How the EU works: the EU’s powers

Published: 14th Apr 2016

References to the EU’s powers (also described as its ‘competences’) generally mean the powers of the EU to make laws. The authority for lawmaking comes ultimately from the EU’s members.

EU member countries have made agreements, or treaties, that guarantee freedom of trade and cross-border business activities.

These treaties promise common action in fields like agriculture, the environment and foreign and security policy. Every citizen of a member country is also a citizen of the EU and has rights of movement and residence, as well as the right to work, in every EU country.

In order to make sure these rights can be enforced, the EU has its own system of rules. Some of the EU rules are set out in the treaties but most are made by the EU itself.

There is an EU court to interpret the rules. The Court of Justice of the European Union is based in Luxembourg.

The power to make laws is limited by the treaties

The EU has the power to make a law only if the treaties give it that power. This is referred to as ‘conferral’.

And the only areas that the EU should regulate are those that member countries cannot sufficiently regulate themselves. Wherever possible, decisions should be taken at national level. This is the idea of ‘subsidiarity’.

Critics say that the idea of subsidiarity hasn’t led to less European regulation, because in practice the Commission interprets the criteria as applying to all proposals for Europe-wide rules.

Some types of law are easier to pass than others. The EU has the power to lay down the rules on value added tax, for example, but making or changing those rules requires every country to agree.

So every member has a veto when it comes to VAT and other taxes.

The EU and human rights

The EU has adopted a Charter of Fundamental Rights to limit its own powers. EU laws must comply with Charter rights, such as free speech, privacy and sex equality.  

Member countries are also bound by the Charter when they apply EU law in their national systems.

The Charter has been controversial in the UK because critics believe the EU court can use it to extend the reach of EU law and reduce national sovereignty. However, EU law states that the Charter does not create new rights and does not increase the EU’s powers.

In practice, the Charter seems to be giving the courts a bigger role. Judges in England have used the Charter in several recent cases to override UK laws.

All this is separate from the European Convention on Human Rights and European Court of Human Rights, which aren’t part of the EU at all.

EU rules cover many different areas

EU law-making powers are limited to what the treaties allow. But the treaties cover a wide range of issues.

EU laws on free movement cover things like product standards and composition, product labelling, rights of movement and residence of EU citizens, company law and banking regulation.

The EU’s powers to regulate the single market are defined widely. They cover rules from consumer protection to animal welfare.

Rules on agriculture provide for payments to farmers and also cover fisheries, limiting the number of fish that can be caught and sold.

Other EU rules implement environmental policy. They lay down minimum standards for the purity of drinking water and clean air. They also address global warming.

EU laws generally have to go through three different institutions

Making a law at EU level usually starts with the Commission making a proposal to the Council. The Council then decides on the content of the law (voting by qualified majority) in conjunction with the European Parliament. For most laws, both have to agree for them to be passed.

The Council is made up of representatives of national governments and the Parliament is directly elected.

EU laws sometimes delegate powers to the Commission—which is an administrative body, headed by commissioners approved both by national governments and the European Parliament.

When the Commission makes rules under these delegated powers, it may be supervised by a committee of national representatives.

The EU has other powers beyond setting the rules, including international dealings

Not all powers of the EU are lawmaking powers.

The Commission has law enforcement powers. It can take a member country to the EU court for breaching EU law. If a member country fails to comply with a judgment of the court, it may impose a financial penalty.

The Commission also enforces EU rules that restrict member countries from giving subsidies to businesses which could distort competition (‘state aid’ rules).

The EU negotiates free trade agreements with non-member countries. It also has power to impose sanctions on regimes breaking international law or oppressing their populations. It has imposed sanctions on countries such as Iran, Libya and Syria.


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