The word ‘federalism’ has become, in the UK at least, shorthand for the concept of increased centralisation of power at the centre of the EU, away from the individual Member States. This is not a popular concept in the UK, to say the least. This is unfortunate, because there is a good case for saying that the EU should be more federal, not less. To understand what I mean by this, it is necessary first to consider what federalism is and how it operates in practice, before asking why the EU would benefit from more of it.
What is federalism?
The Oxford English Dictionary defines the word ‘federal’ as “of, pertaining to, or of the nature of a system of government in which several states form a central political unity but remain independent in internal affairs”. There are thus two layers of government in a federal state, that of the ‘central political unity’ and that of the separate states which ‘remain independent in internal affairs’.
It follows from the above definition that federalism involves a separation of powers between the central political unity and the states. I have always understood as well that there must be clarity in the division of powers for federalism to work properly.
The best known example of a federal state is the United States, though there are many others including Canada, Australia and Germany. In the case of the US, the Constitution assigns specific powers to the federal government, including for example the powers to raise armies, declare war, print money and regulate commerce between the individual states. The US Constitution also, pursuant to the Tenth Amendment, which was adopted in 1791 as part of the ‘Bill of Rights’, states that:
The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.
In short, the US Constitution reserves various specific powers to the federal government, while all other powers remain with the individual states. This is a very simple description of the reality, and the US Supreme Court has had to step in on many occasions over the years to clarify the boundary lines between federal and state powers, but the basic position can be stated in simple terms.
The constitution of Germany (the ‘Basic Law’ adopted in 1949) makes a similar distinction between the powers of the German Federal Republic and the powers of the individual Lander. Article 30 of the Basic Law states:
Article 30: Except as otherwise provided or permitted by this Basic Law, the exercise of state powers and the discharge of state functions is a matter for the Lander.
How are powers divided between the EU and individual Member States?
Article 3 of the EU Treaty, as amended, contains a broad outline of the powers and obligations of the EU. These powers and obligation include:
- providing freedom of movement for its citizens;
- the establishment of a single market;
- combatting social exclusion and discrimination;
- the establishment of an economic and monetary union whose currency is the Euro;
- upholding its values and contributing to the protection of its citizens in its relations with the wider world; and
- pursuing its objectives by appropriate means commensurate with the competences conferred upon it in the Treaties.
Article 4, in turn, states in paragraph 2 that “competences not conferred upon the Union in the Treaties remain with the Member States”.
Article 5 states, in paragraph 1, that the ‘limits’ of the Union’s ‘competences’ (i.e., its powers) are governed by the ‘principle of conferral’, while the ‘use’ of its ‘competences’ is governed by the ‘principles of subsidiarity and proportionality’.
Article 5 paragraph 2 defines the principle of ‘conferral’:
Under the principle of conferral, the Union shall act only within the limits of the competences conferred upon it by the Member States in the Treaties to attain the objectives set out therein. Competences not conferred upon the Union in the Treaties remain with the Member States.
Article 5 paragraph 3 defines the principle of ‘subsidiarity’:
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.
Article 5 paragraph 4 defines the principle of ‘proportionality’:
Under the principle of proportionality, the content and form of Union action shall not exceed what is necessary to achieve the objectives of the Treaties.
Comparison between the EU and the US
The EU Treaty, like the US Constitution, specifies the powers of the central political entity, the ‘Union’, while stating that all powers not conferred upon the Union remain with the individual Member States. However, the EU Treaty goes on to provide in Article 5 para 3 that the Union may act outside the areas of its specified powers (or ‘competences’)
[if] the objectives of [any] 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
The ability of the Union to act outside its specified powers is made subject to the principles of ‘conferral’, ‘subsidiarity’ and ‘proportionality’.
Why the EU needs to be more federal
The fact that the EU may act outside its specified powers under the EU Treaty in circumstances where a ‘proposed action’ can be better achieved at Union level rather than at the level of individual Member States is inconsistent with the key principle of federalism that powers should be clearly separated between the central entity and the individual states.
The EU principle that action may be ‘better achieved’ at Union level rather than at the level of individual Member States is extraordinarily vague, despite the fact its operation is limited by the principles (themselves also very vague) of conferral, subsidiarity and proportionality. In theory, as the economies of countries around the world become ever more globalised, it will become possible to argue that all actions may be ‘better achieved’ at Union level, rather than at the level of individual Member States. This would ultimately lead to the creation of a unitary state at EU level.
It is therefore wrong to say that the EU is in danger of becoming ‘ever more federal’. That is because it is not now a federal state and there is no possibility of it becoming one while Article 5 of the EU Treaty allows it to act outside its specified ‘competences’. It would be far better in my view if the EU Treaty were amended to specify the powers of the EU in far more detail, so that all other powers can be reserved to the Member States. This would have the following key advantages:
- The respective powers of the Union and individual Member States would be far more transparent than at present and could be understood by citizens of Member States. I expect that only a tiny minority of European citizens (most of them professors or students of EU law) are aware of the detailed provisions of Articles 3 to 5 of the EU Treaty, and how they work together.
- The ability of the Union to extend its ‘competences’ if a particular purpose can be better achieved at Union level than at the level of individual Member States gives rise to uncertainty and could be abused.
- The concepts of ‘conferral’, ‘subsidiarity’ and ‘proportionality’ are vague and bureaucratic in nature, and liable to be interpreted in a subjective manner.
- A more straightforward federal structure, like those in the US and Germany, would be more conducive to the development of greater democracy at the Union level, with individual citizens and their elected representatives having a greater understanding of what laws can be implemented at each level.