EU Law-making Competence

What are the law making competences of the EU? The powers/the areas of law
they can legislate on.

For the 2nd part, we try and find out how the EU legislates

Competence and Legal Base

Key Issues

 The EU is not a self-authenticating legal order, it does not have a general

or inherent competence to create laws

 Its law making competencies are constrained and limited by the ‘principle
of conferred powers’ contained in Article 5(1) ECT (now A 5 CTEU)

 They only have powers because the member states give them to it.
(bit like the idea of inter governmentalism)

 Every piece of legislation the EU adopts must find a corresponding legal

base in the Treaties.

 The EU cannot afford to be casual about these things. They have to

spell out the legal base they’re using in order to justify legislation

 But competences and legal bases can be hard to ascertain

 Some legal bases have been drafted in a deliberately open way to

give the EU a chance to legislate but that in itself creates problems.
Also, some are uncertain

 The Court is called upon policing these principles

 If a member state thinks the EU has gone beyond it’s powers with a
piece of legislation, the court is called upon to police them. We will
look at the ffectiveness

In this part of the lecture we will expand upon and critically review the following
two points:

 Principle of conferral

 Types of competence

 The legal base issue

 Role of European Court in policing competences

Principle of conferral - Article 5(1) ECT

– It was known as such even before the treaty of Lisbon expressed it clearly.
– It basically states what we mentioned before.
 – The EU is not a self-authenticating power. Dreives it from treaties
unanimously agreed on by member states

‘The Community shall act within the limits of the powers conferred upon it by this
Treaty and of the objectives assigned to it therein’

(New Article 5(1)-(2) of the CTEU provides that ‘the limits of Union
competences are governed by the principle of conferral’. All other competences
‘remain with the Member States’)

 EU law making institutions must ask themselves:

 Has the Community the competence to legislate in this given policy

area?

 What is the Treaty article (legal base) that confers to the

Community the power to legislate in this area?

 In addition EU law action must comply with the principles of subsidiarity

and proportionality

 The subsidiarity principle means EU intervention should only occur

when intervention at a national level will not produce equally good
results

 It was first imposed with the treaty of (mastricht) in 1992. So the EU

now asks not only whether they can legislate, they should ask
whether it is appropriate to legislate.

 The proportionality question comes after they establish they have a

legal base and that it’s appropriate to legislate but how intensively
should they legislate in this area? The proportionality principle
suggests this should be as unintrusive in the domestic regulatory
framework as possible without frustrating the purpose of the
legislation

 Types of competence

 Prior to Lisbon, ECJ had already highlighted the existence of:

 (i) Exclusive competence

 Areas of law in which the EU institution has the monopoly of law

making. National parliaments have just given up the sovereign
powers in the law making areas

 (ii) Shared competence

 Areas where both the EU and member states retain competencies

 (iii) Competence to support, co-ordinate and supplement national policies.

  Areas where the EU cannot unify/harmonise the law. Can help
member states achieve the aims they seek to achieve but without
harmonising the area

 Lisbon is even clearer – A 3- 6 Treaty on the Functioning of the EU (TFEU)

spell out areas of competence in greater detail

(i) Exclusive competence

 In some policy areas, MSs have completely forfeited their power to

produce legislation in favour of the EC law making institutions

 Exclusivity is present in exceptional areas. (Most areas come under shared

competencies)

 Regulation of external trade under the common commercial policy

(A 133 ECT)

 Conservation of marine biological resources

 Monetary policy for Euro-zone MSs

 Lisbon ‘additions’ (these were a bit contested before Lisbon. Some

member states resisted the idea but ultimately unanimously
decided in Lisbon that these areas should be attributed areas of
exclusive competence)

 Custom union

 Competition rules for the functioning of internal market

 Conclusion of international treaties provided by a legislative

act of the Union, or necessary for the Union to exercise
internal competence.

 The Commission had long argued for more exclusive competencies (e.g.
Common Agricultural Policy (CAP), competition, regulation of internal
market, fundamental freedoms - See COM(94)533).

 In areas of exclusive competence, MSs can act, but only if empowered by

a Community act.

 So they are not areas where member states are totally cut out.
They can act as agents of the EU.

(ii) Shared competence

 Majority of policy sectors falls within the shared competence category

 If you look at the Lisbon treaty you will see a huge list

 Illustrative (not exhaustive)

  So the ECJ is not completely prevented from doing what its done in
the past and creating new competencies out of the treaties.

