Jean Monnet Center at NYU School of Law

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II. The adoption of subsidiarity into EC and EU law

Seeking definition: legal and political dimensions

This paper has as its central subject the notion of subsidiarity within the European Union, and seeks to explore the set of issues embodied in that concept. The legal debate on subsidiarity has concentrated, unsurprisingly, on an analysis of the relevant textual provisions, although there has also been a broader if less focused political debate on the meaning and significance of this concept. [6] A widely shared view amongst lawyers has been that the impact of the subsidiarity principle on EU legislative policy and on the conduct of the decision-making institutions is likely to be slight, given the malleability of the provisions outlined in the Treaty, the difficulty of ensuring compliance even if agreement on the meaning of these provisions were to be reached, and the improbability of judicial review playing any significant role in this respect. Others, however, have considered whether the more general symbolic and political significance of the principle reflects a potentially important change in political and legal culture and suggests a move away from the centralising tendencies of the EU in the past. [7] In this paper, both the legal and the broader political dimensions of the subsidiarity debate will be addressed, in an attempt to appraise the overall significance of the ideas expressed by this concept within the EU process. The question whether the introduction of subsidiarity as a formal norm of EU law has made any concrete difference is not an easy one to address, given the difficulty of identifying or imputing such causal impact. [8] Examining the role of subsidiarity as a procedural norm, [9] however, it will be suggested that one of its significant legal functions is the imposition of a certain onus of justification - a kind of public reason requirement - on the various EU institutions when they act. It is important however that this quite specific and legalistic conception of subsidiarity is understood and situated within the more general framework of the changing EU polity and within the wider international context also.

Further, although the legal articulation of subsidiarity within the EC Treaty and its protocols focuses on the respective roles and competences of the Community and the Member States only, and on the Community legislative institutions rather than on its judicial branches, the significance of the principle and the ideas it represents are, arguably, not so limited in practice. There are two aspects to this argument. The first is that although the legal expression of subsidiarity is rather narrow, in that it purports to apply only to the sphere of so-called non-exclusive competence, and only in relation to the division of powers between the Community and Member State levels, its potential relevance and influence in practice is not confined by these legal limits. The ambiguity inherent in the notion of exclusive competence, the wider reality of institutional practice, and the conflation of the notions of subsidiarity and proportionality in the protocol attached by the Treaty of Amsterdam, all suggest a role for and usage of the subsidiarity concept which is more widespread in practice and which transcends the formal boundaries established by the primary legal formulation in Article 5 (formerly 3b) EC. If the use made of the subsidiarity concept in political debate, in inter-institutional dialogue, in litigation by a range of parties, and in various Community policy documents and legal instruments is examined, it is possible to claim a more general significance for the concept. The second aspect, as I have argued elsewhere, [10] is that the reasons for the introduction of subsidiarity as a formal norm of EU law, reasons which include the fear of excessive centralisation and of inexorable increase in Community action and influence at the expense of other and "lesser" political units, are not necessarily limited in their application to the European legislative institutions. They may be equally relevant to any of the policy actors -including the European Court - which are capable of extending and enhancing the reach and influence of Community law.

One of the difficulties in discussing the meaning and significance of subsidiarity within the EU is that, while it has generated much contention, debate and a great many pages of legal and political analysis, there is a general consensus on the fact that it is characterised as a concept by a high degree of fluidity and vagueness. This is not, however, a reason for dismissing or underestimating the significance of the concept. European law has, as every EC lawyer knows, a rich tradition of evolving through the aid of such "weaselwords", in the sense of terms which are ambiguous and open, and which are even chosen for these very characteristics. Many other examples can be given of terms which are highly significant within the EU legal and political context, but which remain nonetheless or even deliberately uncertain in scope and meaning: ever closer union, exclusive competence, the internal market, and the acquis communautaire , to name but a few. Political bargains which may be arduously negotiated between parties with very different priorities and aims are frequently encapsulated in language which is not only open to differing interpretations, as all language is, but which is specifically chosen to mediate between very different understandings and conceptions of the issue under discussion. Such compromises have been a key feature of EU law and policy-making over the years, appearing not only in secondary legislation and in softer forms of law, but also in key constitutional texts and treaty amendments. That language, of course, in no sense remains the 'property' of, or within the control of the negotiators or the drafters, but is interpreted, used and extended by the various actors who purport to be governed by such texts: including the EU institutions, the Commission, Council and Court, the national courts and national political and private actors. The meanings which emerge from this process of interpretation and usage may alter the nature of the bargain which was broadly thought to have been agreed when that language was chosen, and may crystallise into something less fluid and more concrete than that which first appeared to be the case. The Commission, for example, has given various definitions of exclusive competence, the acquis communautaire and the internal market sphere in its communications. And although these are not themselves legally binding, and it is formally speaking the Court of Justice which has ultimate interpretative authority to determine the legal scope of these terms, it is unquestionable that the meanings used, attributed and acted upon by other actors, including the Commission, have influence in practice.

