1.2.2.  Subsidiarity

LEGAL BASIS

Article 5, second paragraph (3b) ECT, in conjunction with Article 2 (B), last paragraph, and the 12th recital in the preamble to the EUT.

• The principle of subsidiarity has not just applied since its incorporation in Article 5 ECT. As long ago as 1951, Article 5 of the ECSC Treaty stipulated that the Community should exert direct influence on production only when circumstances so required. And although it was not expressly so defined, a subsidiarity criterion was included in Article 130r EECT, on the environment, by the Single European Act in 1987.
• However, the Court of First Instance of the EC ruled in its judgment of 21 February 1995, ECR II-289 at 331, that the subsidiarity principle was not a general principle of law, against which the legality of Community action should be tested, before the EU Treaty entered into force.

OBJECTIVES

The subsidiarity principle pursues two opposing aims. On the one hand, it allows the Community to act if a problem cannot be adequately settled by the Member States acting on their own. On the other, it seeks to uphold the authority of the Member States in those areas that cannot be dealt with more effectively by Community action. The purpose of including this principle in the European Treaties is to bring decision-making within the Community as close to the citizen as possible.

ACHIEVEMENTS

1.     Definition

a. The general aim of the principle of subsidiarity is to guarantee a degree of independence for a lower authority in relation to a higher body or for a local authority in respect of a central authority. It therefore involves the sharing of powers between several levels of authority, a principle which forms the institutional basis for federal States.

b. When applied in a Community context, the principle means that the Member States remain responsible for areas which they are capable of managing more effectively themselves, while the Community is given those powers which the Member States cannot discharge satisfactorily.

c. Under Article 5, second paragraph, ECT there are three preconditions for Community action in accordance with the principle of subsidiarity:

• the area concerned must not fall within the Community's exclusive competence;
• the objectives of the proposed action cannot be sufficiently achieved by the Member States;
• the action can therefore, by reason of its scale or effects, be implemented more successfully by the Community.

2.     Concept and scope

a. The scope of the principle of subsidiarity may be seen from two points of view. In areas in which the Treaty gives responsibility to the Community - shared with the Member States - the principle is a yardstick for measuring that responsibility (limiting the exercise of powers). And in areas in which the Treaty does not give the Community responsibility, the principle does not create additional competence (no allocation of powers).

b. Demarcation problems

The principle of subsidiarity applies only to areas shared between the Community and the Member States. It therefore does not apply to areas which fall within the exclusive competence of the Community or those which fall within exclusively national competence. The dividing-line is blurred, however, because Article 308 (235) ECT may extend the Community's areas of competence if, for instance, action by the Community proves necessary to attain Treaty objectives. The demarcation of the areas of exclusive Community competence continues to be a problem, particularly because it is laid down in the Treaties not by reference to specific fields but by means of a functional description.

In a number of decisions stemming from the Treaties, for example, the Court has defined and recognised certain competences (which are not explicitly regulated in the Treaties) as exclusive, but it has not laid down a definitive list of such competences. The lack of any clear dividing-line for applying the principle of subsidiarity will continue to result in different interpretations of this principle. At the same time, however, the Community clearly has the aim of limiting Community action to the objectives of the Treaty and ensuring that decisions on new action are taken as closely as possible to the citizen. Particular emphasis is also placed on this connection between the principle of subsidiarity and closeness to the citizen in the preamble to the EU Treaty.

c. Where it applies

The principle of subsidiarity applies to all the Community Institutions. The rule has practical significance for the Council, Parliament and Commission in particular. The Court's decisions are also bound by Article 5, second paragraph, ECT. Citizens of the Union cannot derive any rights directly from this provision.

3.     Judicial reviewability

Under Article 5, second paragraph, ECT the principle is in theory subject to judicial testing. Where its application is concerned, however, the EU's bodies have wide discretion regarding the form that this takes, which the Court is bound to respect. In general terms, it can be said that the extent of the Court's jurisdiction is in inverse proportion to the extent to which the Member States are effectively involved in a decision on the substance and scale of measures under consideration, consideration of the question of necessity has been thorough and has done justice to the interests involved, and the institutions and legal entities concerned (including those below national level) have been fully consulted. In this connection, as long ago as 1990 Parliament suggested the introduction of an Article 172a into the ECT to give the Court of Justice the right to determine whether a proposal breaches the limits of Community competence (referral to the Court would take place after a legal act was adopted but before it was implemented, and would be open to both the Member States and the Institutions).
In its judgments of 12 November 1996 in Case C-84/94, ECR I-5755 and 13 May 1997 in Case C-233/94, ECR I-2405, the Court found that compliance with the principle of subsidiarity was one of the conditions covered by the requirement to state the reasons for Community acts, under Article 253 (190) ECT. This requirement is met even if the principle is not expressly mentioned in the act's recitals but it is clear from reading the recitals as a whole that the principle has been complied with.

