Union values

The first example relates to the mobilisation of the Union’s common values. Confronted with the overhaul of the Polish judiciary, the Court started to operationalise these values through more specific Treaty provisions. Based on Articles 2 and 19(1)(2) TEU, which oblige the member states to ensure effective legal protection in the fields covered by Union law, Luxembourg established EU requirements for the independence of national courts.Footnote ⁷

The Polish government at the time objected by referring to the Union’s competence constraints. The Court cannot ‘alter the substance of the principle of conferral or the extent of the European Union’s powers’.Footnote ⁸ As the organisation of the national judiciary is ‘a competence reserved exclusively to the member states’, its interpretation of Articles 2 and 19(1)(2) TEU could not be sustained.Footnote ⁹ The captured Constitutional Tribunal followed suit, rejected Luxembourg’s intervention, and stressed that the institutions, including the Court, can enforce member state obligations under EU law only within the scope of the Union’s competences.Footnote ¹⁰

However, doubts were harboured by EU institutions as well. In 2014, the Council’s legal service asserted that apart from the procedure foreseen in Article 7 TEU, violations of EU values ‘may be invoked against a Member State only when it acts in a subject matter for which the Union has competence’.Footnote ¹¹ Surprisingly, even the Commission’s legal service found it hard to resist such arguments. In its infringement procedures against violations of LGBTQI rights by Hungary,Footnote ¹² the Commission raised a breach of Article 2 TEU as self-standing plea. During the hearing, the situations in which Article 2 TEU can be invoked were discussed. In an attempt to backpedal, the legal service’s Director General stressed that ‘there needs to be a link to the Union’s competences – always’.Footnote ¹³

Despite the Court’s evolving case law, legal scholarship continues to invoke such competence constraints. Benedikt Riedl, for instance, stressed that the Court can only establish EU standards for national measures and review their compliance when these measures fall within the ambit of the Union’s competences. Beyond this limitation, the Court’s activity is not covered by the principle of conferral. As the Union’s competences do not include the organisation of national courts, ‘the ECJ cannot claim to control judicial organization that falls within the core of national constitutional structures’.Footnote ¹⁴

Union citizenship

Similar concerns are raised with regard to the judicial development of Union citizenship, especially its impact on the member states’ nationality laws. Even though the rules pertaining to nationality are a national competence, they are not shielded from the impact of EU law. With regard to the loss of nationality, the Court has stated in Rottmann that the national legal frameworks must comply with principles of EU law, such as proportionality.Footnote ¹⁵ This was criticised by many scholars as a ‘creeping usurpation of competences’ by the Court. As long as the member states have not expressly transferred their law-making powers in the area of nationality law, the EU and its institutions – including the Court – should not have ‘any direct or indirect authority in this area’.Footnote ¹⁶ Despite this criticism, the Court has continued to spell out specific EU requirements in considerable detail, including time limits, procedures, and assessments.Footnote ¹⁷ According to Ferdinand Weber, this ‘process of judicial densification’ might cross the threshold from adjudication to legislation thus leading – if not in law, then in fact – to an EU competence in the area of nationality.Footnote ¹⁸

Particularly controversial is the question of whether EU law contains requirements for the acquisition of nationality as well. In infringement proceedings against the Maltese ‘golden passports’, the Court interpreted Article 20(1) TFEU as prohibiting member states from conferring their nationality – and by implication Union citizenship – in the absence of a ‘special relationship of solidarity and good faith’ to the person concerned.Footnote ¹⁹ In its defence, Malta had argued that the ‘Member State competence on the acquisition of nationality … must be exercised with due respect to EU law’ – but only ‘in the fields of EU competence’. The broader the Court’s review, ‘the higher the risk that the European Union will exceed its competences’.Footnote ²⁰ The Advocate General also stressed the member states’ exclusive competence in this area and warned that EU requirements for the acquisition of nationality would lead to ‘a wholly unlawful erosion of Member States’ competence in a highly sensitive field’.Footnote ²¹

Similar reactions emerged from legal scholarship. Some argued that the Commission’s plea would ‘sacrifice’ the vertical division of competences.Footnote ²² Without ‘compétence en la matière’, the Union and its law is in no position to exert an ‘influence sur le droit étatique de la nationalité’.Footnote ²³ Any contrary interpretation by the Court could be understood as ‘Kompetenzüberschreitung’.Footnote ²⁴ More nuanced, Daniel Sarmiento and Guillermo Íñiguez suggested that the Court’s ability to review the member states’ frameworks governing naturalisation should be limited to cases of a sufficient degree of seriousness. This proposal is based on one central reasoning: ‘to protect the division of competences between the Union and its Member States … set out in Articles 2 to 6 TFEU’.Footnote ²⁵

Equality law

A further, admittedly dated, but still impressive example can be found in the area of equality law. In Kreil, the Court was asked to decide whether the Community’s equal treatment directiveFootnote ²⁶ prohibited discrimination based on sex in armed forces. In Germany, women were barred from serving in military positions involving the use of arms. Several governments argued that ‘Community law does not in principle govern matters of defence, … which remain within the Member States’ sphere of sovereignity’.Footnote ²⁷ The Court, by contrast, stressed that even though ‘it is for the Member States … to take decisions on the organisation of their armed forces’, such decisions are not ‘bound to fall entirely outside the scope of Community law’.Footnote ²⁸ Ultimately, it simply applied the directive. By implication, the full exclusion of women from all military posts was deemed disproportionate.

This provoked an outcry among German politiciansFootnote ²⁹ and legal scholars,Footnote ³⁰ which was almost unanimously framed in competence terms. In this spirit, Rupert Scholz, law professor and former minister of defence, underlined in the German Bundestag that ‘this judgment represents a clear breach of competence on the part of the European Court of Justice’.Footnote ³¹ This seems to have made an impression on the Court. In Kreil’s aftermath, it started mitigating the impact of Community law on the organisation of the member states’ armed forces. Nonetheless, a later ruling confirmed that ‘decisions of the Member States concerning the organisation of their armed forces cannot be completely excluded from the application of Community law, particularly where observance of the principle of equal treatment … is concerned’.Footnote ³²

Internal market

The final example relates to the internal market. Today, it is a commonplace that the Court has interpreted EU law, in particular the fundamental freedoms, so as to apply to basically all areas of sensitive member state competences, be it security, education, healthcare, or social policy.Footnote ³³ As these cases will be analysed below in more detail, it suffices to briefly recall one particularly influential strand of critique. Early on, scholars started to notice an asymmetry of negative and positive integration.Footnote ³⁴ On the one hand, the Court’s broad interpretation of the fundamental freedoms precludes restrictive national measures, including measures related to education, healthcare, or social policy. On the other hand, the Union might not always have a competence to re-regulate the respective issues at the EU level. Denys Simon describes the ensuing void as ‘compétences abolies’.Footnote ³⁵ Neither the member state nor the Union can regulate the area. In consequence, the Court’s broad interpretation of fundamental freedoms may not only curtail national competences but also generate deregulatory effects.Footnote ³⁶

In an attempt to contain these developments, scholars have sought to apply the principles that govern the Union’s vertical division of competences – conferral, subsidiarity, and proportionality – to Luxembourg’s interpretative activity. Thomas Horsley, for instance, criticised the Court’s ‘systematic disregard’ for the principle of conferral when exercising its interpretive choices.Footnote ³⁷ Along similar lines, Vilija Vėlyvytė has assessed whether the Court observes the limits of EU competence when interpreting the Treaty provisions on the internal market.Footnote ³⁸

Unravelling the Treaty framework: Union ‘competences’ and institutional ‘powers’

