Direct effect means that an international rule does not need to be transformed into a national law to be valid, but is directly applicable to the citizens of a nation.
EU regulations are always directly applicable. The EU Court in Luxembourg has also given direct effect to different Treaty articles and directives. They are therefore regarded as legally binding on EU citizens even though they have not been formally adopted as laws at national level.
This has occurred even though such a development was not foreseen or decided by those who drafted the treaties or who adopted the directives in the first place. This is a key example of how the Court of Justice has been a factor for "deepening", that is extending, the powers of the EU beyond what was envisaged by those drafting the original treaties.
It is an example of legal activism or judge-made laws.