The current debate on the future of the European Economic and Monetary Union is only one but nonetheless an important example of how topical the issue of regulatory rule-making by bureaucratic institutions such as the European Commission is. It has placed some fundamental questions (back) on top of the political agenda. How much leeway is desirable to grant the European Commission - an institution without a direct democratic mandate - in shaping legislative measures that shall address macroeconomic imbalances? And how much leeway shall, on the other hand, be left to member states in dealing with economic issues independently? After all, as scholars like Fritz Scharpf have emphasized, what is at stake is not only the legitimacy, be it in substantial or procedural terms, of the European Union (EU). EU integration, though surely necessary to some extent, has also curtailed member states’ room for action, and hence their capacity in dealing with policy issues independently. In other words, European lawmaking can adversely affect the legitimacy of member states. Against this background leeway emerges as an important aspect of EU law and I believe that it has a certain role to play here.

At first sight and on a more general note, leeway and law do not seem to match. Why should there be leeway if law actually aims to fill gaps, to clearly spell out rules, to remove all but one possibility of how rules should be applied? And yet, the fact remains that leeway and law can be mixed and in some cases this is exactly what the legislator intends. EU directives are a case in point as they provide this leeway, known as discretion.

The source of discretion is to be found in the Treaty (now article 288 of the Treaty on the Functioning of the European Union, TFEU) establishing that member states may choose implementation forms and methods when applying a directive while having to live up to the latter’s objectives. What’s more discretion also flows from the wording and content of a directive. Take for instance the Family Reunification Directive, which has drawn a fair amount of scholarly and media attention. Already the minimum harmonization objective enshrined in article 3 indicates that member states have some latitude as they may choose to adopt stricter measures than those laid down by the directive. In addition, article 14.2 explicitly grants member states the latitude to base decisions regarding certain aspects of the directive on national law. In short, directives provide the opportunity for discretionary decision-making. Those who implement them have some room for own interpretation, judgment and choice.

Especially in the past legal scholars would not, however, easily have embraced the fact that discretion is inherent to law. To Ronald Dworkin, for instance, discretion and law that was like the whole in the doughnut. Leeway and law were simply two separate things. Discretion was not held in high regard. It was rather feared that it could encourage subjective justice in the application of law or in general compromise it.

The implementation of EU directives seems to bear witness to that. Different interpretations of EU law may hamper a uniform application by member states and have negative implications at the domestic level. As the study of cross-border effects of EU directives (pdf) demonstrates amongst other things, different applications of EU law in member states may put one country at a competitive disadvantage compared to another. Speaking of the Dutch transposition of EU directives, nearly 90 percent of them are transposed through delegated legislation. Although, parliamentary involvement may not always be necessary, it does add to the impression that executive discretion lacks input legitimacy: parliamentary oversight and involvement of other relevant stakeholders in the preparation and implementation of EU law.

Against this backdrop, how is it possible then that discretion can be intended by the European legislator, implying that it has a useful role to play in the realm of EU law? For this to understand an interdisciplinary approach is needed connecting insights from legal and political theory. Whereas the legal approach very well reveals the tension between discretion and rules, touching upon the legitimacy deficits of executive discretion, political theory prompts us to see law in context prepared and applied by actors pursuing an agenda. From this angle discretion is understood as a deliberate legal creation, as something that fulfills certain functions. First, leeway in law can be a valuable option to save up costs that the drafting of highly detailed legislation would entail. Second, granting discretion can help avoiding political deadlock during negotiations on directives that address politically highly sensitive issues – again the Family Reunification Directives provides good evidence. Third, member states may identify themselves easier with directives that are formulated less strictly and therefore agree on them. Looking at the implementation side, discretion allows for flexibility in the application of directives. National implementing actors may choose those techniques and instruments they consider the most suitable to fit the directive in with their national legal contexts. From this point of view, discretion can be considered a tool with which the EU legislator respects member states’ different legal traditions and practices. What’s more, as recently pointed out by professor Bernard Manin at the conference Political Legitimacy and the Paradox of Regulation, in allowing the flexible application of rules in very specific situations, discretion may serve to stabilize and personalize the more general and impersonal nature of laws and therefore contribute to the legitimacy of political systems. Finally, and with regard to the implementing powers of the European Commission, in some cases, the technical nature of economic and monetary policy issues also justifies the granting of discretion to the Commission and its assisting committees where the legitimacy of decision-making processes lies in the profound knowledge of experts. And yet, discretionary decision-making by administrative actors requires sufficient democratic control which should not only involve the right of the European Parliament and Council to revoke delegated legislation from the Commission. Moreover, EU interference must not jeopardize member states’ legitimacy. Building blocks for stable national democracies, such as budgetary decision-making powers, should remain part of the national sovereignty and thus a privilege of national parliaments.

Apparently coming in different ways and with different effects on the legitimacy of EU and national legal systems, discretion in EU law should therefore not easily be dismissed as a mismatch. Rather it appears to be a double-edged sword. Legitimacy reasons may be part of the explanation for its incorporation in European directives and may justify discretionary decision-making coming along with national implementation. However, its use by EU and national officials may be beset with legitimacy deficits – a problem that I believe is still in need of solutions.