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to make things work in harmony and in the right direction EU has devised a competence
system in which the powers have either been shared between the EU and the
member states or have been retained only by the EU i.e. the exclusive ones
or in the third case the assisted competence where the EU gives its support to
the national parliaments of the member states for the carrying out of its
objectives properly. A brief account of
the competences in the EU system (which
is also denoting the principle of subsidiarity) is given below.


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competences are outlined in Title I of
Part I of the consolidated Treaty on the Functioning of the European Union. There
are three types of competences i.e.
exclusive, shared and the assisted one. Under the head Exclusive Competence,
the EU has been given exclusive competence to make directives and conclude
international agreements when provided for in a Union legislative act. Many
areas such as the customs union, the establishing of the competition rules
necessary for the functioning of the internal market, monetary policy for the
member states whose currency is euro and the conservation of marine biological
resources under the common fisheries policy etc. are brought under the exclusive
jurisdiction of the EU.

the head of Shared Competence it is mentioned that member states cannot
exercise competence in areas where the EU has done so, nonetheless, the EU’s
exercise of competence shall not result in member states being prevented from
exercising theirs in shared matters like the internal market, social
policy for the aspects defined in the Treaty, economic, social and territorial
cohesion, agriculture and fisheries, excluding the conservation of marine
biological resources, environment, consumer protection, transport, research,
technological development and outer space, development cooperation,
humanitarian aid are the areas which come under the shared competences of both
the EU and the member states thereby entitling both of them to legislate.

the head of Supporting (assisted) Competence where the EU can carry out
actions to support, coordinate or supplement member states actions falls the
areas like the protection and improvement of human health, industry, culture,
tourism, education, youth, sport and vocational training, civil protection
(disaster prevention) and administrative cooperation.

careful scrutiny of the aforementioned discloses very important fact that the
EU also works and believes in the concept of power-sharing
like that of federal systems across the globe. EU has specifically demarcated
their respective areas to work in the form of shared, exclusive and supporting competences.


the EU exercise its competence in the matters already mentioned, it often ends up giving one of the following three
results i.e. regulations, directives, and
decisions. Regulations become law in all member states the moment they come
into force, without the requirement for any implementing measures and
automatically override conflicting domestic provisions. In other words, there is nothing left for the national
parliaments to do once EU ends up with
any regulation. Directives require member states to achieve a certain result
while leaving them discretion as to how to achieve the result. The details of
how they are to be implemented are left to member states. Meaning thereby that
the directives are close to the
concept of the principle of subsidiarity as enshrined in the Maastricht


are manifold aspects when one tries to analyze the principle of subsidiarity
from contractual dimensions of international law.1 The foremost thing to be noted in this regard is that international
law follows the basic principles of a contract
too like it is followed in domestic spheres of the states. The European Union itself is the product of a
contract in the form of a treaty concluded between member states themselves
providing for the regulation of state of affairs between the EU and the member
states.2 The provisions regarding
the subsidiarity oblige EU institutions
to take care of this important principle while engaging in any activity on
behalf of the member states. EU being an agent
of the member states collectively must not transgress from what it has been
allowed expressly in the treaty. This is so because ultimately the roots of
international law lie with the concept of respect for the sovereignties of the
nation states together with not going against what they have consented to.

understood that let us have a look at how the Treaty on the European Union has
balanced the relationship between the EU
and the member states contractually.


remain dominant masters of treaties. They enjoy immunity except in areas
explicitly agreed. Treaties only bind states that have agreed to do so. States
may make various declarations and reservations to these treaties limiting their
scope and effectiveness.3 This is the reason that
international scholarship maintains that subsidiarity stands as the great
limiting principle that will defend national sovereignty against incursion by
the ever-expanding European integration.4 It also suggests that
states and their interests should determine the scope of international
institutions’ authority as they state
benefit individual person interests
better than alternative complex international institutional structures.5 The idea and arguments
backing the principle on account of the principle of sovereignty are not agreed
upon hence differing opinions of legal scholarship are also there highlighting
the problems of affiliating and protecting the subsidiarity with the cover of
sovereignty poses threats to evolving and emerging trends of international law.


to Follesdal6
the role of the state is not to regulate a political sphere separate from the
social communities but to coordinate and secure their common purposes in a
symbiosis. Thus state sovereignty is not unconditional. Instead, sovereignty
resides in the people, not individually but as a corporate body constituted by
cities and provinces, and the state has no power to address matters only of
concern to lower levels. Regions and associations may rebel and secede if the
federation fails to satisfy its tasks.

idea of sovereignty also poses a problem where the states do not take care of the genuine needs of the
people as a whole and are not based on the democratic principles for the
protection of economic, social, cultural rights of the people together with
their civil and political rights. The European Court of Justice, therefore,
held that the powers retained by the Member States must be exercised
consistently with Community law and it must not go against the accepted norms
of international human rights law.7


basic nature of international law be it at the level of the United Nations or
Regional accepts the consent as the core principle of international law.8 The law of nations is
actually based upon the fundamental principle of Pacta Sunt Servanda
i.e. the states are bound by the treaties in good faith.9 This principle besides
highlighting the obligation of the states to abide by the provisions of the
treaty they become a party to also and in
the same intensity requires that the states are only bound by the treaties they
have consented for. Therefore, where the states do not want a treaty to
interfere in its own way to regularize economic, social or security-related issues this principle protects
the states from the unwanted and unnecessary demands of the international
organizations (EU in our case). Thus the member states of the EU expects from
the EU organs to accept and respect this very basic and fundamental principle
of international customary law which has acquired the status of jus cogen.10 In the words of Follesdal11 the Community (EU)’s
legitimacy is depended on the fact of transfer of powers by consent from member

1 Rafa? Ma?ko, “Contract Law and
the Digital Single Market: Towards a New EU Online Consumer Sales Law?,”
(Rochester, NY: Social Science Research Network, September 15, 2015)

2 Jan Smits, “Law Making in the
European Union: On Globalization and Contract Law in Divergent Legal Cultures,”
SSRN Scholarly Paper (Rochester, NY: Social Science Research Network, March 9,

3 Follesdal, “The Principle of
Subsidiarity as a Constitutional Principle in International Law.”

4 PD Marquardt, “Subsidiarity and
Sovereignty in the European Union,” 18 Fordham International Law Journal,
1994, 617.

5 Follesdal, “The Principle of
Subsidiarity as a Constitutional Principle in International Law.”

6 Andreas Follesdal, “Subsidiarity,”
(Rochester, NY: Social Science Research Network, 1998)

7 Finanzamt koln- Altstadt
v. Schumacker (C-279/93) 1995 ECR I-225 21; Wielockx v. Inspecteur der
Directe Belastingen (C-80/94) 1995 ECR I-2493 16

8 Duncan Hollis, “Why State
Consent Still Matters: Non-State Actors, Treaties, and the Changing Sources of
International Law,” (Rochester, NY: Social Science Research Network, May 19,

9 Steven Reinhold, “Good Faith in
International Law,” (Rochester, NY: Social Science Research Network, May 24,

10 Matthew Lister, “The
Legitimating Role of Consent in International Law,” (Rochester, NY: Social
Science Research Network, December 8, 2010)

11 Andreas Follesdal, “The
Principle of Subsidiarity as a Constitutional Principle in International Law,” (Rochester,
NY: Social Science Research Network, 2013)

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