ARENA Working Papers
WP 99/21

Andreas F�llesdal
ARENA

The Amsterdam Treaty seeks to bring the European Union closer to the people of Europe by aligning the institutions closer to conceptions of subsidiarity and democracy. Subsidiarity is made operational in a Protocol to the Amsterdam Treaty. This "Amsterdam Subsidiarity" regards Community action as appropriate if "the objectives of the proposed action cannot be sufficiently achieved by Member States' action in the framework of their national constitutional system and can therefore be better achieved by action on the part of the Community." (art. 5). Thus the determination of relative efficiency of Community and Member State action is crucial for this conception of subsidiarity. Democracy is furthered by reforms which increase the European Parliament's powers vis-a-vis both the Commission and the Council of Ministers. These reforms move the Union towards a bicameral model of parliamentary democracy (Nentwich and Falkner 1997).

Subsidiarity may seem attractive for deliberative democrats concerned with the opportunities for preference formation in "decentralised processes of decision making ... within constitutional political structures." (Bohman 1999, 25; Miller 1992: 54, 67). While there are such reasons for supporting subsidiarity, the Amsterdam conception of subsidiarity also conflicts with the concern for democratic deliberation when it comes to institutional arrangements. The paper identifies three main areas of tension between Amsterdam Subsidiarity and deliberative democracy. Firstly, an urgent but unanswered task is how to secure accountable applications of Amsterdam Subsidiarity. Secondly, this conception of subsidiarity seems to grant unwarranted powers to Member States. Other entities, such as sub-state regions, might also appeal to considerations of subsidiarity, yet such applications and arguments are not recognised. Finally, Amsterdam Subsidiarity may hinder the development of trans-European values and commitments necessary for a stable European political order.

The first section provides a brief historical backdrop about the role of subsidiarity in the European Union. To understand and assess the Amsterdam conception of subsidiarity it is then helpful to consider aspects of deliberative democratic theory, as well as alternative theories of subsidiarity. The second section sketches some relevant aspects of deliberative democratic theory. The third section surveys some competing theories of subsidiarity. The aim is twofold: to see how subsidiarity may foster deliberation, and to identify some peculiar features of the conception of Amsterdam Subsidiarity. Section four considers conflicts and tensions between Amsterdam Subsidiarity and deliberative democracy.

1 Subsidiarity in the European Union

The principle of subsidiarity regulates the allocation or the use of authority within a political order where there is no unitary sovereign. The principle holds that powers or tasks are to rest with the sub-units of that order unless a central unit is more effective in achieving certain specified goals. Appeals to subsidiarity take on particular salience in periods of institutional transformation, often as part of the bargain among sovereign communities agreeing to a common authority in federal fashion. A Principle of Subsidiarity reduces the risks for members of being overruled in common decisions, by limiting the common agenda.

How are we to assess the Principle of Subsidiarity? The principle seems to reflect the same normative ideals as democracy: policies must be controlled by those affected, to ensure that institutions and laws reflect the interests of the individuals under conditions where all count as equals. Only when these considerations counsel joint action, is central authority warranted.

In the context of the European Union, the Principle of Subsidiarity has served to quell fears of centralisation. The Union was established to enhance and complement domestic sovereignty in areas where there was a recognised disparity between state borders, electorates, and affected parties. The European level of governance ensured beneficial cooperation, regulation of externalities, and options for collective action.

Talk of subsidiarity was introduced in the late 1980s through the initiative of the European Parliament, Britain and Germany. Britain feared European federalism, and the German L�nder sought to maintain their exclusive powers enjoyed in the German Federal Republic. To constrain centralising tendencies, they sought to place the burden of argument with integrationists. A Principle of Subsidiarity was included in the 1992 Maastricht Treaty on European Union (TEU), and further elaborated in a Protocol of the Amsterdam draft Treaty of 1997.

In the European setting, state governments' fears of excessive centralisation are understandable, for the safeguards against centralisation found in many federations are absent in Europe. There is no doctrine of enumerated powers, and rather than enjoying competencies for specific fields of legislation, Community institutions enjoy whatever competencies they need for specified ends. Member states enjoy little exclusive legislative authority, due to doctrines of "Direct Effect," "Supremacy" and "Absorption of Community Law," and due to the use of qualified majority voting.

One reason why subsidiarity serves to constrain European integration is that the member states presently disagree about common ends, shared standards, and the likely results of separate and common action. These disagreements hinder applications of the principle, and thus prevent joint action. To illustrate, some Member States already address ecological problems better than can be hoped for at the level of the EU, while other states support EU action.

However, the principle of subsidiarity may also foster agreement by indicating the issues which must be resolved, including such topics as the aims of the union, the likely strategies and their expected effects. This is because subsidiarity may require that certain arguments must be made when joint action is contemplated. Thereby subsidiarity stimulates common deliberation, which in turn may lead to further integration - contrary to the constraining role member states envisioned.

There are further reasons why subsidiarity is unlikely to alleviate worries about undue integration. The Principle of Subsidiarity can be interpreted in several different ways, so as to protect against intervention -- or to the contrary, require intervention by the central unit. These and other issues are addressed in section 3. Moreover, the Principle of Subsidiarity does not prohibit centralisation, but only places the burden of proof on integrationists. Thus it can be disadvantageous to those sceptical of integration, by providing warrant for new forms of centralisation. Finally, Subsidiarity may be invoked against member states by their regions, draining national state powers from within. Regions may argue that the Subsidiarity principle must apply all the way down to ensure that "decisions are taken as closely as possible to the citizen."

Some of these aspects have been addressed in the Treaty formulations of the Principle of Subsidiarity. In the Maastricht Treaty the principle is explicitly linked to the uncontested objectives of the Treaty, and stated thus:

In areas which do not fall within its exclusive competence, the Community shall take action, in accordance with the principle of subsidiarity, only if and in so far as the objectives of the proposed action cannot be sufficiently achieved by the Member States and can, therefore, by reason of the scale or effects of the proposed action, be better achieved by the Community.

Any action by the Community shall not go beyond what is necessary to achieve the objectives of this Treaty.

As a result of the inclusion of the Principle of Subsidiarity, the Commission has apparently changed its mode of operation:

The Commission has undertaken to justify each of its new proposals in the light of the subsidiarity principle. It makes more regular use of Green Papers and White Papers, prompting broad public debate, before new proposals are submitted.

European Council 1996, 4

The 1997 Amsterdam Treaty goes further, and includes a Protocol on the application of the Principle of Subsidiarity which offers a more precise interpretation of subsidiarity ^[1]. This "Amsterdam Subsidiarity" applies to issues where competencies are shared between the Union institutions and member states. Subsidiarity provides some safeguards against centralisation by laying down certain requirements for central action, and by increasing transparency about these arguments. Comparative effectiveness of Community action must be determined, by showing that the objectives of the proposed action cannot be sufficiently achieved by member states, and can be better achieved by the Community. Community action is required if

a) the issue under consideration has transnational aspects beyond control by Member States;

b) actions by Member States alone or lack of Community action would violate the Treaty;

c) action by the Community produces benefits of scale or effects, as compared with action at the level of the Member States.

The Community is also required to legislate in the weakest form necessary, leaving discretion to member states. Thus directives are preferred over regulations, and framework directives over detailed measures.

At present, the EU institutions are still in flux: the allocation of competencies and modes of operation are adjusted at the frequent intergovernmental conferences. In this phase deliberation about the purposes and functioning of the Union is particularly important. For this reason Amsterdam Subsidiarity serves a valuable function. It facilitates public discussion and deliberation about the ends and means of the European Union in at least three ways. It requires openness and arguments among member states and the Union institutions about comparative effectiveness.

Secondly, these arguments must draw on arguments within the member states themselves about the ends and means of common action. And finally, the common directives identify certain outcomes which must be reached through domestic legislation, but leave the states free in their choice of how to secure these outcomes. Directives thus require each member state to choose policies on the basis of their comparative advantage. Such domestic discussions may consider expected results, local circumstances, and domestic history and customs, thus facilitating deliberation.

2 Deliberative Democracy

We may use 'democracy' as a term for certain procedures for deliberation and decision. After public deliberation, the electorate votes and runs for office in elections, decided by majority rule, to bodies which legislate after public deliberation, and execute rules by majority rule. Thus rulers are held responsible to electoral majorities (Dahl 1989, ch. 10, 11; Arneson 1993). Theories of democracy in this broad sense have also endorsed other features such as constitutionally specified procedures and constraints.

A broad range of liberal theories hold that institutions are legitimate only if they can be justified by arguments in the form of a social contract of some specific kind. The aim of such theories is not to justify morality from an assumption of self-centred individuals. Rather, they assume that individuals generally have an interest in acting justly, in being "able to justify one's actions to others on grounds they could not reasonably reject" (Scanlon 1982, 116). They "desire to act in accordance with principles that could not reasonably be rejected by people seeking an agreement with others under conditions free from morally irrelevant bargaining advantages and disadvantages" (Barry 1989, 8). The implications are in accordance with the principle that "only those norms may claim validity that could find acceptance by all those concerned as participants in a practical discourse (Habermas 1991, 235). This commitment to give reasons "manifests our respect for the reasonableness of others" (Macedo 1990).

The aim of these liberal theories is to bring the commitment to justice to bear on our rules, institutions and practices. The principles of legitimacy we should hold institutions to, are those that the affected persons would unanimously consent to under conditions which secure and recognise their status as appropriately free and equal. The specific conditions, and the significance of consent, vary among theories in ways which need not concern us here. The set of social institutions as a whole should secure the interests of all affected parties to an acceptable degree, including our interests in peace, stability, basic needs, and shares of goods and powers. Among the important interests we must take each other to have, are interests in joint activity as well as an interest in developing our preferences under acceptable conditions.

An important challenge to any normative theory is the plurality of life plans and conceptions of the good which flourish today and the range of views which will flourish in the future. While much is shared among citizens, there are also conflicting views about what the good life and polity consists in. Respect for all entails that a broad range of such views must be respected by the social institutions. All the same, social institutions affect our lives profoundly: they determine our prospects and life plans. Moreover, they are important for character formation, as they affect our preferences and values deeply. So an important good to be distributed is the power to influence the institutions that shape one's lives. Hence the importance of allocating political rights, the subject of theories of democracy.

The justification of deliberative democratic political arrangements over other arrangements is not, on this view, ultimately that they best carry out the will of the majority, but rather that they best secure the interests of all affected parties. The case for majority rule, for instance, must draw on empirical evidence that, when properly regulated and circumscribed, such mechanisms best secure substantive justice, i.e. that all affected parties' interests are expressed and taken care of acceptably well -- as compared to other arrangements. A general statement of such justifications of democratic institutions runs as follows:

The central virtue of democratic forms is that, in the presence of a suitable social background, they provide the most reliable means of reaching substantively just political outcomes consistently with the public recognition of the equal worth or status of each citizen. Democratic forms succeed in achieving this aim, when they succeed at all, less because they aggregate existing preferences efficiently than because they foster a process of public reflection in which citizens can form political views in full awareness of the grounds as well as the content of the (possibly competing) concerns of others.

Charles Beitz 1989, 113

Note that there are two sets of reasons for democratic arrangements, when combined with public deliberation. Deliberation followed by majority rule provides both acceptable interest formation and acceptable interest aggregation. The discussion of subsidiarity that follows focuses on the former, and following the conventions of this book, 'deliberative democracy' is used about the former features. The discussion leaves aside important issues pertaining to the aggregation of votes through majority rule and mechanisms of representation.

Let us consider some reasons why deliberation is important.

b Deliberation about ends
Deliberation about ends as well as means is not a new concern in democratic theory, unique to recent liberal theories. David Hume (1882), influenced by James Harrington (1656) and in turn influencing James Madison, was concerned with institutional mechanisms conducive to deliberation and criticism. He considered such arrangements as bicameralism and submission of arguments for new pieces of legislation, with the aim of 'refining' the opinion of voters (Beer 1993, 265-270). J. S. Mill supported the creation of deliberative bodies to identify and pursue common interests among those sharing national sentiments.

Deliberation about common ends and means affects preference and option formation, and are crucial input for defining the problems. Will formation is fostered by public deliberation, which allows for the development of a necessary sense of solidarity, a shared political culture and possibly a sense of community. Thus John Stuart Mill (1962) insisted on the role of deliberation for making individuals understand themselves as responsible citizens who consider the views of others. A focus on the constitutional allocation of powers easily ignores these effects on preferences. An important question concerns the opportunities for arguments and the use of public reason under various institutional arrangements which also must serve as a backdrop for bargains and co-ordination (Cf. Dahl 1956, Dewey 1927). The formal powers of putting issues on the political agenda, and the allocation of bargaining power within the political process, shapes the form, content and results of informal norms and arrangements (Follesdal 1998a; Joerges and Everson in this volume).

Deliberation which uncovers arguments for positions may shift the participants towards mutual accommodation. Presenting arguments to one another, based on premises one assumes all can share, fosters willingness and ability to take an interest in the interests of others (Miller 1992). That is,

the need to reach an agreement forces each participant to put forward proposals under the rubric of general principles or policy considerations that others could accept... By giving these reasons, however, I am committing myself to a general principle, which by implication applies to any other similarly placed group.

Miller 1992, 55.

Nino argues that democratic procedures are 'regimented surrogates of moral discussion' (1996, 117) that allow us to determine one another's interests, and turn bargaining procedures in the direction of arguments. (cf. Bohman 1999, 18). This is an element also found in certain "integrative" bargaining approaches, which first seek agreement on principles for settling disagreements, before applying such principles to the conflict at hand (Fisher and Ury 1987; Raiffa 1982) .

Preference adjustment can occur even when arguments are presented with the intention of own gain, for hypocrisy has a civilising impact on character formation (Elster 1998). Hypocrisy can remove blatant violations of shared norms, it fosters some adherence to these norms, and may make people prune their own preferences, since they feel obliged to "report only those reasons that others might plausibly be expected to share" (Elster 1998, 238, cf. Habermas 1973, Goodin 1986, 86-89).

