Someone recently bought our

students are currently browsing our notes.

X

Subsidiarity And Proportionality Notes

Law Notes > European Law Notes

This is an extract of our Subsidiarity And Proportionality document, which we sell as part of our European Law Notes collection written by the top tier of Oxford students.

The following is a more accessble plain text extract of the PDF sample above, taken from our European Law Notes. Due to the challenges of extracting text from PDFs, it will have odd formatting:

TABLE OF CONTENTS

Tutorial 1: European integration, institutions, and limits on european Lawmaking..................................................................................................... 3 1 - The evolution of European Integration..........................................................3
Craig, Ch 2 Craig and De Burca............................................................................................ 4
Para I - Theories of Integration....................................................................................................... 4
I - Neofunctionalism (Early ideology)........................................................................................... 4
II - Liberal intergovernmentalism (1950s: Moravcsik)..................................................................5
III - Multi-Level Governance......................................................................................................... 5
IV - Rational Choice Institutionalism (1990s) and constructivism................................................6
Para II - Democracy and Legitimacy............................................................................................... 6
I - Some of the deficiencies are overstated.................................................................................7
II - Democratic features prioritized by particular scholars...........................................................7

Craig, Ch1 Craig and De Burca (Texts, Cases and Materials)...............................................8 2 - Institutions................................................................................................11 3 - Law-Making...............................................................................................11 4 - LEGAL AND CONSTITUTIONAL LIMITS ON EUROPEAN LAW-MAKING................11
Introduction: Conferral....................................................................................................... 11
(a) Legal limits on European law-making - competence.....................................................12
Unfair Contract Terms Directive (93/13/EEC), [1993] OJ L 95/29 (Preamble).............................13
Case C-376/98 Germany v Parliament and Council [2000] ECR I-8419 ("Tobacco Advertising")15
Case C-210/03 Swedish Match [2004] ECR I-11893...................................................................19
Cases C-154/04 & C-155/04 Alliance for Natural Health [2005] ECR I-6451 and........................20
Case C-380/03 Germany v. Parliament and Council [2006] ECR I-11573 ("Tobacco Advertising
II").............................................................................................................................................. 21
Case C-58/08 Vodafone [2010] ECR I-4999................................................................................22
Case T-526/10 Inuit Tapiriit Kanatami et al v. Commission, judgment of 25 April 2013 (Seal
Products II Case)........................................................................................................................ 24
Case C-547/14 Philip Morris v. Secretary of State for Health (4 May 2016) ECLI:EU:C:2016:325
(and see AG Kokott's Opinion, ECLI:EU:C:2015:853)..................................................................26
D. Wyatt, 'Community Competence to Regulate the Internal Market'........................................26
S. Weatherill, 'The limits of legislative harmonisation ten years after Tobacco Advertising"'
(2011) 12 German LJ 827........................................................................................................... 27
P. Craig, 'The ECJ and Ultra Vires Action: a Conceptual Analysis' (2011) 48 CMLRev 395..........29

(b) Constitutional limits on European law-making - Proportionality and Subsidiarity.........29
(1) Proportionality......................................................................................................................... 30
Case C-375/96 Galileo Zaninotto v. Ispettorato Centrale [1998] ECR I-6629, paras. 57-67........31
Germany v. Parliament and Council [2006] ECR I-11573 ("Tobacco Advertising II")..................31
Case C-58/08 Vodafone [2010] ECR I-4999................................................................................32
Case 114/76 Bela-Muhle (Skimmed-Milk Powder) [1977] ECR 1211;..........................................33
Case 240/78 Atalanta [1979] ECR 2137.....................................................................................34
Cases C-453/03 et al, ex p ABNA [2005] ECR I-10423................................................................34
Case C-310/04 Spain v Council [2006] ECR I-7285.....................................................................34
(2) Subsidiarity.............................................................................................................................. 35
Case C-233/94 Germany v. Parliament (Deposit Guarantee Directive) [1997] ECR I-2405, paras.
24-28;........................................................................................................................................ 38
Case C-491/01 ex parte British American Tobacco [2002] ECR I-11453, at paras. 177-185.......39
Cases C-154/04 & C-155/04 Alliance for Natural Health [2005] ECR I-6451, paras. 99-108;......39
Case C-114/01 AvestaPolarit Chrome Oy, [2003] ECR I-8725, para. 56......................................39
Case C-518/07 Commission v. Germany [2010] ECR I-1885......................................................40
Case C-58/08 Vodafone [2010] ECR I-4999................................................................................40
Case C-547/14 Philip Morris, see esp. AG Kokott (ECLI:EU:C:2015:853) on subsidiarity.............41
B. Bertrand, 'Un principe politique saisi par le droit" (2012) 48 RTDE 329.................................42

