I have been doing some research on the Treaty establishing a Constitution for Europe (hereinafter referred to as TCE or _Constitutional Treaty—_see full text in pdf). It was meant to provide for a consolidated basis for the European Union that would, at least in theory, see it move away from the paradigm of an inter-state-treaties-based formation. The Constitutional Treaty never entered into force as the ratification process came to a halt in 2005, following the rejection from French and Dutch citizens in separate referenda. While archived for historical purposes, many of its provisions were nevertheless preserved and eventually incorporated in the subsequent Treaty of Lisbon, the last one to date.
As of now the European Union is founded on two international treaties that have the same legal value: (i) the Treaty on the Functioning of the European Union or TFEU, and (ii) the Treaty on European Union or TEU. Though these are never referred to as a “constitution” they do perform the exact same function of a codified corpus of primary law, i.e. to explicitly lay down the values and norms that govern a certain political organisation, in particular as concerns the relationship between the Union and the Member State levels of government.
One of the principles that was first introduced in the Constitutional Treaty and then included in the Treaty of Lisbon is that of conferral. The TCE was the first of its kind to explicitly clarify the distribution and separation of powers between the Union and the Member States. It provided for a classification of competences into (1) exclusive, (2) shared, and (3) supportive. The EU level would act on its own accord on the first, would work together with Member States on the second, and would only have an ancillary role on the third.
In practice this distinction still holds, albeit implicitly by the manner in which the EU acts in various areas of policy, such as international trade, regulation of the single market, economic governance, and the now-emerging nexus of political initiatives on the areas of asylum and migration policy as well as border control and security.
On such areas of policy as international trade and the single market, the EU has exclusive competence to adopt policies under the ordinary legislative procedure. On economic governance and migration, where there is an intersection between the supranational and the national levels, the competences are generally shared between the EU and the Member States. Whereas on issues like national security the EU can only perform a supportive function.
Conferral is explicitly referred to in Articles 4 and 5 of the Treaty on European Union. It basically stipulates that the competences of the Union are conferred to it by the Member States and that the EU ought to pursue objectives common to the Member States.
This should not be conflated with the principle of limited government, i.e. a government bound by law. Conferral concerns the qualitative features of the EU architecture in particular as to the scope of Union policy and the [constitutional] subject capable of determining it. It means that the EU as such is not self-determined, for its presence is contingent on the joint will of the Member States. The Union is not sovereign in its own capacity, nor does it stand on the international order as a sovereign nation state (a nation of nations for that sake).
The principle of conferral does not prejudice the rule of law or the notion of limited government. It has a narrower purpose: to make it crystal clear that the EU is a purpose-specific political organisation, whose competences can be limited to an exhaustive list agreed upon by the Member States, which are sovereign nation states in their own right.
The modern world is characterised by a set of legal norms that render sovereignty limited in scope. For instance, no nation state can violate human rights under the presumption that it has the sovereign authority to do so. Nation states operate within a nexus of rules for the international community at-large. Many of these may not yet be perceived by citizens as “constitutional” in nature—and, strictly speaking, they are not—yet they do, in principle, tend to take precedence over any secondary piece of legislation that stands in conflict with them. Still, international norms lack the degree of enforcement necessary for making them the default choice for every government bound by them.
To this end, European Union law is a case where international or inter-state covenants exhibit a self-awareness of the fact that agreements between states necessarily limit their respective sovereignty when a subset of their powers is transferred to a supranational level. European law is international law for a given geographic region. Where it differs from, say, the UN Charter, is in the fact that the European Treaties establish a set of supranational institutions that can in effect exercise sovereign authority over policies that are the exclusive competence of the EU, while they also have a very important role to play on issues that are shared between the EU and its nation states.
Each EU Member State is a nation state with limited sovereignty, courtesy of its commitments to the Union. For example, no national government can, in principle, deviate from the macroeconomic targets that are envisaged in the European framework for economic governance. They will face severe penalties. This limitation is considered worthwhile with the understanding that the Union level is, in return, bound to pursue objectives within the scope of the competences conferred to it by the Member States.
The principle of conferral, especially once considered in conjunction with two other principles of EU law, namely subsidiarity and proportionality, can be perceived as a safeguard against EU-level arbitrariness that could hinge on purely national powers. This is a sound basis for an outright federated polity, for it guarantees that the separation and distribution of competences between the Union and the Member States is evaluated on the basis of a predetermined international agreement.
Given the fact that the European Union is in many ways a work in progress, it perhaps is best that the supranational level is not self-determined. Under the current order, it could be the case that “Brussels”, with its well-known shortcomings on input legitimacy, could legislate on issues well beyond its area of authority, and could consequently seriously hamper the properly-understood interests of [some of] its Member States. At least for the time being, the supranational level pursues its ends in line with the collective will of the Member States; an impetus that is provided by the European Council in its rule forming capacity (for more on rule formation see my free ebook, A Handbook on the European Union).
Finally, the fact that important aspects of the Constitutional Treaty were anyhow enshrined in the subsequent Treaty of Lisbon and, furthermore, that ever since certain pieces of secondary law have greatly enhanced the powers of the Union as such on certain issues of shared competence (particularly on economic governance), shows that the mere rejection of a given international agreement by popular vote is not sufficient to change things. Limited national sovereignty notwithstanding, a referendum does not provide for a counter-proposal to the issue voted upon, an alternative vision for the European architecture in this case. It then is no surprise that the rejection of the Constitutional Treaty ended up being more of an objection to the term “constitution” than to the actual content of the document.