Competence, Subsidiarity and Proportionality

Question 1

Art. 5 TEU

Answer 1

1. The limits of EU competences are “governed by the principle of conferral”; the use of EU competences is “governed by the principles of subsidiarity and proportionality.”
2. Conferral: EU can only act “within the limits of the competences conferred upon it by MS in the Treaties, to attain the objectives set out therein.”
3. Subsidiarity: EU can only act in areas of shared competence where “the objectives of the proposed action cannot be sufficiently achieved by the MS” and “by reason of the scale or effects of the proposed action, [are] better achieved at Union level.”
   Proportionality: the “content and form of EU action shall not exceed what is necessary to achieve the objectives of the Treaties.”

Question 2

What happens if the principles in Art. 5 are challenged?

What must the EU do in the preamble of any act?

Answer 2

If an EU act violates any of these principles, the act can be challenged as invalid before the ECJ by a MS or an individual.

In the preamble of any act the EU must explain how it satisfies these principles, but such explanations have become increasingly formulaic.

Question 3

CONFERRAL

Answer 3

The EU only holds the power conferred on it by MS in the Treaties. EU cannot generate its own powers.

Question 4

COMPETENCE

Answer 4

Three types of competence: exclusive, shared, and supporting:
• Exclusive competence: Art. 2(1) TFEU: areas in which only the EU can act. These areas are listed by Art. 3(1) TFEU customs union, competition law, monetary policy (for Member States within the Euro), conservation of marine biological resources, common commercial policy
• Shared competence: Art. 2(2) TFEU: “the MS shall exercise their competence to the extent that the Union has not exercised its competence.” In most areas the EU and MS share competence; MS legislation is subject to / limited by EU legislation in that area (e.g. consumer protection).
• Supporting competence: Art. 2(5) TFEU: EU can support / coordinate / supplement MS actions in these areas, but cannot supersede MS competence.

Question 5

COMPETENCE CREEP

Answer 5

Particularly broad Treaty provisions are dangerous in that they allow the EU an extension of their competence, allowing them to go ultra vires —i.e. effective competence control may be absent:

Question 6

Art. 352: The ‘Flexibility’ clause

Answer 6

“If an action by the Community should prove necessary to attain one of the objectives set out in the Treaties, and the Treaties have not provided the necessary powers, the Council, acting unanimously on a proposal from the Commission, and after obtaining the consent of the EP, shall adopt the appropriate measures.”

Since the objectives of the EU are very broad (Art 3 TEU) this is a functional and open-ended provision: Weiler: “it becomes virtually impossible to find an activity which could not be brought within the objectives of the Treaty.”

However, changes made by the Treaty of Lisbon means this is not such a threat of competence creep as: (i) acts under this section must be passed unanimously by the council (not QMV) and full agreement is unlikely in an enlarged EU; (ii) also requires the permission (rather than consultation) of the EP; (iii) national parliaments must be notified of EU legislation under Art. 352 subsidiarity procedure (see below).

Question 7

Art. 114: the harmonisation clause

Answer 7

Gives the EU competence to harmonise any divergent national laws if this would contribute to the establishment and functioning of the internal market. E.g. The Unfair Terms in Consumer Contracts Directive was enacted under Art 114 on the basis that there would be no internal market in consumer goods if MS could regulate consumer contracts differently.

Dangerous because the argument can be made that harmonising divergent laws in pretty much any area would contribute to the establishment / facilitation of the internal market, so Art. 114 is very broad. Can be used where divergent laws are creating obstacles to the four freedoms / distorting competition.

Question 8

The ECJ has only once struck down an EU legislative act for violating the principle of conferral:

• Tobacco Advertising [2000]:

Answer 8

o Facts: the EU enacted the Tobacco Advertising Directive under Art. 114, which meant all forms of tobacco advertising / sponsorship were banned within the EU. Germany argued: (i) directive was really aimed at public health, not the internal market, so breached conferral; (ii) the divergent national legislation on tobacco advertising did not create an obstacle to the internal market.

o ECJ: the EU has no general power to regulate the internal market —mere disparities between MS is not enough to justify EU involvement. A measure “must genuinely have as its object the improvement of the conditions for the establishment and functioning of the internal market.” If all that was required for Art. 114 to be engaged was “a mere finding of disparities between national rules” then judicial review by the ECJ would be “rendered nugatory.”

Question 9

The indication that the ECJ would take a stringent approach to policing Art. 114 for breaches of the principle of conferral has not played out in later case law, which has been much more liberal:

Swedish Match [2004]

Answer 9

• company challenged a Directive requiring MS to prohibit the marketing of chewing tobacco. ECJ: Art 114 is an adequate legal basis for the Directive.

o “A mere finding of disparities between national rules is not sufficient … it is otherwise where there are differences between the laws of the MS which are such as to obstruct the fundamental freedoms and thus have a direct effect on the functioning of the internal market.”
o “Where the conditions for recourse to Art 114 are fulfilled, the EU cannot be prevented from relying on it on the ground that public health protection is a decisive factor in the choices made”
♣ Note: generous interpretation: ECJ sees ban on snus as part of a wider regime dedicated to freeing trade in other kinds of (less harmful) products; still very permissive of legislative discretion. Worse interpretation: the ECJ’s attitude encourages broad, rather than targeted, measures —thus, the court, which is intended to police EU competences, actually serves to push them wider.

Question 10

Alliance for Natural Health [2005]:

Answer 10

• companies challenged a Directive which prohibited the marketing of some food supplements. ECJ: Art. 114 could be relied upon.

o Two key requirements for reliance on Art 114:

(i) real or potential/future obstacles to free movement due to current/future divergent national laws;
(ii) EU legislation must contribute to the elimination of those obstacles. If these requirements are satisfied, the EU cannot be prevented from relying on Art. 114 on the ground that public health is a decisive factor.

♣ Case illustrates the wide nature of interpretation — Art. 114 competence is dynamic and allows the EU to respond to actual and likely regulator practices at national level.

♣ Not enough scrutiny: ECJ relied on the Directive’s recitals / observations of EP and Council in finding that there was a threat of regulatory diversity; also refers to “substantial number of complaints from economic operators” made to Commission about variation but does not seem to have examined the substance of these complaints.

Question 11

Tobacco Advertising II [2006]

Answer 11

• Germany challenged a Directive prohibiting tobacco advertising (with some exceptions —e.g. publications aimed at professionals in tobacco trade). ECJ: Directive was valid under Art. 114.

o Recourse to Article 114 does not presuppose the existence of an actual link with free movement between the Member States in every situation covered by the measure founded on that basis.

o “What matters is that the measure adopted … must actually be intended to improve the conditions for the establishment and functioning of the internal market”

This is very expansionist: one complaint was that aspects of the Directive affected media with no connection to the cross-border market.

ECJ: no need for an ‘actual link’ in every situation covered. This is a very easy test to satisfy.

Question 12

Vodaphone [2010]:

Answer 12

• V challenged a Regulation regulating the price of roaming services. ECJ: valid:

Analysis: Where the threshold of Art. 114 is met, this can be relied on even for consumer protection purposes, where MS have residual competence.

Question 13

Inuit [2013]:

Answer 13

• two Regulations banned the sale of seal products other than those sourced from Inuit hunts; supposedly aimed at harmonising rules on trade of seal products. ECJ: valid.

o Pre-Reg there were divergent national laws on sale of seal products, resulting in fragmentation of the internal market in seal products, as traders had to adapt their practices to the different provisions in force in each Member State. The Regs could therefore rely on Art. 114 as a legal basis even though animal welfare was a decisive factor behind the Regs, as was the case in relation to consumer protection in Vodaphone.

Question 14

Weatherill commentary on Inuit

Answer 14

Regs in Inuit closed down a large part of the seal products market to release a small element of it —might be thought this was a disproportionate use of Art. 114.

However, the issue for a challenger is that the measure fits the logic of Art. 114; i.e. one bans unsafe products as part of a scheme to secure free movement of safe products.

Question 15

Summary on use of Art 114 as a legal basis for harmonisation measures

Answer 15

Art 114 does not give EU general competence to regulate the internal market. Legislation cannot be enacted if it only incidentally contributes to the internal market, however, where it does actually contribute to it —by eliminating divergent national laws which create / are likely to create an obstacle to the four freedoms / competition —then legislation under Art. 114 will be valid even though a decisive factor behind legislation was another matter (public health, consumer protection, animal welfare).

Since Tobacco Advertising I, ECJ has held all challenged Art. 114 acts to be valid. Tobacco Advertising is the exception and not the rule. ECJ will generally not strike down legislative acts for violation of the principle of conferral.

• These cases involve a conflict between national legislative autonomy and EU flexibility; the ECJ comes down strongly in favour of the latter.

Question 16

Academic commentary on conferral:

Craig

Answer 16

• while it is possible to give a positive reading to the case law (a broad reading of Art. 114 is necessary if the EU is to achieve its aim of developing / maintaining the internal market) a more accurate reading is that while Tobacco 1 was a welcome restraint on use of Art. 114 the subsequent cases have adhered to it in form but not substance, coming close to giving the EU a general power to regulate the single market where it can identify divergent national laws.

o ECJ should demand more justificatory evidence that conditions for using Art. 114 are met: they should use the Impact Assessment to look behind the legislative preamble to the actual arguments for legislation; if reasoning is inadequate, the EU should strike out legislation.

Question 17

Academic commentary on conferral:

Wetherill:

Answer 17

o Drafting guide: ECJ in Tobacco 1 effectively concocted a set of phrases which serve as a drafting guide, enabling EU legislators to formally company with the principle of conferral when using Art. 114. Swedish Match shows that the ECJ will generously find an adequate contribution to the functioning of the internal market.

o Lisbon: rejected stronger measures to secure the principle of conferral —e.g. a blacklist of areas in which the EU cannot legislate. Only Art. 352 (not 114) is included in the national parliaments’ reasoned opinions procedure, despite problems with Art. 114 —so Art. 114 remains subject only to judicial and not political control.

o EU legitimacy is threatened by the fact that the division of power between EU and MS is not reliably policed.

o Fundamental problem is the wording of Art. 114: tight controls on EU competence would prevent effective discharge of its tasks, but the broad approach of Art. 114 challenges the principle of conferral. How much is EU centralisation is worth pursuing when it will damage local autonomy?

Question 18

Academic commentary on conferral:

Wyatt

Answer 18

1. Swedish Match used Tobacco 1 to support its conclusion that a ban on a product is an appropriate means of removing obstacles to trade in the product, but Tobacco I held that a ban could not be used in this way under Art 114.
2. Swedish Match is also inconsistent with subsidiarity and leads to the conclusion that all harmonisation measures automatically satisfy subsidiarity.

Question 19

Academic commentary on conferral:

RH:

Answer 19

• given the changing political nature of the EU and the fact that it is very difficult to get a Treaty change now that there are 28 Member States, it may be desirable for Art 114 to be drafted and interpreted broadly to ensure that the EU can develop and evolve its competences in response to new political situations. Its competence is no longer realistically confined to economic issues and it is not for the ECJ to try and go backwards and restore the EU to what it used to be through limiting Art 114.

o The ECJ has itself developed the law in a way that goes beyond the EU’s competence and violates the principle of subsidiarity in the name of the internal market: e.g. in Viking and Laval seriously undermined national rules in the social field of collective action, the very area over which the original Treaty of Rome deliberately gave autonomy to Member States.

Question 20

PROPORTIONALITY

Answer 20

Proportionality is contained in Art. 5(4) TEU and regulates the EU’s use of its competence: “the content and form of Union action shall not exceed what is necessary to achieve the objects of the Treaties.”

Question 21

PROPORTIONALITY

Protocol 2

Answer 21

• Art. 2 of the protocol requires the Commission to consult widely before proposing legislation
• Art. 5: Commission is required to give a detailed statement on how draft acts satisfy proportionality and subsidiarity

NB: the early warning system of reasoned opinions from national parliaments applies only to subsidiarity, not proportionality. Weatherill criticises this as it is difficult to disintegrate the two principles.

Question 22

Lisbon expressly incorporated proportionality into the Treaties

Answer 22

it had previously been developed by the ECJ as a principle of the legality of EU acts —however, the case law on proportionality review shows that the ECJ takes a light-touch approach to proportionality review.

