The European Union (EU) has, over the last 50 years, developed, from its beginnings as the European Coal and Steel Community, into a complex sovereignty association [1] .

This unique political and economic European project has continuously advanced by experiencing, throughout the time, a 'constitutionalization' or 'federalization' process. Not only European laws [2]

prevail upon the member states' legislations [3] , but, under the judicial doctrine of direct effect, they may also be invoked before national court by individuals [4] . Thus, by stepping in the path of American constitutionalism, the European Court of Justice (ECJ) has also introduced the principles of pre-emption and implied powers [5] to determine the scope of the EU's powers vis-à-vis those of the member states. Although some initial resistance, national Constitutional Courts have fully endorsed this jurisprudence by accepting the transfer of sovereign powers made by their governments to the Union [6] .

A treaty establishing an international organization has therefore developed into a de facto constitution laying down since its inception the premise for a federal system. In particular when it comes to the issue of separation of powers between the central entity and its subcomponents, both the European legislative framework and the ECJ's jurisprudence evoke well known American doctrines.

The 'constitutionalization' of the European integration is about to move a step further [7]. The 'Draft Constitutional Treaty' [8] that was prepared during 2002 by the Convention on the Future of Europe [9] is likely to be ratified by all member states (25 after 1 May 2004) by the end of this year. This text will provide Europe with a unifying text aimed at reshaping the institutional design of the 'European governance' [10] and, notably, at revisiting the relationship between the Union and the member states.

Against this backdrop, the paper aims at analyzing the development of the separation of powers between the Union and its individual members by focusing in particular on the text of the Draft Constitutional Treaty. In doing do, the paper attempts to draw a comparison between the evolving European supranational project and the American federalist model. I will argue that, although in the course of the evolutionary process the relationship between the Union and the Member States has widened and deepened, its fundamentals have not changed. The separation of powers is functional and by objective (internal market, competition, etc.), rather than being based on policy areas as in the US.

When tackling the sensitive issue of separation of powers in a Euro-American perspective, one has to bear in mind from the outset that, unlike the US, where the Constitution created a nation, the European integration process lies on preexistent states.

Moreover, it must be stressed that the European integration is process, more than a situation. Therefore comparisons with the US federal system should not be concerned with the state of law, but with the nature of legal development.

After sketching out the institutional separation of powers between the central unity and its components in both legal systems, I will make some references to the case-law developed by the European Court of Justice on this topic.

Before embarking in this transatlantic exercise, one must show the different contexts where the two courts operate. The US Supreme Court is at the top of a system of federal courts, whereas the ECJ is the only Community court and it is not hierarchically related to any national court. While the former is thus a general appeal court, the latter is a court responsible for the application and interpretation of EC law and it may intervene only through well-defined particular remedies.

European supranationalism v. American federalism

One hundred and seventy years after the American Founding Fathers stated "We the People of the United States, in order to form a perfect Union, .do ordain and establish this Constitution for the United States of America", the governments of six European countries [11] ordained and established the European Community Treaty "determined to lay the foundations of an ever closer union among the peoples of Europe".
Inevitably, both the European and American legal orders lie on a unique relationship between the whole and its part (the Community and its Member States; the Union and the States) that gives shape to every exercise of public authority.

Thus both legal orders had to face a similar fascinating challenge: to strike a balance between the central government and its components.

Similarly to the US Supreme Court, the European Court of Justice was called upon to sketch out the principles governing the separation of powers between the Community and the Member States. Following the path traced by the Supreme Court, the ECJ tried to delineate and reinforcing the powers of the central government while attempting to safe guard those of the States. To some extent, in Europe, as in the US, the judiciary acted as a 'federalizing agency'.
Along these lines, the ECJ has stated that "the Community Treaties established a new legal order for the benefit of which the States have limited their sovereign rights, in ever wider fields, and the subjects of which comprise not only Member States but also their nationals" [12].

The institutional framework: Enumerated powers, Necessary and Proper clause, Residual Powers

The Community, similarly to the US Federal government, has the powers that it received in the Treaty, while the Member States hold all residual powers [13]. The legal principle at the basis of the Treaty is therefore a principle of limited competence:

"The Community shall act within the limits of the powers conferred upon by this Treaty and of the objectives assigned to it therein" [14].

