Jean Monnet Center at NYU School of Law



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III. Fleshing out the subsidiarity concept: The Amsterdam Protocol


III. Fleshing out the subsidiarity concept: The Amsterdam Protocol and guidelines

Following the inclusion of Article 5 (formerly 3b) in the EC Treaty by the Maastricht Treaty on European Union, and in particular following the initial refusal by the Danish electorate to ratify the TEU (an event which was generally understood to demonstrate the extent of popular hostility in Denmark to the degree of policy activity at Community level and to the further centralisation proposed in the TEU), more detailed guidelines on the meaning and implementation of the subsidiarity principle were agreed by the European Council in Edinburgh in 1992, and these were later incorporated into the Interinstitutional Agreement on implementing subsidiarity in 1993. [38] The momentum towards making the subsidiarity principle a more pervasive part of the Community's legal and political culture through the inclusion of such guidelines in forms and instruments of increasing legal significance has since continued, culminating in their constitutionalisation in the protocol added to the EC Treaty by the Treaty of Amsterdam (signed in 1997, ratified in 1999) on the application of the principles of subsidiarity and proportionality.

One of the notable features of the guidelines contained in the Protocol is the way in which they proceduralise the subsidiarity principle, as well as further blurring the subsidiarity and proportionality principles. The protocol links the concepts by articulating a series of concrete steps which the institutions - and principally the Commission - should take to ensure that Community action conforms to the principles set out in Article 5 (3b). Paragraphs 6-8 in particular indicate a shift away from seeking clear lines of policy demarcation between different levels of government, with a move instead towards an articulation of procedural guidelines and norms for sharing authority and for shaping the kind of action which may be appropriate at each level. Thus the wayin which the Community should act and the manner in which a given tasks could be shared between the Community and the Member States - rather than only whether the Community should act in the first place - are conceived of here as part of the subsidiarity question. This will be returned to below.

When is Community action appropriate?

The 'prior' question of whether it is appropriate at all for the Community to act in the first place is, however, also touched upon in paragraph 5, where the idea of the insufficiency of Member State action and its 'better' attainment by the Community is elaborated somewhat. Again there is no mention, in this context, of levels of government other than those of the Community or the Member State - neither levels above the EC/EU nor below the Member State. The paragraph sets out three guidelines to be examined in determining whether action should be taken by the Community in the areas of so-called shared competence: first whether an issue has transnational aspects which cannot satisfactorily be regulated by Member State action; secondly whether Member State action or lack of Community action would conflict with Treaty requirements and thirdly whether action at Community level would produce clear benefits of scale or effect. However, although these guidelines seem to offer slightly more than the terms of Article 5 (3b) of the EC Treaty, it becomes apparent when they are examined that they largely restate the broad political questions in open-ended terms, and do not provide strong legal criteria to answer them. The first of the three is possibly the most concrete guideline, in the sense that the existence of transnational aspects within certain issues can more easily be identified: the example of cross-border environmental pollution was given earlier. Indeed, any issue with relevant significant cross-border effects or implications is likely to be included in this category - e.g. not only the more obvious factors and matters affecting the flow of trade between states and market conditions across Europe, but also issues such as international organised crime have come to be recognised as appropriate subjects for Union or Community action. However, there is always the possibility that relatively insubstantial or speculative cross-border effects could be used as a reason for acting at Community level. This point has been made in the context of European proposals to harmonize areas of private law: "cross-border elements should, however, not be misused as a pretext to harmonize fields of private law which have little impact on the achievement of market integration". [39] In other words, determining that there are cross-border effects in a particular area should not in itself be an argument in favour of taking Community action, since the question of whether Community-level action would be appropriate should also depend not only on the nature and extent of these effects, but also on other countervailing issues such as the potentially negative effects of harmonization on local standards and cultures, in addition, to questions of process and democracy.

