In the EU's unique institutional set-up:
The European Council sets the EU's overall political direction – but has no powers to pass laws. Led by its President - currently Donald Tusk - and comprising national heads of state or government and the President of the Commission, it meets for a few days at a time at least twice every 6 months.
There are 3 main institutions involved in EU legislation:
Together, these three institutions produce through the "Ordinary Legislative Procedure" (ex "co-decision") the policies and laws that apply throughout the EU. In principle, the Commission proposes new laws, and the Parliament and Council adopt them. The Commission and the member countries then implement them, and the Commission ensures that the laws are properly applied and implemented.
Decision-making in the EU - more on EU law-making procedures
Two other institutions play vital roles:
The powers and responsibilities of all of these institutions are laid down in the Treaties, which are the foundation of everything the EU does. They also lay down the rules and procedures that the EU institutions must follow. The Treaties are agreed by the presidents and/or prime ministers of all the EU countries, and ratified by their parliaments.
The EU has a number of other institutions and interinstitutional bodies that play specialised roles: