For those who are interested in the rules of decision making and legislative advocacy in the European Union (“EU”), this year Santa arrived early to the hills of Luxembourg.  On December 18, Advocate General Jääaskinen rendered his Opinion on a legal challenge of the Council of the EU against the European Commission, where for the first time ever the Court of Justice (“CoJ”) is being asked to decide on the Commission’s powers to withdraw a legislative proposal and to stop a legislative procedure even if the democratically elected legislators –  the European Parliament and Council — have already reached a political compromise.

The Opinion of AG Jääaskinen and the decision of the CoJ that may follow will have a significant impact on policy makers and lobbyists in Brussels, especially in a context where the EU institutions are increasingly using informal trialogue consultations to speed up the legislative process.  The Opinion argues that the Commission may withdraw its legislative proposals subject to certain conditions; bases such power on the Commission’s constitutional duty to promote “the general interest of the Union;” and reminds us that trialogue negotiations are informal procedures that have no basis on the EU Treaties.  The Opinion also highlights the unique legal nature and balance of powers of the EU and the importance of the EU Treaties as a constitutional charter that creates a new legal order to which the institutions are subject. 

While the Opinion of an AG is not binding on the CoJ, past practice shows that the Court follows the opinions of the AG in around 80% of all cases.

The Ordinary Legislative Procedure and its Rules

Most major pieces of EU legislation are adopted through the so-called “ordinary legislative procedure” defined in Article 294 of the Treaty on the Functioning of the European Union (“TFEU”).  This procedure requires the Commission to present a legislative proposal to the European Parliament and Council, who have up to three rounds (so-called “readings”) to reach a political agreement and adopt the legislation.  In essence, during the first and second readings, the Parliament must adopt a resolution with its amendments to the legislative proposal, and thereafter, the Council must adopt its position accepting the Parliament’s text or adopting its own amendments.  If the Parliament and Council cannot reach a compromise during the first and second readings, they must go into a closed door Conciliation Committee to try to reach a deal, which must then be ratified by the plenary of the Parliament and the Council.

However, the rules of Article 294 of the TFEU on the ordinary legislative procedure are complemented by other important provisions of the EU Treaties.  First, Article 17 of the Treaty of the European Union (“TEU”) provides that “[t]he Commission shall promote the general interest of the Union” and that “Union legislative acts may only be adopted on the basis of a Commission proposal, except where the Treaties provide otherwise.”  Second, Article 293 of the TFEU provides that “[a]s long as the Council has not acted, the Commission may alter its proposal at any time during the procedures leading to the adoption of a Union act.”  Third, Article 13 of the TEU provides that “[e]ach institution shall act within the limits of powers conferred on it in the Treaties […] and shall practice mutual sincere cooperation.”

 The Actual Practice: Political Trialogues and the Case in Dispute

Because the legislative ordinary procedure can easily take up to three years, the EU institutions are increasingly trying to reach legislative deals by means of trialogues.  These consist of closed doors tripartite meetings with representatives of the Council, Parliament and Commission negotiating a legislative compromise during the first reading of the ordinary legislative procedure.  The text agreed during the trialogues will typically be ratified by the plenary of the Parliament and the Council.

In the case in dispute, the Commission presented a proposal for a Regulation on the General Provisions for Macro-Financial Assistance to Third Countries to the European Parliament and Council for their consideration and adoption.  To speed up the process, the three institutions participated in up to six trialogue meetings where they tried to reach a political compromise. 

One of the issues of disagreement among the three institutions was the way they should decide whether to grant assistance to particular countries (i.e., whether such decision should be taken by a legislative act requiring a full legislative ordinary legislative procedure or through more expedient non-legislative acts).  During the fifth trialogue meeting, the Parliament and Council declared their willingness to reach a compromise (i.e., legislative ordinary procedure to decide to give assistance to a particular country leaving the details to be adopted through non legislative acts), but the Commission warned that it did not agree with such compromise and that it “could” withdraw its legislative proposal. 

At the sixth trialogue meeting, the Parliament and Council confirmed their political compromise, and the Commission was asked not to withdraw its proposal in light of such agreement.  Two days later, however, the Commission withdrew its proposal before the Council formally ratified the text agreed with the Parliament.  As a result of this, the legislative procedure was formally stopped.

The Legal Question:  Can the European Commission Withdraw a Legislative Proposal Even if the Council and Parliament Have Already Reached a Political Compromise?

To the delight of EU procedure law practitioners, the Council, with the support of nine Member States, brought an action before the CoJ against the Commission’s decision to withdraw its proposal.  The Council does not question the right of the Commission to withdraw legislative proposals– in fact the Commission has been doing so for many years — but argues that such right is not a general prerogative and should only be used in very limited objective cases (e.g., where the proposal has become obsolete, the institutions cannot reach an agreement). 

