Having been in existence for over half a century it is a
universally acknowledged truth that EU law is confusing, and
how compromise is reached raises questions about transparency.
Given this complexity, IFLR's latest primer concentrates on the
process of developing a law in the world’s largest
"If you're trying to get a law passed quickly, it is
inevitably easier to do that on a national scale than via 28
states," said Sebastian Vos, global co-chair of Covington and
Burling’s public policy practice and former
European Commission worker.
EU law functions come down to just two
treaties: The Treaty of the European Union and
the Treaty on the Functioning of the European Union.
The Treaty on European Union (TEU) was signed by all member
states in 2007. It followed unsuccessful attempts to establish
a European Constitution, which collapsed following failed
referendums in the Netherlands and France. It is the foundation
of EU law, establishing it’s principle purposes of
governance (the Commission, parliament and council), as well as
rules on foreign policy.
The Treaty on the Functioning of the European Union (TFEU)
has origins in the Treaty of Rome, which was signed in 1957.
The TFEU also lies at the foundation of EU law, shaping the
scope of its legislative authority and the principles of law
where it is operational.
Who proposes EU law?
"It’s simple and straightforward,
we’re the only part of the world apart from North
Korea where the law is introduced by a committee, not
parliament," joked a source in the European Parliament.
In article 17 (1) of the TEU, it’s declared
that the Commission should "promote the general interest of the
Union" while Article 17(3) adds that Commissioners should be
"completely independent" and not "take instructions from any
In between lurks controversy. Article 17(2) states: "Union
legislative acts may only be adopted on the basis of a
Commission proposal, except where the Treaties provide
Commission has monopoly on which laws come before the EU
Council (representatives of member states) and the EU
parliament (elected parliamentarians representing each member
state). What remedies this is parliament’s ability
to elect the Commission president with an absolute majority,
usually meaning that the Commission does represent the
political alignments of the parliament that has been
Read more: Uncertainty continues for EU
"Parliament holds a lot of power in the law-making process,"
said Sirpa Pietikäinen, a Finnish MEP who sits with the
European People’s Party. "But, only if MEPs know
how to use it."
Parliament has has the ability to initiate new political
topics, such as the circular economy, and ensure that they are
put in the Commission's agenda.
"Another power is our capacity to safeguard how these
initiated political goals are achieved and respected in
different legislation," she continued, citing climate
objectives in the Common Agricultural Policy as an example of a
recent success for the parliament.
How does the legislative process work?
Once the Commission has put forward a proposal for a
legislative text, an MEP working in one of the parliamentary
committees will create a report. The parliamentary committee
subsequently votes on this, with the opportunity to amend. Once
consensus has been reached at committee stage, Parliament will
adopt a position.
This process is repeated one more time, depending on the
legislation and if agreement is reached with the Council. If
agreement is not reached between parliament and the Council
then the proposal proceeds to a conciliation committee, also
known as a formal trilogue meeting, which can be held
informally to speed up the legislative process.
What is a trilogue meeting, and why is it
This process involves representatives from the Commission,
the Council and the parliament. It takes its name from the
phrase 'the trilogue', or a conversation between three
"As co-legislators, Parliament is on equal footing with
Member States in trilogues and inter-institutional
negotiations," summarised Pietikäinen.
However, not all agree.
"While Parliament feels that its role is to bring European
citizens closer to the legislative process, the extent to which
the Council takes on board what Parliament proposes is more a
matter of good will than an issue of legal obligation,"
suggested Gibson Dunn partner, Peter Alexiadis.
"Legislation often has to get brought down to the lowest
common denominator in order to be agreed upon," he continued.
"That is a natural byproduct of the European legislative
process, which is geared towards achieving compromise
Herbert Smith Freehills consultant, Eric White, also said
that the trilogue process is peculiar. "It is a means to broker
agreement rather than part of the formalised system. What else
is slightly strange is the fact that it involves closed-door
discussions where if all goes well there is an agreed text.
However, it is not clear to the outside world how that agreed
text came into place," he added.
Read more: EU gives US a run for its money with
The secrecy has spurred backlash, and led to accusations of
a lack of democratic means. However, those in Brussels remain
willing to defend it.
"The current system of trilogues works," said parliamentary
policy advisor, Dimitrios Pssarrakis. "The European Parliament
is very strong and the Council cannot ignore or bypass the will
of the Parliament."
He continued that the Commission has one essential role: to
facilitate and provide solutions when the negotiations between
Parliament and Council are at an impasse.
"While it has its flaws, and one can raise issues such as
lack of transparency, we aren’t discussing a
national parliament here. The current practice under the
co-legislative procedure is probably the only way that it can
work," concluded White’s Herbert Smith colleague,
Lode Van Den Hende, who previously worked as a member state
representative for the EU.
Will the EU’s law making process be
impacted by Brexit?
In Brussels, there’s continued sadness about
Britain’s decision, with speculation about a
second referendum rife, and continued credence to
Britain’s policymakers in the city’s
European quarter. While the Commission has traditionally
struggled with a dearth of British staffers, the country has
been able to influence the EU in many areas.
"The UK influenced both the behavioural and technical
standards within the EU," said Vicky Pryce, a former government
economist and adviser at the Centre for Economics and Business
Research. "The real question is whether EU countries and the
Commission will still be able to perform the necessary
balancing act to broker the type of compromises that the mere
existence of the UK on the negotiating table was often
Financial service expertise will also be mourned. As the EU
moves to reform Mifid II, and find the compromise needed to
finally implement both a European Banking Union (EBU) and
Capital Markets Union (CMU), a lack of UK input will be noticed
by policy makers.
"If you're trying to get a
law passed quickly, it is inevitably easier to do that
on a national scale than via 28 states"
Read more: City cautiously optimistic about Brexit
In the next parliamentary term, market participants can
expect to find themselves under the jurisdiction of an
increasingly fractious assembly. Traditional troupes have
shelled support to newer groupings, namely populist far right
MEPs and left leaning ecological factions.
There’s also an increased contrast in the
council: countries in the Mediterranean and the North of Europe
have swung toward the left while countries in the East are
increasingly electing nationalist, conservative
While the term has only just began there is every chance
that it could deliver one of the most strained legislative
processes yet, especially given that necessary compromises
appear to be failing to surface.