The second guideline suggested in paragraph 5 of the Protocol for determining whether Community-level action should be taken is whether action by the Member States or the absence of Community action might conflict with Treaty requirements "such as the need to correct distortion of competition or avoid disguised restrictions on trade or strengthen economic and social cohesion". However, as a guide to whether or not the Community should take action in a particular field, this is quite a circular provision, which also takes us back once more to the question of how precise the Treaty's requirements in this respect actually are. The reference to the need to correct distortions of competition or to avoid disguised restrictions on trade calls to mind Articles 94 and 95 (formerly 100 and 100a) EC, which are the Treaty measures providing for action to approximate the laws of the Member States where this is necessary to ensure the establishment or functioning of the internal market. Yet these provisions - rather like Article 308 (formerly 235) - are a paradigm example of an EC Treaty legislative basis which has been controversial because of its capacity to be used in adopting measures which seem to widen the reach of Community law, or at least to permit an apparently indefinite expansion. The problem is that the terms of the article present few if any constraints on action, and they are premised on concepts which are extremely open-ended and in themselves the subject of political contestation. The "internal market" is a very general notion, and its "proper functioning" could mean many things, depending on how strong a vision of the internal market is being adopted. Rather like the question whether any given national rule or policy may constitute an obstacle or disincentive to the mobility of workers so as to breach Article 39 (formerly 48) (and see e.g. how the non-availability of childbirth loans to non-nationals was held in Reina to be such, [40] and even the lack of an adequate national guarantee of protection for fundamental rights was argued by Advocate General Jacobs in Konstantinidis[41] to be such) the question whether certain disparities in economic or social conditions within different Member States give rise to competitive inequalities such as to disturb the proper functioning of the internal market within the meaning of Articles 94 and 95 (100 and 100a) is a highly open-ended one. Harmonisation of rules on product liability, on tobacco advertising, and on equal pay between men and women have all been effected by use of these Treaty Articles, although the centrality of such matters to the functioning of the single market could certainly be debated. The point is that almost any difference in the laws of the different Member States is capable of being construed as a potential distortion in the conditions of competition between states, or as a barrier to the effective functioning of the single market, as indeed the recent political debate over the desirability of harmonising direct taxation in Europe has shown. Guidelines of the kind in paragraph 5 of the Protocol merely show that the desirability or otherwise of expansion of Community activity into certain policy issues, or into certain areas of action, cannot be reduced to "objective" legal criteria or formulae, since these criteria will always be premised on concepts which go to the heart of the political debate about the existence and purpose of the European entity itself: Does the EU remain at heart an essentially economic enterprise? And how far should the logic of a single market be taken?

It is clear that the internal market provisions of the Treaty have in the past been invoked to propose legislation in areas which are sensitive and which have traditionally been seen as an area primarily within State competence, such as culture. A good example of this type of legislative initiative would be the Commission's proposal for a Directive on media concentration, to be based on Articles (52 and 59? 54 and 57?) EC. The free movement of services is undoubtedly an aspect of the Community's internal market, but the area of culture is one which has only reluctantly and with stringent limits thereon been conceded by the Member States to the Community as an area of potential competence under Article 151 (formerly 128). Clearly, a measure which seeks to harmonise rules on or otherwise to regulate media concentration is designed at least in part to facilitate the internal market in media services, yet at the same time it would clearly be a measure of cultural import in the sense of attempting to ensure media pluralism, the quality of programming and the provision of information. Whether or not it could be labelled as an "internal market" measure is, in a sense, an irrelevant question, since it is quite clear that it is both a measure which affects the internal market but which also has a substantial cultural dimension, and culture is an area in which the Member States have deliberately stipulated under the Treaty that they shall retain considerable autonomy and that the Community shall have a secondary, supportive role only. The same can be said of the recently adopted Directive on tobacco advertising, which, although ultimately framed as an internal market measure and adopted under Article 100a (now Article 95) EC, is evidently also concerned with public health and the reduction of smoking. [42] The possible reasons for seeking to label these measures as internal market measures include the fact that Community competence in the alternative fields of culture or public health is considerably more limited, but also the fact that if they are internal market measures they might be said to be part of the Community's exclusive competence in which the subsidiarity principle is inapplicable. But to argue that they are within the Community's exclusive competence is, of course, an untenable proposition, since the areas of culture and indeed also public health are so clearly areas in which respect for the Member State's role is demanded. Further, the proposed media concentration Directive is quite clearly as much about the media and about culture as it is about the internal market in services, and the tobacco advertising Directive is as much about public health as it is about the internal market, however the recitals to the Directive may be phrased. And even if these are accepted as areas falling within the shared competence of the Community and the Member States, it is clear that the second guideline in paragraph 5 of the Protocol - whether there is a need to correct distortions of competition or avoid disguised restrictions on trade - in fact merely restates part of the political choice which is to be made, rather than providing a guide to the answer. The question is whether the competitive distortions and trade restrictions which a directive on media concentration or on tobacco advertising would address are such as to justify overriding the interests of "lower units" - such as the Member States and their regions - in retaining substantial regulatory autonomy in the fields of culture and public health. What the 'prior' subsidiarity question should really do is to draw the attention of the Community institutions and others to these choices, to focus their attention on the different values at stake, and to force them to reason their choices openly. They should be required to show, for example, that the interests of national or regional cultural autonomy were taken into account alongside a weighing up of the importance to the Community's internal market of the kinds of competitive distortions created by disparities in national media concentration laws, and to explain why the degree of distortion in trade caused by different kinds of tobacco advertising regulations in different Member States overrides in their view the specific decision of the States to retain substantial regulatory autonomy in the field of public health under Article 152 (formerly 129) of the EC Treaty.