The intensity of this inquiry varies with the right claimed, the objective, the relative institutional competences of MS and the Commission —there is more deference to MS in policy and economics, less deference in fundamental rights and civil liberties.

Question 23

The ECJ has struck out legislative acts for failure to comply with proportionality

E.g.?

Answer 23

penalty clauses, where the ECJ is not afraid of being searching because of the effect on personal liberties and the ability to strike down parts of legislation without invalidating the act itself:

Question 24

Example case where a penalty clause was struck down for breach of proportionality:

Answer 24

Atalanta [1979]: Regulations concerning the storage of pig meat included a penalty clause imposed on individual traders for failure to comply.

ECJ: the penalty clause failed the test of proportionality “The regulation is contrary to the principle of proportionality in that it does not permit the penalty for which it provides to be made commensurate with the degree of failure to implement the obligations or with the seriousness of the breach of those obligations.”

Question 25

Bela-Muhle [1977]

Answer 25

• Regulation (aimed at reducing stocks of dried milk powder) required livestock importers to use it instead of soya at 3x the market price. ECJ: “If… a measure imposes on certain categories of persons a burden which is in excess of what is necessary… it violates the principle of proportionality.” The question is whether the need “could have been satisfied by imposing a less onerous burden” It was key that less costly measures could have been used and that the measure placed a heavy burden on certain categories of producers/consumers.

Question 26

However, the intensity of review is variable and stringent review will not take place where there are broad discretionary powers

Galileo Zaninotto v Ispettorato [1979

Answer 26

• Regulation apportioned quantities of wine for distillation among producers; applicant claimed the measure was inappropriate for improving conditions in the wine market (where there was surplus supply). ECJ: measure was not disproportionate: “the legality of a measure adopted in [common agricultural policy] can be affected only if the measure is manifestly inappropriate having regard to the objective which the competent institution is seeking to pursue.” Here the measure was not manifestly inappropriate.
o This case demonstrates the intensity of review —close to Wednesbury unreasonableness —where the EU enjoys a wide discretion on policy grounds. I.e. penalty cases don’t involve striking out EU policy, whereas to say the entire scheme here was disproportionate would have involved judicial striking out of EU policy.

Question 27

Note very few EU legislative acts or parts of legislative acts are actually held invalid on grounds of proportionality, but the following case is an example of a successful application

ABNA [2005]

Answer 27

Directive required manufacturers to disclose compounds present in agricultural feedstuffs —claimed it was a breach of proportionality because it seriously affected economic rights / interests. ECJ: struck out the article of the directive. “The Community legislature must be allowed a broad discretion in an area such as that in issue in the present case, which involves political, economic and social choices on its part, and in which it is called on to undertake complex assessments. Consequently, the legality of a measure adopted in that area can be affected only if the measure is manifestly inappropriate having regard to the objective which the competent institutions are seeking to pursue” Here it was manifestly inappropriate because it impacts seriously on economic interests of manufacturers as disclosure means their formulas could be “used as models.”

Question 28

British America Tobacco

Answer 28

the “manifestly inappropriate” standard of review will be used whenever the EU legislator exercises a broad discretion involving political, economic or social choices requiring it to make complex assessments. As a result of this low standard of review, the proportionality challenges in cases such as Swedish Match, Alliance for Natural Health and Vodaphone were all rejected based purely on statements in the Recitals to the legislation stating that the proportionality principle had been complied with.
• Reiterates Weatherill’s point above about the EU legislator using the ECJ case law as a drafting guide so as to avoid scrutiny of its proposals.

Question 29

Does proportionality function as a condition of legality?

Answer 29

Proportionality does not really function as a condition of legality of EU legislation, as it is too easy to satisfy; in many cases ECJ will simply accept legislation is proportionate based on statements in recitals.

Question 30

Davies re proportionality

Answer 30

• The German test for proportionality has four stages, it asks whether legislation: (i) has a legitimate aim; (ii) was suitable to achieve that aim; (iii) was necessary to achieve that aim; (iv) imposed a burden on the individual that was excessive in relation to the objective sought to be achieved.
• The problem is the ECJ only applies the first three limbs; not the fourth — which is the genuine proportionality test; does not refer to MS interests, only whether the measure was appropriate / necessary to achieve the EU’s objectives. It only considers proportionality from the EU’s side.
• This is flawed and the ECJ should undertake true proportionality review; should ask whether the importance of an EU measure is sufficient to justify the effects on MS / individuals.

Question 31

Two possible solutions for weak proportionality:

Answer 31

Proportionality could be incorporated in the Protocol 2 Early Warning System, below, or could be subject to more stringent judicial review by ECJ. Second option is better because proportionality review requires assessment of impact on actual individuals so better suited to ex post facto judicial review rather than ex ante political review.

Question 32

SUBSIDIARITY

Answer 32

Subsidiary is the idea that public powers should be located at the lowest tier of government where they can be exercised effectively, ensuring accountability and participation in political decision making.

Question 33

Art. 5(3) subsidiarity principle

Answer 33

i) EU will only act if the objective could not be sufficiently achieved by MS (necessity test); (ii) EU can better achieve the objective because of its scale/effects (efficiency test); (iii) measure must not go beyond what is necessary to achieve objective (proportionality)
• Test is always satisfied when divergent MS laws affect cross-border trade (e.g. BAT). Because subsidiarity positively authorises / mandates activity in such areas, it can contribute to competence creep rather than control it (i.e. it becomes a mandate for the EU to use Art. 114 competence).

Question 34

Protocol 2 Art. 2

Answer 34

Commission must consult widely before proposing legislation, taking into account the regional and local dimension of the action envisaged. The reasons why an objective can be better achieved at EU level must be “substantiated by qualitative and, wherever possible, quantitative indicators”.

Question 35

The ECJ is generally reluctant to undertake intensive review of legislation for compliance with subsidiarity

Answer 35

Deciding which political institution (EU or national legislatures) is better at performing a particular task is a fundamentally political question and goes to the heart of deep issues (e.g. what kind of EU we should have and how centralised it should be). ECJ does not have the expertise or sensitivity to answer these questions — they are not legal issues.

Question 36

Lisbon changes to subsidiarity

Answer 36

in response to the political nature of subsidiarity, Lisbon implemented provisions to strengthen political review of legislation for compliance with subsidiarity:

Question 37

Enhanced role for national parliaments: Early Warning System:

Answer 37

• Commission must pass all legislative proposals and related documents to national parliaments and national parliaments then have eight weeks to assess a proposal and to submit a reasoned opinion stating why they think the proposal violated subsidiarity. EU must consider these reasoned opinions.
o Yellow card: 1/3 national parliaments object —triggers a formal review by the Commission.
o Orange card: 50% of national parliaments object —triggers formal review by Commission and the Commission must give a reasoned opinion justifying how the proposal does in fact comply with subsidiarity; EP and Council must then consider whether it is in fact compatible. If 55% of Council members or the EP vote that the proposal is incompatible, then it will be terminated.
• The aim of the EWS is to promote dialogue between national parliaments and the EU, so there is no red card veto. It is an ex ante opportunity to raise political opinions on compliance with subsidiarity to compensate for the largely meaningless ex post facto judicial review.
• In 2014 88 reasoned opinions were submitted and it appears national parliaments are communicating horizontally with each other as well as vertically with the EU in order to assert pressure.
Could allow for more substantive judicial review: as the ECJ will have more information on which to make the necessary assessments

Question 38

ECJ Review for Compliance with Subsidiarity

Answer 38

Review for compliance with subsidiarity is incredibly light touch and legislation has never been struck down for violation of subsidiarity. As with conferral and proportionality, the EU legislature uses the ECJ case law as a drafting guide and the ECJ simply accepts legislation satisfies subsidiarity on the basis of statements in the Recitals.

Question 39

Light application of procedural requirements

Germany v Parliament (Deposit guarantee directive) [1997]:

and commentary by craig

Answer 39

• Germany argued the EP and Council had failed to properly state why a Directive’s objectives could not be sufficiently attained by MS. ECJ: the duty to give reasons did not require express reference to subsidiarity, it was enough that the reasons were implicit.
o Germany’s claim is not that subsidiarity has been infringed, but that legislature “did not set out the grounds to substantiate the compatibility of its action with that principle”

The reasons given in the preamble/Recitals to the Directive on compliance with subsidiarity were very minimal, but the ECJ effectively held that a statement of the EU legislator’s view that the legislation complies with subsidiarity is enough.

Craig: dangerous decision — forcing the EU to give more extensive reasons and evidence could facilitate meaning substantive judicial review, without driving judicial review towards substitution of judgment.

Question 40

Case law —light application of substantive requirements

Answer 40

• Ex. p. British American Tobacco [2002]: Directive harmonising rules on marketing of cigarettes was valid under Art. 114. ECJ: also valid under subsidiarity: the objective of the proposed action could better be achieved at community level and could not be “sufficiently achieved by MS individually.” Court also added third limb of the test: whether the measure went beyond what was necessary to achieve the objective pursued; this is a true subsidiarity test.
• Alliance for Natural Health [2005]: (see above): subsidiarity was also satisfied (as well as Art. 114 challenge). “To leave MS the task of regulating trade in food supplements… would perpetuate the uncoordinated development of national rules and, consequently, obstacles to trade between MS and distortions of competition so far as those products are concerned.”
• AvestaPolarit Chrome Oy [2003] Good statement of the test: “in areas which do not fall within its exclusive competence the Community is to 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 and, second, action by the Community must not go beyond what is necessary to achieve the objectives of the Treaty.”
• Commission v. Germany [2010]: Commission challenged German implementation of a Directive harmonising the processing of personal data. Germany pleaded subsidiarity: They argue that they’ve had their own, effective, system for 30 years now and shouldn’t be forced to give that up. ECJ: rejected Germany’s argument because the Directive “does not go beyond what is necessary to achieve the objectives of the EC Treaty.”

NB: again, the Court seems to roll proportionality and subsidiarity into one test. The fact that the ‘necessity’ requirement is the reason given by the Court for rejecting Germany’s argument suggests that it’s really proportionality doing the work.

Question 41

BAT re subsidiarity

Answer 41

ECJ addressed the subsidiarity question by asking which institution was better at adopting common rules, so subsidiarity will always be satisfied in relation to harmonisation measures. This formula on subsidiarity review has been adopted in all cases involving Art 114 legislation e.g. Vodaphone, Inuit Tapiriit, Alliance for Natural Health.

Question 42

The AG in Deposit Guarantee Directiv

Answer 42

urged the ECJ to be more involved in subsidiarity monitoring and to take subsidiarity seriously while not substituting its own judgment for that of the legislator, by requiring the EU legislator systematically to state more comprehensive reasons for its decisions. The ECJ ignored this opinion.

Judicial review for subsidiarity compliance has been effectively neutered. The ECJ pays lip service to subsidiarity but it is not a real ground of judicial review.

Question 43

Academic Commentary on subsidiarity:

Davies:

Answer 43

proportionality should be the key principle used to keep EU competences within bounds.
• Conferral does not work because it merely points us to the Treaties to see what the EU is entitled to do, but this is inappropriate because “the issue is one of interpretation.”
• Subsidiarity does not work because it privileges EU goals, rather than balancing MS and community interests —“it simply asks who should be the one to do the implementing work” rather than looking at whether “the cost of MS interests would be disproportionately high” when balanced against the advancement of legitimate community goals. E.g. a proposal to have a European law of contract to make business transactions easier would be very controversial, yet “subsidiarity does not provide a convincing reason why these measures should not be taken” because it is a measure the MS could not possibly achieve.
o Subsidiarity is meant to protect MS in cases of shared competence, e.g. internal market, but this is precisely where it does not bite, so long as EU identifies one of its objectives. Bizarre that subsidiarity does not bite for Art. 114 legislation.
• Proportionality: the “Court should apply proportionality fully… it should ask whether the importance of a Community measure is sufficient to justify its effect on the Member states. It should spell out… the role of national autonomy in the balance, and have a go at addressing competence concerns in this way”.

Question 44

Academic Commentary on subsidiarity:

Davies (Analysis)

Answer 44

note that subsidiarity does not operate just for 114 issues, so the doctrine won’t always be as weak as Davies (and the case law) indicates. However, 114 is important because that is where the pressure has been placed in terms of competence creep; so we need something to control keep the EU within its bounds in that respect. Also note that the third question added to the subsidiarity inquiry (i.e. whether it does more than what is necessary) blends it into proportionality; but might also give it teeth when its confronting harmonisation issues.

