Select Committee on European Union Eleventh Report


part 3: Subsidiarity

Background

22.  The Convention proposes to strengthen national parliaments' scrutiny of the application of subsidiarity in EU legislative proposals. The Working Group on Subsidiarity has put forward a detailed practical proposal for the mechanism by which this might be done. We consider that a detailed account of the development of the principle of subsidiarity will put the significance of this proposal into context, and we accordingly provide such an account.

23.  Subsidiarity has been generally understood as a principle for determining how powers should be divided or shared between different levels of government. As conventionally understood, the principle states that decisions should be taken at the lowest level consistent with effective action. In the EU, subsidiarity has gradually taken on a specific meaning which is sufficiently open-ended to appeal to both advocates and opponents of deeper integration.

24.  The concept of vertical power sharing between levels of government is not new.[49] Subsidiarity emerged as an explicit principle of political thought in the 19th century, finding expression both in political liberalism and Catholic social theory. In political liberalism, subsidiarity is a 'single-edged sword' used to justify non-intervention by the state in individual affairs. In Catholic social theory[50], subsidiarity is potentially double-edged, in that it counsels state intervention where it is efficient and non-intervention where it is not. Both traditions of subsidiarity have found expression in the development of the European Union.

25.  By the late 1970s, subsidiarity had become part of the popular lexicography of the European Parliament, where it was frequently cited, particularly by members of Christian democratic parties, as grounds for increasing the powers of the European Community. The need to transfer sovereignty to the Community was justified by reference to subsidiarity, in a context in which it was thought only common policies could match the scale of the problems perceived within the environment or industry. In the mid-1980s, subsidiarity began to feature in a range of publications which argued for new actions at Community level to free the internal market.

26.  Subsidiarity found its first legal expression in an EC Treaty when it appeared in the Single European Act's article on environmental protection.[51] By the mid-1980s all Member States recognised the need for the Community to have powers in the environmental field. Several, Denmark in particular, nonetheless feared that a common EC policy would act to weaken their strict national environmental standards. Thus, the Act stated that 'the Community shall take action relating to the Environment to the extent to which the objectives can be attained better at Community level than at the level of individual Member States'.

27.  During the 1991 intergovernmental conference to negotiate the Maastricht Treaty, the British government saw subsidiarity as a means of limiting the EU's involvement in national affairs and holding in check future transfer of policy competences to the EU. For the German government, on the other hand, subsidiarity was welcomed as a safeguard on the powers of the German Länder to regulate in areas such as education and social policy.

28.  The Maastricht Treaty made subsidiarity a general rule for all Community activity. Article 3bTEC set out different requirements for Community action and contained three legal principles of conferral; subsidiarity; and proportionality.[52] These were carried over to Article 5 of the post-Amsterdam TEC (see below).

29.  Article 3b was elaborated on at the Edinburgh European Council in 1992 following the Danish 'no' vote to the Maastricht Treaty. There the Commission committed itself to justify all new proposals on the basis of subsidiarity, both in the preamble to the text and in the accompanying explanatory memorandum. The resulting interpretation of subsidiarity places the burden of proof on the Commission to show that it could better handle issues than the Member States, an interpretation carried on to the next intergovernmental conference in Amsterdam.

30.  The 1999 Amsterdam Treaty placed further emphasis on the principle of subsidiarity by including it in Article 2TEU. According to Article 2 the objectives of the Treaty shall be achieved 'while respecting the principle of subsidiarity as defined in Article 5 of the Treaty Establishing the European Community'. Article 5 (ex Article 3b), states that:-

the 'Community shall act within the limits of the powers conferred upon it by this Treaty';

the second paragraph of Article 5 states that the Community shall take action in accordance with the principle of subsidiarity 'only if and in so far as the objectives of the proposed action cannot be sufficiently achieved by the Member States and can therefore by reason of the scale or effects of the proposed action, be better achieved by the Community';

paragraph 3 then adds the further condition that 'any action by the Community shall not go beyond what is necessary to achieve the objectives of this Treaty'.

31.  The first two of these points also entail what the Commission has termed a test of comparative efficiency.[53] If it is decided that action by the Community is warranted then the third part of the formulation comes into play. This entails the application of a proportionality test, requiring the Community to consider the intensity of the Community measure.

