4. The procedure of the Conditionality Regulation
4.1. The initiation of the procedure
The competence to initiate the procedure lies with the Commission.47 An essential question, which has caused a great debate, is whether the Commission is entitled or obliged to act. This would be of importance if the European Parliament will bring an action for failure to act against the Commission for not yet applying the regulation.
According to art 265 TFEU the Member States and the EU institutions, including the European Parliament, may bring an action against an EU institution which unlawfully fails to act. For such an action to succeed, the ECJ needs to agree with the European Parliament that the Conditionality Regulation enshrines an obligation of the Commission to initiate a procedure if the conditions of art 4(1) Conditionality Regulation are met.
An interpretation of art 4(1) and art 6(1) Conditionality Regulation might help to find out whether this is the case. Therefore, the wording of these provisions will be the starting point. According to art 4(1) Conditionality Regulation ‘measures shall be taken’.
This wording indicates an obligation for the Commission. Art 6(1) stipulates that
‘[w]here the Commission finds that it has reasonable grounds to consider that the conditions set out in Article 4 are fulfilled, it shall, unless it considers that other procedures set out in the Union legislation would allow it to protect the Union budget more effectively, send a written notification to the Member State concerned, setting out
46 Same view Takis Tridimas, ‘Editorial Note: Recovery Plan and Rule of Law Conditionality: A New Era Beckons?’
(2020) 16 CYELP VII, XVIf.
47 Conditionality Regulation, art 6(1).
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the factual elements and specific grounds on which it based its findings’. The beginning of the sentence (‘reasonable grounds to consider’) shows that the Commission has some discretion in initiating the procedure. This discretion increases by the fact that it may initiate other procedures if it considers them more appropriate to protect the EU budget.
However, art 6(1) also states that the Commission ‘shall’ send a written notification, and not ‘may’ send a written notification in such a case. To sum it up, the wording of art 4(1) and art 6(1) Conditionality Regulation indicates an obligation of the Commission to initiate a procedure if it considers the conditions of art 4 are met and no other procedures are more appropriate.48 This is not changed by the fact, that art 5(1) states
‘one or more of the following appropriate measures may be adopted’. In this way, the Commission’s freedom to decide on the measures to be taken is expressed. The principle of effectiveness clearly speaks in favour of such an interpretation. The purpose of to the Conditionality Regulation it is to protect the EU budget from any damage caused by breaches of the rule of law. This aim can merely be effectively realised if the Commission has a legal obligation to apply the Conditionality Regulation under certain circumstances.
Nevertheless, it is doubtful, whether an action for failure to act would be successful in this context. Before such an action can be brought, the EU institution concerned must be called upon to act. The latter then has two months to state its position.49 If the institution concerned complies with this request, an action for failure to act is inadmissible. It is not necessary that the decision requested by the applicant is taken.
It is already sufficient if the institution concerned deals with the content of the request and clearly states its position. Only if it does not respond to such a request at all, an action for failure to act would be admissible.50 On 23 June 2021, the President of the European Parliament, David Maria Sassoli, officially called upon the Commission to apply the Conditionality Regulation.51 From this date, the Commission has two months to define its position.52 It could avoid an action by claiming that the conditions set out in art 4(1) Conditionality Regulation are not met. However, such a response is unlikely as Commission President Ursula von der Leyen has assured the European Parliament that the Commission ‘will start the first files in autumn’.53 It is noteworthy that the
48 For a similar view see Merijn Chamon, ‘A Hollow Threat: The European Parliament’s plan to bring the Commission before the Court of Justice’ 16 June 2021 Verfassungsblog <https://verfassungsblog.de/a-hollow-threat/> accessed 1 August 2021.
49 TFEU, art 265(2).
50 Case 8/71 Komponistenverband v Commission [1971] ECR 705, para 2; Joined Cases 166/88 and 220/86 Irish Cement v Commission [1988] ECR 6473, para 17; Joined Cases C-15/91 and C-108/91 Buckl and others v Commission [1992] ECR 6061, para 17.
51 See <https://the-president.europarl.europa.eu/files/live/sites/president/files/pdf/Letter%20to%20EC%20 RoL%20230621/Sassoli%20Letter%20EC%20230621.pdf> accessed 10 July 2021.
