Law-making within the EU

Turning our attention to law-making, this section will consider the sources of law, law-making process and concept of ‘legal base’ in the European Union. 

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Sources of law

The European Union has a multitude of legal sources.

 

The main sources of EU law are:

•      The Treaties (the Treaty on European Union [TEU] and the Treaty on the                            Functioning of the European Union [TFEU])

•      Acts of the Union (Regulations, Directives, Decisions, Recommendations and                    Opinions)

•      The case law of the European Courts

•      The European Charter of Fundamental Rights

•      The ‘common constitutional traditions of the Member States’[1]

•      Other international treaties (most notably, the European Convention on Human                Rights)

  

 Legal instruments

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The European Union is empowered to further its objectives using a number of legal instruments found within Article 288 TFEU.

 

Explaining the law – secondary legislation in the European Union 

Article 288 TFEU:

‘To exercise the Union’s competences, the institutions shall adopt regulations, directives, decisions, recommendations and opinions.

 

A regulation shall have general application. It shall be binding in its entirety and directly applicable in all Member States.’

 

Regulations apply to the whole of the EU (i.e. they have ‘general application’) and do not require national law to implement them (i.e. they are directly applicable). A particular regulation will be published in the Official Journal and will specify the date on which it will come into force. They are generally used where a high level of consistency is needed as they fully harmonise and override inconsistent national law.

 

Article 288 TFEU: ‘A directive shall be binding, as to the result to be achieved, upon each Member State to which it is addressed, but shall leave to the national authorities the choice of form and methods.’

 

Directives are addressed to the Member States and set out general aims and goals. Member States then have a period of time, usually about 18 months, to ‘implement’ the directive in question. They can use existing national law or pass new laws in order to achieve the aims of the directive. In the English Legal System, directives are most often implemented using statutory instruments and powers under section 2(2) of the European Communities Act 1972. When the Member State has implemented a directive they must report that implementation to the Commission.

 

Article 288 TFEU: ‘A decision shall be binding in its entirety. A decision which specifies those to whom it is addressed shall be binding only on them.’

 

Decisions can be addressed to the world or to specific legal or natural persons (Member States, individuals or companies). Decisions are commonly adopted by the Commission acting alone, under its executive powers, to enforce the competition law of the EU.

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Legislative procedures

Before the reforms of the Treaty of Lisbon 2009 simplified the process there were a myriad of legislative procedures for adopting law and they involved different powers and processes for the institutions to adopt. Following on from Lisbon there are now two primary methods for passing legislative instruments within the EU. These are:

•      The ‘ordinary’ legislative procedure under Article 294 TFEU

•      The ‘special’ legislative procedure under Article 289(2) TFEU

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Ordinary legislative procedure

This is now the ‘normal’ way of making law in the EU. The process is represented by Figure 16.6.  

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Special legislative procedure

The special legislative procedure is more likely to be used in sensitive areas. The process is represented by Figure 16.7 (Figure 16.7).

 

Figure 16.6                   The Ordinary Legislative Procedure

Figure 16.7                   Special Legislative Procedure

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Legal base

Given the issue of conferred competence, and the possibility of annulling unlawful legal instruments, the Commission must be very careful in identifying the precise Article of the Treaty that confers powers on the Union to pass law when they are proposing legislation. The Article of the Treaty that empowers the Union to act is called the ‘legal base’. Selection of the incorrect legal base can lead to the legal instrument being annulled under Article 263 TFEU.

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 The legal base will tell you:

1          The policy area

2          The types of act that the EU can pass (if no specific measure is mentioned, the                EU can adopt regulations, directives or decisions)

3          The powers of the institutions in relation to this area

4          The process of law-making

 

Figure 16.8 demonstrates the operation of an exemplar legal base. 

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Specific legal bases

These can be extremely narrow and prescriptive. For example, Article 153 TFEU is the legal base for actions that can be taken by the EU in relation to social security. Article 153 TFEU:

In the field of social security the EU ‘may adopt…by means of directives, minimum requirements for gradual implementation. The Council shall act unanimously, in accordance with a special legislative procedure, after consulting the European Parliament and the said Committees.

 

Therefore Article 153 TFEU defines the policy area (social security), the types of act that the EU can pass (directives), the powers of the institutions (unanimity in Council, consultation of the Parliament) and the process of law-making (special legislative process). The preceding are just examples of the principle of conferred competence in action. They demonstrate the need for EU law to have a solid legal base in order to avoid challenge. By contrast there is no such need to identify a ‘legal base’ for the passage of Acts of Parliament in the legal system of England and Wales but the equivalent would be the ‘Parent Act’ for the passage of secondary legislation.

