When the member states of a multinational integration scheme [see section 1.1.2] adopt a fundamental or secondary common policy, they implicitly recognise that it has an added value in relation to their previously independent national policies in a certain field. The very existence of a common policy is due to the fact that it has the potential of better achieving the goals of the member states than the individual national policies pursued in disarray. In other words, common policies exist because the member states appreciate their advantages.
The powers assigned to the Union by the Treaties [see chapter 2] are supplementary to those of its Member States. The Union can act in an area only in so far as the competence has been conferred to it by the Member States (principle of conferral). Very few areas come under exclusive European competence. Accordingly, nearly all common policies have a European dimension and a national dimension. The appropriate decision-making level - national, European or both simultaneously - depends on the type of each policy measure under consideration. In the case of laws or decisions which must apply uniformly in all Member States, there is little room for national initiative. On the contrary, when the Treaty provides for non-binding coordination of national policies, the scale of European action leaves a wide margin of manoeuvre to the national authorities. As a common policy develops, the European dimension increases at the expense of the national dimension. The Member States accept the decrease of their powers to the extent that their interests are better served by common action than by national action.
The main drawback compared with the expected benefits of the common policies developed by multinational integration is a certain loss of national sovereignty, due to the commitments accepted by the member states. Certainly, the states which opt for the integration process lose some of their independence in terms of goals and means of their national policies, since segments of their national sovereignties are blended into a new concept of "shared sovereignty" that is intended to serve better their various national interests. But, this loss of independence is circumscribed by two means: the continuing influence of the member states in the development of the common policies after their inception, through the common institutions in which they participate [see chapter 4]; and the possibility left to the member states to choose the means that suit them best to attain the common goals of the common policies, particularly when the legal instrument used by the Union is a ''directive'' [see section 3.3].
The Treaty of Lisbon (like the defunct Constitutional Treaty) defines in detail the principles which govern the transfer of sovereign rights from the Member States to the Union and guarantees that these principles should not be infringed. These principles are: the principle of conferral and the principles of subsidiarity and proportionality, which henceforth are submitted to the control of national parliaments (Articles 5 and 12 TEU = Article III-259, Constitution). Competences not conferred upon the Union in the Treaties remain with the Member States.
Under the principle of conferral, specified in the Treaty of Lisbon (as in the draft Constitutional Treaty), the Union shall act within the limits of the competences conferred upon it by the Member States in the Treaties to attain the objectives set out therein, all other competences remaining with the Member States (Article 5 TEU, ex Article 5 TEC). This is to say that the Member States - and they alone - may confer to the Union parts of their sovereign powers, if and when they consider that their interests are better served by common action.
The principle of subsidiarity means that the EU must not undertake or regulate what can be managed or regulated more efficiently at national or regional levels. This principle, implying multi-level governance [see section 1.1.1] must be exercised in a spirit of cooperation between the various levels of power. According to the Treaty (Article 5 TEU) and the Protocol on the application of the principles of subsidiarity and proportionality, the European Union must act within the limits of the powers conferred upon it by the Treaties and of the objectives assigned to it therein. In areas which do not fall within its exclusive competence, the Union must take action, in accordance with the principle of subsidiarity, only if and in so far as the objectives of the proposed action cannot be sufficiently achieved by the Member States and can therefore, by reason of the scale or effects of the proposed action, be better achieved by the Union. Any action by the Union must not exceed that which is necessary to achieve the objectives of the Treaties. Article 352 of the Treaty on the functioning of the EU enables the Council, , acting unanimously on a proposal from the Commission and after obtaining the consent of the European Parliament, to adopt the appropriate measures needed to attain a common objective for which the Treaties have not provided the necessary powers, excluding, however, the objectives pertaining to the common foreign and security policy. An interinstitutional agreement sets out the procedures for implementing the principle of subsidiarity.
The principle of proportionality implies that, if an EU action proves to be necessary to attain the objectives of the Treaty, the European institutions must further examine whether legislative action is required or whether other sufficiently effective means can be used (financial support, encouragement of cooperation between Member States by a Recommendation, inducement to take action by a Resolution, etc.).
To comply with the principle of proportionality, Union action must be as simple as possible, consistent with satisfactory achievement of its objectives. The Union must therefore legislate only to the extent necessary and give preference to directives rather than regulations and to framework directives rather than detailed measures [see section 3.3]. Moreover, Union measures must leave as much scope for national decision as possible; and respect well established national arrangements and the working of Member States legal systems. The important thing is to ensure that European legislation does not impose on national, regional or local authorities or on civil society any constraints which are illogical, superfluous or excessive given the objective.
The Protocol on the application of the principles of subsidiarity and proportionality, annexed to the Treaty of Lisbon, stipulates that the Commission must simultaneously send all its draft legislative acts and its amended drafts to the Union legislator and to the national parliaments of the Member States. Any draft European legislative act must contain a detailed statement making it possible to appraise compliance with the principles of subsidiarity and proportionality. The reasons for concluding that a Union objective can be better achieved at Union level must be substantiated by qualitative and, wherever possible, quantitative indicators. If one third of the parliaments (or only a quarter if the proposal concerns the area of freedom, security and justice) feel that the draft European legislation does not comply with the principle of subsidiarity, the Commission or the institution from which the draft legislative act originates must review its proposal and decide whether to maintain, adjust or withdraw it. If a majority of national parliaments agrees with the objection but the Commission decides to maintain its proposal anyway, the Commission will have to explain its reasons, and it will be up to the European Parliament and the Council to decide whether or not to continue the legislative procedure.
The Commission applies the principles of subsidiarity and proportionality both to direct its initiatives and to evaluate the need for European legislation, both future and existing. It conducts wide-ranging consultations and presents whenever necessary reference documents (Green Papers) prior to proposing legislative texts. In the explanatory memorandum accompanying its proposals, the Commission includes a "subsidiarity recital" summarising the objectives of the proposed measure, its effectiveness and why it is necessary. The Council verifies that a proposal of the Commission is in accordance with the provisions of Article 5 TEU (ex Article 5 TEC), on the basis of the preamble and the explanatory memorandum of the proposal. The Court of Justice has consistently held that the choice of the legal basis of a European measure must be based on objective factors, which are amenable to judicial review. Among those factors are included in particular the purpose and content of the measure [see Case C-295/90]. Difficulties arise if the measure in question pursues several aims for which different legal bases can be selected. According to the Court, in that case, the principal aim of the measure should determine the choice of the legal basis [Case C-155/91]. When a measure involves the competence granted to the institutions by the EC treaty, it should have as legal basis this treaty, even if some of its objectives or components are related to the EU treaty [Case C-91/05].
In many areas where common policies have not been agreed, the "open method of coordination", established by the Lisbon European Council (23 and 24 March 2000), is used as non-binding means of spreading best practice and achieving greater convergence of national policies. This method involves setting common objectives, translating these objectives into national policy strategies and periodic monitoring on the basis, inter alia, of commonly agreed and defined indicators. The intergovernmental cooperation achieved through this method does not obligate the Member States to follow the objectives set in common, but may through the learning process lead to real common policies.