32.  The 1999 Amsterdam Treaty also significantly advanced the debate about the legal meaning of subsidiarity through an accompanying Protocol on the Application of the Principles of Subsidiarity and Proportionality. The Protocol states inter alia that:

the reasons for preferring Community action must be substantiated by the Commission by qualitative and quantitative indicators (paragraph 4);

forms of legislation that leave the Member States the greatest room for manoeuvre are to be preferred to more restrictive forms of action (paragraph 6);

the Commission must consult more widely and explain how its proposals comply with the requirements of subsidiarity (paragraph 9), and;

The Commission must submit an annual report on the application of Article 5 EC (paragraph 9)

33.  In the 1970s and 80s, the principle of subsidiarity was used to argue for greater integration of the EC. By contrast, subsidiarity, as expressed in the treaties of Maastricht and Amsterdam, indicates a political desire in the 1990s for a 'lighter touch' Community approach.

34.  As Jacques Delors pointed out in 1992 when he offered a prize for anyone who could define subsidiarity, the principle is still a matter of interpretation.[54] Only the European Court of Justice can provide a definitive interpretation of the meaning of subsidiarity in any particular case referred to it [55]. In any case, the Court of Justice can only be asked to intervene after the adoption of legislative acts.

35.  The difficulty of monitoring the principle of subsidiarity prompted the European Council at Laeken in 2001 to include subsidiarity as one of the issues that the Convention of the Future of Europe was to consider.

Convention on the Future of Europe: Working Group on Subsidiarity

Mandate

36.  The Convention established a Working Group on Subsidiarity to complement the general discussion within the EU on the delimitation of competence between the European Union and the Member States referred to in the Nice and Laeken Declarations on the future of the EU. The Working Group was therefore mandated to consider[56]:

how compliance with the principle of subsidiarity can be monitored in the most effective manner;

whether a procedure for monitoring the application of the principle should be established;

whether such a procedure should be of a political and/or legal nature; and

the criteria established in the Protocol on the application of the principles of subsidiarity and proportionality need to be extended to reflect its conclusions.

37.  At the Convention plenary meeting on 15 and 16 April 2002 a large majority of speakers were in favour of more effective mechanisms for monitoring the proper application of the principle of subsidiarity. The Working Group was therefore asked to consider both further political and legal monitoring mechanisms.

Monitoring of Compliance

38.  Political monitoring of subsidiarity should formally be carried out by the institutions which are part of the European legislative process. The Amsterdam Protocol on subsidiarity requires the Commission to justify its legislative proposals with regard to subsidiarity. The Commission is also required to submit to the Council and the Parliament an annual report on the application of the principle of subsidiarity. In addition, national parliaments may, if they wish, provide political monitoring of the application of subsidiarity through their scrutiny of government. The principle of subsidiarity is also subject to ex post judicial review by the Court of Justice.

Working Group Proposals

39.  The Working Group agreed three main proposals to improve the application and monitoring of the principle of subsidiarity:

·  reinforcing application of the principle during the legislative process;

·  setting up an early warning system for national parliaments to reinforce monitoring of compliance; and

·  broadening the right of referral to the Court of Justice to national parliaments and the Committee of the Regions.


49   The exact genealogy of the subsidiarity principle is still an object of some debate between scholars. Some develop a lineage from Aristotle through Thomas Aquinas to the Catholic social philosophers of the 19th and 20th century, while others stress the importance of Johannes Althusius, a political philosopher of the 16th century and John Stuart Mill. Back

50   Most famously in Pope Pius XI Encyclical Quadragesimo Anno of 1931 Back

51   Article 130r. Back

52   Article 3b(1) is the principle of attribution of powers, which has long been an integral part of the EU and is expressed in Article 4(1). This states that 'Each institution shall act within the limits of the powers conferred upon it by this Treaty'. Article 3b(2) is the principle of subsidiarity itself, and involves an assessment `of the need for EU action: 'the [EU] shall take action, only if…' (the necessity test). Article 3b(3) incorporates the principle of proportionality into the Treaty and involves an assessment of the intensity of EU action (the intensity test). Back

53   Commission Communication to the Council and the European Parliament, Bulletin EC 10-1992, 116. Back

54   Quoted in Paul Craig and Grainne de Burca "EU Law: Text, Cases and Materials", 2nd edition, Oxford University Press, 1998, P. 129. Back

55   The Government has on a number of number of occasions had to review the compatibility of a measure with the principle of subsidiarity. For a recent example, see case C-491/01, R v Secretary of State for Health exp British American Tobacco (Investements) Ltd and Imperial Tobacco Ltd. Judgement of 10 December 2002. Back

56   CONV 71/02: Working Group 1: Mandate. Back


 
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