Introduction to the European Institutions

Contents

1. Commission

• Overview
• Organization
• Roles
  - Legislative initiative
  - Guardian of the treaties
  - Manager and negotiator
• Links with the other institutions

2. European Parliament

• Overview
• Composition
• Powers
  - Legislative power
  - Budgetary powers
  - Supervision of the executive
• Working procedures

3. The Council

• Overview
• Role
• Decision-making in the Council
• The Presidency
• The European Council

4. Other institutions

• Court of Justice
• Court of Auditors
• European Central Bank
• Economic and Social Committee
• Committee of the Regions
• European Investment Bank

1. The European Commission

Overview

The European Commission embodies and upholds the general interest of the Union.

The Commission was created as an independent body to represent the European interest common to all Member States of the Union. It is the driving force in the legislative process, proposing the legislation on which the European Parliament and the Council have to take a decision.

The Commission is responsible for implementing common policies (like the common agricultural policy), ad-ministering the budget and managing the Community programmes. For the day-to-day running of Community policies and programmes, the Commission relies heavily on national administrations.

In external affairs, the Commission represents the Community and conducts international negotiations (for example in the World Trade Organisation).

Finally the Commission monitors compliance with the Treaty and the decisions taken by the Community in-stitutions, for example in the field of competition.

The Commission is collectively accountable to the European Parliament.

Organization

It is the 20 members of the Commission, also called Commissioners who provide its political leadership and direction. Since its inception, the Commission has always consisted of two nationals of the most heavily-populated Member States and one national of each of the others. They bring a powerful mix of experience to their tasks, having been members of their national parliaments or of the European Parliament and, in many cases, after having held senior ministerial offices in their home countries. They are obliged to be completely independent of their national governments and act only in the interests of the European Union.

The Commission meets once a week to conduct its business, which may involve adopting proposals, finalizing policy papers and discussing the evolution of its priority policies. Its decisions are taken by simple majority.

The President of the Commission is appointed by common accord of the governments of the Member States, subject to approval by the European Parliament.

The Commission is divided into Directorates-General (DG's). Each one is headed by a director-general, re-porting to a Commissioner, who has political and operational responsibility for its work. With its staff of 16 000, the Commission is the largest of the Union's institutions.

Roles

The European Commission has three distinct functions:

• It can initiate legislative proposals
• It is the guardian of the Treaties
• It is the manager and executor of EU policies and of international trade relations.

Legislative initiative

The legislative process begins with Commission proposals as the Commission has a monopoly on the initiative in Community decision-making (except in two areas: common foreign and security policy and cooperation on justice and home affairs).

In devising its proposals, the Commission has three core objectives: to identify the¹ European interest¹, to consult as widely as necessary and to respect the principle of subsidiarity.

The European interest means that a legislative proposal reflects the Commission's judgment of what is best for the Union and its citizens as a whole, rather than for sectoral interests or individual countries.

Consultation is essential in the preparation of a proposal. The Commission listens to submissions from government, industry, trade unions, special interest groups and technical experts before completing its final draft.

Subsidiarity is enshrined in the Treaty on European Union and is applied by the Commission in such way as to ensure that the Union takes action only when it will be more effective than if left to individual Member States.

Once the Commission has formally sent a proposal for legislation to the Council and the Parliament, the Union's law-making process is dependent on effective cooperation between three institutions - the Council, the Commission and the European Parliament.

Guardian of the Treaties

A major responsibility of the Commission is to ensure that EU law is applied correctly by the Member States. If they breach their Treaty obligation, they will face Commission action. Proceedings are initiated mainly through the 'failure to act' procedure requiring the State concerned to submit its observations. If these do not satisfy the Commission, a reasoned opinion is delivered, requiring the matter to be sorted out by a specific date. After that, Commission action in this respect may also include legal proceedings before the Court of Justice. Under certain circumstances, the Commission can fine individuals, firms and organisations for infringing Treaty law, subject to their right to appeal to the Court of Justice.

Manager and negotiator

The Commission manages the Union's annual budget with responsibility for public expenditure and for ad-ministering the four major Community funds. Of these the European Agricultural Guidance and Guarantee Fund and the Structural Funds account for a considerable proportion of the budget and are designed to even out the economic disparities between the richer and the poorer areas.

The Commission has the following major executive responsibilities:

• It delegates powers to make rules covering the details of Council legislation
• It can introduce preventive measures for a limited period to protect the Community market from dumping by third countries
• It enforces the Treaty's competition rules and regulates mergers and acquisitions above a certain size
• The Commission negotiates international trade and cooperation agreements with third countries, or groups of countries, which are then put to the Council for conclusion. The Commission has important responsibilities for aid and development programmes in third countries.

