12 Subsidiarity and Proportionality in
|Report from the Commission on subsidiarity and proportionality (17th report on Better Lawmaking covering the year 2009)
|Document originated||8 October 2010
|Deposited in Parliament||18 October 2010
|Department||Business, Innovation and Skills
|Basis of consideration||EM of 28 October 2010
|Previous Committee Report||None
|To be discussed in Council||No date set
|Committee's assessment||Legally important
12.1 This is the 17th report
on the application of the principles of subsidiarity and proportionality
which the Commission presents to the European Council, the European
Parliament, the Council and national Parliaments in line with
the Protocol to the EC Treaty on these issues.
The report covers 2009 when the Nice Treaty was still in force,
and briefly explains the changes introduced by the Lisbon Treaty,
which came into force on 1 December 2009.
THE PRINCIPLES OF SUBSIDIARITY AND PROPORTIONALITY
12.2 Subsidiarity and proportionality are fundamental
principles of European law which are defined in Article 5 of the
Treaty on European Union (TEU). Within the limits of the Union's
competences, subsidiarity is described in the report as a guiding
principle for defining the boundary between Member State and EU
responsibilities that is, who
should act? If the Union
has exclusive competence in an area, it is clear that it is the
Union which should act. If the Union and the Member States share
the competence, the principle clearly establishes a presumption
in favour of the Member States taking action. The Union should
only act if Member States cannot achieve the objectives sufficiently
and, by the reason of the scale or effects, the Union can achieve
12.3 Proportionality is a guiding principle when
defining how the Union should exercise its competences, both exclusive
and shared what
should be the form and nature of EU action?
Article 5(4) provides that the content and form of Union action
shall not exceed what is necessary to achieve the objectives of
the Treaties. Any decision must favour the least restrictive option.
APPLICATION, OPPORTUNITY FOR COMMENTS, AND EX-POST
12.4 All institutions of the Union have to comply
with both principles. The Commission must:
widely before proposing legislation;
state in the explanatory memorandum for
each legislative proposal the reasons for concluding that the
proposal complies with subsidiarity and proportionality; and
take into account the burden falling
on the Union, national governments, local authorities, economic
operators and citizens.
12.5 The European Parliament and Council must provide
a justification regarding subsidiarity if an amendment they make
affects the scope of Union action.
The European Economic and Social Committee and the Committee of
the Regions express their views either when they are consulted
or in own-initiative opinions. Finally, the Court of Justice can
review the legality of acts of the institutions for compliance
with the principle of subsidiarity.
CHANGES INTRODUCED BY THE LISBON TREATY
12.6 The Lisbon Treaty has introduced several changes
to how the principles of subsidiarity and proportionality should
be applied. The revised Protocol contains a more specific requirement
to provide for all draft legislative acts a statement making it
possible to appraise compliance with the principles. While it
no longer mentions the guidelines for assessing conformity (such
as 'necessity' and 'EU value added' tests), the report confirms
that the Commission will continue to use these guidelines and
recommends the other actors to do likewise.
12.7 The Lisbon Treaty provides an enhanced role
for national Parliaments which can express their views on whether
draft legislative proposals comply with the principle of subsidiarity.
If they consider that the proposal does not comply, they have
the right to send a reasoned opinion to the initiator of the legislation.
Depending on the number of negative opinions, the Treaty provides
two mechanisms as set out in Article 7 of the Protocol
the so called 'yellow card' and 'orange card'. Where the number
of negative opinions from national Parliaments represents at least
one third of all the votes allocated to them (or one quarter for
proposals in the area of judicial cooperation in criminal matters
and police cooperation), the 'yellow card' mechanism applies.
Under the ordinary legislative procedure, where the number of
negative opinions represents a simple majority, the 'orange card'
mechanism applies. Both mechanisms foresee a review of the draft
legislation and may lead to amendment or withdrawal of the proposal.
The 'orange card' also involves the possibility for either the
European Parliament or Council to stop the legislative procedure.
12.8 The revised Protocol also includes a provision
concerning the role of the Committee of the Regions. For those
cases where the TFEU provides for the Committee to be consulted,
it now has the right to bring a case before the European Court
of Justice if it believes that the subsidiarity principle has
not been respected. Member States, themselves or on behalf of
their national Parliaments, have a similar right.