However, evoking the Necessary and Proper Clause of the US Constitution [15], Article 308 states:

"If action by the Community should prove necessary to attain, in the course of the operation of the common market, one of the objectives of the Community, and this Treaty has not provided the necessary powers, the Council shall, acting unanimously on a proposal from the Commission and after consulting the European Parliament, take the appropriate measures" [16].
With the exception of this subsidiary power [17], the Community did not receive a general empowerment for action by the institutions with a view to performing the tasks which are entrusted to the Community by Article 2. The relevant competence are and were conferred by the particular provisions, know as "legal bases", that allows action in pursuance of a designated purpose by a designated institution.  Among other things, the legal basis indicates the procedure to be followed and it may also prescribe the type of legislative instruments to be used (e.g., regulations, directives ..).

Thus, while the Community is exclusively competent to act in trade policy and customs union issues having an intra-community effect, it also enjoys functional powers, such as the competence "to issue directives for the approximation of provisions laid down by laws, regulations and administrative actions in Member States as directly affect the establishment or functioning of the internal market" [18].

From a prima facie reading of these provisions, the European supranational scheme would seem quite closed to the American 'federalist' model. More precisely, in assuming exclusive competence in some areas, while leaving others to the Member States or to be shared between the central entity and its subcomponents, the Treaty would seem to have endorsed the US Constitution model provided by Article I section 8 and by the 10^th Amendment. However, notwithstanding the clear analogy between the US and EU institutional separation of powers, once must notice that there is a significant quantitative difference that has an impact on the quality of the transferred powers.

The competences of the Union are very rarely exclusive, in the sense of disabling Member States from acting lawfully in the policy area in question. This is due to the functional definition of powers relating to a particular political objective, such as the internal market, that does not allow a clear division of powers by major policy sectors. The Commission has for instance the greatest rights of intervention from the internal market law it administers, which may be made to apply to many situations as long as they can be construed as affecting the internal market. The basic freedoms of the internal market (free movement of goods, services, capitals and workers) [19] and the competition requirement give the EU broad rights of intervention against national legislation in areas of educational policy, social policy and structural policy.

A case study: the human rights area

The area of human rights protection exemplifies the separation of powers between the Community and the Member States.

In the United States, State authorities are subject to the respect of the 14^th Amendment even when operating in their areas of competence. In other words, the federal constitutional guarantees apply to state action regardless of whether a state acts within its own competence or not.

Lacking the Community of a Bill of Rights, the Court has subject EC measures to the respect for the fundamental rights recognized in the common constitutional traditions of its Member States. That implies that all those national measures that are not adopted within the framework of the Community are not bound by this obligation. This situation raises concerns to the extent the level of protection of fundamental rights accorded in one Member State may differ from that of another Member.

It follows that the 'federalist' ideal that is animating Europe suffers from loopholes in certain specific areas.

As a reaction to this situation, the Community has prepared a Charter of Fundamental Rights that was signed by the 15 EU members as a "political declaration" [20]. This means that it may be taken into account by individual national law courts and the European Court of Justice, but it is not legally binding. The charter has recently being incorporated into the draft EU constitution (Part II).

The future: the separation of powers under the 'Draft Constitutional Treaty'

One of the most interesting aspects of the future Constitution of Europe is represented by its provisions delimiting the powers between the European Union and its member states.

For the first time the Union would dispose a clear set of provisions distinguishing formally between defined categories of Union competence.

Article 9 (Fundamental principle) states that 

"The limits of the Union competences are governed by the principle of conferral", while "the use of Union competences is governed by the principles of subsidiarity [21] and proportionality [22] ".

Similarly to what expressed by the principle of enumerated power, "Under the principle of conferral, the Union shall act within the limits of the competences conferred upon it by the Member States in the Constitution to attain the objectives set out in the Constitution". As for those competences not conferred upon the Union, these "remain with the Member States".

This principle remains therefore pivotal to the relationship between the Union and the Member States. It means that the Union is not a self-authenticating order; it does not enjoy Kompetez-Kompetenz. Unlike the Member States, which exist independently of the Constitution and their powers are derived from their sovereignties, the Union is the creation of the Treaty establishing the Constitution.

