Fisking the joint call by 17 member States for the Commission to retain Directives as procurement regulatory instrument
Earlier this month, 17 member States (plus Norway*) led by Austria, France and Germany have put out a call asking the Commission to abandon its plan to propose a Regulation. The Gang of 18 suggests instead to maintain the status quo of using Directive(s) as the legal form for the public procurement reform. This call calls for a fisking of the various arguments presented, to be done so on a paragraph by paragraph basis.
The signatory Member States take note that the European Council, in its conclusions of 19 March 2026, invited the Commission to favour regulations over directives to simplify the EU regulatory framework. They also understand that one of the Commission’s objectives is to prevent “gold-plating” by Member States. While these objectives are in principle broadly supported, public procurement law is different from many other areas of EU law and therefore requires a different approach.
This is a fascinating start to the call, and the obvious comment is that the Commission is (correctly) delivering on what the European Council asked for just two months ago. The Council recognised that Regulations are probably a better tool in the toolbox to simplify the legislative framework than Directives. In a sector that has gone through various generations of Directives for 50 years, it is an obvious candidate to change. So the argument can be spun on its head that the Council likes Regulations, but not like this. When faced with the trade-offs and difficult choices those require, the member States balk at the consequences. Asking for change in theory is great but you need to walk the proverbial walk when it comes around.
First and foremost, it should be noted at the outset that, under Article 4 of the TFEU, the shared competences between the Union and the Member States – and thus the principle of subsidiarity – apply to the internal market. The principle of subsidiarity is intended to safeguard the Member States’ capacity for decision-making and action, and legitimizes EU action only if, and to the extent that, the objectives of the proposed action cannot be sufficiently achieved by the Member States, whether at central, regional or local level, but can be better achieved, by reason of the scale or effects of the proposed action, at Union level (Article 5 of the TEU). Given the application of this principle to the internal market and the diversity of national specificities, particularly economic ones, which justify maintaining a degree of flexibility for Member States, the directive appears to be the most appropriate and suitable instrument for establishing the legislative framework for public procurement, as the Commission itself has pointed out when proposing the revision in 2011.
Here I agree with the premise put forward by the Gang of 18. Yes, the internal market is a shared competency (more on that in a second) and subject to the principle of subsidiarity. But the way this is spun here is mendicious. Subsidiarity only applies if the objectives (ie, the prosecution of the internal market) can only be achieved at least as well at national or sub-national level than EU level. But we have 50 years of track record of trying to open public procurement using Directives as the legislative instrument to do so. What have they yielded? An increase on direct cross-border from 1-2% in the 1960s to less than 5% in recent years. I did enjoy that the call mentions the Commission's view that justified keeping using Directives...from 2011 on the run up to the 2014 revision. That revision has not delivered either on direct cross-border procurement nor the rest of its objectives. These are points the member States do not address or mention at all in their call.
When kicking off this revision process for the Directives, the Commission agreed for the first time ever, that they had failed in their key raison d'etre. So, the subsidiarity afforded by using Directives for >50 years failed.
As I have mentioned a few times in the past 18 months or so, the Directives have failed so we either double down and try to go further on European integration and move to using a Regulation as the regulatory instrument or instead recognise the failure and give up completely on trying to pursue the internal market via public procurement. The logical consequence of subsidiarity here is that since Directives have failed maybe there should be no Directives at all! If we abandon the pursuance of the internal market via public procurement we do not need detailed rules on procurement processes as they only make sense in the context of making sure economic operators are not discriminated based on their origin. If that is no longer a goal worth pursuing then we should not have a detailed Directive and, ultimately, no Directive at all. Let that sink in for a second.
While I agree with the Gang of 18 initial premise on shared competence, the truth is that since the Kolin case, the procurement regulatory framework is no longer treated as simply an internal market issue but instead has been parked firmly in the realm of the commercial policy of the Union...which is an exclusive competence. Somehow, these member States missed out on this crucial development! What is their suggestion to solve the mess created by Kolin? It cannot be a Directive since it requires national transposition so it logically can only be a Regulation. Maybe another piece of legislation to add to the >60 external ones already shaping procurement practice outside of the three (yeah, four) Directives? Not. A. Word.
Secondly, EU Member States face a significant investment backlog. Large financial resources – amounting to billions of euros – must be deployed quickly. Turning the directives into a regulation would significantly slow this process, as practitioners in contracting authorities would need years to learn a completely new legal and operational framework.
Ah yes, the steady as it goes argument. Well, no need to ever change anything then, right? All changes will be disruptive during at least a transitional period. That is inevitable! What is important is the steady state after the transition has happened.
What has not occurred to the Gang of 18 is that the Directives are already so detailed (at least during the procedures) that in some cases they do not need more detail to work if they were directly applicable. It is ironic as well that at least some member States have long adopted the copy out approach to transposing them!
I'm looking forward to the Gang of 18 expousing the same thinking when the changes (via Regulations) hit not the public but the private sector instead.