 To avoid conflicts ==> ‘legislative pre-emption’ principle: the actual

exercise of Community regulatory power curtails MSs national regulatory
powers in respect of the same matters. So called ‘field occupation’
principle.

 If competence has not been exercised by EC, MSs can still act, compatibly
with Treaty principles.

 If a community has not legislated on a specific area, MSs can

legislate and continue to do so as long as it does not conflict with
general principles of community law

Lisbon - Article 4 of TFEU spells out the detail

 principal areas: (a) internal market; (b) social policy (…); (c) economic,
social and territorial cohesion; (d) [CAP] excluding the conservation of
marine biological resources; (e) environment; (f) consumer protection;
(g) transport; (h) trans-European networks; (i) energy; (j) area of freedom,
security and justice; (k) common safety concerns in public health matters
(...).

 so you can see many areas we can think of are areas of shared
competence and in practice, member states are conceding more
and more powers to the EU even if they are areas of shared
competence

 In the areas of research (…), the Union shall (…) define and implement
programmes [without] Member States being prevented from exercising
theirs.

 In the areas of development cooperation and humanitarian aid, the Union

shall (…) carry out activities and conduct a common policy [without]
Member States being prevented from exercising theirs’.

(iii) Competence to support, coordinate and supplement

 areas where MSs have sought to maintain a considerable degree of

regulatory autonomy (e.g. employment policy, industrial policy, education)

 EU can only supplement their action.

 But MSs must still respect ‘horizontal principles’ imposed by the Treaties
(e.g. non-discrimination on grounds of nationality, fundamental
freedoms…)

Lisbon and competence to support and coordinate.

  Article 5(1) – MSs coordinate their economic policies within the EU; (2) The
EU shall ensure coordination of employment policies in the MSs; (3) EU
may ensure coordination of MSs social policies

 A 6 – competence to support, coordinate or supplement the actions of MSs

in areas of ‘… human health; industry; culture; tourism; education, VET,
youth and sport; civil protection; administrative cooperation’.

 Much of this was already known before Lisbon but one of the
advantages of Lisbon is that it spells out many things we knew from
the ECJ clearly in the treaty

 By and large Lisbon has brought a marginal expansion in competence

(sport, civil protection, space policy, European Public Prosecutor,…)

 In theory, all other competences remain with MSs.

 But just looking at the types of competence does not give us the full
picture

 You still have to look at the various legal bases scattered around
the treaty to get an idea of what the exact powers of the EU are

 Two main problems

 Some ‘legal bases’ are ambiguous or formulated in a broad manner

 Legal bases can confer to the EU more or less ‘intrusive’ regulatory

powers (e.g. maximum harmonization v. minimum harmonization)
in ‘shared’ areas.

a. Unfortunately, legal bases do not carry a clear label on the nature and type
of EC competence, and can be quite ambiguous.

 Some articles are framed in a broad manner (e.g. A 95 ECT, or A 308 ECT –
now A 114 and A 308 TFEU respectively)

 The EC can purposively exploit these ambiguities to extend the scope of

its action (s.c. ‘competence creep’)

 It can opportunistically choose ‘softer’ legal bases that do not require

unanimity in the Council

 Little by little there’s a steady expansion of EU competence which

according to critics has been accepted and even sanctioned by the
ECJ.

 Look at the working time directive. Back then when it was passed
the expectation was that it was going to be passed under the legal
bases of the aticle of the reaty that required unanimity of the vote
in the council of ministers. Everybody knew if they went for that, Mr
 Major would have vetoed it. The Uk wouldn’t want any such
regulation.

 So the community instead decided to pass it as a health and safety

vote. Which being more serious only required a majority vote

 The UK applied to the ECJ who said well it can be an employment

regulation but it is also a matter of health and safety so the UK lost
that challenge. They basically said whenever both bases can be
used it’s not really a problem which one you use. The European
institutions have the discretion to choose the legal base.

 Do note that now the power of Veto has been steadily diminished
since the treaty in 1992 and steadily followed and now most things
are down to a majority vote

 In some policy areas (e.g. external competence areas such as common

commercial policy) this can also be achieved by recurring to the ‘implied
powers’ theory developed by the ECJ (e.g. ERTA case, Case 22/70)

 If it has a power to regulate a specific area it must have powers to

adopt instruments that will allow it to pursue the objectives of the
specific area

b. A shared competence for what?

