Report from the Commission - “Better Lawmaking 2004” pursuant to Article 9 of the Protocol on the application of the principles of subsidiarity and proportionality (12th report) {SEC(2005) 364}
Date: 2005-03-21
Institutions: European Commission
Subjects: activity report, application of EU law, operation of the Institutions, principle of proportionality, principle of subsidiarity

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 21.03.2005 
COM(2005) 98 final 

REPORT FROM THE COMMISSION 

“BETTER LAWMAKING 2004” 

pursuant to Article 9 of the Protocol 
on the application of the principles of subsidiarity and proportionality 

(12th report) 

{SEC(2005) 364} 

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The  obligation  on  the  Commission  to  present  an  annual  report  on  the  application  of  the 
principles  of  subsidiarity  and  proportionality  to  the  European  Council  and  the  European 
Parliament  was  enshrined  by  the  Edinburgh  European  Council  in  December  1992.  This 
obligation  was  included  in  a  protocol  annexed  to  the  Treaty  establishing  the  European 
Community (TEC) in the framework of the amendments made by the Treaty of Amsterdam in 
1997.  Since  1995  this  report  has  also  applied  to  measures  taken  to  improve  the  quality  and 
accessibility of legislation.  

Subsidiarity,  proportionality  and  improvement  of  the  regulatory  environment  are  closely 
linked. In compliance with the subsidiarity principle,  the  Union restricts its  actions to those 
that are necessary and effective. In compliance with the proportionality principle, the Union 
opts for the simplest possible methods. Besides, measures relating to the consultation of the 
parties  concerned,  the  accumulation  of  expertise  and  impact  analysis,  the  development  of 
alternative  methods  and  the  exchange  of  “good  regulatory  practices”,  contribute  to  defining 
and fleshing out what is necessary, effective and moderate. The efforts concerning the quality 
of  drafting,  the  delivery  of  texts,  monitoring  of  the  implementation  of  the  rules  and 
simplification of the acquis also contribute to this end.  

This  report  is  the  12th  of  its  kind.  It  reviews  the  situation  in  2004.  A  detailed  analysis, 
including  references  to  relevant  documents,  is  presented  in  the  Commission  Staff  Working 
Document which accompanies this Communication.  

1. 

BETTER REGULATION 

Improvement  of  the  regulatory  environment  is  an  absolute  must  both  with  a  view  to 
to  promoting  sustainable 
enhancing  competitiveness,  growth  and  employment  and 
development  and  a  better  quality  of  life  for  European  citizens.  Because  of  the  division  of 
responsibilities within the Union, this improvement requires a joint effort on the part of the 
European Parliament, the Council, the Commission and the Member States.  

In  this  connection  the  Union's  strategy  is  based  on  two  documents:  the  Commission  action 
plan  "Simplifying  and  improving  the  regulatory  environment"  of  June  20021  and  the  Inter-
Institutional Agreement (IIA) on Better Lawmaking signed by the European Parliament, the 
Council  and  the  Commission  in  December  20032.  A  similar  and  partly  complementary 
strategy  is  applied  at  the  level  of  the  Member  States  via  the  intergovernmental  programme 
adopted in May 2002 by the Ministers responsible for public administration3.  

The  implementation  of  these  three  elements  continued  in  2004,  with  progress  varying  from 
one  area  to  another  and  at  different  levels  of  responsibility.  A  global  reassessment  of  the 
needs  and  available  resources  is  required.  There  is  a  need  to  consolidate  the  achievements 
made  so  far  but  also  to  define  supplementary  actions  on  the  basis  of  the  experience  gained 

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(COM(2002)278,  5  June  2002).  This  action  plan  is  a  follow-up  to  the  White  Paper  on  European 
Governance (COM(2001)727, 25 June 2001). It also takes into account the recommendations made by 
the  Group  on  Regulatory  Quality  created  in  November  2000  by  the  Ministers  responsible  for  public 
administration and chaired by D. Mandelkern (the Mandelkern report, adopted in November 2001). For 
more  information  on  the  eight  specific  communications  detailing  its  objectives,  see  the  annual  report 
"Better Lawmaking 2003", COM(2003)770, 12 December 2003. 
OJ C 321, 31 December 2003, p.1. 
This action programme is also partly based on the above-mentioned Mandelkern report. 

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during the past three years. The creation of a new Commission with a new agenda and new 
priorities offers an ideal window of opportunity in this connection. 