The Treaties themselves appear to distinguish between competences of the Union as a legal order and powers of specific institutions. German scholarship conceptualises this distinction as ‘Verbands-’ and ‘Organkompetenz’,Footnote ³⁹ whereas in France the distinction between ‘compétence’ and ‘pouvoir’ seems more common.Footnote ⁴⁰ The distinction becomes apparent when comparing the wording of Article 5(2) TEU, which states that ‘the Union shall act only within the limits of the competences conferred upon it’,Footnote ⁴¹ with Article 13(2) TEU, which stipulates that ‘each institution shall act within the limits of the powers conferred on it’.Footnote ⁴²

Both notions, Union ‘competences’ and institutional ‘powers’, are interconnected. First, both are, broader and narrower, expressions of the same principle: conferral. Often, the principle of conferral is located in Article 5(1) and (2) TEU and associated with the vertical division of competences between Union and member states, whereas Article 13(2) TEU is understood as an expression of the ‘institutional balance’, and thus the horizontal division of powers between the institutions.Footnote ⁴³ This might indicate that each has a different thrust. The Court, however, has located the principle of conferral not only in Article 5 TEU,Footnote ⁴⁴ but also in Article 13(2) TEU.Footnote ⁴⁵ Many scholars therefore understand Article 13(2) TEU as a specific expression,Footnote ⁴⁶ while some even doubt whether the institutional balance is laid down in that provision at all.Footnote ⁴⁷

Second, Union ‘competences’ and institutional ‘powers’ ultimately derive from the same provisions: legal bases. At first glance, one might be tempted to locate the Union’s ‘Verbandskompetenz’ in Articles 2-6 TFEU, whereas the institutions’ ‘Organkompetenzen’ are to be found in the specific provisions scattered across the TEU and TFEU.Footnote ⁴⁸ Yet, there are good reasons to assume that Articles 2-6 TFEU have little binding force. Article 2(6) TFEU states that the ‘scope of and arrangements for exercising the Union’s competences shall be determined by the provisions of the Treaties relating to each area’. Accordingly, the catalogue in Articles 2-6 TFEU does not contain any legal basis itself; it is indicative rather than constitutive, clarifying rather than constraining.Footnote ⁴⁹ And indeed, a central aim of establishing this ‘catalogue’ was clarity.Footnote ⁵⁰ To delineate the Union’s ‘Verbandskompetenz’, one cannot rely on Articles 2-6 TFEU but must identify the relevant legal bases in the Treaty framework.Footnote ⁵¹

In consequence, the Union’s ‘Verbandskompetenz’ contains the institutions’ ‘Organkompetenzen’: it is the sum of the institutions’ individual powers. In this sense, both present concentric circles. When an institution acts within the limits of its conferred powers, it also acts within the limits of the Union’s ‘Verbandskompetenz’. Can this logic also be reversed and applied to cases of transgressions? At first sight, there may be situations where an institution transgresses the confines of its powers without exceeding the Union’s competences, for instance, when an institution merely usurps the powers of another one. While this creates a horizontal problem for the institutional balance, it does not necessarily affect the vertical division of competences. However, this presupposes that institutional powers are merely a horizontal allocation of competences. That is not the case. Every provision conferring a ‘power’ to an institution always contains a horizontal and vertical delineation.Footnote ⁵² Article 19(1) TEU, for example, confers the authoritative interpretation of the Treaties to the Court of Justice, not the Union legislature (horizontal delineation) nor national apex courts (vertical delineation).

Unravelling arguments from competence constraints: principles-based and area-based approaches

On this basis, we come to the question which lies at the heart of this contribution: which constraints are relevant for the Court? To start with, it seems clear that the Court is bound by the ‘powers’ conferred on it, its ‘Organkompetenz’ under Article 19 TEU and the provisions following Article 251 TFEU. In this respect, the vertical division of competences is evidently relevant for the Court’s interpretative activity. The disagreement emerges with regard to constraints which go beyond the Court’s institutional powers and which are somehow derived from the Union’s ‘Verbandskompetenz’. Two different approaches can be distinguished: principles-based and area-based constraints on the Court’s interpretation.

One group of scholars argues that the Court’s interpretation of EU law is – or should be – constrained by certain overarching principles governing the vertical division of competences, namely those enshrined in Article 5 TEU: conferral, subsidiarity, and proportionality.Footnote ⁵³ These principles should not only bite when the Court reviews acts adopted by other Union institutions, but also when it comes to its own interpretation of EU law. Another group of approaches departs from the principle of conferral as well, but seeks to constrain the Court’s interpretation by reference to substantive areas that have not been conferred to the Union.

The previously outlined examples provide ample evidence for the latter approach. Regarding the case law on EU requirements for the independence of member state courts, Benedikt Riedl argued that the Court of Justice ‘ignores substantive national areas of competence’. He suggested that ‘the more national areas of competence are affected, the more the ECJ must include the principle of conferral in its interpretation’.Footnote ⁵⁴ Regarding the impact of EU law on the member states’ nationality laws, Ulli Jessurun d’Oliveira stressed that ‘[a]s long as the member states have not expressly, in the Treaty, transferred their lawmaking powers in the area of nationality law’, the EU and therefore the Court do not ‘have any direct or indirect authority in this area’.Footnote ⁵⁵ More broadly, Thomas Horsley suggested that the Court should ‘determine the scope of Union competence in specific substantive areas simply by looking, generally, for the existence of any Union competence in that field set out in the Treaties in order to establish judicial competence to act’.Footnote ⁵⁶ By further proposing to link the Court’s ‘judicial competence’ directly to the ‘existence of legislative competence in particular fields’,Footnote ⁵⁷ the Court’s interpretation would be limited to the powers of other institutions.

The following two sections will put these two claims to the test and demonstrate why neither principles-based nor area-based constraints on the Court’s interpretation of EU law can be sustained. Ultimately, the Court’s interpretation is only constrained by its ‘powers’ in the sense of Article 13(2) TEU – its jurisdiction and judicial function expressed in Article 19 TEU and the Articles following Article 251 TFEU.

Inconclusive text

Starting with the wording, Article 5(2) TEU stipulates that ‘the Union shall act only within the limits of the competences conferred upon it’. Similarly, ‘the Union’ shall observe the principle of subsidiarity (Article 5(3) TEU), whereas ‘Union action’ shall respect the principle of proportionality (Article 5(4) TEU). The ‘Union’ comprises all institutions mentioned in Article 13 TEU, including the Court. Article 5 TEU refers to any kind of Union ‘acts’ or ‘action’, which includes interpretations by the Court.Footnote ⁵⁹ At first glance, this suggests that the constraints of Article 5 TEU apply to the Court as well. Yet, reading these three paragraphs in their systematic context may alter this perception. From the outset, Article 5(2)-(4) TEU should be approached under the premise of consistency. As all three paragraphs refer to ‘the Union’, this notion should be understood consistently throughout the provision. If ‘the Union’ in one paragraph does not include the Court, this is a strong indication that the same applies to the other paragraphs as well.

Starting with Article 5(2) TEU, the notion of ‘competences’ could be understood as excluding the Court’s activity. Throughout the Treaty framework, ‘competences’ are juxtaposed with the notions of ‘powers’, ‘tasks’, or ‘legal basis’. The provisions on the Court employ the notion of ‘jurisdiction’ (see Articles 263, 267-276 TFEU or Article 24 TEU). This could indicate that the Court’s ‘powers’ are not framed in terms of ‘competence’ but rather ‘jurisdiction’. Still, the other language versions of the TFEU denote that the Court is ‘zuständig’ or ‘compétente’. Further, legal scholarship and national courts often use the notions of ‘jurisdiction’ and ‘competences’ synonymously.Footnote ⁶⁰ As such, there seems to be no clear-cut distinction between the Court’s ‘powers’, ‘competences’, and ‘jurisdiction’.