This process of compromise over a contested term has been clearly evident in the context of the subsidiarity principle, which, it has often been pointed out, signified different things to the different actors involved in negotiating the Treaty on European Union in which it first appeared in a general legal form. Yet despite predictions as to its meaninglessness and vacuity, the term has thrived and spread within EC and EU law discourse, and subsidiarity has arguably developed into a more defined, albeit still vigorously contested notion. Much of EU constitutional law has been taken up with the search for ways of resolving the tensions and balancing the interests of integration and differentiation, of harmonisation and diversity, of centralisation and localisation or devolution. The notion of subsidiarity can be seen as yet another conceptual space in which this balance can be negotiated, as a language through which the ongoing debate is channelled.

It is undeniable that the legal articulation of subsidiarity within the EC Treaty, and to some extent its elaboration and linkage with the proportionality principle in the Protocol added by the Treaty of Amsterdam, is focused principally on the relationship between the Member State level of government and the EC level and suggests a degree of closure in this respect. However, it is also clear that the invocation of subsidiarity both as a rhetorical device to legitimate certain institutional practices and more instrumentally in explaining certain legislative and policy choices, or in the use of softer more 'flexible' forms of law, [11] or the practice of involving actors at different subnational [12] and transnational [13] levels, or the invocation of the principle in litigation (eg the argument of the applicants in the CFI social partners case [14]) give it a broader significance in practice. Further, the more diffuse notion of decision-making which takes place "as closely as possible to the citizen", which appears elsewhere, albeit in the introductory general provisions of the Treaty on European Union rather than in the more clearly justiciable and 'harder' EC Treaty provisions, implies that EU law is concerned not only with ensuring appropriate action at the level of the Member States, but also at any level which brings decision-making in some way closer to those who are affected. Thus even if the primary legal discourse of subsidiarity is focused on the issue of resolving questions of Community-Member State action, it is also clear that within the EU, law-making power is exercised and decisions are taken by an array of actors and institutions, both public and private, across the range of policy areas covered by EC and EU law. Bodies such as the standardization committees, the social partners, the national central banks, association councils, to name but a few, all play a relatively institutionalised role in the process of EU law- and policy-making. The discussion below will attempt to identify not only the scope, use and possible impact of the narrower legal-textual formulation of the subsidiarity principle, but also some of the effects of the wider usage of this concept to explain, legitimate and further other practices and the involvement of other actors and bodies within EU law and policy.

Popular alienation and democratic concerns

One consequence of the increase in the number of international and transnational organisations and institutions (such as the EU, the World Trade Organisation, the United Nations, and NATO) which effectively govern many aspects of economic and political life along with the low profile or opacity of some of the other policy-making entities outside of the realm of high politics (such as the various transnational standard-setting and regulatory bodies) is an increase in the distance and the degree of alienation of individuals from the processes of governance affecting their lives. The traditional structures and processes of the democratic nation state, and the broadly shared cultural and social context within which they have operated have, in the past, enabled domestic problems of alienation and disaffection to be relatively contained and mediated within those internal structures and processes. The internationalisation of economic and political activity, however, has not been accompanied by the development or emergence of a transnational political and social community in any real sense, even if a number of relatively successful sectoral transnational alliances and networks have been established in particular areas. It has been pointed out that "people are less mobile than money, goods or ideas; in a sense they remain 'nationalized', dependent on passports, visas, and residence and labour qualifications" and that the EU nation states remain the crucial locus of political legitimacy and democratic accountability: "national-level politics and citizen identification remain compelling". [15] In more familiar language, not only the establishment and growth of the EU with its dominant single-market core, but also the process of economic globalisation more generally has resulted in the emergence of an expanding and strengthened "market without state", [16] with all of the resulting problems of democracy and legitimacy which that development suggests. Political communities remain largely located at the national and subnational level, even while an increasing number of the relevant decisions and policies which concern them directly are made outside the structures and processes of that political community. It was partly a combination of such national concerns over the loss of political authority at Member State level, over the negative impact on domestic political life of the perceived degree of popular alienation from and opposition to the EU, and the lack of an adequate political community at EU level, which influenced the decision to introduce subsidiarity as a formal norm into the EC Treaty in 1992. Some of the reasons why these concerns led, at the particular time they did, to the concrete step of incorporating it as a legal principle have been suggested by those who have analysed the processes of Treaty-making and bargaining represented by the Intergovernmental Conferences within the EU context. The aim of the current discussion instead is to question and consider now, six years after its introduction, what the implications and outcome of that decision have been for the EU.

