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Abstract

This article draws on the theory of “federalism as the new nationalism” to illustrate that regulatory fragmentation is not necessarily synonymous with disintegration. Regulatory fragmentation can rather be conceptualized as a tool assisting European integration. Looking at the status of subnational authorities (SNAs) in EU law, the article identifies decisions of the Court of Justice of the European Union (CJEU) in free movement law that illustrate that SNAs can be conceived as valuable insiders, rather than threatening outsiders, of European law. This account, which indicates that SNAs’ contribution to European legal integration is in many ways analogous to that of the Member States, stands in contrast with the European Treaties that recognize only two levels of public authority as SNAs are seen as a predominantly domestic phenomenon of little relevance for the supranational project. My analysis underscores that SNAs and their norms do not exist in a sphere separate from that of EU law. It highlights diverse interactions between the subnational and the supranational and suggests that the influence of levels of public authority can best be captured by a paradigm of interconnection rather than separation. Indeed, contrary to commonplace assumptions, it is not actors’ formal status, anchored in notions such as independence, sovereignty, and autonomous competences but the manifold functional interactions between them that shape the polycentric Union. Through this functional lens we confirm what federalism scholars have observed in the USA, namely, that “decentralization can serve rather than undermine the project of integration.”