The EU and the Administration’s Unattainable Subordination to the Law

1. Introduction

Legal principles developed by the EU courts and legal techniques of judicial review have fleshed out an essential tenet of the rule of law: as in the public law systems of its Member States, law both grounds and constrains the exercise of public authority in the EU. But the law’s ability to serve these ends is often strained by the functional needs of integration and by the new realities for which legal solutions must be crafted. The ensuing tensions have been at the core, sometimes dramatically so, of important legal disputes.^[1] Yet, in one way or another, the EU courts or the legal services of the other institutions have ultimately found ways to uphold the law’s enabling and controlling role, even when the solutions remained contentious.^[2]

Time and again, in high-profile judgments, the Court of Justice of the European Union (‘the Court’) recognizes the challenges of making reality fit the system. Time and again, the Court has found a solution that maintained the legal fiction of subordination to the law, within the limits of its jurisdiction. That happened in Fundación Tatiana Pérez, the most recent iteration of the Meroni doctrine, according to which the powers ‘delegated’ to European agencies must be ‘clearly defined executive powers … subject to strict review in the light of objective criteria’.^[3] Similarly, in Gauweiler and Weiss, the Court considered the European Central Bank’s exercise of wide discretion as being subject to the principle of proportionality, as if the principle could be a legal constraint to the exercise of monetary policy.^[4] The same occurs in relation to administrative acts like approving or refusing approval of pesticides and of their components; here, despite the density of the detailed written legal norms applicable, the high complexity and uncertainty of the activities underlying those acts necessarily limit the Court’s jurisdiction.^[5]

Behind the appearance of subordination to the law lie powers that, for structural reasons, cannot be subject to legal strictures in the way that the case law and the system of law that the Court has delineated seem to uphold. That happens when legal acts have as their object socio-economic activities that are characterized by uncertainty, are future-oriented and hence rely on complex prognostic and probabilistic assessments, mobilize competing interests, and have a political-economic relevance that extends beyond the solution given to specific cases. Because of these characteristics, the legal norms that frame those activities are necessarily indeterminate. That also means that their justiciability is weakened and, often, can only be secured by resorting to legal principles that hardly constrain the resolution of concrete cases. In these circumstances, the tension between the tenet of subordination to the law and the necessity of addressing socio-economic problems means that the strict subordination of power to the law, as conceived of by EU courts in the EU legal system, is simply not tenable. Because of the nature of activities they perform, administrations may determine the meaning of the law that binds them; through exercising their powers, they articulate and generate the public interests that they are bound to pursue. They are deeply imbricated in the social-economic reality that they regulate. Courts have little capacity to constrain the constitutive powers of such administrations.

After presenting this argument in some more detail (Section 2), I develop it by analysing two areas where these characteristics are present: banking resolution, ie administrative activity dealing with bank failures, and the authorization of pesticides and of their component substances. Both areas are instances of a reality that runs through various fields of public action, as the characteristics mentioned above indicate: they pertain to socio-economic activities marked by uncertainty, and they require future-oriented public action that relies on complex prognostic and probabilistic assessments, the balancing of competing interests and the adoption of individual decisions of political-economic significance. Banking resolution is a particularly compelling illustration of the impossible subordination of administrative powers to a narrow conception of the law: the EU regulation permits the resolution of a bank if it is ‘necessary in the public interest’.^[6] But the illustrative capacity of this example is also limited by the exceptionality of the power of resolution (as I explain below, the administrative resolution of banks is something that public powers intend to avoid). The authorization of pesticides, in contrast, is an ordinary administrative activity, which despite its arcane technical aspects, is key to the preservation of human health and biodiversity. These two examples are complementary in another regard: the administrative system for banking resolution (‘the single resolution mechanism’) is centred around an EU agency; the authorization of pesticides, while also involving an agency, centres around the Commission’s formal decision-making powers. But this important difference in administrative structures makes no difference to the law’s ability to contain the administrative powers at stake.

Sections 3 and 4 guide the reader through the intricacies of banking resolution and pesticide regulation. Section 3 illuminates the limits of the ‘objective criteria and conditions’ enshrined as presumptive legal constraints on administrative action relating to banking resolution. It argues that neither these nor the possibility of judicial review sets substantive boundaries to how administrative bodies define and delimit the scope of these criteria and conditions. The avoidance of ‘an actual transfer of responsibility of decision-making’ to an agency depends on the administrative dynamic that unfolds through legally mandated collaboration.^[7] Section 4 examines the EU regulation of pesticides, where authorisations depend on the absence of ‘harmful’ and ‘unacceptable effects’ on human or animal health and on the environment.^[8] It examines the ability of courts to review administrative determinations of what counts as ‘harmful’ and ‘unacceptable effects’. I show that these terms are difficult—perhaps impossible—to define through techniques of legal interpretation. Instead, they become, in the judicial process, grounds for establishing rules on the burden and standard of proof. Combined with the general legal principles that govern judicial review of administrative action, those rules enable courts to reconstruct the administrative process that has ascertained the presence or absence of ‘harmful’ and ‘unacceptable effects’.

Sections 5 and 6 present the jurisprudential implications of the analysis. The nature of the activity concerned and the centrality of the administrative system regulating it make subordination to the law unattainable. They make the meaning of applicable legal norms situationally dependent, such that we cannot understand the enabling norms independently of specific instances of decision-making, and of decision-makers’ policy preferences. Beneath lengthy discussions on the intensity and effectiveness of judicial review lies the reality of constitutive powers, whereby administrations define the meaning of the law that binds them through public interest determinations. Section 7 concludes by enunciating the implications of this argument for EU law.

2. Public Power, the Law, and the EU

That law is the foundation of, and a crucial constraint to, public power is as fundamental a pillar of the EU as the goal of integration that law is meant to sustain. Thus, the principle of conferral obliges the EU to demonstrate the existence of a legal basis for its programmes and legislation, and judicial rulings insist that law grounds, enables and delimits the exercise of public power.^[9] Judicially made principles showed that the EU can uphold the same tenets of public law that it risked eroding as EU law progressively adapted national legal systems to the needs of integration. Through judicial and doctrinal development, the EU law approach to constraining public power became largely analogous to those found in the public law of the Member States.^[10] From the perspective of constructing the legal system, the different objects to which these legal frameworks applied mattered little.^[11] General principles of law stemming from the common constitutional traditions of the Member States were the normative glue that held together the fragmented complex legal regimes comprising EU law.

It also mattered little that the regulatory activities of the internal market placed the EU administrations at the heart of legal regimes directed at taming and steering the socio-economic interdependencies that arose from technological and scientific progress,^[12] and that the activities to be regulated were such that the law would struggle to effectively regulate them. No matter the complexity, the Court ensured that the legal anchor that enables the courts to be the ultimate arbiters of the legality remained steady. It always reiterated this role, reinstated it where needed (even if sometimes only formally), and, thus, secured the subordination of public power to the law typical in constitutional systems.

The comfort that public lawyers took from the role of courts in the EU’s political-administrative system, however, paid little heed to what the limits of judicial review may conceal. Scholars of regulation have since long noted the role of regulators ‘in constituting, not just administering, the regulatory systems which govern the activities of both public and private actors’ as they ‘wield power over significant swathes of public and private life’.^[13] They have identified the areas where public intervention is, in essence, future-oriented, and legislatively enacted norms have a weaker material density;^[14] areas where, despite the legal norms that back their action, ‘the administration largely forms and adapts its action program’ in view of goals and conditions set in legal norms.^[15] But the admission that the law may not, after all, subordinate public power, as an external constraint to the exercise of that power that can be meaningfully imposed by courts, remains an irritant in an EU law system that continues to insist that law is the foundation of competences and mandates. General legal principles like proportionality and careful and impartial examination may help judges and lawyers make sense of complex situations, but they arguably provide little guidance for the resolution of concrete policy issues or for the determination of substantive legality. But the EU Courts nevertheless uphold the law’s role in relation to the EU’s administrative system—operating beneath the ‘more traditional skyline dominated by … the Commission, the Council, the Parliament, the Member States and their governments’^[16]— seemingly oblivious to the reality of the exercise of administrative power. In given structural conditions, the socio-economic function that administrators perform may preclude the subordination of power to the law that liberal constitutionalism dictates, even if the law frames their action, and even if courts can be called upon to review.

The detailed legal strictures directed at governing complex socio-economic systems and shaping the conduct of their actors, which one finds in many EU regulations, are not only the result of difficult political compromises at the supranational level; they also reflect the characteristics of the reality that they regulate. The needs of public interest that motivate the creation of the legislative regime arise from the social interdependences generated by political, economic, and technological developments (irrespective of whether they have been caused by European integration). These social interdependencies make public intervention necessary to create and protect public goods (financial stability in view of the financial operations that compose financial markets; environmental and public health protection stemming from the use of pesticides).^[17] More than creating and grounding administrative power, legislative frameworks recognize the necessity of public intervention and, to a significant extent, validate the complex systems that precede them.^[18] Legislative frameworks have an important function: they authorize, and hence enable, the functions that administrations will perform. But they do not create those powers. They organize the terms of public intervention, and design the complex administrative systems that support it, to shape the socio-economic reality and the terms of social interdependence.^[19]

In many areas of EU law, complex administrative systems act in ‘normatively diluted’ spaces,^[20] because of the nature of the activity that they regulate. If what is at stake are risks stemming from technology, from the functioning of markets or of integrated spaces, and the protection of public goods valued in society, the legal norms that delimit the legal conditions of administrative action reflect the uncertainty of that activity, the complexity it involves, and the forward-looking character of public intervention. Those norms, then, set legal conditions by reference to value-based and goal-oriented terms. Key norms of the legal regimes hinge on the specification of the meaning of underdetermined normative predicates.^[21] The instances that will be analysed in detail below provide two illustrations: the Single Resolution Board can only adopt a resolution scheme (which will liquidate a bank in financial distress administratively instead of allowing normal insolvency procedures), if that is ‘necessary in the public interest’ and there is no ‘reasonable prospect’ that private law measures would prevent its failure within a ‘reasonable timeframe’^[22]; the Commission’s authorization or refusal thereof for placing pesticides on the market depends on determining whether they have ‘harmful’ and ‘unacceptable effects’ on human or animal health and on the environment.^[23] These terms are underdetermined because it is impossible to know what ‘public interest’ or ‘harmful’ and ‘unacceptable effects’ are without the decisions produced by the administrative system. They have no autonomous meaning that is external to administrative action. At the same time, the legal norms whose meaning depends on such terms are not just empty vessels. They constrain administrative actors to discursive processes that require a justification fitting with the legal framework.^[24] In this sense, they also co-determine the outcomes.^[25]

The awareness of public administrations acting in such ‘normatively diluted’ spaces is certainly nothing new. It is the reason why public lawyers focussed on administrative organization and procedure as a means to compensate for the law’s material indeterminacy and, thereby, retain law’s role in constraining administrative action.^[26] However, when administrations act in structural circumstances of uncertainty, complexity, and ‘situational dependence’, calling for future-oriented action, this compensatory function largely fails at securing law’s ability to subordinate the exercise of administrative powers.^[27] In substantive terms, the scope of the legal norms depends to a great extent on the practices and decisions of the administrative bodies that they are meant to constrain. It is administrative actors who define the meaning of those key terms used in the legal norms that delimit their mandates. As will be shown below, this determination is consequential.