The dual legal expression of subsidiarity at Maastricht: Article 5 (3b) EC and Article 1 (A) TEU

Following what was described at the time as an ultimately unstable compromise influenced by at least three different ideological sources - conservative British concerns about national sovereignty and the loss of state control, Christian Democratic/Catholic social philosophy concerning the importance of allowing lower units of authority to achieve their own ends, and German regional politics based on the constitutionally protected competences of the Länder - Article 5 (formerly 3b) was inserted into the EC Treaty. [17] The argument of Van Kersbergen and Verbeek was that these different and actually conflicting influences doomed the subsidiarity principle to a short existence. They took the view that the principle may have been a tool to facilitate compromise at a difficult moment in the IGC process, but that it failed to provide any real criterion for specifying which competences should be exercised at which level and simply postponed political confrontation. One of the arguments of this paper is that the subsidiarity principle in fact can not only be seen to have survived these conflicts of interest, but also that the language and 'culture' of subsidiarity can increasingly be seen reflected in different ways throughout the EC law and policy process. This does not amount to a claim that the formal incorporation of a legal principle into the Treaty has had demonstrable causal effects, but rather that in a reflexive way, the changing political and legal culture within the Community and Union was both embodied in and contributed to by this formal constitutional step. If it fails to provide "a real substantive criterion" for delimiting competences and the exercise of power, this is not necessarily because the language of subsidiarity or of Article 5 (3b) is inherently flawed, but rather because the set of questions underlying the decision as to which forum or level of authority is appropriate to decide on particular policy issues is many-faceted, complex and not readily reducible to an operative legal formula. Equally, the failure to provide a clear or objective legal criterion does not necessarily mean that the range of concerns underlying the introduction of the principle of subsidiarity have been without legal and political impact within EU policy-making.

Much has been said about the different versions or expressions of subsidiarity to be found in Article 1 (previously A) of the Treaty on European Union and in Article 5 (previously 3b) of the EC Treaty. [18] While the latter, which is the formally justiciable expression of the principle, refers only to the exercise of power on the part of the Community institutions or the Member States (reflecting the UK's national sovereignty-inspired view), the former, which is in a part of the Treaty on European Union over which the Court of Justice was not given interpretative authority, speaks of decisions which are to be taken "as closely as possible" to the citizen (reflecting aspects of the Christian Democrat philosophy including respect for smaller units of government and the position of the individual). This broader conception of subsidiarity - which has variously been termed democratic or full-blown [19] subsidiarity - is also reflected in the recent declarations made by the German, Austrian and Belgian governments at the Intergovernmental Conference on the Treaty of Amsterdam. [20] Further, the formal non-justiciability of parts of the Treaty on European Union does not necessarily mean they will be without practical significance nor that they cannot be attributed legal effects by the Court. The ECJ has not refrained in the past from drawing on non-justiciable provisions of the TEU [21] (and particularly not where there is a potential overlap with important justiciable parts of the 'first pillar' as in the Airport Visas case [22]) and with the increasing mixity and linkage between the Union and Community pillars, the distinctions in legal influence and effectiveness of the respective provisions are likely to become increasingly blurred.

It has been argued also that there is a necessary relationship between the narrower legal formulation of subsidiarity in Article 5 (3b) and the democratic expression of subsidiarity in Article 1 (A), given that the general principle in Article 1 on closeness to the citizen purports to govern the Union as a whole, including the Community, so that the more precise criterion in the EC Treaty must be interpreted within the context of that general principle in the TEU, with its preference for lower-level decision-making. This touches on what has been referred to in the US as the distinction between democratic subsidiarity and executive subsidiarity, each conception reflecting a different view about the aims and purposes of federalism. [23] From the point of view of democratic federalism (or what we might in the EU context call democratic subsidiarity) it could be said that the aim of an appropriate distribution of and regulation of the exercise of power between levels of government is the protection of citizens' rights, rather than the protection of executive prerogatives. And certainly in the EU context, the rhetoric of citizens' rights and closeness to the citizen is regularly invoked, although what appears in the primary legal text is the executive version, with subsidiarity as a principle appearing to protect Member State powers against encroachment by the Community organs rather than to protect individual rights and interests in the making of policy.

It is Article 5 (formerly 3b) EC which contains what might be called the hard legal core of subsidiarity - the binding, enforceable and justiciable expression of the principle within primary EC law. This article is a three-part provision containing first, an express articulation of the limited competence of the Community, secondly a statement of the subsidiarity idea proper, and finally an expression of the principle of proportionality which was already familiar within the EC legal system as a constitutional and administrative principle. However, despite this provision - by comparison with the "softer" formulation in Article 1 (formerly A) TEU - being the clear legal core of subsidiarity, it is evident that each part of Article 5 (ex 3b) is characterised by a substantial degree of ambiguity and openendedness.

Discovering the objectives of the Community

The first part of the Article sets out the familiar principle of limited Community competence, declaring that

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

It is of course apparent to any EC lawyer that not only are the limits of the Communitys conferred powers very difficult to specify with any degree of certainty, but also that there is no agreement even as to the objectives which can be said to be assigned to the Community. Article 5 does not attempt to clarify these issues, nor to articulate any more precisely what the scope of the Community's conferred competence is, whether there are areas over which the Community has sole competence to the exclusion of Member State action, what the areas are in which it shares competence with the Member States, nor whether there are areas in which it simply lacks competence. It was evidently decided - in particular leading up to the signing of the Amsterdam Treaty in 1997, since this was one of the possibilities mooted during the preceding Intergovernmental Conference - not to attempt to include an express list of competences in the EC Treaty. Although this solution has been adopted within other federal constitutions, such as Germanys, the exact division of powers and competences at EU level has, to date, been left to be determined rather more fluidly, by a mixture of action and initiative on the part of the relevant Community organs which can then be challenged during the political process or ultimately before the Court of Justice if there is opposition. [24]

