Sample Undergraduate 2:2 EU Law Assignment

The Development of Subsidiarity and Proportionality after the Implementation of the Lisbon Treaty

The exercise of subsidiarity and proportionality within the EU is clearly linked to the competence of the EU to make law.[1]  The Lisbon Treaty gave the EU the opportunity to reform its position regarding its competencies which had been described as being unprincipled as well as being unclear[2] with the system in place since the Maastricht Treaty. It must be noted that the link with competency is clear for subsidiarity considering that it asks whether an objective that the Member States cannot sufficiently achieve can, by reason of the scale or effects of the proposed action, be better achieved by the EU[3] which has become more of a concern with the increasing amount of binding law that is emanating from the EU.[4]  Behind that, the principle of proportionality is designed to ensure that the law passed by the EU should not go beyond what is necessary in attempting to achieve the objectives of the EU Treaties.[5]  Whilst proportionality was recognised as a general principle of Community law before Maastricht,[6] it has been subject to great challenge in the CJEU. Accordingly, this essay will examine how the competences have changed since the Lisbon Treaty with the knock-on effect that that has had on the concepts of subsidiarity and proportionality.

Competency of the EU

It is imperative that the competency of the EU is discussed, which will give a greater footing for the discussion of subsidiarity and proportionality within the EU after Lisbon.  Under Article 5 TEU, conferral determines which powers the EU has. Subsidiarity and proportionality govern their exercise. Article 2 of the Treaty on the Functioning of the EU (‘TFEU’) outlined that there is exclusive competence meaning that only the EU may legislate, except where it empowers Member States to act or they implement Union acts,[7]  there is shared competence under which Member States may legislate to the extent that the EU has not exercised, or has ceased to exercise, its competence.[8]  It has been noted by Professor Craig that the Lisbon Treaty, in expanding shared competency, has created some confusion as the lines are blurred between exclusive and shared.[9]  It must also be noted that the power given to the Member States vis-à-vis shared competences are subject to control and oversight by the CJEU demonstrating how the EU is retaining its power.[10]  Supporting competence allows the EU to support, coordinate or supplement Member State action, but binding acts adopted on that basis may not harmonise national laws. Article 2 also makes separate provision for the coordination of economic and employment policies and for the common foreign and security policy.[11]  With these types of competency given to the EU, the issue that arises is the extent to which the EU can use its powers which is where subsidiarity and proportionality come into play.  On this basis, they will be discussed to determine how their remit has altered since Lisbon and the effectiveness in ensuring that the Member States still retain some oversight powers.

Subsidiarity and Proportionality Prior to the Lisbon Treaty

The concepts of subsidiarity and proportionality were set out together at Maastricht in Article 3b of the European Community Treaty, later renumbered Article 5, which stated that in areas outside its exclusive competence the EC could act only where the Member States could not sufficiently achieve the objectives and Community action could better achieve them by reason of its scale or effects and that the EC would not act beyond what is necessary.    This limitation applied to subsidiarity. Proportionality applied also to the exercise of exclusive competence.  To this end, the European Commission had taken a very wide view of what was meant by exclusive competence.[12]   Taken together, subsidiarity and proportionality under Maastricht required that:

1. The EU was only to take action if the objective could not be sufficiently achieved by the Member States;
2. The EU could better achieve the objective; and
3. If the first two are met, then the action taken by the EU would not go beyond what was necessary.[13]

In this regard, the first two questions concerned subsidiarity and the third concerned proportionality.   The duties placed upon the institutions of the EU began to grow in relation to subsidiarity and proportionality considering that the Protocol on the Application of Principles of Subsidiarity and Proportionality were attached to the Amsterdam Treaty meaning that the concepts had to be taken into account when making law.[14]  This idea of subsidiarity and proportionality was criticised by Estella on the basis that trying to have self-regulation on where the EU should not be able to intervene was not going to succeed due to the defining lines being difficult to discern.[15]