Article 5(3) and (4) TEU provide a clearer picture. Some have argued that subsidiarity and proportionality apply – or should apply – to the Court.Footnote ⁶¹ Still, subsidiarity and proportionality seem to pose limits for the Union’s legislative and executive branches, which the Court is mandated to police, but no limit for the Court’s own interpretation of EU law.Footnote ⁶² Article 5(3) and (4) TEU state that the institutions shall apply the principles of subsidiarity and proportionality as laid down in Protocol No. 2. Even if its Article 1 stresses that ‘each institution shall ensure constant respect’ for these principles, it eventually applies only to legislative acts. The Court is merely mentioned as a controlling institution in Article 8, not as an institution bound by subsidiarity and proportionality. And finally, Article 5(3) TEU clarifies that subsidiarity does not apply to the Union’s areas of exclusive competence. As the Court’s jurisdiction is exclusive, many reject applying that principle to Luxembourg’s judicial activity.Footnote ⁶³

Against this backdrop, Article 5(3) and (4) TEU do not seem to cover the Court’s interpretation of EU law. By implication, the same would apply to the principle of conferral in Article 5(2) TEU. While certainly ambivalent, the provision’s wording and system provide a first indication.

Lacking intention

This indication can be corroborated with the drafting history, which suggests that Article 5 TEU was adopted with the Union legislature in mind. The EEC Treaty already contained in its Article 4 a precursor of the later principle of conferral, stressing that ‘each of these institutions shall act within the limits of the powers conferred upon it by this Treaty’. The Single European Act added that the institutions ‘shall exercise their powers and jurisdiction under the conditions and for the purposes provided for by the Treaties’ (Article 3).Footnote ⁶⁴ Maastricht indicated an important shift. It not only introduced the limits of subsidiarity and proportionality but shifted from powers of single institutions to powers of the entire Community.Footnote ⁶⁵ This might be a first hint of what has been described as the Union’s ‘Verbandskompetenz’, its competence as a legal order.

In the following rounds of Treaty revision, there was a constant intention to tighten the competence constraints on the Union. However, none of these attempts related to the Court. On the contrary. In Amsterdam, the Court’s limited jurisdiction over the TEU was broadened.Footnote ⁶⁶ Even though the Union’s judicial system was subject to a major overhaul in Nice, these reforms aimed at securing its functioning after the prospective ‘big bang’ enlargement. Overall, the Court’s activity was framed in positive terms.Footnote ⁶⁷ In addition, many delegations suggested expanding the Court’s jurisdiction or strengthening its constitutional role, rather than constraining its activity.Footnote ⁶⁸

The issue of competences was raised with greater force in the aftermath of Nice.Footnote ⁶⁹ The Laeken Declaration of 15 December 2001 noted the need to ‘clarify, simplify and adjust the division of competence’. Further, it stressed the need ‘to ensure that a redefined division of competence does not lead to a creeping expansion of the competence of the Union or to encroachment upon the exclusive areas of competence of the Member States’. Eventually, these calls resulted in the drafting of today’s competence catalogue in Articles 2-6 TFEU (at the time, Articles I-13 to I-15 of the Constitutional Treaty), and Article I-11 of the Constitutional Treaty – today’s Article 5 TEU.

What is remarkable is that the Court’s activity was completely detached from this debate.Footnote ⁷⁰ Despite the increasing debate on the Court’s ‘judicial activism’Footnote ⁷¹ or court-driven ‘mutations’ of the Union’s competences,Footnote ⁷² there was little mention of reforming the Union’s judiciary.Footnote ⁷³ The Court itself only warranted a discussion circle, which was proposed by the Convention President at a rather late stage of the drafting process. Valery Giscard d’Éstaing noted during the plenary meeting of 21 January 2003 that he was

As regards the drafting of the Union’s competences, the Convention adopted a narrow understanding focusing on legislative competences.Footnote ⁷⁵ The Court’s interpretative activity was not framed, let alone problematised in terms of competences. This is demonstrated by the reports that were conducted prior to the Convention.Footnote ⁷⁶ Neither the plenary debates devoted to issues of competences,Footnote ⁷⁷ nor the final report of Working Group VFootnote ⁷⁸ on competences mentioned any limits for the Court. Critical overtones emerged merely in one statement by David Heathcoat-Amory, a British MP, who criticised during a plenary debate that ‘judicial activism by the European Court has extended the reach of the European Union into areas which were not anticipated when the text was drawn up’.Footnote ⁷⁹ Beyond this isolated instance, intrusions by the Court into sensitive national policy areas were not discussed.

As regards the Court, the drafters were rather concerned with expanding its jurisdiction.Footnote ⁸⁰ First, some stressed the need for its stronger involvement in reviewing the exercise of the Union’s competences by other institutions. In this sense, Working Group I on the Principle of Subsidiarity did not suggest holding the Court accountable to these constraints, but rather ‘broadening the possibility of referral to the Court of Justice on grounds of non-compliance with the principle of subsidiarity’.Footnote ⁸¹ Even if some delegates pondered withdrawing this power from the Court and establishing a ‘Constitutional Council’, a ‘Subsidiarity court’, or a ‘Kompetenzgerichtshof’,Footnote ⁸² these proposals were eventually discarded. In any case, many of them concerned an additional check for the competences of other institutions, not the Court’s own interpretative activity. This applies especially to those proposals that wanted to include a competence chamber within the Court or develop Luxembourg into a fully-fledged constitutional court.Footnote ⁸³

Second, many delegates called for extending the Court’s jurisdiction to the ‘third pillar’ (police and judicial cooperation in criminal matters),Footnote ⁸⁴ the ‘second pillar’ (common foreign and security policy)Footnote ⁸⁵ and acts by the European Council.Footnote ⁸⁶ Also Working Group X on Freedom, Security and Justice noted that ‘the limited jurisdiction of the Court is no longer acceptable’.Footnote ⁸⁷ And finally, the discussion circle on the Court focused on expanding individual access to the Court by redrafting today’s Article 263(4) TFEU (then Article 230(4) EC-Nice).Footnote ⁸⁸ These suggestions found their way also into the plenary, which discussed broadening the standing requirements for individuals.Footnote ⁸⁹

Eventually, the Constitutional Treaty performed a significant shift from limited to full jurisdiction of the Court. While the Court’s jurisdiction over the TEU-Nice was excluded save for the expressly mentioned grounds in Article 46 TEU, the Constitutional Treaty changed this configuration and established the Court’s ‘jurisdiction by default’ in Article I-29 (later Article 19(1) TEU-Lisbon). Exceptions, such as those in the Common Foreign and Security Policy, needed to be expressly included in the Treaties.

All this demonstrates that the drafters of Article 5 TEU had no intention of constraining the Court. We can only speculate on the reasons. The Treaty of Nice had just seen a major overhaul of the Union’s judicial system. Were the drafters fed up with reforming the Court? Some argued that the Tobacco case, in which the Court stipulated certain limits for adopting acts based on today’s Article 114 TFEU, had a calming influence.Footnote ⁹⁰ Still, this decision relates only to the review of the competences of other Union institutions, not the Court’s far-reaching interpretations itself. So why did the Convention invest so much time on establishing a competence catalogue and practically none on the possible effect of the Court’s jurisprudence on the member states’ competences? Franz Mayer suggested that most Convention members simply did not realise its impact.Footnote ⁹¹ Yet, there could be a different explanation: the drafters may have simply endorsed the Court’s expansive case law.

Questionable (non-)comparability

In sum, there are good reasons to assume that the principles of conferral, subsidiarity, and proportionality were never intended to address and constrain the Court’s interpretation of the Treaties.Footnote ⁹² For that reason, many scholars shift gear from textual constraint to normative claim. They argue that the Court’s interpretation should be bound by the principles in Article 5 TEU. This normative claim is based on two arguments: first, these scholars claim a structural comparability of the Court’s judicial and the Union’s legislative activity; and second, some argue for a non-comparability with constitutional courts at the national level.