52 This contribution was finalised before the expiry of the Commission’s two-month time limit.
53 Commission, ‘Speech by President von der Leyen at the European Parliament Plenary on the conclusions of the European Council meeting of 24-25 June 2021’ (Speech) SPEECH/21/3526.
The Conditionality Regulation: Procedural Aspects of the EU’s New Rule of Law Mechanism i45 Commission could not claim that it still needs time to analyse the matter. According
to the case-law of the ECJ, such stalling answers are not considered to be a statement in the sense of art 265(2) TFEU.54
Even if the European Parliament would bring an admissible action for failure to act, it is hard to imagine that the ECJ will uphold it. In fact, the Commission has no absolute obligation to act. It has already been shown that the Conditionality Regulation grants a certain degree of discretion in this matter. For an action to be successful, the European Parliament would have to prove that the Commission has violated the limits of its discretion.55 However, it would be extremely difficult to provide such evidence.56 Moreover, it would take some time until the ECJ has ruled on the European Parliament’s action for failure to act. By then, a judgement of the ECJ on the actions for annulment brought by Hungary and Poland will certainly have been delivered and the conditions for the application of the Conditionality Regulation set out in the December Conclusions of the European Council will be fulfilled.
Therefore, it would have been more efficient to take legal action against this Conclusions, as has also been suggested by several scholars.57
Despite an action for failure to act, how could the Commission otherwise be mobilised to act? This question will still be relevant once the ECJ has ruled on the action for annulment brought by Hungary and Poland. In fact, the Commission is criticised for its inaction in fighting rule of law deficiencies in the Member States.58 The Article 7 procedure against Hungary was also not initiated by the Commission, but by the European Parliament.59 How could the Commission therefore be pressured to apply the Conditionality Regulation? Firstly, the European Parliament could vote on a motion of censure against the Commission under art 234 TFEU.60 It has already pointed out to this option in its resolutions of March and June 2021 regarding the Conditionality Regulation.61 In addition, the European Parliament could ask the
54 Case 42/58 S.A.F.E. v High Authority [1959] ECR 183, 190f; Joined Cases 42 and 49/59 S.N.U.P.A.T. v High Authority [1961] ECR 53, 73f; Case T-95/96 Gestevisión Telecinco v Commission [1998] ECR II-3407, para 88.
55 Markus Kotzur, ‘Article 265 TFEU’ in Rudolf Geiger, Daniel-Erasmus Khan and Markus Kotzur (eds), European Union Treaties: A Commentary (C.H.Beck, Hart Publishing 2015) para 15.
56 Chamon (n 48); Sébastien Platon, ‘Bringing a Knife to a Gunfight: The European Parliament, the Rule of Law Conditionality, and the action for failure to act’ 11 June 2021 Verfassungsblog <https://verfassungsblog.de/
bringing-a-knife-to-a-gunfight/> accessed 1 August 2021; see in this context also the case-law of the ECJ, in which it denies an obligation of the Commission to initiate an infringement procedure: Case 247/87 Star Fruit Company v Commission [1989] ECR 291, paras 11f; Case C-87/89 Sonito and others v Commission [1990] ECR I-1981, paras 6f; Case C-72/90 Asia Motor France v Commission [1990] ECR I-2181, para 13.
57 Alemanno and Chamon (n 37); Scheppele, Pech and Platon (n 37).
58 Pech, Wachowiec and Mazur (n 4) 21ff.
59 See European Parliament, ‘European Parliament resolution of 12 September 2018 on a proposal calling on the Council to determine, pursuant to Article 7(1) of the Treaty on European Union, the existence of a clear risk of a serious breach by Hungary of the values on which the Union is founded (2017/2131(INL))’
P8_TA(2018)0340.
60 Alemanno and Chamon (n 37).
61 P9_TA(2021)0103 (n 38), para D; P9_TA(2021)0287 (n 38), para G.
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President of the Commission to withdraw confidence in a Member of the Commission.62 The legal basis for this can be found in section 5 of the Framework Agreement between the European Parliament and the Commission.63 In such a case, the President of the Commission considers whether to make use of the possibility of art 17(6) TEU and to request the Member of the Commission concerned to resign.
Of course, these would be drastic measures, which should only be considered as ultima ratio. The European Parliament should first try to convince the Commission to act through a dialogue. Nevertheless, it would be preferable that such measures will not be necessary, and the Commission will fulfil its role as guardian of the Treaties and actually use the new instrument to protect the rule of law on its own initiative.