Other examples of this kind of weighing of choices and values - and of the importance of making the weighing process explicit - can be seen in the debates over the desirability of harmonising private law rules in the Member States, and over the extent of the need for centralisation of environmental regulation in the Community. [43] Once again it becomes obvious that the subsidiarity question cannot be addressed simply by identifying whether there are competitive distortions or hidden trade barriers which need to be eliminated to ensure the proper working of the single market, since a distortion on competition through the existence of different national standards can almost always be discovered in any policy field. It is almost always possible to point to the danger of a so-called regulatory "race to the bottom" between states which are trying to gain a competitive advantage over one another by gradually reducing the perceived regulatory burden imposed by their laws, if a centralised standard is not adopted. Van den Bergh, in his analysis of whether there is a need for harmonised rules of private law, questions whether there is any real danger of a 'race to the bottom' in this context, and points out that "the 'unequal conditions of competition' argument is advanced to justify European legislation in almost any field, ranging from public law...to private law". [44] What is important, however, is that the extent of the distortions of competition or the danger of a race to the bottom are investigated and some attempt made to clarify them, and then that these dangers are weighed against the desirability (either in terms of the decision-making process, the nature and effectiveness of the outcome or both) of removing decision-making from those other levels of government and acting instead at a central, Community level.

The third guideline in paragraph 5 simply restates the comparative effectiveness test of Article 5 (ex 3b) EC in essentially the same words, with the minor additional emphasis that action at Community level should produce "clear" benefits by reason of its scale or effects by comparison with Member State action. Essentially, then, the legal expression of subsidiarity in terms of sufficiency and relative effectiveness in Article 5, and the development of these in terms of the three guidelines in paragraph 5 of the Protocol, do not provide clear objective criteria for addressing the issues of 'appropriateness' which underlie the subsidiarity issue. They restate the question in various ways, and provide essentially open-ended and circular guidelines for answering what is unavoidably a multi-faceted political question. A more revealing, although undoubtedly more politically controversial, set of questions could be articulated instead along lines such as the following: How strong and how compelling are the internal-market requirements/competitive distortions/trade restrictions/cross-border effects in question? What precisely are the aims by reference to which the effectiveness of action at a particular level is being assessed? What are the countervailing arguments in favour of Member State action, e.g. such as the decision of the states to specify expressly in the Treaty that they retain national competence over a closely related or overlapping policy area? What kind of parties would be involved and what kind of decision-making process would take place if action were adopted (i) at Community level (ii) at national (or subnational) level? Are there alternatives to allocating the decision to be taken at one level or the other only - e.g. could the decision-making be shared between Community and other levels through the adoption of particular kinds of legal instrument or action?

Linking subsidiarity and proportionality

Softer forms of law and shared policy-making

This consideration of alternative and more probing ways to pose the set of subsidiarity questions leads us on to the second and more interesting feature of the Amsterdam Protocol which was mentioned above, which is the linkage - in particular in paragraphs 6-8 of the concepts of subsidiarity and proportionality, and the search for ways of sharing policy action and decision-making between different levels of government. Paragraph 6 concerns the form of Community action and stipulates that it shall be as simple as possible. As regards the types of instrument to be adopted, it is suggested that "directives should be preferred to regulations and framework directives to detailed measures". Since directives are instruments which leave more room for - and indeed which positively require - national intervention and action in implementing their aims than most other types of binding Community legal instrument, it is clear from this paragraph that the intention is to encourage the Community, where possible, to set the general outline for action and to leave the Member States to choose their different ways of carrying this through in detail. The Protocol here is imposing certain constraints on the types of Community action which are appropriate, and although those constraints relate to the form rather than the substance of action, it is of course apparent that the type of instrument chosen is very likely to affect the nature, substance and degree of detail of any given measure. The terms of paragraph 7 make this even more explicit, providing that Community action is to leave as much scope for national decision as possible, respecting well-established national arrangements and the organisation of the national legal systems, and permitting alternative ways for Member States to achieve the objectives of the action in question. In this way, the Protocol's procedural guidelines as to the form of Community action, which are partly phrased in the language of proportionality - in that "the Community shall legislate only to the extent necessary" - offer an alternative way of conceptualising the subsidiarity question. Rather than pursuing the doomed attempt to divide general areas of policy into blocks of 'exclusive Community competence' and 'exclusive Member State competence', or seeking to provide hard legal guidelines for determining whether the Community should act at all, or seeking to confine action on a given issue to one level of government only, this approach focuses instead on the kind of action the Community could take which leaves room for other levels of government to develop and articulate that policy further. This emphasis on mutual co-operation in the sharing of a common sphere of potential authority is evident also in paragraph 8 of the Protocol, in which reference is made to the duty of solidarity in Article 10 (formerly 5) EC, to encourage the Member States, in the absence of Community action, to refrain from acting in any way which would jeopardise Treaty objectives.

