Guide to the eu institutions

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European Commission

Directorate-General for Communication

Manuscript completed in July 2007

How the European Union works
Your guide to the EU institutions

The European Union (EU) is unique. It is not a federal State like the United States of America because its member countries remain independent sovereign nations. Nor is it a purely intergovernmental organisation like the United Nations because the member countries do pool some of their sovereignty — and thus gain much greater collective strength and influence than they could have acting individually.

They pool their sovereignty by taking joint decisions through shared institutions such as the European Parliament, which is elected by the EU citizens, and the Council, which represents national government. They decide on the basis of proposals from the European Commission, which represent the interests of the EU as a whole. But what does each of these institutions do? How do they work together? Who is responsible for what?
This booklet sets out the answers in clear and simple language. It also gives a brief overview of the agencies and other bodies that are involved in the European Union’s work. The aim is to provide you with a helpful guide to EU decision-making.

European Union

Introducing the European Union

The Treaties

How the EU takes decisions

The European Parliament: voice of the people

The Council of the European Union: voice of the member states

The European Commission: promoting the common interest

The Court of Justice: upholding the law

The European Court of Auditors: getting value for your money

The European Economic and Social Committee: voice of civil society

The Committee of the Regions: voice of regional and local government

The European Investment Bank: financing economic development

The European Central Bank: managing the euro

The European Ombudsman: investigating your complaints

The European Data Protection Supervisor: safeguarding your privacy


Introducing the European Union
The European Union (EU) is a family of democratic European countries working together to improve life for their citizens and to build a better world.
Family squabbles and occasional crises are what make the news headlines, but away from the cameras the EU is actually a remarkable success story. In just over half a century it has delivered peace and prosperity in Europe, a single European currency (the euro) and a frontier-free ‘single market’ where goods, people, services and capital move around freely. It has become a major trading power, and a world leader in fields such as environmental protection and development aid. No wonder it has grown from six to 27 members and more countries want to join.
The European Union’s success owes a lot to the unusual way in which it works. Unusual because the countries that make up the EU (its ‘member states’) remain independent sovereign nations but they pool their sovereignty in order to gain a strength and world influence none of them could have on their own. This stops short of being a federation like the United States, but is much more than an organisation for cooperation between governments, like the United Nations. The EU is, in fact, unique.
Pooling sovereignty means, in practice, that the member states delegate some of their decision-making powers to shared institutions they have created, so that decisions on specific matters of joint interest can be made democratically at European level.
The three main decision-making institutions are:

  • the European Parliament (EP), which represents the EU’s citizens and is directly elected by them;

  • the Council of the European Union, which represents the individual member states;

  • the European Commission, which represents the interests of the Union as a whole.

This ‘institutional triangle’ produces the policies and laws that apply throughout the EU. In principle, it is the Commission that proposes new laws, but it is the Parliament and Council that adopt them. The Commission and the member states then implement them, and the Commission enforces them.

The Court of Justice is the final arbiter in disputes about European law.
The Court of Auditors checks the financing of the Union’s activities.
A number of other bodies also have key roles in making the EU work:

  • the European Economic and Social Committee represents economic and social players in organised civil society such as employers and employees, trade unions and consumer organisations;

  • the Committee of the Regions represents regional and local authorities;

  • the European Investment Bank finances investment in economic development projects within and outside the EU, and helps small businesses via the European Investment Fund;

  • the European Central Bank is responsible for European monetary policy;

  • the European Ombudsman investigates complaints about maladministration by EU institutions and bodies;

  • the European Data Protection Supervisor safeguards the privacy of your personal data.

In addition, specialised agencies handle certain technical, scientific or management tasks.

The powers and responsibilities of the EU institutions, and the rules and procedures they must follow, are laid down in the Treaties on which the EU is founded. The Treaties are agreed by the presidents and prime ministers of all the EU countries and then ratified by their parliaments.
The following chapters describe the Treaties, the EU institutions and the other bodies and agencies, explaining what each entity does and how they interact.
The Treaties

The EU is founded on four Treaties:

  • The Treaty establishing the European Coal and Steel Community (ECSC), which was signed on 18 April 1951 in Paris, came into force on 23 July 1952 and expired on 23 July 2002.

  • The Treaty establishing the European Economic Community (EEC), which was signed on 25 March 1957 in Rome and came into force on 1 January 1958. It is often referred to as ‘the Treaty of Rome’.

  • The Treaty establishing the European Atomic Energy Community (Euratom), which was signed in Rome along with the EEC Treaty.

