XM does not provide services to residents of the United States of America.

How do European Union institutions function?

<html xmlns="http://www.w3.org/1999/xhtml"><head><title>EXPLAINER-How do European Union institutions function?</title></head><body>

June 7 (Reuters) -Citizens across the European Union are currently voting in the European Parliament elections to choose direct representatives for the supranational legislative body.

The European Parliament is one of the EU's three main political institutions, along with the European Council, which represents national governments of the 27 member states, and the European Commission, the bloc's Brussels-based executive arm.

Here are some details about how the three main EU bodies function.


Only the European Commission can formally propose new laws, either on its own initiative or after requests by other EU institutions or citizens.

Laws are passed through an agreement between the European Parliament and the Council of the European Union, composed of national government ministers of a particular policy area.

In May, the Council approved landmark rules on artificial intelligence after the Parliament voted in favour of them, but a law to restore damaged nature is hanging in the balance after Hungary withdrew its support for the bill in March.

As some of the Council's decisions must be unanimous, member states hold a de facto veto power over EU lawmaking in areas including taxes, EU enlargement, and foreign policy, including sanctions.

Both the Parliament and the Councilcan formally reject a law at any stage of the process, thus scrapping it.


Apart from Councils of EU ministers, EU countries' heads of state or government also meet, usually every three months, in the European Council. The head of the Commission is invited to participate.

The European Council is the highest political body in the EU, dealing with issues that ministers were unable to sort out, setting priorities for EU work, and taking positions on global issues.

EU leaders also propose the President of the European Commission, who then has to secure majority backing in the Parliament.

This will be one of the first tasks of the newly elected European Parliament, along with picking its own president for a term of two and a half years.

The European Council also appoints the European Commission, and other key officials such as the European Central Bank chief and the head of diplomacy.

Countries contribute to, and receive a portion of, the EU budget, depending on the size and type of their economy, adherence to EU law, and specific policy or project needs.

About a third of the funds goes to raising the standard of living in poorer regions, and another third to farmers.

Money is also spent on grants and loans to businesses, non-profit organisations and students.


EU law is negotiated by the Parliament, the Commission and member states. Treaties set out the bloc's principles, institutions and legislative processes.

Regulations apply directly to all member states, while directives require countries to achieve specified objectives and allow flexibility in implementation methods. Decisions are addressed to specific companies, individuals or member states.

Among recently approved acts are a regulation on horse mackerel fishing quotas, a directive on occupational gender equality, and a decision to approve Kuwait's accession to an international sugar agreement.

Prominent examples from recent months include a May regulation to set tariffs on Russian grain products, a February directive on environmental crimes, and a decision to approve German state aid to RWE in December.

Treaties and legislation are interpreted by the Court of Justice of the EU that ensures they are applied, with the power to impose fines on members for breaches.

In antitrust cases, the court reviews fines imposed on companies by the Commission.

International agreements with partner countries or organisations also shape the legal landscape.

Reporting by Olivier Sorgho, Luca Fratangelo and Alessandro Parodi; editing by Milla Nissi and Gareth Jones


Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.

All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.

Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.

Risk Warning: Your capital is at risk. Leveraged products may not be suitable for everyone. Please consider our Risk Disclosure.