These underdetermined key terms may have three functions. First, they define the legal conditions of action. If these conditions are not met, the decision-makers will be unable to determine a resolution scheme for the financial institution in distress or authorize the marketing of pesticides. Second, they identify the purpose of that action, ie the goals that administrators should pursue in concrete instances (eg that a resolution is necessary in the public interest; that pesticides can safely be used by farmers whose crops depend on them while avoiding ‘harmful effects’ on public health, and ‘unacceptable effects’ on the environment).^[28] It is the very essence of administrative action to define how these goals are pursued. Third, those key terms set out the raison d’être of the whole administrative system (eg precluding the failure of banks and securing the public interest when failure cannot be avoided; blocking ‘harmful’ and ‘unacceptable effects’ stemming from the use of pesticides in crops). They provide the material foundations of the administrative system. The administrative system was created to establish what is acceptable/unacceptable, what is harmful/innocuous, what is/is not in the public interest. The lines between these opposites are impossible to establish in abstract or a priori, because the public interests that justify that system are only articulated—and generated—through that very same system. Those lines can only be defined through the cumulation of administrative acts and practices unfolding under those legal regimes. But that also means that neither those terms, nor the norms that enshrine them, have a substantive content which is external to the administrative process. The verification of the legal capacity to act depends, therefore, largely on the meaning that the administrative system gives to those terms.

This argument sheds a different light on not only on the law’s ability to define the boundaries of administrative action, but also on the limits of judicial review. These limits run deeper than just the exercise of restraint—they stem from the limits of the legal norms that frame administrative action. In instances such as the ones I analyse in this article, it is imperative to understand and assess the extent to which norms can provide legal grounds that a court can interpret. The reason is straightforward. As Grimm writes: ‘The control of legality depends on the existence of justiciable norms. Where these are lacking, there is nothing for the courts to review’.^[29] Grimm’s analysis refers to a very different situation (the weakening role of the rule of law in the welfare state), but it applies here too: the control of legality through goal-oriented and open-ended norms amounts to assessing ‘whether conflicting goals were reasonably weighed and all normatively prescribed aspects were considered’.^[30] This terminology resonates clearly with the principles of proportionality and careful and impartial assessment which have become cornerstones of judicial review in the EU in matters of discretion and technical complexity. These principles have enabled the courts to reconstruct the decision-making process following legal parameters. But they also helped to perpetuate a three-fold fiction: where legal norms delimit the conditions for public action (ie define the grounds for lawful public intervention), they enable a judicial judgment to ascertain whether those conditions were met (even where a ‘margin of discretion’ is acknowledged); this judgment subordinates administrative power to the law and ascertains whether legally permissible measures were adopted; and judicial control is autonomous of, and external to, the assessments that decision-makers have conducted.

Following this path, we ignore the necessary circularity that such norms entail, viz., we only know what they mean based on the administrative action that concretizes them, because the law’s meaning (and the determination of what is lawful) depends on the policy objectives that the decision-makers were set up to achieve.^[31] We ignore that, in the structural circumstances considered in this analysis, the powers to choose the best solution in view of the circumstances of the case are qualitatively different from a discretionary power. They are constitutive powers. As administrative decision-makers interpret key norms that lay out the legal conditions of their action, they define those conditions as part of their public interest determinations. They delimit the boundaries of their own powers, through the same processes by which they perform their functions.

That does not mean that judicial review will be meaningless. The Court retains, of course, its ability to adjudicate as an impartial umpire, with the support of judicial tools—including proportionality and careful and impartial assessment.^[32] But, as a matter of principle, it can only do as much as the legal norms allow it. If those norms are not external constraints on public action, but rather means of mediating the processes through which different actors define how public interests are composed and legal positions defined, the courts are not controllers of legality. They are, instead, actors that mediate the processes through which public interests are pursued in areas of deep complexity.^[33]

The phenomenon I analyse affects particularly the meaning of the Meroni delegation strictures, which in EU law are meant to constrain the powers that EU agencies have. But it exists irrespective of whether the decision-maker is an agency or an EU institution acting in an administrative capacity, as the examples I will examine show.

3. Banking Resolution: The Porous Material Boundaries of an Administrative System

In the aftermath of the financial crisis, the EU set up the single resolution mechanism as part of the still incomplete banking union. If and where needed, the EU now has the capacity to wind down a credit institution or group that is ‘failing or likely to fail’, provided that there is ‘no reasonable prospect that any alternative private sector measures (…) prevent its failure within a reasonable timeframe’ and that a resolution action ‘is necessary in the public interest’.^[34] This is an exceptional power in a double sense: the regulation put in place a system of prevention meant to avoid resolution. Depending on the economic relevance of the institution, the political impact of resolution on the Member States where the institution or group is based (both in terms of financial stability, and of the resources needed to prevent undesirable economic effects) can be very significant, to the point that resolution authorities will prefer to avoid exercising that power. The success of their action is measured more by prevention than by the correction that resolution entails. At the core of a resolution decision—and hence, at the core of the whole system of banking crisis management—is the assessment of whether there is a public interest in taking that route.^[35] In the EU, this decision will determine whether the failing bank will be subject to national insolvency procedures or to the EU administrative procedure, each having significantly different implications on the protection of creditors, the involvement of public funds, and transnational mutualization of risks.^[36]

Unsurprisingly, the most complex part of the resolution ‘mechanism’ created in 2014—composed of a Single Resolution Board (SRB), the Council, the Commission and national resolution authorities, and involving also the European Central Bank—is the procedure leading up to a resolution decision.^[37] The stakes, in particular (but not only) of determining if resolution is indeed in the public interest, both mobilized and defied the strictures of the Meroni delegation doctrine, ie that an ‘actual transfer of responsibility’ to an administrative agency should be avoided.^[38] Understanding this point—and what the allocation of the legal authority to decide on resolution says about the law’s ability to constrain such administrative powers—requires a brief explanation of how the procedure was set up.

A. ’Necessary in the Public Interest’ and the Delegation Doctrine

The Meroni strictures, as well as political disputes during negotiations on the single resolution mechanism regulation about the allocation of the power of resolution, have resulted in a particularly complex procedure for determining the resolution of a bank. Resolution can happen ‘only when’, first, the ECB (in consultation with the SRB) finds that a credit institution or group is ‘failing or likely to fail’; second, the SRB, or, where applicable, national resolution authorities in close cooperation with the ECB, ascertain that there is ‘no reasonable prospect that any alternative private sector measures … would prevent its failure within a reasonable timeframe’; and, third, the SRB concludes that a resolution action ‘is necessary in the public interest’, ie it is ‘proportionate to one or more’ of the resolution objectives.^[39] Formally, the SRB must verify the public interest in resolution, with the Commission and the ECB being mere observers. Importantly, that assessment will be converted into a decision subject to the control of the Commission and the Council, if—and only if—the SRB concludes that such public interest is present.^[40] The legal regime thus places the SRB in a position of subordination not only to the law that it must apply, but also to the EU institutions. In fact, here, subordination to the law is meant to have precisely this effect. Formally, the regulation disconnected the administrative ‘technical’ capacity and legal competence to determine the resolution scheme, on the one hand, and the political responsibility for the decisions taken, on the other. In reality, it diffuses the power to determine whether resolution is ‘necessary in the public interest’ amongst the various actors involved in the process, by virtue of the inevitability of cooperation. Cooperation is inevitable because the competence to define the resolution scheme (attributed to the SRB) is detached from the formal ability to determine ‘the discretionary aspects’ of that same scheme (ultimately subject to a decision of the Commission).^[41] As the institutions and the Court acknowledged, it is impossible to separate these two components of the decision, even if the regulation requires such a distinction to delimit the respective spheres of intervention of the Commission and the Council.^[42]

This administrative system was notoriously tested during the resolution of Banco Popular in 2017. More than a hundred actions against the resolution decision reached the General Court.^[43] Most were filed against the SRB’s resolution scheme and the Commission’s endorsement thereof, some against the SRB only and another against the Commission only.^[44] There were clear doubts about who was the formal author of the decision. One of these cases (Fundación Tatiana Pérez) addressed that question. Overriding a contrary judgment of the General Court, the Court of Justice held that the SRB’s decision cannot produce legal effects without the Commission’s endorsement of its discretionary aspects, and, hence, the legal author of the decision is the Commission, or at least, ‘it is the Commission, and not the SRB, which must answer for that resolution action before the EU judicature’.^[45] Following word for word the Regulation’s preamble, the Court held that the ‘involvement’ of the Commission and, as the case may be, of the Council, ‘strengthens the necessary operational independence of the SRB while respecting the [Meroni] principles of delegation of powers to agencies’.^[46] Because ‘the discretionary aspects of a resolution scheme … are inextricably linked to the more technical aspects of resolution’, it is impossible to distinguish them for the purposes of determining who has passive standing before the Court.^[47] This solution, the Court held, is required by Meroni, according to which an EU agency cannot be delegated a ‘discretionary power implying a wide margin of discretion which may, according to the use which is made of it, make possible the execution of actual economic policy’ and, hence, would cause an ‘actual transfer of responsibility’.^[48]

Now, the conclusion that the regulation abides by the Meroni doctrine was only possible because the Court also considered that the SRB’s ‘wide margin of discretion… is, by virtue of Article 18(1) and (4) to (6) of the SRM Regulation, circumscribed by objective criteria and conditions delimiting the SRB’s scope of action’.^[49] That includes the requirement that the resolution be ‘necessary in the public interest’ (Article 18(1)(c)) in the sense indicated in Article 18(5).^[50] ‘Public interest’ is legislatively specified as ‘necessary for the achievement of’ and ‘proportionate to one or more’ of the following objectives: ‘[ensuring the continuity of critical functions; [avoiding] significant adverse effects on financial stability …’; ‘[protecting] public funds by minimising reliance on extraordinary public financial support’; ‘protecting depositors … and investors …’; ‘[protecting] client funds and client assets’.^[51] The political judgment that such assessments entail is clearly greater than those ‘requiring an economic analysis’, which the Court encounters in other fields of EU law (such as ‘significant impediment to effective competition’). The multidimensionality of determining ‘public interest’ in this case and the intertwined economic (such as ‘the continuity of critical functions’) and legal considerations (protection of depositors and investors) set this requirement apart from those concepts which are common currency in fields like competition law.^[52] And yet, a public interest in resolution is a legal requirement—an objective condition of action—that, according to the Court of Justice in Fundación Tatiana Pérez, sufficiently circumscribes the SRB’s powers.^[53]

This judicial pronouncement in Fundación Tatiana Pérez simply follows the EU law nomenclature that guides the powers attributed to EU agencies, in accordance with the Meroni doctrine. Usually, cases involving Meroni are about the possibility of judicial review, but in this case, the Court considered the SRB’s powers to be sufficiently circumscribed by political—not legal—controls that formally belong to the Commission and to the Council (when the Commission disagrees about the existence of public interest). This important difference notwithstanding, as a matter of law, the verification of an objective condition of action can and must be ‘amenable’ to judicial review because it is a condition of lawful action.^[54] As such, and irrespective of the degree of judicial review, it must be subject to a ‘substantive examination’ that ‘extends to all the elements’ of the challenged acts ‘which are subject to in-depth review’, as the Court has held in other policy fields where the discretionary aspects of a decision clearly fall on the Commission.^[55] But the Court’s practice in judicial review cases indicates otherwise; indeed the Court cannot possibly conduct a judicial review that constrains the finding of public interest in resolution.