Question 45

Academic Commentary on subsidiarity:

Craig’s response to Davies

Answer 45

• Davies role from proportionality —balancing interests of MS and EU —underplays the extent to which the Treaties balance MS and EU interests (i.e. division between shared/exclusive/supporting competence) and overstates the conflict between the goals of the EU and the goals of MS (in reality MS are involved in EU decision-making; EU objectives are determined by the “interplay of political forces”).
o Note: However, there is still a problem with shared competences because, in this area, the subsidiarity analysis privileges EU goals. Further, although EU/MS goals are not fully distinguishable, there is obviously a degree of divergence between MS and EU ‘objectives’.
• Difficulties concerning Davies’ role for proportionality:
o Not supported by treaties: he envisages a different role for proportionality than that in Art. 5 TEU and such a role was not suggested by Lisbon.
o Paternalistic: “It would be odd and paternalistic for a Court to say to MS that have voted in favour of a measure and thus do not believe that it entails too great an incursion on MS values/autonomy, that the measure is nonetheless disproportionate.” Mere fact MS honestly believes legislation on which it was outvoted in the Council involves too great an intrusion on its values, does not mean that this ‘entitles’ it to win the legal action, or that it should ‘privilege’ its vision of the balance between EU objectives and MS values over those of other MS.
♣ Note:: this is true and persuasive, but we legislation often gets voted through as a whole package, whereas in a proportionality challenges a MS might focus on one particular bit of a Directive.
♣ My thoughts: ignores the fact that MS may have different concerns than their representatives in the EP.
• Would be of little utility: EU enacts thousands of pieces of legislation each year; but his proportionality test would only come into play if someone invoked the judicial machinery in each case; the ECJ’s judgements would have little precedential impact because each case would be highly fact-specific, so most EU legislation would not be controlled by EU proportionality.

Question 46

Academic Commentary on subsidiarity:

Answer 46

• Subsidiarity should be understood as federal proportionality: it should ask whether the EU legislator has unnecessarily restricted national procedural autonomy. Proportionality protects private individuals’ rights against EU interference, whereas subsidiarity protects peoples’ collective national autonomy against EU interference.
• ECJ should implement the federal proportionality idea of subsidiarity by adopting a presumption against pre-emption by the EU of Member States’ law and powers in certain policy areas. The ECJ should outlaw disproportionate interferences with national procedural autonomy, should go beyond its current light touch review in favour of more detailed subsidiarity review. This would require the ECJ to get involved in fundamental political and social questions but this is what national constitutional courts do. Subsidiarity should be a legal limit on EU legislative competence.

Question 47

What should subsidiarity be doing?

Politics:

Answer 47

• We now have the new procedure under Protocols 1 and 2, under which national governments can trigger the issue of yellow and orange cards.

Question 48

What should subsidiarity be doing?

• Kiiver:

Answer 48

o Under the EWS, national parliaments act as a Conseil d’Etat, in that: (i) their role is advisory rather than co-legislative; (ii) NPs review proposed legislation for legality and not political desirability [Me: although, because subsidiarity is inherently political, this is not a clear line].
o The EWS gives national parliaments a role in the EU legislative process that is similar to their role in the domestic legislative process —asking critical questions and demanding justification of policies and legislation.
o Suggests also that the procedure might trigger increased political interest in European law in national legislatures.

Question 49

What should subsidiarity be doing?

Cygan:

Answer 49

• A collective voice from national parliaments speaking out against competence creep may uphold subsidiarity, but national politicians must see value in the Treaty provisions and be willing to engage more directly and more often in EU affairs. EU integration is not a ‘vote winning issue’ in national parliamentary elections, and, if parliamentarians remain preoccupied with the domestic political agenda and ministerial accountability, then horizontal political dialogue will not become a priority”. Also points out issues with the EWS:
o May be difficult to get the 33% or 55% of reasoned opinions necessary to activate yellow / orange card procedure.
o No guarantee that national parliaments will use EWS proactively—some may not have the resources to do so and the eight-week time limit may be too short.
o National Parliaments may not be able to cooperate effectively with the EP because it may not share an expansive interpretation of subsidiarity with the NPs; it may be an unreliable partner for orange card cases.
o The different levels of participation and strength of influence on EU affairs between national parliaments means they cannot cooperate effectively. Weak national parliaments may decide not to engage with EWS if they see nothing to gain from the time and expense of subsidiarity monitoring.
o Better system: if a majority of national parliaments raised a subsidiarity objection, there would be a presumption that the legislative proposal would be withdrawn, EU legislator could rebut the presumption using overriding reasons of urgency or necessity but national parliaments could bring judicial review to test those reasons.
• Since Cygan’s article, there has been some evidence — e.g. yellow card issues inMonti II and then on the proposal to establish the European Public Prosecutors Office —that national parliaments are engaging with the process and that a dialogue has been created. However, note in relation to Monti II:
o The Commission withdrew the proposal but stated that withdrawal was due to the possible opposition against the draft from the Council and European Parliament rather than subsidiarity concerns, maintaining that the regulation satisfied subsidiarity.
o Further, as Fabbrini & Granat note national parliaments went beyond their proper task under EWS, failed to identify any subsidiarity violation in the Reg but commenting instead on other aspects of the Reg e.g. its legal basis, proportionality. The EWS was therefore misused by national parliaments. The use of the yellow card in relation to Monti II is better explained as a consequence of national parliaments’ wish to make themselves more visible as participants in the EU decision-making process on a topic of great political saliency, the right to strike. So in practice maybe the yellow card procedure is doing more than initially indicated on paper.
• Red Card? Schutze: A red card/veto power was rightly rejected from the EWS.
o Giving national parliaments a veto would be incompatible with the Commission’s constitutionally protected independence.
o Giving national parliaments a veto would distort the proper distribution of power and responsibility in the EU’s system of transnational governance by giving citizens too much power. Giving national parliaments a veto would undermine the inter-State negotiation and compromise involved in EU decision-making. The EWS is effective in that it channels national parliaments’ attention to the area in which they can be most useful, scrutinising their respective national governments.

Question 50

What should subsidiarity be doing?

Cygan thoughts:

Answer 50

It seems, then, that the political dimension to subsidiarity is working well. It allows national parliaments to put their expertise to good use, yet does not fundamentally alter the constitutional dynamic of the EU (as a red card would). Fabbrini’s work indicates that the national parliaments may actually be going beyond subsidiarity review (indeed, they suggest that it was really about national parliaments wanting to make themselves more visible, weighing in on an important socio-economic issue) —but a by-product of this is that the Commission is getting additional input and scrutiny on proposed legislation. Two questions then arise. Additionally, even if the no yellow card is issued, the EU may be forced to include more detailed subsidiarity reasoning in the recital of a directive / regulation, allowing the CJEU to more readily conduct legal proportionality review.
o Can the procedure be improved? The UK government’s report on subsidiarity / proportionality had some suggestions here: (i) mechanism for review later in the process, since the effect of a measure can change over time; (ii) longer than 8 weeks should be allowed for governments to produce their reasoned opinions.
o The question then is whether this is enough? Is additional legal protection needed?

Question 51

What should subsidiarity be doing?

Law

Shutze:

Answer 51

• argues that we should strengthen the judicial safeguards of subsidiarity; he thinks that we should be doing hard-edged review:
o Subsidiarity should be understood as federal proportionality, and we should ask whether the EU legislator has unnecessarily restricted national procedural autonomy. Under this system, conferral tells us whether the EU can act within a policy field, subsidiarity tells us whether a piece of EU legislation disproportionately restricts national autonomy, and proportionality tells us whether the legislation unnecessarily interferes with liberal values. Proportionality protects private individuals’ rights against EU interference, whereas subsidiarity protects peoples’ collective national autonomy against EU interference.
o The ECJ should implement the federal proportionality idea of subsidiarity by adopting a presumption against pre-emption by the EU of Member States’ law and powers in certain policy areas. The ECJ should outlaw disproportionate interferences with national procedural autonomy, should go beyond its current light touch review in favour of more detailed subsidiarity review. This would require the ECJ to get involved in fundamental political and social questions but this is what national constitutional courts do.

Question 52

What should subsidiarity be doing?

Law

Shutze (problem with this)

Answer 52

• My problems with this: what’s the measurement by which the CJEU is to decide whether something unduly infringes national autonomy? Surely, in order to introduce such a presumption, we would need treaty provisions to that effect. The goal of ECJ review for subsidiarity isn’t to make sure that national preferences are taken into account when drafting proposals; that’s dealt with on the political level.
• Court should better enforce the process of subsidiarity: an essential procedural requirement of EU law (contained in Art. 296 TFEU) means that the Commission does have to give clear and unequivocal reasons for why they did what they did. Thus, if the court increases its policing of this article in light of subsidiarity, forcing the Commission to give clear, evidence backed reasons for compliance with subsidiarity. This would tie in with the thrust of the Lisbon Early Warning System (i.e. it’s all targeted at the Commission being forced to consider subsidiarity issues). The courts should, therefore take a step back from the line taken in Deposit Guarantee Directive. The result should be that (given we also have the EWS) the court does not have to frequently engage in substantive subsidiarity review, because clear and cogent reasons have been given.
• Obvious breach of subsidiarity: where there is an obvious breach of subsidiarity, the courts should intervene at that point, but this should be a high threshold —a national parliament should not be able to effectively have two bites of the apple because they have been outvoted in the European Parliament.

Question 53

Academic Commentary on PROPORTIONALITY:

Works in tandem with subsidiarity,

Answer 53

Works in tandem with subsidiarity, although at the expense of doctrinal tidiness (so, for example, in cases such as ex parte BAT we get a ‘necessity’ question bolted onto the proportionality inquiry). Is this acceptable, or should we separate them out?
• We should separate them: Shutze: subsidiarity works at a national level, whereas proportionality works at an individual level —proportionality tells us whether the legislation unnecessarily interferes with liberal values and protects private individuals’ rights against EU interference.

Question 54

Academic Commentary on PROPORTIONALITY:

Institutional competence

Answer 54

the court is better at looking at proportionality questions; hence why they have been willing to strike down legislation on this ground of review. For example, in Atalanta the court strikes out a penalty clause because it was not proportionate (it represented too great an infringement on private rights). The same is true of Bela-Muhle and ABNA— both cases involved the infringement of individual rights; something the court is very good at adjudicating. The court is not as good, and has less institutional competence at, reviewing relative competence of the EU and national bodies (that’s a political question).

This helps to explain the varying standard of review: in cases like Zaninotto and Vodaphone we get indications that the test is whether something is “manifestly inappropriate”. However, we need to see this within the context of areas in which a large discretion is conferred on the EU and where policy choices were involved (the Common Agricultural Policy). Even here legislation should be struck down where manifestly unnecessary —e.g. ABNA. In other areas, proportionality will be wielded with less intensity —e.g. in Bela-Muhle where the ECJ asks whether the objective could have been satisfied by imposing a less onerous burden.

Question 55

Academic Commentary on PROPORTIONALITY:

Answer 55

Conclusion: this is a better tool for legal enforcement than subsidiarity, which is political. We have tests, we can operate them with different intensity depending on how deferential we want to be.

Question 56

Academic Commentary on PROPORTIONALITY:

Political dimension

Answer 56

Should proportionality have been included in the EWS?
• Point 1: national parliaments seem to comment on it anyway (see Monti II)
• Point 2: (Fabbrini): national parliaments are more suitable than EU institutions to carry out subsidiarity review, but EU institutions are better than national parliaments at evaluating the content of a legislative proposal, proportionality and legal basis. EU political process involves multiple institutions to ensure broad consideration of all the interests involved, national parliaments have too much of a local focus, may reflect a minoritarian bias and fail to take account of the comprehensive problems at stake. The ECJ as an independent institution is more capable of conducting the value assessments involved in proportionality review without a single national bias compared to national Parliaments, and ECJ has better technical expertise than national parliaments to review legal basis of EU legislative proposals.