 In some areas EC law can only produce ‘minimum harmonisation’ (e.g.

social policy), or co-legislate along with MSs (e.g. humanitarian
intervention).

 It;s not enough to say this falls within the area of shared competence, you
have to look at ????

 So ….the devil is often in the legal base!

Judicial Control - Is the Court of Justice adequately policing the divisions of

competence?

– There are all these nice guarantees for member states sovereignty spelt
out in the treaties but who’s policing them. If an instrument is adopted
and somebody puts in a challenge, who sorts it out? In theory, the ECJ is
the institution that watches over these safeguards.
– The courts have attempted to make some thingies over legal base
– But it’s bee very liberal in its interpretation. It’s almost deferent to
European law making institutions. Very reluctant to challenge the choice
they have in picking a legal base.

 The Court’s approach is to identify the ‘predominant purpose of the

matter’ (see e.g. Waste Directive Case, C-155/91)
  The Court took a robust stance in Case C-376/98 Tobacco Advertising
Case, where it found an improper use of A 95.

 95 was about regulating internal markets. They should have

adopted the one on protection of human health. And back them,
human health would not have allowed EU institutions to produce
harmonising legislation

 So the court quashed the directive. We still talk about the case
today cause it’s really the only case

 But this is an exception to the general attitude of deference observed by

the Court.

 Chalmers there is ‘nothing in the Lisbon Treaty which would prevent the or
limit the ECJ from extending competences from the base established by
the Lisbon Treaty’ (HL Report 2009, p. 29).

 If, ex post facto (once a law has been adopted), judicial control is not the
answer could the answer be better competence monitoring ex ante facto
(i.e. before EU legislation is actually adopted)?

 See Part II of this lecture

EU –making and the democratic deficit

Learning outcomes

 Familiarise with the most important EU law making procedures (in

particular CoM acting alone, Consultation and Co-decision)

 Understand the relevance of different voting rules within the CoM (in
particular QMV, simple majority and unanimity)

 Understand the connection between these two themes and the

‘democratic deficit’ question

 Identify the main changes brought by Lisbon

Which sources are we talking about?

 Legal sources in the EC pillar

Article 249 ECT

‘In order to carry out their task and in accordance with the provisions of this
Treaty, the European Parliament acting jointly with the Council, the Council and
the Commission shall make regulations and issue directives, take decisions,
make recommendations or deliver opinions’.

 …more next week

Legislative procedures

 the ‘bad news’: in theory, pre-Lisbon, there were about 22 different

legislative procedures!!

 The good news: in practice 90% of EC primary legislation is produced

through:

 the Council of Minister deciding alone, or

 the ‘Consultation’ procedures, or

 the ‘Co-decision’ procedure (now called the ‘ordinary legislative

procedure’)

 The other important law making procedure is ‘co-operation’ (A 252 EC ).

Very important between SEA and Amsterdam, but now limited to just a
few policy matters (e.g. EMU).

Some important preliminary considerations:

 Where do we find under which law making procedures an EC instrument is

to be adopted?

 Unfortunately there isn’t as clear a categorisation as in terms of

competence

 Answer: each legal base (i.e. each treaty article) will normally define under
what legislative procedure EC law can be adopted in its policy area:

 e.g. by reference to a specific procedure (e.g. A 95 EC ‘The Council

shall, acting in accordance with the procedure referred to in A
251...’)

 or by mentioning the powers and obligations of the Council (e.g. A

94 ‘The Council shall, acting unanimously on a proposal from the
Commission and after consulting the EP…’).

Council acting alone

 There are still a number of areas in which the CoM can pass legislation, on
a proposal from the Commission, without consulting the EP (A 250(1) EC,
new A 293)

 This was the norm in 1957 but it’s now the exception. The trend is
towards a greater involvement of the EP and reduction of the veto
power.

 E.g. A 26 EC (new A 31), fixing common custom tariff duties; A 96(2)

adoption of directives to eliminate distortion within the common market;

 Under this procedure national Gvts sitting in CoM are the dominant
players both in respect of EP and of national parliaments.
  Unanimity ==> individual Gvts are at their strongest!

Consultation procedure

 Under this procedure the Council is still very strong, but EP at least has
some say

 Again though, it’s increasingly an exceptional procedure in terms of

the areas that are covered

 3-step procedure:

 Commission submits proposal to CoM

 CoM consults the EP that delivers an opinion

 CoM adopts the measure, either by QM or unanimity, depending on

the legal base requirements.

