July 13, 2017
By Joan Solanes Mullor
The two dimensions of the agencification process in Europe
The Agencification process in Europe presents two dimensions: the EU and national levels. Over the last two decades, the EU has relied on agencies to exercise its own competences. EU agencies have increased in number and are now part of the EU administrative landscape. At the same time, the EU has bolstered agencies as a form of government and administration at national level. The EU has introduced agencies in several sectors as a form of organization for national regulators. Some examples are the energy, the telecommunications, and the railway services markets. If the Commission’s directive proposal succeeds, the independence of national competition authorities will be reinforced as well.
The institutional balance matters at EU level
At the EU level, the institutional balance between all the EU institutions has been determinant for the development of the agencification process. From the legal perspective, this principle has been built and applied to EU agencies by the CJEU over the years (Meroni–Romano–Short Shelling) and has implied a limitation on the powers of EU agencies. Most of the agencies are only consultative in nature; and only a few have adjudicative powers, being at most, quasi-legislative powers.
The weaknesses of EU agencies can be also explained in the interinstitutional struggle between all EU institutions involved: the Commission acts as a leader implementing EU agencies to gain institutional strength; the Council protects the interests of Member States in the day-to-day operation of EU agencies, interested, especially, in the composition of the Boards; and the Parliament has raised deep concerns about agencies and democracy –and the perils of technocratic government- and, like the Council, has shown is preoccupation for its control. Hence, the institutional balance at the EU level has been taken into consideration in the design, functions and control of EU agencies.
The EU should care about national institutional balance
On the contrary, when the EU introduced agencies at the national level was not concerned about the impact of this form of organization on Member States’ constitutional frameworks. Agencies are more or less familiar to national constitutions depending on the legal and political culture of each Member State. The accommodation of agencies is more difficult in countries with a long hierarchical administrative tradition in which the executive is predominant.
In addition, the balance of powers between national institutions can be altered because of the introduction of new actors such as agencies. The relationship between national executives and parliaments changes and the role of the judiciary must be recalibrated to face the decisions of agencies. The alteration of the balance of powers is not only a question of a new distribution of competences between all the actors involved, but it also raises accountability issues. Some national parliaments may not be prepared to scrutinize agencies, executives may be unable to coordinate them and to ensure horizontal policy coherence, and the judicial power may be at a loss before the technocratic decisions of agencies and hesitant about the level of scrutiny/deference to be applied.
This is not a mere internal question for Member States, which the EU can ignore. The effectiveness and the aims pursued by EU law are at stake. The EU bolsters truly functional, independent and accountable national regulatory agencies. A national constitutional framework unable to hold accountable an agency –because neither the legislative, executive nor the judiciary are well-equipped to deal with it – jeopardizes the ultimate purpose of EU law. Despite its efforts, it seems quite difficult that the CJEU can ensure, on a case-by-case basis, the independence of national regulatory agencies. See the rulings on national data protection authorities’ cases in Germany (C-518/07) and Austria (C-614/10), and the merging of national regulators in Hungary (C-288/12) and Spain (C-424/15).
Finally, if the institutional balance at the national level is not taken seriously, it can have a boomerang effect against the EU. The debate about the independence of the European Central Bank and its lack of democratic legitimacy between the German Federal Constitutional Court – the preliminary reference to the CJEU and its final judgment in 2 BvR 2728/13– and the CJEU –in Gauwelier– in the OMT case reflects some national concerns about the agencification process in the EU. The classical national debate about the democratic accountability of agencies –and the ways to overcome it, such as shifting from an electoral democratic accountability to a more procedural or substantive accountability- must be confronted at the EU level and, especially, when the EU imposes the creation of agencies in Member States. The concerns of the German Federal Constitutional Court could be the tip of the iceberg of a more widespread discomfort with agencies.
Linking the two dimensions
The EU shows inconsistency when, at the EU level, relies on the institutional balance principle and recognizes that EU agencies affect the relationship between EU institutions, and, on the contrary, does not consider that these same concerns can be problematic at national level. The institutional balance between the EU institutions led to weak EU agencies, while at national level the EU has pushed for stronger agencies.
The EU can incorporate national concerns into the EU debate through two mechanisms. First, prior 2009, the EU referred to the institutional autonomy principle to leave room to Member States in the articulation of national regulators in the energy and telecommunications sectors. In 2009, the principle disappeared from the language of the new legislation and truly independent agencies were imposed to Member States. The institutional autonomy principle is an old-fashioned, a case-law development by the CJEU without textual grounds, which seems unfit to integrate these two dimensions.
Second, the constitutional identity clause (article 4.2 TEU) seems to have better chances of success. It has an unexplored potential to redirect the debate and to introduce national interests –national institutional balance and democratic legitimacy- in the EU debate on agencies. Both dimensions of the agencification process in Europe can share concerns and experiences to improve the role, powers and control of agencies in Europe, both at the EU and national levels.
Joan Solanes Mullor is Lecturer of Constitutional Law at Universitat Pompeu Fabra (Barcelona, Spain). He obtained his PhD from Universitat Pompeu Fabra in 2014 and his LL.M. at Harvard Law School in 2009.Author : TARN