APPLICATION OF THE PRINCIPLES
12.9 The report states that the legislative work
of the Commission has always been governed by the need to respect
subsidiarity and proportionality. Checks are now applied at three
key stages of the policy development process.
preliminary analysis in roadmaps which are published for major
initiatives when the Commission Work Programme is agreed. These
roadmaps provide a preliminary description of a planned Commission
initiative and aim to allow all interested actors to be informed
in a timely manner. From 2010, the Commission is also publishing
roadmaps for initiatives with significant impacts which are not
in the Commission Work Programme.
A fuller analysis of subsidiarity as
part of the impact assessment process, taking into account views
expressed during stakeholder consultations.
Finally, a justification in terms of
subsidiarity and proportionality in the explanatory memorandum
and recitals of each legal proposal.
12.10 The most detailed analysis of subsidiarity
and proportionality is provided in impact assessments. The Impact
Assessment Board controls the quality of this analysis, and in
2009 the report states it made recommendations on subsidiarity
and proportionality in 27 out of 79 impact assessments (34 %).
In its 2009 Report the
Board recommended that the Commission services should use more
consistently the structured questions for the subsidiarity and
proportionality analysis provided in the revised Impact Assessment
12.11 The Board has asked for a better analysis of
the principles in areas such as asylum, migration, consumer and
health policies, transport and energy. For example, for the impact
assessments for the proposals for Directives
on Minimum Standards for the Qualification and Procedures
of Asylum Seekers,
the Board asked the lead service to demonstrate better that the
costs of the measures were proportionate to the objectives, and
did not go beyond the obligations established by the Treaty and
international law. For the impact assessment for the Consumer
the Board asked the lead service to clarify how harmonisation
of domestic sales in addition to cross-border sales would comply
with the subsidiarity principle. For the Directive
on Cross-Border Healthcare,
it noted the need to consider the appropriate
level of action while applying definitions such as 'appropriate
care' and 'undue delay'. For the Directive
on Energy Performance of Buildings,
the Board recommended that the lead service
strengthen the cost-benefit analysis to demonstrate the value
added of measures such as the lower threshold for compulsory energy
requirements for major renovations and a compulsory benchmarking
system for new buildings. The Board recommendations have helped
the Commission services to improve the subsidiarity analysis,
and there have also been cases where its advice has led to changes
in the proposals to ensure compliance with the subsidiarity and
12.12 Since 2006, the Commission has on its own initiative
transmitted all new proposals to national Parliaments, and has
put in place a procedure for replying to their opinion.
The Commission received 250 opinions in 2009 compared to 115 in
2007. About 10% contained comments on subsidiarity and/or proportionality,
with in most cases only one national chamber expressing a view.
The chambers with a particular interest in subsidiarity questions
were the French Sénat,
the Austrian Bundesrat,
the German Bundesrat
and the Dutch, Portuguese
and Greek Parliaments. Some opinions did not question the respect
of subsidiarity as such, but indicated that the Commission's justification
was not sufficient.
12.13 In the past three years, the Conference of
Community and European Affairs Committees of Parliaments of the
European Union (COSAC) has conducted exercises to simulate the
subsidiarity control mechanism introduced by the Lisbon Treaty.
This has enabled national Parliaments to refine and test their
institutional arrangements. In 2009 COSAC conducted three such
exercises on Commission proposals for Standards
of Human Organs Intended for Transplantation,
Right to Interpretation
and to Translation in Criminal Proceedings,
Instruments in Matters of Succession.
In all cases a large majority of participating chambers
confirmed that the proposals complied
with the subsidiarity principle, with very few seeing a
reason for concern (the number of negative
opinions was respectively one, three and one).
The European Parliament and Council
12.14 In the European Parliament compliance of draft
legislative acts with the principle of subsidiarity is ensured
by the committees in charge of a specific legislative dossier,
together with the Committee on Legal Affairs. In the Council,
the Committee of the Permanent Representatives of each Member
State (Coreper) ensures that the principles of legality, subsidiarity
and proportionality are respected.