Furthermore, if there is so much money to deploy so quickly, surely the correct approach to support the Gang of 18's position can only be not to change the rules at all. Any meaningful change even while keeping a Directive will imply a transition, transposition period and subsequently, delays. However, that argument goes unmentioned.
The hundreds of thousands of practitioners applying procurement rules across the EU are predominantly not fully trained EU law specialists, whose professionalization remains an ongoing challenge. They are administrative staff who rely on clear, structured, and nationally adapted rules and the well established terminology that comes with them. The direct application of an EU regulation potentially combined with multiple delegated and implementing acts – would create fundamental practical challenges for them, which would be further intensified by complex interplays between different regulatory layers.
This paragraph continues in the same vein as the previous one: "would someone think about the poor procurement professional?!" This, however, hits at the core of the thinking behind this call. Pay attention to the claim "they are not fully trained EU law specialists." Funny that! An admission that EU law is not taken seriously in public procurement circles! Thank you for admitting as much. What can also be said here is that having a directly applicable legislative instrument would put expose everyone across the EU to the same exact legal problems instead of variations as it currently happens. It means a solution found in member State A would be valid as well for member State B.
Even if procurement professionals are not fully trained EU law specialists, the Directives transpositions are supposed to be a faithful implementation in national law, so what is the fundamental difference here? Primary law has to be complied with. Judgments from the CJEU determining the correct interpretation of EU law and thus by consequence national law, have too. And what about those >60 pieces of sectorial legislation that are interfacing with procurement at the moment? Quite a few are Regulations so, it appears the Gang of 18 is only concerned with practical implications of directly applicable EU law in the how to buy but not the what to buy. Fascinating.
There is something to say about the risk of multiple delegated and implementing acts, on that I agree it is a risk. That is surely a possible outcome from using a Regulation as the main legal instrument for public procurement. Having said that, is it that different from the counter-factual of Directive(s) + delegated acts + national implementations? Or the difference is that the member States would lose the control they have to selectively implement or ignore the bits they do not really like from EU law?
And if the rules are so good already, why isn't the Gang of 18 simply saying they should remain unchanged? Food for thought.
Clarity and legal certainty are essential in public procurement. Contracting authorities operate under constant risk of legal challenges and review procedures. A complete switch in the “operating framework” of public procurement from familiar national rules to a directly applicable EU regulation would increase uncertainty and administrative burdens for an unforeseeable period of time, slowing down the use of public funds. Such a radical switch would also negatively affect the strategic use of public procurement, undermining the efficient and targeted deployment of public funds, which cannot be in the interest of the Commission.
This paragraph starts with an interesting argument as the Gang of 18 recognises that "contracting authorities operate under constant risk of legal challenges and review procedures"... today! That is, in the context of Directives as the legal instrument. Somehow the problem that exists today...would still exist if we changed the choice of legal instrument.
The second one is also interesting for a different reason. It is fair to say that something that is consistently heard across proponents of the strategic use proponents complain about is that it is not working or at least not being deployed as widely as it should. It seems thus that the Gang of 18 is concerned a Regulation might make it worse, but without explaining how that might be the case. If anything, I would posit it is likely that will increase the compliance with the rules and thus with whatever objectives said rules include.
Thirdly, converting the current directives into a regulation would not prevent “gold-plating”. In areas like sustainable or social procurement, any regulation would not be fully harmonising. Even if Member States did not intend to exceed the level of harmonisation required by EU law, they would have to adopt measures to adapt to the new provisions of the regulation, given the specificities of their national laws, thereby reintroducing, due to the scale of these measures, a form of “implementation”. This would lead to contracting authorities having to apply both the regulation and the complementary national rules in parallel, resulting in further fragmentation of public procurement law and increased complexity. Thus, a regulation would remove necessary flexibility and hinder implementation in national terminology and structures without fully achieving the goal of avoiding regulatory divergence.
On here I think the Gang of 18 have a point - partially. Yes, in areas where the Regulation would not be fully harmonising there would still be scope for national rules, which, incidentally is the crux of the matter for those member States. Nonetheless, the scope for divergence is smaller than at the moment meaning that instead of having more fragmentation we would have less than at the moment or with the counter-factual of using Directives to regulate public procurement.
If the Commission considers a “framework regulation” where Member States could regulate certain areas, it has to be pointed out that such a legal construct would also create the above mentioned problems and would create an unreadable and not comprehensible legal framework for the stakeholders. Additionally, the “below threshold” area of public procurement would still need to be regulated by Member States; a regulatory approach with a regulation would therefore create a multi-level
complex legal framework and not an integrated framework as is the case now.
Once more, the call starts with a reasonable premise but moves on to bend reality to suit the position of the member States. A framework Regulation would lock in place what can be fully harmonised leaving for additional legislation (Directives?, implementing legistation at EU/national level?) those areas that cannot be fully harmonised. Again, this would likely still leave scope for the member States to exercise their prized subsidiarity principle rights! As for the complexity, I think they are grasping at straws with the complaint when we have >60 sectorial pieces of legislation interfacing with public procurement. That's where the real complexity in day-to-day procurement operations is coming from.
