European Law Monitor

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 In What Areas Can the European Union Legislate?

Most people believe that the European Union can legislate on anything, and that there are no limits beyond which the EU should, or may not, get involved.

In fact, the European Unions’s powers are dictated by the various EU Treaties, which are agreed and signed by each Member government.

Essentially the process whereby the EU gains its powers is that the different EU governments meet and agree the European political priorities for the following ten years or so, negotiate a treaty encapsulating these, then grant the different EU institutions the powers to get on with the job. In very simple terms this is what happens each time a new Treaty e.g. Maastricht and Nice, is agreed.

It is a long recognized principle that the EU can only act within the limited areas in which it has been given power by the Member governments through the governing treaties. However, there are two core types of powers that the EU may be granted: Exclusive Competence, and Shared Competence.

Exclusive Competence

The European Commission has taken the view that an area falls within the exclusive competence of the EU if the Treaties impose on it a duty to act, and it is given sole responsibility under the Treaty to act in that area.

The areas over which the EU assumes exclusive competence are:

  • the Common Commercial policy
  • the Common Agricultural policy
  • Fisheries policy
  • Transport policy
  • Competition rules
  • Rules governing the free movement of goods, persons, services and capital.

What is the effect of EU having exclusive competence?

The effect of exclusive competence is profound. It means that Member States no longer have the power to introduce their own legislation in those areas. Member States may only act within the limits of strictly defined management and implementing powers delegated back to the national governments by the EU through the legislation.

If the European Union comes out with legislation in these areas national governments may come out with their own national legislation to implement it, but they may not come out with their own new legislation outside of the EU framework, particularly anything that might conflict with EU law.

So if you are in business, a farmer, in agriculture, a fisherman, or work in the transport sector, much of your regulatory environment is governed by laws initiated by the EU where they hold exclusive competence.

This is why individuals and businesses do need to get involved when laws are being drafted, because if they don’t they may suddenly find that they are bound by highly detrimental new laws and regulations.

Does the EU have these exclusive powers in any other area?

No. For every other area where is does not specifically have exclusive competence, the EU has to act within the limits of the powers conferred on it by the Treaties, and within the limits of the objectives listed in the Treaty.

Policy areas where the EU has not been granted exclusive competence are usually known as "areas of Shared Competence".

Shared Competence

The Treaty objectives that the EU is bound to implement are listed in Article 2 of the Treaty, and they state that:

"The Community shall have as its task, by establishing a common market and an economic and monetary union and by implementing common policies or activities referred to in Articles 3 and 4,

  • to promote throughout the Community a harmonious, balanced and sustainable development of economic activities,
  • a high level of employment and of social protection,
  • equality between men and women,
  • sustainable and non-inflationary growth,
  • a high degree of competitiveness and convergence of economic performance,
  • a high level of protection and improvement of the quality of the environment,
  • the raising of the standard of living and quality of life, and
  • economic and social cohesion and solidarity among Member States.”

The defined limits in which the EU governments have agreed that the EU may legislate, and over which they do not have exclusive competence are,

  • the approximation of the laws of Member States to the extent required for the functioning of the common market
  • the promotion of coordination between employment policies of the Member States with a view to enhancing their effectiveness by developing a coordinated strategy for employment
  • a policy in the social sphere comprising a European Social Fund
  • the strengthening of economic and social cohesion
  • a policy in the sphere of the environment
  • visas, asylum, and immigration
  • economic and monetary policy
  • customs cooperation
  • the strengthening of the competitiveness of Community industry
  • the promotion of research and technological development
  • the encouragement for the establishment and development of trans-European networks
  • a contribution to the attainment of a high level of health protection
  • a contribution to education and training of quality and to the flowering of the cultures of the Member States
  • a policy in the sphere of development cooperation
  • the association of the overseas countries and territories in order to increase trade and promote jointly economic and social development
  • a contribution to the strengthening of consumer protection
    measures in the spheres of energy, civil protection and tourism.

In all the activities referred to above, the European Union has agreed that it shall aim to eliminate inequalities, and to promote equality, between men and women.

In areas which do not fall within its exclusive competence, i.e. the ones listed above, the EU shall take action only if the objectives of the proposed action cannot be sufficiently achieved by the Member States, and can therefore, by reason of the scale or effects of the proposed action, be better achieved by the EU. This is known as the Principle of Proportionality and Subsidiarity and is one of the ways in which individuals or businesses can oppose proposals which they feel are unecessary over regulation. (For further information on this please read the article on proportionality and subsidiarity).

If the EU has not been granted the powers to act in a particular area by the Member governments, then it may still legislate but only if it needs those powers to attain one of the objectives listed above, and for some reason the Treaty has not given the EU the powers it needs to complete the job.

Before this extension of powers can be granted, the Council has to vote unanimously that it is required, and they also need to consult the European Parliament.

In theory, the EU cannot get involved in anything outside of the areas listed above.