Although performances were mixed, all the parties concerned have at any rate expressed their 
growing  interest  in  actions  to  improve  regulatory  quality.  However,  partly  because  of  this 
increasing  interest,  the  problems  of  coordinating  the  different  initiatives  and  respect  for  the 
prerogatives  of  each  institution  have  grown.  Hence  the  Commission  considers  that  the 
rationalisation  of  structures  and  procedures  is  an  issue  which  must  be  addressed  as  soon  as 
possible. 

1.1. 

Actions taken by the Commission 

While  far  from  being  complacent,  the  Commission  believes  it  is  important  to  note  that  the 
progress made in the relatively short period of time since the adoption of the Action Plan has 
been considerable and compares favourably with that made by many Member States over the 
same period. 

Consultation of interested parties 

In  2004,  the  number  of  consultations  increased  significantly.  This  was  achieved  while 
complying  with  most  of  the  minimum  standards  for  consultation  introduced  in  2003.  The 
Commission still needs to make additional efforts on feedback to respondents and, to a lesser 
extent, on transparency. “Consultation fatigue” on the part of some stakeholders and having to 
apportion  limited  advertising  and  analytical  resources  among  too  many  consultations  have 
become  real  risks  in  some  sectors.  All  institutions  should  keep  that  in  mind  for  the  coming 
years when deciding on the number of consultations and the level of detail required. Constant 
vigilance is also needed to engage all parts of society at the consultation stage. 

Impact assessment 

Assessing the potential impacts of often highly complex scenarios across 25 Member States 
and  beyond  is  particularly  difficult.  The  Commission  managed  nevertheless  to  increase  the 
number of Extended Impact Assessments completed in 2004 (29 against 21 in 2003) as well 
as  their  overall  quality.  Delivery  remained  a  problem,  with  fewer  impact  assessments 
completed than initially planned. While initial experience shows that the methodology used is 
sound,  there  needs  to  be  a  more  systematic  application  of  the  current  methodology  across 
Commission  services  and  greater  focus  on  competitiveness  issues.  New  guidelines  and 
technical  aids  are  under  development.  They  will  contribute  to  address  these  questions  and 
improve  quality  and  quantity.  Additional  resources  will  also  be  needed  to  meet  growing 
internal ambitions and external expectations.  

Collection and use of expertise 

In 2004, the collection of expertise in specific domains has been systematised thanks to the 
sixth  Framework  Programme  for  R&D.  The  technical  development  of  a  web  application 
allowing  for  greater  dissemination  and  use  of  scientific  advice  (SINAPSE  e-network  - 
Scientific  INformAtion  for  Policy  Support  in  Europe)  has  been  completed.  The  scientific 
community has been invited to register, the official launch being scheduled for March 2005. 
Work also started to improve transparency on expert groups established by the Commission. 
It will result in the publication, early 2005, of a list of these groups and in the launch, later 

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that year, of a register providing Parliament and the public with standard information on all 
expert groups. 

Updating and simplifying the acquis 

Simplification of the acquis remains a top priority, in particular for the Lisbon Strategy. The 
Commission actively pursued its rolling programme on simplification. The Commission has 
also started examining the priority list submitted by the Council in November 2004 and will 
decide  in  the  course  of  2005  on  the  appropriate  follow-up.  In  addition,  the  Commission  is 
considering reinforcing the mechanisms for identifying legislation which is disproportionately 
burdensome for EU manufacturers in relation to the public interests that it aims to safeguard. 
This  exercise  could  lead  to  the  launch  of  a  new  phase  of  the  Commission’s  simplification 
programme. 

The  reduction  of  the  volume  of  Community  legislation  remains  a  relatively  weak  point 
(codification and elimination of outdated legislation). The Commission needs to find original 
solutions to overcome the serious translation delays and pre-empt their return on the occasion 
of future enlargements. Upgrading the Inter-institutional Agreement of 1994 on codification 
should also be envisaged. 

Accessibility to documents was greatly improved in 2004 with the opening of the new EUR-
Lex.  The  database  offers  access,  free  of  charge,  to  EU  and  EC  treaties,  international 
agreements binding the Union, EC legislation in force (incl. consolidated texts), preparatory 
acts, parliamentary questions, case law and European Court reports, as well as all sections of 
the Official Journal. 

Choice of instruments 

The Commission has prepared an inventory of the co-regulation mechanisms put in place by 
the Union and the forms of self-regulation with a Community dimension. This inventory will 
be used as a basis for the first report on the possibilities of growing use of these regulatory 
alternatives, which will be presented in 2005. 