One contested issue concerns to what extent such public political deliberation affects preferences, as compared to other inputs on character formation. (cf. Femia 1996). Thus Miller holds that deliberative democratic theory

relies upon a person's capacity to be swayed by rational arguments and to lay aside particular interests and opinions in deference to overall fairness and the common interest of the collectivity. It supposes people to be to some degree communally orientated in their outlook.

(Miller 1992, 45)

It is important to be clear about both the efficacy and objectives of preference formation by public deliberation. This is because each individual faces a dual threat under partial compliance possibly wrought by unilateral preference adjustment.

On the one hand, there is a risk of exploitation. My willingness to abide by principles required by the common interest as I see it, may be abused by others who claim to be guided likewise, but who actually pursue their own self interest under the guise of common interests. When the stakes are high, such partial compliance is a risk which institutions should try to protect individuals against (Elster 1983, 37-8). To allay this risk it is important to consider evidence of the claim that "base prejudices will be transformed, and worthy intuitions like hatred of racism vindicated, through rational criticism and dialogue" (Ackerman 1980, 353; discussed by Sanders 1997, 351). One mechanism for preference adjustment is the civilising impact of hypocrisy mentioned above. It is unclear, however, whether this and other mechanisms reduce the harms of partial compliance sufficient to protect against exploitation.

The second challenge is to lay out publicly observable limits to appropriate self interest. There is a legitimate place for self-interest where issues of just distribution of benefits and burdens arise, since the complete subjection of self interest for the sake of "common interests" of others seems illegitimate. Yet there are few standards available to determine the reasonable limits to subjection to altruistic goals. (cf. Sanders 1997, 361). While deliberation should not be thought to extinguish self-interest, the appropriate level and content of self-interest must be clarified, to allow limited self interest without provoking suspicion of partial compliance.

c Deliberation about Means
To be legitimate, decisions must be made by voters with the appropriate preferences, who are informed about the available policy alternatives, and the candidates' performance and promises. Deliberation in this sense, scrutinising such claims, improves the chance that voters identify the best policy choices, and the best candidates, among those available. There are at least four reasons for this ^[2].

a) Option Creation. Deliberation may help identify better alternatives, for instance by discovering trade-offs and side payments for mutual gain. This is consistent with recent bargaining theory, which suggests that public discussion -- or the use of trusted mediators -- is helpful for discovering areas of mutual gain and opportunities for linked bargains (cf. Raiffa 1982, Lax and Sebenius 1986).

b) Option Assessment. Deliberative procedures can improve voters' assessments of existing policy choices. Miller holds that "deliberative democracy has the resources to attenuate the social choice problems faced by the political community" (1992, 60). The reason is that many rankings are eliminated through three reasons: fact checks which remove preferences based on false beliefs; through the condition of publicity which removes morally repugnant preferences; and through requirements of universalisability: "To be seen to be engaged in political debate we must argue in terms that any other participant would potentially accept, and "It's good for me" is not such an argument" (61). The main point seems sound, though important social choice problems may well remain, as noted by Mill and Nino (1996).

c) Option Choice. Voters of good will are more likely to cast their votes according to their conception of the common interest when they are convinced, through public debate, that they know what choice it requires. David Miller underscores this role of deliberation even after deliberation has changed the preferences expressed in votes:

"finally when a decision has to be reached there may still need to be a vote taken between two or more options, what participants are doing at that point is something like rendering a judgement or a verdict on the basis of what they have heard. They are expressing an opinion about which policy best meets the various claims that have been advanced, or represents the fairest compromise between the competing points of view that have been expressed.

Miller 1992, 55-6

It is unclear why Miller's conjecture will always be the case. There is no guarantee that voters who through deliberation are more likely to understand the common good, always will vote accordingly. The more cautious claim seems more plausible.

d) Majority constraint. Deliberation can also indicate the limits to majority rule. Public deliberation can identify weaknesses of majoritarian decisions. Consider Brian Barry's argument for majority rule (Barry 1991). He claims that majority rule is wise under four conditions: when there is only one decision, only two alternatives, when the constituency is not open to doubt, and when the outcome is not of vital importance. The majority principle itself offers no guidance for identifying which issues should be on the agenda, the set of alternatives, the constituency, or the set of vital interests which should be kept off the agenda. Public deliberation may provide answers to these important questions, and remind people that under majority rule no one should be permanently in the minority. This may also be Miller's point, when he claims that

The emphasis in the deliberative conception is on the way in which a process of open discussion in which all points of view can be heard may legitimate the outcome when this is seen to reflect the discussion that has preceded it, not on deliberation as a discovery procedure in search of a correct answer.

Miller 1992, 57

The challenge for Miller is to show how the outcome "reflects" the discussion, beyond for instance identifying the alternatives.

d Democratic deliberation at the European level?
The reasons in favour of deliberation for interest formation rests on assumptions that are presently less plausible at the European level than at the national level (see Schlesinger and Kevin, this volume, for a careful consideration of these arguments). The opacity of European institutions, the present lack of a well-developed European public space, and the relative absence of European political parties reduce the opportunities for character formation, and limit the informational bases and range of political choice. Additional problems arise in the scenario of multiple Europes - that is, extensionally different sets of Member States forming a "Defence Europe", "Common Currency Europe", "Human Rights Europe". Different arenas for public deliberation may arise clustered around each functional regime, without arenas for addressing the issues arising across functions. Segments of citizens, including those in small states, harbour reasonable fears of becoming permanent minorities in the absence of trans-sectoral arenas for public deliberation.

One might hope that the Principle of Subsidiarity as found in the Amsterdam Treaty alleviates some of these hindrances to democratic deliberation, and brings the European Union closer to the citizens. However, the Amsterdam conception of subsidiarity has characteristics which suggest that high hopes are premature.

3 Traditions of Subsidiarity

To get a better grasp of the features of the Amsterdam conception of Subsidiarity it can be contrasted to five alternative theories of subsidiarity, each of which has different implications both for institutional arrangements and for the role of political deliberation. The five accounts draw on insights from Althusius, the American Confederalists, Economic Federalism, Catholic Personalism, and Liberal Contractualism, respectively (Follesdal 1998). These accounts may regard subsidiarity as proscribing or prescribing central intervention, apply subsidiarity to the allocation of political powers or to their exercise, and add or remove issues from the sphere of political decision-making altogether. Some of these features reduce the room for democratic deliberation, while some may foster deliberation.

a Liberty: Althusius
Althusius, "the father of federalism", developed an embryonic theory of subsidiarity drawing on Orthodox Calvinism. Communities and associations are instrumentally and intrinsically important for supporting ("subsidia") the needs of the holy lives of individuals. Political authority arises on the basis of covenants among associations. The role of the state is to co-ordinate and secure symbiosis among associations on a consensual basis. The notion of symbiosis may be interpreted as requiring deliberation about common ends among sub-units, since it involves "explicit or tacit agreement, to mutual communication of whatever is useful and necessary for the harmonious exercise of social life" (Althusius 1614, ch. 28). At the same time, Althusius recognised that deliberation will not always yield agreement, particularly not in matters of faith. In such cases, he counselled religious toleration: "the magistrate who is not able, without peril to the commonwealth, to change or overcome the discrepancy in religion and creed ought to tolerate the dissenters for the sake of public peace and tranquillity, blinking his eyes and permitting them to exercise unapproved religion" (Althusius 1614, ch. 28)