It needs no reminder that the terms of the EC and EU Treaties remain very general and open-ended, that the nature of the powers conferred are often broad and imprecise, and that there are few - if indeed any - absolute exclusions of Community competence from a general policy sphere. All that can be said is that there are some areas of policy which are more clearly and more expressly within the remit of the EC, and others which are at best only marginally or tangentially so. This can be seen in some of the inter-institutional debates over the scope of Community competence in the more recently added and so-called flanking or supplementary policies, such as those of education, culture, public health, and energy. The European Parliament for example, in its resolution on a number of the Commissions reports on subsidiarity, expressed its concern over the fact that over a two-year period, 1994-1996 "questions relating to subsidiarity were systematically raised in relation to initiatives taken under new policies, in particular in the fields of culture, the audiovisual sector, energy, research, the protection of health, consumers and the environment", and felt that this showed a danger of weakening Community law and the acquis communautaire .[25] Yet these are clearly areas in which others - and particularly various national ministers represented in the sectoral Council meetings - feel that the principle of subsidiarity should have a strong role in restraining any Community zeal for centralised action.

On the second point raised by this first sentence of Article 5 (ex 3b), namely what the objectives assigned by the Treaty to the Community are, there is considerable disagreement, despite the articulation of a list of objectives in Article 2 EC and a list of activities in Article 3, over what exactly these objectives comprise. A recent example of this confusion is to be found in the area of human rights, more specifically over the question whether the Community has competence to take action under Article 308 (formerly 235) of the EC Treaty to promote or protect human rights. What Article 308 requires, in order to serve as a legal basis for action, is that there be an objective of the Community which is necessary to attain in the course of operation of the common market, and a lack of adequate power granted under the Treaty to attain this objective. However, the Court of Justice's failure to state one way or another, in Opinion 2/94 on Accession of the EC to the ECHR ,[26] whether or not protection of human rights was a Community objective, [27] has led to lively academic debate on this point. [28] It could be argued - by analogy with Directive 76/207 on equal treatment for men and women, [29] which was adopted under Article 308 (ex 235) EC by asserting that equality between men and women was an objective of the Community even where that broad objective was not expressed in the Treaty itself at the time, but only the more limited equal pay principle in Article 141 (Article 119 at the time of adoption of the Directive) - that protection for human rights is, as reflected more specifically in the development policy provisions of Article 177 (previously Article 130u) EC and more generally in the umbrella provision of Article 6 (formerly Article F) TEU, an objective of the Community. But it would also be possible to make an argument that this is not so, and that while it is a condition for the lawfulness of other Community action, protection for human rights has not in itself acquired the status of an independent, positive Community objective, but remains primarily within the sphere of competence of the Member States. This lengthy example is given only to illustrate the point that the first part of Article 5 (ex 3b) on the limited, attributed competence of the Community to achieve its "objectives" raises as many questions as it answers, and provides little guide to the boundaries of the Community's powers of action.

The formal scope of subsidiarity: identifying 'non-exclusive' competence

The second part of the Article is a more complex section which focuses specifically on the subsidiarity concept, and contains a number of different requirements:

In areas which do not fall within its exclusive competence, the Community shall take action, in accordance with the principle of subsidiarity, only if and in so far as the objectives of the proposed action cannot be sufficiently achieved by the Member States and can therefore, by reason of the scale or effects of the proposed action, be better achieved by the Community.

One feature of this provision which is immediately apparent is that the sense of subsidiarity elaborated here is not the broader idea of "closeness to the citizen", nor one which takes in the 'upwards' perspective of levels and sites of authority outside and beyond the EC/EU. It does not reflect the philosophy of allowing smaller units to define and achieve their own ends, and refers only to two levels of authority: that of the nation state and that of the Community. The provision first expresses a minimum notion of effectiveness or adequacy, in the sense of whether an objective can be sufficiently achieved by Member States acting alone. If the objective cannot sufficiently be achieved by the Member States acting individually, then the action would presumably not be effective. Secondly the provision expresses a less minimal and more relative notion of effectiveness (which is to be read cumulatively with the first), in the sense of how much better the objectives of that action can be achieved at the Community level. The criteria for measuring how much better they can be achieved are described in terms of outcome only - by reference to the "scale or effects" of an action - rather than by reference to the nature of the decision-making process or to any other criteria of appropriateness. In other words, the only levels or fora of decision-making contemplated by this paragraph are the Member State and the Community level, and the only criterion given for determining which level is appropriate is one of outcome or effect, rather than process.