  • The Treaty on European Union (EU), which was signed in Maastricht on 7 February 1992, and came into force on 1 November 1993. It is often referred to as ‘the Maastricht Treaty’.

The ECSC, EEC and Euratom Treaties created the three ‘European Communities’, i.e. the system of joint decision-making on coal, steel, nuclear power and other major sectors of the member states’ economies. The common institutions set up to manage this system were merged in 1967, resulting in a single Commission and a single Council of Ministers.

The EEC, in addition to its economic role, gradually took on a wide range of responsibilities including social, environmental and regional policies. Since it was no longer a purely economic community, the fourth Treaty (Maastricht) renamed it simply ‘the European Community’ (EC). As the ECSC Treaty approached expiry in 2002, responsibilities for coal and steel were progressively merged into other Treaties.
At Maastricht, the member state governments also agreed to work together on foreign and security policy, and in the area of ‘justice and home affairs’. By adding this intergovernmental cooperation to the existing Community system, the Maastricht Treaty created a new structure with three ‘pillars’ which is political as well as economic. This is the European Union (EU).

[Text on the diagram:]


Community domain (most common policy areas)

Common foreign and security policy

Police and judicial cooperation in criminal matters

[Caption for the diagram:]
The European Union is founded on its Treaties. Its three ‘pillars’ represent different policy areas with different decision-making systems.
The Treaties are the basis for everything the EU does. They have been amended each time new member states have joined. From time to time the Treaties have also been amended to reform the European Union’s institutions and to give it new areas of responsibility. This is always done by a special conference of the EU’s national governments (an ‘intergovernmental conference’ or IGC). Key intergovernmental conferences resulted in:

  • The Single European Act (SEA), which was signed in February 1986 and came into force on 1 July 1987. It amended the EEC Treaty and paved the way for completing the single market;

  • The Treaty of Amsterdam, which was signed on 2 October 1997 and came into force on 1 May 1999. It extended the pooled sovereignty to more areas involving more citizens’ rights, and closer interaction on social and employment policies;

  • The Treaty of Nice, which was signed on 26 February 2001 and came into force on 1 February 2003. It further amended the other Treaties, streamlining the EU’s decision-making system so it could continue to work effectively even after further enlargements;

  • The Constitutional Treaty, which was agreed and signed in October 2004, but has not come into force, because it has not been ratified by all EU countries. It was specifically rejected by the people of France and the Netherlands in referendums. In June 2007, the EU’s political leaders decided to call for a new intergovernmental conference to work instead on a reform treaty.

How the EU takes decisions
Decision-making at European Union level involves various EU institutions, in particular:

  • the European Parliament (EP/Parliament),

  • the Council of the European Union, and

  • the European Commission.

In general, it is the European Commission that proposes new legislation, but it is the Council and Parliament that pass the laws. In some cases, the Council can act alone. Other institutions also have roles to play.

The main forms of EU law are directives and regulations. Directives establish a common aim for all member states, but leave it to national authorities to decide on the form and method of achieving it. Normally, member states are given one-to-two years to implement a directive. Regulations are directly applicable throughout the EU as soon as they come into force without further action by the member state.
The rules and procedures for EU decision-making are laid down in the Treaties. Every proposal for a new European law must be based on a specific Treaty article, referred to as the ‘legal basis’ of the proposal. This determines which legislative procedure must be followed. The three main procedures are ‘co-decision’, ‘consultation’ and ‘assent’.

  1. Co-decision

Co-decision is the procedure now used for most EU law-making. In the co-decision procedure, Parliament shares legislative power equally with the Council.

If Council and Parliament cannot agree on a piece of proposed legislation, there will be no new law. The procedure provides for two successive ‘readings’ in each institution. If an agreement is reached in these readings, the law can be passed. If not, it will be put before a conciliation committee, composed of equal numbers of Council and Parliament representatives. Once this committee has reached an agreement, the agreed text is sent again to Parliament and the Council so that they can finally adopt it as law. Conciliation is becoming increasingly rare. Most laws passed in co-decision are, in fact, adopted either at the first or second reading as a result of good cooperation between the three institutions.
The diagram shows the procedure in greater detail. For further information, go to

[Text for the diagram boxes]

