations are often excluded from tax breaks. For want of an agreement, they are obliged to acquire an additional recognition of non-profit status for activities in other EU countries. Conversely, donations to foreign organisations are frequently non-deductible in practice because the tax authorities are unwilling or unable to verify the non-profit status of overseas recipients.

It is true that laws on non-profit status and charitable donations do not fall within the sphere of competence of the European Union, but the member states are bound by their legislation to align themselves upon the fundamental freedoms of the EU Single Market. They have so far fulfilled this obligation reluctantly and insufficiently. Nor was it done voluntarily, but only by demand of the European Court of Justice (ECJ) in the wake of several legal disputes.[2]

Overall, the case-law of the ECJ must underscore the fact that non-profit organisations, those who volunteer on their behalf and their financial support, must be able to rely on the protection of their basic freedoms. In the framework of their economic activities, they must be able to enjoy the freedom of establishment, the freedom to provide services, the free movement of capital, free movement for workers and, ideally, free movement of persons. So far, however, the court judgments have had the effect of only partial adjustments of non-profit status law in the member states – on a case-by-case basis. This is just the tip of the iceberg and a warning of a generalised and urgent need for regulation.[3]

The fact that the ECJ is thus subconsciously bolstering the understanding of civil society activities in Europe and is required to enforce the framework conditions of European engagement against the legislator is deeply undignified. It is clearly disproportionate to the importance of civil society for democracy and societal cohesion in Europe. It runs counter to the EU Charter of Fundamental Rights and the freedom of association set out within it. It also complicates the implementation and further interpretation of Article 11 TEU, which sets out the basic tenets of participative democracy in Europe and the role of civil society. Proactively developing a common corporate form for European citizens’ engagement and paving the way for the harmonisation of non-profit status in Europe should be of greater interest to political leaders than reactively following along behind highly controversial ECJ rulings.

One can only hope, therefore, that the new initiative by the European Parliament, which was requested by the European Commission in its "Report on a statute for European cross-border associations and non-profit organisations" of February 2022 to draft new legislation, will create new momentum that will ultimately lead to a legal form to benefit the whole of