This interpretation of subsidiarity would appear to take the existing sub-units for granted - a feature it shares with Amsterdam Subsidiarity. While this account allows for negotiation among sub-unit representatives based on existing preferences, agreement on ends is not expected - which is why subsidiarity is required in the first place. Althusian subsidiarity thus seems based on a fundamental pessimism regarding the complete obliteration of disagreement by means of preference formation through deliberation.

b Liberty: Confederalists
Similar conclusions emerge from confederal arguments for subsidiarity based on the fear of tyranny. On this view, individuals should be free to choose in matters where no others are harmed. This is thought to be best secured by decentralised government enjoying veto powers. Thus sub-units may veto decisions, or super-majoritarian mechanisms must be established. An added reason for local politics often found in this tradition is that participation -- and possibly subsidiarity -- might be thought to facilitate learning and to secure political virtue, clearly embracing preference formation.

Two drawbacks of this view should be mentioned. Firstly, the exclusive focus on tyranny as the sole ill to be avoided is questionable. In the context of the European Union, similarly, abuse of centralised powers is not the only risk: inability to secure necessary common action is also a threat.

Secondly, as Madison pointed out, the plight of minorities is uncertain, since it is unlikely that smaller units are completely homogeneous. Indeed, tyranny may emerge more easily in small groups. It might also be easier for minorities to muster courage in larger settings (Sanders 1997).

Regarding deliberation, let us note that there is room for deliberation regarding ends within sub-units, but not between them. Thus subsidiarity and veto powers may reduce opportunities and need for agreement, rendering such solutions unattractive for discourse democrats. If we agree that it is easier to reach agreement about ends in local polities, i.e. that individuals are likely to come to agreement on ultimate values, this may be an argument for subsidiarity. Montesquieu held that common interest is easier to see in a smaller setting. We may note that Scharpf (1988) makes similar arguments for subsidiarity in the European Union.

Agreement may be easier to reach in small democracies with homogeneity of socio-economic circumstances and closed borders, where politicians are less likely to pursue own advantage, and where demands are stable over time. However, these conditions are unlikely - as the American Federalist debate made clear. Perfect homogeneity is never achieved, and "the fewer the distinct parties and interests, the more frequently will a majority be found of the same party; and the smaller the number of individuals composing a majority, and the smaller the compass within which they are placed, the more easily will they concert and execute their plans of oppression." (Madison 1787). These risks should be kept in mind when considering the deliberative implications of Amsterdam Subsidiarity.

A final implication for deliberation of this kind of subsidiarity might be illustrated by Montesquieu's suggestion, that once agreement was secured by homogeneity in sub-units, this should be combined with a limited central agenda. For instance, an agreement on the common end of defence should move on to a discussion of the best means of defence, rather than a more expansive discussion of other common ends (Beer 1993, 230). In effect this argument supports a proscriptive version of subsidiarity, and limits deliberation of ends from the outset. It is similar to the Amsterdam conception of subsidiarity in that the objectives of cooperation are laid down in advance.

c Efficiency: Economic Federalism
This theory of subsidiarity holds that powers and burdens of public goods should be placed with the populations that benefit from them. Decentralised government is to be preferred insofar as a) local decisions prevent overload, or b) targeted provision of public goods is more efficient in economic terms. This conception of subsidiarity seems to match the Euro-sceptics' wariness of European cooperation -- though they might object to the label "federalism".

This theory is concerned with competence allocation, and provides standards for sub-unit identification and tasks. Sub-units do not enjoy veto powers, since free-riding individual sub-units may be overruled to ensure efficient co-ordination and production of public goods, namely non-excludable and inexhaustible goods. Weaknesses of this view include the following: it is limited in scope to such public goods. Moreover, it suffers from the standard weaknesses of economic theory regarded as a theory of normative legitimacy. Standard economic theory does not address the important issue of preference formation, and relies on Pareto improvements from given utility levels, ignoring the pervasive impact of unfair starting positions.

Deliberation about means and strategic cooperation is important on this view, partly in order to determine win-win situations. The focus on expressed preferences without regard for how the preferences develop sets this approach apart from deliberative democracy. Also note that arguments of economic federalism may recommend that issues are removed from democratic and political control, and left to market mechanisms or other non-political arrangements within sub-units. Finally, of relevance for Amsterdam Subsidiarity, we may note that this argument questions the presumption in favour of Member States as the appropriate sub-units, and instead supports placing powers with sub-state regions. Subsidiarity, on this view, may go "all the way down".

d Justice: Catholic Personalism
The Catholic tradition of subsidiarity is expressed clearly in the 1891 Encyclica Rerum Novarum, and further developed in the 1931 Encyclica Quadragesimo Anno against fascism. The Catholic Church sought protection against socialism, yet protested capitalist exploitation of the poor. As developed in Personalism, a tradition which influenced Delors, the human good is to develop and realise one's potential as made in the image of God. Voluntary interaction is required to find one's role and promote one's good. A hierarchy of associations allow persons to develop skills and talents, and assist those in need. The state must serve the common interest, and intervene to further individuals' autonomy.

Subsidiarity should regulate both competence allocation and exercise. It allows both territorial and functional applications of the principle, possibly placing issues outside of the scope of democratic politics. Sub-units do not enjoy veto rights, and interpretation of subsidiarity may be entrusted to the centre unit.

Christian Democratic governments and the European People's Party hold views on subsidiarity close to this, for instance supporting just wage constraints on market economies.

This view rests on contested conceptions of the social order as willed by God, and human good as a particular mode of human flourishing. Thus it cannot settle beyond reasonable disagreement which sub-units and cleavages should be embedded - e.g. families, or labour unions - and what their responsibilities should be regarding care for infirm, wages, or unemployment. Deliberation might reduce these disagreements for purposes of reaching public consensus.

This theory recognises an important role for deliberation, both so that individuals and social groups may discover their proper function, and in the exercise of powers regulated by considerations of subsidiarity. This aspect is shared by Amsterdam Subsidiarity, which holds in paragraph (1) that subsidiarity primarily regulates how institutions exercise their powers, and not how these powers should be allocated. However, the Catholic view would deny that standards and functions are determined by deliberation, paralleling Amsterdam Subsidiarity in that the objectives of the social order are to be taken as given. Aspects of the natural social order are at most discovered, and not constituted, by deliberation.

e A Liberal Contractualist case for subsidiarity
Liberal Contractualism of the kind associated with Rawls, Scanlon or Barry might acknowledge a limited role for subsidiarity. Socialisation into a sense of justice is important. However, this does not amount to full-fledged support for a Principle of Subsidiarity. Even though political virtue must be fostered, possibly through political participation, local democracy need not be given priority in the form of subsidiarity as long as some learning takes place locally.

