The EU has been confronted with some major challenges in the last years. These challenges also include the so-called ‘rule of law crisis’.1 According to art 2 of the Treaty on European Union (TEU) the rule of law is one of the fundamental values on
1 Peter Van Elsuwege and Femke Gremmelprez, ‘Protecting the Rule of Law in the EU Legal Order:
A Constitutional Role for the Court of Justice’ (2020) 16 EuConst 8, 10.
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which the EU is founded and which is common to all its Member States.2 However, in some Member States there are currently serious deficiencies regarding the rule of law.
This is particularly the case in Hungary3 and Poland.4 Yet worrying developments can also be observed in other Member States. The rule of law crisis has far-reaching consequences for the EU. Above all, it jeopardises the principle of mutual trust, which is essential for the judicial cooperation between the Member States.5 It requires each Member State ‘to consider all the other Member States to be complying with EU law’.6 The principle of mutual trust is based on the premise that all Member States respect the fundamental values of art 2 TEU.7 If a Member State systematically violates these fundamental values, however, the basis for mutual trust no longer exists.8 Moreover, if the judiciary of a Member State is no longer independent, this affects the functioning of the preliminary ruling procedure, which is one of the cornerstones of the EU’s judicial system.9 The political consequences of the rule of law crisis should not be underestimated either. The EU is in danger of losing its integrity if it promotes its fundamental values in its external relations but fails to act in the event of serious breaches of these values by its own Member States.10
Although art 7 TEU provides a mechanism for sanctioning serious breaches of the EU’s fundamental values (Article 7 procedure), this ‘nuclear option’11 is hardly applicable, as it requires a unanimous decision by the European Council.12 In regard to Hungary and Poland art 7 TEU has proven to be ineffective and not so nuclear at all. The European Court of Justice (ECJ) has made an important contribution to the
12 For the rule of law as a fundamental value of the EU see 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 et al. (eds), Defending Checks and Balances in EU Member States (Springer 2021).
13 Gábor Attila Tóth, ‘Illiberal Rule of Law? Changing Features of Hungarian Constitutionalism’ in Maurice Adams, Anna Meuwese and Ernst Hirsch Ballin (eds), Constitutionalism and the Rule of Law: Bridging Idealism and Realism (CUP 2017).
14 Laurent Pech, Patryk Wachowiec and Dariusz Mazur, ‘Poland’s Rule of Law Breakdown: A Five-Year Assessment of EU’s (In)Action’ (2021) 13 HJRL 1.
15 See Clemens Ladenburger, ‘The Principle of Mutual Trust between Member States in the Area of Freedom, Security and Justice’ (2020) 23 ZEuS 373.
16 Case Opinion 2/13 Accession of the EU to the ECHR [2014] ECLI:EU:C:2014:2454, para 191; Joined Cases C-404/15 and C-659/15 PPU Aranyosi and Căldăraru [2016] ECLI:EU:C:2016:198, para 78; Case C-216/18 PPU LM [2018] ECLI:EU:C:2018:586, para 36.
17 Case Opinion 2/13 Accession of the EU to the ECHR [2014] ECLI:EU:C:2014:2454, para 168; Case C-284/16 Achmea [2018] ECLI:EU:C:2018:158, para 34; Case C-216/18 PPU LM [2018] ECLI:EU:C:2018:586, para 34.
18 Carlos Closa, ‘Reinforcing EU Monitoring of the Rule of Law: Normative Arguments, Institutional Proposals and the Procedural Limitations’ in Carlos Closa and Dimitry Kochenov (eds), Reinforcing Rule of Law Oversight in the European Union (CUP 2016) 16f.
19 Marek Safjan, ‘Domestic Infringements of the Rule of Law as a European Union Problem’ (2018) 64 OER 552, 554f.
10 Werner Schroeder, ‘The European Union and the Rule of Law: State of Affairs and Ways of Strengthening’ in Werner Schroeder (ed), Strengthening the Rule of Law in Europe: From a Common Concept to Mechanisms of Implementation (Hart Publishing 2016) 4.