Question 57

Academic Commentary on PROPORTIONALITY:

Conclusion

Answer 57

both subsidiarity and proportionality fulfil valuable functions, but neither is the correct too for correcting competence creep in the EU. There is a real issue with competence creep under Art. 114 (although Weatherill perhaps overstates the issue). That should be tackled using greater intensity of review under the tests that have been developed for review under 114. We shouldn’t stretch either of these doctrines to tackle that issue, when they both actually serve valuable functions —e.g. too stringent review in either subsidiarity or proportionality could give the CJEU too much power (serious democratic issues there) and neuter the EU’s ability to legislate.
o Subsidiarity deals with macro level, and is aptly dealt with on political level. Court should look into this more but only really based on process stuff, looking at the reasons, Impact Assessment, etc.
o Proportionality then brings us to the individual, and is something that a court can, with greater expertise, look at. There may well still be deference issues – that will depend on subject matter – but can deal with these as they arise.

Question 58

Academic Commentary on PROPORTIONALITY:

Note also:

Answer 58

• There have been very few challenges based on subsidiarity.
• In a number of cases, the subsidiarity challenge was opposed by other Member States, who argued that the contested EU legislation was consistent with the subsidiarity principle.
• It is by no means clear that the ECJ decisions in the real subsidiarity cases were wrong, or that they would have been different if review was more intensive.
Might be argued that the existing subsidiarity principle is defective, that the focus should be on whether the EU norm violates proportionality by infringing too greatly on Member State values

Question 59

Assimilation of proportionality into subsidiarity

Answer 59

• Introduction of the ‘necessary’ aspect of the test from British American Tobacco, which is a clear adoption of an aspect of proportionality.
• Addition of this element looks as though it is compensating for the absence of a proportionality-style tool.
• Davies argues that subsidiarity is unable to answer the correct questions, with proportionality offering a preferable solution. However, he does little more than re-conceptualise the problem—it is not an issue of subsidiarity v proportionality, but the two should be used as complimentary tools.
• Craig: the nature of different competencies shows proportionality-style balancing in the very nature of the body.
• Subsidiarity is best understood as a principle throughout the EU institutions, only used judicially as a last resort. Partly seen in role of national governments in reviewing – pushes the political questions further back in the process.

Question 60

S. Weatherill, ‘The limits of legislative harmonisation ten years after Tobacco Advertising: how the Court’s case law has become a “drafting guide”’ (2011) 12 German LJ 827

Intro

Answer 60

Thesis: the “limits” of EU legislative competence are constitutionally significant in principle but imprecisely defined in practice, so that legislative institutions in fact enjoy wide discretion, producing a circular pattern: the CJEU presents a formula, the legislature adopts the formula, and the CJEU no longer has a plausible basis to set aside the measure. Much of these deficiencies persisted after Lisbon, which instead put most of its reforming faith in national Parliaments. Though these are poorly shaped, the intention is positive: they reflect the need to supplement judicial control (become largely ineffective) with political control against over-hasty centralization.

Question 61

S. Weatherill, ‘The limits of legislative harmonisation ten years after Tobacco Advertising: how the Court’s case law has become a “drafting guide”’ (2011) 12 German LJ 827

I – Tobacco Advertising I

Answer 61

• The attacked Directive was stated in its Preamble to be aimed at opening up the market for products that serve as the media for advertising and sponsorship of tobacco products.
• The Court agreed that there were obstacles, but only in relation to a likely future emergence of disparities on advertising tobacco in the press (so that such a ban would be justified to ensure the free movement of press products), and certain types of sponsorship that led to sports events being relocated.
• Thus, the Directive went too far in prohibiting advertising on posters, parasols, ashtrays and other articles, and in cinemas. These did not help facilitate trade in the products concerned. The general prohibition of sponsorship also went too far.
• The Court’s ruling is confined to misuse of Article 114 TFEU, but by implication, it was accusing the EU legislature of having used the cover of harmonization to smuggle measures of public health policy.
• This was the first annulment partly because, before the Single European Act (1987), harmonization legislation was adopted by unanimity in Council, so that constitutional review was more hesitant in the face of political consensus (whereas now there is QMV in Council) – the case is therefore significant as an expression of judicial defense of the limits of EU legislative competence against political preference. The Court’s reading of the Treaty, not a qualified majority in Council (with Parliamentary support), decides the limits of EU competence.

Question 62

S. Weatherill, ‘The limits of legislative harmonisation ten years after Tobacco Advertising: how the Court’s case law has become a “drafting guide”’ (2011) 12 German LJ 827

II – Limits, what Limits?

Answer 62

• Most Treaty provisions are sector-specific and thus tightly confined, whereas Article 114 TFEU is functionally driven (any national measure can be harmonized as long as it leads to an improvement in the functioning of the internal market except those mentioned in Article 114(2))
• Tobacco Advertising (and the subsequent cases that adopt its criteria) seems to promise a constitutionally proper standard of review, but this is deceptive:
  o The Court uses slippery adjectives (“genuinely”, “abstract risk” is not sufficient, differences must have a “direct” effect on the functioning of the internal market or cause an “appreciable” distortion of competition, preventative harmonization is allowed only if emergence of obstacles is “likely”)
  o How are these to be measured in practice? The anxiety is that the Court failed to address the problem and has instead concocted a “drafting guide” that readily enables the legislative institutions to comply with the principle of conferral
  o The threshold seems very low:
  ♣ As long as the conditions of recourse to Article 114 is satisfied, the fact that public health protection is a decisive factor in the choice of measure is irrelevant
  ♣ A harmonized rule can require all MSs to authorize, or under certain conditions, or provisionally or definitively prohibit the marketing of a product no objection in principle to a harmonized ban (so long as the ban forms part of a regime dealing with a wider category of products than those banned)
  ♣ Article 114 says it applies “save where otherwise provided in the Treaties”, but it is not subordinate to (ex.) Article 168 because it is not dedicated to the pursuit of the internal market

Question 63

S. Weatherill, ‘The limits of legislative harmonisation ten years after Tobacco Advertising: how the Court’s case law has become a “drafting guide”’ (2011) 12 German LJ 827

III – The Nature of the Court’s Inquiry Pursued in the Caselaw

Answer 63

i. e. what is the court objectively reviewing in order to patrol the limits of the treaty?
- BAT Imperial Tobacco: The subjective political preferences and declared intentions of the Member States intimately affect the assessment of the Court (which merely “regurgitates” recitals of the preamble and accepts the likelihood of future divergences argument): there were significant arguments to the effect that the size required under the Directive for the health warning labels precludes compliance with multilingual rules of several MSs – is it really plausible that the measure was not only intended to protect public health but also truly to improve the functioning of the internal market?
- Swedish Match: the judgment is “terse and unsatisfactory, and yet revealing”, deciding that even a ban on a product may fall within the legitimate scope of harmonization – demonstrates that unsafe products may be the subject of a harmonized ban in order to improve the functioning of the market for safe products. AG Geelhoud said that a product ban can improve the functioning of the internal market by diminishing improvement costs (including the cost of enforcing regulations applying to related products), but IAO Swedish Match is troubling even under this interpretation because of its permissiveness – it invites strategic drafting of legislative measures that are broad not targeted. Instead of controlling the limits of EU competence, the Court tends in practice to push them even wider.
- Inuit Tampiriit Kanatami: the problem is that the measure shuts down a large part of the market for seal products, but seems to fit the logic of Article 114 because it is a ban of unsafe products as part of a scheme to secure free movement of safe products (i.e. seal products made by a traditional hunt). Still, doubtless the deciding factor in selecting the control is animal welfare and the preservation of the “culture” of the Inuit hunt. Closing a large part of the market to free up a small one is arguably disproportionate, but this has little chance of success because the Court is unlikely to intervene on the ground of proportionality once competence is successfully established.
- Alliance for Natural Health: the problem is the same as BAT – the Court’s purportedly objective review of the impact of regulatory diversity is immediately and unavoidably tied to what MSs do and are likely to do (ex. here, apparently unverified private complaints). “The competence conferred by Article 114 is not static, but rather dynamic, depending on regulatory practices, actual and likely, at national level and the reported impact on economic operators”. The easy manipulation of these threshold criteria by those politically responsible for their application stands in stark contrast to the practical difficulty of the courts finding means to find independent evidence for claimed appreciable distortions. Can the courts really do more?
- Tobacco Advertising II: the court did not insist on an actual link with free movement in every situation covered by the measure. But it is true that purely internal situations are rarer and likely to become rarer still, and certainty of application militates in favour of the adopted measure. Nevertheless, it still shows that competence is in principle limited but in practice truly broad.
- Vodafone: the measure appears to be addressed at private practices under an assumption that the market was malfunctioning because of intransparency – a very significant stretch of Art 114 which the Court “wrenched … back into the mainstream” by saying that it was adopted in response to the likelihood that national price control measures would be adopted (i.e. as a classic preventive harmonization case). Perhaps Art 114 could have been extended to situations where there is an internal market problem but national measures are unlikely because of want of incentives – “regrettably” this was completely ignored.

Conclusion: placing formal limits is important, but (esp. in the case of Art 114) it can lead to slippage in the form of inviting clever drafting to actually widen the scope of competence.

Question 64

S. Weatherill, ‘The limits of legislative harmonisation ten years after Tobacco Advertising: how the Court’s case law has become a “drafting guide”’ (2011) 12 German LJ 827

IV – Legislative discretion: The limits of EU competence in principle and in practice

Answer 64

I – Proportionality and subsidiarity

Theoretically legislative discretion is limited by subsidiarity (though a harmonization measure has never been struck down on this basis) and proportionality. In practice, the Community legislature is simply using the Court’s formulae as a drafting guide, asserting its compliance rather than demonstrating it.

Subsidiarity as antidote to blind pursuit of “more Europe” can serve a useful purpose, but “this is remote from legal rules of the type apt to form the basis of judicial review of legislation”. In a broad sense, it is about whether even if the EU’s objectives are advanced by and best achieved by the proposed measure, it is nevertheless important enough to override objections rooted in the worth of national diversity and autonomy – this is important, but a question of political judgment.

Nevertheless, a heavier emphasis on procedural openness might usefully be demanded by the Court, which can at least invalidate acts that ignore the expectations of consultation etc.. But a more aggressive procedural push is likely to do little more than induce the legislature to more clever drafting.

II – Competence

Theoretically, Competence should leave no discretion, but its boundaries must be policed. In practice this is not the case – the problem is that the Treaty denies the Court an operationally useful role in checking the limits of Art 114, so that the legislature enjoys discretion here too, making this also little more than a drafting guide.

Question 65

S. Weatherill, ‘The limits of legislative harmonisation ten years after Tobacco Advertising: how the Court’s case law has become a “drafting guide”’ (2011) 12 German LJ 827

V – What can be done about it?

Answer 65

Most debate assume that a more effective review system is required – competence is both a legal and political issue. After Lisbon it has become clear that the CJEU’s powers are still limited (Vodafone), but Lisbon aimed to clarify more aggressively that MSs are the source of the competence conferred on the Union, which are limited. “But this is a novel rhetoric: there is no change of substance”.

The dominant assumption throughout the Convention on the Future of Europe (that led to Lisbon) is that the Court’s review function should not be adjusted, but that it needed to be supplemented by other political controls in the ex ante process. In this vein, Lisbon has achieved institutional reform.

It is possible that this new monitoring system will provide the basis for a more intensive ex post control by the Court; if objections raised by several NPs were swept aside summarily, the Court might be inclined to find the measure invalid (or the Court could effect a shift in presumption – the Commission would need to show a manifest error of appraisal in the objections before it could proceed with the proposal).

Question 66

S. Weatherill, ‘The limits of legislative harmonisation ten years after Tobacco Advertising: how the Court’s case law has become a “drafting guide”’ (2011) 12 German LJ 827

VI – How Lisbon could have done better

Answer 66

Including subsidiarity and not proportionality in the review process of NPs risks triggering unhelpful demarcation disputes – it seems to be a result of accident not design (in that the Treaty establishing a Constitution made the mistake and left it uncorrected in Lisbon).

The problem is not the Courts, but the wording of Art 114 TFEU and Art 26 TFEU; this is an instance of the need to confer flexible powers on the EU conflicting with the functional breadth of Art 5 TEU. More generally, there is a pressing need for all actors to engage with assessments of how much centralization is worth pursuing where it will damage local autonomy.