Moreover, the Commission continued to argue and act in favour of decentralising some highly 
detailed executive tasks to European regulatory agencies. The total number of Community / 
EU agencies at the end of 2004 amounted to 26. The adoption of a trilateral Interinstitutional 
Agreement setting an operating framework for European Regulatory Agencies will be a major 
objective for the Commission in 2005.  

Finally,  progress  was  made  on  target-based  tripartite  contracts  and  agreements  between  the 
Community,  the  States  and  regional  or  local  authorities,  with  the  signature  of  the  first 
agreement  by  the  Commission,  the  Italian  State  and  the  Lombardy  region.  As  for  the  other 
central,  regional  and  local  authorities  concerned,  the  Commission  believes  that  a  more 
sustained commitment on their part would be desirable. 

Monitoring the application of Community law 

The  new  Member  States  have  been  fully  integrated  into  the  system  for  the  control  of  the 
application  of  Community  law  (on-line  notification  of  national  measures  transposing 

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directives, etc). A procedure has also been established to ensure monitoring and review of the 
overall impact of enlargement. 

Problems citizens and businesses encounter with the application of Community law have been 
better addressed thanks to measures such as SOLVIT, the Internal Market’s problem-solving 
network. Moreover the Commission has prepared the launch in 2005 of a new internet-based 
tool to facilitate the filing of complaints by citizens and businesses concerning non-respect of 
Community law. 

1.2. 

Actions taken at the level of EU institutions 

In 2004, the Council and its Presidency were proactive on a number of better regulation items. 
The  January  2004  Joint  Initiative  of  Member  States  holding  the  presidency  in  2004-2005 
(Ireland, the Netherlands, Luxembourg and the UK) and its December 2004 update (endorsed 
also by Finland and Austria which will hold the presidency in 2006) have called for special 
efforts  on  the  reduction  of  administrative  burden,  impact  assessment,  simplification  and 
greater  use  of  regulatory  alternatives  (such  as  self-  and  co-regulation).  A  noteworthy 
achievement was the Council’s endorsement of a list of 15 priorities for simplification which 
the  Commission  is  invited  to  take  into  consideration  and  the  launch  of  its  first  ever  impact 
assessment prior to the adoption of substantial amendments (relating to the proposed directive 
on  batteries  and  accumulators).  It  is  however  regrettable  that,  out  of  30  proposals  for 
simplification  tabled  by  the  Commission,  the  Council  adopted  only  10  and  that  too  many 
amendments were not transparently analysed. 

The implementation of the interinstitutional agreement ‘better lawmaking’ started in 2004 but 
should gather momentum. The adaptation of the working methods of the European Parliament 
and  the  Council  to  speed  up  the  adoption  of  pending  proposals  for  simplification  is 
particularly urgent.  

1.3. 

Actions taken by the Member States 

The  regulatory  burden  on  European  operators  still  is  mainly  due  to  national  legislation. 
Further  progress  is  therefore  necessary  at  Member  States  level.  The  Commission  however 
welcomes the efforts deployed by Member States in response to the recommendations of the 
Commission and of the Mandelkern Group. While most Member States have now put in place 
initiatives to improve their regulatory environment, implementation remains uneven. 

The Commission calls in particular on Member States to consult and to assess impact before 
adopting national legislation transposing EC acts. By analogy with what is required from EU 
institutions,  it  also  stresses  the  need  to  do  so  before  submitting  EU  legislative  proposals. 
Finally  it  recommends  the  introduction  of  comparable,  or  at  least  compatible,  regulatory 
quality indicators at EU and Member State level in order to monitor progress and facilitate the 
identification of best practices. 

2. 

APPLICATION OF THE PRINCIPLES OF SUBSIDIARITY AND PROPORTIONALITY 

The  Commission  took  its  procedural  obligations  regarding  subsidiarity  and  proportionality 
very seriously. Efforts to consult widely before proposing legislation reached record levels4. 

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See sub-section 2.1.1 of the annexed Commission Staff Working Document 

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Besides, the decrease in the number of regulations and directives compared to the number of 
decisions and recommendations, both in absolute and relative terms, indicates how careful the 
Commission has been to choose the lightest instrument5. 