B. ’Necessary in the Public Interest’ and Judicial Review

Amongst the many cases that the resolution of Banco Popular triggered was Eleveté Invest Group, where the applicants contested the verification of each of the conditions of resolution set in Article 18, including the public interest requirement.^[56] The applicants sought, unsuccessfully, to set legal boundaries to the verification of public interest, and proportionality was the entry point for their legal claim. They argued that the SRB’s failure to weigh relevant interests and the ‘unnecessary destruction of value’ that the resolution entailed breached proportionality.^[57] The Court, however, dismissed the argument quickly: the requirement of public interest, in its view, did not entail an obligation to weigh the public interest in the resolution of the bank against the private interests of the shareholders.^[58] In addition, Article 14(2) SRM Regulation’s directive to ‘minimise the cost of resolution and avoid destruction of value unless necessary to achieve the resolution objectives’ could not be interpreted as limiting a finding of public interest.^[59] On the contrary, ‘where the destruction of value caused by the chosen resolution tool is necessary to achieve those objectives and therefore in the public interest, the resolution cannot be regarded as disproportionate’.^[60] The Court thus shielded the SRB’s discretion against property claims that would hinder its ability to decide on a resolution scheme. Irrespective of the merits of this position, the Court’s reasoning is circular: because the resolution tool is necessary to achieve the objective pursued—something that only the SRB can ascertain from within the administrative web of collaboration into which it is inserted—it cannot be disproportionate. Full stop. The Court did not assess why that tool is necessary, and when considering whether the SRB had minimized the destruction of value that it entails (as obliged by law), it simply reiterated what the SRB had stated in its decision.^[61] Finally, it dismissed summarily the allegations that the actions of the SRB and the Spanish authorities were ‘discriminatory and arbitrary’ when compared to other decisions where no public interest in resolution was found: the applicant’s claims in this regard were ‘purely speculative’ and ‘unrelated to the issue of compliance with the public interest criterion’, the Court found.^[62]

There is little point in criticizing the Court in view of the degree of judicial review that it applies to complex technical assessments, or arguing that the Court has conducted rigorous judicial scrutiny of such decisions.^[63] My point is a different one: setting legal boundaries to such an open-ended condition of action was always beyond judicial reach. In digging out the minutia of the case law to prove the Court wrong, or to identify shortcomings in its analysis, we must not ignore the limits of the legal norm that underlies the dispute. A legal norm that sets out a condition of administrative action in the terms of Article 18(1)(c) and (5)—that the action be ‘necessary in the public interest’, ie ‘necessary for the achievement of, and … proportionate to[,] one or more of the resolution objectives’ and the ‘winding up of the entity under normal insolvency proceedings would not meet those resolution objectives to the same extent’—does not provide legal grounds external to the administrative action it is meant to ground and constrain. It does not provide legal grounds that a court can interpret to re-evaluate the administrative assessments of necessity.

If it were not a legal condition of action, few would contest that determining what is in the public interest is a competence of the administrative actors. That is their very purpose, the raison d’être of an administrative system.^[64] The fact that the legislature turned it into a condition of action—a ground of the lawful exercise of the power of resolution—does not make its verification more amenable to judicial review. To claim otherwise is to reify the fictions of subordination to the law, and of the Court’s ability to review determinations of public interest.

When it comes to ascertaining whether the condition of public interest was met, the Court can do little more than just restate the law and the SRB’s reasoning. Anything else would mean weighing in on the intricacies not only of the technical matters—which are not out of reach of the courts’ purview—but more importantly, on the delicate compromises that the web of administrative collaboration secures in the process leading up to a resolution, and which contends with the whole system of banking crisis management. Even in an action of annulment which ‘provides a particularly appropriate procedural framework for the thorough examination … of legal and factual questions, particularly in complex fields’,^[65] the limits of what the Court can ascertain based on the law are clear.

C. ’Objective Criteria and Conditions Delimiting the SRB’s Scope of Action’

Eleveté Invest Group indicates that, no matter how detailed the Court’s review, the legal tools at its disposal would not have allowed it to weigh in on the administrative practices developed under the single resolution mechanism regulation to determine the presence or absence of a public interest in resolution. Manifestly, that assessment remains in the SRB’s hands, in collaboration with (and, if positive, subject to the control of) the Commission (and the Council, where applicable). The reason is not that resolution is an urgent and exceptional matter that must be decided in a short time and is the culmination of a series of interventions by different administrative bodies. It also cannot be found in the fact that the Court decided these cases in 2022, five years after the bank had disappeared as a result of the SRB’s decision and of the Commission’s endorsement (potentially, the court’s decision could still have affected the future practice of resolution). Instead, the reason why judicial review cannot weigh in on the administrative practice is the nature of the activity concerned: it is ‘future-oriented’, given the objectives of Article 14(2), and it exhibits ‘such a high degree of complexity, situational dependence, and unpredictability that [it] cannot be fully anticipated and thus cannot be normatively determined’.^[66] These characteristics affect the possibility of establishing ‘objective criteria and conditions’ that constrain the scope of administrative action needed to manage an unavoidable bank crisis.^[67] Because of the activities that they frame, these criteria and conditions reflect, rather than contain, public action. The capacity of decision-makers to weigh in depends not only on legislative design,^[68] but also on the nature of the activities concerned. In drafting a statute, legislatures must establish conditions for future-oriented action that are dependent on complex technical assessments and weighing competing interests; assessments that only the administrator is competent to make. In the case of bank resolution, legality depends on the necessity of the action to safeguard financial stability, minimize disruptions to the real economy, and shield taxpayers from losses.

Against this background, the Fundación Tatiana Pérez acquires a different significance. It upheld Meroni in circumstances where the norms that are intended to delimit the scope of executive powers clearly defy the Court’s ability to judicially review. The nature of the subject matter of regulation is such that it is impossible—as the Commission emphasized and the Court upheld—to disentangle the technical aspects from the wide discretionary powers involved in resolution. The result, as argued above, is a dispersion of power within the administrative system. This result defies the raison d’être of Meroni, even as it may be used in the legal regime of banking resolution to seek political and not legal subordination. First, such dispersion of power is antithetical to the guarantee of avoiding an ‘actual transfer of responsibility’, which was an imperative dictated in the 1960s in the name of institutional balance, and remains crucial to secure judicial review.^[69] That presupposes the ability to identify the actual decision-maker, which is substantively impossible in this case (even as the SRB’s actions evolve in the Commission’s formal shadow). Second, and more importantly, it leaves the extent to which there is an ‘actual transfer of responsibility’ largely in the hands of the administrative process, insofar as this is fundamentally dependent on administrative collaboration. Both the SRB and the Commission asserted their capacity to be sued before the Court, each claiming that their respective acts were the ones that produced legal effects to the exclusion of the other. Beneath that judicial battle was the prospect that a judicial pronouncement holding the SRB to be the author of the challengeable act could have changed the administrative dynamics between the agency and the Commission during the procedure. Arguably, a different outcome could have weakened the Commission in the process leading up to the SRB’s adoption of a resolution scheme in cases that might entail a positive declaration of public interest. Although this result seemingly confirms the grip of Meroni, delegation strictures that mandate a formal separation between wide discretionary powers and technical assessments can hardly weigh in on the relative roles of the Commission and the SRB. These remain largely dependent (and hidden) in the dynamics of collaboration. Arguably, the impossibility of distinguishing them suggests that one cannot presume that the Commission can effectively weigh in on the discretionary aspects of the resolution scheme merely based on its procedural powers of intervention (information, status of observer in the SRB meetings, endorsement). That is, however, the path that the Court followed to conclude that the regulation precludes an actual transfer of responsibility.^[70]

The unattainability of subordination of public powers to the law may come with additional challenges in the case of EU agencies, because of its implications to the Meroni doctrine. That unattainability is, however, independent of the institutional framework for the allocation of administrative powers in the EU. It lies, rather, in the material characteristics of the socio-economic activities that are both the object of the law and of the mandates given to administrators in view of the ensuing societal challenges. The case of the authorization of pesticides and their components will demonstrate this point.

4. Fighting Pests Without ‘Harmful Effects’ and ‘Unacceptable Effect[s]’

Legal norms that do not serve as external constraints on public action, but rather reflect the characteristics of the activities that are the object of regulation, are present whenever those activities have the structural conditions identified above. Legal norms with a similar structure to those in Article 18 of the SRM Regulation indicate conditions of lawful action that can only be determined through the administrative powers that they are meant to contain. One example is the legal conditions for the approval of the active substances, ie the main chemical or biological components of pesticides. The grant, renewal, and revision of the Commission’s authorization of those substances require the Commission to certify that the ‘approval criteria provided for in Article 4 of Regulation 1107/2009 are satisfied’.

In essence, the regulation enables the Commission to approve active substances in pesticides ‘if it may be expected, in the light of current scientific and technical knowledge, that (…) plant protection products containing that active substance, [under] realistic conditions of use: (a) [are] sufficiently effective, (b) (…) have no immediate or delayed harmful effects on human health (…), or animal health (…), (c) [do] not have any unacceptable effects on plants or plant products; (d) [do] not cause unnecessary suffering and pain to vertebrates; [and] (e) have no unacceptable effect on the environment (…)’.^[71] This conclusion depends on ‘taking into account’ approval criteria further specified in an annex that, like many others in EU internal market and environmental legislation, is highly detailed but also includes provisions that lack legal yardsticks external to the administrative actions they are meant to ground and constrain. Amongst other indications, the technical annex resorts to value-based criteria similar to those found in Article 4.^[72] For the sake of simplicity, as I develop my argument, I will take the absence of harmful effects on human or animal health, and unacceptable effects on the environment, to encapsulate the aforementioned five criteria. Analysing the role these terms play within the regulatory framework for the regulation of pesticides, and their component substances, will highlight why the relevant administrative processes cannot, in reality, be subordinated to the pertinent legal norms.

A. The Triple Function of Value-Based Normative Predicates

The absence of harmful effects on human or animal health and of unacceptable effects on the environment is, first of all, a legal condition of action: if it is established (both at the risk assessment and management stages), then the substance ‘shall be approved’ by the Commission (Article 4); if not, the Commission must refuse authorization. Positive decisions ‘definitely and exhaustively’ certify that the substances meet the regulation’s criteria. Negative decisions show that it cannot be established that the criteria were met. Hence, both criteria preclude the exercise of related competence by other national, regional, or local environmental protection authorities.^[73]

But the absence of such effects is more than a legal condition of action; preventing such effects is also the purpose of administrative action, insofar as achieving a ‘high level of protection of both human and animal health and the environment’ is one of the legal regime’s objectives, together with improving the functioning of the internal market and agricultural production.^[74] The order of priority amongst these competing objectives is far from evident. This difficulty was noted in the Group of Chief Scientific Advisors’ report during the revision of the pesticides regulation. The report lamented this lack of clarity and stressed that ‘a literal interpretation of the objectives of the [Regulation] with respect to protection of human health would … not permit any [pesticide] authorisation in the EU’.^[75] The Commission’s reply was that the ‘the aim of EU legislation on pesticides is… not to eliminate pesticides but rather to minimise their impact on human health and the environment’.^[76] This response reflects the conflict central to pesticides regulation: while public health and environmental protection concerns militate towards urgently shifting away from pesticide use in agricultural production, pesticides are currently too important to agricultural production to be eliminated, and so these changes are opposed both by farmers and by the pesticide industry that supports existing modes of agricultural production. Even if one could argue that the protection of human health and the environment should prevail over competing interests and policy goals,^[77] whether and how that will be given effect depends on how decision-makers weigh these competing interests. In instances of scientific uncertainty, regulators must exercise their judgement to determine what is ‘harmful’ and ‘unacceptable’. Absent these assessments made within the administrative system, it is impossible to know the meaning of those value-based terms.