The co-decision procedure
1. Proposal from the Commission

1.A EESC opinion, CoR opinion

2. First reading by the EP — opinion

3. Amended proposal from the Commission

4. First reading by the Council

5. Council approves all the EP’s amendments

6. Council can adopt the act as amended

7. EP has approved the proposal without amendments

8. Council can adopt the act

9. Common position of the Council

10. Communication from the Commission on the common position

11. Second reading by the EP

12. The EP approves the common position or makes no comments

13. Act is deemed to be adopted

14. The EP rejects the common position

15. Act is deemed not to be adopted

16. The EP proposes amendments to the common position

17. Commission position on the EP’s amendments

18. Second reading by the Council

19. Council approves the amended common position

(i) by a qualified majority if the Commission has delivered a positive opinion

(ii) unanimously if the Commission has delivered a negative opinion

20. Act is adopted as amended

21. Council does not approve the amendments to the common position

22. Conciliation Committee is convened

23. Conciliation procedure

24. Conciliation Committee agrees on a joint text

25. Parliament and Council adopt the act in accordance with the joint text

26. Act is adopted

27. Parliament and Council do not approve the joint text

28. Act is not adopted

29. Conciliation Committee does not agree on a joint text

30. Act is not adopted

Three ‘councils’: which is which?
It’s easy to get confused about which European body is which — especially when very different bodies have very similar names, such as these three ‘councils’.
The European Council

This means the Heads of State or Government of all the EU countries, plus the President of the European Commission. It depends on the political system of each country whether their participant is the president and/or the prime minister. The European Council meets, in principle, four times a year to agree overall EU policy and to review progress. It is the highest level policymaking body in the European Union, which is why its meetings are often called ‘summits’.

The Council of the European Union

Formerly known as the Council of Ministers, this institution consists of government ministers from all the EU countries. The Council meets regularly to take detailed decisions and to pass EU laws. A fuller description of its work is given later in this booklet.

The Council of Europe

This is not an EU institution at all. It is an intergovernmental organisation which aims (amongst other things) to protect human rights, to promote Europe’s cultural diversity and to combat social problems such as racial prejudice and intolerance. It was set up in 1949 and one of its early achievements was to draw up the European Convention on Human Rights. To enable citizens to exercise their rights under that convention, it set up the European Court of Human Rights. The Council of Europe now has 46 member countries, including all 27 European Union countries, and its headquarters is the Palais de l’Europe in Strasbourg (France)

2. Consultation
The consultation procedure is used in areas such as agriculture, taxation and competition. Based on a proposal from the Commission, the Council consults Parliament, the European Economic and Social Committee and the Committee of the Regions.
Under the consultation procedure, Parliament may:

  • approve the Commission proposal,

  • reject it, or

  • ask for amendments.

If Parliament asks for amendments, the Commission will consider all the changes Parliament suggests. If it accepts any of these suggestions it will send the Council an amended proposal.

The decision ultimately rests with the Council, which either adopts the amended proposal or amends it further. In this procedure, as in all others, if the Council amends a Commission proposal it must do so unanimously.

3. Assent

The assent procedure means that the Council has to obtain the European Parliament’s assent before certain very important decisions are taken. The procedure is the same as in the case of consultation, except that Parliament cannot amend a proposal: it must either accept or reject it. Acceptance (‘assent’) requires an absolute majority of the votes cast.

The assent procedure is mostly used for agreements with other countries, including the agreements allowing new countries to join the EU.

Who works for the EU institutions?
The civil servants who work for the EU institutions come from all EU member countries. They cover a wide range of activities and skills, from policymakers and managers to economists, engineers, lawyers, linguists, secretaries and technical support staff. They must be able and willing to work in a multicultural and multilingual environment, usually at quite a distance from their home country.
To become an EU civil servant you have to pass a tough competitive examination. These exams are centrally organised by the European Personnel Selection Office (EPSO).
Further information at
The European Parliament: voice of the people
Key facts
Role: Directly elected legislative arm of the EU

Next election: June 2009

Meetings: Monthly plenary sessions in Strasbourg, committee meetings and additional sessions in Brussels.

Address: Plateau du Kirchberg, B.P. 1601, L-2929 Luxembourg

Tel. (352) 4300-1


The European Parliament (EP) is elected by the citizens of the European Union to represent their interests. Its origins go back to the 1950s and the founding Treaties. Since 1979 its members have been directly elected by the citizens of the EU.
Elections are held every five years, and every EU citizen is entitled to vote, and to stand as a candidate, wherever they live in the EU. Parliament thus expresses the democratic will of the Union’s nearly 500 million citizens and it represents their interests in discussions with the other EU institutions.
The latest elections were in June 2004. Parliament has 785 members from all 27 EU countries.
Members of the European Parliament (MEPs) do not sit in national blocks, but in EU-wide political groups. Between them, they represent all views on political issues and European integration, from the strongly pro-federalist to the openly Eurosceptic.