The Committee of the Regions
12.15 The Subsidiarity Monitoring Network (SMN) of
the Committee of the Regions operates through an interactive website
and its membership grew by 20% in 2009 to 111 partners. The SMN
enables its members to take part in the Committee's consultations
on new EU initiatives. The SMN also held two consultations to
feed local and regional views into the Commission's impact assessment
work. In 2009 the first SMN Action Plan was launched to identify
best practice in applying the subsidiarity principle in Europe's
regions and cities in selected policy areas immigration,
climate change, social policies, health policy and innovation.
Given the new role which the Lisbon Treaty creates for the Committee,
it has adapted its Rules of Procedure
and as from 2010 all its
opinions will contain an explicit reference to the subsidiarity
and proportionality principles.
The Court of Justice
12.16 The 2008 subsidiarity report mentioned the
where the High Court of Justice of England and Wales asked the
Court of Justice of the European Union if the regulation infringed
the principles of proportionality and/or subsidiarity by setting
price caps on the costs of using a mobile phone while in another
Member State. Following the opinion of the Advocate General in
November 2009, the Court ruled in June 2010. It confirmed that
the Regulation was proportionate to the objective of protecting
consumers against high charges, and was justified on the grounds
of subsidiarity as it is necessary to ensure the smooth functioning
of the internal market in roaming services. In its findings, the
Court underlined the fact that, before proposing the Regulation,
the Commission had considered in its impact assessment the effectiveness
and economic impacts of regulating the retail market and the wholesale
KEY CASES WHERE SUBSIDIARITY CONCERNS WERE RAISED
12.17 This section of the report gives an overview
of Commission proposals which gave rise to most discussion among
the co-legislators and stakeholders on subsidiarity and proportionality.
Some of these cases were mentioned in previous reports and discussions
continued in 2009. The key proposals are as follows.
"Directive on Aviation Security Charges
"The proposal lays down common principles that
Member States and airport authorities must respect when determining
how to recover the costs of airport security. The aim is to prevent
distortions of competition. The Commission verified the proportionality
of different measures as part of the impact assessment process,
and as a result some elements such as an obligatory 'one-stop'
for security were dropped from the final proposal. The proposal
also refrained from regulating how security measures should be
financed, leaving Member States to decide this issue. The European
Parliament wanted to reinforce the Directive by requiring that
security measures, such as those to protect citizens from acts
of terrorism, should be financed through public funds rather than
by passengers. While it also proposed to include all commercial
airports, several Member States in Council proposed to limit the
scope to airports where annual passenger traffic exceeds a certain
threshold, in order to ensure that compliance costs are proportionate
to the objectives of the initiative. Political agreement has not
yet been reached.
"Directive on Energy Performance of Buildings
"The Commission proposed a recast of the Directive
as part of the Second Strategic Energy Review in November 2008.
While in general all institutions welcomed the initiative, views
varied on the appropriate content and ambition level of EU action.
"In 2009 the Commission received opinions from
the two chambers of the Dutch Parliament. While the First Chamber
was positive, the Second Chamber argued that the proposal breached
the subsidiarity principle because in its opinion it is for Member
States to determine how and in which sectors the national climate
targets are to be achieved.
"The European Parliament proposed amendments
which added to the level of ambition including a condition that
from 2019 new buildings would have to be 'zero-energy'. In Council,
several Member States were concerned that the level of ambition
was too high and that "several amendments proposed by the
European Parliament appear at first sight to be overly ambitious
They considered that the definition of low and zero carbon buildings
and the quantitative targets raised subsidiarity issues and entailed
further costs and disproportionate administrative burdens. A compromise
was agreed in November 2009: all new buildings should comply with
high energy-performance standards and supply a significant share
of their energy requirements from renewable sources after the
end of 2020. It is up to each Member State to define the standards
for achieving these objectives.
Equal Treatment outside Employment
"In 2008, the Commission adopted this proposal
to extend protection against discrimination on the grounds of
age, disability, sexual orientation, religion or belief outside
employment, and it was discussed in the 2008 subsidiarity report.