Subsidiarity and Proportionality after the Lisbon Treaty

The concepts of subsidiarity and proportionality were retained in the Treaty law at Article 5 of the Treaty on the EU (‘TEU’) which retained the limit on subsidiarity to areas outside exclusive competence. It expressly included action at regional and local level in the comparison with EU action and required national Parliaments to ensure compliance with the subsidiarity procedure in the Protocol.  Additionally, Article 5(4) named proportionality and applied the necessity test expressly to both the content and form of Union action.   To this end, there were two protocols attached to the Lisbon Treaty, that being one on subsidiarity and proportionality[16]  and the other on the role of national Parliaments of the Member States.[17]

In terms of the changes that were brought about by these protocols attached to the Treaty, the subsidiarity protocol was seen to put greater duties upon the EU Commission to consult widely before proposing new legislation, unless exceptional urgency is explained in the proposal.[18]  To this end, there should be a statement as to how the legislative proposals would have a financial consequence as well as why it should be introduced at an EU level rather than by the Member States.[19]  Under Article 8 of Protocol No 2 the Court may review a legislative act for breach of subsidiarity in proceedings under Article 263 TFEU. A Member State may bring the action, including on behalf of its parliament or a chamber in accordance with national law. The French National Assembly was the first parliamentary chamber to use this route, challenging the Asylum and Migration Management Regulation. In June 2026 Advocate General Ćapeta advised the Court to dismiss the action. The Committee of the Regions may also challenge acts on which it had to be consulted. The Court had already considered subsidiarity under the earlier Treaty rules, as seen in Commission v Germany.[20] In Artegodan v Commission the issue was whether breach of a rule allocating competence entitled an undertaking to damages.[21] Individuals and companies may bring direct actions if they satisfy Article 263(4), or raise an issue of validity before a national court, which may refer it under Article 267. In Philip Morris the Court took that route and upheld the EU legislature’s conclusion that the tobacco rules in question could better achieve their objectives at Union level. Proportionality can also affect the outcome. In 2024 the Court annulled the requirement for lorries to return to an operational centre every eight weeks because the legislators had not shown they had enough information to assess whether it was proportionate.

One key area where there has been greater oversight given is through the greater powers given the national Parliaments.  Under Articles 6 and 7 of Protocol No 2, a national parliament or chamber has eight weeks to send a reasoned opinion explaining why a draft legislative act breaches subsidiarity. Each national parliament has two votes, divided between the chambers in a bicameral system. A ‘yellow card’ requires at least one third of the votes, or one quarter for proposals under Article 76 TFEU. The proposer must review the draft and give reasons for maintaining, amending or withdrawing it.  However, this has been regarded as a vacuous oversight mechanism considering that it only requires the Commission to review its decision again and it can decide to continue with its initial legislative proposal. Under the ordinary legislative procedure, an ‘orange card’ requires at least a simple majority of the votes allocated to national parliaments. If the Commission maintains the proposal, it falls before the end of the first reading if 55% of the members of the Council or a majority of votes cast in the European Parliament find it incompatible with subsidiarity.[22] Indeed, the overall use of subsidiarity has been criticised as being too limited in scope and that it is easily displaced by the Commission in introducing legislative acts with Davies stating that there should be a greater emphasis on proportionality with Parliaments being able to argue that legislation is not proportionate.[23]  Indeed, Weatherill has also criticised this role for Parliaments regarding subsidiarity but not for proportionality on the grounds that the two principles come together within the same remit, that being whether and how the EU should exercise a competence conferred by the Treaties.[24]

In terms of the effectiveness of the reforms, especially that of giving increased scrutineering powers to the national Parliaments, there has been some success.  Indeed, Kiiver has noted that national parliaments can, like an advisory council of state, influence proposals without having the final decision.[25] This could be seen with the labour law proposal, Monti II, which the Commission withdrew in 2012 after a yellow card. It maintained that the proposal complied with subsidiarity but recognised that it lacked political support. By contrast, it maintained the European Public Prosecutor’s Office proposal in 2013 and the posting of workers proposal in 2016 after yellow cards. No orange card has been issued.[26]  To this end, the Lisbon Treaty can be seen as giving greater oversight powers to Parliaments vis-à-vis the Commission and this means that it is more likely that it will ensure the laws that are proposed comply with the idea of subsidiarity.