The proceduralisation of subsidiarity: reasoning, consultation and reporting

The remainder of the Amsterdam Treaty Protocol deals largely with what might be called the 'public reason' requirements of subsidiarity, imposing further procedural obligations on various Community institutions (not including the Court) which are involved in policy-making. A limited attempt is made to address issues of process and participation in decision-making - albeit at Community level rather than national level, since the Protocol avoids prescribing any procedures for the national level of implementation - by requiring the Commission to consult widely before proposing legislation and to publish consultation documents. In this sense, the subsidiarity and proportionality requirements as conceived in Article 5 (ex 3b) EC and in the Protocol are primarily directed towards shaping the behaviour of the Community and its institutions, rather than that of the Member States or any other levels of government. This is so even though the proportionality principle has always been treated by the Court of Justice as an administrative principle which is relevant both to national authorities within the scope of Community law as well as to Community authorities. Certainly if the subsidiarity principle were to be applied to the Member States in the same way as the Protocol suggests it is to the Community, the Member States would also have to consider sharing authority over policy with lower levels of authority, and to examine and reconsider their consultative mechanisms and decision-making processes.

It is notable, in this respect, that the European Parliament in the past has expressed its opposition to the conflation or linkage of the subsidiarity and proportionality principles presented in some of the Commission's annual reports on subsidiarity, in particular in the way the Commission refers to its use of framework directives and softer forms of law allowing room for Member State input, and to its practice of advance consultation on policy initiatives through the use of green and white papers. [45] Rather than seeing these as alternative ways of respecting the notion of subsidiarity, by developing complementary roles for different levels of governmental authority and encouraging the input of different actors into the policy-making process through consultation, the Parliament instead perceives such moves as creating uncertain forms of softer law which are insufficiently binding and which might not be adequately transposed at national level, and considers the notification and consultation exercises to be deflecting the Commission's time and resources away from its more important and exclusive powers of legislative initiative. [46] The Parliament's conception of subsidiarity, to judge from its 1997 Report and Resolution, is focused on the need for the Community to demonstrate the legitimacy of its actions and to indicate clearly what the Community dimension to a given policy is. [47] In other words, the Parliament considers that the Commission and other Community actors need to show why Community action is necessary and would be more effective than national action in the first place, but that having done this that it should then act strongly and autonomously, rather than using softer forms of framework law or seeking to share decision-making with the Member States, or diluting its energy and commitment to introducing concrete legislation by engaging instead in widespread consultative processes. The Parliament demonstrates its concern that the subsidiarity concept will be used as an argument for reducing the Community's policy activity, and also for engaging in softer forms of lawmaking which, unlike most of the legislative processes provided for in the Treaty, might not necessarily involve a role for the Parliament, by arguing in its Resolution that the Commission should not apply the subsidiarity principle in a way which would upset the Community's institutional balance [48] nor detrimentally affect the acquis communautaire .[49]

Paragraph 9 of the Protocol, which outlines the Commission's obligations, specifically requires it to justify all of its proposals with regard to the principle of subsidiarity, and to explain any financing of action from the Community budget. The Commission is also required to ensure that any financial or administrative burden, whether on the Community, national governments, local authorities or on economic operators or individuals, is not excessive. Even though it has been criticised as formalistic, the requirement of subsidiarity-specific reasoning (like the general reasoning requirement in Article 253 - formerly 190 - of the EC Treaty) is actually an important one, in that it is designed at least to encourage the institutions - particularly the Commission - to reflect self-consciously about whether a given kind of Community action on a given issue is appropriate, and to force them to articulate more openly how and why they have reached that conclusion. It is a significant transparency-type requirement even though the practice of the Commission and other institutions in this respect could certainly be criticised for being cosmetic and superficial. Even if a "subsidiarity justification" is tacked on ex post facto in a largely self-serving and cosmetic way to the preamble or explanatory memorandum to a measure, that very fact and the unconvincing nature of the reasoning may provide evidence of the failure to take the subsidiarity questions seriously and could also be helpful if a subsequent challenge to the measure were to be mounted.