Links with the other institutions

The Commission has special links with each of the other institutions. It works most intensively with the Council of Ministers and the European Parliament drafting EU legislation and attends Council and Parliament meetings. In addition, the President of the Commission participates alongside the Heads of State and/or Government of the Member States at the twice-yearly meetings of the European Council. The President also participates as a representative of the Union as a whole at the annual economic summits of the Group of Eight (G-8) leading industrialised nations.

The Commission is answerable to the European Parliament, which has the power to dismiss it by a vote of censure or no confidence. The Commission attends all sessions of the European Parliament and must explain and justify its policies if so requested by members of the house. It must reply to written or oral questions put by MEPs.

The Commission's functions regularly involve the European Court of Justice, which is the final arbiter of European law. The Commission refers cases to the Court where directives or regulations are not being re-spected by governments or companies. The Court can also be consulted by the Member States and enterprises when, for instance, they want to appeal against fines imposed by the Commission.

The Commission's management of the EU budget is scrutinized by the Court of Auditors which is responsible for examining the legality and regularity of revenue and expenditure and for ensuring the sound financial management of the EU budget. The common goal of both institutions is to eliminate fraud and wastage. On the basis of the Court of Auditors' reports, it is the European Parliament which gives the Commission final discharge for the execution of the annual budget.

Finally, the Commission works closely with the Union's two consultative bodies, the Economic and Social Committee and the Committee of the Regions, and consults them on most items of draft legislation.

2. The European Parliament

Overview

The European Parliament (EP) is the institution that represents the citizens of the Member States. In many areas, the Parliament acts as co-legislator with the Council.The Parliament and Council jointly constitute the budgetary authority. The Parliament also exercises democratic supervision over all Community activities.

The Parliament sees itself as the guardian of the European interests and the defender of the citizens' rights. Individually, or as a group, European citizens have the right to petition the Parliament and can seek redress of their grievances on matters that fall within the European Union's sphere of responsibility. The Parliament has also appointed an ombudsman to investigate allegations of maladministration brought by citizens.

The European Parliament attaches high priority to maintaining links with the national parliaments through regular meetings between speakers and chairpersons and between parliamentary committees.

Composition

The President represents Parliament on official occasions and in international relations, presides over its plenary sittings and chairs meetings of the Bureau and the Conference of Presidents.

The Bureau is the regulatory body that is responsible for Parliament's budget and for administrative, organisational and staff matters. In addition to the President and fourteen vice-presidents, it includes five quaestors who deal in a consultative capacity with administrative and financial matters relating to Members and their statute. The members of the Bureau are elected for a term of two-and-a-half years.

The Conference of Presidents is the political governing body of Parliament. It draws up the agenda for plenary sessions, fixes the timetable for the work of parliamentary bodies and establishes the terms of reference and size of parliamentary committees and delegations. It comprises the President of Parliament and the political group chairs.

Preparation of the work for Parliament's plenary sessions is conducted in its committees covering all areas of the Union's activities, ranging from agriculture to common foreign and security policy, from legal affairs and citizen's rights to overseas cooperation and development.

Parliament's work is organized by a secretariat, headed by a Secretary-General with a permanent staff of about 3500, in addition to which there are political group staff and Members' assistants. Parliament's 11 working languages mean that one third of the staff work in the language service (translation and interpretation). However, despite the constraints of multilingualism and three places of work, Parliament's operating budget is only 1 percent of the EU budget, or one and a half Euros a year for each person living in the Union.

The EP is currently made up of 626 representatives of the peoples of the Member States of the Community. Members of the European Parliament, who have been directly elected since 1979, sit in political groups, not in national delegations.

Powers

The most important mandates of the European Parliament are the following:

• Legislative power
• Budgetary powers
• Supervision of the executive

Legislative Power

Originally, the Treaty of Rome (1957) gave the EP a consultative role only, whereas the Commission was entitled to propose and the Council of Ministers to decide legislation. Subsequent Treaties have extended the EP's influence from a purely advisory role to full involvement in the Community's legislative process. The EP is now empowered to amend and even adopt legislation. Thus, in a large number of areas the power of decision is shared by the Council and the EP. Depending on the individual legal basis, the EP takes part, to varying degrees, in the drafting of Community legislation. The different legal bases and associated procedures defined in the Treaties are as follows.

The co-decision procedure shares decision-making power equally between the Parliament and the Council. It strengthens the role of the EP as co-legislator, applies to a wide range of issues, such as the free movement of workers, creation of the internal market, research and technological development, the environment, consumer protection, education, culture and health.