Question 67

P. Craig, ‘The ECJ and Ultra Vires Action: a Conceptual Analysis’ (2011) 48 CMLRev 395

Answer 67

Essentially argues that the view that the EU Courts are the ones driving the expansion of EU competence is too simplistic; in reality, the balance between EU competence and MS autonomy is the result of the symbiotic relationship between four variables: 1) MS choice as to the scope of EU competence (as expressed in the Treaties), 2) EU legislation, 3) JP of the EU Courts (interpretation of Treaty articles and legislation etc.), and 4) action taken by EU institutions.
The Courts are but one actor in the resultant distribution of power between MSs and the EU. The discussion about vires inevitably includes issues of perception and feel, and not merely analytical scrutiny of the bounds of Treaty provisions. It is here that the ECJ may be at its most vulnerable. The CJEU’s “light-touch” review of harmonization under Art 114 and subsidiarity has led some national courts to conclude that the ECJ does not regard these bounds sufficiently seriously.
There are difficulties in detailed substantive review in these areas. The difficulties do not, however, warrant the low intensity review that currently prevails, more especially because process-based review, which focuses on reason and evidence for the challenged action, can facilitate meaningful substantive review, without driving the latter into anything akin to substitution of judgment.

Question 68

(1) Proportionality

2018 Notes

is a principle which places a legal limit on the law-making powers of the EU institutions.

On its face, it covers very different things than subsidiarity:

Answer 68

• Subsidiarity = when the Union should intervene (reflects self-government – local decisions are better than EU ones)
• Proportionality = the quality of the intervention (reflects a presumption in favour of private autonomy and requiring justification for state intervention: requires the measure to be suitable for achieving the objective and to impose the fewest possible constraints on individuals)

Question 69

(1) Proportionality

2018 Notes

Proportionality requires the content and form of Union action not to exceed what is necessary to achieve the objectives of the Treaties, its current formulation in ex parte Fedesa (1990) – where it is conflated into two balancing tests:

Answer 69

• Whether there is an appropriate balance between the ends sought and the means used, and whether the means used are suitable to the ends sought (the suitability of the measure)
• Whether the effect of the measure on other interests and values is excessive (the necessity of the measure)

Question 70

(1) Proportionality

2018 Notes

The extent to which this is taken up will depend on the legal culture within which it arises (Cohen-Eliya, Porat):

Answer 70

• A culture of justification (broad conceptions of rights every administrative and legislative action is required to justify itself)
• A culture of authority (proportionality exists not to allow merit-review but to check that the institution is the appropriate body to take the decision; once this is determined, the sphere of authorization is treated as a black box where the legislator enjoys discretion)

This second culture is reflected in Fedesa (“manifestly inappropriate” test); often the Court sees the realization of the objectives of European integration as sufficient; this is “damning” as it is difficult to see how simply realizing a system (independent of anything else) is necessarily valuable.

Question 71

(1) Proportionality

2018 Notes

perhaps the impact of proportionality is best seen in the change in legislative culture brought about through it:

Answer 71

• in 2003 the EU institutions moved away from a process of law-making to a process of regulation (where the instrument deployed is no longer necessarily legislation, but other more suited instruments with less intrusive effects on private parties) using instruments like co-regulation and self-regulation (Inter-Instititutional Agreement on Better Law-Making (2003)).
• in 2005 the Commission established a programme simplifying the regulatory environment, bringing together subsidiarity and proportionality, on the basis of a commitment to EU regulation only where it is necessary, simple and effective. As part of this, the Commission proposed a strategy to repeal all irrelevant or obsolete legislative acts (Commission, Implementing he Community Lisbon Programme: A Strategy for the Simplification of the Regulatory Environment, COM (2005) 535)
• then a “Smart Regulation” initiative supplemented this, calling for a programme of reducing the administrative burdens imposed on private actors by EU law by simplifying or repealing EU legislation, and by ex post evaluation of the effectiveness of all EU legislation (Commission, Action Programme for Reducing Administrative Burdens in the EU Final Report)
• A Regulatory Fitness programme took this further: it maps out the regulatory areas with greatest potential for simplification and reduction, involving stakeholders in the process (Commission, Regulatory Fitness and Performance: Results and Next Steps)

Question 72

(1) Proportionality

2018 Notes

Case C-375/96 Galileo Zaninotto v. Ispettorato Centrale [1998] ECR I-6629, paras. 57-67.

Answer 72

The contested provision requires the quantities for distillation to be apportioned among various producers in a region on the basis of yield per hectare, for the objective of improving conditions in the wine market by preventing overproduction.
Judgment:
C argued that:
1º the criterion of yield per hectare was inappropriate for pursuing the objective + penalizes excessively winegrowers who are not overproducing while encouraging those producing poor quality wine (because the criterion doesn’t allow you to distinguish poor quality wine or overproduction).
2º possible to envisage an equally effective but less prejudicial method: the criterion of end-of-year stocks, which shows whether there is overproduction (a criterion that the Commission itself recognized was more relevant).
Rs (Council, Commission and Spanish Government) argue that:
1º the decision between measures is a political choice falling within the responsibilities of the Council, and that the Community legislator cannot be in a position to foresee the future effects of an adopted measure a measure cannot be held unlawful merely because it subsequently proves less effective than it could have been.
2º the criterion is appropriate because there is general correlation between high yield and low quality, and because other criteria are inappropriate (like end of year stocks would be too difficult to monitor).
Court’s answer:
1º In matters concerning the common agricultural policy the Community legislature has wide discretion. Thus, the legality of a measure adopted in that sphere can be affected only if the measure is manifestly inappropriate having regard to the objective which the competent institution is seeking to pursue.
2º In this case there is no manifest error as it is designed to impose most burdens on the producers who are principally responsible for overproduction without penalizing producers with low yields. It cannot therefore be regarded as disproportionate.
3º The Commission subsequently acknowledged that the end of year stocks criterion would be more appropriate, but the legality of a Community act cannot depend on retrospective considerations of its efficacy. If the legislature is obliged to assess the future effects that cannot be accurately foreseen, it can be criticized only if manifestly incorrect in light of information available at the time of adoption. [CF Spain v Council].

Question 73

(1) Proportionality

2018 Notes

Germany v. Parliament and Council [2006]

Answer 73

Judgment: the Community legislature must be allowed a broad discretion in an area which entails political, economic and social choices on its part, and in which it is called upon to undertake complex assessments. The legality of a measure adopted in that sphere can be affected only if the measure is manifestly inappropriate having regard to the objective.
It is apparent from the analysis set out in paragraphs 72 to 80 of the present judgment [relating to competence, i.e. whether the Directive is intended to improve the conditions for the functioning of the internal market] that the Directive is appropriate for achieving the objective that they pursue. [146] [So the Court is basically saying that because competence is fulfilled, so is proportionality?]
Nor, given the obligation on the Community legislature to ensure a high level of human health protection, do they go beyond what is necessary in order to achieve that objective. The Community could not have taken a less restrictive measure (ex. exemption for local products) because this would have rendered the field of application of the prohibition uncertain, contrary to the objective of harmonization.
Claimants argued that it would significantly reduce press income from advertising and thus be contrary to Art 10 ECHR (freedom of expression), but per Art 10(2) this freedom can be limited by certain legitimate aims. Further, journalistic freedom of expression as such remains unimpaired – the only possible weakening by the measure is indirect.
No violation of proportionality.

Question 74

(1) Proportionality

2018 Notes

Case C-58/08 Vodafone [2010] ECR I-4999

Answer 74

Cs argue that the measure is disproportionate because it doesn’t merely regulate wholesale, but also retail, charges.

A-G’s Opinion: the question is proportionality of the measure in terms of the goals of Art 114 and the policy objective of consumer protection balanced against the loss of autonomy on the part of MSs and interference with the rights of the claimants (property, right to engage in commerce).
In assessing proportionality, the court accords a margin of discretion to the legislature – the standard is manifest error of assessment or a misuse of powers or whether the legislature has manifestly exceeded the limits of its discretion.
Price controls are one of the most intrusive forms of intervention in the market and constitute a particularly strong limitation of rights to property and the freedom of economic initiative. The decision to enact them should not be taken lightly by the legislator. However, it does not appear that the Community legislature did so in the present instance:
1º The Community legislator decided to intervene as a last resort – it had already taken other measures to attempt to reduce retail roaming prices (competition law investigations, the previous regulation, warnings…) and had concluded that roaming charges stand no relation to underlying costs and there is no reason to believe that decreasing wholesale prices would lead to decrease in retail prices.
2º Faced with conflicting evidence, the Community legislature is not required to adopt all the advice of expert groups, in particular, it is not required to adopt the “wait and see” approach. The decision to regulate fell within the range of options reasonably open to the legislature.
3º The controls is not intended to achieve long-term market regulation but to respond to a market failure that competition rules are not in a position to address.
4º There is a sunset clause [providing that it will cease to take effect after a particular date unless action is taken to renew] which minimizes its impact on the rights of economic operators by ensuring that the Community legislature periodically reassesses its interventions. If the Community legislature were to extend the price controls or make them permanent, that decision would also need to be proportionate and additional reasons would need to be presented to justify it. [CF the Judgment on competence – assessed in relation to the original act and not amendments, whereas proportionality is judged according to the amendment]
On proportionality of the loss of Member State autonomy: “given the almost-unanimous support amongst the relevant Member State agencies for the introduction of the regulation in question, such an argument loses force and in the light of the limited scope of the rules (roaming services), the margin of discretion the Court accords to the legislature and the absence of any substantiated arguments to the contrary, the regulation cannot be said to be disproportionate in this regard”. [CF undermines the contention that proportionality is merely about legality – if it is about legality, then why does it matter that the majority of MSs agreed? It is precisely where the majority of MSs agreed that controls of legality play a role – by ensuring that the minority is not forced into something that they did not agree to by signing the Treaty.]
Judgment: proportionality requires that Community “measures (…) be appropriate for attaining the legitimate objectives pursued by the legislation at issue and must not go beyond what is necessary to achieve them”.
In judicial review, “the criterion is not whether a measure adopted was the only or the best possible measure, since its legality can be affected only if the measure is manifestly inappropriate having regard to the objective pursued”.
However, the Legislature must base its choice on objective criteria, and must examine whether the objectives pursued by the measure are such as to justify even substantial negative economic consequences for certain operators [53]. [So here it’s suggesting that the proportionality requirement is based on the objectives themselves and not merely the measure!]
The objective here is consumer protection (by reducing the level of charges the public has to play). The level of retail charges for roaming was high and the relationship between costs and prices not such as should have prevailed in fully competitive markets. Thus, introducing ceilings for retail charges is appropriate for the purpose of protecting consumers against high levels of charges.
Could the objective be achieved by regulating only wholesale prices? In this area, competition at retail level took place in terms of the complete retail package, of which roaming was only a small part and not a critical consideration when consumers chose their providers. It is also clear that regulating wholesale charges alone would not have had a direct and immediate effect on consumers.
The measure recognizes that it is exceptional and justified by the unique characteristics of the roaming markets.
No infringement.

Question 75

(1) Proportionality

2018 Notes

Case 114/76 Bela-Mühle (Skimmed-Milk Powder) [1977] ECR 1211;

Answer 75

The contested Council regulation sought to reduce a surplus of skimmed milk powder by forcing animal feed producers to incorporate it in their products in place of soy.
Held that it was discriminatory (benefits were felt by dairy farmers whereas the burdens affected all animal-breeders discrimination based on the different categories of farmers) + disproportionate (the measure was unnecessary to fulfil the objective.
AG’s opinion (why the measure was disproportionate): The extent of the burden this creates must be assessed according to two factors: the price fixed for the compulsory purchase of milk powder and its actual value as compared with the price of other substances having the same nutritional value (turns out to be 3x the market value).
1º The same need can be achieved by imposing a less onerous burden:
aº Evenly share the sacrifice among all citizens by absorbing the whole cost with Community budget (this was later adopted after the expiry of the Regulation)
bº Noticing that the cost of producing milk powder from liquid milk was higher than the market price of the milk for use in animal feed; if continued encouragement had not been given to the processing of liquid milk into powder (market value < cost of processing), but the liquid milk was instead devoted to other uses, then the total burden on producers and importers of feedingstuffs and cattle breeders would have been less. As such, the objective of reducing milk powder stocks could have been attained by less burdensome means (despite Commission’s objection that destroying large quantities of liquid milk would cause ecological problems).
2º The system made demands too heavy on certain categories of producers and consumers, compared with the advantages sought.
Thus, proportionality breached.
Judgment: The arrangements imposed on producers of milk and milk products + other agricultural sectors, a financial burden (compulsory purchase of animal feed product + purchase price three times higher than that of the substances which it replaced). The obligation to purchase at such a disproportionate price constituted a discriminatory distribution of the burden of costs between the various agricultural sectors. Nor, moreover, was such an obligation necessary in order to attain the objective in view, namely, the disposal of stocks of skimmed-milk powder. It could not therefore be justified for the purposes of attaining the objectives of the common agricultural policy.