Two other arguments within this tradition provide better support for subsidiarity. Firstly, individuals must be acknowledged to have an interest in controlling the social institutions that in turn shape their values, goals, options and expectations. Such political influence secures and promotes two important interests. Agreeing with the republican claim of Confederalists, it protects our interest in avoiding domination by others. In modern polities this risk is reduced by a broad dispersion of procedural control. And control over institutional change serves to maintain our legitimate expectations. We have an interest in regulating the speed and direction of institutional change. This interest is secured by ensuring our informed participation, to reduce the risk of false expectations. When individuals share circumstances, beliefs or values, they have a prima facie claim to share control over institutional change to prevent subjection and breaking of legitimate expectations. Those similarly affected are more likely to comprehend the need and room for change. Insofar as this holds true of members of sub-units, there is a case for subsidiarity. However, this account does not single out Member States as the only relevant sub-units, contrary to Amsterdam Subsidiarity.

The second argument for subsidiarity concerns its role in character formation. The Principle of Subsidiarity can foster and structure political argument and bargaining in ways beneficial to public deliberation, and to the character formation required to sustain a just political order. By requiring impact statements and arguments of comparative efficiency, Amsterdam Subsidiarity facilitates the socialisation of individuals into the requisite sense of justice and concern for the common good. For this purpose the Principle of Subsidiarity need not provide standards for the resolution of issues, as long as it requires public arguments about the legitimate status of sub-units, the proper common goal, and the likely effects of sub-unit and centre-unit action.

This argument underdetermines subsidiarity. That is: other rules for the exercise of political power could serve the same purpose, which is to ensure public argument about shared ends and suitable means, leading to preference adjustment. Furthermore, this argument must be supplemented by theories of institutional design in order to suggest suitable institutional reforms. Whether sub-units should enjoy veto, votes or only voice is a matter of the likely institutional effects on character formation, and on the likely distributive effects.

f Summary: Subsidiarity improving deliberation
In light of these brief sketches, we may conclude that Amsterdam Subsidiarity may improve the deliberative aspects of democratic decision-making. This is in accordance with some deliberative theorists, who prefer decentralisation and direct democracy (Bohman 1999, 20). Thus Miller seeks a "reshaping of those [liberal democratic] institutions in the light of a different regulative ideal", including subsidiarity to allocate decisions downwards to the sub-constituencies according to who are affected (Miller 1992, 54, 67). The five accounts of subsidiarity sketched above suggest several reasons to support these claims that subsidiarity and deliberative democracy are compatible and indeed mutually supportive.

a) Sub-units are better able to secure shared interests, particularly if shared geography, resources, culture or other features make for similar interests and policy choices among members of the sub-units. Option assessment and option choice are facilitated.

b) A reduction of issues on the agenda and parties to agreements serve to reduce the risk of information overload, and foster joint gains. Preference formation, option assessment and option choice are made easier.

c) The deliberation fostered by subsidiarity can help build community, partly by preference formation towards the common good. The deliberation about ends also supports an important sense of community for a minority, that these decisions are "ours", and can foster a sense among the majority about majority constraints. Deliberation may thus enforce the boundary within which majoritarianism is accepted as a legitimate decision procedure (cf. Miller 1995, 257, Manin 1987, 352).

d) Subsidiarity helps protect against subjection and domination by others, by proscribing intervention into local affairs. Option choice is fostered.

e) Deliberation outside direct political control may be warranted by considerations of subsidiarity, since it allows for preference formation without the risks associated with political domination. Thus Habermas stresses the importance of deliberation in the public sphere, rather than deliberation in state institutions. This can be said to express a non-territorial application of subsidiarity, where some important aspects of preference formation are placed outside political control.

4 Subsidiarity versus Deliberation?

This final section considers some unresolved dilemmas between Amsterdam Subsidiarity and deliberative democracy. Classical features of democratic rule -- free agenda setting and accountability -- appear to conflict with political orders as regulated by Amsterdam Subsidiarity. Some of these objections are presented only to be rebutted. Other criticisms survive scrutiny. In particular, the Amsterdam conception of subsidiarity embeds states in ways incompatible with deliberative democracy, and it remains an open question whether the present institutions can foster the requisite trans-European values and commitments.

a Agenda setting
Subsidiarity constrains political agenda in ways which might appear incompatible with fundamental norms of democratic theory, by moving some issues away from democratic control in the same way as federal arrangements split the agenda (Dahl 1983, 95-105). Constraints on the political agenda are of course particularly worrisome if some affected parties are not part of the sub-unit which deliberates and decides. However, when subsidiarity regulates the allocation of competencies, the agenda of political discourse is reduced correspondingly. This immunity from majority control is indeed central to several arguments for subsidiarity, and is crucial for the protection of minorities and other protections of individuals through legal rights and immunities (Lijphart 1991).

In response, we must first note that the alternatives to splitting competencies are also problematic. Allocation of competencies according to who is affected makes for an opaque distribution of authority. The problem is that it "easily leads to overlapping jurisdictions of communication flows" (Habermas 1992, 11; and Schlesinger and Kevin, this volume).

From the point of view of liberal political theory, the removal of some issues from day-to-day political debate is not necessarily to be regretted. Surely, allegiance to the political system may be threatened if everything can be put on the agenda. If the elected representatives are able to redefine the basic rights of all, or revoke minority protections, trust may not be forthcoming. More importantly, constitutional protections and competence allocations by such means as subsidiarity do not remove issues from public debate, even though the issues are taken off the day-to-day political agenda. Thus some objections to constitutional constraints should be reconsidered. Dryzek, for one, argues against constitutional guarantees which violate a claim to "unconstrained political debate" which should allow discussion of "the authority of prior norms or requirements" (Dryzek 1990, 170). But constitutional constraints on the political agenda, for instance by a constitutional court, remove issues from ordinary legislative debate, but do not remove issues from political debate tout court. Instead, such measures may serve to give notice to the public that the political process now yields extraordinary effects; or that the unintended systemic effects of political decisions now cross certain limits defined as trigger issues by a constitution. Such warnings do not stifle political debate. To the contrary, they may indicate that further public deliberation is in order, for there are ways of revising the constitution or the Union treaties. Such procedures typically involve further political debate and deliberation, and further opportunities for reconsideration, than the deliberations required for ordinary legislation (Ackerman 1988, 192; and cf. Sunstein 1994, 13-14). Requisite arenas for public constitutional deliberation must be present -- a requirement which is not satisfied as yet in the European Union (cf. Schlesinger and Kevin, this volume).

These considerations aside, there are clearly risks in limiting local or central agendas, e.g. through rights. The current allocation of authority between the EU and Member States is biased in favour of some conception of the proper relations between Member States and the Community, which may not be legitimate (Femia 1996, 370). Other divisions than those based on citizenship -- class, gender, profession or age -- might be more appropriate for certain issues, but states are identified in the treaties as the main sub-units. We consider these issues further below.

Moreover, institutional arrangements for re-assigning competencies must be available. Miller suggests that this task might be handled better by deliberation than by other means. Apparently, only deliberative democracy reveals what sort of issue is at hand - whether it is indeed a topic where

personal preferences should reasonably play a large role in deciding them. This will be true of many ordinary public goods, for instance. If we have to make a budget allocation as between football pitches and the swimming pool in the local park, the main consideration is likely to be the general direction and strength of preference between these options. ... this is a case where the role of deliberation is to identify a procedure for making a decision rather than to arrive at a substantive agreed judgement.