 CoM need not adopt opinion of the EP, or justify its rejection!

 But do note that it does HAVE TO WAIT for the EP to express its
opinion. So in a way the EP has a power to delay by withholding
their opinion

 Roquette Frères ‘consultation… constitutes an essential formality

disregard of which means that the measure … is void’. If measure is
amended, EP must be consulted again (Cabotage II).

 So it’s an important formality and cannot be disregarded

Co-decision procedure A 251 EC (new A 294 TFEU, the ‘ordinary legislative

procedure’)

 Most common procedure

 Under this procedure the EP is strongest, it can have the last word
on legislation.

 Majority of the legal bases now prescribed co-decision and qualified

majority vote as the procedure required.

 CoM and EP are seen as ‘co-legislators’ under this procedure

 Central features: (it contemplates 3 main readings; so a instrument can be

read by colegislators 3 times. The first to introduce; 2nd and 3rd they can
veto)

A) First Reading

 Commission proposes an instrument to CoM and EP

 EP gives an Opinion on draft instrument. If EP makes no amendments to

draft, or if these amendments are approved by CoM
  CoM can adopt the instrument (typically by QMV)

B) Second reading

 If no agreement between EP and CoM in first reading, the CoM can stick to
the Commission’s initial draft by QMV or amend it by unanimity (s.c.
‘common position’, CP)

 CP is sent back to EP for 2nd reading, and if the EP acquiesces for 3

months CP becomes law. If EP rejects, it exercises a veto power! But if EP
makes amendments (amended CP),

 the amended CP goes back to Commission and CoM. If Com approves of

amended CP, CoM can adopt amended CP by QMV, if it does not CoM can
still agree with EP by unanimity, and law is adopted.

But if CoM disagrees with amended CP, then…

C) Conciliation procedure

 27 members from CoM and 27 MEP discuss for up to 6 weeks in the

Conciliation Committee (CC) trying to agree a joint text.

 If they don’t agree JT==> no law!

 If they do decide a JT, they don’t adopt it directly, it still has to go to the
planary forum

D) Third reading

 If they agree JT, then CoM (by QMV) and EP have 6 weeks to ‘ratify’ this
agreement, that becomes EC law.

 Effectively the EP has a ‘double veto’ (second reading, or after the CC has
adopted a joint text)

 CoM also has an ‘assent’ power. It is at its strongest up until the second
reading, where it can still take decisions unanimously (each MSs has a
veto power). It become weaker in the third reading, after CC, where
decisions are taken under QMV

 Notice: in practice CC is preceded by ‘Trilogues’ (MEP, Coreper and Com

reps)

 Notice: in practice the procedure is very consensual. Between May 1999

and July 2009 EP used veto 3 times (out of 916 procedures). Threat of veto
is more important than its use!

Lisbon introduces distinction between

  Ordinary legislative procedure (co-decision) – now extended to virtually all
fields of EU law

 Special legislative procedures

 The consultation procedure (see above)

 Council alone (see above)

 The assent procedure (EP initiates or consents to legislative

proposals; in some cases Council may also have to consent) . E.g.
new article 352 TFEU (old 308 ECT), discrimination matters, budget,
…

 Enhanced cooperation (at least 9 States; not in a field where the Union has
exclusive competence; last resort; must not undermine the internal
market or economic or social cohesion; respect the rights, competences
and obligations of other Member States).

 Been going on for a while but becomes more of an issue as the EU

gets bigger. More likely that member states won’t agree on things.

 So when member states are sick of this attitude, they can change
gear. It has to do with the idea of a two-speed Europe. Some
member states can go ahead and produce their own procedures
even if some other don’t

 There are of course safeguards (see things in the brackets above)

Decision making within the CoM

 Legal base will specify if CoM can decide under QMV or unanimously (very
few areas retain unanimity as a requirement now) on a given issue.

Old QMV (pre-Lisbon)

 Each MS is awarded some votes by A 205 EC weighted according to its

size (e.g. the four big MSs have 29 each, Spain and Poland have 27…).
Smaller MSs are comparatively over-represented.

 For a vote to go through, 258 votes out of a total of 345 are needed and
on top of that, MSs can request that the QMV reached represents at least
62% of the EU population (205(3)).

