This chapter examines the lawmaking powers of the European Union (EU) in the context of its Treaties. It explains that the EU has the competence to make law of various types (including secondary legislation, soft law, delegated acts and implementing acts) in a broad range of areas and that the amendments to the lawmaking procedures have affected the institutional balance, giving an increased role to the European Parliament. It discusses the changes made to improve the level of democracy at EU level, to address concerns that EU law-making has a ‘democratic deficit’ and lacks transparency and proportionality. The chapter also considers the different aspects of EU competence, describes the lawmaking process and sources of EU law and also addresses questions concerning the determination of exclusive, shared and concurrent competence, particularly in the context of subsidiarity. Furthermore, it examines the rules on the EU adopting legislation without all Member States participating (closer cooperation).