Phd Defence: Legislative differentiation: reconciling uniformity and diversity in EU legislation

This research (and book) takes the European Union’s motto ‘United in Diversity’ as a starting point. The twenty-seven Member States of the EU are diverse in their languages, cultures and traditions, just as in their economic structure, social governance and geographical circumstances. This diversity has been part of the EU since its initial beginnings and created challenges to achieving common objectives. Over the years, various legal instruments of differentiation have developed to accommodate the heterogeneity within the EU. As an alternative to what is called 'differentiated integration' (including the so-called opt-outs), Hübner researches the potential of another form that accommodates this heterogeneity: legislative differentiation. This might be suitable in situations where: uniform rules are not necessary for achieving the legislation’s objectives; objectives can be more effectively attained at the national level; the impact on the internal market is limited; or there is a need for a compromise on substantive issues.

Legislative differentiation

A consequence of the varying forms of differentiated integration is that they break the unity between the Member States, as one or more Member States are not participating in further integration. In contrast, legislative differentiation is presented as a more nuanced approach, where rules apply equally to all Member States. Legislative differentiation refers to EU legislation which allows Member States certain forms and degrees of discretion in the application and implementation of EU rules, and the way Member States employ this discretion within their national frameworks. Compared to differentiated integration, legislative differentiation guarantees, in principle, the participation of all Member States in a policy.

Legislative differentiation within the European Union can manifest in several ways. While a legal instrument applies equally to all Member States, provisions may, for example, contain general exemptions for Member States, provide a choice among alternatives or allow them to decide whether to apply a specific provision. The main research question is: How does this approach reconciles the effective achievement of EU objectives with the accommodation of differences among EU Member States, and can this approach stand as a viable alternative to differentiated integration? As it turns out this applies in situations where uniform rules are not necessary for achieving the legislation’s objectives, where objectives can be more effectively attained at the national level, where the impact on the internal market is limited, or where there is a need for a compromise on substantive issues.

The pursuit of EU uniformity and a wish for national of differentiation

Overall, legislative differentiation reflects the autonomy of the Member States within the European Union. This autonomy is delineated by the balancing act embedded in EU legislation, where the scales tip between the pursuit of uniformity and the accommodation of differentiation. There are five core values that determine the choice for legislative differentiation: national autonomy, coherence, legal equality, legal certainty, and the effectiveness of EU policies. Within this context, a potential conflict surfaces between two values in particular: national autonomy and coherence. Additionally, the values of legal equality, legal certainty, and the effectiveness of EU policies can, in specific situations, function both as justifications for and arguments against differentiation. Importantly, these values are not mutually exclusive; rather, they frequently overlap and interconnect. 

Case studies: GDPR and others

The research looks specifically into the these aspects based on a comparison of three domains (the General Data Protection Regulation, the Consumer Rights Directive and the domain of economic policy-making within the EU) and three Member States: Germany, Ireland and the Netherlands. Several aspects of of legislative differentiation are studied: the mandatory or optional nature of discretion; different forms of discretion allowed to Member States (to adjust the scope of application, to further develop EU legislation, or to rely on existing national legal rules); and thirdly the degree of discretion provided to the Member States.

Germany, Ireland, and the Netherlands have demonstrated diverse approaches to legislative differentiation within the context discussed. Despite this diversity, common trends emerge. When implementing the CRD and GDPR, these Member States often adopt a default strategy of maintaining the status quo, that is preserving the choices made earlier in existing national legislation or the current level of protection within the Member State. This approach is closely tied to the entire national legal order.

Striking a balance

The assessment of these cases reveals that legislative differentiation is not a panacea, and an increased reliance on it cannot replace such forms of differentiated integration. Nevertheless, it also reveals that legislative differentiation is a well-established instrument in each of these cases. Forming a unity of law is inherently difficult in a multilevel legal order which partly functions at the EU level and partly at the national level. Legislative differentiation helps in striking this balance, by providing Member States the flexibility to maintain a degree of coherence, while also establishing a coherent set of rules at the EU level. 

Legislative differentiation may, initially, appear to conflict with the principle of legal certainty, but  at closer examination in fact be necessary to ensure legal certainty. Also, legislative differentiation is able to guarantee legal equality between Member States, by achieving substantive equality – a result-based notion of equality – across the Member States. Legislative differentiation also does not impair the effective achievement of the legislation’s objectives, because it often relates to situations in which there is no or a limited cross-border effect. 

But, not all legislative differentiation resonates with the preceding line of thought. Within the context of the CRD and GDPR, certain provisions exist that grant Member States the flexibility to establish differing rules, regardless of their potential impact on the internal market. They create an unequal level playing field in the EU, as traders and data processors are not subject to the same conditions regardless of which Member State they operate in. Consequently, these legal differences may serve as obstacles for foreign companies seeking to enter another Member States market.