Question 76

(1) Proportionality

2018 Notes

Case 240/78 Atalanta [1979] ECR 2137

Answer 76

Judgment: the absolute nature of the provision in question is contrary to the principle of proportionality because it doesn’t permit the penalty for which it provides to be made commensurate with the degree of failure to implement the contractual obligations or with the seriousness of the breach thereof.

Question 77

Cases C-453/03 et al, ex p ABNA [2005] ECR I-10423

Answer 77

Preliminary reference on the validity of a Directive that imposes an obligation to indicate the precise feed materials and their percentage contained in compound feedingstuff to any customer who requests it.
Judgment: proportionality requires that measures be appropriate for attaining the objective pursued and not go beyond what is necessary to achieve it. JR of these conditions must recognize that the Community legislature must be allowed a broad discussion in an area that involves political, economic and social choices, so that a threshold of “manifestly inappropriate” (with regard the objective) is to be used.
Cs (Spanish and UK Governments) submit that the notification of the precise composition of feedingstuffs seriously affects their economic rights and interests and is not necessary for the protection of health in view of existing legislation (i.e. requirements to indicate batch reference and to provide national authorities (bound by confidentiality) with a document containing the composition).
Rs (Italian, Netherlands, Danish, Greek and French Governments) respond that it is not disproportionate with regard to the public health objective. The Parliament also invokes an objective of transparency (allowing breeders to decide on the feedingstuff for their livestock) – informing health authorities is not enough. [See this supports Craig’s point that in most cases, some MSs bring a case whereas other MSs defend it – no uniform conception of what proportionality (and subsidiarity for that matter) requires!]
Response of the Court: the measure attacked is not redundant because informing health authorities doesn’t allow users of the product to have sufficient information to adopt preventative measures in the event of a food crisis, and batch numbers don’t allow immediate response nor immediate identification of possibly contaminated ingredients.
However, it does not appear that the measure is necessary for the purpose of pursuing that objective; the obligation to notify customers impacts seriously on the economic interests of manufacturers as it forces the disclosure of formulas that can be used as models by the customers themselves (whereas they undertook research and innovation).
An obligation of this kind cannot be justified by the objective of protecting public health and manifestly goes beyond what is necessary to attain that objective: the obligation is independent of any problems of food contamination because it has to be met only if the customer requests it, and existing measures are sufficient to identify contaminated food.

Question 78

Case C-310/04 Spain v Council [2006] ECR I-7285

Answer 78

The contested measure is in the context of a new cotton support scheme (introduced pursuant to the common agricultural policy), and fixes the amount of aid for cotton at 35% of the aid available under the previous support scheme, and lowering the conditions of eligibility.
The Directive’s objective is to ensure economic conditions which enable the production of cotton to generate a fair income and to prevent it from being driven out by other crops.
Judgment:
C (Spanish Government) argued that the measure was manifestly disproportionate because the foreseeable consequence (according to two studies by C) of the measure will be the abandonment of a considerable part of Spanish production of cotton, possibly replacement by other crops, and substantial decrease in the utilisation of production plants.
R (Council and Commission) argued that the measure does not affect the profitability of cotton producing undertakings because the income under the new and old schemes will be the same (taking account of a “single payment” – see infra), and because this income is comparable to that of other crops like wheat or maize (so replacement by other crops is unlikely). [They drew up a lot of figures to support this, and the Spanish government then challenges these figures]
Court:
1º Proportionality requires that acts do not exceed the limits of what is appropriate and necessary in order to attain the legitimate objectives pursued; where there is a choice between several appropriate measures, recourse must be had to the least onerous, and the disadvantages caused must not be disproportionate to the aims pursued
2º Manifestly inappropriate in terms of the objective pursued is the right test because of wide discretion because common agricultural policy the test is not whether the measure adopted was the only or best possible one but whether it was manifestly inappropriate.
3º In light of the objective (i.e. “fixing the amount of the specific aid for cotton at a level such that it ensures adequate profitability and hence the continuation of cotton production in regions which lend themselves to that crop, thus avoiding its being driven out by other crops”) [look how detailed that is! It doesn’t use all that “harmonization” or “common market” shit. But on the other hand what is required seems to be a measure that goes directly against the objective pursued…], the question is whether the new level of aid suffices for attaining that objective.
4º The Commission’s argument is to be rejected because the “single payment” should not be taken into account as it is granted independently of the crop chosen (or if a crop is grown at all), so has no influence on a farmer’s crop choice.
5º Where the Community legislature has to assess the future effects of legislation to be enacted although these cannot be accurately foreseen, its assessment is open to criticism only if it appears manifestly incorrect in light of the information available at time of adoption + the broad discretion applies to the nature and scope of measures AND to the finding of basic facts.
6º However, JR requires that the institutions be able to show that they actually exercised their discretion (took into consideration all relevant factors and circumstances of the situation the act was intended to regulate). It must therefore be able to set out clearly and unequivocally the basic facts which had to be taken into account.
7º In this case certain labour costs were not taken into consideration, despite the Spanish Government’s submission that they could be calculated and are significant, and undermine significantly the profitability of cotton growth under the new scheme. The relevance of these costs seems undeniable, and the Council and Commission have not argued to disprove the Spanish Government’s assertion that it undermines profitability.
The potential effects on production plants was also not taken into account, despite the fact that cotton production and the plants is inextricably linked (as argued by the Spanish government).
Proportionality is violated because the information submitted by the institutions does not enable the Court to ascertain whether the legislature was able to reach the conclusion it did without exceeding the bounds of its discretion.

Question 79

(2) Subsidiarity

Two logics sit at the heart of it:

Answer 79

• The Union should not intrude on national, regional and local political and cultural identities
  o The first general incorporation of subsidiarity as a Treaty provision reflects this: it stems from the concern prompted by the explosive growth in quantity of EU legislation:
  ♣ 400 binding acts in 1984 2500 in 1992
  ♣ 6.8% of UK law had a role in implementing EU obligations (British House of Commons estimate), 9.6% in Denmark, 20% in France (greater because no opt-outs)
  ♣ A large proportion of these have more significant impact than other legislation (ex. 50% of UK legislation with a significant economic impact derive from the EU)
  o Reflected in the first part of Art 5(3) TEU (“the objectives of the proposed action cannot be sufficiently achieved by the Member States”), which goes not merely to whether EU or national laws would be more effective, but whether MSs can do for themselves
• A federal logic (whether a measure would be more effective at the national or EU level)

Question 80

This dual-logic often conflicts with each other, so that adjudicating it is difficult, even more so because if the CJEU invalidates a measure on this ground after all three Institutions agreed with it.
But the CJEU sidesteps this difficulty in two ways:

Answer 80

• It never considers the first part of the test
• The second test (comparative efficiency) is not used to assess whether an EU measure would bring advantages that a national measure cannot, but whether it helps to realize a general objective set by EU law ;(CF Davies: it’s a hopelessly tilted test as national measures can never realize a policy like a single market or common environmental policy, but the Union always can)

Question 81

Has the CJEU ever annulled a measure for breach of subsidiarity?

Answer 81

Thus the CJEU has never annulled a measure for breach of subsidiarity, which prompted calls for reform:
- Weiler: create a European Constitutional Court
- Brittan: create a chamber of national parliamentarians who would vet EU legislative proposals
There is evidence that the early warning system has been effective at patrolling the exercise of EU competences, but at the expense of subsidiarity; the MSs simply give opinions on whether they like the EU measure (Granat, Fabbrini, “Yellow Card, but No Foul” (2013) 50 CMLRev, 150).
But if it is difficult for courts to engage in substantive review, it must at least be possible to verify that the legislator addressed the question meaningfully, through controlling the obligation to justify. But the intensity of review is weak (see Germany v European Parliament and Council (1997)).

Question 82

Subsidiarity is the concern of all the institutions, political and judicial.

Answer 82

• Article 5(3) TEU: the principle of conferral (Art 5(1)) dictates the scope of EU competence; the exercise of such competence is then subject to two pre-conditions: proportionality (Art 5(4)) and subsidiarity (Art 5(3)).
• With regards to subsidiarity, Lisbon added (in the final sentence of Art 5(3)) an additional mechanism for monitoring the application of subsidiarity: the involvement of national parliaments
• Article 12 TEU refers expressly to the role of national Parliaments to contribute to the good functioning of the EU, by being informed of legislative proposals and seeing that subsidiarity is respected in accordance with the procedures in the Protocol (no. 2)

Question 83

• The role of national parliaments is described in Protocol 1:

Answer 83

o Information: Commission consultation documents and EP/Council’s draft legislative Acts forwarded to national Parliaments, who may send a reasoned opinion within eight weeks except for urgency (Council will give reasons). Agendas and outcomes of Council meetings are forwarded to national Parliaments. If the Council intends to make use of Art 58(7) TEU (allowing decisions that normally require unanimity to be taken by qualified majority) it must inform national Parliaments six months before adopting the decision.
o Interparliamentary cooperation: role of EP and national Parliaments to promote together, a special conference can submit appropriate contributions to the EP, Council and Commission.

Question 84

• The functioning of subsidiarity (and its connection with national parliaments) is described in Protocol No. 2 (Lisbon):

Answer 84

o Proposing legislation: the Commission, before proposing legislative acts, will consult widely (unless there is particular urgency, in which case the Commission will give reasons in the proposal) taking into account the regional and local dimensions of the proposed action. Then, it will forward the proposal and amended drafts to national Parliaments. Proposals will be justified with regards to subsidiarity and proportionality principles, in a detailed statement permitting assessment of compliance. Any national Parliament can within eight weeks send to the President of the EP a reasoned opinion as to why they think the proposal does not comply with subsidiarity (consulting, where appropriate, regional and local governments), and the legislative institutions must take this into account. Each national Parliament has two votes:
♣ if the total votes in favour of non-compliance is >1/3 or >1/4 in the fields of justice, security and freedom, then the proposal must be reviewed, before deciding whether to maintain, amend or withdraw the proposal, giving reasons (only been used three times)
♣ In the ordinary legislative procedure, if votes for non-compliance is >1/2, and the Commission decides to maintain, it must give a reasoned opinion justifying its compliance with subsidiarity, and the legislator (EP and Council) will consider and vote: if >55% in Council or >1/2 in Parliament say it’s incompatible, then the proposal fails (never been used)

Question 85

G. Davies, ‘Subsidiarity: the wrong idea, in the wrong place, at the wrong time’ (2006) 43 CMLRev 63

Thesis:

Answer 85

subsidiarity envisages a world where it is a matter of time before borders are fully removed, the necessary measures to compensate are in place, and much of the Community apparatus can go away. However, one must accept that Community purposes will never be complete; it is an ongoing process with new obstacles arising and a constant need for compromises. We should devise legal mechanisms for creating a balance; proportionality can do that, but the role of national interests needs to be made explicit, and national interests need to be given a public role.

Question 86

G. Davies, ‘Subsidiarity: the wrong idea, in the wrong place, at the wrong time’ (2006) 43 CMLRev 63

The Competence Problem

Answer 86

We increasingly need a system that defines and contains the legitimate scope of Community power because the scope of these powers is increasingly broad, but the current system (conferral, subsidiarity, proportionality) is deficient. This is difficult because there is no embracing neutral structure for both Community and Member States (akin to national constitutions).
The problem is that the Treaties’ only (and it’s implicit) reference to MSs’ powers is that they continue to have all the competences not transferred to the Union. But Community powers cannot be determined without regard of what MSs’ interests might be touched upon, and the silence therefore works against the interests of MSs: the Court can consider in depth the purposes and importance of Community policy but not MS policies unbalanced.
There is, therefore, a structural bias no matter how hard the CJEU tries to take a balanced neutral view.
This is exacerbated by the fact that the powers of the EU are defined in very broad manners, though there is an argument that these powers cannot be clearly defined – any precision would bring a huge price in functionality.