Number of seats per political group, as at 1 March 2007

Political group


No of seats

European People’s Party (Christian Democrats) and European Democrats



Socialist Group



Alliance of Liberals and Democrats for Europe



Union for Europe of the Nations



Greens/European Free Alliance



European United Left/Nordic Green Left






Identity, Tradition and Sovereignty



Non-attached members and temporarily vacant seats





Number of seats per country

















Czech Republic


































United Kingdom






Hans-Gert Pöttering was elected President of the EP in 2007 and is to hold that post until the 2009 elections.

Where is Parliament based?
The European Parliament has three places of work: Brussels (Belgium), Luxembourg and Strasbourg (France).
Luxembourg is home to the administrative offices (the ‘General Secretariat’). Meetings of the whole Parliament, known as ‘plenary sessions’, take place in Strasbourg and sometimes in Brussels. Committee meetings are also held in Brussels.

What does Parliament do?
Parliament has three main roles.
1. Passing European laws — jointly with the Council in many policy areas. The fact that the EP is directly elected by the citizens of the EU helps guarantee the democratic legitimacy of European law.

2. Parliament exercises democratic supervision over the other EU institutions, and in particular the Commission. It has the power to approve or reject the nomination of commissioners, and it has the right to require the Commission as a whole to step down.

3. The power of the purse. Parliament shares with the Council authority over the EU budget and can therefore influence EU spending. It adopts or rejects the budget in its entirety.
These three roles are described in greater detail below.
1. Passing European laws
The most common procedure for adopting (i.e. passing) EU legislation is ‘co-decision’ (see above: ‘How the EU takes decisions’). This procedure places the European Parliament and the Council on an equal footing, and it applies to legislation in a wide range of fields.
In some fields (for example agriculture, economic policy, visas and immigration), the Council alone legislates, but it has to consult Parliament. In addition, Parliament’s assent is required for certain important decisions, such as allowing new countries to join the EU.
Parliament also provides impetus for new legislation by examining the Commission’s annual work programme, considering what new laws would be appropriate and asking the Commission to put forward proposals.

2. Democratic supervision
Parliament exercises democratic supervision over the other EU institutions in several ways.
When a new Commission takes office, its members are nominated by the governments of the EU countries, but they cannot be appointed without Parliament’s approval. Parliament interviews each of them individually, including the prospective Commission President, and then votes on whether to approve the Commission as a whole.
Throughout its term of office, the Commission remains politically accountable to Parliament, which can pass a ‘motion of censure’ requiring the Commission’s mass resignation.
More generally, Parliament exercises control by regularly examining reports sent to it by the Commission (the annual general report, reports on the implementation of the budget, etc.). Moreover, MEPs regularly ask the Commission questions which the commissioners are legally required to answer.
Parliament also monitors the work of the Council: MEPs regularly ask the Council questions, and the President of the Council attends the EP’s plenary sessions and takes part in important debates.
Parliament can exercise further democratic control by examining petitions from citizens and setting up committees of inquiry.
Finally, Parliament provides input to every EU summit (the European Council meetings). At the opening of each summit, the President of Parliament is invited to express Parliament’s views and concerns about topical issues and the items on the European Council’s agenda.

3. The power of the purse
The EU’s annual budget is decided jointly by Parliament and the Council. Parliament debates it in two successive readings, and the budget does not come into force until it has been signed by the President of Parliament.
Parliament’s Committee on Budgetary Control monitors how the budget is spent. In addition, the Parliament each year decides whether to approve the Commission’s handling of the budget. This approval process is technically known as ‘granting a discharge’.
How is Parliament’s work organised?
Parliament’s work is divided into two main stages.

  • Preparing for the plenary session. MEPs debate the Commission’s proposals in committees that specialise in particular areas of EU activity and on the basis of a report prepared by one of the committee members, the so called ‘rapporteur’. The report gives the background and the pros and cons of the proposal. The issues for debate are also discussed by the political groups.

  • The plenary session. Each year, 12 four-day plenary sessions are held in Strasbourg and six two-day sessions are held in Brussels. At these sessions, Parliament examines proposed legislation and votes on amendments before deciding on the text as a whole.

Other agenda items may include Commission ‘communications’ setting out its intentions in a particular sphere, or questions to the Commission or Council about what is going on in the EU or the wider world.

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