EU LAW: INTRODUCTION

Page 1 G. Davies, 'Subsidiarity: the wrong idea, in the wrong place, at the wrong time' (2006) 43
CMLRev 63................................................................................................................................. 44
P. Craig, 'Subsidiarity: A Political and Legal Analysis' (2012) 50 JCMS 72 at 82-84....................46
R. Schutze, 'Subsidiarity after Lisbon: Reinforcing the Safeguards of Federalism' (2009) 68
Cambridge Law Journal 525;...................................................................................................... 48
P. Kiiver, 'The Early-Warning System for the Principle of Subsidiarity' (2011) 36 ELRev 98;......49
Jancic 'The Game of Cards' (2015) 52 CMLRev 939...................................................................51
Annual Report 2014 on Subsidiarity and Proportionality (Commission).....................................53
COM 2013 566 (Annual report 2012 on Subsidiarity and Proportionality)..................................53
Com (2016) 505 (Communication from the Commission to the European Parliament, the Council and the National Parliaments).................................................................................................... 54

Questions.......................................................................................................55

EU LAW: INTRODUCTION

Page 2 CONSTITUTIONAL LIMITS ON EUROPEAN LAW-MAKING - PROPORTIONALITY
AND SUBSIDIARITY
These only apply if there is shared competence.

(1) PROPORTIONALITY
is a principle which places a legal limit on the law-making powers of the EU institutions.
On its face, it covers very different things than subsidiarity:Subsidiarity = when the Union should intervene (reflects self-government - local decisions are better than EU ones)
Proportionality = the quality of the intervention (reflects a presumption in favour of private autonomy and requiring justification for state intervention: requires the measure to be suitable for achieving the objective and to impose the fewest possible constraints on individuals)

Proportionality requires the content and form of Union action not to exceed what is necessary to achieve the objectives of the Treaties, its current formulation in ex parte Fedesa (1990) - where it is conflated into two balancing tests:Whether there is an appropriate balance between the ends sought and the means used, and whether the means used are suitable to the ends sought (the suitability of the measure)
Whether the effect of the measure on other interests and values is excessive (the necessity of the measure)

Thus, the principle offers the possibility of very wide-ranging review of EU action, allowing judges the possibility to address the merits of the measure (excessive or not suitable) and consider a wide range of arguments (balance all interests and values against each other in necessity, and consider the wider policy and broader ethos/rationale behind the political system that gives rise to a measure in suitability).
The extent to which this is taken up will depend on the legal culture within which it arises (CohenEliya, Porat):A culture of justification (broad conceptions of rights ? every administrative and legislative action is required to justify itself)
A culture of authority (proportionality exists not to allow merit-review but to check that the institution is the appropriate body to take the decision; once this is determined, the sphere of authorization is treated as a black box where the legislator enjoys discretion)