So can their exercise be controlled instead by the general principles (conferral, proportionality and subsidiarity)?
1º Conferral: doesn’t help because the problem is interpretation of what there is, while conferral just says that there is what there is.
2º Proportionality: currently most used to assess MS measures that may impact on Community policies (so as to restrict the MS), but IAO this is misguided – proportionality offers the best hope for a legal solution to competence questions.
3º Subsidiarity: ill-suited to the task of containing Community competences and protecting national powers.

Question 87

G. Davies, ‘Subsidiarity: the wrong idea, in the wrong place, at the wrong time’ (2006) 43 CMLRev 63

Subsidiarity: The Wrong Idea

Answer 87

The attraction of subsidiarity is the explicit consideration of the appropriate level of action. This is misguided, because it assumes the Community’s goals and achievements thereof absolutely, it simply asks who should do the work.
Example: most people think that a common contract code or a common high school curriculum are a bad idea because education and contract are matters to be regulated by MSs. However, subsidiarity doesn’t provide a convincing reason why: the goals of preventing the educational disadvantage of migrants, and of simple and transparent cross-border contracting, obviously cannot be sufficiently achieved by MSs!
The objections stem from proportionality not subsidiarity: the objection is that the harms of integrating education or contract far outweigh the Community’s goals!
Can proportionality be brought within subsidiarity, more precisely the word “sufficiently”, to argue that the impact on national autonomy and policies is a part of determining what is sufficient (no)? But this is inconsistent with the purpose of subsidiarity (with regards to the Protocol (Amsterdam) and the 3 things that must be taken into account. This is also ideologically at odds with subsidiarity: it might lead to the conclusion that the goals are sufficiently achieved when they are (because local autonomy weighs too strongly) not achieved at all.
The problem is that the Community’s competences are defined in terms of objectives to be achieved and not in terms of areas of activity to be regulated, whereas MS often assess measures in terms of their effects on an area of activity (the degree to which they invade MSs’ powers) failure to agree on the subject of conversation.
The major day-to-day role of subsidiarity is in the pre-legislative stage, but here it acts as a masking principle, by:
1º using an extremely low threshold (MSs cannot do the cross-border things that the Community can do)
2º ignoring national autonomy while suggesting that the impact on these has been carefully weighed
3º marginalizing proportionality considerations and reducing them to whether the goal could be achieved more efficiently (rather than the status of the goals themselves).
4º manipulating debate by focusing discussion on the achievement of the Community goal to the exclusion of other factors (ex. that the measure also has a negative effect on other policies that MSs may wish to pursue).

Question 88

G. Davies, ‘Subsidiarity: the wrong idea, in the wrong place, at the wrong time’ (2006) 43 CMLRev 63

Subsidiarity: The Wrong Place

Answer 88

The origins of subsidiarity are in the Roman Catholic Church, which makes sense there because the Church organization assumes that the objectives of the Church are not open to discussion and must be achieved come what may. But it does not work in the EU: the fundamental difference is that there are two levels of legitimate law-makers with overlapping competences and sometimes conflicting policies and interests, and no simple rule for determining which objective should take precedence.

Question 89

G. Davies, ‘Subsidiarity: the wrong idea, in the wrong place, at the wrong time’ (2006) 43 CMLRev 63

Subsidiarity: The Wrong Time

Answer 89

Subsidiarity is useful for democratic and economic reasons in the process of implementing objectives, but these are not the issues of the day: the current competence anxieties are about something else. The current problem is in deciding the extent to which the Community may legitimately make demands and legislate in these areas, and the extent to which, even if there is a price in openness or in other aspects of Community goals, Member State autonomy should be respected.

Question 90

G. Davies, ‘Subsidiarity: the wrong idea, in the wrong place, at the wrong time’ (2006) 43 CMLRev 63

Proportionality = the solution

Answer 90

There are problems:
1º Article 5 does not acknowledge “true proportionality” but a one sided version – no more than “what is necessary” (though Courts and commentators accept the fuller definition so it’s fine)
2º For it to work, national autonomy must be acknowledged as a factor to be weighed. The CJEU has never acknowledged openly that the desire of the Community to achieve full openness should sometimes be balanced against MS desires to retain autonomy, though it can be argued that this is the best understanding of the limits to Article 114 in Tobacco Advertising.
3º In early cases proportionality is often argued alongside subsidiarity and dismissed summarily without considering “true proportionality”, assessing the measure entirely from the Community side.
Because there is no other principle that can prevent important national measures falling victim to less important Community action, the Court should apply proportionality fully.

Question 91

P. Craig, ‘Subsidiarity: A Political and Legal Analysis’ (2012) 50 JCMS 72 at 82-84

The difficulties with realization

Answer 91

1º Paradox post-Maastricht pre-Lisbon: subsidiarity was supposed to alleviate competence disputes, and yet its application is predicated on the question of whether something is of exclusive or shared competence. The Community took a wide stance of exclusive competence (whenever the treaties imposed a duty to act: 1994), so as to exclude the application of subsidiarity in wide terrains of Community policy.
2º Post-Lisbon: again, in Lisbon the reinforcement of subsidiarity was a way to bolster the division of competence, but the problem is that competence is determined not only by MSs in treaty amendment, but also by the CJEU, where there is no evidence that their interpretation of treaty provisions take account of subsidiarity.
3º Problems with application of subsidiarity judged in terms of comparative efficiency and proportionality. Does it mean that the entirety of the EU objective must be sufficiently achieved at MS level, or only certain aspects need to meet this requirement? Directives (instead of regulations) are seen as fostering subsidiarity, but this approach is predicated on the feasibility of the divide between different aspects of a regulatory scheme.
4º Subsidiarity is not taken sufficiently seriously. But Impact Assessment Reports (reports on who might be affected by a proposal, pros and cons about the Union getting involved, what objectives it should set to address the problem, policy options etc.) should help; the CJEU should consider the adequacy of the EU reasoning by looking behind the formal preamble and into the IAR.
5º We must not merely focus on national actors, but must consider private actors too, and the fact is that private actors often regard national diversity negatively (especially for businesses seeking new markets or not wanting different regulatory health or safety regimes) and are thus not in favour of subsidiarity. If a part of the subsidiarity rationale is fostering national diversity etc., then this must attach not only to national values, but also to the people! This may not be taken as a given.
6º MSs do not take a uniform view of subsidiarity; many cases where measures are challenged for violating subsidiarity are opposed by other MSs, and some claims are brought by private parties without any MS backing.
7º Often the response is that CJEU control should be more searching, but more intensity does not automatically mean a different result; there is no evidence that in the decided cases, the result would have been different! Even in cases where the AG’s reasoning is more searching than the Court’s (Vodafone, and [MI] possibly Phillip Morris) the result was the same.
The reason that subsidiarity claims fail is not the intensity of review; it is the fact that a MS that brings a subsidiarity claim will (by definition) be faced with a recently enacted EU measure whose enactment itself attests to the fact that sufficient MSs to secure QMV believed that action at the EU level was required (in accordance with subsidiarity).

Question 92

P. Craig, ‘Subsidiarity: A Political and Legal Analysis’ (2012) 50 JCMS 72 at 82-84

Criticisms of Davies’ Argument that Subsidiarity is Misplaced

Answer 92

1º The Treaties do balance MS and EU interests, through the division between exclusive, shared, supporting/coordinating/supplementing competences, which is a reflection of what the Treaty framers viewed as the appropriate balance between national autonomy and EU competence.
2º The criticism that subsidiarity privileges the achievement of Community goals absolutely misses the reality of EU decision-making, by failing to take account of the way in which EU objectives are fashioned, i.e. through political discourse that involves an assessment of whether MSs are willing to accept the impact on their national values and autonomy.
3º There are difficulties concerning the legitimacy of the role Davies accords to proportionality (i.e. to assess whether the importance of an EU measure justifies its effect on the MSs); this is very different from Article 5(3), which does not support any kind of free-standing, competence-based proportionality.
4º There are difficulties of adjudication: courts adjudicating as to whether incursion on MS values is disproportionate in light of the EU objective is more difficult than other kinds of proportionality analyses, because the fact that a qualified majority of MSs voted in favour of it means that the ECJ would also have to balance the fact that most MSs do not agree with the applicant state.
5º It is not clear that there is a problem to be addressed. Whether or not you think the EU is going too far, it doesn’t make the case for proportionality. Davies grounds his argument on hypothetical examples of what the EU might do [MI but hasn’t done, probably for a reason that is ahem political] – we shouldn’t fashion legal doctrines on the basis of hypothetical examples.

Question 93

P. Craig, ‘Subsidiarity: A Political and Legal Analysis’ (2012) 50 JCMS 72 at 82-84

Other points I found useful

Answer 93

The Commission’s willingness to consider subsidiarity concerns raised by individual Member States is to be welcomed, although we should be mindful of the dangers of diluting such concerns if they merely become part of the general political dialogue between Commission and Member States.

Question 94

R. Schütze, ‘Subsidiarity after Lisbon: Reinforcing the Safeguards of Federalism’ (2009) 68 Cambridge Law Journal 525;

Thesis:

Answer 94

that Lisbon strengthens the political safeguards of federalism through the card procedures but these only provide a “soft” constitutional solution, so that we should turn to the judicial solution for a “hard” constitutional solution. To do this, the CJEU should, first, adopt a “federal proportionality” conception of subsidiarity, second, adopt a presumption against pre-emption, and third, adopt a stricter test for JR of subsidiarity where even express pre-emption will be knocked down for violation of subsidiarity.

Problem = subsidiarity has remained a “subsidiary principle of European constitutionalism” because of continued absence of clear conceptual contours (difficulty of application) + assessment has been largely left to the Community legislator (thus not taken seriously by European constitutionalism).
Proposals for reform that have emerged, and how Lisbon will take up these proposals (leading to subsidiarity being strengthened?):

Question 95

R. Schütze, ‘Subsidiarity after Lisbon: Reinforcing the Safeguards of Federalism’ (2009) 68 Cambridge Law Journal 525;

1º Strengthening the political safeguards of federalism

Answer 95

notably through the involvement of national Parliaments in the legislative process, either through a European “senate” grouping national parliamentarians or integrating national Parliament, as such, into the legislative process):
The European Convention thought that this would be the best solution: “Such a mechanism would enable national parliaments to ensure the correct application of the principle of subsidiarity by the institutions taking part in the legislative process through a direct relationship with the Community institutions.” [But what is the “correct” application of the principle? Different national Parliaments will obviously disagree about its “correct” application and what it requires, because different national Parliaments will ultimately have different views as to the appropriate extent of EU-level action! The fundamental flaw in the reasoning that led to adopting this “solution” in Lisbon is that it assumes there can ever be a “correct” application of subsidiarity, though there cannot.]
Lisbon integrated this solution, but rejected the “red card” mechanism (veto). Lisbon will thus continue to “proceduralise” subsidiarity without turning the principle into a hard and fatally efficient political safeguard of federalism.This solution will channel NPs’ scrutiny to where it can be most useful and effective: on their respective national governments.