The value-based predicates, ‘harmful’ and ‘unacceptable’ effects, have a third key function. They are the material foundation of the administrative system that enables the Commission to authorize or proscribe active substances in pesticides: it is the determination of what is ‘harmful’ and ‘unacceptable’ that justifies the complex regulatory system (much like the avoidance of resolution and a determination of public interest in resolving a bank is central to the regime of banking resolution). The key nodes of this system are the same as those that compose the ‘administrative machinery’ of the EU:^[78] the administrations of the Member States, the EU agency tasked with collecting and assessing scientific evidence on food-related risks (European Food and Safety Authority—EFSA), the Commission, and a comitology committee composed of Member State representatives that both controls and supports the Commission’s decisions (the Standing Committee on Plants, Animals, Food and Feed). All these actors are involved in the procedure that the Pesticides Regulation has designed to determine whether ‘harmful’ and ‘unacceptable’ effects can be ascertained in relation to specific substances. Their respective roles in the procedures for authorization, revision and renewal depend on their resources and political-administrative capacity within the EU legal system, and on the extent to which they can authoritatively determine what ‘harmful’ and ‘unacceptable’ effects are. The Commission is at the apex of the system, and formally, it determines what ‘harmful’ and ‘unacceptable’ mean for the purposes of Article 4 of the Pesticides Regulation. But the Commission is also embedded in that system. Over a decade and a half, all these actors have progressively established, inter alia, the parameters of acceptable and innocuous risks, thresholds of uncertainty and of data sufficiency for scientific conclusions, accepted scientific methods and practices, methods to assess costs and benefits, determinations of when such assessments are needed, and the value and pertinence of administrative classifications.^[79] These practices are the mesh that holds together the risk assessment and management processes that enable advisory and decision-making bodies alike to ascertain the presence of ‘harmful’ and ‘unacceptable’ effects, within the overall limits of the precautionary principle.

The last two functions of the value-based normative predicates indicate that is it only possible to determine the meaning of ‘harmful’ and ‘unacceptable’ effects through administrative action, which involves coordination amongst the several actors implicated in that process. Only through the ‘regulatory conversations’ in which they engage can we know the meaning of the norms they are applying.^[80] True, Article 4 of the Pesticides Regulation specifies thresholds and indicators that the administrative system must consider, but at their core is the determination of whether some effects are ‘harmful’ or ‘unacceptable’. This is a public interest determination, which is both legally and epistemically within the administrative system’s competence. The performance of that function justifies the existence of administrative powers; without them, it is impossible to ascertain whether effects are ‘harmful’ or ‘unacceptable’.

B. Judicial Review: The Procedural Nature of the Legal Conditions of Action

If it is impossible to know what ‘unacceptable effects’ are before setting in motion the administrative system, Article 4 of the Pesticides Regulation also does not provide material legal grounds to ascertain the lawfulness of administrative decisions that are external to the very administrative action that it grounds and supposedly contains. This necessarily has an impact on judicial review: what is ‘harmful’ or ‘unacceptable’ is not determined by legal norms (even though these terms name conditions for lawful action) and, therefore, this cannot be specified through the judicial process.

The interpretation of ‘unacceptable effects on the environment’ and ‘harmful effects’ on health is rarely the main ground for judicial challenge. Yet, it was central in PAN Europe, where an NGO challenged a Commission’s decision to renew its approval of an active substance, alleging (only) the infringement of the precautionary principle and of the Union’s obligation to ensure a high level of protection of human health and the environment under the Treaty, the Charter of Fundamental Rights (Article 37) and the Pesticides Regulation.^[81] This was one of few cases where it was argued that a decision was illegal because it was insufficiently protective of the environment, as opposed to excessively protective (and, hence, excessively restrictive of the industry’s interests).^[82]

PAN Europe challenged the Commission’s practice of renewing its approval of substances even when the EFSA identifies ‘critical areas of concern’, subject to risk mitigation measures being adopted by Member States. This practice has been criticized by both the Ombudsman and the European Parliament with little success. To counter it, PAN Europe advanced an interpretation of the regulation based on the precautionary principle intended to establish limits on the decision-makers’ discretion.^[83] It argued that because the whole regulation, including the criteria of approval, is ‘underpinned by the precautionary principle’ (as stated in Article 1(4) of the Pesticides Regulation), the applicable law ‘systematically places [those public interests] above the satisfaction of economic interests’.^[84] On this reading, the Commission’s ability to deviate from the EFSA’s scientific conclusions is restricted on legal grounds. Given the criteria of approval set out in the regulation, the ‘“acceptable” nature of the risk [may] be determined [already] at the assessment stage’.^[85] Thus, when the EFSA identifies ‘critical areas of concern’, these signify ‘harmful effects’ on human or animal health or ‘unacceptable effects’ on the environment. Legally, this conclusion could follow from a systematic interpretation of Article 4 of the Pesticides Regulation, read in combination with its Article 1(4). Such interpretation substantively limits the notion of ‘unacceptable effects’, and thereby excludes the Commission’s controversial practice.

This line of argumentation offered the Court a way to ascertain, through interpretation, whether the legislature has adopted a threshold of protection to limit the Commission’s discretion. That view would give substantive ‘bite’ to the CJEU’s pronouncement in Blaise, according to which if ‘the competent authorities come to the conclusion that, having regard to all the information at their disposal, an applicant has not established to the required standard that the conditions governing the approval or authorisation applied for are satisfied, they are bound to decide that the application should be rejected’.^[86] The Court, however, took a different route. Instead of focussing on interpreting Article 4 as a substantive requirement for any decision adopted under the Pesticides Regulation, it focussed on the scheme of risk assessment and management that underpins the application of the precautionary principle to each individual authorization.^[87] This inevitably led it to deciding that the Commission, when deciding individual cases as a risk manager, is not obliged to adopt the scientific evaluator’s conclusions, since the Commission must retain discretion in deciding on each approval application. In other words, the Court rejected an interpretation of the Regulation that would have allowed it to rein in the Commission’s discretion (although it did not make this choice explicit in its judgment).

Note that my argument is not that the Court should have established the limits sought by the applicant.^[88] Reaching that conclusion would require examining the consequences of such result, and the accompanying shift in the relative authorities of EFSA as an advisory risk assessor, and the Commission as the risk manager.^[89] My point is different: the legal conditions of action—‘no harmful effects’ on human or animal health or ‘unacceptable effects’ on the environment—are not substantive, but procedural, requirements.^[90] What counts as ‘harmful’ and ‘unacceptable’, and thus justifies rejecting an approval application, is only determined through administrative practices as applied in individual cases. These decisions are, of course, subject to a possible review of manifest errors of assessment, which usually concerns the soundness of the data and the methods used to establish or dispel the existence of persistent uncertainty.^[91] But the enabling norms offer no constraints on the meaning of ‘harmful’ and ‘unacceptable’ that are external to the administrative process.^[92]

And, yet, the Court concluded that both Article 4 and the precautionary principle are constraints to ‘the Commission’s broad discretionary powers as risk manager’,^[93] which the Court defines as the powers ‘to pursue effectively the objectives [legislatively] assigned to it’ and to carry out ‘complex technical assessments’.^[94] They are constraints, yes, but only in procedural and organizational terms, since they postulate a procedure and an allocation of administrative powers amongst the various bodies and entities involved in the decision. That statement overlooks something fundamental: the Commission’s power in this case is qualitatively different from a discretionary power, understood as its ability to choose the best solution in view of the circumstances of the case. Being a risk manager enables the Commission to determine the meaning of the legal conditions of action as set out in Article 4, and to decide whether and to what extent they are fulfilled. While acting, the Commission sets the order of priority to be given to competing interests, and defines the terms in which they are socially and economically realized. The enabling legal norms place virtually no material limits on this process.

One final note: PAN Europe is pending appeal, and the Court of Justice may reverse the General Court’s ruling.^[95] If it ends up accepting PAN Europe’s argument, the Court will be doing more than ‘just’ setting substantive limits on findings of ‘harmful’ and/or ‘unacceptable’. Setting such limits on legal conditions for action is undoubtedly a judicial task, but given the three-fold function of ‘harmful’ and ‘unacceptable’, if the Court adopts PAN Europe’s proposal, it will also be weighing in on how the public interest is pursued, and more concretely, on how risk managers and assessors alike construe their role in view of their own understanding of the goals they are tasked with under the Regulation. It will also change the relative position of risk managers and assessors within the administrative system, and the functioning of that administrative system.^[96] It will, hence, have an impact on how the production of pesticides is governed.^[97] While this is not out of judicial reach, it means treading on legally thin ground.

C. Judicial Review: The Judicial Value of the Legal Conditions of Action

The difficulty—perhaps impossibility—of defining substantive legal bounds for the discretion of risk managers (who must always act in combination with risk assessors) stems, as argued, from the nature of the activity that is the object of the law. This activity defines the structural conditions under which discretionary powers are exercised. This limits the law’s ability to constrain those powers, and also limits judicial review,^[98] without however, rendering it meaningless. The limits run deeper, I argue, than controlling only for manifest errors of assessment to protect administrative discretion.

Manifest errors of assessment are the main grounds invoked to establish the illegality of a precautionary decision. They lead the Court to assess both the quality of the science behind the decision, and the administrative practices of the Commission and the EFSA under the Pesticides Regulation. Examples of the first category are claims pertaining to the novelty of scientific studies used for the scientific assessment,^[99] the methodological soundness of those studies,^[100] and the choice not to consider new studies or wait for the outcome of related procedures.^[101] Examples of the second category include: the speed with which the Commission and the EFSA carry out the procedure,^[102] the Commission’s practices for assessing the costs and benefits of a measure in accordance with the precautionary principle, given its own guidelines,^[103] the extent to which it is pertinent to reassess previous studies without new information during the renewal process.^[104]

The Court adjudicates these claims by reference to the rules on the burden and standard of proof, and the standard of judicial review, both of which it has elaborated and attuned on the basis of Article 4(1) of the Pesticides Regulation. Both assist in the judicial reconstruction of the decision-making procedure so that the Court can assess whether a plea of manifest error should be upheld. In this process, the function of Article 4(1) of the Pesticides Regulation changes: it is no longer a condition of legal action as defined in the regulation, but the norm from which the Court progressively derives the rules on the burden and standard of proof that enable it to adjudicate claims of error. As legally ‘thin’ as it is, this norm influences important matters of proof.

Thus, the Court has established that the burden of proof lies ‘in principle, with the notifier’^[105] for two reasons: first, Article 4(1) ‘requires that it must be “expected” that plant protection products containing an active substance … and their residues … have no harmful effects on human or animal health or unacceptable effects on the environment […]’; and second, ‘the principle that a party who relies on a legal provision must prove that the conditions of application of that provision are met’.^[106] Additionally, the standard of proof in Article 4(1) is the foreseeability that both the pesticides containing that substance and their residues do not have harmful effects on human health or unacceptable effects on the environment.^[107] On this basis, the Court has decided that, if the competent authorities (Commission and national administrations) conclude ‘that, having regard to all the information at [its] disposal, an applicant has not established to the required standard that the conditions governing the approval or authorisation applied for are satisfied, they are bound to decide that the application should be rejected’.^[108] Finally, the Court has also held that, because of the precautionary principle, a rejection of approval or renewal can be based on ‘a mere uncertainty as to the presence of a risk concerning that substance’.^[109] As for the standard of review, the Court will make an examination of plausibility, but will not ‘substitute its assessment of complex facts for that of the author of the measure’.^[110] In other words, in order to obtain the annulment of a decision on grounds of error, ‘the evidence adduced by the applicant must be sufficient to make the factual assessments used in [the Commission’s decision] implausible’.^[111] The Court uses this procedural framework to examine the documents produced in the administrative process, the text of the challenged decision and the allegations of the parties to ascertain whether there were contradictions, divergences, inconsistencies that may indicate errors.