This second culture is reflected in Fedesa ("manifestly inappropriate" test); often the Court sees the realization of the objectives of European integration as sufficient; this is "damning" as it is difficult to see how simply realizing a system (independent of anything else) is necessarily valuable.
But perhaps the impact of proportionality is best seen in the change in legislative culture brought about through it:-

in 2003 the EU institutions moved away from a process of law-making to a process of regulation
(where the instrument deployed is no longer necessarily legislation, but other more suited instruments with less intrusive effects on private parties) using instruments like co-regulation and self-regulation (Inter-Instititutional Agreement on Better Law-Making (2003)).
in 2005 the Commission established a programme simplifying the regulatory environment,
bringing together subsidiarity and proportionality, on the basis of a commitment to EU
regulation only where it is necessary, simple and effective. As part of this, the Commission proposed a strategy to repeal all irrelevant or obsolete legislative acts (Commission,
Implementing he Community Lisbon Programme: A Strategy for the Simplification of the Regulatory Environment, COM (2005) 535)

EU LAW: INTRODUCTION

Page 3 -then a "Smart Regulation" initiative supplemented this, calling for a programme of reducing the administrative burdens imposed on private actors by EU law by simplifying or repealing EU
legislation, and by ex post evaluation of the effectiveness of all EU legislation (Commission,
Action Programme for Reducing Administrative Burdens in the EU Final Report)
A Regulatory Fitness programme took this further: it maps out the regulatory areas with greatest potential for simplification and reduction, involving stakeholders in the process
(Commission, Regulatory Fitness and Performance: Results and Next Steps )

Thus, subsidiarity and proportionality are recasting the EU legislative landscape ? strong deregulatory bias. Problem = lack of transparency + structure + pluralism about the process of repealing unnecessary legislation (compared to the process of enacting legislation). Who decides whether a measure is obsolete? On what basis? How do you distinguish between "dormant" and "obsolete"
legislation?

CASE C-375/96 GALILEO ZANINOTTO V. ISPETTORATO CENTRALE [1998] ECR I-6629,
PARAS. 57-67.
The contested provision requires the quantities for distillation to be apportioned among various producers in a region on the basis of yield per hectare, for the objective of improving conditions in the wine market by preventing overproduction.
Judgment:
C argued that:
1o the criterion of yield per hectare was inappropriate for pursuing the objective + penalizes excessively winegrowers who are not overproducing while encouraging those producing poor quality wine (because the criterion doesn't allow you to distinguish poor quality wine or overproduction).
2o possible to envisage an equally effective but less prejudicial method: the criterion of end-of-year stocks, which shows whether there is overproduction (a criterion that the Commission itself recognized was more relevant).
Rs (Council, Commission and Spanish Government) argue that:
1o the decision between measures is a political choice falling within the responsibilities of the Council,
and that the Community legislator cannot be in a position to foresee the future effects of an adopted measure ? a measure cannot be held unlawful merely because it subsequently proves less effective than it could have been.
2o the criterion is appropriate because there is general correlation between high yield and low quality,
and because other criteria are inappropriate (like end of year stocks would be too difficult to monitor).
Court's answer:
1o In matters concerning the common agricultural policy the Community legislature has wide discretion. Thus, the legality of a measure adopted in that sphere can be affected only if the measure is manifestly inappropriate having regard to the objective which the competent institution is seeking to pursue.
2o In this case there is no manifest error as it is designed to impose most burdens on the producers who are principally responsible for overproduction without penalizing producers with low yields. It cannot therefore be regarded as disproportionate.
3o The Commission subsequently acknowledged that the end of year stocks criterion would be more appropriate, but the legality of a Community act cannot depend on retrospective considerations of its efficacy. If the legislature is obliged to assess the future effects that cannot be accurately foreseen, it can be criticized only if manifestly incorrect in light of information available at the time of adoption. [CF
Spain v Council].