Article 11 establishes then different categories of competence:

-         exclusive competence in a specific area (only the Union may legislate);

-         shared competence (both the Union and the member states may act, but the latter only when the former has not act);

As for the exclusive competence, Article 12 lists for the first time all those areas where only the Union may legislate, such as monetary policy, common commercial policy, customs unions, competition law (antitrust) and the conservation of marine biological resources under the common fisheries policy. The Union enjoys exclusive competence also for the conclusion of an international agreement when its conclusion is provided for in a legislative act of the Union or necessary to enable it to exercise its internal competence.

These represent the generally recognized categories of a priori exclusivity.

Shared competences applies in areas such as: internal market, area of freedom, security and justice, agriculture and fisheries, transports, energy, social policy, economic social and territorial cohesion, environment, consumer protection, common safety concerns in public health matters. This is an indicative list though.

The 'European Necessary and proper clause', originally contained in Article 308, has been transposed into Article 17 and denominated 'Flexibility clause'.

As it may be noticed, the technique of specific and detailed attribution of competences has been maintained by making the Constitution a text of more than 300 pages!

Conclusion

Although the 'Constitutional treaty' sheds some light on the separation of powers between the Union and the member states by distinguishing formally between defined categories of Union's competences, the original sin of the European Community treaty is not yet overcome. The technique of specific and detailed attribution remains. It therefore follows that the system of check and balances of the constitutional order resulting from the original Treaty still maintains the unique character of the Union as a polity having sovereign States as its political entities. As long as the Member States exercise `sub-competences' jointly, they remain the central units of the system to which sovereignty is attributed. If, however, `core sovereignties' are transferred to the `Federation', then it becomes the bearer of the central sovereign rights. In order to achieve this, a confederation with original sovereignty would have to be founded. Only then would an entity that could form a `federal state' be constituted; for `federation' is, after all, without doubt just a euphemistic expression for what is really meant, namely, the European federal state. To constitute an autonomous bearer of sovereignty, the population of the EU would have to be constituted into a European people as the possessor of the sovereignty. This would indeed be the step that would allow the EU's existing order to go beyond. The unclear competency rules are repeatedly pointed to. Although prima facie more understandable than the previous Treaty, the present arrangement is indeed neither systematic nor unambiguously demarcated.

A division of powers by policy areas should remain the final goal. Core sovereignty and only what it is absolutely necessary to regulate at European level should be transferred to the Federation, and all other powers should be decided at national level. But this means a division of sovereignty which goes beyond the question of the division of powers.

It also remains to be see to what extent the proclaimed principle of subsidiarity will turn to be an effective means towards the division of powers. The level at which a political measure is to be located has always been a controversial, debatable matter of expediency among subsidiarity criteria, and may very well present itself differently for the various Member States.

The process is complicated by the recent admission of 10 new states [23], principally from Eastern Europe, which emerged from under Soviet control after the disintegration of the Soviet empire in the 19 90s.

Finally, as in 1784 James Madison asked his friend Thomas Jefferson, then the American Minister in Paris, to send him all treatises available in Europe on past confederacies [24], today the European Constitution Framers would have proved wiser if they had looked at the American federalist model in search of inspiration .

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* LL.M. Harvard Law School, 2004; LL.M. College of Europe, 2001; Ph.D. Candidate, Bocconi University, Milan. The author wishes to thank Professor Martha Field for her thoughtful comments and for her inspiring constitutional law lectures. The usual disclaimer applies.

[1] The words "European Economic Community" (EEC), "European Community" (EC) and European Union (EU) do not mean the same thing. The EEC was established in 1957 by the Treaty of Rome, but was then radically reformed by the Treaty of Maastricht in 1992, thus becoming the EC. The Treaty of Maastricht also gave rise to a more ambitious supranational project: the EU, based on three "pillars": the first pillar being the EC, the second and third respectively the EU Foreign and Security policy and the EU Home and Internal Affairs. Under the 'draft Constitutional Treaty', currently discussed by the Intergovernmental Conference (IGC), the EU's pillar-based system is voted to disappear as a result of the merger of the Treaties in a unique text: the Constitutional Treaty of the EU. The only remaining entity would be the European Union. Throughout the paper I will mainly refer to the Treaty establishing the European Community (hereinafter: the ECT) available at http://europa.eu.int/abc/obj/treaties/en/entoc05.htm
[2]

These are the laws (regulations, directives and decisions) enacted by the European institutions in accordance with specific decision-making procedures established by the European Treaties.