While this is well known, the implications of this process are rarely, if ever, spelt out. In essence, the Court mediates, through its examination of evidence, the views of the parties regarding the ‘harmful effects’ and ‘unacceptable effects’ of the substances under consideration. Divergences of opinion stem, not from the applicable norm (from a meaning that exists irrespective of each individual instance), but from scientific details that cumulatively enable the EFSA’s and the Commission’s assessments. These assessments are shaped by the administrator’s practices, self-understanding of their role, and resources. Judicially, the conclusions of harmful or unacceptable effects stand or fall depending on whether the evidence adduced before the Court establishes their plausibility, but what is harmful or unacceptable—even if legally and politically crucial—can hardly be determined legally, whether through legal norms, or judicial interpretations thereof.

5. Whither the Law

If any critique can be levelled against the Court in the cases that I have examined, it is not that it fails to strike a balance in the degree of intensity of judicial review that could make such review effective. It is, rather, that each of its judicial pronouncements—the SRB regulation complies with the Meroni doctrine (Fundación Tatiana Perez), the resolution tool cannot be regarded as disproportionate if it is necessary in the public interest (Eleveté Invest Group), the norm setting out the legal conditions for the authorization of pesticides constrains the Commission’s discretion as risk manager (PAN Europe)—perpetuate the fiction that the conferral or exercise of powers that the Court is reviewing is amenable to judicial review because it is subordinated to the law. However, those powers cannot be subordinated to the law in the manner claimed, because of the nature of the activity involved.

That activity is characterized by features very similar to those that led scholars in the 1970s and 1980s to question the law’s ability to govern ‘the planning and steering activities of the … welfare state’.^[112] Bank resolution and pesticide authorization are ‘future-oriented’, ‘group-relevant’, ‘highly complex’, ‘[situationally] dependent’, and while not ‘unpredictable’ (largely because of the regulatory process itself), display various degrees of uncertainty.^[113] Although ‘the classic norm type of the conditional programme, which lists the conditions under which the state is entitled to intervene and determines the measures it may take’,^[114] is deployed to regulate these activities, as Grimm notes, it ‘largely fails here’.^[115] Other scholars have noted a similar phenomenon in relation to the terms in which the liberal democratic ideal of public law purports to subordinate the administration to law. They argued that the activities that public administrations must perform, in tune with socio-economic needs, transform public powers and the positioning of administrations in relation to the law.^[116] The upshot is that socio-economic realities, the interdependences they engender, and the technology that triggers them, tend to shape the structure of public powers in ways that undermine the classic liberal schemes of public law. While this may seem obvious, it seems to have been forgotten when evaluating the claim that administrative powers are necessarily subordinated to the law, which keeps them within reviewable bounds.

The nature of the activity that is the object of legal norms makes legal underdeterminacy inevitable. Norms such as Article 18 of the SRM Regulation or Article 4 of the Pesticides Regulation must have a high degree of openness. They resort to evaluative or goal-oriented terms whose content can only be defined through administrative action. Even enumerating the factors that decision-makers must consider does not change this; the degree to which the failing bank may cause systemic instability, and whether pesticide components produce harmful and unacceptable effects are evaluative assessments. They necessarily call for forward-looking and probabilistic analyses that are highly complex both technically and politically, because of the knowledge required, the competing public interests involved, and the socio-economic implications of how they are balanced. Such determinations can only be done in light of the specific facts of a case. More than underdeterminate, legal norms are situationally dependent, ie they only acquire meaning in view of the specific facts, and through decisions that ascertain the subsumption of those situations under the legal norm. Hence, administrative decision-makers get to construe the meaning of the norms that bind them.

But there is more. The decisions taken on those activities are ‘group-relevant’, because they shape a political-economic order.^[117] Although banking resolution and pesticide approval decisions are formally individual decisions, they do not follow the binary authority-liberty scheme, according to which unilateral exercises of authority oppose individual rights affected by that authority.^[118] They have an indisputable collective dimension that is difficult to capture in legal terms. It is expressed by the fact that banking resolution decisions affect financial stability, and pesticide authorizations shape the terms under which a society balances crop production and the economic interests of chemical companies against the protection of human and animal health, and the environment. In both cases, the decision’s ordering function generates the public interests that administrative bodies must consider. Those public interests are nominally mentioned in the enabling regulations, but only situationally dependent individual decisions can materialise those public interests and how they are secured. These individual decisions are ‘group-relevant’, not because they produce general legal effects—characteristically diffuse—but because they define the terms under which the various communities concerned by their material effects can enjoy the public interests at stake. They are, hence, deeply political.

In these conditions, framing administrative action as implementing or executive is a misnomer. As Grimm says, ‘the administration largely forms and adapts its own program of action in the implementation of norms’; it is, hence, ‘a politically decisive authority’.^[119] This process is much less one of ‘implementation’ than one where the meaning of the law is generated as part of the process of determining what is socially acceptable when weighing the competing interests at stake. Terms like ‘harmful’, ‘unacceptable’, and ‘necessary in the public interest’ have no substantive legal meaning independent of, and external to, the determinations made through the process that they inform.

One final implication follows from this analysis. The administrations’ legal competences reflect the variety of material and legal resources that the procedure can muster, and its decisions embody the compromises that the web of administrative collaboration secures amongst the various authorities involved. As long noted by public lawyers, the laws can only prescribe the organization and the procedure. What is less emphasized is that both organization and procedure are at least as much conditioned by overarching legal structures of a ‘constitutional’ type, like the Meroni doctrine in EU law, as by the socio-economic reality to which they apply and that they mostly reflect.^[120] That the public interests that justify the existence of this system can only be determined through the administrative system itself shows that the law can only provide a porous frame for a reality that it cannot contain.

6. In the Shadow of the Law: Constitutive Powers

It follows from the above that administrative decision-makers not only get to define key terms of the legal norms that bind them, but they do so as part of purposive decision-making processes which were designed to give content to the public interests that they were set up to serve. The interpretation of legal terms is part of the processes through which administrations define and shape public interests. I call this ability of administrations to determine the meaning of the legal norms that define what it can lawfully do their ‘constitutive powers’.^[121]

Administrative interpretations in the exercise of constitutive powers have an anchoring effect. They inform the complex technical and value-based prognostic assessments that are the sole competence of the administration, and are also likely to shape how the courts review these assessments. Any judicial interpretation of these legal norms contrary to that of the administration may jeopardize the functioning of the system, because of the ordering function of administrative decisions and of the centrality of the administrative system that supports that function. Courts may prefer to avoid this,^[122] especially when these norms provide no legal grounds of review external to the administrative action.^[123] Because the definition of key terms on which the legality of public action depends (what is ‘necessary in the public interest’, ‘harmful’ or ‘unacceptable’) is not legally determined, weighing in on the administrators’ interpretations affects how administrative decision-makers construe their role in view of their own understanding of the goals they were tasked with pursuing.

An example from merger control illustrates the point. A decade and a half after the reform of merger control in the EU, the General Court rejected the Commission’s longstanding position on the meaning of ‘significant impediment to effective competition’, which influences whether a merger is found to be compatible with the internal market.^[124] Reiterating its ‘exclusive jurisdiction to interpret EU law’,^[125] the General Court set a threshold of significance that restricted the Commission’s ability to prohibit mergers. Among other aspects, it found that the Commission’s practice of prohibiting mergers that would eliminate ‘an important competitive force’ in already concentrated markets was too broad.^[126] In particular, it ‘afforded the Commission, in effect, the power to decide which horizontal mergers to authorize and which to prohibit’, unconstrained by substantive legal structures.^[127] Instead, the General Court held that only a ‘particularly aggressive’ competition practice would qualify as an impediment to competition.^[128] Absent a successful appeal, that interpretation would have had a profound impact on the practice that the Commission had developed over 15 years.^[129] But the Court of Justice made a damning critique of the General Court’s reasoning and conclusions. The problem was not lack of jurisdiction over the interpretation of economic information, which the Court reasserted, following ‘well-established case law, pursuant to which issues of law and of fact are subject to full review’.^[130] Rather, the issue was that an interpretation of ‘significant impediment to effective competition’ must preserve ‘the full effectiveness’ and the ‘practical application’ of the regulation, and the interpretation advanced by the General Court would have hindered both.^[131] The Court of Justice therefore overturned the first instance judgment. In doing so, it followed ‘almost verbatim’ the interpretation that the Commission had stated in its guidelines.^[132] In circumstances such as those that I highlight here (arguably applicable also to merger control), the courts can hardly constrain administrative interpretations, for the reasons I stated above.

These are constitutive, not constituent, powers.^[133] Their legal existence stems from an enabling norm (eg Article 18 of the SRM Regulation, Article 4 of the Pesticides Regulation, and also Article 2(2) and (3) of the EC Merger Regulation). But they are constitutive because they generate the public interests that are nominally indicated in the legal regimes into which they are inserted, and because only through their exercise can the content of the law that binds them be determined. Yet, law still binds the holders of those powers to a discursive process whereby the decision-maker needs to explain how its action lies within the semantic coverage of the enabling norms.

These powers are not merely discretionary powers. Discretion exists insofar as a legal norm enables decision-makers to choose a course of action that they consider suitable in view of the public interests at stake and the policy objectives that they are deemed to pursue. However, discretion presupposes that the legal norms that enable discretion delimit the boundaries of the permissible scope of those choices. This does not occur if the meaning of those legal norms is situationally dependent to the point that they cannot provide legal grounds of action which are external to the administrative activity itself, as in the cases analysed in this article.^[134] Here, by acting, administrative decision-makers are defining the terms of what is legally acceptable behaviour.^[135] The conceptual framing of interpretation and discretion cannot explain this reality, because it is indebted to the paradigm of subordination.