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Figure 16.8                   Legal Bases

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General legal bases

In addition to the specific legal bases there are also general legal bases. These are broadly defined legal bases that give the EU potentially wide-ranging powers and are not really linked to a particular policy area. The clearest example is Article 114 TFEU:

 

The European Parliament and the Council shall, acting in accordance with the ordinary legislative procedure and after consulting the Economic and Social Committee, adopt the measures for the approximation of the provisions laid down by law, regulation or administrative action in Member States which have as their object the establishment and functioning of the internal market.

 

You can see that this is a very broad Article, giving the EU wide powers to legislate. The use of Article 114 TFEU (and its outer limits) has been the subject of many ECJ judgments. It was in issue in the landmark Germany v European Parliament and Council[2] case. This case concerned a directive that banned the advertising of tobacco in various forms. The measure was adopted under Article 114 TFEU. Germany[3] challenged the measure, claiming that it had been adopted using the incorrect legal base. Had a different legal base been used, Germany argued that the EU would not have been permitted to adopt the measure that it did.

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This case demonstrates the need for careful thought on the part of the Commission about the concept of conferred competence when adopting legislation. It also demonstrates the difference between the legal system of England and Wales and the EU legal system. Using the correct legal base is important precisely because the EU is a body of conferred competence. This means that technical arguments over competence can be as important as the substance of a case. This was also evident in Kadi.[4] The case involved human rights, terrorists, secret phone calls and the freezing of bank assets. However, despite the excitement and intrigue raised by the facts of the case, a very substantial part of the judgment was dedicated to whether the Union had adopted measures on the correct legal base![5] This sort of comparative case study can be helpful in fully understanding not only the history of the UK’s membership of the EU but also in helping draw distinctions between different legal systems.

      

Democratic deficit

One of the most frequent (and vocal) criticisms of the EU relates to its lack of democratic legitimacy. There is a strong argument that the presence of a democratic deficit was a major factor in public opinion moving towards Leave in the referendum. Whilst there are many superficial (and inaccurate) statements on the topic,[6] there are some very real concerns about democratic legitimacy and these are most often expressed in terms of a perceived ‘democratic deficit’.

 

Figure 16.9                   The Balance Between the Powers of the EU Institutions

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There is no generally accepted definition of ‘democratic deficit’[7] but this chapter takes it to mean the gap between the strength of the voice of the people of Europe in the institutions of the EU and powers exercised on their behalf. The democratic deficit can be demonstrated on the vertical (as between the people and the institutions) and the horizontal level (as between the different institutions).

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On the horizontal level academics have questioned whether the allocation of powers between the institutions is democratically legitimate. In particular, the role (or lack of it) of the European Parliament is highlighted.[8] It is the only directly elected institution of the EU and yet it can only ‘co-decide’ and not propose legislation or authorise legislation independently from the other institutions. This argument, however, does not recognise that the Parliament has gained significant law-making powers over the lifetime of the EU and now co-decides on the majority of EU law.[9] It also fails to address the significant powers that the European Parliament has in holding the Commission, as a whole, to account and the powers to reject the EU budget in its entirety (Figure 16.9).

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On the vertical level, there is a sense of ‘disconnection’ between the people of Europe and the EU itself. This is compounded by the progressive transfer of powers to the EU and the failure of democratic exercises, such as the national referenda in France, the Netherlands and  Ireland in relation to the Constitutional and Lisbon Treaties. In addition, the use of degressive proportionality to apportion seats in the European Parliament has attracted criticism from the very influential German Constitutional Court due to the overrepresentation of smaller states at the expense of bigger states (including Germany).[10] Figure 16.10exemplifies the limited nature of direct democracy within the EU, with a focus on the institutions.

 

Figure 16.10                 Direct and Indirect Democracy in the European Union

 

Figure 16.10 is complex but that is because the question of democracy is not straightforward. What the figure reveals is that in judging the democratic deficit of the EU both the presence of direct and indirect democratic input should be examined.