EU LAW: INTRODUCTION

Page 4 GERMANY V. PARLIAMENT AND COUNCIL [2006] ECR I-11573 ("TOBACCO ADVERTISING
II")
Judgment: the Community legislature must be allowed a broad discretion in an area which entails political, economic and social choices on its part, and in which it is called upon to undertake complex assessments. The legality of a measure adopted in that sphere can be affected only if the measure is manifestly inappropriate having regard to the objective.
It is apparent from the analysis set out in paragraphs 72 to 80 of the present judgment [relating to competence, i.e. whether the Directive is intended to improve the conditions for the functioning of the internal market] that the Directive is appropriate for achieving the objective that they pursue. [146] [So the Court is basically saying that because competence is fulfilled, so is proportionality?]
Nor, given the obligation on the Community legislature to ensure a high level of human health protection, do they go beyond what is necessary in order to achieve that objective. The Community could not have taken a less restrictive measure (ex. exemption for local products) because this would have rendered the field of application of the prohibition uncertain, contrary to the objective of harmonization.
Claimants argued that it would significantly reduce press income from advertising and thus be contrary to Art 10 ECHR (freedom of expression), but per Art 10(2) this freedom can be limited by certain legitimate aims. Further, journalistic freedom of expression as such remains unimpaired - the only possible weakening by the measure is indirect.
No violation of proportionality.

CASE C-58/08 VODAFONE [2010] ECR I-4999
Cs argue that the measure is disproportionate because it doesn't merely regulate wholesale, but also retail, charges.
A-G's Opinion: the question is proportionality of the measure in terms of the goals of Art 114 and the policy objective of consumer protection balanced against the loss of autonomy on the part of MSs and interference with the rights of the claimants (property, right to engage in commerce).
In assessing proportionality, the court accords a margin of discretion to the legislature - the standard is manifest error of assessment or a misuse of powers or whether the legislature has manifestly exceeded the limits of its discretion.
Price controls are one of the most intrusive forms of intervention in the market and constitute a particularly strong limitation of rights to property and the freedom of economic initiative. The decision to enact them should not be taken lightly by the legislator. However, it does not appear that the
Community legislature did so in the present instance:
1o The Community legislator decided to intervene as a last resort - it had already taken other measures to attempt to reduce retail roaming prices (competition law investigations, the previous regulation,
warnings...) and had concluded that roaming charges stand no relation to underlying costs and there is no reason to believe that decreasing wholesale prices would lead to decrease in retail prices.
2o Faced with conflicting evidence, the Community legislature is not required to adopt all the advice of expert groups, in particular, it is not required to adopt the "wait and see" approach. The decision to regulate fell within the range of options reasonably open to the legislature.
3o The controls is not intended to achieve long-term market regulation but to respond to a market failure that competition rules are not in a position to address.
EU LAW: INTRODUCTION

Page 5 4o There is a sunset clause [providing that it will cease to take effect after a particular date unless action is taken to renew] which minimizes its impact on the rights of economic operators by ensuring that the Community legislature periodically reassesses its interventions. If the Community legislature were to extend the price controls or make them permanent, that decision would also need to be proportionate and additional reasons would need to be presented to justify it. [CF the Judgment on competence - assessed in relation to the original act and not amendments, whereas proportionality is judged according to the amendment]
On proportionality of the loss of Member State autonomy: "given the almost-unanimous support amongst the relevant Member State agencies for the introduction of the regulation in question, such an argument loses force and in the light of the limited scope of the rules (roaming services), the margin of discretion the Court accords to the legislature and the absence of any substantiated arguments to the contrary, the regulation cannot be said to be disproportionate in this regard". [CF undermines the contention that proportionality is merely about legality - if it is about legality, then why does it matter that the majority of MSs agreed? It is precisely where the majority of MSs agreed that controls of legality play a role - by ensuring that the minority is not forced into something that they did not agree to by signing the Treaty.]
Judgment: proportionality requires that Community "measures (...) be appropriate for attaining the legitimate objectives pursued by the legislation at issue and must not go beyond what is necessary to achieve them".
In judicial review, "the criterion is not whether a measure adopted was the only or the best possible measure, since its legality can be affected only if the measure is manifestly inappropriate having regard to the objective pursued".
However, the Legislature must base its choice on objective criteria, and must examine whether the objectives pursued by the measure are such as to justify even substantial negative economic consequences for certain operators [53]. [So here it's suggesting that the proportionality requirement is based on the objectives themselves and not merely the measure!]
The objective here is consumer protection (by reducing the level of charges the public has to play). The level of retail charges for roaming was high and the relationship between costs and prices not such as should have prevailed in fully competitive markets. Thus, introducing ceilings for retail charges is appropriate for the purpose of protecting consumers against high levels of charges.
Could the objective be achieved by regulating only wholesale prices? In this area, competition at retail level took place in terms of the complete retail package, of which roaming was only a small part and not a critical consideration when consumers chose their providers. It is also clear that regulating wholesale charges alone would not have had a direct and immediate effect on consumers.
The measure recognizes that it is exceptional and justified by the unique characteristics of the roaming markets.
No infringement.