Starting with the latter argument, constitutional courts are usually constrained solely by the letter of the law, which they are tasked to interpret, not by the division of competences among different levels of authority in the respective legal order. However, the Court of Justice is different – or so Vilija Vėlyvytė claims. According to her, it cannot be compared to constitutional courts at the national level, as Luxembourg ‘operates in a polity whose own powers are constrained’. The Union’s mandate is ‘confined to the specific areas of competences conferred upon the EU and restricted by the constitutional principles which govern the exercise of those competences’. Thus, the Court is placed in an ‘institutional position that excludes it from some of the constitutional protections enjoyed by national constitutional courts’.Footnote ⁹³

This claim can be countered by changing the lens through which we look at the Union. The EU might not be a state, but it is a federal system. As such, the Union has always been compared to federations, the Court of Justice to federal apex courts.Footnote ⁹⁴ Under such a lens, there is little comparative evidence to sustain Vėlyvytė’s argument. The German constitutional court, for instance, operates in a federal context between Bund and Länder. Yet, it would never reduce the intensity of its review in light of the division of competences under Articles 70-74 of the German constitution. For instance, when reviewing the compliance of a Land with the fundamental rights guarantees enshrined in the federal constitution, it is of no relevance whether the measure under review falls into an area in which the Länder retain an exclusive competence, such as police or education.

True, pluralism and diversity within the EU exceed most federal states. And true, the Union has no ‘Kompetenz-Kompetenz’, as it can only act within the powers transferred by the member states. And it is equally true that the application of certain provisions of EU law to the member states, such as the Charter under its Article 51(1), are limited. Nonetheless, the Court of Justice has been conferred a mandate to interpret EU law. In this respect, there is no difference to other federal apex courts that derive their mandate from the federal constitution as well. Where the empowerment comes from – member states or a constituent power – is secondary. Its limits are governed by the respective constitutional text. At the EU level these limits flow institutionally from the Court’s mandate in Article 19 TEU and substantively from the respective provisions of EU law which are to be interpreted.

This leads to the second argument, the alleged comparability of the Court and the legislature. According to Thomas Horsley, the Court has become ‘the most powerful supranational policymaking institution’. The effects of Luxembourg’s decisions within the member states are ‘functionally equivalent’ to the Union’s legislative activity. Due to this comparability, the principle of conferral should act as a ‘brake on judicial lawmaking’. And even though this limitation is stipulated nowhere in the Treaties, Horsley argues that the Court is under the ‘constitutional responsibility’ to observe the limits that apply to the Union’s legislative activity.Footnote ⁹⁵ Similarly, Vilija Vėlyvytė referred to the Court’s ‘regulatory capacity’, which makes a situation where the Court is exempt from competence constraints that apply to the rest of the EU’s institutional framework ‘constitutionally unacceptable’.Footnote ⁹⁶ Based on this structural comparability, one might contemplate the need for a greater sensitivity of the Court to competence, subsidiarity, and proportionality constraints.

Yet, this argument seems questionable for several reasons. Can we really equate the Court’s judicial activity to that of the legislature? Both have a considerable impact on the member states. Further, nobody will seriously question that the Court is a political actor.Footnote ⁹⁷ Like any constitutional or apex court, it is a hybrid that straddles the legal and political spheres.Footnote ⁹⁸ Nevertheless, several features justify a different treatment of courts and legislators.

In terms of procedure, Luxembourg is not the master of its docket. It has no right of initiative and is called upon by litigating parties or referring judges. These litigants and courts frame the case and thus the procedural and substantive context, in which the Court is bound to decide. For instance, in procedures under Articles 258 and 263 TFEU the Court cannot go beyond the ‘moyens’ raised by the litigants. It cannot decide ultra petita.Footnote ⁹⁹ And also in preliminary references, there is a strong ‘power of the first word’.Footnote ¹⁰⁰ Although the Court can reformulate the questions posed by referring judges and provide them with the answers it deems necessary,Footnote ¹⁰¹ it is bound by the case presented to it.Footnote ¹⁰² At the EU level, however, this distinguishing feature of courts might be levelled as the Union legislature lacks a right of initiative as well. Article 17(2) TEU reserves this power to the Commission, a monopoly reinforced through Article 293 TFEU. Nevertheless, the legislature can request the Commission to submit a proposal (Articles 225 and 241 TFEU). In this context, Commission President von der Leyen pledged to act on such requests and submit proposals, leading to an indirect right of initiative.Footnote ¹⁰³ Moreover, legislative proposals may change beyond recognition during the negotiations in trilogues.Footnote ¹⁰⁴

In terms of reasoning, the Court is subject to methodological constraints. One might argue with many legal crits or realists that legal methods can easily be manipulated, allowing judges to arrive at almost any outcome.Footnote ¹⁰⁵ In this spirit, legal methodology has been accused of merely concealing, as a kind of smokescreen, underlying political, moral, or ideological preferences. Indeed, choices among legal methods are inevitably determined by a judge’s background assumptions. Still, legal methodology exerts a disciplining effect on the interpreter.Footnote ¹⁰⁶ Whereas the legislature can resort to a wide spectrum of pragmatic or ethical reasons, including political expediency, preference, or ideology,Footnote ¹⁰⁷ submitting political issues to a court goes hand in hand with a ‘change of arena’.Footnote ¹⁰⁸ The reasoning in this arena differs from reasoning based on morality, politics, or economics. Judges cannot simply base their interpretation on any kind of considerations but must translate them into a specifically legal reasoning. As H.L.A. Hart noted, ‘judges do not just push away their law books and start to legislate without further guidance from the law’.Footnote ¹⁰⁹

Failing practicability

Even if one were to follow these claims, the principles of conferral, subsidiarity, and proportionality seem difficult to apply to judicial interpretations. As such, it comes as no surprise that many proposals do not go beyond tentative sketches. Horsley, for instance, suggested a ‘conferral assessment’ when the Court interprets EU law. Its judicial activity could ‘be linked directly to the existence of legislative competence in particular fields’. The details, though, are deferred to further research.Footnote ¹¹⁰ Also Vėlyvytė’s proposal to show greater ‘sensitivity’ to competence constraints remains fuzzy. She argues that the Court should contextualise the fundamental freedoms in light of the principle of conferral.Footnote ¹¹¹ Eventually, her plea breaks down to an interpretation that remains faithful to the letters of the Treaties and a call for judicial restraint when interpreting the Union’s internal market law. But do we need the principles of conferral, subsidiarity, and proportionality as a basis for this restraint? Or does it already flow from the Court’s judicial function?

Similar doubts concern the operationalisation of subsidiarity and proportionality. Taking Article 5(3) and (4) TEU literally, there is little room for applying these principles to the Court’s interpretation of EU law. How should the Court assess whether the objectives of the ‘proposed action’ – in this case: its interpretation of EU law – ‘cannot be sufficiently achieved by the member states’ (Article 5(3) TEU)? And how should we assess whether ‘the content and form of Union action’ – again: the Court’s interpretation of EU law – exceeds ‘what is necessary to achieve the objectives of the Treaties’ (Article 5(4) TEU)?Footnote ¹¹² Unlike legislative measures, such as regulations, directives, or decisions, there are no less intrusive means to choose from: there are just judicial decisions whose form usually depends on the procedural route taken by the parties. Hence, we might end up, yet again, with a call for judicial restraint.

