Similar to the principle of proportionality, the principle of subsidiarity regulates the exercise of powers by the EU. It seeks to set actions taken by the EU institutions within specified bounds.

The principle of subsidiarity means that, in areas which do not fall within its exclusive competence, the EU can act only if, and insofar as, the objectives of the proposed action cannot be sufficiently achieved by the member states, either at central level or at regional and local level, but can rather, by reason of the scale or effects of the proposed action, be better achieved at EU level.

The principle of subsidiarity is laid down in Article 5 of the Treaty on European Union (TEU). The criteria for applying it is set out in Protocol (No 2) on the application of the principles of subsidiarity and proportionality annexed to the Treaties.

For more information, see Practice note, EU law essentials: Scope of EU powers and competences.