[3]

This is generally defined as the 'Supremacy' of EC law and it was established by the European Court of Justice in 1964, in the landmarking case 64/62, Costa v. Enel. In 1962, Italy nationalized the production and distribution of electricity and transferred the assets of the electricity undertakings to the National Electricity Board (ENEL). As a shareholder of Edison Volt, one of the companies that was nationalized, Mr Costa considered that he had been deprived of his dividend and consequently refused to pay an electricity bill for ITL 1 926. In proceedings before the arbitration court in Milan, one of the arguments put forward by Mr Costa to justify his conduct was that the nationalization infringed a number of provisions of the EC Treaty. In order to be able to assess Mr Costa's submissions in his defense, the court requested the European Court of Justice to interpret various aspects of the EC Treaty. In its judgment, the Court stated the following in relation to the legal nature of the EC:  "By contrast with ordinary international treaties, the EEC Treaty has created its own legal system which ... became an integral part of the legal systems of the Member States and which their courts are bound to apply. By creating a Community of unlimited duration, having its own institutions, its own personality, its own legal capacity and capacity of representation on the international plane and, more particularly, real powers stemming from a limitation of sovereignty or a transfer of powers from the States to the Community, the Member States have limited their sovereign rights ... and have thus created a body of law which binds both their nationals and themselves [.] It follows from all these observations that the law stemming from the Treaty, an independent source of law, could not, because of its special and original nature, be overridden by domestic legal provisions, however framed, without being deprived of its character as Community law and without the legal basis of the Community itself being called into question. The transfer by the States from their domestic legal system to the Community legal system of the rights and obligations arising under the Treaty carries with it a permanent limitation of their sovereign rights, against which a subsequent unilateral act incompatible with the concept of the Community cannot prevail".

[4]

This is the 'Doctrine of Direct Effect' pronounced by the ECJ in 1963, in the case Van Gen en Loos. In this legal dispute, the Dutch transport company Van Gend & Loos filed an action against the Netherlands customs authorities for imposing an import duty on a chemical product from Germany which was higher than duties on earlier imports. The company considered this an infringement of Article 12 of the EEC Treaty (now Article 25 of the EC Treaty), which prohibits the introduction of new import duties or any increase in existing customs duties between the Member States. The court in the Netherlands then suspended the proceedings and referred the matter to the European Court of Justice for clarification as regards the scope and legal implications of the abovementioned Article of the Treaty establishing the EC. In its judgment, the Court stated that: "The objective of the EEC Treaty, which is to establish a common market, the functioning of which is of direct concern to interested parties in the Community, implies that this Treaty is more than an agreement which merely creates mutual obligations between the contracting States. This view is confirmed by the preamble to the Treaty, which refers not only to governments but to peoples. It is also confirmed more specifically by the establishment of institutions endowed with sovereign rights, the exercise of which affects Member States and also their citizens. The conclusion to be draw from this is that the Community constitutes a new legal order of international law for the benefit of which the States have limited their sovereign rights, albeit within limited fields, and the subjects of which comprise not only Member States but also their nationals".

[5]

According to this principle there are further powers to take such measures as are indispensable for the effective and meaningful implementation of powers that have already been expressly conferred. These powers have acquired a special significance in the conduct of external relations. They enable the Community to assume obligations towards non-member countries or other international organizations in fields covered by the list of tasks entrusted to the Community. An outstanding example is provided by the 'Kramer' case decided by the Court of Justice. This case concerned the Community's capacity to cooperate with international organizations in fixing fishing quotas and, where considered appropriate, to assume obligations on the matter under international law. Since there was no specific provision laid down in the EC Treaty, the Court inferred the necessary external competence of the Community from its internal competence for fisheries policy under the common agricultural policy.