The consultation procedure requires an opinion from the EP before the Council can adopt a legislative proposal from the Commission. Neither the Commission nor the Council is obliged to accept the amendments listed in the opinion of the EP. Once the EP has given its opinion, the Council can adopt the proposal without amendments or adopt it in an amended form. However, the EP can refuse to give an opinion. The consultation procedure applies notably to agriculture (price review) and taxation.

The cooperation procedure allows the Parliament to improve proposed legislation by amendment. This requires an opinion and involves two readings by the EP, giving its members ample opportunity to review and amend the Commission's proposal and the Council's preliminary position. The Treaty of Amsterdam has simplified the various legislative procedures by significantly extending the codecision procedure, which is in practice almost replacing the cooperation procedure. As a consequence, the cooperation procedure applies to very few cases.

The assent procedure applies to those legislative areas in which the Council acts by unanimous decision, limited, since the Amsterdam Treaty, to the organization and objectives of the Structural and Cohesion Funds. The EP's assent is also required for important international agreements concluded between the Union and a non-member country or group of countries, such as the accession of new Member States and association agreements with third countries (absolute majority of the EP's total membership required). Since the Maastricht Treaty, the EP has had a limited right of legislative initiative in that it has the possibility of asking the Commission to put forward a proposal.

Budgetary powers

As one of the two arms of the budgetary authority, the EP is involved in the budgetary procedure from the preparation stage, notably in laying down the general guidelines and the type of spending.

Parliament has the final say on 'non-mandatory EC expenditure', i.e. expenditure not specifically provided for under Community rules: the institutions' administrative expenses (especially the 'operational expenditure' on the structural funds), research policy, energy policy, transport policy or environmental protection. This expenditure accounts for almost half the EC budget.

The other half of the EC budget consists of 'compulsory expenditure', i.e. expenditure which is mandatory under Community rules (which basically means expenditure on the common agricultural policy). Parliament may propose amendments relating to this expenditure.

Finally, the Parliament is also entitled to reject the entire budget, and is responsible for granting formal discharge for the Commission's budget management for the previous year.

Monitoring of expenditure is the continuous work of the Parliament's Committee on Budgetary Control.

Supervision of the executive

Parliament exercises democratic supervision over all Community activities. This power, which was originally applied to the activities of the Commission only, has been extended to the Council of Ministers, the European Council and the political cooperation bodies which are accountable to Parliament.

The EP exercises democratic supervision over the Commission. The Commission must answer parliamentary questions, defend its proposals before Parliament and present it with an annual report on the activities of the communities for debate. Parliament approves the nomination of Commissioners and it can, by a two-thirds majority of its members, pass a motion of censure and thereby compel the Commission to resign as a body.

Parliament's expanded budgetary and legislative powers have increased its influence over the Council. The codecision procedure in particular has helped to create a balance of legislative power between the Council and the EP.

The European Central Bank is accountable to the European Parliament. After committee hearings, the nominees for Presidency of the European Central Bank have to be approved by Parliament before they can be appointed by the Council.

Working procedures

The basic rules governing the workings of Parliament are set out in its Rules of Procedure.

The MEPs form political groups and given Parliament's status as a Community institution, these are Community-wide party-political groupings that cut across national lines.

Parliament also has 17 standing committees. The members of the Commission or their representatives must appear before the relevant committee for their area of responsibility in order to provide clarification about Commission decisions, documents for the Council and the position adopted by the Commission in the Council. The committees are also responsible for preparing Parliament's opinions on proposals from the Commission, Parliament's proposed amendments to any 'common position' drawn up by the Council, and Parliament's resolutions drawn up on its own initiative.

Parliament holds its week-long plenary sessions in Strasbourg once every month, except in August. Shorter emergency sessions (lasting one or two days) may be held in Brussels to deal with current major issues, enabling Parliament to set out its position on matters of importance (such as Community affairs, international affairs, violations of human rights, etc.). All plenary sessions are open to the public.

3. The Council

Overview

The Council is the EU institution in which the governments of the Member States are represented. Together with the European Parliament it acts as Community legislator and budgetary authority. It is the lead institution for decision-making on the common foreign and security policy and on police and judicial cooperation in criminal matters.

The Council consists of one representative of each Member State at ministerial level (e.g. the Ministers for Agriculture when the Council takes decisions on the common agricultural policy). Council members are politically accountable to their national parliaments.

The President of the Council is the Minister of the Member State currently holding the Presidency of the European Union. Each Member State holds the Presidency for a six-month term according to an agreed rota (Spain and Denmark in 2002).