Moreover, according to the Council, during the ordinary legislative procedure, the role of the Commission should be limited to that of an “honest broker” as otherwise it would invade the legislative powers of the Council and Parliament.  The Council points out that giving the Commission the power to withdraw its legislative proposals and the possibility of threatening to do so gives it a means to pressure the legislative work of the co-legislators.  Importantly, Germany also claims that the duty of sincere cooperation prevents the Commission from withdrawing a proposal once the Parliament and Council reach a compromise that anticipates the adoption of a legislative act.

In response, the Commission takes the view that its right of legislative initiative necessarily means that it also has the right to withdraw its proposal until the Council acts.

The Opinion of AG Jääaskinen

AG Jääaskinen recommends that the CoJ hold that the Commission may withdraw its legislative proposals subject to several conditions.  First, the Commission’s right of withdrawal must be limited in time so that it can only be exercised until the Council has “acted” in first reading by formally adopting a position that accepts the Parliament’s amendments or proposes its own amendments.  Thus, the Commission may withdraw its proposal as long as the Council does not formally ratify the agreement reached with the Parliament during the trialogue meetings.

Second, the Commission’s right to withdraw is subject to the Commission’s duty of sincere cooperation with the Council and Parliament.  This means that the Commission should not withdraw its proposals by surprise, but only after extensive communication with the co-legislators.

Third, the Commission is not required to formally motivate the withdrawal of its legislative proposal.  However, it must duly inform the co-legislators of its reasons during the trialogue negotiations, and such reasons must be closely related to the Commission’s exercise of its duties under Article 17 TEU, including its obligation to promote the general interest of the Union and to ensure the application of the Treaties.

To reach these recommendations for the CoJ, AG Jääaskinen follows a reasoning that reminds us of the very unique nature of the EU and that the legitimacy of its acts is not necessarily always based on a formal concept of democracy.

AG Jääaskinen starts by recalling the CoJ’s case law that emphasizes that the legitimacy of the EU is based on the fact that the EU Treaties are a constitutional charter giving rise to a legal order the subjects of which are the citizens of the Union.  This legitimacy means that the rules laid down by the Treaties are not at the disposal of the institutions.  Specifically, the powers of the Commission conferred by a particular provision of the Treaties must not be inferred from a general principle (of democracy or otherwise), but from an interpretation of the particular wording of the provision in question.

AG Jääaskinen then reminds us that the EU Treaties entrust the Commission with the power to identify the general interest of all the Member States as a whole and that this also leads to granting the Commission a quasi-monopoly of the legislative initiative in the EU.  This “Community method” leads to decision making procedures that differentiate the EU from any state or international organization.

Moreover, according to AG Jääaskinen, the Commission’s duty to promote the general interest of the EU also justifies its power to withdraw legislative acts.  Although the Commission is not a co-legislator, it is not simply an executive body.  Instead, the Commission is a fundamental actor in the legislative process as it has the power of initiative, the Council can only amend its proposals by unanimity, and it can amend its proposals as long as the Council has not acted.  Hence, the Commission’s power to withdraw its proposals is a manifestation of its monopoly of legislative initiative, which is an expression of its role of guardian of the interest of the EU.

Importantly, the AG also emphasizes that the Commission’s power to withdraw its legislative proposals is not undermined by the fact that the Council and Parliament may have already reached a political compromise.  According to the AG, nothing in Article 293 and 294 of the TFEU (which regulate the ordinary legislative procedure) supports the proposition that a formal or informal political understanding between the Parliament and Council may overrule the right of legislative initiative of the Commission during the first reading of the ordinary legislative procedure.  Moreover, while trialogues are an expression of inter-institutional cooperation, they are not recognized in the EU Treaties and do not constitute a legally binding phase of the legislative procedure.  Politics cannot prevail over the law that emanates from the EU Treaties.

What Does the Opinion of AG Jääaskinen Mean for Legislative Advocacy in Brussels?

The Opinion of AG Jääaskinen emphasizes the important role of the Commission — a non-democratically elected (at least not directly) institution — in the EU decision making process as the guardian of the EU’s general interest.

From a practical perspective, the Opinion is nothing more than a reminder of Rule Number One of legislative advocacy in Brussels: any effective legislative advocacy must start even before the European Commission begins drafting its legislative proposal.  In other words, in most cases the amendments that the Parliament and Council may adopt during the legislative process will only have a limited impact once the Commission presents its proposal. 

While the Commission will withdraw a proposal in very rare cases and only after considering the serious political consequences of such drastic action, it can always threaten to do so if the Parliament and Council intend to adopt an amendment that it fundamentally opposes.

The CoJ’s decision is expected within the next few months.