entity but not all subsidiary entities, implementation of that principle can be delayed at the more local level.
- When a genuinely efficacious economic principle is recognised by a higher political entity, but not all subsidiary entities, implementation of that principle can be delayed at the more local level.
- In areas where the local use of common resources has a broad regional, or even global, impact (such as in the generation of pollutants), higher levels of authority may have a natural mandate to supersede local authority.
General principle of European Union law
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Subsidiarity is perhaps presently best known as a general principle of European Union law. According to this principle, the EU may only act (i.e. make laws) where action of individual countries is insufficient. The principle was established in the 1992 Treaty of Maastricht. However, at the local level it was already a key element of the European Charter of Local Self-Government, an instrument of the Council of Europe promulgated in 1985 (see Article 4, Paragraph 3 of the Charter) (which states that the exercise of public responsibilities should be decentralised). Subsidiarity is related in concept to, but should not be confused with, the concept of a Margin of appreciation.
Subsidiarity was established in EU law by the Treaty of Maastricht, which was signed on 7 February 1992 and entered into force on 1 November 1993. The present formulation is contained in Article 5(3) of the Treaty on European Union (consolidated version following the Treaty of Lisbon, which entered into force on 1 December 2009):
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.
Court of Justice
The Court of Justice of the European Union in Luxembourg is the authority that has to decide whether a regulation falls within the exclusive competence of the Union. As the concept of subsidiarity has a political as well as a legal dimension, the Court of Justice has a reserved attitude toward judging whether EU legislation is consistent with the concept. The Court will examine only marginally whether the principle is fulfilled. A detailed explanation of the legislation is not required; it is enough that the EU institutions explain why national legislation seems inadequate and that Union law has an added value.
An example is the judgement of the Court of Justice of the European Union in a legal action taken by the Federal Republic of Germany against the European Parliament and the Council of the European Union concerning a Directive on deposit guarantee schemes (13 May 1997). Germany argued that the Directive did not explain how it was compatible with the principle of subsidiarity. The Court answered:
- In the present case, the Parliament and the Council stated in the second recital in the preamble to the Directive that ‘consideration should be given to the situation which might arise if deposits in a credit institution that has branches in other Member States became unavailable’ and that it was ‘indispensable to ensure a harmonised minimum level of deposit protection wherever deposits are located in the Community’. This shows that, in the Community legislature’s view, the aim of its action could, because of the dimensions of the intended action, be best achieved at Community level. (…)
- Furthermore, in the fifth recital the Parliament and the Council stated that the action taken by the Member States in response to the Commission's Recommendation has not fully achieved the desired result. The Community legislature therefore found that the objective of its action could not be achieved sufficiently by the Member States.
- Consequently, it is apparent that, on 