Is the Conditionality Regulation powerless without the notion of generalised

The notion behind the Proposal was specifically to grasp these situations. Systemic problems that generally concern the proper functioning of the public authorities may have easily lead to the application of the Proposal. This is important since the Proposal’s legal base is art 322(1) TFEU, not on the ’unrestricted’⁹⁷ art 2 TEU. Thus, reality, even if at first glance it is outside the realm covered by Union law, could have been taken

89 Werner Schroeder, ‘The Rule of Law as a Value in the Sense of Article 2 TEU: What does it mean and imply?’

in Armin von Bogdandy, Piotr Bogdanowicz, Iris Canor, Christoph Grabenwarter, Maciej Taborowski and Matthias Schmidt, Defending Checks and Balances in EU Member States – Taking Stock of Europe’s Actions (Springer 2021) 116; One could have considered the Proposal’s solution regarding generalised deficiencies rather blurry, see: von Bogdandy and Łacny (n 26) 7–8. Also see the cited case-law of the CJEU here.

90 von Bogdandy and Ioannidis (n 84) 60; Grabowska-Moroz, Kochenov and Scheppele (n 85) 18–19; von Bogdandy, Bogdanowicz, Canor, Taborowski and Schmidt (n 74) 989; Armin von Bogdandy, ‘Towards a Tyranny of Values? Principles on Defending Checks and Balances in EU Member States’ in Armin von Bogdandy, Piotr Bogdanowicz, Iris Canor, Christoph Grabenwarter, Maciej Taborowski and Matthias Schmidt, Defending Checks and Balances in EU Member States – Taking Stock of Europe’s Actions (Springer 2021) 93–94; Scheppele (n 85) 122.

91 von Bogdandy and Ioannidis (n 84) 71, 73.

92 von Bogdadny (n 79) 29–30.

93 Scheppele (n 85) 110.

94 von Bogdandy and Ioannidis (n 79) 60.; Scheppele (n 85) 114.

95 von Bogdandy and Ioannidis (n 79) 60, 70.

96 COM(2019) 343, 1; von Bogdandy (n 54 ) 13, 23.; von Bogdandy (n 73) 707, 712; Grabowska-Moroz, Kochenov and Scheppele (n 85) 19–21.

97 Luke Dimitrios Spieker, ‘Breathing Life into the Union’s Common Values: On the Judicial Application of Article 2 TEU in the EU Value Crisis’ (2019) 20(8) German Law Journal 1198. But see the concept of von Bogdandy: von Bogdadny (n 54) 23.

Safeguarding the Rule of Law Under the Conditionality Regulation i33 into consideration. As such – since systemic problems require systemic measures⁹⁸

– the reactions would have addressed the bigger picture indirectly.

Bearing all these in mind, in principle, the same can be done with the Conditionality Regulation. Reading together especially recital 15–16; art 2a; arts 3 and 4, with special attention to the bridging art 4(2)(h) – ‘other situations that are relevant’ – of the Conditionality Regulation, it can be said that systemic issues still could be addressed.

The Conditionality Regulation does not rule out that breaching more principles of the rule of law can be taken into consideration which is highly important due to the fact that the rule of law is enforced through its sub-principles.⁹⁹ This is vital since individual violations may not tackle the real issue: the autocratization of a Member State.¹⁰⁰ Secondly, recital 15 puts up to a matter of interpretation whether breaches of the rule of law shall be considered widespread and as such, systemic. The Conditionality Regulation is definitely sharper here than the Proposal: even individual – normal – breaches of the law could trigger its application. However, more systemic the breaches are, the application of the Conditionality Regulation is more likely.¹⁰¹ This shall be taken into consideration if one bears in mind the real regrettable issue with the Conditionality Regulation: art 4(1). requires that the breaches shall affect or risk affecting the sound financial management of the EU budget or the protection of the financial interests of the EU in a sufficiently direct way. This provision is the matter of concern as it could greatly narrow down the applicability of the Conditionality Regulation: requiring concrete interference with the list of indicators of art 4(2).

However, the list of examples of the EU’s financial interests is still heavily institution focused, containing a bridging provision. As such, finding a link from the breaches of the rule of law principles may still be relatively easy. In other words, the Conditionality Regulation is capable of addressing a great deal of institutional concerns [including law-making – general measures – recital 15 and art 2(a)]; interactions¹⁰² through the principle of separation of powers; and also, some violations of fundamental rights which may be connected to these issues (right to effective judicial remedy, right to fair trial or equality before the law notably). Changes in these fields may change the bigger picture after all. On top, recital 16 prescribes qualitative, holistic assessment from various sources within the European Legal Space, which has been indicated as a key to find and establish systemic violations of the rule of law. To conclude, one might say that the Conditionality Regulation is sufficiently clear for application and bears the potential to address systemic breaches. The issue could be the matter of its

198 Scheppele (n 85) 122.

199 Schroeder (89) 117.

100 von Bogdandy, Bogdanowicz, Canor, Taborowski and Schmidt (n 74) 988.