A second key feature of this paragraph, which lays down the legal field of application of the subsidiarity principle, is that the question whether action cannot be effectively adopted by the Member States and can be better achieved by the Community, is made relevant only when the area is not one over which the Community has exclusive competence. Combining this with the first paragraph of Article 5 (ex 3b), it seems clear then that subsidiarity has no formal legal relevance either when an area is altogether outside the Communitys competence and within the competence of the Member States, or when the area is outside the Member States' competence altogether and falls within the exclusive competence of the Community. This appears to confine the compulsory scope of application of the subsidiarity principle in Article 5 (3b) to those policy areas in which the Community and the Member States share competence, in which each potentially has the power to take action. This is why it is said that subsidiarity is not about determining or defining the competences of the Community, but instead that it purports only to provide some kind of guide to the exercise of the Community's existing powers (whatever they may be), and that as a principle it regulates only the exercise of those powers in the policy areas which the Community shares with the Member States. [30]

However, it was seen above in examining the first paragraph of the Article which concerns the supposed sphere of exclusive Member State competence in which the Community has no power to act, that this is a very difficult, if not impossible sphere to define in practice. Not only is it extremely difficult to delimit the actual objectives of the Community by reference to the Treaties, but even when it seems unlikely that the Community could have legislative competence to intervene in a particular policy sphere - e.g. such as to regulate the provision of abortion, or to provide for the conditions in domestic jails - it is rarely impossible to envisage a situation in which such policy areas could fall to some degree within the Community's regulatory remit. The Grogan case [31] demonstrated how a slight variation in factual circumstances could bring the cross-border provision of information on abortion within the scope of the Treaty provisions on the free movement of services, and it requires only a small step further to imagine how a case for minimum-level Community legislation on such information provision could be made out. And even in relation to the more unlikely issue of prison conditions, the treatment in the jails of another Member State of EU nationals whose Community rights of free movement within that state have been restricted could conceivably fall within the scope of EC law, [32] and looking to possible future developments, the provisions in the new post-Amsterdam EC Treaty title allow for more systematic Community action in the field of police and judicial co-operation in criminal matters. In other words, it is no longer possible to say with any certainty that an area of policy falls entirely outside the sphere of Community competence, [33] and therefore that the principle of subsidiarity has no necessary relevance to action in that policy field. This is not by any means an argument for unlimited Community competence. Rather it is an acknowledgement of something that is increasingly hard to deny: that there are in fact no clear boundaries to the Community's potential competence and that any formal legalistic boundaries we may try to erect will be constantly changing and shifting; and that it would be more realistic and more sensible to consider openly the cluster of 'appropriateness' issues which underlie the subsidiarity question whenever action is needed in an area in which either the Member States or the Community may have the capacity or the desire to act.

It is equally arguable that the second legal limit on the formal scope of application of the subsidiarity principle, in other words its apparent non-application to those areas which are said to be exclusively within the competence of the Community, is a notional limit only. The debate over the meaning of "exclusive" Community competence has been lively but entirely inconclusive. [34] While the Commission, in its 1992 report and communication on subsidiarity expressed fairly clear views about what was within the scope of exclusive Community competence - declaring that the implementation of the four freedoms of movement "lie at the very core of the Community's exclusive powers", [35] this can readily be understood as an inevitable attempt by the Commission to protect a large swathe of Community policy-making from subsidiarity-inspired challenges. The Commission has argued that when the Community is under a duty to act and has been given the responsibility to take action in a particular field, it has exclusive competence in that sphere, which includes not only the free movement core of the internal market, but also the common commercial policy, agriculture, competition, transport and fisheries conservation. No sooner is this list considered, however, than it is apparent that these policy areas cannot be entirely outside the scope of Member State competence. The regulation of banking, for example, is undoubtedly of central relevance to ensuring the free movement of services and freedom of establishment within the Community, but this is equally undoubtedly an area in which both the Member States and the Community share competence. The same can be said of countless other apparently core "internal market" issues. What is clear is that once Community action has been taken on a given matter, the Member States are prohibited from acting on that very same issue, and that if they do, the principle of supremacy should ensure that the Community measure takes priority. Further, if the Member States do adopt action on that issue or on a related issue, they must make sure (as they are required to by the principle of loyal co-operation in Article 10 -formerly Article 5 - EC) that their measures are in conformity with Treaty obligations more generally and do not jeopardise any other Community policies. The notion of pre-emption - that once the Community has acted within a sphere of supposedly exclusive competence, the Member States can no longer act unilaterally within that field - is increasingly difficult to apply and is problematic as a conceptual tool for understanding the respective spheres of action of Community and Member States. [36] However, it is not at all clear what, if anything, this notion of exclusive competence adds to the principles of supremacy and the principle of loyal co-operation. Further, we find that in practice there are numerous instances of 'subsidiarity clauses' or subsidiarity-type reasoning (even the express term is not used) in legislative measures which fall within core areas of Community competence - and which the Commission certainly considers to be spheres of exclusive Community policy, which indicates that, whatever the formal legal position may be, the legislative bodies do not necessarily treat the subsidiarity question as being irrelevant to decision-making within these spheres.