Jurisdictional versus substantive constraints

To start with, it is unclear how to put area-based competence constraints into practice. Abstractly, we may differentiate between limits to the Court’s jurisdiction and limits to the substantive EU law that is interpreted by the Court. Several reasons speak against jurisdictional constraints based on the Union’s ‘Verbandskompetenz’.Footnote ¹¹³ Indeed, it is difficult to envision how such a jurisdictional limitation could work. Should the Court conduct a two-tiered assessment each time it interprets the member states’ obligations under EU law? In that case, it could interpret the pertinent EU law only after verifying the Union’s competences in the area at stake. Beyond the Union’s competences, the Court would be required to decline its jurisdiction and dismiss the reference or action as inadmissible.

Such jurisdictional limitations cannot be squared with the Treaties. The Court has a general jurisdiction under Article 19(1) TEU. Exceptions need to be expressly stipulated, such as Article 269 TFEU with regard to the Article 7 TEU procedure or Article 275(1) TFEU with regard to Common Foreign and Security Policy provisions. These examples exclude the Court’s jurisdiction over specific provisions, not their application and interpretation in ill-defined subject matters or vaguely delineated policy fields. Neither can such exceptions be read into the provisions conferring jurisdiction in specific procedures. Article 258 TFEU unequivocally states that the Court shall assess whether a member state has failed to fulfil any ‘obligation under the Treaties’ – without qualification. Pursuant to Article 267(1) TFEU, its mandate covers the ‘interpretation of the Treaties’ – again without qualification. The only condition is that the interpretation must be ‘necessary’ to enable the referring court to give judgment. The Court must declare a reference inadmissible if there is no ‘connecting factor’ between the dispute and the provisions of EU law whose interpretation is sought.Footnote ¹¹⁴ This can be the case if EU law is not applicable to the main proceedings. Still, the Court polices these limits extremely leniently and rejects such references only if the conditions of the respective provisions of EU law are evidently not met (e.g. the lack of a cross-border element when interpreting fundamental freedoms).Footnote ¹¹⁵ This threshold is certainly not met where the interpretation of EU law concerns a field of competences not conferred upon the Union.

Ultimately, declining jurisdiction based on a lack of the Union’s ‘Verbandskompetenz’ could be perceived as a betrayal of the spirit of cooperation that underpins the preliminary reference procedure, as a ‘déni de justice’ that disregards the Court’s task under the Treaties. However, even if the Union’s ‘Verbandskompetenz’ cannot constrain the Court’s jurisdiction, it might be able to pose a substantive constraint on EU law and thus indirectly on the Court’s interpretation.

Institutional competences versus substantive scope

By introducing another, highly ambivalent notion, Loïc Azoulai argued that – according to the member states’ will expressed in the Treaty framework – ‘the scope of EU law … should correspond strictly to the competences attributed to the EU’.Footnote ¹¹⁶ Such a limitation would conflate ‘scope’ and ‘competence’. Yet, the two concepts serve different functions.Footnote ¹¹⁷

A provision’s scope is a substantive delimitation. By defining its scope, we seek to answer the question of ‘when?’, i.e. in which situations, a provision applies. In very simple terms, the notion refers to the conditions that must be fulfilled before a provision’s normative command kicks in. This scope can be defined in various ways, including a provision’s subject matter (ratione materiae), the actors addressed, empowered, or obliged (ratione personae) as well as to its temporal (ratione temporae) or geographical application (ratione loci). These delimitations are not necessarily spelled out in the respective provision itself, but can also be expressed in other, systematically related ones.

Some provisions of EU law feature the particularity of a ‘derived’ scope. For instance, the obligation to guarantee effective judicial protection before national courts bites only ‘in the fields covered by Union law’ (Article 19(1)(2) TEU), the prohibition of discriminations based on nationality ‘within the scope of application of the Treaties’ (Article 18 TFEU), and Charter rights ‘within the scope of European Union law’ (Article 51(1) of the Charter as interpreted in Åkerberg Fransson). Thus, the scope of these provisions depends on the scope of others. Overall, it must be stressed that there is not one scope of EU law, but rather a multiplicity.Footnote ¹¹⁸ National areas that are not covered by this sum of scopes are often referred to as ‘purely internal situations’.Footnote ¹¹⁹

Competences, by contrast, address a very different set of questions. They usually determine which institution (‘who?’) is entitled to adopt an act (‘what?’), taking a certain form, following a certain procedure or satisfying certain conditions (‘how?’). In this sense, competences can fulfil several interrelated functions. Some might focus on their constitutive function by defining competences as ‘power-conferring norms’,Footnote ¹²⁰ others on their constraining function by referring to a ‘bounded set of tasks’.Footnote ¹²¹ Others again might concentrate on the distributive function and distinguish between a functional (who shall legislate, adjudicate, execute, etc?) or a substantive allocation (who shall address which subject matter?).Footnote ¹²²

In federal systems, such as the EU, this distribution defines, horizontally, the institution (Commission, Council, Parliament, Court), and, vertically, the level empowered to act (EU or member states). In this context, some assume that competences have a protective function as well: they preserve a space for autonomy and pluralism of the federal sub-entities.Footnote ¹²³ Yet, no matter which function is placed at the centre, the ‘who?’ will always be a defining feature of a competence. Unlike a substantive provision containing a prohibition or command, a competence cannot be thought of without an institution called to exercise it. To sum up, competences address institutions – they are institutional constraints.

Certainly, there can be interplays between the two notions. On the one hand, EU competences can limit the scope of secondary law. Competences determine what kind of provision with what kind of scope the Union can adopt in the first place. By implication, the institutional constraints posed by competences have substantive spill-over effects. On the other hand, the exercise of EU competences can have a triggering function at the level of primary law. This applies to the previously mentioned provisions featuring a derived scope of application, such as Article 18 TFEU or the Charter. The obligations contained in these provisions apply within the scope of other EU law, including secondary law. In the context of Article 18 TFEU, some cases suggest that the mere existence of an EU competence can bring a matter within the scope of EU law.Footnote ¹²⁴ At least with regard to the Charter, the Court took a more limited stance, stating that ‘the mere fact that a national measure comes within an area in which the European Union has powers cannot bring it within the scope of EU law’.Footnote ¹²⁵

Aside from these spill-overs, however, competences cannot constrain the substantive scope of EU law. Some might object by resorting to Article 51(2) of the Charter, which states that the Charter ‘does not extend the field of application of Union law beyond the powers of the Union’. This oddly phrased provision connects scope (‘field of application’) and competences (‘powers’) and seems to limit the Charter’s scope to areas in which the Union has such ‘powers’. So far, few scholars have tried to make sense of this connection.Footnote ¹²⁶ According to the explanations, the provision shall prevent a circular reading of the Charter’s scope. Under Article 51(1), the Charter applies to the member states when they ‘implement’, respectively act within the scope of EU law. Article 51(2) merely clarifies that acting within the substantive areas covered by the Charter does not trigger that scope. Instead, the member states must act within the scope of other EU law.Footnote ¹²⁷

Still, some scholars argue that the Union’s division of competences and the principle of conferral unfold a substantive, protective function for the member states’ autonomy, which can constrain the scope of EU law. But even these voices recognise the lack of any Treaty provision in support of such an understanding.Footnote ¹²⁸ Loïc Azoulai explains this void with particular assumptions regarding the Treaty makers’ terminology. In his view, the drafters did not think in terms of ‘scope of application’ but rather in terms of ‘allocation of competences’. By repeatedly limiting the Union’s competences they intended to limit the impact of EU law.Footnote ¹²⁹ As this view finds no expression in the travaux, it remains a rather shaky assumption.

