The unclear competency rules are repeatedly pointed to. The present arrangement is indeed neither systematic nor unambiguously demarcated. The EU's powers have arisen from individual empowerments by the Council or by the European Council, which have been fleshed out and expanded by the Commission over time, and subsequently confirmed by the ECJ. The latest ECJ judgment, removing a ban on tobacco advertising imposed by an EU directive, shows the problems with the division of powers. The Court did not see any direct relation in the directive to the fundamental freedoms of the internal market or to the assuring of competition; accordingly, it was to be abrogated. Here, it was following a strict interpretation of the EU competence to shape the internal market. The Court did not accept the argument of the plaintiff, the German Federal Government, that the Commission ought not to interfere in the sphere of health policies; it even approved of Commission health-policy measures on condition that these were directly aimed at developing the internal market. This functional definition of powers relating to a particular political objective does not allow a clear division of powers by major policy sectors. The Commission thus has the greatest rights of intervention from the competition law it administers, which may be made to apply to many situations as long as they can be construed as a distortion of competition. The basic freedoms of the internal market and the competition requirement give the EU broad rights of intervention against national legislation in areas of educational policy, social policy and structural policy, too. The outcome is a sharp isolation, which is unprecedented in extent, of one sub-system, the internal-market system, with rationality criteria that outweigh other rationality criteria that also claim validity in the same area. It was in the same sense that the ECJ ruled that women in the Bundeswehr could not be excluded from arms-bearing duties, since this would amount to discrimination forbidden in the internal market. Contrasting value concepts about the involvement of women in combat, even with the constitutional foundation existing in the Federal Republic, play no part. The power of the EU is a segmental one, with far-reaching externalisation of contingencies. This is the EU's effectiveness. It decides in relation to objectives, by dissolving the political contexts, and has direct effect on the law and justice systems of Member States.
From this starting position, a clear division of powers between the EU and the Member States is difficult. It is not policy areas that can be divided; the point is to specify the areas to which rationality criteria, each with their own functional logic extending into various policy areas, apply. The EU cuts specific situations out of the policy areas which, in principle, operate interdependently and subjects them to supra-national structuring requirements. While at the outset what was involved was still a branch of industry fairly easy to isolate, coal and steel, the EU now covers broad areas of economic and competition law, and free movement. This autonomisation of particular sub-systems has led to the rapid establishment of the internal market, and national deregulation. To the extent that `the economy' in the Member States is institutionalised as a relatively independent policy area, the acceptance was there for that. Presumably, it would have been otherwise in relation to social legislation or tax law, which do not have a comparable `instrumental' isolation in political perceptions.
A division of powers by policy areas is continually being called for. Here, the EU is allotted such things as foreign and security policy, regulating the internal market, competition and the agricultural market, asylum and immigration policy, and also cross-border environmental policy and the promotion of fundamental European research. Employment policy, welfare, health, culture and structural policy are to remain with Member States. Such proposals by the Bavarian Minister-President are plausible, but hard to apply, since broad overlaps emerge. In particular, the call to develop a European Social Model and establish it alongside market and competition policy as a second basis for legitimation, blurs the boundaries. Again, the `macro-economic dialogue' necessitated by monetary union and the European Central Bank transcends a division by policy areas. Co-ordinating the economic policies of the Member States covers not just the budget discipline of the individual nation-states, but also their employment and incomes policies. The policy entanglement typical of the Federal Republic also determines the interpenetration of European and national competences. A look at the positions in the Federal Republic shows the difficulties of the division of powers in federal systems with a broad framework of competence at federal level. Everything complained of at EU level is everyday material in Germany: interpenetration of administrative staffs, lack of transparency, dilution of parliamentary powers to decide, and lack of accountability for political responsibilities in the interpenetrating policies.
It has to be surprising how often a division of powers is called for without calling the associated problems by their names. This applies, in particular, to issues of the financial constitution of a contemplated confederation. The most effective control on EU powers today lies in the payments to the Union that Member States have to decide. As long as these are kept low, the EU cannot pursue any major distributive projects, and must remain primarily oriented to regulatory policies.
Nor is the oft-proclaimed principle of subsidiarity an effective means towards the division of powers either. The level at which a political measure is to be located is always a controversial, debatable matter of expediency among subsidiarity criteria, and may very well present itself differently for the various Member States. In the event of conflict, there are no operational criteria for deciding the subsidiarity question. Nor are there any clear entitlements for an individual Member State to proceed against an EU directive.
The hard problem lies in the division of rationality criteria and their allocation to various levels of control and legitimation. As with the internal market and competition arrangements, as long as they can relatively be detached instrumentally from the policy complex and have more or less the same effect for Member States, fragmentation of powers is possible. Where Member States are left with room for manoeuvre in implementation, contingencies can also be fended off. But as soon as the number and heterogeneity of rationality criteria for EU policy increase, to cover, say, structural and employment policy, then complicated problems of mediation and balancing arise. The contradictory nature of rationality criteria and the conflicts existing among them need, at this point, to be centrally controlled; they can no longer be handled through the fragmentation of various control levels alongside each other. Mediating between equal-rank rationality criteria and balancing their validity comes about in parliamentary systems through majority decisions and budget resolutions. The call is being made to transfer the competence for jurisdictional conflicts to the level of the `federation'. Here, Fischer's proposals are internally consistent: `Core sovereignty and only what it is absolutely necessary to regulate at European level [should be] transferred to the Federation,' and European legislation should be fully parliamentarised. But this means a division of sovereignty which goes beyond the question of the division of powers.