Conclusion

This essay has examined the development of subsidiarity and proportionality in the EU.  It is clear that they are integral in determining the remit of the powers of the EU to make legislation.  The concept of subsidiarity can be seen as greatly changing as a result of the Lisbon Treaty to the extent that increased powers have been given to national Parliaments to raise concern.  Whilst a yellow card does not bind the Commission to withdraw its proposal, the political control that it can give has been seen to the extent that Monti II was stopped and the Commission are aware of the consequences of failing to take into account the concerns of the Member States.  This demonstrates that it has developed in favour of the Member State, yet this would be bolstered if the formal reasoned-opinion procedure was expanded to allow national parliaments to object on proportionality grounds as well.

Bibliography

Legislation

Amsterdam Treaty

Lisbon Treaty

Maastricht Treaty

Protocol (1) On the Role of National parliaments in the European Union

Protocol (2) on the application of the principles of subsidiarity and proportionality, [2008] OJ C115/206

Treaty on European Union

Treaty on the Functioning of the European Union

Cases

Commission v Germany [2010] ECR I-1885

Internationale Handelsgesellschaft v Einfuhr- und Vorratsstelle für Getreide und Futtermittel [1970] ECR 1125

Artegodan GmbH v Commission Case C-221/10 P, EU:C:2012:216

Case C-547/14 Philip Morris Brands and Others, EU:C:2016:325. Joined Cases C-541/20 to C-555/20 Lithuania and Others v Parliament and Council, EU:C:2024:818. Case C-553/24 Assemblée nationale v Parliament and Council, Opinion of Advocate General Ćapeta, EU:C:2026:454.

Books

Azoulai L (ed), The Question of Competence in the European Union (OUP, 2014)

Chalmers D, Davies G & Monti G, European Union Law (2^nd edn, CUP 2010)

Craig P, The Lisbon Treaty: Law, Politics and Treaty Reform (OUP 2010)

Craig P & De Burca G, EU Law: Text, Cases and Materials (6^th edn, OUP 2015)

Estella A, The EU Principle of Subsidiarity and its Critique (OUP 2002)

Foster N, Blackstone’s EU Treaties and Legislation 2015-2016 (OUP, 2015)

O’Keeffe D & Twomey PW (eds), Legal Issues of the Maastricht Treaty (Chancery, 1994)

Articles

von Bogdandy A and Bast J, ‘The European Union’s Vertical Order of Competences: The Current Law and Proposals for its Reform’ (2002) 39 CMLR 227

Craig P, ‘Competence: Clarity, Conferral, Containment and Consideration’ (2004) ELR 323

Davies G, ‘Subsidiarity: The Wrong Idea, in the Wrong Place, at the Wrong Time’ (2006) 43 CMLR 63

De Burca G, ‘The Principle of Proportionality and Its Application in EC Law’ (1993) 13 YEL 105

Fabbrini F & Granat K, ‘Yellow Card but no Foul: The Role of National Parliaments under the Subsidiarity Protocol and the Commission Proposal for an EU Regulation on the Right to Strike’ (2013) 50 CMLR 115

Kiiver P, ‘The Early Warning System for the Principle of Subsidiarity: The National Parliament as a Conseil d’Etat for Europe’ (2011) 36 ELR 98

Schutze R, ‘Co-Operative Federalism Constitutionalized: The Emergence of Complementary Competences in the EC Legal Order’ (2006) 31 ELR 167

Weatherill S, ‘Better Competence Monitoring’ (2005) 30 ELR 23

Miscellaneous

Commission Communication to the Council and the European Parliament, Bull EC 10-1992

EU Commission, Annual Report 2012 on Subsidiarity and Proportionality (Com 566, 2013)