In  a  number  of  cases,  however,  the  Commission  was  criticised  for  not  addressing  the 
principles  in  more  precise  terms  and  for  the  way  it  assessed  the  burden  put  on  certain 
stakeholders6. In order to better explain reasons for concluding that its proposals comply with 
these  principles  and  to  facilitate  compliance  monitoring,  the  Commission  developed  and 
tested a new software application for drafting explanatory memoranda7. This application will 
ensure that all requested information on the principles is provided in a systematic way. It will 
be  used  by  all  services  in  2005.  As  for  burden  assessment,  the  Commission  wishes  to 
underline  that  this  is  a  fairly  complex  matter  in  a  Union  so  large  and  so  diverse.  Providing 
precise  forecasting  on  each  and  every  possible  impact  is  not  always  possible;  when  it  is 
feasible,  it  is  often  very  costly  and  long.  Attempting  to  be  exhaustive  could  result  in 
legislative  paralysis  at  the  very  time  the  Union  is  confronted  with  urgent  challenges.  The 
Commission  therefore  thinks  that  the  principle  of  proportionate  analysis  should  continue  to 
prevail. This being said, the Commission will revise or even withdraw its proposals whenever 
important  elements  have  been  overlooked,  or  to  take  into  account  significant  developments 
occurring after the introduction of its proposals.  

On  the  whole,  the  European  Parliament  and  the  Council  introduced  relatively  few 
amendments  referring  explicitly  to  subsidiarity  and  proportionality.  This  consensual 
interpretation  is  not  surprising  considering  that  consultation  reached  record  levels,  but  also 
that  a  very  large  proportion  of  the  Commission’s  proposals  were  in  fact  responding  to 
invitations made by the European Council, the Council and the European Parliament.  

While  Parliament  usually  provided  a  justification  for  its  amendments,  anecdotal  evidence 
suggests  that  this  was  rarely  the  case  for  Council’s  amendments.  When  Member  States 
exercised  their  right  of  initiative  for  police  and  judicial  cooperation  in  criminal  matters  and 
made formal proposals, compliance with the principles of subsidiarity and proportionality was 
more often stated than demonstrated. A review of the contents of the most salient debates on 
the matter confirms established trends. More often than not, Parliament’s amendments have 
called  for  broader  EU  action  and  argued  that  stronger  instruments  are  required  to guarantee 
success,  while  Council’s  amendments  were  asking  to  narrow  down  the  scope  of  the  action 
envisaged  or  adopt  a  lighter  form  of  intervention.  In  most  cases,  the  three  institutions 
eventually managed to come to a common interpretation of subsidiarity and proportionality.  

EU  institutions  must  remain  aware  of  the  risk  of  resorting  to  mere  bargaining  in  their 
negotiations. Subsidiarity and proportionality would suffer in the process, undermining policy 
coherence,  acceptance  and  effectiveness.  Conversely,  these  principles  cannot  be  used  as  a 
pretext to ignore competences given to the Union or twist the principles and rules set by the 
Treaties, in order to match the political mood of the hour or the sensitivity of a particular file. 
In  a  Union  of  25,  deliberation  based  on  facts  and  sound  arguments  is  more  important  than 
ever. 

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See Annex 1 of the Commission Staff Working Document. 
Section  3.2  of  the  Commission  Staff  Working  Document  provides  exemplary  cases  of  2004 
developments in the application of the principles. 
See sub-section 2.1.4 of the Commission Staff Working Document. 

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As  regards  political  monitoring  of  the  Union’s  legislative  process,  the  Committee  of  the 
Regions has recognised, in the great majority of its opinions, the legitimacy of Union action. 
However  in  two  cases  it  invited  the  European  Commission  to  reconsider  its  choice  of 
instruments  in  order  to  comply  more  faithfully  with  the  proportionality  principle.  These 
recommendations have culminated in an approach that provides for the closer involvement of 
local  and  regional  authorities  in  implementing  Community  legislation.  Besides,  the 
Committee  of  the  Regions  has  announced  that  it  intends  to  systematise  its  assessment  of 
compliance with the subsidiarity principle in 2005 by preparing a subsidiarity evaluation grid 
annexed to its opinions and, on the other hand, progressively to create a network of local and 
regional authorities with a view to monitoring subsidiarity. For its part, COSAC8 and certain 
national  parliaments  have  begun  to  examine  new  models  of  monitoring  application  of  the 
subsidiarity principle, with a view to the future entry into force of the Constitutional Treaty9.  

As  regards  ex-post  judicial  review,  the  subsidiarity  principle  has  been  referred  to  on  six 
occasions by the European Court of Justice. No judgment has concluded that the rules of the 
Treaty have been badly applied in this connection. 

The  Commission  welcomes  these  developments  because  vigilance  is  needed  on  all  sides  to 
ensure that the Union’s intervention is truly needed and takes the most appropriate approach.  

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"Community and European Affairs Committees of the Parliaments of the European Union" 
As  to  the  new  framework  proposed  by  the  Constitutional  Treaty  concerning  subsidiarity,  see 
Commission Staff Working Document subsection 3.1.3. 

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