Existence versus exercise of national competences

The Court itself has never accepted that the division of competences poses any limits to the substantive scope and content of Treaty provisions. On the contrary. It has consistently ruled that the exercise of the member states’ retained powers can fall into the scope of and thus be subject to the obligations under EU law. The notion of ‘retained powers’ comprises not only the member states’ exclusive powers (e.g. nationality, civil status, armed forces) but also those fields in which the Union has only limited competences (e.g. education, health, taxation).Footnote ¹³⁰ National laws falling within these areas are ‘framed’ by EU law; respective member state competences become ‘compétences encadrées’.Footnote ¹³¹

This jurisprudence is even older than primacy and direct effect, dating back to 1961. The Court had to decide whether Article 67 of the ECSC Treaty, which allowed the High Authority to intervene against impairments of competition in the coal and steel industry, allowed action against national measures taken in the area of social and fiscal policy. While the Court stressed that the member states ‘remain in full control’ of these policy fields, Article 67 was ‘designed to enable the jurisdiction of the Community to impinge on national sovereignty in cases where, because of the power retained by the member states, this is necessary to prevent the effectiveness of the Treaty from being considerably weakened’.Footnote ¹³²

On that basis, the Court started to slowly distinguish between the existence and the exercise of the member states’ competences.Footnote ¹³³ In Casagrande, it ruled on the access of migrant workers’ children to educational grants in the host state. According to Article 12 of Regulation 1612/68 such children had to be admitted to that state’s education system ‘under the same conditions as the nationals of that state’. Germany rejected the applicant’s claim, referring to its retained powers in matters of education. The Court admitted that ‘educational and training policy is not as such included in the spheres which the Treaty has entrusted to the Community institutions’. Nevertheless, ‘it does not follow that the exercise of powers transferred to the Community is in some way limited if it is of such a nature as to affect the measures taken in the execution of a policy such as that of education and training’.Footnote ¹³⁴ This case law was noticed early on as an important expansion of EU law’s impact.Footnote ¹³⁵

Over the years this formula became ever more concise. In Commission v United Kingdom, for instance, the Court stressed that even though ‘competence to determine the conditions for the registration of vessels is vested in the member states’, the ‘powers retained by the member states must be exercised consistently with Community law’, in this case non-discrimination and the freedom of establishment.Footnote ¹³⁶ Since then, the case law has steadily increased. Today, the Court’s formula can be summarised as follows:

This formula operates irrespective of how ‘X’ and ‘Y’ are defined, meaning which national competences and which provisions of EU law are at stake. Starting with ‘X’, the Court has consistently applied this approach to most areas of sensitive member state competence. This includes matters such as education,Footnote ¹³⁸ healthcare,Footnote ¹³⁹ social security,Footnote ¹⁴⁰ or direct taxation,Footnote ¹⁴¹ where the EU has only very limited competences, but also criminal law,Footnote ¹⁴² extradition,Footnote ¹⁴³ acquisition, loss, and recognition of nationality,Footnote ¹⁴⁴ collective labour law,Footnote ¹⁴⁵ membership of political parties,Footnote ¹⁴⁶ surnames,Footnote ¹⁴⁷ marriage,Footnote ¹⁴⁸ and other issues relating to civil status,Footnote ¹⁴⁹ where the EU has no competence. As seen above, even the organisation of armed forces is not excluded.Footnote ¹⁵⁰ Very similar developments can be observed with regard to the member states’ procedural law, remedies, and enforcement of EU law, which is increasingly subject to EU constraints as well.Footnote ¹⁵¹ Confronted with attacks on judicial independence in the member states, the Court extended this rationale to the organisation of the national judiciary. Even though it falls within the competence of the member states, ‘the fact remains that, when exercising that competence, the member states are required to comply with their obligations deriving from EU law’.Footnote ¹⁵² This rationale applies even to the member states’ ‘constitutional models’ in general. In its 2022 RS judgment the Court stressed that EU law does not require the member states to adopt a ‘particular constitutional model’ governing the relationship among the branches of power: ‘However, in choosing their respective constitutional model, the member states are required to comply, inter alia, with the requirement that the courts be independent’.

The obligations under EU law apply with the same intensity in all these policy areas, irrespective of whether the EU has certain supportive competences or none at all. A closer look at the case law might question this assertion, as the Court uses different formulations in different fields. In education, social security, or healthcare, for instance, the member states must ‘comply’ with EU law when exercising their competences.Footnote ¹⁵³ Regarding direct taxation and the registration of vessels, these competences must be exercised ‘consistently’ with EU law.Footnote ¹⁵⁴ In matters of nationality, the national rules must have ‘due regard’ to EU law.Footnote ¹⁵⁵ In criminal law, EU law only sets ‘certain limits’ to the powers of member states.Footnote ¹⁵⁶ And with regard to extradition and the organisation of armed forces, the member states’ decisions are not ‘bound to fall entirely outside the scope’ of EU law.Footnote ¹⁵⁷ At first glance, these terminological nuances indicate a different intensity of obligations according to the area at stake. Yet, the terminology is not consistent in all language versions and can change over time.Footnote ¹⁵⁸ Further, the obligation to ‘comply’ extends not only to those areas where the Union has some kind of supportive competence, but also to highly sensitive areas, such as civil status or the organisation of the national judiciary.Footnote ¹⁵⁹ As such, the Court does not seem to distinguish according to the sensitivity of the competences at stake.

With regard to ‘Y’, the Court has applied its case law both to obligations under primary and secondary law. As Advocate General Maduro stressed in Rottmann, it would be ‘wrong to assume that … only certain Community rules – essentially the general principles of law and the fundamental rights – are capable of being invoked against the exercise of State competence … In theory, any rule of the Community legal order may be invoked …’.Footnote ¹⁶⁰ In this spirit, the Court has applied its formula also to obligations stemming from secondary legislation.Footnote ¹⁶¹ This is surprising. As secondary law requires – unlike the Treaties themselves – a legal basis, interpreting legislation in that manner might lead to an extension of the respective ‘competence’.Footnote ¹⁶² In this sense, Vilija Vėlyvytė notes that the Court ‘unlocks the legislative mandate for the EU to regulate areas that fall outside its explicit sector-specific legislative competence’.Footnote ¹⁶³ However, in most of these cases, such as Casagrande, the respective secondary legislation gives expression to underlying general principles, namely non-discrimination, which has the rank of primary law.

To conclude, the scope of EU law, including its interpretation, application, and enforcement by the Court, has always been indifferent to the attribution of competences. All this is well-studiedFootnote ¹⁶⁴ and ‘hardly shocking’.Footnote ¹⁶⁵ Support can be found on the international plane. In principle, international law acknowledges ‘domaines réservés’ that remain subject to the domestic jurisdiction of states. However, their determination depends, just like in the EU context, on the rule of international law that is to be interpreted and applied. Once an area has been ‘regulated by international law’, it can no longer be considered a ‘domaine réservé’.Footnote ¹⁶⁶ While some suggest interpreting international rules ‘in dubio mitius’ to protect the states’ sovereignty,Footnote ¹⁶⁷ the growing body of international law has not only led to an erosion of the ‘domaine réservé’,Footnote ¹⁶⁸ but has rendered the concept ‘outdated if used as a complete shield for entire policy areas’.Footnote ¹⁶⁹ If this applies to the much less integrated international legal system, it must apply a fortiori to the highly integrated EU legal order.

Totalisation without limits?

Nonetheless, one might inquire whether there are any limits to these far-reaching obligations. Azoulai argued that EU law has become – in the hands of the Court – a ‘total law’.Footnote ¹⁷⁰ Is this totalisation without limits? First, the previously mentioned case law usually requires the member states to observe obligations under EU law from other, substantively unrelated areas. Examples are compliance with fundamental freedoms in matters of direct taxation or non-discrimination in extradition law. This would exclude the judicial development of EU requirements in the respective area itself. Yet, the Court has already moved away from this conception. In cases concerning judicial independence, it derived EU law requirements for the organisation of the national judiciary directly from Article 19(1)(2) TEU.