Role

Under the Treaty establishing the European Community, the main responsibilities of the Council are the following:

• The Council is the Community's legislative body: for a wide range of Community issues, it exercises that legislative power in co-decision with the European Parliament
• The Council coordinates the general economic policies of the Member States
• The Council concludes, on behalf of the Community, international agreements between the latter and one or more States or international organisations
• The Council and the European Parliament constitute the budgetary authority that adopts the Community's budget.

Under the Treaty on the European Union, the Council:

• Takes the decisions necessary for defining and implementing the common foreign and security policy, on the basis of general guidelines established by the European Council
• Coordinates the activities of Member States and adopts measures in the field of police and judicial cooperation in criminal matters

Decision-making in the Council

The Treaties specify whether the Council is to take its decisions by unanimous agreement of all members, by qualified majority or by simple majority, in the case of procedural matters.

A unanimous decision, which follows from the agreement or abstention of all Member States, is required in several areas of importance to the development of the Union, such as the common foreign and security policy, police and judicial cooperation in criminal matters, asylum and immigration policy, economic and social cohesion policy and taxation. In other words, each Member State has a veto on European measures in these sectors.

In the case of qualified-majority voting, which has become the rule for decision-making on the most important EU policies (such as the completion of the internal market), each Member State has a number of votes, weighted to reflect the fact that the Member States are equal as members of the Union but different in terms of population.

In the framework of the Treaty establishing the European Community, Council acts may take the form of regulations, directives, decisions, recommendations or opinions. The Council may also adopt conclusions of a political nature or other types of acts such as declarations or resolutions.

The Presidency

The European Council is hosted by and takes place in the Member State holding the Presidency of the Council, and punctuates the political life and development of the European Union by meeting at least twice a year (generally in June and December). It is an important event: the presence in a European city of fifteen representatives with unimpeachable democratic credentials, accompanied by other Ministers and close collaborators, has for twenty-five years been an eagerly awaited political event. The Presidency, assisted by the Secretary-General (currently Javier Solana) of the Council, who acts as High Representative for the Common Foreign and Security Policy, also represents the Union for matters covered by that policy.

The decisions taken at the European Council meetings are a major impetus in defining the general political guidelines of the European Union. The Presidency Conclusions are made public at the closing of a European Council meeting.

The European Council

The European Council brings together the Heads of State or Government of the fifteen Member States of the European Union and the President of the European Commission. (It should not be confused with the Council of Europe (which is an international organization) or with the Council of the European Union!)

The principal role of the European Council is described as follows in Article 4 of the common provisions of the Treaty on European Union: "The European Council shall provide the Union with the necessary impetus for its development and shall define the general political guidelines thereof." The European Council is not legally an institution of the European Union. Nevertheless it plays a vital role in all European Union fields of activity whether it be by giving impetus to the Union or defining general political guidelines, or by coordinating, arbitrating or disentangling difficult questions.

4. Other Institutions

Court of Justice

This is the institution responsible for enforcing Community law. It has jurisdiction in disputes between Member States, between the Union and its Member States, between institutions and between private individuals and the Union. It can also answer questions about the interpretation of Community law raised by national courts in the course of a dispute being heard in such courts. This power to issue preliminary rulings is essential to ensure a uniform interpretation of Community law throughout the Union.

The court may be called upon to decide cases brought by the Member States, by the Community institutions and by individuals and companies. It ensures uniform interpretation of Community law throughout the Community by close cooperation with national courts and tribunals through the preliminary ruling procedure.

The Court of Justice worked alone until 01 September 2023 when the Council attached to it a Court of First Instance in order to improve the judicial protection of individual interests and to enable the Court of Justice to concentrate its activities on its fundamental task of ensuring uniform interpretation of Community law.

The Court of First Instance now has jurisdiction to deal with all actions brought by individuals and companies against decisions of the Community institutions and agencies. Its judgements may be subject to an appeal brought before the Court of Justice but only on a point of law.

Court of Auditors

The European Court of Auditors is the taxpayers' representative responsible for checking that the European Union spends its money according to its budgetary rules and regulations and for the purposes for which it is intended.

Some see the Court as the 'financial conscience' of the Union, others as a 'watchdog' over its money. In either case, it's a guarantor that certain moral, administrative and accounting principles will be respected. The Court's reports are a rich source of information on the management of the Union's finances, and a source of pressure on the institutions and others with administrative responsibility to manage them soundly.

The Court's function, performed with complete independence, is a vital contribution to transparency in the Union. Objective scrutiny reassures the taxpayer that the Union's money is being managed responsibly - a reassurance which is all the more necessary given the growth of expenditure in recent years over a widening range of policies.

The EU budget is approximately 90 thousand million euro.