Indeed, the argument of this paper is that, just as in the case of the notion of an area of exclusive Member State competence, the idea of an area of exclusive Community competence is a confused and uncertain one which ultimately adds little to any attempt to understand or operationalise the subsidiarity principle. It can of course be argued that the closer a particular issue is to an area of policy which is traditionally at the core of national sovereignty and far removed from the original express aims of the Community, or the closer it is to the core common market goals of the Community, the less room there is likely to be for serious or prolonged consideration of the subsidiarity question - i.e. the question which level of decision-making would be more appropriate for action. There are other issues, too, such as many of those within the scope of the External Commercial Policy, which are closer to the core of the Community's objectives and which allow little room for Member State action. [37] But to isolate broad issues, groups of issues, or general policy areas, and to categorise them as belonging exclusively to the sphere of Member State action or exclusively to the sphere of Community action, is ultimately unrealistic and simply avoids the set of questions (those which underlie the subsidiarity inquiry) which may need to be asked about the appropriate level and forum for action. The relevance of the subsidiarity inquiry cannot be excluded by defining general policy areas like "agriculture", "free movement of goods" and "competition" on the one hand, or areas like "crime", "family law" and "welfare policy" on the other hand, and deeming them to be either for the Community alone or for the Member States alone to decide on. Rather the answer will depend on the precise kind of policy issue in question, and it may well be that certain issues which may affect the free movement of goods (such as the regulation or banning of soft drugs) are most appropriately decided by Member States acting alone, whereas certain issues relating to the family (such as the treatment of non-national spouses or children) need to be regulated at Community level.

In other words, despite their detailed legal provisions, the first two paragraphs of Article 5 (formerly 3b) EC do not provide an objective criterion or a useful standard for deciding on the appropriate levels of decision-making. It is extremely difficult, and, it is argued here, ultimately not helpful in addressing the issues and questions which underlie the subsidiarity concept, to declare certain areas to be areas within exclusive Community competence and others to be areas within exclusive Member State competence. Particular policy issues need to be dealt with as they arise, and the question whether a particular issue should be decided at national level or at Community level - or indeed at any other level of political authority, regional, transnational, local or international - will best be addressed individually on their own merits rather than by categorisation in advance within broad policy spheres.

Integrating proportionality

It is not only the first and second paragraphs of the Article which are interconnected in this way, however. The third part of Article 5 (ex 3b) sets out what is known as the proportionality principle, which has generally been perceived as something quite distinct from the principle of limited competence in paragraph one or the principle of subsidiarity 'proper' in paragraph two. The traditional understanding has been that paragraph one concerns the existence or non-existence of Community competence in the first instance, that paragraph two concerns whether or not power should be exercised at Community or Member State level once it is established that they do fact share competence in a particular area, and that paragraph three concerns the way in which that power should be exercised once the decision is taken by the Community to act. This third part, the proportionality principle, seems applicable to all Community action and does not appear to be restricted by the notion of non-exclusive competence in part two. Part three of the article reads as follows:

Any action by the Community shall not go beyond what is necessary to achieve the objectives of this Treaty.

Taking this together with the rest of the article, however, it seems difficult to separate the question in the second paragraph - i.e. whether a matter is better dealt with by the Community than the Member States- from the proportionality question here. In other words, although the proportionality question purports to deal with the means by which an objective is pursued, and the second part ("subsidiarity proper") with whether the objective is best pursued by Community action or by Member State action in the first place, it would often be difficult to answer the second question without knowing what kind of action is envisaged. That is to say, the objective of an action and the means to achieve that action cannot so readily be separated. This goes, once again, to the degree of specificity with which we articulate a particular policy issue. We could speak generally of an internal market action, or we could speak more precisely of action in the field of promoting the free movement of services and freedom of establishment, or more precisely again of action regulating the conduct of credit institutions in the various Member States, or even more precisely still of action to ensure the protection of deposit-holders in credit institutions across Europe, or finally we could speak of requiring the compulsory participation by all credit institutions in guarantee schemes providing a minimum level of cover for deposit-holders. Which of these is to be seen as an objective, and which as an action taken in order to achieve an objective? The more precisely we define an objective, the more it can also be described as the action taken to achieve a broader objective. And the more broadly a Treaty objective is defined, the more the action necessary to achieve that objective will itself be broadly defined. It is evident that each of the three parts of Article 5 (ex 3), the principle of limited competence, the principle of subsidiarity and the principle of proportionality are all centred around the notion of the Community's, or the Treaty's, objectives. The fundamental open-endedness of this notion both connects the three ideas - the boundaries of the Community's power to act, the circumstances in which it should exercise its power to act, and the way in which it should exercise that power - and at the same time exposes the fluidity of the legal criteria for determining when and to what extent Community level action is appropriate in a given situation.