101 Łacny (n 1) 85.

102 According to Scheppele, this is one of the main points with rule of law measurements, see: Kim Lane Scheppele, ‘The Rule of Law and the Frankenstate: Why Governance Checklists Do Not Work’ (2013) 26(4) Governance: An International Journal of Policy, Administration, and Institutions 559, 562.

l34 ászló deTre

interpretation by the Commission and by the Council. However, the CJEU might also be involved and as such, judicial review, the ’essence’¹⁰³ of the rule of law,is guaranteed.

Conclusions

One could say that the glass is half empty or half full.¹⁰⁴ However, the Conditionality Regulation still has some promises, especially from the point of view of institutions which are vital to safeguard liberal democracy.¹⁰⁵ In legal scholarship, it is rather debated whether financial coercion could lead to real changes¹⁰⁶ but the signs – bearing in mind the example of Greece¹⁰⁷ – are promising. Having said that two points are to be made. Firstly, despite the fact that the Conditionality Regulation bears a great potential, it is useless without the political will to apply it.¹⁰⁸ Secondly, the indirect effect of the Conditionality Regulation is the real treat. The goal would be putting back the concerned Member State – its institutions – in line with the European values.¹⁰⁹ However, here, the question will be whether the Member State – or more precisely, the governing majority – is willing to pay the price of its policies that run against the fundamental values of the EU.¹¹⁰ Ultimately, this may be the real problem with such issues:¹¹¹ it could easily turn out that the presumably shared values within the EU are not that shared, or they are so in parallel universes. This is the reason why solving value issues in a community, in which its members are not on the same page is close to impossible.¹¹² If a society strongly believes in a certain policy that runs against red lines, it might be willing to pay a literally high price for it,¹¹³ regardless how much the system is depended on the concerned funds. In this case, no financial – or any kind¹¹⁴ of – coercion within the current setting of the Union will save the day.

103 Case C-64/16 Associação Sindical dos Juízes Portugueses [2018] e.g. [36].

104 Łacny (n 1) 102.

105 Jakab (n 44) 768, 790.

106 von Bogdandy and Ioannidis (n 84) 29; Daniel R. Kelemen, ‘Can courts rescue national democracy? Judicial safeguards against democratic backsliding in the EU’ (2017) 24(3) Journal of European Public Policy 333;

Kochenov (n 25) 19; Scheppele (n 85) 127.

107 von Bogdandy and Ioannidis (n 84) 77–81, 87–90.

108 Łacny (n 1) 103.

109 Scheppele (n 85) 122, 125.

110 In other words, value debates often lack rationality, see: von Bogdandy (n 79) 4.

111 von Bogdandy and Ioannidis (n 84) 94: ‘Systemic deficiencies raise difficult questions of […] broader compatibility with the European project’.

112 For example, only the citizens can restore the separation of powers, see: von Bogdandy, Bogdanowicz, Canor, Taborowski and Schmidt (n 74) 985, 994.

113 Act with caution, such debates may lead to explosive conflicts, see: von Bogdandy (n 73) 713–15.

114 In this regard see: Grabowska-Moroz, Kochenov and Scheppele (n 85) 22.

David l

(assistant professor, University of Innsbruck)

The Conditionality Regulation: Procedural Aspects of the EU’s New Rule of Law Mechanism

Introduction

The rule of law crisis is one of the biggest challenges the European Union (EU) has faced in recent years. With the Regulation on a general regime of conditionality for the protection of the Union budget (Conditionality Regulation), a new instrument has been created to help to overcome this crisis. It entitles the EU to suspend payments of EU funds to Member States that breach the principles of the rule of law. In this contribution, the procedural aspects of the Conditionality Regulation will be examined.

Firstly, the effects of the rule of law crisis on the EU are presented, before the genesis of the Conditionality Regulation is examined. Subsequently, the focus lies on the functioning of the Conditionality Regulation. In particular, the conditions for adopting measures and the resulting burden of proof will be dealt with. The main part of the contribution then concentrates on the procedural steps of the Conditionality Regulation, especially on those which are decisive for its success. The respective responsibilities of the EU institutions will be discussed to show whether the Conditionality Regulation has the potential to help protecting the rule of law in the EU. The findings of the analysis will be summarised in the conclusions.