The final requirement - a form of accountability requirement - imposed upon the Commission is that it should submit an annual report to the European Council, the European Parliament and the Council of Ministers, which is also to be forwarded to the Committee of the Regions and the Economic and Social Committee, on the application of Article 5 (ex 3b) EC. It was already the practice of the Commission, following the Edinburgh Council conclusions, to present an annual report on subsidiarity, and it is interesting to note that what the Commission first presented in 1994 was a straightforward report on the application of the subsidiarity principle, whereas in subsequent years it has presented a composite report on "Better Lawmaking", including not only the subsidiarity and proportionality principles but also reports on the 'simplification and consolidation' of EC and EU law. This development has been criticised by the European Parliament, which has argued that this approach confuses two significantly different sets of principles. [50] Simplification and consolidation are, in the Parliament's view, simply "criteria of good legislative practice" whereas subsidiarity and proportionality are substantive legal principles and, in the case of subsidiarity, constitutional principles. This reflects again Parliament's concern that the subsidiarity principle is being diluted and transformed into something other than a supposedly objective criterion for determining when clear and strong Community action on a particular issue can be justified and adopted by the traditional legislative process involving all of the institutions.

Subsidiarity and the inter-institutional dimension of the EC and EU

The final paragraphs 10-12 of the Protocol, which are fairly minimal, govern the responsibility of three of the other major institutions - the European Council, Council and Parliament - in relation to the subsidiarity principle. The European Council (as a 'Union' rather than a Community institution) is required to take the Commission's annual report into account within its own report to the European Parliament on the progress of the Union. Both the Council of Ministers and the European Parliament are required to consider the consistency of the Commission's legislative proposals, as well as the consistency of their own respective amendments and the Council of its common position, with the subsidiarity principle. The Commission evidently resents fact that the detailed requirements of the subsidiarity principle seem to be targeted mainly towards itself rather than towards the other institutions or the Member States, as though the Commission were the main culprit responsible for profligate, unnecessary or excessively burdensome decision-making in areas which are better suited to Member State action. In its most recent report on subsidiarity, the 1998 report entitled "Better Lawmaking: A Shared Responsibility", the Commission makes much of the fact that responsibility for compliance with the aims of subsidiarity is not borne by itself alone, but is shared between the Council, the Parliament and indeed the Member States. [51] In its own defence, the Commission asserts that about 20% of its legislative proposals are not entirely of its own initiative, but are made in response to specific requests from the institutions or the Member States. Its argument - which indeed it has made in various earlier reports on subsidiarity - is that these others cannot evade their share of responsibility for having requested controversial legislative proposals such as those concerning zoos, foodstuffs for athletes, animal welfare and health. The Commission asserts also that the legislative texts adopted by the Council and Parliament are more complex than its original proposals, thus defending itself again against the familiar charge that its legislative initiatives are unnecessarily interventionist and detailed. In this sense the report continues the tendency to which the Parliament has objected, in that the Commission appears to blend together a number of issues - those of clarity, simplicity, legislative transparency, and the overall quality of legislation, [52] with its practices of advance consultation, 'impact assessment' of proposals and more fundamentally its "judicious exercise" of the right of legislative initiative - into a broader conception of subsidiarity as a lighter, more participative, and more careful approach to Community policy-making.

One final point worth noting, in the context of the Protocol's reference to the European Council as an institution with responsibility in relation to the subsidiarity principle, is that there has been little discussion of the application of the subsidiarity principle to purely 'Union' (i.e. pillars two and three) rather than Community activities. Even in the Protocol - which unlike other protocols is attached only to the EC Treaty and not to the TEU - the involvement of the European Council is in its capacity as the body which gives overall political leadership for the Community as part of the Union, rather in relation also to action taken under the second and third pillars of the TEU. There are several possible reasons, however, for the lack of attention which has so far been paid to the subsidiarity principle in relation to second and third pillar, even though Articles 1 and 2 (ex A and B) of the TEU make clear that the principle of subsidiarity should be respected in all of the Union's activities and that all decision-making, not only Community decision-making, should take place 'as closely as possible to the citizen'. A first reason could be that the problems of the second and third pillars thus far have been seen as problems of inadequate and insufficient action rather than excessive or over-zealous action, and that the dictate of restraint implicit in the subsidiarity principle would, as a result, have been unnecessary and inappropriate in this regard. Secondly, the forms of law adopted under these pillars - joint actions, common positions and the many more traditional resolutions and declarations which have been used - have tended to be very different from the detailed, regulatory, harder legal instruments of the Community pillar, so that the idea of subsidiarity requiring a "lighter touch" or softer, non-binding forms of law, seems superfluous. Thirdly, the primary actors under the second and third pillar, at least before the Amsterdam Treaty amendments to the third pillar, have been the Member States within the Council, and the process of decision-making has been by consensus rather than by majority voting, although the possibility for qualified majority voting in limited areas exists. It seems therefore unlikely, since the Member States effectively retain control over the nature and extent of decision-making, unless a practice of majority voting develops in those areas where it is contemplated by the Treaty, that any of them will seek to invoke the subsidiarity principle. Of course the fact that the Member State levels of government remain in control does not mean that it is unnecessary to consider whether other levels of government - both above and beyond the Community/Union level as well as levels which are 'closer to the citizen' - should be involved in a given policy decision. This seems particularly evident in the context of the Common Foreign and Security Policy in the second pillar, given circumstances in which EU may need to work within and alongside other international fora such as the WEU, NATO or the UN.

