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What EU Conditionality Says about the Rule of Law
Published online by Cambridge University Press: 15 August 2024
Abstract
The Covid-19 crisis provided an opportunity for the European Union to offer an alternative regulatory response to the crisis of values by systemically linking European funding to respect for the rule of law. A rule of law conditionality mechanism for spending was introduced in the Recovery and Resilience Facility and in Regulation 2020/2092. It is both positive – in that it encourages Member States to implement reforms and investments aimed at improving the rule of law – and negative – in that it takes the form of financial sanctions. However, the development of the rule of law conditionality is leading to an economisation of the concept of the rule of law, insofar as it mainly concerns those dimensions of the rule of law that are conducive to growth – such as justice systems and the fight against corruption. As a result, it could paradoxically exacerbate the very crisis it is designed to resolve.
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Footnotes
This research is part of the MEDROI project (ANR-21-CE41-0004-01).
References
1 For an analysis of this crisis: M. Smith, “Staring into the abyss: A crisis of the rule of law in the EU” (2019) 25 European Law Journal 6, pp. 561–576; L. D. Spieker, “From Moral Values to Legal Obligations – On How to Activate the Union’s Common Values in the EU Rule of Law Crisis” (2018) 24 Max Planck Institute for Comparative Public Law & International Law (MPIL) Research Paper No. 2018–24, 28 p.
2 Opinion 2/13, Accession of the European Union to the European Convention for the Protection of Human Rights and Fundamental Freedoms, EU:C:2014:2454, para. 191.
3 On the principle of mutual trust, see C. Rizcallah, The Principle of Mutual Trust in European Union Law: An Essential Principle Facing a Crisis of Values (Larcier 2022).
4 See, for example, P. Bárd, “In courts we trust, or should we? Judicial independence as the precondition for the effectiveness of EU law” (2022) 27 European Law Journal 1–3, pp. 185–210.
5 L. Fromont and A. Van Waeyenberge, “Trading Rule of Law for Recovery? The New EU Strategy in the Post-Covid Era” (2022) European Law Review, pp. 1–16.
6 European Commission, Proposal for a Regulation of the European Parliament and of the Council on the protection of the Union’s budget in case of generalised deficiencies as regards the rule of law in the Member States, COM(2018) 324 final, 2018/0136(COD). See also European Commission, Further strengthening the rule of law within the Union: State of play and possible next steps, COM(2019) 163 final; European Commission, Strengthening the rule of law within the Union – A blueprint for action, COM(2019) 343 final.
7 European Council, Special meeting of the European Council (17, 18, 19, 20 and 21 July 2020) – Conclusions (CO EUR 8 CONCL 4).
8 Regulation (EU) 2021/241 of the European Parliament and of the Council of 12 February 2021 establishing the Recovery and Resilience Facility (hereafter the “RRF Regulation”), (2020) OJ L 57/17.
9 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 (hereafter the “Conditionality Regulation”), (2020) OJ L 433I/1.
10 See, for example, P. Leino-Sandberg and M. Ruffert, “Next Generation EU and its Constitutional Ramifications: A Critical Assessment” (2022) 59 Common Market Law Review 2, pp. 433–472; B. De Witte, “EU emergency law and its impact on the EU legal order” (2022) 59 Common Market Law Review 3, pp. 3–18.
11 J.-C. Juncker, Speech – EP Plenary Session – Conclusions of the European Council meeting of 17 and 18 December 2015, 19 January 2016.
12 It has been used, for example, by the EU in the area of accession policy (see, for example, M. Cremona, “Accession to the European Union : Membership Conditionality and Accession Criteria” (2001) Polish Yearbook of International Law, pp. 219–240; C. Pinelli, “Conditionality and Enlargement in Light of EU Constitutional Developments” (2014) 10 European Law Journal 3, pp. 354–362) and during the sovereign debt crisis (See A. Baraggia, “Conditionality Measures within the Euro Area Crisis: A Challenge to the Democratic Principle?” (2015) 4 Cambridge Journal of International and Comparative Law 2, pp. 268–288; M. Ioannidis, “EU Financial Assistance Conditionality after ‘Two Pack’” (2014) 74 ZaöRV, pp. 61–104; A. Poulou, “Financial Assistance Conditionality and Human Rights Protection: What is the Role of the EU Charter of Fundamental Rights?” (2017) Common Market Law Review, pp. 991–1026.)
13 See F. Fabbrini, “Next Generation EU: Legal Structure and Constitutional Consequences” (2022) 24 Cambridge Yearbook of European Legal Studies, pp. 45–66.