7. In Conclusion: A Deeper Challenge for EU Law

The unattainable subordination of some types of administrative power to the law, and the constitutive nature of that power, is not a phenomenon specific to the EU. The structural conditions that give rise to such powers are a feature of the administrative state, as the works of Duguit, Forsthoff, and Grimm indicate. Of course, public administrators underwent radical changes in the second half of the 20th century (privatization, liberalization, and deregulation) because of political-economic shifts that fundamentally changed the role of public powers (something we are seeing again in the first quarter of the 21st century). Public powers came to include state powers integrated into, or exercised in coordination with, powers of European and global bodies. The scale of the changes is such that the references to Duguit and Forsthoff seem misplaced in an article on the nature of powers exercised by EU bodies and national administrations acting in their EU capacity. But the societal imbrication of the public power exercised by public administrations remains at the core of the tensions that persist to this day. The integration of public administrations in the EU has only intensified those tensions. That imbrication has been neglected in the literature on the EU administration, but it is arguably manifested in the law’s inability to constrain administrative powers such as those analysed in this article. These powers are constitutive not only of the law that frames them, but also of the social fabric that results from their exercise.^[136]

But this phenomenon is of particular relevance in the EU for at least two reasons. First, subordination to the law is a stronger normative imperative in a polity that draws much of its legitimacy from the law’s ability to contain the powers given to the EU institutions and bodies. Second, the EU administration is a space where national and EU actors are deeply intertwined. Their decisions both integrate the legal and material resources of national administrations and affect the retained ability of national administrators to act within their jurisdictions. Thus, an EU decision refusing to resolve a distressed bank in the public interest will leave space for national authorities to address the case through its insolvency procedures. Similarly, the EU administration’s assessments of pesticides’ risks open or preclude the ability of national administrators to approve pesticides and tend to influence the assessments made at the national level. Centralisation or decentralisation depends on the functioning of the administrative system; administrative decisions then define the extent to which political choices are taken at the national or at the EU level.^[137] Constitutive powers, therefore, while not specific to the EU, create particularly significant problems for the EU.^[138]

In a sense, much of my analysis can be perceived as a manifestation of executive dominance or technocratic management. But such a critique misses the target. It assumes that the solution to the problem will lie in more controls or accountability, necessary correctives to otherwise overextensive powers. It perpetuates the idea of subordination to law, that law is a limit that courts can enforce as ultimate arbiters of the law. Structurally, this misses something fundamental about the nature of administrative powers and their role in our societies: they stem not from the law, but from the complex technical developments and the social function that administrators perform. Strategies devised to address such executive dominance are likely to replicate it if they do not acknowledge this fundamental point. In the EU, transformations of public power have been ongoing since the covid-19 pandemic and the Russian invasion of Ukraine arguably call for a reconsideration of the relationship between law and administrative powers. The perception has been that these administrative powers are becoming less anchored in the law, which in turn now appears sidelined, and signify a move away from the regulatory model to an interventionist mode of public action.^[139] Yet, the novelty of recent developments is cast in a different light if one scrutinizes the role of public law in relation to the administration in more conventional areas of EU public intervention, stripped of the assumption of subordination.

1. Case C–493/17, Weiss and Others, EU:C:2018:1000; German Federal Constitution Court, Judgment of the Second Senate of 5 May 2020, 2 BvR 859/15. ↑

2. Bruno de Witte, ‘The European Union’s Covid-19 Recovery Plan: The Legal Engineering of an Economic Policy Shift’ (2022) 58 CML Rev. 635; Päivi Leino-Sandberg and Matthias Ruffert, ‘Next Generation EU and Its Constitutional Ramifications: A Critical Assessment’ (2022) 59 CML Rev. 433. ↑

3. Case C–551/22 P, Commission v Fundación Tatiana Pérez de Guzmán el Bueno et al., EU:C:2024:520 (‘Fundación Tatiana Pérez’), para 70, citing both Case C–9/56, Meroni v High Authority, EU:C:1958:7, pages 152 and 154 (‘Meroni’)and Case C–270/12, United Kingdom v Parliament and Council, EU:C:2014:18, para 41 (’ESMA’). ↑

4. Case C–62/14, Gauweiler and Others, EU:C:2015:400 and Weiss, n 1; Marco Dani and others, ‘“It’s the Political Economy…!” A Moment of Truth for the Eurozone and the EU’ (2021) 19 ICON, 309. ↑

5. See, for the case of pesticides, Giulia Leonelli, ‘Judicial Review of Compliance with the Precautionary Principle from Paraquat to Blaise: “Quantitative Thresholds,” Risk Assessment, and the Gap Between Regulation and Regulatory Implementation’ (2021) 22 German L J 184. ↑

6. Article 18(1)(c) of Regulation (EU) No 806/2014 of the European Parliament and of the Council of 15 July 2014, establishing uniform rules and a uniform procedure for the resolution of credit institutions and certain investment firms in the framework of a Single Resolution Mechanism and a Single Resolution Fund and amending Regulation (EU) No 1093/2010 [2014] OJ L 225/1, as amended (‘SRMR’). ↑

7. Meroni, n 3. ↑

8. Regulation (EC) No 1107/2009 of the European Parliament and of the Council of 21 October 2009 concerning the placing of plant protection products on the market and repealing Council Directives 79/117/EEC and 91/414/EEC [2009] OJ L 309/1, as amended (‘Pesticides Regulation’), Article 4. ↑

9. Jürgen Schwarze (1992[2006]) European Administrative Law (Sweet & Maxwell), 2nd ed. ↑

10. Edoardo Chiti and Joana Mendes, ‘The Evolution of EU Administrative Law’ in Paul Craig and Gráinne de Búrca (eds.), The Evolution of EU Law, 3rd edn. (Oxford University Press, 2021), 456–491. ↑

11. On the construction of the legal system, see Jacob Van der Beeten, In the Name of the Law. A Critique of the Systemic Rationality in EU Law (LSE Doctoral School thesis, March 2024). ↑

12. On the role of administrations in relation to societal interdependencies, see Ernst Forsthoff, Der Staat der Industriegeselschaft. Dargestellt am Beispiel der Bundesrepublik Deutschland, (C.H. Beck, 1971), as translated into Italian by Alessandro Mangia (trans), Lo Stato della Società Industriale (Giuffrè, 2011), 32–35, 58–59; and Léon Duguit, Les Transformations du Droit Public (Mémoire du Droit, 1913 ed, reprinted in 1999), xvii, 45 and 51. On the role of the EU administration, see Edoardo Chiti and Claudio Franchini, L’integrazione amministrativa europea (Il Mulino, 2003). ↑

13. Julia Black, ‘Constitutionalising Regulatory Governance Systems’ [2021] Law, Society and Economy Working Papers 02/2021, at 2, emphasis added. ↑

14. Schmidt- Assmann indicates that administrative norms and plans enable ‘the administration to establish the programme that will guide its activity’ in areas ‘where the law (Gezetz) has a weaker normative density’, Eberhardt Schmidt-Assmann, La Teoría General del Derecho Administrativo como Sistema (Madrid, Marcial Pons, 2003), 338–339. ↑

15. Dieter Grimm, ‘Der Wandel der Staatsaufgaben und die Krise des Rechtsstaats’ in Dieter Grimm (ed.), Wachsende Staatsaufgaben – sinkende Steuerungsfähigkeit des Rechts (Nomos, 1990), 300. ↑

16. Joseph Weiler, ‘Epilogue: “Comitology” as Revolution—Infranationalism, Constitutionalism, and Democracy’ in C. Joerges and E. Vos (eds), EU Committees: Social Regulation, Law, and Politics (Oxford: Hart Publishing, 1999), 339–349, at 339. ↑

17. For Duguit, this was the sense of service public which he identified as the foundation of public law (Duguit, n 12, 41–51). ↑

18. Martin Loughlin, Legality and Locality: The Role of Law in Central-Local Government Relations (Clarendon Press, 1996), 266. See further Section 5 below. The analysis of the pesticides regulation (Section 4 below) illustrates this point. ↑

19. Duguit, n 12, at 53–54, adding that ‘it is the goal pursued by those in power that give [the laws] their character’. ↑

20. Grimm, n 15, at 300. ↑

21. The term is used in Elizabeth Mertz, ‘A New Social Constructionism for Sociolegal Studies’ (1194) 28 L&SR 1243, to convey ‘not simply … the inevitable slip between formal rule and practical application, between text and interpretation, [but also] careful consideration of the determinacies that follow from legal frames with acknowledgment of the structured ways in which social actors and contexts refract and reshape those frames in practice’ (1246). ↑

22. Article 18(1) SRMR. See Section 3 below. ↑

23. Article 4 Pesticides Regulation. See Section 4 below. ↑

24. See text accompanying n 135 below. ↑

25. Mertz, n 21, at 1246, n 4. ↑

26. José María Rodriguez de Santiago, Metodología del Derecho administrativo: Reglas de racionalidad para la adopción y el control de la decisión administrativa (Marcial Pons, 2016), 27, 28. See also Grimm, n 15, at 301. ↑

27. These characteristics are mentioned by Grimm, n 15, at 299, who concluded his analysis noting that the ‘extent [to which procedural law] can compensate for the loss of the material guarantee of correctness remains to be clarified’ (idem, 301). ↑

28. Article 14 SRMR and Article 1 Pesticides Regulation, respectively. ↑

29. Grimm, n 15, 291, 300. ↑

30. Ibid. ↑

31. See further, Section 5, below. ↑

32. For details, see Hanns Peter Nehl, ‘Judicial Review of Complex Socio-Economic, Technical, and Scientific Assessments in the European Union’ in Joana Mendes (ed.), EU Executive Discretion and the Limits of Law (OUP, 2019) 157. ↑

33. As I have argued elsewhere: see Joana Mendes, ‘Law and discretion in monetary policy and in the banking union: Complexity between high politics and administration’ (2023) 60 CML Rev. 1579, 1618. See, further, Section 4.3 below. ↑

34. Article 18(1)(c) SRMR. Article 18(5) SRMR defines ‘public interest’ as being ‘proportionate to one or more’ of the statutorily defined resolution objectives set out in Article 14(2) SRMR, which are the continuity of the bank’s critical functions, ie those deemed essential to the functioning of the Member States’ economies; the protection of financial stability; non-reliance on bail-outs, making the bank’s creditors and shareholders (rather than the taxpayers) the primary bearers of the losses; and the protection of depositors, investors, and client funds and assets. Article 18(5) further clarifies that a resolution is in the public interest when ‘winding up [an] entity under normal insolvency proceedings would not meet [Article 14(2)’s] resolution objectives to the same extent’. ↑

35. Olina Capolino, ‘The Single Resolution Mechanism: Authorities and Proceedings’ in Mario P. Chiti and Vittorio Santoro (eds), The Palgrave Handbook of European Banking Union Law (Palgrave Macmillan, 2019), 247, 258–260; Jens-Hinrich Binder, ‘The Relevance of the Resolution Tools within the Single Resolution Mechanism’ in Chiti and Santoro (eds), idem, 299, 305–310. ↑

36. As summarized in Joana Mendes, ‘Constitutive Powers of Executive Bodies: A Functional Analysis of the Single Resolution Board’ (2021) 84 MLR 1330, 1344. ↑

37. Article 18 SRMR. On the definition of the ‘mechanism’, see Article 1 SRMR, 2nd paragraph. ↑

38. Meroni, n 3, p. 152. ↑

39. Article 18(1) and (5) SRMR. I have analysed this procedure in Mendes, n 37, in a different, though related argument. The legal developments analysed now justify returning to this example. ↑

40. The Commission may object to the discretionary aspects of the SRB decision, with the exception of the assessments of whether the resolution is in the public interest, and which funds from the Single Resolution Fund must be used. In those cases, it must involve the Council (Articles 18(7) SRMR, 2nd and 3rd paragraph; see also Case C–551/22 P, AG Capeta Opinion, Commission v Fundación Tatiana Pérez, EU:C:2023:846, paras 57 fn 42 and 62) (‘Fundación Tatiana Pérez AG Opinion’). Negative conclusions are not subject to the control of either institution (on the various scenarios, see ibid, paras 43–47). The participation of the Commission and the ECB in SRB meetings is permitted by Article 43(3) SRMR; see also Case T–570/17, Algebris (UK) and Anchorage Capital Group v Commission, EU:T:2022:314 (‘Algebris’), paras 132–135; and, on the consequences, Fundación Tatiana Pérez AG Opinion, para 128. ↑

41. Recitals 24 and 26 and Article 18(7) SRMR, as interpreted by the Court of Justice (see Section 3.4 below). ↑

42. Fundación Tatiana Pérez, n 3, para 56 and para 87. See, on the implications for judicial review, Fundación Tatiana Pérez AG Opinion, n 41, paras 62–71. ↑