European Central Bank

The European Central Bank is at the heart of the economic and monetary union. Its task is to maintain the stability of the European Currency, the Euro and control the amount of currency in circulation.

In order to carry out its task, the ECB's independence is guaranteed by numerous legal provisions. When exercising their powers or carrying out their tasks or duties, neither the ECB, nor a national central bank, may take instruction from Community institutions, governments of Members States or any other body.

The ECB consists of a Governing Council and an Executive Board. The Governing Council comprises the governors of the national central bank and the members of the Executive Board of the ECB. The Executive Board, which is made up of the President, Vice President and four other members, is effectively in charge of running the ECB. Its President and members are appointed from among persons of recognised standing and experience in monetary or banking matters by common accord of the governments of the Member States, on a recommendation from the Council after it has consulted the European Parliament.

The European System of Central Banks (ESCB) is composed of the ECB and of the central banks of the Member States. It has the task of defining and implementing the monetary policy of the Community, and has the exclusive right to authorise the issue of banknotes and coins within the Community. It also holds and manages the official foreign reserves of the Member States and promotes the smooth operation of payments systems.

Economic and Social Committee

The European ESC is made up of representatives of Europe's organised civil society, i.e. the EU's economic and social interest groups (including employers, employees, farmers carriers, businessmen, craftsmen, the professions and managers of small and medium-sized businesses). It also provides a forum for consumers, environmental groups and associations. Its members serve in a non- party-political capacity which gives them a great degree of independence as well as expertise rooted in their work in employers' organisations, trade unions and other groups.

The European ESC is thus a bridge between organised civil society and the EU institutions and a vital platform for consultation, bringing greater understanding of, and transparency to, EU policies - without any party-political slant. Consultative bodies have a key role to play; their work should be clearly visible as a necessary component of our democracies.

The ESC has three main tasks:

• A consultative role vis-à-vis the three large institutions (European Parliament; Council; Commission)
• Enabling the organizations of civil society to be more closely involved in and to make a greater contribution to the European enterprise; embodying and promoting a Europe which is close to its citizens
• Strengthening the role of civil society in non-Community countries (or groups of countries) by promoting dialogue with their representatives and creating similar structures in the CEEC, Turkey; the Euromed Countries; the ACP; Mercosur etc.

In pursuit of these tasks; the ESC can issue three types of opinion:

• Opinions on matters referred by the Commission, the Council and the European Parliament
• Own-initiative opinions, which enable the Committee to express its views whenever it deems it appropriate
• Exploratory opinions in cases where the Commission and the European Parliament have asked it to consider a matter and make specific suggestions which might ultimately lead to a proposal for EU rules.

The Committee can also instruct one of its sections to draw up an information report with a view to exploring a topic of general or current interest.

Committee of the Regions

The Committee of the Regions was created by the Maastricht Treaty in 1991. Europe's leaders were afraid that the EU was steaming ahead and leaving the public behind, and that is why they decided to set up a Committee to represent the local and regional authorities.

It is certainly no coincidence that the Committee of the Regions and the concept of subsidiarity were conceived at the same time, in the same place.

The Maastricht Treaty (1991) states that the Committee of the Regions must be consulted as a matter of course on all areas likely to have repercussions at local or regional level. To begin with, its responsibilities were limited to five areas: economic and social cohesion, trans-European infrastructure networks, health, education and culture. The Commission and the Council were obliged to consult the Committee before taking measures in those areas.

The Treaty of Amsterdam (1999) gave the Committee of the Regions another five areas for compulsory consultation (employment policy, social policy, the environment, vocational training and transport), and gave the European Parliament the right to consult the Committee, in addition to the Commission and the Council. The Committee of the Regions also has the right to issue own-initiative opinions.

European Investment Bank

The European Investment Bank (EIB), the financing institution of the European Union, was created by the Treaty of Rome. The members of the EIB are the Member States of the European Union, who have all subscribed to the Bank's capital.

The EIB enjoys its own legal personality and financial autonomy within the Community system. The EIB's mission is to further the objectives of the European Union by providing long-term finance for specific capital projects in keeping with strict banking practice.

It thereby contributes towards building a closer-knit Europe, particularly in terms of economic integration and greater economic and social cohesion.

As an institution of the Union, the EIB continuously adapts its activity to developments in Community policies.

As a Bank, it works in close collaboration with the banking community both when borrowing on the capital markets and when financing capital projects.

The EIB grants loans mainly from the proceeds of its borrowings, which, together with "own funds" (paid-in capital and reserves), constitute its "own resources".

Outside the European Union, EIB financing operations are conducted principally from the Bank's own resources but also, under mandate, from Union or Member States' budgetary resources.