 

On the notion of direct democracy, there are two important points to discuss in relation to Figure 16.10. Firstly, European citizens directly elect Members of the European Parliament, which has an important law-making function in that it is the joint decision-maker for the EU.[11] Secondly, and as a result of the Treaty of Lisbon, citizens can petition the Commission and invite the institution to bring forward legislative proposals in a particular area.[12] This new procedure, called the Citizens’ Initiative, requires a minimum of one million signatures from at least seven Member States with a minimum number of signatories (based on total population) in each country, gained within a year.[13] As such, the effectiveness of the procedure can be questioned as the requirements involve coordination that would be beyond the reach of most European citizens.[14]

 

From the perspective of indirect democracy, the EU does demonstrate checks and balances between the various institutions, as indicated in Figure 16.10. Although the European Parliament is the only directly elected body, this does not mean that the other institutions completely lack democratic credentials:

• The Council is composed of Ministers drawn largely from the national parliaments. This had a level of indirect democratic credibility in the UK as these will be drawn from the Government who at in the UK Parliament and who remained accountable to that Parliament and the people.

• The European Commission is not elected, nor are its President and Vice-President(s). As previously mentioned, the European Parliament (which is elected) has an important role in approving the Commission as a whole and in holding them to account. Equally, the appointment of Commissioners could be said to gain some democratic legitimacy from their selection by the Council which itself has indirect democratic accountability.

• The President of the European Council and the High Representative also hold unelected positions but derive some legitimacy from their selection by the indirectly accountable Council.

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Finally, Figure 16.10 demonstrates another form of indirect democratic accountability through the ‘orange card’ system operated by the national parliaments, another innovation that was introduced by the Treaty of Lisbon. If a national parliament believes that a proposed piece of EU legislation would be better achieved at the national level then it can send an opinion to the Commission and if one-third of national parliaments send such an opinion then the Commission is required to review, amend or discard the proposed legislation. Similar to the Citizenship Initiative discussed previously, the threshold and time limit restrictions may harm the effectiveness of this indirect form of democratic accountability.

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Analysing the law – democracy and standards 

One of the difficulties in assessing the standard of ‘democracy’ we expect from the EU is finding a suitable comparator. Is it some ideological notion of a perfect democracy? Is it the same as we expect of a sovereign state (such as the UK)? Is it the same as an international organisation (such as the UN)?

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Think of some of the earlier chapters of this textbook and what they revealed about the nature of democracy within the legal system of England and Wales. In particular, consider some of the issues with democratic accountability, which are highlighted in relation to law-making in the UK system:

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1   The role of the Monarch in the legal system (Chapter 3)

2   The highly controversial role of the unelected House of Lords in the law-making process (Chapter 4)

3   The extensive use of secondary legislation that is subject only to minimal scrutiny by Parliament (Chapter 5)

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[1] This is a phrase that the Court favours in its case law. See, for example Case C-28/08 P Commission v Bavarian Lager [2010] ECR I-6055, para 100.

[2] Case C-376/98 Germany v European Parliament and Council [2000] ECR I-8419.

[3] This demonstrates the implications of Qualified Majority Voting, where Member States can be outvoted.

[4] Cases C-402/05 P and C-415/05 P Kadi and Al Barakaat [2008] ECR I-6351.

[5] Ibid. paras 121–205.

[6] See, for just one example, Macer Hall, ‘EU Plot to Scrap Britain’ The Daily Express (London, 4 May 2012), www.express.co.uk/news/uk/318045/EU-plot-to-scrap-Britain.

[7] For some attempts, see Andreas Follesda and Simon Hix, ‘Why there is a democratic deficit in the EU: a response to Majone and Marovcsik’ (2006) 44(3) JCMS 533; Giandomenico Majone, ‘Europe’s “democratic deficit”: the question of standards’ (1998) 4(1) ELJ 5.

[8] Andrew Moravcsik, ‘In defence of the “democratic deficit”: reassessing legitimacy in the European Union’ (2002) 40(4) JCMS 603.

[9] Andreas Maurer, ‘The legislative powers and impact of the European Parliament’ (2003) 41(2) JCMS 227, 230–234.

[10] BVerfG, 2 BvE 2/08 judgment of June 30, 2009 (the Lisbon Judgment), para 284.

[11] Refer back to the ‘Institutions’ section of this chapter for a brief discussion of whether the direct elections achieve true representation in the European Parliament.

[12] Article 11(4) TEU and Article 24(1).

[13] These requirements are laid down in Council Regulation (EU) 211/2011 on the citizens’ initiative’ [2011] OJ L65/1.

[14] Michael Dougan, ‘What are we to make of the Citizens’ Initiative?’ (2011) 48(6) CMLRev 1807.