To comply with the subsidiarity principle, the Commission made
a clear distinction between EU and Member States competences with
the aim to exclude from the scope of the directive issues that
could potentially be considered part of national competence. While
the Commission's proposal stated inter
alia that 'this Directive is without prejudice
to national laws on marital or family status and reproductive
rights', the European Parliament Committee on Legal Affairs nevertheless
considered that the boundaries between Community law and national
law in the areas of family law, marriage and reproduction needed
to be further specified. In Council, some Member States raised
questions related to the respect of the subsidiarity principle,
and others expressed concerns about administrative and financial
costs created by the Directive, including the possibility that
they may be disproportionate to the objectives. Discussions under
the Swedish and Spanish presidencies in 2009 and 2010 lead to
a more precise definition of the scope of the action and more
detailed references to the division of competences between the
Member States and the EU, but political agreement has not yet
the Protection of Soil
"The discussions on this proposal were signalled
in the 2007 and 2008 subsidiarity reports, and continued in 2009.
The Commission proposal was supported by the European Parliament,
but stopped in the Council by a blocking minority of delegations,
some of which opposed the proposal on the grounds of subsidiarity
and others because of expected costs and administrative burdens.
Other Member States consider that EU level action is necessary,
not least because soil has an influence on climate change and
biodiversity which both have crossborder effects. The file was
a priority of the Spanish presidency in the first half of 2010,
but a consensus has still not been reached.
"The Commission proposed the Directive in 2008.
Although Member States are primarily responsible for their health
systems, the need for EU level action arose following a number
of rulings of the European Court of Justice in this area. The
Commission received seven opinions from the chambers of national
Parliaments, three of which raised subsidiarity concerns, on the
grounds that the proposal might put into question the Member States'
ability to plan and finance health services. While similar issues
were raised during discussions in the European Parliament, it
adopted the proposal in first reading in April 2009.
"The Council reached political agreement on
8 June. The agreement strengthens provisions allowing Member States
to develop "prior authorisation systems" for healthcare
in another EU Member State and to refuse such authorisation. In
addition, comitology is no longer foreseen for eHealth related
measures as was the case in the Commission's original proposal.
This reflects national concerns over the need to control the flows
of patients and to ensure planning and financial balance of their
"The Commission adopted a Green
Paper 'Towards a new culture for urban mobility'
in 2007 to identify what the EU should
do in this area. The European Parliament in its resolution on
the Green Paper argued that the EU should not legislate, but has
a role in developing a European approach and mainstreaming the
needs of urban transport into other policy areas. In 2009 the
Parliament also adopted an own initiative resolution which stressed
that local authorities often cannot meet urban mobility challenges
without European coordination. It proposed that the Commission
should provide studies and a legal framework, finance research,
and promote best practices. However, in its opinion on the 2009
subsidiarity report the
expressed the view that certain measures
in the Green Paper were not in line with the principles of subsidiarity
and proportionality, as measures at Member State level are sufficient.
This was in contrast to the Leipzig Charter put forward by the
German EU Presidency which,
while noting that urban development policy should be decided at
national, regional or local level, saw value added of EU action
in pooling best practice and supporting urban research.
"The Commission adopted the Urban
Mobility Action Plan
in September 2009. The impact assessment
process helped to focus actions on the exchange of information
and good practices. The European Economic and Social Committee
welcomed the plan, but called for EU powers and responsibilities
to be more clearly defined. The Committee of Regions supported
the Action Plan noting that the measures do not undermine the
subsidiarity principle. The Council considered the principle of
subsidiarity, welcomed the Action Plan and asked the Commission
to include in the upcoming White Paper on European transport policy
targets and policies for urban mobility.
Standards of Human Organs Intended for Transplantation
"The Commission proposal, adopted in 2008, aimed
at securing basic quality and safety standards for human organs
intended for transplantation. COSAC carried out a 'subsidiarity
check', and of the 27 opinions received, 23 were positive. The
found a breach of the subsidiarity principle.
The German Bundestag, UK House of Commons and Dutch Tweede
Kamer der Staten-generaal noted that the
Commission's subsidiarity analysis did not provide a sufficient
basis for them to conclude. In addition the German Bundesrat
and the Italian Senato
della Repubblica found that some provisions
may have gone beyond the Union's competences. No such issues were
raised by the co-legislators, however, and Member States in Council
gave the Directive political backing, and the European Parliament
adopted it in first-reading.
