Explain the link between subsidiarity and federalism. What view of federalism would be consistent with the principle of subsidiarity?

‘The principle of subsidiarity is defined and established by the second paragraph of Article 3b {5} EC, inserted into the treaty by the Maastricht Agreement (Treaty on the European Union), where it is stated:

 ‘In areas which do not fall within its exclusive competence, the Community shall take action, in accordance with the principle of subsidiarity, only if and in so far as 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 Community.’

The Treaty of Amsterdam added a protocol to the EC Treaty, the Protocol on the Application of the Principles of Subsidiarity and Proportionality, which states that both these requirements must be met: for Community action to be justified, it must be established both that the objectives of the proposed action cannot be sufficiently achieved by the Member States and that they can be better achieved by action on the part of the Community.’

There is considerable ambiguity found within the notion that the principle of subsidiarity shall only apply to areas which do not fall within the exclusive competence of the community. The main problem here being that there are no clear criteria for distinguishing areas which fall within the Community’s exclusive competence.  

Commentators have unsurprisingly studied this problem in depth and there is a division over whether a narrow (so subsidiarity would apply to many situations) or a wide view of "exclusive competence" should be used.

 Toth advocates the wide view, that subsidiarity cannot apply to any matter covered by the original EEC Treaty, though as Hartley points out he does admit an exception in the case of implied treaty making powers.  Steiner, on the other hand, advocates the narrow view, that the Community has exclusive competence in areas in which it has already legislated. 

The ambiguity in this area is still far from resolved, but it seems that competence of Member States ends not, as Toth has suggested where the competence of the Community begins, but where its powers have been exercised.  A possible argument is that exclusive competence begins where the Community has a duty to act.

Subsidiarity is therefore a principle of EU governance which says that the lowest possible tier of government should act, and thus that centralised authority should be avoided as much as possible.

Therefore it can be argued that the EU is decentralised, in practice however this is not really the case as there is no agreement about what the ‘lowest possible tier of government’ is for any given issue. For European federalists, subsidiarity implies that power should be exercised at local/regional and EU levels; whilst for defenders of national sovereignty, subsidiarity implies that power should be centralised at national level.

Subsidiarity has been a principle of EU governance since at least the 1970s, but it came to the fore as part of the Maastricht Treaty 1992. It was supposed to help reduce the democratic deficit by making clearer who does what in the EU, and why. However, although all the EU member states could agree that this was necessary, they did not agree on the substance – i.e. on which tier of government should do what, why, and how. Over the last decade, European integration has made many advances, but these difficult decisions remain to be made. In fact, subsidiarity has recently lost ground to a related, but different principle – Proportionality (the idea that the EU should do as little as possible, in as minimal a way as possible).

Subsidiarity is one of the most controversial and ambiguous principles of EU governance.

It came to prominence in the early 1990s when, as mentioned, at the insistence of the UK government it was used in the Maastricht Treaty, or Treaty on European Union (TEU), as an alternative to the words ‘federal’ or ‘federation’. The TEU was perhaps the most significant single step forward in the European integration process, since it set in train, among other developments, moves towards the single currency, the common foreign and security policy, and a bicameral legislature at EU level. Given this step-change in the European integration process, it was considered necessary to elaborate the principles by which the EU could evolve from a primarily economic to a more broadly political union in an effort to ensure public support for this development. The crisis of the ‘democratic deficit’, which grew worse in the wake of the TEU, was nonetheless apparent before it was signed. ‘It was hoped that subsidiarity could assuage popular concerns that the EU would usurp the powers of its member states, or subsume national identities. The subsidiarity principle has thus been lauded almost universally as both the essence of European democratic thought and the means by which the EU undertakes only those tasks which are appropriate for it. By the same token, the ambiguity and problems of subsidiarity are due in no small part to the fact that different actors have different understandings of what ‘the essence of European democracy’ and the appropriate tasks of the EU actually are - two complex issues which were avoided in the Maastricht negotiations’. 

Three models of subsidiarity were invoked by the various member states in the negotiations which produced the TEU. First, one which draws on Christian Democratic social philosophy, and which argues that power should be exercised by organisations and groups at the lowest possible level of governance: thus, individuals and social groups, rather than the state, should be empowered. In this model, civil society is considered to be the best place to locate public power, with the smallest possible role given to other institutions of governance.

Second, there is what might be termed the German federal model. This can be summed up as the view that subsidiarity requires a clear separation of powers both horizontally

(i.e., between the different EU institutions) and vertically (i.e., between local, regional, national and European institutions). This model thus emphasises a written constitution for the EU and a clear answer to the question of who does what in European governance and how, and clearly is also a view of subsidiarity closely linked with federalism.

Finally, there is the national sovereignty model, which argues that subsidiarity is the means by which EU powers can be limited, and those of the member states (and particularly their central governments) preserved. In this model, subsidiarity is conceived as the means by which member states control the EU and render it incapable of replacing them; this model was famously championed at Maastricht by the UK government. These models have obvious differences, although they are united in opposition to the idea that the EU should centralise all legislative power, clearly supporting Weatherill’s argument. Therefore, as the Treaty is deliberately ambiguous about the meaning of ‘subsidiarity’; at Maastricht it was vital to find a form of words which would allow all the member states to sign up to the TEU and claim that the integration process was following the particular development trajectory which they supported. Thus the Treaty provisions on subsidiarity are a rather vague package deal which was made to ensure that the member states would not veto the Treaty itself, and the actual meaning of the principle was left to evolve over time.