11 Commission, ‘State of the Union 2012 Address’ (Speech) SPEECH/12/596, 10.
12 TEU, art 7(2).
The Conditionality Regulation: Procedural Aspects of the EU’s New Rule of Law Mechanism i37 protection of the rule of law with its jurisprudence on art 19(1) TEU, which obliges
the Member States to guarantee effective legal protection in the fields of EU law.13 However, infringement procedures are only suitable for claiming individual violations of EU law.14 Otherwise, only non-binding measures exist so far to protect the rule of law, such as the newly introduced rule of law report of the Commission.15
This institutional deficiency has led to many debates for a new instrument to strengthen the rule of law in the EU.16 Due to the principle of conferral,17 the EU only has limited room for action. It lacks a general competence to adopt measures regarding the rule of law. In the course of time, the idea came up to link the payment of EU funds to compliance with the rule of law.18 An idea that was put into practice in the middle of January 2021, when the Conditionality Regulation entered into force.19 It links the EU funds of a Member State directly to the rule of law as it enables the EU to suspend or reduce EU funds of a Member State in case of a violation of the rule of law. Officially, the Conditionality Regulation is not an instrument to protect the rule of law, but an instrument to protect the EU budget.20 However, it is quite obvious that the main goal was to create an instrument to effectively sanction violations of the rule of law.
Conditionality is not a new concept in EU law. In fact, conditionality mechanisms exist in EU law since the end of the 1970s. They were originally used in the EU’s external policy. At that time, the EU began to link the granting of economic benefits to the compliance with human rights standards in international agreements with third countries.21 Nowadays, such conditionality clauses are usually included in international agreements of the EU. Conditionality mechanisms are also increasingly
13 See Case C-64/16 Associação Sindical dos Juízes Portugueses [2018] ECLI:EU:C:2018:117; Case C-619/18 Commission v Poland [2019] ECLI:EU:C:2019:531; Case C-824/18 AB and others [2021] ECLI:EU:C:2021:153.
14 Kim Lane Scheppele, ‘Enforcing the Basic Principles of EU Law through Systemic Infringement Actions’ in Carlos Closa and Dimitry Kochenov (eds), Reinforcing Rule of Law Oversight in the European Union (CUP 2016) 108ff.
15 Commission, ‘2020 Rule of Law Report: The rule of law situation in the European Union’ COM(2020) 580 final.
16 See for example Carlos Closa and Dimitry Kochenov, ‘Reinforcement of the Rule of Law Oversight in the European Union: Key Options’ in Werner Schroeder (ed), Strengthening the Rule of Law in Europe: From a Common Concept to Mechanisms of Implementation (Hart Publishing 2016); Gábor Halmai, ‘The Possibility and Desirability of Rule of Law Conditionality’ (2019) 11 HJRL 171; Jan-Werner Müller, ‘Protecting the Rule of Law (and Democracy!) in the EU: The Idea of a Copenhagen Commission’ in Carlos Closa and Dimitry Kochenov (eds), Reinforcing Rule of Law Oversight in the European Union (CUP 2016).
17 TEU, art 5(2).
18 Critical on this Iris Goldner Lang, ‘The Rule of Law, the Force of Law and the Power of Money in the EU’
(2019) 15 CYELP 1, 5ff.
19 Regulation (EU, Euratom) 2020/2092 of the European Parliament and of the Council of 16 December 2020 on a general regime of conditionality for the protection of the Union budget [2020] OJ L433I/1.
20 cf Conditionality Regulation, art 1; the Conditionality Regulation is also not listed among the other rule of law instruments on the Commission’s homepage.
21 Elena Fierro, The EU’s Approach to Human Rights Conditionality in Practice (Martinus Nijhoff Publishers 2003) 41ff.
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found in the EU’s internal policies. This development started with the then Cohesion Fund,22 which was introduced in the mid-1990s to realise the establishment of the European Monetary Union. Accordingly, some Member States (Greece, Ireland, Portugal and Spain) would only have access to the Cohesion Fund’s resources if they adopted the economic convergence plans and complied with the EU’s budgetary deficit rules (called macroeconomic conditionality).23 The current Common Provisions Regulation24 also contains a conditionality mechanism. This regulation contains common provisions regarding the European structural and investment funds (ESIF).
According to art 142(1)(a) Common Provisions Regulation, the Commission may suspend payments from the ESIF if ‘there is a serious deficiency in the effective functioning of the management and control system of the operational programme, which has put at risk the Union contribution to the operational programme and for which corrective measures have not been taken’. Some scholars argue that this provision already authorises the EU to suspend payments to a Member State that violates the rule of law.25