Subsidiarity and the Court of Justice

[53]

It is generally accepted that concerns over excessive centralisation of decision-making and over the expanding competence of the Community at the expense of Member States and sub-national levels of government, resulting in the desire to impose some kind of formal discipline or legal restraint on its policy-making functions, formed a significant part of the motivation for introducing the subsidiarity principle into European law. The legal formulation of subsidiarity in Article 5 (ex 3b) EC and in the Amsterdam Treaty protocol, however, is essentially directed at the legislative institutions of the Community. The notable omission is the Court of Justice, which is treated as being beyond the scope of application of the subsidiarity principle insofar as its interpretative function is concerned. Although Article 5 (3b) EC seems inclusive, in that it does not specify which of the Community institutions is or is not subject to the subsidiarity principle, and although the Amsterdam Protocol also initially requires that "each institution" shall, in the exercise of its powers, ensure compliance with the principles of subsidiarity and proportionality, the subsequent provisions of the Protocol seem to exempt the Court of Justice, at least in its role of interpreting the scope of the Treaty, from the application of subsidiarity. The protocol goes on to state that "the principle of subsidiarity does not call into question the powers conferred on the European Community by the Treaty, as interpreted by the Court of Justice" but provides a guide as to how those powers are to be exercised at Community level. This statement distinguishes the Court's interpretation of the scope of Community powers under the Treaty, from their actual exercise by the institutions and states that the principle of subsidiarity does not apply to the Court's interpretation of those powers which are conferred on the Community by the Treaty. This suggests that subsidiarity should operate as a general principle to guide the legislative institutions in their exercise of power, and not - although notably the protocol does not state this in the case of the proportionality principle - as a principle which would influence the Court in deciding whether or not a particular provision of the Treaty should be read as conferring legislative power on the institutions. Thus it is clearly supportive of the Court's ultimate interpretative authority to determine what powers the Community has been given under the Treaty.

What the protocol and the other Agreements and guidelines before it do not seem to contemplate, however, is that the Court plays a role not only in determining the existence of the legislative powers which have been conferred by the Treaty on the political institutions, but also in interpreting the scope of Treaty provisions which, although they may be negatively worded rather than expressly power-conferring, are open to a number of interpretations capable of expanding the scope of Community law and correspondingly restricting the scope of action of Member States. The act of interpretation itself amounts to the exercise of a certain kind of power by the Court, yet it is unclear from any of the various Treaty provisions dealing with subsidiarity whether or how the principle might affect this particular exercise of power.

Indeed, it is not only the role of the ECJ as an institutional actor which is in issue here, but the entire 'negative integration' potential of the Treaty provisions as they have been construed by the various institutions and actors, [54] even if most importantly by the Court. The aspect of expansion and centralisation of Community action which is not apparently taken into account by the legal formulation of the subsidiarity principle is that there is a bias towards integration inherent in some of the economic provisions of the Treaty, and this, often in the hands of the Court of Justice, this has been affirmed and supported. The "economic constitutional" provisions of the EC Treaty not only have the potential effect of prioritising and privileging market liberalisation norms, but have been judicially construed in such a way as to make it virtually impossible to assert with confidence that there is any area of national law which falls clearly outside the competence of the Community. This - i.e. the assertion that an area of policy falls outside Community competence - is an answer often given by Commissioners responding to Parliamentary questions about what action the Community will take in spheres in which the Commission does not wish to take action, but insofar as the impact of Community economic rules, as construed by the ECJ, on domestic law is concerned, it is difficult to claim that any area of domestic policy is excluded, be it family law, abortion, sport, culture or criminal law. Taking the following three cases as examples of this phenomenon, we can see the Court's refusal to engage with the argument that it too, as a Community institution, may have responsibility for observing and ensuring that there are boundaries to the reach of Community law into national law. They are cases decided at very different times - 1974, 1982 and 1996 respectively - by a differently constituted European Court, and yet the reasoning and the inexorability of the expansionist logic is remarkably similar in each. The fact that areas of domestic policy which were thought to be (deliberately) kept free from Community influence are being undermined or altered by the strength of the economic rules as interpreted by the Court, is treated as a matter of legal logic and textual inevitability. Instead of assessing or questioning, for example, what the proper extent of incursion by the Treaty's economic rules into other areas of national policy might be, the ECJ has answered arguments of this kind simply by asserting that even if matters remain ostensibly within the sole competence of the Member State, it does not necessarily mean that they will be unaffected by any other Community rules.