43. For an overview of this litigation, see Marco Lamandini and David Muñoz, ‘10 years of Banking Union’s case-law: How did European courts shape supervision and resolution practice in the Banking Union?’, European Parliament Study: Economic Governance and EMU Scrutiny Unit (EGOV) Directorate-General for Internal Policies PE 755.729, September 2024. ↑

44. These refer only to the 6 pilot cases of 105. See, for details on the pilot cases, Fundación Tatiana Pérez AG Opinion, n 41, para 7 fn 7. ↑

45. Fundación Tatiana Pérez, n 3, para 88. ↑

46. Ibid, para 69 (emphasis added). ↑

47. Ibid, para 87. On the aspects that can fall under the first category, see Fundación Tatiana Pérez AG Opinion, n 41, para 57 fn 42. ↑

48. Meroni (n 3, at 152) ‘recalled’ ESMA (n 3, paras 41–42), and re-recalled in Fundación Tatiana Pérez (n 3, paras 69–73). ↑

49. Fundación Tatiana Pérez, n 3, para 77 (emphasis added). ↑

50. See n 35. ↑

51. Article 14 SRMR. ↑

52. Case T–399/16, CK Telecoms UK Investments v Commission, EU:T:2020:217 (’CK Telecoms, General Court’). That decision was set aside on appeal by the Grand Chamber of the Court of Justice of the European Union (‘CJEU’) in Case C–376/20, Commission v CK Telecoms UK Investments Ltd., EU:C:2023:561 (‘CK Telecoms, Appeal’). ↑

53. See n 49, above. ↑

54. ESMA, n 3, para 53. ↑

55. CK Telecoms, General Court, n 53, para 73. ↑

56. Case T–523/17, Eleveté Invest Group and others v Commission and SRB, EU:T:2022:313 (‘Eleveté Invest Group’). ↑

57. Ibid, paras 232, 242. Their claim was vague: ‘the SRB should have weighed up a range of interests. [It] should therefore have found that the public interest did not justify a breach of the principle of proportionality or a discriminatory and arbitrary intervention’ (para 232). Underlying it was the argument that their property rights as shareholders should have been weighed against the public interest in resolution. ↑

58. Ibid, para 243. ↑

59. This was the ancillary basis for the applicants’ claim that the finding of public interest was illegal. ↑

60. Eleveté Invest Group, n 57, para 245 (emphasis added). ↑

61. Ibid, para 247. ↑

62. Ibid, para 253. The applicants argued that the authorities ‘turned their backs on the bank because its share capital was owned by private interests, including a high percentage of foreign investors’ (para 252). Two years earlier, the Financial Times reported that the SRB’s then-president acknowledged a ‘perceived inequality of treatment’, pointing to structural issues in the legal regime, particularly the interplay between national and European authorities through state aid rules. Laura Noonan, ‘EU regulator call for clearer rules on rescuing banks’, Financial Times (London, 10 February 2020)<https://www.ft.com/content/0cb5d87e-4434-11ea-a43a-c4b328d9061c> accessed 4 February 2025. ↑

63. In all cases relating to the resolution of Banco Popular, including Eleveté Invest Group (n 57), the Court unsurprisingly reiterated the standard of review that first emerged in Case C–12/03, Commission v Tetra Laval, EU:C:2005:87, para 39 (‘Tetra Laval’), applicable to highly complex scientific and technical facts and complex economic assessments (ie the Court must check whether ‘the evidence relied on is factually accurate, reliable and consistent …[, to] ascertain whether that evidence contains all the information which must be taken into account in order to assess a complex situation and whether it is capable of supporting the conclusions drawn from it’). For example Eleveté Invest Group, n 57, para 114; Case T–481/17, Fundación Tatiana Pérez de Guzmán el Bueno and SFL v SRB, EU:T:2022:311, para 170; Case T–510/17, Del Valle Ruiz and Others v Commission and SRB, EU:T:2022:312, para 110; Algebris, n 41, para 108; and Case T–628/17, Aeris Invest v Commission and SRB, EU:T:2022:315, para 118. On the significance of that standard, see Joana Mendes, ‘Discretion, Care and Public Interests in the EU Administration: Probing the Limits of Law.’ (2016) 53 CML Rev. 419. ↑

64. See, further, Section 3.1, below. ↑

65. CK Telecoms, General Court, n 53, para 73. ↑

66. Grimm, n 15, at 299. ↑

67. Fundación Tatiana Pérez, n 3, para 77. ↑

68. As reflected in the interview given by the chair of the SRB to the Financial Times: ‘Europe’s bank resolution authority seeks ’firepower’ to deal with collapsed lenders’, 25 June 2023 (‘We need a framework that gives us the tools to act, without making the decision-making process so difficult in terms of actors and endorsements that we cannot make a decision’, said Laboureix. ‘If it’s too complex, it won’t work.’) <https://www.ft.com/content/25c680cd-6850-4a34-b009-fb98ec76a46d> accessed 4 February 2025. ↑

69. Jean-Paul Jacqué, ‘The Principle of Institutional Balance’ (2004) 41 CML Rev. 383, 384. Fundación Tatiana Pérez (n 3, para 72) reiterates the rationale of ‘balance of powers’, and the judgment in ESMA (n 3, paras 45, 52) reiterated the importance of judicial review. ↑

70. Fundación Tatiana Pérez, n 3, para 78–81 (of all the references in the judgment to this effect, only in para 81 did the Court drop the adjective ‘actual’). This impossibility is implicit in the Opinion of the AG: ‘The Commission’s approval of the Banco Popular resolution scheme does not seem to be a mere rubber-stamping. By its approval, the Commission endorsed the content of the resolution scheme’. (Fundación Tatiana Pérez AG Opinion, n 41, para 128, emphasis added). ↑

71. Articles 4(1) to (3) Pesticides Regulation, emphasis added. ↑

72. Article 4(1) and Annex II, point 3 Pesticides Regulation. The active substance must be ‘sufficiently effective’ under ‘realistic conditions of use’ (as further specified in Commission Regulation (EU) No 546/2011 of 10 June 2011 implementing Regulation (EC) No 1107/2009 and the uniform principles for evaluation and authorization of plant protection products [2011] OJ L 155/127, as amended—Annex II, pt 3.2). Its components must be ‘within acceptable limits’ and ‘where necessary for reasons of protection of human or animal health or the environment’ subject to ‘stricter specifications’ (Annex II, pts 3.4.1, 3.4.2 and 3.4.3.). The methods of analyses used must be, inter alia, ‘sufficiently specific’, and ‘sensitive to with respect to levels of concern’ (Annex II, pts 3.5.1, 3.5.2, 3.5.4 and 3.5.5). For a complete overview, see Leonelli, n 5, at 204–207. ↑

73. AG Bobek Opinion, Case C–352/19 P, Région de Bruxelles-Capitale v Commission, EU:C:2020:588, para 69–79, in particular para 72. ↑

74. Article 1(3) Pesticides Regulation. ↑

75. European Commission: Directorate-General for Research and Innovation, EU authorization processes of plant protection products from a scientific point of view—Group of Chief Scientific Advisors—Scientific opinion 5 (supported by SAPEA evidence review report No. 3)—Brussels, 4 June 2018, Publications Office, 2018, <https://data.europa.eu/doi/10.2777/238919> accessed 4 February 2025 (‘Group of Chief Scientific Advisors Opinion 5’). This report resulted from a request by the Commission and was part of the process of evaluation of the EU legislation on pesticides (see Group of Chief Scientific Advisors Opinion 5 at 13, and the Report from the Commission to the European Parliament and the Council Evaluation of Regulation (EC) No 1107/2009 on the placing of plant protection products on the market and of Regulation (EC) No 396/2005 on maximum residue levels of pesticides, COM/2020/208 final, dated 20 May 2020 (‘REFIT Report’) at 2). The Group of Chief Scientific Advisors Opinion 5 stated: ‘it is not possible to ensure that products or substances of any sort placed on the market will not have any harmful effect on human or animal health under all circumstances’ (at 25, emphasis in original). ↑

76. REFIT Report, n 76, at 2 (emphasis added). ↑

77. One of the recitals of the regulation specifies that ‘when granting authorisations of plant protection products, the objective of protecting human and animal health and the environment should take priority over the objective of improving plant production’ (Recital 24 Pesticides Regulation). This same recital featured in the Commission’s original proposal and survived legislation unscathed. This is a specification directed at Member States—they have the competence to authorize pesticides—but it is hardly in doubt that it applies to the Commission’s approval of the active substances that those pesticides incorporate. ↑

78. The term is Chiti’s: Edoardo Chiti ‘An Important Part of the EU’s Institutional Machinery: Features, Problems and Perspectives of European Agencies’ (2009) 46 CML Rev. 1395. ↑

79. These aspects appear recurrently in litigation on the authorization or renewal of pesticides’ components, indicating that they are determinants of the decisions establishing their harmful or acceptable character (see case law cited in n 95 and Section 4.3 below). ↑

80. Julia Black, ‘Regulatory Conversations’ (2002) 29 JL&Soc 163, 172. ↑

81. Case T–536/22, PAN Europe v Commission, EU:T:2024:98, paras 1 and 19 (‘PAN Europe’), which was appealed in Case C–316/24 P, Appeal brought on 29 April 2024 by Pesticide Action Network Europe (PAN Europe) against the judgment of the General Court (Fourth Chamber) delivered on 21 February 2024 in Case T–536/22, PAN Europe v Commission, [2024] OJ C, C/2024/3751 (‘PAN Europe Appeal’). ↑

82. On the distinction and why it matters, see Leonelli, n 5. ↑

83. See, further, ibid. ↑

84. PAN Europe, n 82, paras 62–65, 75 (emphasis added). ↑

85. Ibid, para 63. PAN Europe characterizes those criteria as ‘the clear and precise conditions for approval set out in Article 4 and Annex II of the Pesticides Regulation’ (para 65). On the continuum between risk assessment and risk management, see Giulia Leonelli, ‘Transatlantic Divergencies in the Regulation of Uncertain Risks: Co-Production, Normative Frames and Ideal Evidence-Based and Socially Acceptable Risk Approaches’ (2022) 23 German L J 769, 772–776. ↑

86. Case C–616/17, Blaise and Others, EU:C:2019:800 (‘Blaise’), para 95, emphasis added. On the significance of Blaise, see Leonelli, n 5, at 207–214. See also Antoine Bailleux, ‘Don’t judge a case by its cover: The pesticides Regulation survives judicial scrutiny but is given new teeth: Blaise’ (2020) 57 CML Rev. 86, stressing the organizational and procedural constraints that follow from the scheme of the regulation. ↑

87. PAN Europe (n 82, paras 70–74). The judgment includes a problematic understanding of the precautionary principle. It holds that ‘[w]here scientific assessment does not enable the existence of a risk to be determined with sufficient certainty, whether or not the precautionary principle is applied will generally depend on the level of protection chosen by the competent authority in the exercise of its broad discretion’ (para 73). But the principle applies always—without substantively determining the level of protection—when there is uncertainty regarding risks (see appeal of Joined Cases T–429/13 and T–451/13, Bayer CropScience and others v Commission, EU:T:2018:280 (‘Bayer and others, General Court’), Case C–499/18 P, Bayer CropScience and Bayer v Commission, EU:C:2021:367 (’Bayer and others, appeal’), paras 109–110, 116, 119, identifying the conditions under which uncertainty justifies the adoption of preventive measures, and 340, stating that ‘the precautionary principle applies not only in cases where it is uncertain whether a risk exists, but also where the existence of a risk has been demonstrated and the Commission must assess whether or not that risk is acceptable (…) or assess how that risk should be addressed in the context of its management (…)’, emphasis added). ↑