[6] In addition to the vast general literature on subsidiarity and the EU, there are many analyses of subsidiarity in relation to specific policy areas, most obviously in the environmental sphere such as W. Wils, "Subsidiarity and EC Environmental Policy: Taking People's Concerns Seriously", [1994] JEL 85, G. Cross "Subsidiarity and the Environment" (1995) 15 YBEL 107, Brinkhorst "Subsidiarity and EC Environmental Policy: a Panacea or a Pandora's Box?" (1993) 2 EELR 17 and T. Jeppesen "Subsidiarity: A Janus Head?" European Studies Discussion Paper No. 11/95, Odense University, but also in many other sectors: e.g. "L'applicabilité du Protocol social à l'art 118a du Traité" (CEEP, Bruxelles, Opinion of 6 January 1995), P. Santos "Industrial Policy, Subsidiarity and Cohesion" (ECU, Bruxelles, no. 30 1995/1) pp 54-58, A. Cox "Derogation, Subsidiarity and the Single Market" (1994) 32 JCMS 127, S. Smith "Subsidiarity and the Co-ordination of Indirect Taxes in the European Community" (1993) 9 Oxford Review of Economic Policy 67, P Spicker "The Principle of Subsidiarity and the Social Policy of the European Community" (1991) Journal of European Social Policy 3, J. Sun & J. Pelkmans "Why Liberalisation needs Centralisation: Subsidiarity and EU Telecoms" (1995) 18 World Economy 635, K. Lenaerts "Subsidiarity and Community Competence in the field of Education" (1994) 1 Columbia Journal of European Law 1.

[7] I. Maher "Legislative Review by the EC Commission: Revision without Radicalism" in J Shaw and G. More, (eds) New Legal Dynamics of European Union (Oxford: Clarendon Press, 1995).

[8] See the discussion by A. Estella de Noriega The principle of subsidiarity and its critique (Florence : EUI, Ph.D., 1997.)

[9] See G.. Berman "Taking Subsidiarity Seriously" (1994) 94 Columbia LR 332, on the importance of subsidiarity as a procedural principle rather than as a substantive jurisdictional principle.

[10] "The Principle of Subsidiarity and the Court of Justice as an Institutional Actor" (1998) 36 JCMS 217.

[11] See for example the Commission's reference, in its Better Lawmaking 1998 Report COM(98)715 to its use of a Recommendation rather than a Directive on the settling of consumer disputes.

[12] See e.g. in the recently adopted Water Quality Directive 98/83, where the fourth recital refers to the need for most decisions on monitoring, analysis and redress to be taken "at a local, regional or national level" in accordance with the principle of subsidiarity. See also the principle of partnership in the operation of the Community's structural funds: most recently in the proposed Regulation COM(98)131, and more generally see J. Scott "Law, Legitimacy and EC Governance: Prospects for 'Partnership' " (1998) 36 JCMS 175. The Economic and Social Committee also referred, in its Opinion on the Commission's Communication on the Social Policy Agreement, to the involvement of the social partners rather than other national authorities in decision-making as an example of "horizontal" subsidiarity: OJ 1994 C 397/40. Further, the Commission itself in its White Paper on European Social Policy COM(94)333 stated that the key to social progress, "through a cooperative partnership between the EU, the Member States, the social partners and European citizens... must be a positive and active conception of subsidiarity".

[13] See e.g. the proposed Decision to adopt a multiannual Community action plan on promoting safer use of the Internet by combating illegal and harmful content on Global networks, [1998] OJ C 48/8, and C 360/83. The recitals refer not only to the relevance of the principle of subsidiarity on account of the transnational character of the issues at stake, but also to the necessity "to engage in cooperation activities with international organisations and third countries...given the global character of the problems encountered on the Internet, requiring global solutions".

[14] T-135/96 UEAPME v Council [1998] ECR II-2335.

[15] P. Hirst and Thompson, ibid. n 2.

[16] C. Joerges "Markt ohne Staat? Die Wirtschaftsverfassung der Gemeinschaft und die Renaissance der regulativen Politik" EUI Working Papers in Law 91/15, and "The Market without a State? States without Markets? Two Essays on the Law of the European Economy" EUI Working Paper Law 1/96

[17] K.Van Kersbergen and B.Verbeek "The Politics of Subsidiarity in the European Union" (1994) 32 J.C.M.S. 215

[18] J. Peterson "Subsidiarity: A definition to suit any vision?" (1994) 47 Parliamentary Affairs 116, A.Scott, J. Peterson and D. Millar "Subsidiarity: A 'Europe of the Regions' v. The British Constitution?" (1994) 32 JCMS 47

[19] See e.g. G. Cross "Subsidiarity and the Environment" (1995) 15 YBEL 107.

[20] See 1997 OJ C 340/143: "It is taken for granted by the German, Austrian and Belgian governments that action by the European Community in accordance with the principle of subsidiarity not only concerns the Member States but also their entities to the extent that they have their own law-making powers conferred on them under national constitutional law".

[21] For example, the ECJ cited the former Article F TEU (now Article 6, which has expressly been rendered justiciable by the amendments made by the Treaty of Amsterdam) in its Opinion 2/94 on accession of the EC to the ECHR [1996] ECR I-1759,and in cases C-473/95 Commission v Luxembourg [1996] ECR I-3207 and C-415/93 Bosman [1995] ECR I-4921.