... deliberative democracy, precisely because the content of people's preferences emerges in the course of deliberation, can in theory select the decision procedure most appropriate to the case in hand."

Miller 1992, 66

On Miller's argument, observe that it is unclear whether such deliberations avoid the problems of partial compliance and strategic arguments shared by deliberative democracy and integrative bargaining. Individuals may reasonably fear that others will promote principles which favour them, in the guise of allegedly reasonable principles. A second concern arises if we grant that deliberative democracy might in theory be better equipped to select procedures, and allocate authorities. Still, empirically informed arguments are needed to support Miller's view about the likely effects of deliberative procedures for institutional redesign and competence re-allocation.

b Accountability
A further challenge to some applications of subsidiarity stems from the requirement of accountability. Subsidiarity can prevent the public from placing responsibility for actions on particular officials, who may appeal to vague and complex notions of comparative effectiveness and limited room for independent action. Such responses hinder accountable government. This opacity may occur when competencies are shared between sub-units and central units, as in the European Union, or when the principle of subsidiarity guides discretion without making the deliberations public. These features also hinder the desired effects of subsidiarity on preference formation.

In response, we may note that Amsterdam Subsidiarity partly alleviates these fears by requiring public, substantiated arguments for comparative effectiveness of central action (paragraph 4). However, the objection points to general challenges of institutionalising deliberative democracy. The information required for making and assessing claims for centralisation is exceedingly complex, and relies in part on counterfactual hypotheses. Recall that Amsterdam Subsidiarity requires a comparison of the likely effects of decentralised action with the effects of central action, assessed by some standard of efficiency. Information overload threatens. On the other hand, witholding information also violates precepts of democratic deliberation. Robert Dahl warns against institutionalising deliberative democracy on such grounds: as long as governments fail to inform the public about the problems of health care services, well-grounded political choices are impossible (Dahl 1997). A major challenge of liberal, deliberative institutional design is thus to enhance the public's ability to hold officials accountable.

c Equality vs Democratic Sovereignty
We may also note a problem which arises for subsidiarity from the perspective of egalitarian political theories, such as John Rawls' theory of Justice as Fairness (Rawls 1971). For such theories it would appear that few distributive decisions should be left to sub-units and domestic democratic institutions. It would appear that such theories support centralisation and uniformity of policy. These egalitarian distributive implications are consistent with the EU objective to "promote ... economic and social cohesion and solidarity among Member States" (Art 2 ECT). But this egalitarianism appears to conflict both with our judgments regarding the priority of compatriots (Beitz 1983) and with the traditional scope of domestic sovereignty, since egalitarianism puts drastic constraints on the legitimate outcomes of democratic decision-making.

An unresolved challenge to the egalitarian objective concerns whether and how to reduce differences in living conditions across Member States when some differences may be due to

costly local policy choices made according to the principle of subsidiarity. Given that some egalitarian objectives are found in the treaties, Amsterdam Subsidiarity might support Community action which overrides such local variations. However, Member States then risk a complete erosion of such kinds of autonomy that matter.

As a preliminary response, the egalitarian commitment requires careful delineation of which goods and burdens must be secured on an equal basis across sub-units. Furthermore, this commitment to equal respect may allow some democratically generated distributive variations among sub-units. It remains, however, an open question whether the best justification for equal political control among Europeans also supports equal shares of other goods and benefits - and how this egalitarianism is to be squared with subsidiarity.

The tension between equality and sub-unit autonomy points to a central problem of Amsterdam Subsidiarity: the status of states.

d Political Equality: among persons or states?
Subsidiarity arrangements often grant small states powers beyond what the number of inhabitants should suggest, so too in the European Union. Historically, in the EU and in other systems of pooled sovereignty, the prominent role of states is no doubt due to the historical bargain that took place among the formally equal sovereign joining members. This feature ensured the concerns of smaller states within the community. Such arrangements seem illegitimate, as they violate the ideal of one person - one vote. Note, however, that such discrepancies between voting powers of individuals are not a necessary feature of subsidiarity or of federal arrangements. David Hume, in defending a federal design, suggested electorates of equal size. However, the apparent anti-egalitarian feature occurs when sub-units are of different sizes - as is the case in Europe.

The future institutional design of the EU is at stake. In order to increase the equal influence of citizens, institutional reform could increase the powers of the European Parliament, a 'federal' institution. Furthermore, the electoral bases of the seats should be reallocated to equalise representation, roughly reflecting the influence of the population of Spain. The populations of Germany, the United Kingdom, Italy and France should then receive seats from the rest. This conception of political equality also suggests that state votes in the Council of the European Union should reflect population size. Thus the influence of large states should be increased so that individuals of those states gain more equal control over the conditions shaping their lives.

Alternatively, 'peoples', that is states, should be represented as equals in federal arrangements. From this perspective, small states should continue to wield power irrespective of population size. The question might then be whether Germany, with 10 votes in the Council, are too influential in comparison to Luxembourg's two and Ireland's three -- even though Germany has a population more than 200 times that of Luxembourg and 22 times that of Ireland.

One might argue that such federal features can be endorsed by considerations of subsidiarity, in that they allow states to protect their vital "national interests" through cooperation restricted by veto powers and blocking abilities. A defence of this kind must indicate how a system of checks and balances serves these ends, and how it constrains the day-to-day political bargaining between tiers, possibly giving the bargaining more of a deliberative bent. The grounds for veto or blocking must be specified, perhaps through a list of individual and state rights. A definite list of the objectives of the federation, coupled with a Principle of Subsidiarity, must provide further guidance. Such an account must draw on a theory indicating which interests and values are at stake, and what are the legitimate ends of state and federal institutions. However, these "national" interests must be specified in terms of the interests of individuals. Why should states otherwise enjoy political powers? After all, democratic deliberation is fundamentally concerned not with the interests of states but the interests of persons.

In response, skewed representation can be justified on one of two grounds compatible with deliberative democracy. Such arrangements can ensure that representatives of all affected parties are able to participate as equals in the deliberations. States' representatives present the views and interests of citizens, and it is not obvious that proportional representation is required. Instead, skewed voting weights, veto, double majorities or qualified majority mechanisms, typical of federal arrangements, may be appropriate to give citizens of small states both voice and clout.

Alternatively, one might argue that states are appropriate units for controlling cultural and institutional change. Small states may properly be overrepresented in federal decision-making bodies, since equal concern for the similar interests of all is sometimes appropriately secured by allowing citizens of small states to enjoy influence in deliberative settings beyond what their population size should entail. Citizens of small states are threatened in other ways than citizens of populous states. For instance, if decisions were made by majority vote, small states will tend to be permanent policy takers rather than policy makers, risking massive and systematic changes to the expectations of their citizens. It therefore seems acceptable to allow small states extra opportunities for voicing concerns and receiving a fair hearing for their arguments, for instance through disproportionate votes, or by veto rights.

