On 9 June 2026, a hearing took place before the Grand Chamber of the Court of Justice of the European Union concerning an open issue of fundamental importance to the constitutional architecture of the Union. Essentially, the Court is being asked to define the exact scope of the power conferred on the Council of the EU by Article 122(1) of the Treaty on the Functioning of the European Union to adopt –by qualified majority and without the participation of the European Parliament– emergency measures on a proposal from the Commission (for example, in the event of ‘serious difficulties’ in the supply of goods, particularly in the energy sector), ‘in a spirit of solidarity between Member States’.

Article 122 TFEU (which was numbered differently in previous Treaties) has existed since the Treaty of Rome (although, until the Treaty of Nice, it required unanimity amongst Member States in the Council) but its use in recent years (particularly since the Covid-19 pandemic) has increased in both intensity and frequency (including regarding the second paragraph, which allows financial assistance to be granted to a Member State in serious difficulties due to exceptional circumstances beyond its control). Among many examples, the following have been adopted under Article 122: the so-called SURE Regulation (Council Regulation (EU) 2020/672 of 19 May 2020), on financial support to Member States to mitigate the risks and costs of unemployment, and the Next Generation EU package of measures aimed at supporting economic recovery following the pandemic, at the heart of which lie the EURI (European Union Recovery Instrument) funds and financing introduced by Council Regulation (EU) 2020/2094 of 14 December 2020.

The point is that, whilst the simplified governance provided for in Article 122 allows the Council to act swiftly in crisis situations, on the other hand the lack of Parliament’s involvement and the abolition of the unanimity requirement raise delicate issues of institutional balance (and democratic oversight), which are particularly acute in cases where the Council is accused of using this power in a manner that goes beyond the conditions under which it may be applied. For example, the so-called SAFE Regulation (Council Regulation (EU) 2025/1106 of 27 May 2025), which establishes, on the basis of Article 122 TFEU, an action tool to ensure Europe’s security by strengthening its defence industry, has been challenged by the European Parliament (regarding its legal basis), including by seeking its annulment by the Court of Justice, on the grounds that it was not justified by exceptional circumstances amounting to an emergency and that the measures provided for were not temporary. The emergency nature of the economic situation and the limited duration of the measures adopted are both conditions for the application of Article 122, according to established interpretation. It should be added that Article 122 is ‘without prejudice’ to any ‘other procedure provided for in the Treaties’, a formulation whose interpretation remains unresolved to date but which, at least, should place a heightened burden on the Council to justify why the other legislative procedures were not followed.

In the case leading to the hearing on 9 June 2026 –following reference orders on validity and interpretation from the Irish High Court, the Belgian Constitutional Court and the Italian Constitutional Court– the Council of the EU was accused of also encroaching upon the Member States’ competences in the field of direct taxation. The focus is on Council Regulation (EU) 2022/1854 of 6 October 2022 ‘on an emergency measure to address high energy prices’ (adopted on the basis of Article 122(1) TFEU during the energy crisis following Russia’s invasion of Ukraine), in particular Chapter III thereof, which established a mandatory ‘solidarity contribution’ on the ‘excess profits’ (so-called windfall profits) of companies operating in the crude oil, natural gas, coal and refining sectors.

The contention is that the Council infringed the principle of conferral enshrined in Articles 4(1) and 5(2) of the Treaty on the European Union, by virtue of which the Union acts exclusively within the limits of the competences conferred upon it by the Member States in the Treaties, and any competence not conferred upon the Union remains with the Member States. The underlying argument is that competence in the field of direct taxation, in particular the introduction of a new (and additional) direct tax on the profits of certain undertakings, has remained a competence of the Member States. In other recent instances of the use of the emergency powers referred to in Article 122, the Council had intervened in areas where the Union has at least concurrent competence or competence to support and complete the actions of the Member States: industrial policy, economic, social and territorial cohesion, public health safety, etc. 

The Council and the Commission counter that the Treaties also confer competence on the Union in the field of direct taxation, for example in Articles 115, 192(2) and 194(3) TFEU, a competence which Article 122 (provided its conditions for application are met) allows to be exercised on an emergency basis. The counter-argument is that all cases in which the Union is granted any competence in tax matters, within the framework of the functioning of the internal market, require unanimity amongst the Member States and the involvement of the European Parliament (‘no taxation without representation’), and in no case is there any provision for the competence to introduce new taxes on corporate income. By adopting the regulation in question pursuant to Article 122 TFEU, the Council would have simultaneously undermined the principle of conferral (the vertical allocation of powers between the Union and the Member States) and the institutional balance (the horizontal allocation of powers between EU institutions), ultimately creating a democratic deficit.

The Council considers that Article 122 constitutes a self-standing legal basis, provided its conditions are met. Also this view is contested by those who argue, on the one hand, that Article 122 does not confer a new and unlimited competence but only the power to adopt, in an emergency, measures falling within a competence which, ‘in normal times’, may be exercised by the Union through the ‘other procedures’ provided for in Article 122 and, on the other hand, that Chapter III of the Regulation does not satisfy the conditions of Article 122, in that the ‘solidarity contribution’ is not a suitable measure to mitigate the effects of high energy prices whilst preventing the fragmentation of the internal market, as it is intended to be collected by the few Member States in which the undertakings subject to the measure are established and in the absence of a redistributive mechanism towards the other Member States; consequently, it does not in practice comply with the ‘spirit of solidarity’ required by the provision.

Finally, there are interpretative issues relating specifically to the Italian case, where the implementing legislation (Law No 197 of 29 December 2022, namely the 2023 Budget Law), on the one hand, introduced an additional tax on certain profits, classifying it as a so-called ‘national measure equivalent’ to the solidarity levy (a classification provided for by the Regulation itself) and, on the other hand, has extended the scope of those subject to taxation on so-called ‘extra profits’ to downstream operators (distributors and retailers of gas and petroleum products) and to producers and retailers of electricity, including renewable energy operators: the Court of Justice is therefore asked whether, assuming that Regulation 2022/1854 is valid, it precludes the adoption of such an Italian measure, with particular reference to the extension of its scope of application.

Advocate General Rantos will deliver his Opinion on the case on 22 October 2026. The Court of Justice of the European Union is expected to deliver its judgment by the first quarter of 2027.