[22]Case C-170/96, Commission v. Council , [1998] ECR I- judgment of 18 May 1998.

[23] G. Bermann in "Taking Subsidiarity Seriously" (1994) 94 Columbia LR 332, 340-2 sets out the different values which may underlie subsidiarity, including self-determination and accountability, political liberty, preservation of identity and diversity.

[24] For examples of such challenges to Community competence, see cases 281, 283 - 285, 287/85, Germany v. Commission [1987] ECR 3203 (the non-Community workers case), and more recently the challenges to the tobacco advertising Directive made in cases C-376/98, Germany v Parliament and Council , pending before the Court of Justice and cases T-172/98, Salamander v Parliament and Council , T-175/98, Una Film v Parliament and Council , T-176/98, Alma Media Group v Parliament and Council and T-177/98, Zino Davidoff v Parliament and Council , pending before the Tribunal of First Instance. A reference under Article 234 (ex 177) EC has also been made from the English High Court in Rv Secretary of State for Health, ex parte Gallaher and Rothmans , questioning the legal basis of the same Directive.

[25] 1997 OJ C 167/34, Resolution on the Commission reports to the European Council - on the application of the subsidiarity principle in 1994 COM (94)533 entitled "Better Lawmaking"; on the application of the subsidiarity and proportionality principles, on simplification and on consolidation 1995 CSE(95)580 entitled "Better Lawmaking 1996; on the application of the subsidiarity and proportionality principles, on simplification and on consolidation CSE(96)7; on the application of the subsidiarity and proportionality principles (interim report) CSE(96)2.

[26] [1996] ECR I-1759. See also paragraphs 44-45 of the Court's ruling in case 249/96 Grant v South-West Trains [1998] ECR I-621

[27] It is possible that the Court of Justice in its Opinion wished to be seen to be responding to the warning sounded by the German Constitutional Court in paragraph 99 of its 'Maastricht' decision, (translated into English and reported in [1994] 1 CMLR 57) about the danger of Article 235 (now 308) becoming a means for effecting a petite revision of the Treaty and expanding the field of competence of the Community indefinitely.

[28] See S. Peers (1998) 35 CMLRev 539, A. Dashwood CELS Discussion Paper no. 1., P. Alston and J. Weiler Human Rights and the European Union (EUI, 1998) and "An 'Ever Closer Union' in Need of a Human Rights Policy" (1998) 9 EJIL 658 and M. Cremona "The EU and the External Dimension of Human Rights Policy" in S. Konstadinidis (ed.) EC-International Law Forum III - A People's Europe: Turning a Concept into Content (Dartmouth, 1998)

[29] [1976] OJ L39/40.

[30] N. Bernard, "The Future of European Economic Law in the Light of the Principle of Subsidiarity" (1996) 33 CMLRev 633.

[31]C-159/90 SPUC v Grogan [1991] ECR I-4685.

[32] Several situations concerning the treatment of EU nationals during criminal trials in other member states have been found to be within the scope of EC law, e.g. cases 137/84, Ministère Public v. Mutsch [1985] ECR 2681 and C-274/96, Bickel and Franz , ruling of 24 November 1998. Further, if the facts of case C-299/95, Kremzow v Austria [1997] ECR I-2629 were slightly different and the individual who was invoking Community rights had been imprisoned in another Member State in which his rights of free movement had been infringed, the situation might well have fallen within the scope of EC law.

[33] See AG La Pergola's rejection, in case C-273/97, Sirdar v Army Board and Secretary of State for Defence, Opinion of 18 May 1999, of the British government's argument that the area of defence was one which remained within the exclusive competence of the Member States.

[34] Compare the well-known difference between the strong views of A. Toth, taking a broad view of exclusive Community competence in "A Legal Analysis of Subsidiarity", and those of J. Steiner who takes a more restrained view, in "Subsidiarity under the Maastricht Treaty", in chapters 3 and 4 respectively of in D. O'Keeffe and P. Twomey (eds.), Legal Issues of the Maastricht Treaty (Wiley, 1994).

[35] See Commission Report to the European Council on the application of the Subsidiarity Principle 1994, COM(94)533 part I.A., also the Commission's Report on the subsidiarity principle 1992 (Bull 1992 no. 10, 116-126).

[36] See S. Weatherill 'Beyond Preemption? Shared Competence and Constitutional Change in the European Community' in D. O' Keeffe and P. Twomey, eds., Legal Issues of the Maastricht Treaty (Wiley, 1994) 13.

[37] Although see cases 41/76, Donckerwolcke and Schou v Procureur de la République [1976] ECR 1921 and 174/84, Bulk Oil AG v Sun International Ltd and Sun Oil Trading Co [1986] ECR 559. For a more general discussion of the move, within the sphere of external Community relations, from classic pre-emption theory and the strong assertion of exclusive competence, towards an acceptance of non-exclusive, shared competence, see M. Cremona "External Relations and External Competence: The Emergence of an Integrated Policy" in (P. Craig & G de Búrca, eds.) The Evolution of EU Law, 137.

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