To illustrate how subsidiarity might be defended along this line, recall that subsidiarity insulates sub-units from majority rule in the larger polity, by offering sub-units a veto or by separating competencies. This effect is similar to that of consociational arrangements (Lijphart 1979); and federal arrangements (Dahl 1983). True, majority rule is constrained. But for deliberative democrats, this is not an objection, since it is not clear that the preferences of the majority should always win out. What matters is that the interests of all should be secured to an acceptable degree, after preference formation through public deliberation has run its course. Majoritarianism is plausible when everybody benefits acceptably in the long run (Barry 1991). One problem arises for minorities in polities with deep structural cleavages. Two assumptions in favour of majority rule are broken for permanent minorities in small Member States: their chances of being in the majority are not equal to the chances for citizens of larger states, and the compounded outcome of several decisions against their votes can amount to major disadvantages for them. Subsidiarity would secure these minorities control over such issues among others.

Liberal theories of the kind explored here recognise that majoritarianism poses risks, even when we grant an important role for democratic deliberation. If possible, institutions should protect against miscarriages of deliberation wrought by partial compliance with the norm of voting one's conception of the common interest. Institutional safeguards should protect against these risks.

e Why are states the appropriate sub-units?
This strategy in defence of subsidiarity against majoritarianism highlights a problem for Amsterdam Subsidiarity. The case for states as sub-units remains to be made. Given pluralism of values and shared circumstances both within and across state borders, claims that states should be privileged parties regulated by Amsterdam Subsidiarity must be substantiated better than as yet. Why allocate powers precisely at the level of nation states, rather than insisting that decisions must be local? It would seem that subsidiarity sometimes should go "all the way down", at least to the various regions of states, as argued by the Committee of the Regions. Individuals' concern for political control suggests precisely that jurisdiction should be local except insofar as larger scale arrangements are required for co-ordination or externalities.

State governments have traditionally enjoyed control over institutional design, so citizens' expectations have to a large extent reflected the domestic institutions and cultures. As primary implementors of policies, these governments are also the most plausible agents of union directives. Yet this does not mean that state governments are the primary locus for shared purposes and goals. Pluralism of cultures and values within states suggest that they are too large and heterogeneous for inhabitants to agree to common ends. Indeed, regional unrest and regionally based political parties indicate that the unit of the state is too large. Moreover, permanent minorities within states, such as migrant workers, cultural minorities or the unemployed, have needs that are not secured by Amsterdam Subsidiarity. It regulates co-decisions by states and the Community, and does not recognise other units. Arguments for subsidiarity as explored in section 3 can support non-territorial representation in some functional areas, since non-state units may be better equipped to ensure efficacious responses.

A central problem with Amsterdam Subsidiarity is thus that it embeds states even further, together with any injustice that exists between them, for instance unfair shares of resources. Amsterdam Subsidiarity perpetrates the original status of groups clustered by state borders, freezing patterns, rather than accommodating groups under common institutions as counselled by some deliberative democrats (cf. de Buys 1997, and Eriksen this volume). The embedded partitioning may limit mutual respect, and reduce the interest in political participation beyond sub-units, as witnessed in consociational arrangements (Lijphart 1979, cf. de Beus 1997). The problem from the point of view of deliberative democracy is not that some groups have counter-majoritarian power, but that the wrong groups may have it. Those likely to benefit unfairly from unjust advantages may enjoy disproportionate control over political decisions, and they may be insulated from the processes of public preference formation. Insofar as the present system of nation-states in Europe is taken for granted, Amsterdam Subsidiarity does nothing to alleviate such injustices.

f How secure support for polity-wide values and solidarity?
A second problem with the status of states in Amsterdam Subsidiarity has to do not with the lack of justification, but with problematic and unintended effects. It is unclear that stability and support for basic democratic values is likely across Europe, if local cultures and political culture flourish within Member States, but not between them.

This is indeed one reason why one may object to subsidiarity, consociational democracy and other quasi-federal arrangements which embed, rather than remove, entrenched divides among inhabitants. Borders between sub-units may limit mutual respect, and limited political participation beyond the sub-unit. Appeals to a historically shared European identity is unhelpful for these purposes. Indeed, several writers note that the essence of Europe in fact is diversity and complexity of localised societies (Kundera 1984; Enzenberger 1987), with competing attempts at redefining the concept of Europe (W�ver 1990). Thus the quest for shared values, identities and loyalties through deliberation may be arduous and yield few suggestions about the ends of Europe.

The significance of this worry depends on the extent that shared values and commitments are needed in a polity. If "thicker" sentiments are needed, as e.g. indicated by David Miller (1995), this may challenge subsidiarity. On the other hand, Habermas' "Constitutional Patriotism" may make modest demands on empathy and compassion. Empathy generated on the basis of shared history or deliberation plays a small role. On this point, we might agree with Habermas' recommendation, that

... our task is less to reassure ourselves of our common origins in the European Middle Ages than to develop a new political self-confidence commensurate with the role of Europe in the world of the twenty-first century.

Habermas 1992, 12

Of course, it also remains to be seen what sort of institutional arrangements can foster Europe-wide deliberation. Interaction in a shared public sphere might be necessary to foster and maintain mutual respect and solidarity. Considerations of subsidiarity might support local deliberation and action, either to foster the required shared sense of justice (Blichner and Sangolt 1994), or because Amsterdam Subsidiarity requires a comparison of the effects of member states acting on their own, with the effects of common action. The comparisons required by Amsterdam Subsidiarity may require domestic deliberation about common ends and proper means. We should also be aware that this practice of justification may become a model for domestic political decision-making.

Insofar as popular support for institutions is required, considerations of subsidiarity might also require local measures to ensure support for whatever common endeavours are needed. Thus, if a common political culture must be developed among all members of the polity, including a commitment to justice or the European common-weal (Habermas 1992, 9), this is no objection to subsidiarity in general. However, it may be a problem for Amsterdam Subsidiarity insofar as that conception of subsidiarity limits the interaction between citizens of different Member States.

One lesson to be drawn is that important dilemmas may occur where system capacity suggests centralisation, while deliberative preference formation requires local decision-making. In the European Union, cumulative impact of policies and responses to international market competition suggests central responses. At the same time, there is still reason to doubt whether individuals across the EU are able to achieve deliberative agreement in the relative absence of European public spheres. The Principle of Subsidiarity as expressed in the Amsterdam Treaty offers little hope for resolving these issues.

Deliberation and subsidiarity may both be crucial components of a legitimate European order securing the equal dignity of all Europeans. The tensions and risks suggest that there is a long way to go. Three main challenges have been identified. Amsterdam Subsidiarity must be applied transparently and accountably. Member States are institutionally entrenched in ways difficult to justify by any theory of subsidiarity. This is particularly problematic in the absence of procedures for institutional redesign and competence re-allocation. The task of generating and maintaining the requisite trans-European values and commitments is a daunting challenge, given the current flaws of a European public sphere. European institutions may one day embody the ideals of deliberative democracy and subsidiarity, and secure and express respect for all Europeans as equals. Careful and public deliberation is needed to get us there.

Footnotes

* To appear in Erik Oddvar Eriksen and John Erik Fossum, eds., Democracy and the European Union - Integration Through Deliberation, London: Routledge, 1999.