"The Commission proposal sought to simplify
the EU framework for consumer protection by merging four consumer
rights directives, and by fully harmonising essential rights of
consumers to reduce legal fragmentation.
"Five of the six opinions from the chambers
of national Parliaments, concluded that full harmonisation of
certain rights would be contrary to subsidiarity, as it would
not allow for the application of national law which in some cases
provides for a higher level of consumer protection. In the European
Parliament there were concerns on whether the degree of legal
fragmentation among Member States justifies action at EU level
and whether full harmonisation would be too restrictive. In Council,
a majority of Member States expressed a preference for a mixed
and flexible harmonisation. In order to overcome the resistance
to full harmonisation, the Commission has suggested that a possible
way forward could be to focus full harmonisation on issues with
the strongest internal market dimension such as the
rules on distance and off-premises contracts."
12.18 The report concludes that the majority of Commission
proposals were adopted by the co-legislators without significant
discussions on subsidiarity and proportionality. Therefore, for
those proposals compliance with the principles of subsidiarity
and proportionality has, the Commission presumes, not been an
issue. However, the above analysis shows that, where compliance
is questioned, the actors involved in discussions hold a broad
variety of views. This is the case not only between the different
institutions, but also within these institutions, and sometimes
between different actors of the same Member State.
The Government's view
12.19 In his Explanatory Memorandum of 28 October
the Minister for Business and Enterprise at the Department for
Business, Innovation and Skills (Mark Prisk) says that the Government
continues to be a firm and active advocate of the principles of
subsidiarity and proportionality and will underpin its advocacy
with early engagement with Brussels policy making, particularly
at the pre-negotiation stage of the Commission's legislative cycle.
It welcomes the extension of the scrutiny role of national parliaments,
as set out under the Lisbon Treaty, and looks forward to working
with Parliament and COSAC to improve the quality of EU legislation.
Regarding proportionality, the Government will continue to push
the Commission to consider alternatives to regulation and to give
particular consideration to the impact of regulation on small
businesses. To this effect, the Government will continue to push
for the consistent application of the 'SME Test' to forthcoming
legislation in Europe, as set out in the 'Small Business Act for
Europe' and adopted by the Commission in June 2008.
12.20 We have decided to report this document
to the House because of the renewed attention being given to the
principle of subsidiarity in the EU as a consequence of the new
powers of national parliaments under the Treaty of Lisbon to monitor
how the principle is applied. One aspect of the reforms which
has already caused the Committee concern is that the new powers
apply only to legislative act and exclude non-legislative acts.
The Commission's report contains a useful analysis of draft legislation
which has attracted subsidiarity concerns in 2009, and a reference
to the Vodafone case,
in which the Court of Justice decided that the Roaming Regulation
did not infringe the principles of proportionality
12.21 We clear the document from scrutiny.
35 Protocol (No 30) to the Treaty establishing the
European Community, applicable until 30/11/2009 and Protocol (No
2) to the Treaty on the Functioning of the European Union (TFEU),
applicable since 1/12/2009.
Section 2, point 3 of the Inter-Institutional Agreement on Subsidiarity
COM(09) 551 and COM(09) 554. Back
COM(08) 614. Back
COM(08) 414. Back
COM(08) 780. Back
COM(06) 211. Back
COM(08) 818. Back
COM(09) 338. Back
Council Decision 2004/338/EC, Euratom of 22 March 2004 adopting
the Council's Rules of Procedure, OJ No. L 106, 15.4.2004, p.
Case C-58/08 Vodafone Ltd, Telefónica O2 Europe plc, T-Mobile
International AG, Orange Personal Communications Services Ltd
v. Secretary of State for Business, Enterprise and Regulatory
Reform about EC Regulation No 717/2007. Back
COM(09) 217. Back
COM(08) 70. Back
COM(08) 426. Back
COM(06) 232. Back
COM(08) 414. Back
COM(07) 551. Back
COM(09) 490 Back
COM(08) 818. Back
COM(08) 614. Back
Case C-58/08 Back
EC/717/2007: see OJ No. L171, 27.06.07, p.32. Back