The first of the cases in question is Casagrande,[55] in which the Staatsanwaltschaft of the Verwaltungsgericht, the third party in the main action, argued for a more limited interpretation of Article 12 of Regulation 1612/68 on the basis that educational policy and educational grants were within the competence of member states . The Court responded in the following terms:

11. In the Federal Republic of Germany such policy is largely within the competence of the Länder, and therefore it must be asked whether article 12 applies not only to the conditions laid down by laws emanating from the central power but also to those arising from measures taken by the authorities of a country which forms part of a federal state, or of other territorial entities .
12 Although educational and training policy is not as such included in the spheres which the Treaty has entrusted to the community institutions, it does not follow that the exercise of powers transferred to the Community is in some way limited if it is of such a nature as to affect the measures taken in the execution of a policy such as that of education and training .

The Court in this way rejected the argument that the provision in Article 12 of the Regulation that children of migrant Member State workers should be "admitted to courses" should be limited to the actual admission of children to educational courses so as not to encroach unnecessarily on the competences of the Länder. Instead, without actually addressing the question of the possible limits of Community competence in a sphere which potentially touches upon reserved areas of sub-national powers, the Court interpreted it expansively to include any 'general measures intended to facilitate educational attendance', including educational grants for secondary school in Germany, thus construing the EC provisions as extending into the realm of Member State financing of education.

Some years later, in the case of Reina,[56] it was argued to the Court that the legislative measures fleshing out the Treaty provisions on the free movement of workers should not be interpreted in such a way as to extend to non-national Community workers the national policy of offering interest-free loans to encourage childbirth amongst German nationals. This, it was argued, was an aspect of German demographic policy not linked in any way to employment status, but instead to political aspects of nationality, and that it did not in any way hinder the mobility of migrant workers. The Court again responded in the following way:

14. The Landeskreditbank disputes that conclusion by maintaining that childbirth loans, such as those at issue, fall outside the scope of the concept of "social advantage" within the meaning of Article 7(2) of Regulation 1612/68 since they are granted principally for reasons of demographic policy in order to counteract the decline in the birth rate of the German population. It is therefore a measure adopted in the area of political rights, necessarily linked to nationality, and which as a result falls outside the ambit of Article 48 et seq of the Treaty and of the rules adopted to implement those provisions.
15. It should be stated that, since the Community has no powers in the field of demographic policy as such, the Member States are permitted, in principle, to pursue the achievement of the objectives of such a policy, even by means of social measures. This does not mean, however, that the Community exceeds the limits of its jurisdiction solely because the exercise of its jurisdiction affects measures adopted in pursuance of that policy.

Once again, the Court's judgment treats it as sufficient, in answer to the Landeskreditsbank's argument, to assert that an area of national decision-making does not necessarily remain untouched by Community law even if it falls primarily within the limits of Member State competence. There was no more nuanced consideration of the relative importance or autonomy of this area of national demographic policy in relation to its possible impact on the Community's policy of promoting the free movement of workers, nor any analysis of the claim that the loan policy was an issue of political rights linked to nationality, rather than social rights linked to mobility and residence as a Community worker. The implication of the Court's approach seems to be that no area of national or regional policy, however circumscribed or reserved for that level of government within national constitutional structures, can be definitively said to be beyond the reach of the Community's economic norms. But it goes no further than this in considering whether there may be any limits, stemming in part from respect for those other levels of government and the nature of their powers, to the extent of the potential reach of these Treaty norms.