[6]

The German and Italian Constitutional Courts have shown strong resistance against the EU attempt to subject their national constitution to the respect of the European Treaties. See, e.g., the German case 'Maastricht-Urteil", 12 October 1993, BverfGE 89, 155.

[7]

There were `constitutional debates' at earlier points in time, too. Thus, in 1984, the European Parliament presented the `Draft Treaty establishing the European Union'. The 1992 Maastricht Treaty has since set up the European Union, absorbing the original European Communities without a new constitution having been required. Numerous procedural changes have so far assured its functionality, even with an expanded number of Members, new areas of competence and greater involvement of the European Parliament.

[8]

Available at http://european-convention.eu.int/DraftTreaty.asp?lang=EN

[9]

The EU has convened a Constitutional Convention in Brussels. The convention's function was to propose the next step in European integration, subject to approval by all the member states. The 'draft constitutional Treaty' was prepared last December the Brussels Constitutional Convention, a body of 150 members from the parliaments of the 15 member states, representatives of their governments, of European Union institutions, of nonvoting representatives of the 13 countries that have applied to join the EU, and of private groups in civil society.

[10]

Three main institutions govern Europe: the Parliament shares the lawmaking function with the Council of Ministers, which comprises an appointed member of the government of each Member State, and also with the Commission, which has the monopoly of legislative initiative.

[11]

The six founding members of the European Communities are France, Germany, Italy, Belgium, Luxembourg and the Netherlands.

[12]

Opinion 1/91 [1991] E.C.R. i-6079, at para 21.

[13]

This principle follows from Article 5 of the Treaty establishing the European Community.

[14]

Article 10 of the ECT, supra note 1.

[15]

Article I section 8 clause 18 of US Constitution.

[16]

Article 308 of the ECT, supra note 1.

[17]

The Community may have recourse to a non-specific power (necessary and proper clause) only when a specific power is lacking as a basis for its action, but, similarly to what happen in the US, it must exercise it in conjunction with another EC power.

[18]

Article 100 of the ECT, supra note 1. This power has recently been constrained by the ECJ, who stated that " .the measures referred to in that provision are intended to improve the conditions for the establishment and the functioning of the internal market", but "this article does not give the community exclusive competence on the internal market, but only  a certain competence for the purpose of improving the conditions for its establishment and functioning ..". See Case 391/01, British American Tobacco [2002] E.C.R. I-11453.

[19]

To achieve the objective of the creation of the internal market, defined by Art. 14 ECT as an "area without internal frontiers in which the free movement of goods, persons, services and capital is ensured", two sets of rules are provided within the Treaty: "negative integration" and "positive integration" provisions. While the former consist in a set of prohibitions aimed at eliminating a number of impediments to the proper operation of an integrated area, such as the internal market, the latter consists in measures allowing for the creation of new policies. The distinction between negative and positive integration was originally formulated by Jan Tinbergen, International Economic Integration 76 (2d ed. 1965).

[20]

Available at http://www.europarl.eu.int/charter/pdf/text_en.pdf

[21]

The subsidiarity principle, taken over from Roman Catholic social doctrine, has acquired virtually constitutional status after being embodied in the EC Treaty (Article 5). There are two facets to it: the affirmative statement that the EC must act where the objectives to be pursued can be better attained at Community level, which enhances its powers; and the negative statement that it must not act where objectives can be satisfactorily attained by the Member States acting individually, which constrains them. What this means in practice is that all Community institutions, but especially the Commission, must always demonstrate that there is a real need for Community rules and common action. To paraphrase Montesquieu, when it is not necessary for the Community to take action, it is necessary that it should take none. The application of the subsidiarity principle was further clarified in a Protocol annexed to the Treaty of Amsterdam.

[22]
If the need for Community rules is demonstrated, the next question that arises concerns the intensity and the form that they should take. The answer flows from the principle of proportionality that has entered Community law through the decisions of the Court of Justice. It means that the need for the specific legal instrument must be thoroughly assessed to see whether there is a less constraining means of achieving the same result.
[23]
Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, Slovenia.
[24]
The Federalist n. 20 (J. Cooke ed., 1961) (J. Madison) 126.