,
,Chapter 1 – EU Law and the European Legal Order
EU Institutions and Competences
The EU is a supranational legal order based on the Treaty on European Union (TEU) and Treaty on the
Functioning of the European Union (TFEU). EU action is governed by the principle of conferral: the Union
may act only within competences conferred by the Member States. Competences not conferred remain with the
Member States. Their exercise is further constrained by subsidiarity and proportionality.
Institution Principal function
European Parliament Democratic representation; legislation and budget
European Council Defines general political priorities
Council of the EU Represents Member States; adopts legislation
European Commission Legislative initiative, policy implementation and enforcement
Court of Justice of the EU (CJEU) Interpretation and enforcement of EU law
European Central Bank Monetary policy within the euro area
Court of Auditors Audits EU finances
EU competences are principally exclusive, shared, or supporting/coordinating. Exclusive competences allow
only the EU to legislate in specified areas; shared competences permit both the EU and Member States to act,
subject to the Treaties; supporting competences allow EU action without replacing national competence.
Sources of EU Law
EU law consists of primary law, secondary law, and general principles.
Primary law
TEU and TFEU
Charter of Fundamental Rights
Protocols and annexes
General principles recognised by the CJEU
Secondary law
Regulations: binding and directly applicable in their entirety.
Directives: binding as to the result, while leaving national authorities discretion regarding form and
methods.
Decisions: binding in their entirety; addressed generally or specifically.
Recommendations and opinions: non-binding.
International agreements concluded by the EU form part of the EU legal order and must comply with the
Treaties.
, Direct Effect and Supremacy
Direct effect means that an EU-law provision may confer rights or impose obligations capable of being invoked
before a national court. The classical conditions are that the provision is sufficiently clear, precise and
unconditional and does not depend on further discretionary implementation.
The distinction between vertical and horizontal direct effect is essential:
Vertical: individual ↔ State/public authority.
Horizontal: individual ↔ individual/private entity.
Treaty provisions can satisfy direct-effect requirements. Regulations may also produce direct effects. Directives
can, under established conditions, have vertical direct effect, but cannot of themselves impose obligations on
individuals in purely horizontal disputes. National courts must nevertheless interpret national law, so far as
possible, consistently with EU law.
Supremacy/primacy requires national courts and authorities to give effect to applicable EU law where national
law conflicts with it. This applies even where the conflicting national provision has constitutional status.
National courts may therefore be required to disapply conflicting national rules rather than await their formal
repeal.
A useful distinction is:
Direct effect = enforceability of an EU rule.
Primacy = priority of applicable EU law over conflicting national law.
Preliminary Reference Procedure
Article 267 TFEU establishes the preliminary reference procedure, which connects national courts with the
CJEU. Its principal functions are to secure the uniform interpretation and effective application of EU law
and to determine the validity of EU acts.
A national court may refer questions concerning:
1. interpretation of the Treaties;
2. interpretation of acts of EU institutions, bodies, offices or agencies;
3. validity of such acts.
The CJEU provides the authoritative interpretation or determines validity; the national court then resolves the
underlying dispute. The procedure therefore creates a judicial dialogue while preserving the CJEU's role in
ensuring uniform EU-law interpretation.
For courts of final instance, the duty to refer is subject to recognised exceptions, particularly where the correct
interpretation is already established or the answer is sufficiently clear. A 2026 Grand Chamber judgment
emphasised that a refusal by a final-instance court must satisfy the applicable reasoning requirements.
,Chapter 1 – EU Law and the European Legal Order
EU Institutions and Competences
The EU is a supranational legal order based on the Treaty on European Union (TEU) and Treaty on the
Functioning of the European Union (TFEU). EU action is governed by the principle of conferral: the Union
may act only within competences conferred by the Member States. Competences not conferred remain with the
Member States. Their exercise is further constrained by subsidiarity and proportionality.
Institution Principal function
European Parliament Democratic representation; legislation and budget
European Council Defines general political priorities
Council of the EU Represents Member States; adopts legislation
European Commission Legislative initiative, policy implementation and enforcement
Court of Justice of the EU (CJEU) Interpretation and enforcement of EU law
European Central Bank Monetary policy within the euro area
Court of Auditors Audits EU finances
EU competences are principally exclusive, shared, or supporting/coordinating. Exclusive competences allow
only the EU to legislate in specified areas; shared competences permit both the EU and Member States to act,
subject to the Treaties; supporting competences allow EU action without replacing national competence.
Sources of EU Law
EU law consists of primary law, secondary law, and general principles.
Primary law
TEU and TFEU
Charter of Fundamental Rights
Protocols and annexes
General principles recognised by the CJEU
Secondary law
Regulations: binding and directly applicable in their entirety.
Directives: binding as to the result, while leaving national authorities discretion regarding form and
methods.
Decisions: binding in their entirety; addressed generally or specifically.
Recommendations and opinions: non-binding.
International agreements concluded by the EU form part of the EU legal order and must comply with the
Treaties.
, Direct Effect and Supremacy
Direct effect means that an EU-law provision may confer rights or impose obligations capable of being invoked
before a national court. The classical conditions are that the provision is sufficiently clear, precise and
unconditional and does not depend on further discretionary implementation.
The distinction between vertical and horizontal direct effect is essential:
Vertical: individual ↔ State/public authority.
Horizontal: individual ↔ individual/private entity.
Treaty provisions can satisfy direct-effect requirements. Regulations may also produce direct effects. Directives
can, under established conditions, have vertical direct effect, but cannot of themselves impose obligations on
individuals in purely horizontal disputes. National courts must nevertheless interpret national law, so far as
possible, consistently with EU law.
Supremacy/primacy requires national courts and authorities to give effect to applicable EU law where national
law conflicts with it. This applies even where the conflicting national provision has constitutional status.
National courts may therefore be required to disapply conflicting national rules rather than await their formal
repeal.
A useful distinction is:
Direct effect = enforceability of an EU rule.
Primacy = priority of applicable EU law over conflicting national law.
Preliminary Reference Procedure
Article 267 TFEU establishes the preliminary reference procedure, which connects national courts with the
CJEU. Its principal functions are to secure the uniform interpretation and effective application of EU law
and to determine the validity of EU acts.
A national court may refer questions concerning:
1. interpretation of the Treaties;
2. interpretation of acts of EU institutions, bodies, offices or agencies;
3. validity of such acts.
The CJEU provides the authoritative interpretation or determines validity; the national court then resolves the
underlying dispute. The procedure therefore creates a judicial dialogue while preserving the CJEU's role in
ensuring uniform EU-law interpretation.
For courts of final instance, the duty to refer is subject to recognised exceptions, particularly where the correct
interpretation is already established or the answer is sufficiently clear. A 2026 Grand Chamber judgment
emphasised that a refusal by a final-instance court must satisfy the applicable reasoning requirements.