More recently in the Bosman case, [57] we see another example of this kind of judicial reasoning, where the Court, despite express reference being made by the German Government to the subsidiarity principle, again refused to engage with the question of the possible impact of its interpretative strategies on the competences and policy-making functions of lower levels of government:

72. The German Government stressed, first, that in most cases a sport such as football is not an economic activity. It further submitted that sport in general has points of similarity with culture and pointed out that, under Article 128(1) of the EC Treaty, the Community must respect the national and regional diversity of the cultures of the Member States...
....
78. The argument based on points of alleged similarity between sport and culture cannot be accepted, since the question submitted by the national court does not relate to the conditions under which Community powers of limited extent, such as those based on Article 128(1), may be exercised but on the scope of the freedom of movement of workers guaranteed by Article 48, which is a fundamental freedom in the Community system.

In other words, none of the limits expressly imposed in the Treaty on the legislative competence of the Community are treated by the Court as being relevant to its interpretative choices over the breadth of application of the Treaty's economic norms. Even if the powers of the Commission and the Council to enact policy measures in the field of culture and sport have been circumscribed by reference to the subsidiarity principle, in order to protect the decision-making powers and processes of lower levels of government, [58] this, in the Court's view, has nothing to do with the possible impact on policy-making by those levels of government of its own rulings on the scope of the Treaty's economic norms. The free movement norm in Article 48 is a "fundamental freedom" to be interpreted by the Court and this is not comparable, on the Court's reasoning, to the exercise of "Community powers of limited extent". There is apparently no contemplation of the possibility that the Community norms in provisions such as Article 48, and their interpretation by the Court, may themselves be subject to certain 'subsidiarity-inspired' limits of the kind which are openly expressed in Article (previously 128).


[38] Bull EC 10-1993 1.6.3, 2.2.2.

[39] R. Van den Bergh "Subsidiarity as an Economic Demarcation Principle and the Emergence of European Private Law" (1998) Maastricht Journal of European and Comparative Law 129.

[40] Case 65/81, Reina v. Landeskredit Bank Baden-Württemberg [1982] ECR 33

[41] Case C-168/91, Konstantinidis v. Stadt Altensteig, Standesamt, and Landratsamt Calw, Ordnungsamt [1993] ECR I-1191.

[42] Directive 98/43/EC of the European Parliament and of the Council of 6 July 1998 on the approximation of the laws, regulations and administrative provisions of the Member States relating to the advertising and sponsorship of tobacco products.

[43] See e.g. R. L. Revesz "Federalism and Environmental Regulation: Lessons for the European Union and the International Community" (1997) 83 Virginia L.Rev 1331, "The Race to the Bottom and Federal Environmental Regulation: A Response to Critics" (1997) 82 Minnesota L.Rev. and a paper on "Federalism and Environmental Regulation" delivered at the conference on Flexible Environmental Regulation in the Internal Market in Warwick University, July 1998.

[44] R. Van den Bergh, above n. 39.

[45] See the Report of the Committee on Legal Affairs and Citizens Rights and the Parliament's Resolution on the Commission reports to the European Council, A4-0155/97, O.J. 1997 C 167/34

[46] See also Debates of the European Parliament No 4-500/6-12, 12 May 1997.

[47] N 45 above.

[48] The same concern that the subsidiarity principle former should not be seen to affect this amorphous "institutional balance" was voiced also by the President of the Commission, Jacques Santer, following the Commission's May 1998 Communication on its programme to "legislate less to legislate better": European Information Service European Report, May 30 1998, although obviously this time with a view to protecting the Commission's sole right of legislative initiative, rather than protecting the legislative role of the Parliament.

[49] Ibid., paras 9 and 12 of the Resolution.

[50] N. 45 above.

[51] COM(98)715.

[52] For a general discussion see T. Burns "Law Reform in the Community" (1997) 17 YBEL

[53] For a more detailed analysis of this issue, see G. de Búrca "The Principle of Subsidiarity and the Court of Justice as an Institutional Actor" (1998) 38 JCMS 214.

[54] F Scharpf "Negative and postitive Integration in the Political Economy of European Welfare States" EUI Jean Monnet chair Paper no. 28, 1995.

[55] Case 9/74, Casagrande v. Landeshauptstadt München FACE="New York"> [1974] ECR 773

[56] Case 65/81, Reina v. Landeskredit Bank Baden-Württemberg FACE="New York"> [1982] ECR 33.

[57] C-415/93, Union Royale Belge des Sociétés de Football Association and others v Bosman [1995] ECR I-4921.

[58] The Court has however recognised the regulatory autonomy of lower - and private - levels of governance in certain in non-economic areas of sport. See most recently AG Cosmas in C-51/96 and 191/97 Deliege v Asbl Ligue Francophone de Judo , Opinion of 18 May 1999.


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