88. On the difficulties of establishing the limits of discretion based on the precautionary principle in cases where the risk manager has allegedly failed to comply with the principle, see Leonelli, n 5, at 197–199 (stating also the limits of judicial review in this regard). ↑

89. See, in particular, Leonelli, n 86. ↑

90. I own this point to a discussion with Michal Krajewski. ↑

91. See Leonelli, n 5, at 193, 197–199. ↑

92. On the value of judicial review, see Section 4.3, below. ↑

93. PAN Europe, n 82, paras 91, 96, 103. ↑

94. Bayer and others, General Court, n 88, para 143; Case T–584/13, BASF Agro and Others v Commission, EU:T:2018:279, para 92; Case T–476/17, Arysta LifeScience Netherlands v Commission, EU:T:2019:618 (‘Arysta’), para 85; Case T–719/17, FMC v Commission, EU:T:2021:143 (‘FMC’), para 91; Case T–574/18, Agrochem-Maks v Commission, EU:T:2020:226 (‘Agrochem-Maks’), para 61; Case T–740/18, Taminco and Arysta LifeScience v Commission, EU:T:2022:61(‘Taminco’), para 52; Case T–153/19, European Union Copper Task Force v Commission, EU:T:2021:688 (‘Copper Task Force’), para 64; Case T–317/19, AMVAC Netherlands v Commission, EU:T:2022:62 (‘AMVAC’), para 45; Case T–742/20, UPL Europe and Indofil Industries v Commission, EU:T:2023:74 (‘UPL and Indofil’), para 60; PAN Europe, n 82, para 52. The formulation is different in Case T–77/20, Ascenza Agro and others EU:T:2023:602 (‘Ascenza Agro’), where the Court refers merely to the ‘complex scientific assessments which must be made when … the risks posed by the use of substances are assessed’ as justification for discretion (para 414). ↑

95. In the PAN Europe Appeal, n 82, PAN Europe invokes ‘errors of law, contradictory, insufficient and erroneous reasoning’ that entail involve not only lack of data that grounded the decision, but also critical areas of concern raised by the European Food Safety Authority. ↑

96. That, in turn, will impact the model of risk regulation followed in the EU (on which, see Leonelli, n 86, at 777–781). ↑

97. See, further, text accompanying n 118 (Section 5, below). ↑

98. Leonelli (n 5, at 193–194) notes the additional difficulty of using the precautionary principle against decisions deemed insufficiently protective of human or animal health and/or the environment. ↑

99. Bayer and others, General Court, n 88, paras 162–163, 177–184 (noting that the novelty of confirmatory studies ‘presupposes at the very least that the new methodologies are more reliable than those used previously’ in para 179). The General Court explained ‘new scientific and technical knowledge’ because the applicants contested the novelty of the studies on which the Commission had relied, and this was a condition for initiating the revision procedure. The Court of Justice, on appeal, held that this was an error in law: Article 21(1), first paragraph, of the Pesticides Regulation does not condition the Commission’s initiation of a revision procedure on the existence of new scientific and technical knowledge (Bayer and others, appeal, n 88, paras 49, 50, 55). See also BASF Agro, n 95, paras 119–124. ↑

100. Ascenza Agro, n 95, paras 560–567. ↑

101. Arysta, n 95, para 92. ↑

102. Bayer and others, General Court, n 88, para 311–326, 343–353, 417–429. ↑

103. Ibid, paras 456–461; BASF Agro, n 95, paras 157–163; Taminco, n 95, paras 162, 195–201; AMVAC, n 95, paras 200, 211–220. ↑

104. FMC, n 95, paras 98–109. ↑

105. Bayer and others, General Court, n 88, paras 137–139, 140–142 (specifying also that the burden is inverted in the case of a review of an approved substance); BASF Agro, n 95, paras 86–91; Arysta, n 95, para 117; FMC, n 95, para 88; Agrochem-Maks, n 95, paras 66, 121; Taminco, n 95, para 57 (applying the principle to the process of renewal of an authorization), and AMVAC, n 95, para 50; UPL and Indofil, n 95, para 65; Blaise, n 87 paras 78–80. ↑

106. Taminco, n 95, para 57; AMVAC, n 95, para 50; UPL and Indofil, n 95, para 50; and also Bayer and others, General Court, para 139; BASF Agro, n 95, para 88; Arysta, n 95, para 117; FMC, n 95, para 90; Agrochem-Maks, n 95, paras 66-67; Ascenza Agro, n 95, para 399 (albeit with a different formulation, drawing on Blaise (n 87)). In most of these judgments, the Court also invokes Recitals 8 and 10 of the Pesticides Regulation (eg Bayer and others, General Court, n 88, para 138; BASF Agro, n 95, para 87; FMC, n 95, para 89). ↑

107. Ascenza Agro, n 95, paras 106, 412. The same can arguably be deduced from Bayer and others, General Court, n 88, para 138; BASF Agro, n 95, para 87. See also Arysta, n 95, para 117; FMC, n 95, paras 89-90; Taminco, n 95, para 57; AMVAC, n 95, para 50; and UPL and Indofil, n 95, para 65 (referring to Article 4(1), according to which ‘it must be “expected” that plant protection products containing an active substance comply with the conditions set out in paragraphs 2 and 3 of that article’). ↑

108. Ascenza Agro, n 95, para 404, reflecting the judicial determination in Blaise (n 87, paras 92, 95, where the Court invoked this argument to demonstrate the compliance of the whole Pesticides Regulation with the precautionary principle) and extending the rules on standard of proof to the renewal procedure (paras 405, 409). For a different formulation, with different implications: Agrochem-Maks, n 95, para 67, Taminco, n 95, para 57; AMVAC, n 95, para 50; UPL and Indofil, n 95, para 65 (‘it is not the Commission which must prove that the conditions for approval are not met in order to be able to refuse it’, emphasis added). Similarly, Bayer and others, General Court (n 88, para 142) and BASF Agro (n 95, para 91) hold that the obligation is grounded in the precautionary principle. ↑

109. Ascenza Agro, n 95, paras 325, 413. ↑

110. Bayer and others, General Court, n 88, para 145; BASF Agro, n 95, para 94; Arysta, n 95, para 87; FMC, n 95, para 93; Agrochem-Maks, n 95, para 63; Taminco, n 95, para 54; AMVAC, n 95, para 47; Ascenza Agro, n 95, para 416 (specifying in paras 472, 518, that, in order to be successful, the factors that the applicants rely upon must lead to the conclusion that a finding was ‘manifestly devoid any plausibility’, emphasis added). See also Copper Task Force, n 95, para 65 and PAN Europe, n 82, para 54, referring to the Tetra Laval formulation (n 64) (the limits of judicial review do not ‘affect the court’s duty to verify the material accuracy, reliability and consistency of the evidence relied on and to check whether that evidence constitutes all the relevant data to be taken into account in assessing a complex situation and whether it is such as to support the conclusions drawn from it’). ↑

111. See n 111. ↑

112. Grimm, n 15, at 299. ↑

113. Ibid. ↑

114. Ibid. ↑

115. Ibid. ↑

116. Duguit, n 12, xvii, 51, 54, 79–81; Forsthoff, n 12, 164. ↑

117. According to Grimm, they are ‘ordnungsgestaltender’, ibid, at 297. ↑

118. Sabino Cassese, ‘L’Arena Pubblica. Nuovi Paradigmi per lo Stato’ (2001) 3 Riv Trim Dir Pubbl 601, arguing that this scheme must be overcome. ↑

119. Grimm, n 15 at 300. ↑

120. Indicating that legislative frameworks may merely ‘validate’ pre-existing complex systems, see Loughlin, n 18 at 266. ↑

121. See Mendes, n 37; Joana Mendes, ‘Constitutive Powers and Justification: The Duty to Give Reasons in EU Monetary Policy’ in Mark Dawson (ed.) Substantive Accountability in Europe’s New Economic Governance (CUP, 2023) 288; and Mendes, n 34. ↑

122. See Loughlin, n 18, 232–237, 282–289 and 350–354. ↑

123. Sections 3.2. and 4.2. ↑

124. Article 2(2) and (3) of the Council Regulation No 139/2004 of 20 January 2004 on the control of concentrations between undertakings (the EC Merger Regulation) [2004] OJ L 24/1. See Guidelines on the assessment of horizontal mergers under the Council Regulation on the control of concentrations between undertakings [2004] OJ C 31/5, whose adoption was ‘mandated’ by Recital 28 of the EC Merger Regulation, ‘in order to clarify and explain the Commission’s appraisal of concentrations under this Regulation’. On the practice that unfolded between 2004 and 2020, see Pablo Ibáñez Colomo, ‘EU merger control between law and discretion: when is an impediment to effective competition significant?’ (2021) 44 World Comp. 347, 362. ↑

125. CK Telecoms, General Court, n 53, paras 72, 100. ↑

126. It amounted to broadening the scope of ‘significant impediment to effective competition’; the interpretation followed by the Commission would ‘allow it to treat as an “important competitive force” any undertaking in an oligopolistic market exerting competitive pressure’ (ibid, paras 173–174). ↑

127. Ibáñez Colomo, n 126, at 371. ↑

128. CK Telecoms, General Court, n 53, paras 170 and 216. ↑

129. Elias Deutscher, ‘Prometheus Bound? The Uncertain Future of the Unilateral Effects Analysis in EU Merger Control After CK Telecoms’ (2022) 18 JCL&E 323, 325. ↑

130. Ibáñez Colomo, n 126, at 364 (citing CK Telecoms, Appeal, n 53, paras 123–127, 131). ↑

131. CK Telecoms Appeal, n 53, para 161 (see also para 158). ↑

132. Ibid, paras 166–167. Calisti, n 126, at 248. See, for more detail, Giorgio Monti, ‘EU Merger Control After the Grand Chamber’s Judgment in Commission v CK Telecoms Investments’ (2024) 47 World Comp. 11, 12–14. ↑

133. The following elaborates on Mendes, n 37, at 1340. ↑

134. See Mendes, n 37, at 1341 (in the circumstances of constitutive powers, ‘discretion is a choice that both co-determines and is co-determined by the meaning [of the law] which occurs within the agency’s constrained regulatory environment’), drawing on Julia Black’s argument that there may be no clear distinction between rules and discretion (Julia Black, Rules and Regulators (Clarendon Press Oxford, 1997) 216: ‘discretion may be not only the space between rules but within rules in which legal actors may exercise choice’, emphasis in the original). ↑

135. Black, n 81, at 165. ↑

136. Noting the ability of state powers to ‘design and constitute the social fabric’, see Rogério Ehrhardt Soares, Direito Público e Sociedade Técnica (Atlântida Editora, 1969, reprinted by Tenacitas, 2008), 87. ↑

137. The example of Case C–450/17 P, Landeskreditbank Baden-Württemberg v ECB, EU:C:2019:372, is striking in this regard, with the Court endorsing a political choice by the ECB with major consequences in terms of vertical allocation authority. ↑

138. I owe this point to a comment by Elise Muir. ↑

139. Kathleen McNamara, ‘Transforming Europe? The EU’s Industrial Policy and Geopolitical Turn’ (2024) 31 JEPP 2371. ↑