Question 96

R. Schütze, ‘Subsidiarity after Lisbon: Reinforcing the Safeguards of Federalism’ (2009) 68 Cambridge Law Journal 525;

2º Substantiating the principle by strengthening the judicial safeguard of federalism

Answer 96

aº two proposals: ex ante jurisdiction to review European bills on subsidiarity grounds, or instituting a new Court specialized on the question of competence and subsidiarity): both rejected.
European Convention: “the introduction of a judicial review in the legislative phrase would be tantamount to the monitoring of subsidiarity losing its primarily political nature”.
bº reinforce ex post judicial review of subsidiarity by understanding subsidiarity in terms of “federal proportionality” (it’s not merely about whether the Community should exercise its powers but how it should).
Two reasons: a philosophy of dual federalism (either-or logic that excludes completely one or the other of the EU and MSs) cannot be sustained + it is impossible to reduce subsidiarity to “whether” because where the Union enjoys a competence in an area it is generally entitled to act in that area, so “whether” is always answered in the affirmative for that area. It would only make sense to ask “whether” for the specific act, where the “whether” and “how” are inherently tied together.
Difference between proportionality and subsidiarity: restrict proportionality to its liberal dimension (to protect the collective autonomy of the people against excessive public interference). The federal dimension of proportionality is subsidiarity.
How to reinforce JR if the federal proportionality analysis is adopted: adopt a “clear statement rule” and “presumption against pre-emption” inspired by the American Supreme Court (i.e. insist on express pre-emption before concluding that an EU law occupied a field, and a judicial presumption against pre-emption in particular fields), possibly extending to a “presumption in favour of national responsibility” [But surely these presumptions assume that the federal legislator can (i.e. has the power to) pre-empt as long as it says so clearly, like the presumption of legality in British constitutional law that says that Parliament (because of its sovereignty) can legislate against common law fundamental principles as long as it says so clearly. But the problem with EU law is that the EU legislator cannot pre-empt – either something infringes subsidiarity or it doesn’t, and spelling it out clearly does not entitle it to do something that it would otherwise not be entitled to do! Also, these presumptions are presumptions as to construction or interpretation, not presumptions as to power. Actually what he goes on to say illustrates my point perfectly:]
However, this would only provide a soft institutional solution (subsidiarity-inspired interpretation of European legislation): where the European legislator spoke clearly and expressly field-pre-empted national legislators in violation of the subsidiarity principle, the European Court would face a choice: the American solution (it’s fine) or rather outlaw disproportionate interferences into national legislative autonomy (IAO preferred).
This hard constitutional solution would imply the Court abandoning its manifest-error standard and develop a stricter standard of review. It would mean that the Court of Justice gets involved in fundamentalpolitical and social questions. But this is - after all - whatconstitutionalcourts do.

Question 97

P. Kiiver, ‘The Early-Warning System for the Principle of Subsidiarity: the National Parliament as a Conseil d’Etat for Europe’ (2011) 36 ELRev 98;

Thesis:

Answer 97

In 1999, Weiler suggested setting up an EU institution that would check draft EU legislation for competence and subsidiarity (a sort of Conseil constitutionnel) to help establish the inviolability of the boundary between EU and MS competence. [Aside: le Conseil constitutionnel est chargé (inter alia) d’assurer le respect de la Constitution par les lois et les règlements; il effectue un contrôle a posteriori et (depuis 2008) a priori (QPC). Le Conseil d’État a une double fonctionnalité: il est conseiller du Gouvernement (il donne son avis sur la légalité et l’opportunité des projets de lois) et juge administratif suprême (sans intérêt)]
Lisbon did not do that, but established (IAO) a sort of Conseil d’Etat through the Early Warning System (NPs exercising an advisory role in the EU legislative process). NPs might not like the idea that they should be reduced to issuing non-binding advice, but the procedural set-up and empirical reality suggests that this is the case, and the alternative seems to be getting sidelined altogether.
Criticisms of the EWS (before it was implemented): It’s not binding, and will probably never be triggered (because the thresholds are unattainably high and coordination between NPs impossible, deadline very short, and breaches of subsidiarity don’t seem to be a problem in practice).
However, it might trigger interest and raise European awareness among national parliamentarians, acting as a catalyst for the exercise of those powers that NPs already have (without conferring on them any significant new powers).

Question 98

P. Kiiver, ‘The Early-Warning System for the Principle of Subsidiarity: the National Parliament as a Conseil d’Etat for Europe’ (2011) 36 ELRev 98;

IV – Conclusion

Answer 98

Hoped that NPs would take the EWS seriously, and a realistic model to adopt is one akin to the Conseil d’État’s advisory role, focusing on the legality of legislation and not its political desirability. “Political considerations may still be triggered in the wake of EWS review, although it is probably too late at the EWS stage to make much of a substantive difference.” [What to make of this, are the political considerations that the Commission frequently deals with merely triggered in the wake of EWS review, or are they part of EWS review itself?]
Perhaps the yellow or orange cards of the EWS will never be triggered, but that should not automatically be considered a sign of the system’s weakness. If the Commission stays within the limits of conferred competences and of the principles of the exercise of these competences, and if national parliaments or chambers call the Commission to account for its choices and reasoning in proposing new EU measures, then there will simply be no need for any yellow or orange cards to be raised. [Like the only good point of the article, but then if the role of the EWS is to hold the Commission to account, “keep it on its toes” so to speak, then isn’t there a more effective way of doing that, like the possibility of bringing a QPC? Indeed, the reason why in France it was felt that a QPC was needed despite the Conseil d’État’s role is probably exactly this; an advisory, non binding, mechanism is insufficient to keep anyone on their toes!]

Question 99

Jančić ‘The Game of Cards: National Parliaments in the EU and the Future of the Early Warning Mechanism and the Political Dialogue’ (2015) 52 CMLRev 939

Thesis:

Answer 99

The current concept and practice of subsidiarity monitoring do not satisfactorily address the problem of competency creep and the need to safeguard domestic socio-economic and politico-legal idiosyncrasies. Argues that refocusing parliamentary scrutiny towards the principle of conferral and legislative substance is more conducive to alleviating the democratic deficit and increasing EU legitimacy.

Question 100

Jančić ‘The Game of Cards: National Parliaments in the EU and the Future of the Early Warning Mechanism and the Political Dialogue’ (2015) 52 CMLRev 939

I – What is subsidiarity monitoring

Answer 100

1º Nature: intrinsically political. Criticized on the basis that its porous nature undercuts rather than defends national sovereignty because it allows the EU too wide a margin of competence interpretation. Its political nature makes it unfit for JR; subsidiarity has never led to the annulment of an EU measure.
2º Effectiveness (of the early warning system): two yellow cards to date; the first (Monti II) withdrawn and the second (EPPO) maintained. Should the yellow card procedure be seen as a collective achievement (a sign of success), or should we rather analyse the Commission’s reasoning which will lead to a less optimistic conclusion (Monti II withdrawal was not a direct corollary of the yellow card, indeed the Commission expressly concluded that subsidiarity was not breached, and said that the reason for withdrawal was because of lack of political will and because they wanted to rapidly adopt another proposal).
The second yellow card (EPPO Proposal) did not lead to withdrawal, but the Commission’s response was in much more detail (they even responded to objections beyond subsidiarity – those concerning conferral and proportionality), so can be seen as more effective than the first in fostering dialogue (though the UK House of Commons found the response “unsatisfactory” and exemplary of “poor practice”.
3º The Barroso Initiative (informal political dialogue): much more used than the early warning mechanism (from Lisbon until June 2015, 1659 Barroso opinions and 298 early warning opinions). Difficult to gauge their effectiveness because of their informal nature, but it is institutionally and procedurally asymmetrical – 80% come from the 10 most active chambers and most directed at legislative (and not non-legislative) proposals.
But it offers more flexibility of discussion than the early warning mechanism, so that the two can be seen as complementary – with concerns not relating to subsidiarity, or those that cannot meet the eight week deadline, being addressed under the Barroso Initiative.
4º Benefits (of current subsidiarity policing): alerts national parliaments to the ubiquity of EU law and motivates them to more closely scrutinize EU affairs through subsidiarity policing. But its effectiveness depends not only on the Commission but also on the political motivation of national parliaments.
4º Drawbacks: they only pose questions about the exercise of EU competence, not its limits, so that where national parliaments can (when they coordinate sufficiently) exert legally binding outcomes through the early warning mechanism, they cannot question the legal basis; where they can question the legal basis (Barroso Initiative) they cannot exert legally binding outcomes.

Question 101

Jančić ‘The Game of Cards: National Parliaments in the EU and the Future of the Early Warning Mechanism and the Political Dialogue’ (2015) 52 CMLRev 939

II – The Early Warning System is a “Straightjacket”

Answer 101

1º Reasoned opinions can only address draft legislative proposals (and not more upstream like consultation documents and legislative planning documents)
2º Reasoned opinions can challenge the contents of draft EU proposals but only subsidiarity points go towards yellow card thresholds, whereas identifying the true target of reasoned opinions is difficult.
3º Subsidiarity does not apply to exclusive EU competence nor encompass proportionality and conferral (which are more significant for bringing the EU closer to the citizen).

Question 102

Jančić ‘The Game of Cards: National Parliaments in the EU and the Future of the Early Warning Mechanism and the Political Dialogue’ (2015) 52 CMLRev 939

III – Solution: focus on conferral instead

Answer 102

The early warning system should focus on the admissibility of the EU action in the first place, making competence assessment an ongoing process and not merely a process conducted during treaty ratification.
Difficulty: it might allow “whimsical and vengeful approaches” by disgruntled political parties to use the early warning mechanism to derail integration. Advantage: it might assuage Euroscepticism.
1º Static conferral (assessment of whether a MS’s consent to be bound by EU norms coincides with the electorate’s interests and preferences – not triggered by EU action and can be undertaken at any point): this can lead to renewal of democratic consent to the limits of EU action (good), but it can also lead to its rejection (bad). It can’t be done via the early warning mechanism.
2º Dynamic conferral (assessment, triggered by EU action, of the EU’s interpretation of the nature of the competences it exercises): less amenable to repatriation of powers from the EU because it doesn’t assess the transfer but whether those already transferred have been correctly classified (exclusive/shared/supporting, coordinating, supplementing).

Question 103

Jančić ‘The Game of Cards: National Parliaments in the EU and the Future of the Early Warning Mechanism and the Political Dialogue’ (2015) 52 CMLRev 939

IV – Card proposals

Answer 103

1º Red card: to allow national parliaments to veto draft EU legislation (upon attainment of thresholds), or even to repeal enacted legislation (retrospective red cards). But surely a step too far, undermining the coherence, common application and effet utile of EU law.
2º Late card: to allow national parliaments to re-examine EU proposals at the end of the legislative procedure before enactment. Currently, any national parliament can bring actions before the ECJ if they deem a piece of EU legislation in violation of subsidiarity, but this is ineffective (has never been used (although some MSs have procedures for this) [CF Bernard, highlighting the need for cooperation at national and EU levels], depends on the government’s willingness to notify, and the ECJ is not very inclined to invalidate legislation on subsidiarity grounds). The late card would therefore be a political complement to JR of subsidiarity compliance (but still no say in the substance of the legislation).
3º Green card: to allow national parliaments to propose new EU legislation and to call for review/amendment/appeal of existing ones.
Together, they provide useful signposts as to the evolution of the European role of national Parliaments, but they were all rejected in the Convention on the Future of Europe. Perhaps now we’d be more favourable?

Question 104

Jančić ‘The Game of Cards: National Parliaments in the EU and the Future of the Early Warning Mechanism and the Political Dialogue’ (2015) 52 CMLRev 939

V – Potential drawbacks to increased involvement of national parliaments

Answer 104

1º Upset institutional balance of the EU: a veto power of national parliaments would distort proper distribution of power and responsibility in the EU’s “complex but remarkably successful” (Weatherill) system of transnational governance by conceding too much to state control, leading potentially to the re-nationalization of the EU.
2º Weaken the link between national parliaments and national executive: lack of time for domestic law and politics + transformation into EU actors dilution of their domestic constitutional roles. This would also give national parliaments more means to disagree with their government, upsetting existing mechanisms of executive-legislative relations.
3º Weaken the link between national parliaments and the national electorates by causing parliamentary remoteness due to over-implication in EU matters.

Question 105

Jančić ‘The Game of Cards: National Parliaments in the EU and the Future of the Early Warning Mechanism and the Political Dialogue’ (2015) 52 CMLRev 939

VI – Conclusion

Answer 105

The early warning mechanism and political dialogue must be reformed: by expanding its scope to encompass conferral and legislative substance.
But should national parliaments acquire stronger legally binding rights in EU policy making (new card initiatives)? There is demand from national parliaments, but absent Treaty revision, this would depend on the political will of the Juncker Commission, and there is meagre chance of success, particularly because of the potential to overhaul existing constitutional structures and balance of powers between EU institutions.
In the short to medium term, therefore, the role of NPs in the EU is bound to remain in limbo, torn between their domestic and EU prerogatives, and in a quest to reconcile their mutual divergences with a unified approach to the exigencies of European integration.