CASE 114/76 BELA-MUHLE (SKIMMED-MILK POWDER) [1977] ECR 1211;
The contested Council regulation sought to reduce a surplus of skimmed milk powder by forcing animal feed producers to incorporate it in their products in place of soy.
Held that it was discriminatory (benefits were felt by dairy farmers whereas the burdens affected all animal-breeders ? discrimination based on the different categories of farmers) + disproportionate (the measure was unnecessary to fulfil the objective.
AG's opinion (why the measure was disproportionate): The extent of the burden this creates must be assessed according to two factors: the price fixed for the compulsory purchase of milk powder and its
EU LAW: INTRODUCTION

Page 6 actual value as compared with the price of other substances having the same nutritional value (turns out to be 3x the market value).
1o The same need can be achieved by imposing a less onerous burden:
ao Evenly share the sacrifice among all citizens by absorbing the whole cost with Community budget
(this was later adopted after the expiry of the Regulation)
bo Noticing that the cost of producing milk powder from liquid milk was higher than the market price of the milk for use in animal feed; if continued encouragement had not been given to the processing of liquid milk into powder (market value < cost of processing), but the liquid milk was instead devoted to other uses, then the total burden on producers and importers of feedingstuffs and cattle breeders would have been less. As such, the objective of reducing milk powder stocks could have been attained by less burdensome means (despite Commission's objection that destroying large quantities of liquid milk would cause ecological problems).
2o The system made demands too heavy on certain categories of producers and consumers, compared with the advantages sought.
Thus, proportionality breached.
Judgment: The arrangements imposed on producers of milk and milk products + other agricultural sectors, a financial burden (compulsory purchase of animal feed product + purchase price three times higher than that of the substances which it replaced). The obligation to purchase at such a disproportionate price constituted a discriminatory distribution of the burden of costs between the various agricultural sectors. Nor, moreover, was such an obligation necessary in order to attain the objective in view, namely, the disposal of stocks of skimmed-milk powder. It could not therefore be justified for the purposes of attaining the objectives of the common agricultural policy.

CASE 240/78 ATALANTA [1979] ECR 2137
Judgment: the absolute nature of the provision in question is contrary to the principle of proportionality because it doesn't permit the penalty for which it provides to be made commensurate with the degree of failure to implement the contractual obligations or with the seriousness of the breach thereof.

CASES C-453/03 ET AL, EX P ABNA [2005] ECR I-10423
Preliminary reference on the validity of a Directive that imposes an obligation to indicate the precise feed materials and their percentage contained in compound feedingstuff to any customer who requests it.
Judgment: proportionality requires that measures be appropriate for attaining the objective pursued and not go beyond what is necessary to achieve it. JR of these conditions must recognize that the
Community legislature must be allowed a broad discussion in an area that involves political, economic and social choices, so that a threshold of "manifestly inappropriate" (with regard the objective) is to be used.
Cs (Spanish and UK Governments) submit that the notification of the precise composition of feedingstuffs seriously affects their economic rights and interests and is not necessary for the protection of health in view of existing legislation (i.e. requirements to indicate batch reference and to provide national authorities (bound by confidentiality) with a document containing the composition).
Rs (Italian, Netherlands, Danish, Greek and French Governments) respond that it is not disproportionate with regard to the public health objective. The Parliament also invokes an objective of transparency
EU LAW: INTRODUCTION

Page 7

Buy the full version of these notes or essay plans and more in our European Law Notes.

More European Law Samples