 Ensures that legislation passed under this are really supported by a

majority of citizens

 This system remains in place till 2014.

 It makes ‘blocking minorities’ quite difficult (88/345 votes are needed and
38% of EU population).
  But effectively a coalition of 3 large MSs (e.g. Germany, France and Italy)
and any other MSs can block a proposal that is not palatable to them.
Whereas, by and large, the 14 smallest MSs will have to coalesce to form a
blocking minority of 88!

 Coalitions can vary according to the subject matter

New post-Lisbon system – that will apply exclusively after March 2017 – Double
Majority QMV System

 A 238 (2)(a) For a proposal to pass it needs votes from at least 55% of
Council members (notice: one member one vote! i.e. at least 15 MS) and
representing at least 65% of the EU population.

 Blocking Minority: must include at least 4 MS representing at least 35% of

the population.

 Easier to pass legislation? All ‘big 4’ agree to block legislation.

The democratic deficit question(s)

– What causes it? The fact that the commission is appointed not elected
maybe?
– We’ve seen the commission is in itself not a law making institution but it
has the power to initiate legislation
– It has a policy making decision
– In fact to some extent it produces secondary legislation but it is still not a
law making legislation the CoM and the EP can create primary legis to
confer powers to the comm. To produce secondary legislation but you can
say this happens in states as well.
– On the other hand, there’ve been some important changes and the EP
now has a big say on who the commissioners are going to be.
– What are other possible causes? Loss of veto powers. The fact a member
state can’t veto legislation means you can have a minority of European
people having a piece of legislation imposed on them. The counter-
argument however is democracy means majority rule. The more we feel
European, the more we feel what is better for European states is good for
all of us even if we sacrifice national policies.

 Competence creep

 The more the EU gains competence, the more national powers lose
competence. Note that all the extensions of competence in the
treaties are agreed unanimously by our democratically agreed
leaders.

 Law making process

 Loss of national veto

 Role of European Parliament

  Who says giving all the powers to the EP democratically elected as
it is is the solution the to the problem? The majority of the EP may
take a decision that goes against particular states still. E.g you may
have all Greek MEP’s voting against something but everyone else
votes for it so it will still pass.

 It’s a complicated matter, you have to leave some power to hte

member states sitting in the council to have a balanced process.

 Role of unelected bodies

 Commission

 European Court

 A lot has been written about hte court being judicially

activist. T or F?

 Distance and transparency

 We don’t know a lot of what is going on but it is becoming more

transparent

 Citizens’ involvement (A 24 TFEU!)

 Everything decided in Brussels and Strasbourg. But now under A 24,

if 1 million of us out of the 500 million agree on a petition we can
put it on the agenda of the European comission

 I am a sovereign state – get me out of here!

 The old question, if I don’t fancy this can I leave. We always knew
under intl. Law we could now under A50 we know they definitely
can.

Lisbon’s answer to the democratic deficit question more power to national

Parliaments (who have been the big losers in this process.)

 Article 12 CTEU National Parliaments contribute actively to the good

functioning of the Union:

(a) through being informed by the institutions of the Union and having draft
legislative acts of the Union forwarded to them …;

(b) by seeing to it that the principle of subsidiarity is respected in accordance

with the procedures provided for in the Protocol on the application of the
principles of subsidiarity and proportionality ...

(f) by taking part in the interparliamentary cooperation between national

Parliaments and with the European Parliament, …

Ex ante controls? (we saw the ex post control exercised by the ECJ and it isn’t
great so lets see if the Ex ante controls operated by the EP can be more ffective)
  The ‘yellow card’ procedure (Lisbon Protocol on Subsidiarity)

 Within 8 weeks from receipt of EU proposal, NP can cast vote. If 1/3

of the member states (1/4 in police and criminal matters) objects to
proposal, EU must review it (in practice the commission).

 The ‘orange card’

 If majority of NP finds against, Com may review. If it does not

Council and EP in first reading must cast vote on NP reasoning!
(can’t just pay lip service or ignore as com can do under yellow
card)

Problems with NP involvement

 ‘Review’?

 Yellow card; doesn’t mean much

 Coordinated enough? 27

 Efficient enough? Can all the parliaments come up with a reasoned opinion
in 8 weeks

 Devolution? What happens to the Scottish parliament? Westminister has a

say but what about subnational p’s and regional assemblies.