European Union

Piet Eeckhout is Professor of Law and Director of the Centre for European Law at King's College London. In two parallel decisions of March of this year (Case C-249/06 Commission v Sweden and Case C-205/06 Commission v Austria) the European Court of Justice ruled that Sweden and Austria are in breach of their EC Treaty obligations by maintaining bilateral investment treaties with third countries which may interfere with the EU's powers to restrict capital movements.  This is the Court's first venture into the booming international investment law field.  It should be seen in its broader setting. The Treaty of Lisbon purports to extend the scope of the EU's common commercial policy to matters of "foreign direct investment".  Perhaps in anticipation of this significant expansion of Community competence, the Commission is becoming active in this area.  It considers that bilateral investment treaties between Member States and third countries are incompatible with Community law, in so far…