The principle of subsidiarity is defined in Article 5 of the Treaty on European Union (TEU):
Under the principle of subsidiarity, in areas which do not fall within its exclusive competence, the Union shall act only if and in so far as the objectives of the proposed action cannot be sufficiently achieved by the Member States, either at central level or at regional and local level, but can rather, by reason of the scale or effects of the proposed action, be better achieved at Union level.
Background and status
The Treaty of Maastricht (1993) introduced the principle of subsidiarity into primary EU law. The principle is intended to ensure that decisions are taken at a level as close as possible to citizens and that any action to be undertaken at European level is justified given the options available at national, regional and local levels. Specifically, the principle asserts that the EU should refrain from taking action – except in areas that fall within its exclusive competence – unless such an initiative would be more effective than action taken at national, regional or local level. The principle of subsidiarity is closely linked with the principle of proportionality, which requires that any action by the EU should not go beyond what is necessary to achieve the objectives of the EU treaties.
Two protocols annexed to the Treaty of Lisbon (2007) play an important role in applying the principle of subsidiarity. Protocol No 1 on the role of national parliaments encourages their involvement in EU activities and requires EU documents and proposals to be forwarded promptly to the parliaments so that they can examine them before the Council makes a decision. Protocol No 2 requires the European Commission to take into account the regional and local dimension of all draft legislation and to make a detailed statement on how the principle of subsidiarity is respected. This protocol allows national parliaments to object to a proposal on the grounds that it breaches the principle. If one or more national parliaments objects to a proposal, it must be reviewed and may subsequently be upheld, amended or withdrawn by the Commission, or blocked by the European Parliament or the Council. If there is a perceived breach of the principle of subsidiarity, the Committee of the Regions or an EU country may refer an adopted act directly to the Court of Justice of the European Union (CJEU). The process whereby national parliaments of Member States can object to draft legislation on the grounds of the principle of subsidiarity is known as the yellow card procedure.
- EUR-Lex: Treaty on the functioning of the European Union – Protocol (No 2) on the application of the principles of subsidiarity and proportionality
- European Industrial Relations Dictionary: Yellow card procedure
Vertical and horizontal subsidiarity
The European Parliament and the European Economic and Social Committee (EESC) have set out two separate applications of this principle: vertical subsidiarity and horizontal subsidiarity.
- Vertical subsidiarity refers to the division of competences between different levels of authorities – European, national and regional.
- Horizontal subsidiarity refers to the exercise of competences at the same level of power, that is, between the EU and the European social partners; it relates to the specific question of whether the exercise of competences by the EU institutions or by the European social partners is more appropriate. The same test is applicable at Member State level: whether an action by the state or by the two sides of industry is preferable. The result is a need to choose when considering action among various bodies at different levels: the European social partners or the EU institutions; Member State governments or national social partners; or the social partners at EU or national level. In this way, the principle of horizontal subsidiarity can offer effective guidance on identifying the right actor and the best level for action.
European Public Service Union case
On 23 May 2019, the European Public Service Union (EPSU) brought a claim before the CJEU that the European Commission had breached rules on social dialogue (Article 155(2) of the TFEU) by refusing to make a proposal to the Council for the implementation of the central government social partners’ agreement on information and consultation rights, adopted on 21 December 2015. The European Commission had rejected the social partners’ request to transpose the collective agreement into EU legislation. With regard to the principle of subsidiarity in the context of the case, the CJEU stated in its decision of 24 October 2019 that
the applicants rely on a principle of ‘horizontal subsidiarity’, meaning that the social partners are best placed to assess whether an agreement must be implemented at the level of management and labour and the Member States or at EU level. … the principle of subsidiarity governs the exercise by the EU of the competences that it shares with Member States. Therefore, that principle is understood as having a ‘vertical’ dimension, in the sense that it governs the relationship between the European Union on the one hand and Member States on the other. By contrast, contrary to what the applicants suggest, that principle does not have a horizontal dimension in EU law, since it is not intended to govern the relationship between the European Union, on the one hand, and management and labour at EU level on the other. Furthermore, the principle of subsidiarity cannot be relied on in order to alter the institutional balance.
In its decision, the CJEU seems to indicate that the principle of horizontal subsidiarity does not derive from primary EU law. Nevertheless, in assessing whether the Commission had infringed the principles of proportionality and subsidiarity in this case, the CJEU does not seem wholly opposed to the concept of horizontal subsidiarity as such.