Costa v ENEL (1964): The Supremacy of EU Law

Costa v ENEL (Case 6/64) is the landmark judgment in which the European Court of Justice established the doctrine of supremacy of EU law over conflicting national law. Decided on 15 July 1964, one year after Van Gend en Loos, it completed the constitutional foundation of EU law by ensuring that Community law could not be unilaterally overridden by subsequent national legislation. Together with Van Gend en Loos, Costa established the twin pillars of the EU legal order: direct effect and supremacy. The judgment articulated a vision of European integration that required the permanent limitation of sovereign rights by Member States, creating a legal order autonomous from both international and national law.

Facts of the Case

Flaminio Costa, an Italian lawyer and shareholder of Edison Volta, refused to pay his electricity bill — equivalent to approximately 1,925 Italian lire (about one euro at the time) — to protest the nationalisation of the electricity sector under Italian Law No. 1643 of 6 December 1962, which created ENEL as the national electricity monopoly. Before the Giudice Conciliatore in Milan, Costa argued that the nationalisation violated several provisions of the EEC Treaty, including rules on state aids, distortion of competition, and the prohibition of discrimination based on nationality.

The Italian government responded that national courts must apply the later Italian law, invoking the traditional international law principle lex posterior derogat priori — the later statute prevails over the earlier treaty. Under orthodox dualist theory, an international treaty is incorporated into national law by legislation, and subsequent inconsistent legislation impliedly repeals the earlier incorporating act. The Giudice Conciliatore referred preliminary questions to the ECJ, asking whether Article 102 EEC (concerning distortion of competition from state measures) had direct effect and whether the Italian nationalisation law violated the Treaty.

Before the ECJ ruled, the Italian Constitutional Court issued its own decision in the parallel case of Costa v ENEL, holding that the later Italian law prevailed over the EEC Treaty under Italian constitutional principles. The Italian Constitutional Court reasoned that while Article 11 of the Italian Constitution allowed limitations of sovereignty for international organisations, it did not give Community law precedence over subsequent inconsistent legislation. This created the potential for a direct conflict between the ECJ’s interpretation of Community law and the Italian Constitutional Court’s interpretation of Italian constitutional law.

The ECJ’s Reasoning

The Court held that the EEC Treaty created a legal order that became an integral part of the legal systems of Member States and that national courts are bound to apply. Member States have limited their sovereign rights, creating a body of law that binds both their nationals and themselves. The Treaty could not be overridden by subsequent national legislation without depriving it of its character as Community law and jeopardising the attainment of Treaty objectives.

The Court’s most frequently cited passage states: “The law stemming from the Treaty, an independent source of law, could not, because of its special and original nature, be overridden by domestic legal provisions, however framed, without being deprived of its character as Community law and without the legal basis of the Community itself being called into question.” The transfer of rights and obligations from national legal systems to the Community legal order carries a permanent limitation of sovereign rights that cannot be reversed by subsequent unilateral national measures.

The Court reasoned from three foundations. First, the nature of the Treaty: the EEC Treaty established institutions with sovereign powers and created a legal order that was autonomous, directly effective, and supreme. Second, the principle of non-discrimination: permitting Member States to override Community law by subsequent legislation would discriminate against other Member States and their nationals by allowing a state to escape its Treaty obligations unilaterally. Third, the effectiveness of Community law: uniform application of Community law across all Member States required that Community law prevail over any conflicting national provision, regardless of when the national provision was adopted.

The Doctrinal Basis for Supremacy

The ECJ’s assertion of supremacy is absolute and unconditional. Any provision of national law, whether adopted before or after the relevant EU measure, must be disapplied to the extent of the conflict. This obligation extends to all forms of EU law — Treaty articles, regulations, directives, decisions, and general principles — and applies to all national authorities, including legislatures, executives, and courts. The obligation to disapply covers all conflicting national provisions, including constitutional provisions and fundamental rights guarantees.

The doctrinal basis for supremacy is distinct from national constitutional doctrines of treaty incorporation. The ECJ does not rely on Article 11 of the Italian Constitution or any analogous provision of other Member States’ constitutions. The supremacy of EU law derives from the nature of the EU legal order itself, not from national constitutional authorisation. This autonomous basis ensures that supremacy cannot be unilaterally withdrawn by Member States.

National Constitutional Courts’ Qualified Acceptance

National constitutional courts have accepted supremacy on various constitutional bases, but with qualifications that create ongoing constitutional tension. The Italian Constitutional Court in Frontini (1973) held that Community law could not prevail over fundamental constitutional principles or inalienable human rights. In Granital (1984), the Italian Constitutional Court aligned more closely with the ECJ’s interpretation, holding that national courts must disapply conflicting national law in favour of directly applicable Community law.

The German Federal Constitutional Court in Solange I (1974) reserved the right to review Community law for compliance with fundamental rights under the German Basic Law so long as (solange) the Community lacked a catalogue of fundamental rights equivalent to the German Constitution. In Solange II (1986), the German Court accepted that the Community’s fundamental rights protection had reached an equivalent standard and would no longer exercise its review. However, in the Lisbon Treaty judgment (2009) and the PSPP judgment (2020), the German Court reaffirmed its authority to review ultra vires acts of EU institutions, asserting that supremacy has limits under German constitutional identity.

The French Conseil d’État, long resistant to supremacy over French legislation, finally accepted it in Nicolo (1989), twenty-five years after Costa. The French Cour de Cassation had accepted supremacy earlier in Administration des Douanes v Société Cafés Jacques Vabre (1975). The British courts accepted supremacy through the European Communities Act 1972, which gave EU law domestic legal force, with the House of Lords confirming supremacy over subsequent UK legislation in Factortame (1991).

Relationship with Direct Effect

Costa established the second pillar of EU constitutional law, complementing Van Gend en Loos. Direct effect determines whether a provision can be invoked by an individual; supremacy determines what happens when that provision conflicts with national law. Together, they ensure that EU law is effective and uniformly applied. A provision must have direct effect to be invoked before a national court, but once invoked, supremacy requires that conflicting national law be disapplied. The two doctrines are distinct but interdependent: direct effect provides the entrance ticket for EU law into national legal systems; supremacy ensures that once admitted, EU law prevails.

Contemporary Significance

Declaration No. 17 annexed to the Treaty of Lisbon recalls the existing case law of the CJEU that EU law has primacy over national law, providing political confirmation of this foundational principle. The declaration states that “the Treaties and the law adopted by the Union on the basis of the Treaties have primacy over the law of Member States, under the conditions laid down by the said case law.”

The principle of supremacy has been tested in the context of Brexit, which required the UK to repeal the European Communities Act 1972 and enact the European Union (Withdrawal) Act 2018 to end supremacy after withdrawal. The UK’s withdrawal demonstrated both the importance of supremacy to the EU legal order and the possibility of its termination through withdrawal rather than unilateral national action. Costa’s concept of “permanent limitation of sovereign rights” proved accurate: supremacy could only be terminated by exiting the Union, not by unilateral national override while remaining a member. Costa v ENEL remains the most powerful articulation of EU constitutionalism, establishing that EU law is not merely an international treaty regime but a constitutional legal order integrated into the national legal systems of Member States.