Anyhow, I am certainly in favour of a single Regulation forcing all difficult decisions to be taken at the law making stage instead of being swept under the rug and left for member States to work with the ambiguity when transposing Directives. Even then, I cannot see a Regulation not requiring some implementation at member State level.
As for the problem of below-thresholds, well, that is easy to solve: simply abolish them. That does not mean the current procedural rules should apply to low value contracts but there is plenty of evidence on the national legislation that it is possible to regulate such contracts in a lighter fashion. Doing so at EU level would bring them into the fold of the internal market and make way with the Telaustria string of cases and the unsolved mystery of what amounts to "certain cross border interest" and how to determine it before launching a procedure. Win-win.
Directives, by contrast, allow Member States to transpose EU rules into their own legal systems, while maintaining the system and terminology familiar to users. This makes the rules easier to use, while still achieving EU-level objectives. In this way, the resources of contracting authorities would not be tied up for years in adapting to a new directly applicable EU regulation, but could instead be focused on faster procurement processes and a more strategic allocation of public funds.
Ah, yes back to the "steady as she goes" kind of argument. While the Gang of 18 claim that using Directives "makes the rules easier to use, while still achieving EU-level objectives" the reality does not support such claim. As mentioned above Directives are already pretty detailed anyway and some member States transpose them using the copy out method so a Regulation would not change much here. What is definitely not true is that Directives are successful at achieving EU-level objectives. They are not and have failed. If they have failed, how would the vaunted national implementations magically foster "faster procurement processes and a more strategic allocation of public funds"? We are left to wonder.
Interestingly enough, the "gold plating" done by member States during transposition is not mentioned in this paragraph. Somehow it seems the Commission is trying to solve a problem created by the member States which themselves fail to recognise it exists when addressing transposition!
A regulation would disrupt the balance achieved thus far — through a series of directives adopted as the internal market was gradually opened up to competition, between the coordination of public procurement procedures for contracts above a certain threshold and the flexibility that Member States must retain to adapt the rules to the specificities and particularities of their national laws.
The Gang of 18 buried the lede quite at the end of their call. Let's translate this paragraph for what it is: we like to be able to tailor our transpositions to suit our interests and, ergo, in consequence, make it ever slightly more difficult for foreign economic operators. In short, the member States are afraid that a Regulation would be more effective at opening their procurement markets (which remain overwhelmingly closed!) than the status quo. That's it, that's the smoking gun.
On this paragraph is the only mention to competition in the call (competitiveness is absent) and it is used in a way to claim the Directives have been adopted "as the internal market was gradually opened up to competition" and not as a way to improve competition in public procurement. This really shows the importance the Gang of 18 afford to competition.
As a consequence, a switch from directives to a regulation would be likely to undermine the Commission’s objectives of simplifying the applicable legal framework and increasing efficiency. Indeed, in theory, a regulation is supposed to ensure the direct and uniform application of European law but, in practice, in the field of public procurement, it is not guaranteed to make the rules automatically and easily applicable.
Simplification as an objective does a lot of heavy lifting in this paragraph. The problem is that simplification is an umbrella term, ie you can project what you think simplification is because there is not a standard definition for it in the context of public procurement. Is a reduction in the number of hard rules in the legislation, akin to the what the UK tried to do with the Procurement Act 2023? That simply led to the complexity being buried in secondary legislation and especially guidance. That is surely a risk here if a Regulation ends up being bereft of enough detail and shies away from solving the thorny issues. Or is simplification reducing legal uncertainty? Paradoxically, it requires more and not less detailed rules, assuming their ambiguity can be reduced as well. Or is it reducing the transaction costs connected with public procurement? Again, more detailed and prescriptive rules help in that regard.
Finally, the Gang of 18 is correct in its assertion that adopting a Regulation "it is not guaranteed to make the rules automatically and easily applicable." On that we agree, but I welcome the recognition that they not see as guaranteed either that the rules will be more difficult to use just because they're contained in a Regulation. Furthermore, the same argument can also be used against Directives...
In conclusion, I do not find the arguments persuasive and the drawbacks mentioned are known quantities at this point. The bottom line for me is that the Gang of 18 recognise that a Regulation reduces the scope for regulatory divergence, thus their push to avoid it. Which is why as in so many other areas over the last 15 years the move from a Directive to a Regulation is the correct one in my view. It will not magically solve all problems with public procurement including regulatory divergence, but it will definitely reduce its scope.
A Regulation can leave us in a better regulatory equilibrium than what Directives have proved to be able to after >50 years of trying to make them work. We will be trading a period of transition where complexity would for an ongoing steady state of a legal regime that would be more harmonising and thus identical on the long run. This is what happened with the GDPR which significantly reduced the scope for regulatory divergence without fully eliminating it. And yes, I am well aware that problems remain with it including divergent enforcement at national level. But overall the move was positive.
*I am quite puzzled to see Norway as an EEA member State participating in a public call aiming to influence the direction of travel of a legal reform. I don't know what to make of it.