Second, the respective obligations under EU law were primarily negative. In the area of criminal law, for instance, the Court emphasised that EU law ‘sets certain limits’ to the competences of the member states.Footnote ¹⁷¹ Still, the distinction between negative and positive is hardly clear cut. Any positive obligation can ultimately be turned into a negative one and vice versa. For instance, the positive obligation to introduce procedural safeguards in a member state’s legal framework governing the loss of nationality can be turned – if formulated accordingly – into a negative prohibition to withdraw a Union citizen’s nationality without these guarantees.Footnote ¹⁷² Further, the largest part of the case law refers not to negative ‘limits’ but to the member states’ general ‘compliance’ with EU law.

Finally, one may wonder whether there is any limitation as to the specificity of the obligations flowing from EU law in areas of member state competences. By imposing detailed EU standards in the respective areas, the Court might shift from adjudicating to actually legislating. As the EU has no legislative competence in this respect, one might suspect an incremental ‘competence creep’. The case law on the loss of nationality illustrates this well. The Court not only polices outer limits for the member states’ nationality laws but has started to spell out the details of time limits, procedures, and assessments in considerable detail. Even if the Court continues to interpret primary law – namely Article 20 TFEU – its decisions might reach the same specificity and effect as a legislative harmonisation.Footnote ¹⁷³ In very similar terms, the president of the Bundesverfassungsgericht pleaded for more restraint with regard to Luxembourg’s case law on the independence of national courts: ‘If the power of … the CJEU … to review the member states’ judiciaries is too stifling, it risks the danger of introducing a regulatory power that is not provided for in the Treaties “through the back door”.’Footnote ¹⁷⁴ This is what Vilija Vėlyvytė described as the Court’s ‘regulatory capacity’.Footnote ¹⁷⁵

Ultimately, however, this concern can be dissociated without much loss of meaning from the vertical division of competences. The Court has a general jurisdiction under Article 19(1) TEU to interpret and apply the Treaties. And it is exactly here, at the level of its ‘Organkompetenz’, that we should locate any problem. While its interpretation can lead to the development of the law, the Court is tasked to adjudicate, not to legislate.

Jurisdictional constraints

Procedurally, the Court’s jurisdiction is stipulated in much detail in the provisions following Article 251 TFEU. The Court has handled these limitations very differently. The standing requirements in actions for annulment, for instance, are strictly policed. Under Article 263(4) TFEU, individuals can only challenge acts taken by EU institutions if they are of direct and individual concern to them. Since Plaumann, the Court interpreted this provision in very narrow terms.Footnote ¹⁷⁶ The rationale behind this narrow conception is that individuals should challenge EU acts primarily in national courts, which can then refer to Luxembourg.Footnote ¹⁷⁷ Despite fierce critique both from within the Court and legal scholarship,Footnote ¹⁷⁸ the Court has not altered its position. In UPA it stated that ‘[w]hile it is, admittedly, possible to envisage a system of judicial review of the legality of Community measures of general application different from that established by the founding Treaty … it is for the Member States … to reform the system currently in force’.Footnote ¹⁷⁹ By broadening the standing requirements for individuals, the Court would ‘go beyond the jurisdiction conferred by the Treaty’.Footnote ¹⁸⁰

At the same time, the Court has consistently broadened its jurisdiction in the Common Foreign and Security Policy. By exception to the Court’s general jurisdiction, Article 24(1)(2) TEU and Article 275(1) TFEU exclude judicial review of acts adopted in this policy area. This ‘carve out’, in turn, is subject to a so-called ‘claw back’ in Article 275(2) TFEU, which established the Court’s jurisdiction regarding actions for annulment against restrictive measures. During the past decade, the Court has combined a narrow reading of the carve out with a broad interpretation of the claw back.Footnote ¹⁸¹ While the latter includes the Court’s jurisdiction to hear preliminary rulingsFootnote ¹⁸² and actions for damages regarding restrictive measures,Footnote ¹⁸³ the carve out does not exclude reviewing CFSP acts related to staff matters or public procurement.Footnote ¹⁸⁴ This case law culminated in KS and KD v Council, according to which the ‘carve out’ excludes the Court’s jurisdiction only regarding measures directly related to ‘political or strategic choices’ in the CFSP.Footnote ¹⁸⁵ As such, fundamental rights violations occurring in the ‘day-to-day management’ of CFSP measures, such as missions, can be brought before the Court.

This extension was largely justified by interpreting the respective Treaty provisions in light of the rule of law, a value enshrined in Article 2 TEU.Footnote ¹⁸⁶ In KS and KD v Council, for instance, the Court stressed that the ‘basic principles of the EU legal order’, including ‘respect for the rule of law and fundamental rights, values expressed in Article 2 TEU’, form the ‘context’ in which to interpret the Court’s jurisdiction.Footnote ¹⁸⁷ This reasoning is expressed even more strongly in Advocate General Ćapeta’s Opinion. Confronted with the choice of whether to ‘strictly abide by the wording of the Treaties’, which limits the Court’s jurisdiction, or whether to ‘give preference to EU constitutional principles’,Footnote ¹⁸⁸ she chose the latter path. Even if the principle of the rule of law cannot ‘lead to the modification of the Treaties by the EU Courts’, it nonetheless obliges the Court to interpret primary law in its light.Footnote ¹⁸⁹

The Court underlined in KS and KD v Council that the principle of conferral also applies in the CFSP. Admitting all appeals by individuals once they claim a fundamental rights violation would deprive the carve out of its effectiveness and infringe the principle of conferral.Footnote ¹⁹⁰ Still, conferral is not insulated. Instead, it is embedded in a thick constitutional context and must be accommodated especially with the Union’s constitutional core in Article 2 TEU.Footnote ¹⁹¹ The member states not only decided to confer powers upon the Union to attain certain objectives (Articles 1(1) and 3 TEU) but also founded that Union on certain values (Article 2 TEU). Thus, it seems plausible to interpret the Union’s powers, including its limitations, in light of the Union’s values.

Functional constraints

Moving from jurisdiction to function, the Court is entrusted with a judicial mandate. According to Article 19(1) TEU, it ‘shall ensure that in the interpretation and application of the Treaties the law is observed’. This ‘interpretation and application’ leaves ample room for judicial development. As EU law is characterised by a special, evolutive dynamic, its creative judicial development has been an accepted feature of the Court’s legal reasoning since the very beginning.Footnote ¹⁹² In this spirit, the Bundesverfassungsgericht noted early on that

While the line between legislating and adjudicating remains notoriously elusive,Footnote ¹⁹⁴ the German constitutional court has formulated two limits for any judicial development of the law. Substantively, the Court may not ignore the Treaty makers’ clearly recognisable decisions and create ‘new rules without a sufficient connection to the existing legal framework’.Footnote ¹⁹⁵ In this sense, the Court shall neither adjudicate contra legem, nor cross the line of Treaty amendment. Methodologically, the mandate conferred in Art. 19(1) TEU ‘is exceeded where the traditional European methods of interpretation … are manifestly disregarded’.Footnote ¹⁹⁶ As such, the principle of conferral does not preclude the Court ‘from refining the law by means of methodically bound case law’.Footnote ¹⁹⁷ Or formulated in Solange terms: ‘as long as the Court of Justice applies recognised methodological principles’, the judicial development of the law by the Court of Justice of the European Union has to be accepted.Footnote ¹⁹⁸

