EU Member States have transferred part of their sovereignty to EU institutions, with many decisions made at the EU level. The legal foundation of the EU is built on a complex system of treaties among its members, which have been adapted over the years to meet the needs of a changing world and an evolving and expanding EU.
The EU operates according to the principle of subsidiarity, which means that the European Union does not take action (except in the areas which fall within its exclusive jurisdiction) unless it is more effective than action taken at the national, regional, or local level.
Exclusive EU jurisdiction: Only the EU may legislate and adopt legally binding acts in fields including the customs union, the common commercial policy, competition rules, and monetary policy for euro countries.
Shared EU-Member State jurisdiction: Jurisdiction is shared between the EU and the Member States in specified areas including internal market rules; aspects of social policy; economic, social, and territorial cohesion; agriculture and aspects of fisheries; the environment; consumer protection; transport; trans-European networks; energy; freedom, security, and justice; aspects of public health; aspects of research and technological development and space; and aspects of development cooperation and humanitarian aid.
Member State jurisdiction with support from the EU: Although Member States retain jurisdiction in areas related to the protection and improvement of human health; industry; culture; tourism; education, vocational training, youth and sport; civil protection; and administrative cooperation, EU actions can support, coordinate, or supplement Member State activities.
The EU also coordinates economic employment policy and a common foreign and security policy, but these areas are managed separately from the framework above.
The European Council, made up of the heads of state or government of the EU Member States, the president of the European Commission, and the president of the European Council, sets overall EU policy and is the highest political authority in the EU.
The EU’s law-making process involves three main institutions:
|European Commission: The executive branch of the EU, the European Commission proposes legislation, manages the Union’s day-to-day business and budget, enforces the rules, and negotiates international trade agreements on behalf of the EU.|
|Council of the European Union: Made up of ministers from the 28 Member State governments, the Council adopts laws in conjunction with the European Parliament, coordinates the Member States’ broad economic policies, concludes international agreements between the EU and other countries or international organizations, and approves the EU budget (jointly with the European Parliament).
|European Parliament: The voice of European citizens, Members of the European Parliament are directly elected for five-year terms. The Parliament, jointly with the Council of the EU, passes laws and adopts the EU’s annual budget. The Parliament also approves the membership of the European Commission and its leadership.|
Other major EU institutions include the Court of Justice of the EU, the highest EU judicial authority; the European Central Bank, which is responsible for monetary policy in the 17-nation euro area; and the European Court of Auditors.
The European External Action Service is the EU’s official diplomatic service.