Art. 41 to 47 of the Constitution ___________________________ ______

1. Private and Public lawlesson 5 – The principles of Italian constitutional order: the economic relationships-March 28, 2014-

2. INDEX Art. 41 to 47 of the Constitution: Constitutional principles governing economic relationships- right to carry out business activities- ownership- right to work

3. Art. 41 to 47 of the Constitution • _________________________________ art. 41 to 47 of the Italian ConstitutionPublic intervention in the economic systemRegulation of the economic initiative (both private and public)Regulation of ownership rights

4. Art. 41 to 47 of the Constitution • _________________________________ Four different models:- free market- public monopoly / public intervention- “self-production”- arts & crafts

5. Art. 41 to 47 of the Constitution • _________________________________ free market:- art. 41 and 42- “the” Constitutional option- it goes hand in hand with regulations, limitations and rules of conduct- specific sectors are “reserved” to the State (acting either directly or by means of State-owned undertakings).

6. Art. 41 to 47 of the Constitution • _________________________________ State-owned undertakings:- the State may influence the structure of corporate governance- the State is entitled to exercise shareholders’ rights - the State is entitled to influence and determine the company business and its targets / priorities

7. Art. 41 to 47 of the Constitution • _________________________________ Art. 43 - the State’s power to maintain control (or mandatorily transfer control) over a given business activity is conditional upon the following:(i) general purposes(ii) essential public services (e.g., energy)(iii) predominant general interest

8. Art. 41 to 47 of the Constitution • _________________________________ Art. 45: “models” other than free market- “self production” / cooperative methods / associations are also encouraged: mutual interest and no “speculative” purposes (e.g., “società cooperative”). Manufacturers are often also consumers; employees may be compensated by means of goods manufactured or benefits to purchase them [- arts and crafts: manufacturers do not usually resort to employees or to a significant corporate structure]

9. Art. 41 to 47 of the Constitution • _________________________________ Art. 41, paragraph 1: in principle, private individuals are generally free to undertake a business activity:- a general provision- directly applicable (no need for any implementation)- it is also binding on the State, which is not entitled to hamper application of art. 41, para 1exceptions (limitations)

10. Art. 41 to 47 of the Constitution • _________________________________ Limitations to private initiative- limitations depending on the relevant social / historical context - “Economic activities may not be carried out in contrast with social wealth or in such manner that could damage safety, liberty, and human dignity”(Art. 41, paragraph 2)

11. A definition of “social wealth” (“utilitàsociale”)? • _________________________________ - no express definition; this depends on the historical context (e.g., privacy issues, environmental awareness, etc.); average of the progress gained by public welfare as a consequence of a given economic activity. Community not as the “aggregate” of all individuals, but as a single and autonomous “subject”- an absolute / unconditional limitation; no possibility to deviate or depart from it- in order to stop an economic activity, conflict with “utilitàsociale” must undoubtedly arise (nor room for discretion)

12. Art. 41 to 47 of the Constitution • _________________________________ Other limitations to private initiative- subjective limitations: e.g., professional requirements to be fulfilled in order to perform an economic activity- objective limitations: e.g., limitations regarding town-planning matters

13. Art. 41 to 47 of the Constitution • _________________________________ Art. 43, paragraph 3:“The law shall set out appropriate planning and controls, ensuring that public and private economicactivities are properly oriented and coordinated to achieve social goals”

14. Art. 41 to 47 of the Constitution • _________________________________ “oriented”: each economic activity should not just pursue the entrepreneur’s individual profit targets“coordinated”: each economic activity should be harmonized with all other existing activities, in order to ensure that all of them are consistent with the aim to increase and promote social welfare

15. Art. 41 to 47 of the Constitution • _________________________________ “programs”: ex ante (planning)“controls”: ex post (checking if certain targets were reached)- this is no “mandatory” intervention by the State- Interventions should be of a general nature and should not regard specific economic sectors- Interventions should not be discretionary and should comply with the aims set out by the Constitution[The experience of “CIPE”]

16. Is the State entitled to enact “plans” (art. 41, para 3)? _________________________________________________ Different opinions: (A) the State plans are mandatory and binding on companies and undertakings(B) Plans should not impact on individuals’ right to autonomously lay down their business targetsNowadays, the State is expected to legislate on competition, to regulate relationships among companies and to issue antitrust and antimonopoly norms: to that extent, the State may also issue “directives” to companies and businesses

17. Is the State entitled to enact “plans” (art. 41, para 3)? _________________________________________________ Adoption by the State of “plans” / “programs”, setting forth the ultimate goals to be achieved within the relevant deadlines Approval of the balance sheets for the relevant time period (investments and economic / social targets)

18. Art. 41 to 47 of the Constitution • _________________________________ • Right of ownership: art. 42 • - Property is either public or private. Economic goods belong to the State, to public entities or to private individuals. • - Private property is recognized and guaranteed by the law, which determines the ways it is acquired, enjoyed and the relevant limitations, in order to ensure its social function and to make it accessible to all. • Owned goods may be expropriated, in the situations provided for by the law, for reasons of general interest, provided that appropriate compensation is granted. • The law shall set out the rules and limits of legitimate and testamentary inheritance and the rights of the State in matters of inheritance.

19. Art. 41 to 47 of the Constitution • _________________________________ • the law may not limit individuals’ ownership rights except for the ways it is acquired and enjoyed • expropriation may not occur to deprive an individual of his/her ownership rights and to grant those to another individual: expropriation may be only aimed at ensuring achievement of public goals (public interest)

20. Art. 41 to 47 of the Constitution • _________________________________ • ownership: art. 832 of the Civil Code • The owner has the right to enjoy and dispose of things fully and exclusively, within the limits and in compliance with the obligations set out by the law.

21. Art. 41 to 47 of the Constitution • _________________________________ • ownership: art. 834 of the Civil Code • No one may be deprived of ownership unless for public interest reasons, provided that: (i) such reasons are acknowledged in accordance with the law; and (ii) adequate compensation is paid to the person to whom expropriation is addressed.

22. Art. 41 to 47 of the Constitution • _________________________________ • ideally, the Constitution envisages ownership as a tool to promote / increase social welfare, not as something which is enjoyed by the owner only • owned goods should be dynamically “oriented” to production / trade, they should not just statically held by the owner

23. Art. 41 to 47 of the Constitution • _________________________________ • soil / natural resources should be exploited for production purposes in accordance with the social needs and public interest • production should be organized in accordance with the need to harmonize social relationships • minor undertakings should be encouraged: special care is taken for agricultural businesses (in particular those managing small pieces of land). Limitations may be imposed to the extension of land owned

24. Art. 41 to 47 of the Constitution • _________________________________ • public property: State-owned goods (“benidemaniali” and “benipatrimoniali") • They are set to meet a public/general need or interest • In certain cases, they may not be disposed of • They may not be diverted from their public destination

25. Art. 41 to 47 of the Constitution • _________________________________ • public property is also subject to limitations: Art. 9 of the Constitution:The Republic promotes the development of culture and scientific and technical research. It safeguards the natural landscape and the historical and art heritage of the nation

26. The freedom to perform a business activity • and the right to work • _________________________________ Article 4 of the Constitution The Republic recognizes the right of all citizens to work and shall promote all conditions to make this right effective. All citizens have the duty, according to their possibilities and individual choice, to carry out an activity or a function […]. Article 38 of the Constitution Every citizen unable to work and without the resources necessary to live has a right to maintenance and assistance. Workers have the right to be provided with adequate means for their needs in cases of accidents, illness, disability, old age and involuntary unemployment.