The paper explores the new balance between market freedoms and national regulatory autonomy following entry into force of the ToL, particularly, Art 4(2) TEU,according to which EU should respect the national identities of its MS, and Art 4(3) TEU which defines duty of sincere cooperation as being reciprocal. Claims weremade (see AG Cruz Villalon in C-505/08 Palhota §§ 51-53) that the ECJ should recognize broader discretion to the MS when pursuing one of the values listed in Art 9TFEU, such as high level of employment, the guarantee of adequate social protection, the fight against social exclusion, and a high level of education, training andprotection of human health. Also, in C-208/09 Sayn-Wittgenstein the ECJ recognized national identity as a justification for departure from market freedoms. The paperargues (a.) that national identity must not be construed in confrontation to fundamental principles and values of the Union and (b.) that in absence of EU competence toenact positive integration measures in area of social policy, recourse to public policy and national identity justifications has to remain narrowly construed. It is suggestedthat extensive interpretation of national identity clause has a potential of reversing the course of European integration.
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