Kazuo Ishiguro’s novel, The Remains of the Day (1989), is a tale of reminiscence, lost chances, and of the need to move ahead. Considering the implications of the Judgement rendered in Case 911/19 (July 15, 2021) by the CJEU, this suggestion comes at hand. The long-awaited Judgement became viral also because of the quote, by AG Bobek, of Lord Baelish’s words ‘The past is past. The future is all that’s worth discussing’, from the notorious Game of Thrones saga.

The backdrop to the Case is the long-standing debate on the nature and reviewability of EU soft law. The Case considers the 2016 Guidelines of the European Banking Authority (EBA) on product oversight and governance for banking retail products. The French ACPR decided to comply with the Guidelines in September 2017; the French Banking Federation (FBF) challenged the relative Notice before the French Conseil d’État. The questions raised in the request for preliminary judgement touched upon three points: (i) whether the 2016 Guidelines are valid; (ii) whether they fall under art. 263 TFEU, thus subject to actions for annulment in front of the CJEU; and (iii) whether the FBF has locus standi. In our paper, we comment upon the Judgement and its implications, which—despite what may seem at first glance—are deeply innovative, setting it amongst the latest Grands Arrêts of the Court in the field of EU Financial legislation.

(i) On the validity of the Guidelines.

Differently from other soft law measures submitted over time to the CJEU, the 2016 Guidelines are, indeed, problematic: their legal basis is shaky. The text identifies certain provisions of the Capital Requirements Directive (CRD IV), the Payment Services Directive (PSD), the e-Money Directive (EMD), and the Mortgage Credit Directive (MCD). However, most of them do not explicitly address the topic of product governance. During the discussion, the Commission and the Advocate General clearly shared the opinion that the EBA’s Guidelines should be declared invalid by the Court. The Court, instead, confirmed that the 2016 Guidelines do have sufficient legal basis.

Undoubtedly, this conclusion did not prove easy, as the Court aimlessly searched its way through the (usual) maze of the relevant secondary legislation. Ultimately, the Court had to accept the fact that the maze had a dead end and decided to bypass the formal wording of the single provisions and to uphold the Guidelines on the basis of the objectives and aims of EBA’s action. Formal legal basis was therefore supplemented with the objectives and aims of the Guidelines, and a happy ending was ensured. This is a striking conclusion, even more so because in some way—probably not by chance—it resembles, albeit in a totally different context and with all the due differences, the position that the CJEU took in relation to the exercise of the powers of the ECB in the field of monetary policy starting—needless to say—with Gauweiler, and, ultimately, Weiss.

(ii) Annulment or preliminary reference?

The kind of review applicable to the Guidelines depends on them having, or not, binding force. The FBF Case is not the first where the CJEU was called upon to assess the nature of soft law: it was thus perfectly reasonable for the Court to follow its own precedents. The Court’s opinion carefully analyses the wording of the Guidelines, pointing out that they are formulated in non-mandatory terms (‘should’), and that their legal regime resembles that of Recommendations under the European Supervision Authorities’ Regulations. The conclusion is that they have no binding force; they lie outside the scope of article 263 TFEU and cannot be reviewed in an action for annulment before the Court. However, they are Union acts of general application, challengeable indirectly through a preliminary reference. In this analysis, a central element is the comply-or-explain mechanism, proper to the Guidelines, which the Court, in sharp contrast with the Advocate General’s opinion, greatly undervalues, disregarding the specificities of the European Supervision Authorities context In this respect, the Judgement is also problematic in light of the recent decision in Case C-501/18, and other precedents cited therein, where the CJEU clearly directs national Courts to consider soft law in their decisions, with an evident hardening effect.

(iii) Locus standi.

In the Judgement, the Court confirms that the admissibility, before a national court, of a plea of illegality directed against an act of the Union is not subject to the condition of that act being of direct and individual concern to the person who relies on such plea. Even if this is in line with previous judgements, one should not underestimate the practical importance of this statement in the context of financial markets, where the presence of intermediate bodies is particularly relevant.

All in all, the FBF judgement ends up being at odds with the Court’s precedents on soft law not because it openly contradicts them, but because it does not seem to properly consider the peculiarities of the case. A possible justification, which we discuss extensively in our paper, might be the attempt by the Court to not openly contradict the Meroni doctrine, or—rather—its fading remnants. By expunging the Guidelines from article 263 TFEU and adopting a ‘teleological’ approach to the powers of the EBA, the Judgement stretches to its limits the legal and conceptual framework of Meroni. However, the Court is very careful in not raising this issue openly: Meroni, in fact, is never confronted, but one clearly feels its ominous presence.

After the FBF judgement, the road is now open for new research in the area of all of the three ESAs. The process of expansion of their powers and prerogatives is clearly visible, and the Court is distinctly supportive, even if this implies clashing with what is left of Meroni. Needless to say, it has been a long way since the old Lamfalussy Committees were set up 20 years ago. Whether one prefers Game of Thrones to The Remains of the Day doesn’t make much difference: the past is, indeed, rapidly fading into oblivion.

Filippo Annunziata is an associate professor at the University of Bocconi and a member of the Academic Board of the European Banking Institute.