This constraint was also central to the Bundesverfassungsgericht’s decision in Honeywell, so far the only newer case in which it assessed whether the Court’s interpretation of EU law itself is ultra vires.Footnote ¹⁹⁹ Under review was the Court’s development of a new general principle prohibiting age discrimination: the notorious Mangold decision. The Second Senate noted that, on top of the aforementioned confines of legal methods, an ‘essential limitation on judicial development of the law at the EU level is the principle of conferral’.Footnote ²⁰⁰ Even if it ‘were presumed that the Court of Justice had developed the law in a way that was no longer methodologically tenable, such interpretation of the law would only constitute an evident violation of the principle of conferral if it de facto created new competences’.Footnote ²⁰¹ This seems as if Karlsruhe accepted principles-based or even area-based competence constraints for the Court’s development of the law. Later on, however, the Second Senate rejected that the Court created a ‘new competence’ in Mangold as the EU legislature had adopted Directive 2000/78 based on Article 19 TFEU. Hence, the crucial point was that the Court did not usurp the legislature’s function. With other words: it did not transgress the dividing line between adjudicating and legislating.Footnote ²⁰²

Substantive: from ‘competence constraints’ to ‘legitimate interests’

Starting with the latter, we should concentrate on the ends to which competences are exercised. Member states usually need to justify restrictions of or derogations from EU law. In this context, they can advance legitimate interests. Some scholars argue that competences can be such a legitimate interest. Seen from this perspective, Articles 36, 45(3), 52, 62, or 65 TFEU would become a space for member states to defend ‘national policy preferences’.Footnote ²⁰⁸ In other words, these policy preferences would acquire, irrespective of their content, a self-standing value.

According to Loïc Azoulai, the Court embraced this view.Footnote ²⁰⁹ In Marks & Spencer it accepted the ‘preservation of the allocation of the power to impose taxes’ as a ground to justify restrictions of fundamental freedoms.Footnote ²¹⁰ And in Watts the ‘medical competence’ of a state was invoked as an admissible ground of justification.Footnote ²¹¹ However, these instances do not seem to prove Azoulai’s point. In Marks & Spencer, the Court did not rely on the vertical division of competences, but on the horizontal ‘allocation of the power to impose taxes between Member States’.Footnote ²¹² And in Watts, the Court did not refer to ‘medical competence’ in terms of ‘authority’, but in terms of ‘expertise’.Footnote ²¹³

In my view, the Court has never accepted ‘competences’ for their own sake as a ground of justification. Instead, it has focused on the underlying interests that the exercise of these competences seeks to foster or protect.Footnote ²¹⁴ Selected examples from all areas of ‘retained competences’ may support this point. In Bressol, quotas for foreign medical students could not be justified by invoking the national competence in the area of education, but by ‘maintaining a balanced high-quality medical service open to all’ – mainly by reserving university spots for those persons that will stay in that member state to work in its healthcare system.Footnote ²¹⁵ In Petruhin, the admitted ground to justify a different treatment of nationals and other Union citizens in matters of extradition was not their competence in this area but preventing the ‘risk of impunity’.Footnote ²¹⁶ In Kreil, the legitimate interest was not the member states’ competence to organise their armed forces, but ‘public security’.Footnote ²¹⁷ In Tjebbes, a member state’s rules on the loss of nationality and Union citizenship could not be justified by simply relying on their sovereign prerogatives in these matters, but only to ‘protect the special relationship of solidarity and good faith’ between them and their nationals.Footnote ²¹⁸ And – most clearly – the Court expected the respective member state in Mirin to invoke a legitimate interest beyond its competences in matters of civil status that would justify prohibiting the recognition of changes in legal gender identity obtained in another member state.Footnote ²¹⁹

All these considerations can be invoked either under explicit derogations, under ‘mandatory requirements’ or ‘overriding reasons’ in the public interest, or under provisions such as Article 4(2) TEU that allow for derogations in terms of ‘national security’ or even ‘national identity’. Within these grounds, member states might be afforded a certain degree of discretion.Footnote ²²⁰ Yet, I would argue that this discretion does not follow from the member states’ competences in the field, but rather from the lack or indeterminacy of EU standards. Moreover, the exercise of this discretion is again subject to compliance with EU law.Footnote ²²¹ Invoking national competences without an underlying legitimate interest, by contrast, is similar to invoking objectives of a ‘purely economic’ or ‘purely administrative nature’. Both have been consistently rejected by the Court as a justification.Footnote ²²² In conclusion, we simply should stop referring to national competences when justifying restrictions of or derogations from EU law. They have no added value.

Institutional: from ‘vertical’ to ‘horizontal’ constraints

Moving to the institutional perspective, a possible trajectory for future development could be to shift our focus when assessing national measures in sensitive policy fields. Instead of understanding these situations vertically as federal conflicts between two levels, we could translate them into more horizontal terms. What member states seek to protect in such situations should not be understood as the naked authority to act, but rather as democratic choices in fields that are important for social integration and social cohesion.Footnote ²²³ Fixing the conditions for the conferral of nationality or redistributive choices in the field of education, healthcare, or social security might be choices that require a close involvement of the stakeholders of the respective society.

When it comes to such ‘political, economic and social choices’ at the EU level, the Court has granted the legislature a ‘broad discretion’.Footnote ²²⁴ Instead of scrutinising the substantive policy choice, the Court conducts a process-oriented review.Footnote ²²⁵ And there are good reasons for such an approach. Institutionally, the Court might be a hybrid, political and legal, even a representative institution. Nevertheless, its democratic legitimacy is more fragile than that of a democratically accountable legislature. In addition, the EU legislature seems often better equipped than the Court to conduct complex and controversial balancing processes between different social interests and decide on the EU’s course of action in an inclusive and transparent manner. As such, there are arguments from legitimacy and from capacity in favour of the EU legislature.Footnote ²²⁶

Eventually, the Court’s relationship with the member states’ political processes is not so different from the one between the Court and the Union’s political process. Certainly, there are reasons to apply different standards to EU and member state legislation.Footnote ²²⁷ By reviewing national legislation strictly and EU legislation more leniently, the Court can incentivise re-regulation at the EU level and thus boost the political process. However, just as the Court keeps an eye on the EU legislative processes, it could include such processes at the member state level in its reasoning. Comparable conceptualizations have been advanced with regard to the European Court of Human Rights’ margin of appreciation. Besides claims that national institutions are better placed to decide certain issues (arguments from expertise and proximity), the margin of appreciation is often based on arguments from subsidiarity.Footnote ²²⁸ However, more recent scholarship has started to reconceptualise this doctrine not in terms of subsidiarity, but rather in terms of democracy, namely when procedures at the national level feature a strong democratic pedigree.Footnote ²²⁹ In this spirit, the ECtHR has been more lenient in granting a margin of appreciation if the respective processes satisfy a certain democratic quality.Footnote ²³⁰ Some have termed this a ‘democracy-enhancing approach’.Footnote ²³¹ By applying a similar reasoning, the Court might show greater respect for member state choices of a sensitive nature for the society concerned if they are the outcome of an inclusive, transparent, democratic law-making process.Footnote ²³²

For some, this will be nothing but a ‘querelle de mots’, a formalistic struggle over words. Indeed, some may ask what difference it makes whether one refers to national competences or the reasons behind them. First, there might be situations where no such reasons are to be found. In this case, invoking member state competences is unveiled as an empty signifier. Second, words matter. They convey concepts, which in turn have a bearing on our understanding of reality. As seen above, subjecting the Court’s interpretation to principles- or area-based competence constraints could make a great difference. It would change the way we look at EU law itself and open new avenues for the member states to shield their policies against its impact.

Against this backdrop, this article was a plea for conceptual clarity. We should stop invoking the vertical division of competences against the Court’s interpretations. Institutionally, we can hold the Court accountable by assessing whether it has transgressed its judicial function. Substantively, we can refer to legitimate interests to limit the impact of EU law in a given area or work towards translating democratic concerns into a larger margin of appreciation for member states. Flagging concerns in these terms may make an impression on the Court. Insisting on competences will certainly not. This was true in 1961, and it remains true today.