The principle of institutional balance implies that each institution has to act in accordance with the powers conferred on it by the Treaties, in accordance with the division of powers. The principle itself is not set out in so many words in the Treaties but derives from a judgment by the Court of Justice (Meroni judgment of 1958). The principle of Community institutional balance thus prohibits any encroachment by one institution on the powers conferred on another. It is the responsibility of the Court of Justice of the European Union (CJEU) to ensure that this principle is respected.
The relationship between the European Commission, the Council of the European Union and the European Parliament is governed by the idea of the "institutional triangle". Their relationship and the powers conferred on them by the Treaties have changed radically over the years, particularly for the Parliament, whose influence has increased considerably. With the adoption of the Treaty of Lisbon, the imbalance which existed between the legislative powers of the Council and those of the Parliament has lessened. The Parliament has been accorded wider legislative and budgetary powers. Furthermore, the extension of the codecision procedure, also known as the ordinary legislative procedure, to a greater number of policy areas contributes to the re-balancing of powers between the Parliament and the Council of the European Union.