The EU is constrained by the Treaties by which it was established and cannot make laws on any matter it likes. It can only make laws where it has the legislative competence to do so. Even then, there are a series of principles which help to achieve a careful balance of power between the European Union on the one hand and Member States on the other.
Articles 2 to 6, and article 352(1), of the Treaty on the Functioning of the European Union (TFEU) set out those areas in which the EU may contribute to law making. In other words, articles 2 to 6 and 352(1) help to define the limits of the EU’s legislative competence. There are three types of competence.
The first is where the EU has exclusive competence: in these areas the EU alone is able to legislate and adopt binding laws. The Member States’ role is therefore limited to applying these laws, unless the EU authorises them to adopt certain laws themselves. The areas are set out in article 3(1) of TFEU which provides as follows:
“1. The Union shall have exclusive competence in the following areas:
(a) customs union;
(b) the establishing of the competition rules necessary for the functioning of the internal market;
(c) monetary policy for the Member States whose currency is the euro;
(d) the conservation of marine biological resources under the common fisheries policy;
(e) common commercial policy.”
The second category of competence is shared competence: in these areas both the EU and Member States may adopt binding laws. However, Member States may exercise their competence only in so far as the EU has not exercised, or has decided not to exercise, its own competence. This is set out in article 4 of TFEU which provides as follows:
“1. The Union shall share competence with the Member States where the Treaties confer on it a competence which does not relate to the areas referred to in Articles 3 and 6.
2. Shared competence between the Union and the Member States applies in the following principal areas:
(a) internal market;
(b) social policy, for the aspects defined in this Treaty;
(c) economic, social and territorial cohesion;
(d) agriculture and fisheries, excluding the conservation of marine biological resources;
(f) consumer protection;
(h) trans-European networks;
(j) area of freedom, security and justice;
(k) common safety concerns in public health matters, for the aspects defined in this Treaty.
3. In the areas of research, technological development and space, the Union shall have competence to carry out activities, in particular to define and implement programmes; however, the exercise of that competence shall not result in Member States being prevented from exercising theirs.
4. In the areas of development cooperation and humanitarian aid, the Union shall have competence to carry out activities and conduct a common policy; however, the exercise of that competence shall not result in Member States being prevented from exercising theirs.”
The third category of competence is where the EU has competence to take supporting action: in these areas the EU can only intervene to support, coordinate or complement the action of Member States. Consequently, it has no legislative power in these fields and may not interfere in the exercise of these competences reserved for Member States. This is set out in article 6 of TFEU which provides as follows:
“The Union shall have competence to carry out actions to support, coordinate or supplement the actions of the Member States. The areas of such action shall, at European level, be:
(a) protection and improvement of human health;
(e) education, vocational training, youth and sport;
(f) civil protection;
(g) administrative cooperation.”
The following principles are important to understanding the extent of the EU’s legislative competence:
the EU may legislate only for the purpose of furthering the objectives set out in the Treaty on European Union and the Treaty on the Functioning of the European Union;
the principle of subsidiarity – this requires that the EU does not legislate in those areas in which it shares legislative competence with Member States if the objectives being pursued could be better achieved by legislation at national level (see article 5(3) of the Treaty on European Union); and
the principle of proportionality – this requires that EU law should not have wider scope than is necessary to achieve the objectives of the treaties (see article 5(4) of the Treaty on European Union).