Dr Warleigh believes that subsidiarity has not worked well in practice except for its undoubted ability to generate consensus (on a disagreement) at Maastricht. This is largely because, as shown above, the Treaty refers to subsidiarity as both a principle and an instrument of governance, while omitting to make clear exactly when and how it should be applied. For example, there are no criteria to assess whether the EU is more likely to make successful policy on a given issue than its member states: this means that, in practice, the decision about which level of government should act is either taken on an ad hoc basis, or simply finessed. ‘Such decision-avoidance often carries the approval of the member states, which are themselves not averse to adding idiosyncratic duties to the EU’s competences. As a result, neither those who thought subsidiarity could be the means to bring the EU ‘closer to the citizen’ – an objective echoed in the Treaty preamble – nor those who wanted subsidiarity to be a purely administrative device can be entirely satisfied with how it has been ‘operationalised’.

A further issue to consider is whether the idea of a ‘Europe of the Regions’ has any real world significance. This idea, which has been put forward in various forms over time, would in essence see regions (and perhaps localities) take on a greater political salience in the context of a unified Europe, with national levels of government retreating from their current pre-eminence. Currently, it appears that the great interest in this idea at the time of the Maastricht Treaty has faded, and that its strongest erstwhile advocates (actors from powerful regional governments such as the German Länder) have actually been content to ensure that their powers are constitutionally entrenched in terms of national rather than EU systems. The Treaty makes no mention of sub national governments in its sections on subsidiarity, concentrating solely on relations between national and EU levels. However, it is clear that given the power of certain regional-level actors – for example, the Länder could actually veto any new EU Treaty under the terms of the German constitution – European integration will have to respect the powers of devolved or decentralised administrations in at least some of the member states. Indeed, the Amsterdam Protocol has an attached declaration of its own to this very effect, at the expressed desire of the EU’s federal member states (Austria, Belgium and Germany). This declaration is of uncertain legal force, but its political weight is significant.

‘Far from being a transitory notion whose usefulness to seal a political compromise was exhausted once the Maastricht bargain had gelled, the concept of subsidiarity continues to express, and to raise, fundamental questions about the appropriate locus of political and legal authority within a complex and multi-layered polity, which is itself situated within an increasingly interconnected international order.’ 

This said, can any clear link between subsidiarity and federalism be found? There is undoubtedly evidence of a historical heritage between the two indeed as Shaw highlights subsidiarity and federalism have in many areas developed alongside one another. In Post-war Germany subsidiarity, although it was never explicitly adopted in the Constitution or Basic Law, helped to actually create federalism, by underlying its evolution, allowing a breakaway from the former ‘shackles of corporatism under national socialism’.

“Subsidiarity in Germany today protects the Bundeslander in a system of cooperative federalism in which the individual states and the federal Bund share certain key political powers.”

The hopes of many who were first attracted to the idea of subsidiarity, such as the British government, were based on the belief that it “seemed a perfect instrument to prevent the European Community from snatching away national sovereignty”. Surprisingly whether or not this has proved to be the case is still unknown. Whilst it can clearly be argued that subsidiarity in this context, is based upon, and indeed may even lean towards federalism, this does not necessarily support the view that this ‘European federalism’ is a centralising process, not least because, as mentioned, the original federal supporters seem themselves, at present, content with retaining national sovereignty.

The most important aspect of a federal system is that it recognises that there are different types of political issue which need different types of institution to deal with them. Some affect only a local area; others are more widespread in their scope. Supporters of a federal system argue that the institutions of government should reflect this. The idea that government should be based solely on strong central institutions is old-fashioned and out-of-date. In a federal system, the power to deal with an issue is held by institutions at a level as low as possible, and only as high as necessary.

Shaw argues that eventually, as subsidiarity becomes more established within the EU it will establish models of decision making which will decentralise local and regional authorities. For now though she argues that subsidiarity operates merely on a binary divide, between the nation state and the EU.

The link between certain views of federalism and subsidiarity are undeniable, but any solid comparison is almost impossible to achieve due largely to the ambiguity of the principles themselves, but also due to the motives of their creators and ‘supporters’.

It is impossible to say what future the principle of subsidiarity has within the EU, undoubtedly the initial support it received from many members has largely diminished as all Member States seek to retain the ability to govern themselves as independently as possible. However it would be unwise to dismiss it as unwanted and outdated, the principle has clearly had a considerable impact on Europe, Shaw states that as a political principle, it has enjoyed a relatively long history- having risen from Catholic social philosophy. ‘It has undoubtedly served a useful purpose even if only in its capacity to ask important questions’.

Whilst the principle appears to have had a long history within the continent, it is only since its more recent inclusion into the TEU that it has obtained any significant academic attention. Academic writers have expressed numerous conflicting views, all seemingly able to support their arguments, we need look no further than the Toth and Steiner debate to see this. It seems therefore that one can reach almost any conclusion to this question, yet it appears clear that contrary to earlier British belief, that there are forms of federalism that are consistent with subsidiarity, and that it can support a form of federalism which need not necessarily support a centralising process.

Word Count 3197

Bibliography

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