The European Union is the functional extension of the collective will of its constitutive nation states. Whatever powers it has are given to it by common accord incorporated in treaty law. The EU is created by its Member States for the sake of strengthening and promoting their collective interests as well as for pursuing objectives they have in common.
The European Treaties, the Union’s primary law, inter alia specify the distribution of competences in the Union.1 They provide for the vertical separation of powers between the national and European levels. This is about what area of policy belongs to which government. Whether it is a local, national, or European issue. In doing so, they formalise a key aspect of a federal system: clear delineations between the scope of authority of the various administrative strata.
There are three criteria that guide the distribution of competences in the EU. These namely are:
- the principle of conferral;
- the connatural principles of subsidiarity and proportionality;
- the inferred principle of delegated sovereignty (shared responsibility).2
The three-fold distribution of authority
The principle of conferral is the single most important item in this context. In essence, it is an exhaustive list covering areas of policy where the EU has a role to play. The underlying rationale is that powers explicitly given to the EU—in the way and extent to which they are—are no longer specific to national governments and, conversely, any area of policy that is not mentioned in the Treaties remains a national prerogative.
The division of competences has three permutations based on the degree of power conferred to the European level:
- those that are exclusive to the Union;
- those that are matters of shared competence between the EU and the Member States;
- those where the EU can only be supportive of the actions of national governments.
Exclusive competence confers supreme authority to the EU.3 European institutions have the first and final say over the specifics of policy. National governments must abide by supranational decisions. An example would be the European Central Bank (ECB), which gets to conduct monetary policy against the backdrop of the Union’s exclusivity over monetary affairs in the euro area. The eurozone’s National Central Banks cannot deviate from the supranational agenda to exercise a monetary policy that is good for the economy under their jurisdiction. They can only implement the decisions of the ECB, even to the detriment of the domestic economy.
Another example would be trade agreements with the rest of the world. It is the European Commission, the Union’s implementing executive, which gets to negotiate them. The controversial proposed deal between the EU and the USA, formally known as the Transatlantic Trade and Investment Partnership (TTIP), is a case in point. Should it enter into force, it would have a profound effect on the European economy and the standards upheld therein, much to the dismay of civil society. Popular protests notwithstanding, and courtesy of the EU’s exclusive competence, it is only up to the Commission to make the judgment call on whether to proceed with finalising TTIP or not.
In general terms, exclusive competence means that the European interest, defined in terms of what EU institutions consider the best course of action under the circumstances, takes precedence over any national interest in the area of policy concerned.
Shared competence confers a degree of sovereignty to the EU institutions while entailing a high level of responsibility from the Member State towards its peers.4 This is sometimes referred to as “shared sovereignty” which is not the most useful of descriptions. Sovereignty is not really shared. The legal framework is outright supranational, i.e. outside the scope of national unilateral action, and the European level gets to have the first and final say over the implementation of decisions. What is mutualised is the accountability of the national government, which is no longer limited to its citizens but extends to the other national governments.
Put simply, in areas of shared competence no national government can act on its own accord, nor can its initiatives prejudice or otherwise undermine the position of the rest of the Union. The reason some speak of “shared sovereignty” is that the accountability part gets to be negotiated between national governments, typically at the European Council or the Council of the EU. They neglect the fact that in such negotiations Member States are already bound by European laws and, hence, have already outsourced much of their decision-making power. The sovereignty to be shared, if thought of as absolute, was not there to begin with.
Supportive competence for the EU leaves authority to the national level.5 However, the very fact that it is being mentioned under the principle of conferral implies that the Union can still issue its recommendations and, potentially, exert a degree of diplomatic pressure when and where necessary.
This could be the case especially on issues where the lines can be blurred. For example, industry is supportive competence, yet it could be considered in conjunction with some other item, say, energy, which would introduce an element of shared competence. Speculation aside, national governments have the first and final say. This provision is likely meant to be a fallback option for the EU in case where it would absolutely need a residual legal basis to promote some European policy.
Criteria for balancing competences
The principle of conferral is not enough to draw clear delineations between the various levels of government. The enumerated areas of policy are generic and subject to diverging interpretations. With multiple actors involved, in the form of EU institutions and national governments, there needs to be a canonical method for guiding policy-makers. To this end, the Treaties envisage two principles: subsidiarity and proportionality.
Subsidiarity stipulates that power should be exercised as close to the citizen as possible. Its scope should always be commensurate with the task at hand. If a matter can be properly addressed locally, then only the local authorities should be involved. Phenomena that have a national reach must fall under the control of the national government. Policies with a cross-border dimension require action at the supranational level.
This bottom-up approach cannot automatically define the degree to which the authorities can exercise their power. Hence the principle of proportionality to ensure that actions pursued are always limited to the sought ends, while never creating conditions for the expansion of control. For instance, even if a European institution were supposed to tackle a given issue, its policies should not grant it additional powers, nor should they have that objective. Furthermore, they should not prejudice the capacity of other political entities to pursue their mandate.
Subsidiarity and proportionality can be perceived as distinct categories. Their functions are different. These however are not ultimate functions but only instrumental for a greater end, a common objective: to set the normative parameters for the application of the principle of conferral.
Subsidiarity and proportionality substantiate a bottom-up method for distributing competences in accordance with the vertical separation of powers, and for limiting the scope of the authorities’ discretion to the sought ends within their remit.