^[1] Included as an appendix, below.

^[2] A distinct additional role of political deliberation associated with "ideal pure procedural deliberation" should be noted.. Sunstein holds that answers to political problems "are understood to be correct through the only possible criterion, that is, agreement among equal citizens." (Sunstein 1993, 137). One reading of this claim is compatible with the arguments laid out above, that deliberation plays roles in preference formation, in discovering correct or good policy outcomes, and in enhancing majority mechanisms of preference aggregation. Such deliberation is the most reliable method for attaining correct answers. However, an additional claim may also be ascribed this position, regarded as "ideal pure procedural deliberation" (Estlund 1997, 1989). On this interpretation, the standard for moral truth is constituted as the result of actual deliberation under certain conditions. These issues go beyond the arguments of concern in this paper. There are particular challenges to this view concerning why majority rule should be included as a democratic feature, and how to identify intentional and unintentional political abuse. We do not pursue these issues here.

Appendix

PROTOCOL

ON THE APPLICATION OF THE PRINCIPLES OF

SUBSIDIARITY AND PROPORTIONALITY,

in Amsterdam Treaty 1997

THE HIGH CONTRACTING PARTIES,

DETERMINED to establish the conditions for the application of the principles of subsidiarity and proportionality enshrined in Article 3b of the Treaty establishing the European Community with a view to defining more precisely the criteria for applying them and to ensure their strict observance and consistent implementation by all institutions;

WISHING to ensure that decisions are taken as closely as possible to the citizens of the Union;

TAKING ACCOUNT of the Interinstitutional Agreement of 25 October 1993 between the European Parliament, the Council and the Commission on procedures for implementing the principle of subsidiarity;

HAVE CONFIRMED that the conclusions of the Birmingham European Council on 16 October 1992 and the overall approach to the application of the subsidiarity principle agreed by the European Council meeting in Edinburgh on 11-12 December 1992 will continue to guide the action of the Union's institutions as well as the development of the application of the principle of subsidiarity, and, for this purpose,

HAVE AGREED UPON the following provisions which shall be annexed to the Treaty establishing the European Community:

(1) In exercising the powers conferred on it, each institution shall ensure that the principle of subsidiarity is complied with. It shall also ensure compliance with the principle of proportionality, according to which any action by the Community shall not go beyond what is necessary to achieve the objectives of the Treaty.

(2) The application of the principles of subsidiarity and proportionality shall respect the general provisions and the objectives of the Treaty, particularly as regards the maintaining in full of the acquis communautaire and the institutional balance; it shall not affect the principles developed by the Court of Justice regarding the relationship between national and Community law, and it should take into account Article F(4) of the Treaty on European Union, according to which "the Union shall provide itself with the means necessary to attain its objectives and carry through its policies".

(3) The principle of subsidiarity does not call into question the powers conferred on the European Community by the Treaty, as interpreted by the Court of Justice. The criteria referred to in the second paragraph of Article 3b of the Treaty shall relate to areas for which the Community does not have exclusive competence. The principle of subsidiarity provides a guide as to how those powers are to be exercised at the Community level. Subsidiarity is a dynamic concept and should be applied in the light of the objectives set out in the Treaty. It allows Community action within the limits of its powers to be expanded where circumstances so require, and conversely, to be restricted or discontinued where it is no longer justified.

(4) For any proposed Community legislation, the reasons on which it is based shall be stated with a view to justifying its compliance with the principles of subsidiarity and proportionality; the reasons for concluding that a Community objective can be better achieved by the Community must be substantiated by qualitative or, wherever possible, quantitative indicators.

(5) For Community action to be justified, both aspects of the subsidiarity principle shall be met: the objectives of the proposed action cannot be sufficiently achieved by Member States' action in the framework of their national constitutional system and can therefore be better achieved by action on the part of the Community.

The following guidelines should be used in examining whether the abovementioned condition is fulfilled:

–the issue under consideration has transnational aspects which cannot be satisfactorily regulated by action by Member States;

–actions by Member States alone or lack of Community action would conflict with the requirements of the Treaty (such as the need to correct distortion of competition or avoid disguised restrictions on trade or strengthen economic and social cohesion) or would otherwise significantly damage Member States' interests;

–action at Community level would produce clear benefits by reason of its scale or effects compared with action at the level of the Member States.

(6) The form of Community action shall be as simple as possible, consistent with satisfactory achievement of the objective of the measure and the need for effective enforcement. The Community shall legislate only to the extent necessary. Other things being equal, directives should be preferred to regulations and framework directives to detailed measures. Directives as provided for in Article 189 of the Treaty, while binding upon each Member State to which they are addressed as to the result to be achieved, shall leave to the national authorities the choice of form and methods.

(7) Regarding the nature and the extent of Community action, Community measures should leave as much scope for national decision as possible, consistent with securing the aim of the measure and observing the requirements of the Treaty. While respecting Community law, care should be taken to respect well established national arrangements and the organisation and working of Member States' legal systems. Where appropriate and subject to the need for proper enforcement, Community measures should provide Member States with alternative ways to achieve the objectives of the measures.

(8) Where the application of the principle of subsidiarity leads to no action being taken by the Community, Member States are required in their action to comply with the general rules laid down in Article 5 of the Treaty, by taking all appropriate measures to ensure fulfilment of their obligations under the Treaty and by abstaining from any measure which could jeopardise the attainment of the objectives of the Treaty.

(9) Without prejudice to its right of initiative, the Commission should:

–except in cases of particular urgency or confidentiality, consult widely before proposing legislation and, wherever appropriate, publish consultation documents;

–justify the relevance of its proposals with regard to the principle of subsidiarity; whenever necessary, the explanatory memorandum accompanying a proposal will give details in this respect. The financing of Community action in whole or in part from the Community budget shall require an explanation;

–take duly into account the need for any burden, whether financial or administrative, falling upon the Community, national governments, local authorities, economic operators and citizens, to be minimised and proportionate to the objective to be achieved;

–submit an annual report to the European Council, the European Parliament and the Council on the application of Article 3b of the Treaty. This annual report shall also be sent to the Committee of the Regions and to the Economic and Social Committee.

(10) The European Council shall take account of the Commission report referred to in the fourth indent of point 9 within the report on the progress achieved by the Union which it is required to submit to the European Parliament in accordance with Article D of the Treaty on European Union.

(11) While fully observing the procedures applicable, the European Parliament and the Council shall, as an integral part of the overall examination of Commission proposals, consider their consistency with Article 3b of the Treaty. This concerns the original Commission proposal as well as amendments which the European Parliament and the Council envisage making to the proposal.

(12) In the course of the procedures referred to in Articles 189b and 189c of the Treaty, the European Parliament shall be informed of the Council's position on the application of Article 3b of the Treaty, by way of a statement of the reasons which led the Council to adopt its common position. The Council shall inform the European Parliament of the reasons on the basis of which all or part of a Commission proposal is deemed to be inconsistent with Article 3b of the Treaty.

(13) Compliance with the principle of subsidiarity shall be reviewed in accordance with the rules laid down by the Treaty.

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[Date of publication in the ARENA Working Paper series: 15.08.1999]