INNOVATIONS IN THE TREATY OF AMSTERDAM

Without changing the wording of the subsidiarity criterion in Article 5, second paragraph, ECT, the Treaty of Amsterdam incorporates the ‘Protocol on application of the principles of subsidiarity and proportionality’ into the European Treaties. The overall approach to the application of the subsidiarity principle agreed in Edinburgh in 1992 thus became to a large extent subject to judicial review via the protocol on subsidiarity.

On the question of who is responsible for exercising a given competence, the principle in Article 5, second paragraph, ECT merely distinguishes between the Member State and Community levels. But the Declaration on subsidiarity by Germany, Austria and Belgium (of which the Amsterdam Summit took note) clearly points out that ‘action by the European Community in accordance with the principle of subsidiarity not only concerns the Member States but also their entities, to the extent that they have their own law-making powers conferred on them under national constitutional law'.

ROLE OF THE EUROPEAN PARLIAMENT

1. Ongoing work

Parliament has defended the principle of subsidiarity for many years, and was the instigator of the introduction of this principle into the Community when, on 14 February 1984, in adopting the Draft Treaty on European Union, it included a provision stipulating that where the Treaty conferred on the Union competence which was concurrent with that of the Member States, the Member States could act so long as the Community had not legislated. Moreover, it stressed that the Community should only act to carry out those tasks which could be undertaken more effectively in common than by individual States acting separately.

Parliament was to reincorporate these proposals on the principle of subsidiarity into many resolutions (e.g. resolutions of 23 November and 14 December 1989, 12 July and 21 November 1990 and 18 May 1995), in which it reaffirmed its support for this principle in the context of the European Union and called for a debate to be opened on the interpretation and application of the principle of subsidiarity.

2. Agreement on interinstitutional cooperation

The debate triggered by Parliament resulted (supported by the conclusions of the Edinburgh Council on subsidiarity, transparency and democracy and Parliament's resolution of 18 November 1992) on 25 October 1993 in the conclusion of an interinstitutional agreement between the Council, Parliament and the Commission. This gave expression to decisive steps by the three Institutions in this area. All three Institutions are thus required to respect the principle of subsidiarity.

The aim of the agreement is to use procedures for implementing the principle of subsidiarity to regulate the details of the powers conferred on the Community Institutions by the Treaties, so that the objectives laid down in the Treaties can be attained. It includes the following provisions.

• In exercising its right of initiative, the Commission will take into account the principle of subsidiarity and show that it has been observed. The same applies to Parliament and the Council, in accordance with the powers conferred on them by Articles 192 (138b) and 208 (152), respectively, of the ECT.
• The explanatory memorandum for any Commission proposal will include a justification of the proposal under the principle of subsidiarity.
• Any amendment which may be made to the Commission's text by the Council or Parliament must be accompanied by a justification regarding the principle of subsidiarity if it entails a change in the sphere of Community intervention.
• The three Institutions will regularly check, under their internal procedures, whether the action envisaged complies with the provisions concerning subsidiarity as regards both the choice of legal instruments and the content of the proposal. Accordingly, under Rule 58 of Parliament’s Rules of Procedure, 'During the examination of a legislative proposal, Parliament shall pay particular attention to respect for fundamental rights and the principles of subsidiarity and proportionality'.

In addition to this agreement, at the European Council in Edinburgh the Commission undertook, inter alia, to provide justification for all its proposals for legal acts in the light of the application of the principle of subsidiarity, to withdraw or revise certain proposals and to review existing legislation. It was also envisaged that the Commission would draw up an annual report on observance of the principle.

In its resolution of 13 May 1997 on the Commission reports on application of the subsidiarity principle in 1994, 1995 and 1996, Parliament drew attention to the binding, constitutional nature of the subsidiarity principle, which was subject to interpretation by the Court, and pointed out that it should not obstruct the legitimate exercise of Community powers. Neither should it in any way be used as pretext to call into question all that the Community had already achieved.

16/10/2000