Delegated sovereignty (shared responsibility)
A nation state can gain accession to the European Union only after it complies with the European legal order, the acquired level of integration known as the Community acquis, acquis communautaire, or just acquis. The state in question needs to harmonise its legal order with that of the Union, typically by transposing into national law the EU’s legislation.
Rule harmonisation is not a mere exercise of matching distinct sets of legal documents. It rather is kind of a constitutional reform, for it ramifies to key areas of statehood and implies a diminution in the sovereign authority of the nation state.
By virtue of the aforementioned principles, EU Member States commit to divide their sovereignty and to transfer a portion of it to the supranational level, either in the form of an exclusive EU competence or as a matter of shared competence with the rest of the Union. Whatever the specifics, they agree to bind their fate with that of the EU: to considerably limit their scope for unilateral action, acknowledge the shared responsibility intrinsic to membership and the conditions it entails, in exchange for the benefits of European integration.
The transfer of sovereignty is a negotiated result agreed upon in functional terms. Powers are given to the EU so that it may be in a position to pursue objectives common to its Member States. There is no normative aspect to it. The European level does not make claims on sovereignty. Legitimacy is firmly rooted in its constitutive nations and in their common will, manifesting as the European integration process and constitutional order thereof.
European Member States do not forfeit their right to sovereignty. They only provide assent to its redistribution within the framework of EU law. A nation that would consider its position in the Union to have become detrimental to its interests could engage in a predefined process of reclaiming its sovereignty, with the ultimate effect of exiting the Union.6 As the acquis currently stands this trade-off cannot be circumvented. Full national sovereignty and EU membership are mutually exclusive.
The repatriation of sovereign authority is no mechanistic procedure nor is it dependent solely on the will of the nation concerned. Joining the EU means delegating competences to the supranational level. Doing so creates a certain bond between the nation state and the Union; a bond that cannot be severed unilaterally. For that to happen, the rest of the Union, mostly the other Member States, must offer its consent. EU-exit and its modal features will have to be thoroughly negotiated at the level of the European Council.
Thus while EU Member States do not forgo the claims on their sovereignty, they do, nonetheless, outsource or mutualise at the supranational stratum the decision over its possible repatriation. This is, in and of itself, a clear indication of the shared responsibility attached to EU Membership.
De facto European sovereignty
The EU is seldom referred to as “sovereign”. The historical evolution of this term carries significations that are intimately linked with the construct of the nation state. Only nations qua states are meant to be sovereign. The EU is not a nation, nor is it a state in its own right, at least not properly so called.
While there may be good reasons for maintaining that approach, we cannot afford to obfuscate the fact that the European Union does exercise sovereign authority over a range of policies. Whether this qualifies as “sovereignty” in a technical sense within the framework of international law is of secondary consideration. What matters is the more immediate effect: in areas of policy where the EU has exclusive or shared competence, no national government can pursue a unilateral course of action. In other words, a Member State cannot appeal to its sovereign right as a nation state in an effort to deviate from the agenda forwarded at the European level.
Perhaps the only legitimate reason for not considering the EU as sovereign is that its authority is conferred to it by nation states that reserve the ultimate right to reclaim control over any area of policy. Should the Member States choose to proceed with a Treaty reform that would roll back much of the integration process, the EU’s sovereignty would necessarily be diminished.
The problem with this line of reasoning is that it goes both ways. It also holds true for nation states. In their case a legal or constitutional reform could equally impact their sovereign authority, such as when they first complied with the European acquis for the purposes of joining the Union. Yet we tend not to think of the possible reformulation of a nation’s legal order as sufficient reason for withholding judgement on the effective features therein.
Rather than predicate our concerns on the potentiality of things, let us consider their actuality: as things currently stand, the EU enjoys sovereignty over a number of policies. Furthermore, its constitutive nation states have forged a supranational bond between them that they cannot cut without the approval of the rest of the Union. The EU’s authority cannot be undone by any one national government and must therefore be considered robust in that regard. European sovereignty—in the way and extent to which it is—will remain present for as long as the European Treaties and concomitant secondary law foster the necessary conditions for its existence and enforcement.
When we allude to “the Treaties”, “European Treaties”, or “EU Treaties”, we are referring to the two international covenants that underpin the European legal order, namely: (1) Treaty on European Union or TEU, (2) Treaty on the Functioning of the European Union or TFEU. Both have the same legal status as primary law of the Union. ^
It is “inferred” as such since the Treaties do not offer a proper name for it. “Delegated sovereignty” or “shared responsibility” are descriptive terms I have coined. ^
Exclusive competence covers (Article 3.1 TFEU):
(a) customs union; (b) the establishing of the competition rules necessary for the functioning of the internal market; (c) monetary policy for the Member States whose currency is the euro; (d) the conservation of marine biological resources under the common fisheries policy; (e) common commercial policy.
Supportive competence includes (Article 6 TFEU):
The Union shall have competence to carry out actions to support, coordinate or supplement the actions of the Member States. The areas of such action shall, at European level, be: (a) protection and improvement of human health; (b) industry; (c) culture; (d) tourism; (e) education, vocational training, youth and sport; (f) civil protection; (g) administrative cooperation.
The meaning of delegated sovereignty—though not the exact term—and the provisions for its reversal are enshrined in Article 50 of the Treaty on European Union. ^