14 See N. Lupo, “The Recovery and Resilience Facility and its effects on the Rule of Law conditionality”, in C. Fasone, A. Dirri and Y. Guerra (eds.), State-of-the-art Working Paper on “Established Rule of Law Instruments” (2023), p. 85. N. Lupo uses the term “government” but, considering the nature of conditionality, the term “governance” seems more appropriate.
15 It favours, for example, a contractualisation of the relationship between the EU and the Member States through national plans.
16 V. Vita, “Revisiting the Dominant Discourse on Conditionality in the EU: The Case of EU Spending Conditionality” (2017) Cambridge Yearbook of European Legal Studies, p. 2.
17 Ibid., p. 3.
18 The most comprehensive classification was presented by V. Vita who distinguishes between the nature of conditionality (positive, negative or carrot-and-stick conditionality), the functions of conditionality (EU law or EU policy enforcement), the types of conditionality (ex post/ex ante, same-sector/cross-cutting/cross-over or generic, compulsory/optional) and the subjects of conditionality (active/passive). See ibid., pp. 1–28.
19 The Member States can also receive technical support from the Technical Support Instrument: Regulation (EU) 2021/240 of the European Parliament and of the Council of 10 February 2021 establishing a Technical Support Instrument, (2021) OJ L 57/1.
20 Which focuses, as Art. 3(3) TEU states, on “the sustainable development of Europe based on balanced economic growth and price stability, a highly competitive social market economy, aiming at full employment and social progress, and a high level of protection and improvement of the quality of the environment”.
21 Art 4(1) RRF Regulation.
22 See also, A. Capati and Th. Christiansen, “The European Semester: EU Rule of Law Guidance, Monitoring and Enforcement Through Economic Governance Mechanisms” in C. Fasone, A. Dirri and Y. Guerra (eds.), State-of-the-art Working Paper on “Established Rule of Law Instruments” (2023), p. 72.
23 Art 17 RRF Regulation.
24 Ibid., Art 3. The European Commission also defines ten flagships that the Member States were strongly encouraged to include in the NRRPs. See European Commission, Annual Sustainable Growth Strategy 2021, COM (2020) 575 final, pp. 9–12.
25 See European Commission, 2023 European Semester – Spring Package, COM (2023) 600 final, p. 22.
26 For an overview, see European Commission, “Thematic analysis: Rule of Law – Judicial Systems”, Recovery and Resilience Scoreboard, April 2022.
27 For an overview, see European Commission, “Thematic analysis: Anti-corruption and anti-fraud”, Recovery and Resilience Scoreboard, April 2022.
28 Art 18(4c) and (4o) RRF Regulation.
29 For an overview, see European Commission, “Thematic Analysis: Equality”, Recovery and Resilience Scoreboard, January 2023. See also C. Bernardo et al., “Evidence to Action: Gender equality and gender mainstreaming in the COVID-19 Recovery”, European Institute for Gender Equality, 2023.
30 Recital 32 and Art 17(3) RRF Regulation.
31 European Commission, Annual Sustainable Growth Strategy 2021, supra note 24, p. 5.
32 M. Fisicaro, “Beyond the Rule of Law Conditionality: Exploiting the EU Spending Power to Foster the Union’s Values” (2022) 7 European Papers 2, pp. 713–714; L. Pech, “The Rule of Law in the EU: The Evolution of the Treaty Framework and Rule of Law Toolbox” (March 2020) Reconnect Working Paper no. 7, pp. 26–28.
33 See, for example, the European Commission, “Further strengthening the Rule of Law within the Union – State of play and possible next steps”, supra note 6, p. 4. See also: European Court of Auditors, “The European Semester – Country Specific Recommendations address important issues but need better implementation”, Special Report 16/2020, para. 33.
34 Art 18(4q) RRF Regulation. On this issue, see, for example, the European Parliament, “Recovery and Resilience Plans: stakeholders’ involvement”, In-Depth Analysis, December 2021; R. Rodríguez Contreras and P. Sanz, “Involvement of social partners in the national recovery and resilience plans”, Eurofound, 2022; B. Vanhercke, et al., “From the European Semester to the Recovery and Resilience Facility. Some social actors are (not) resurfacing”, European Trade Union Institute Working Paper, 2021/13.
35 Recital 40 and art. 22(1) RRF Regulation.
36 Ibid., Art 18(4r).
37 It is interesting to note that the RRF Regulation also provides for financial sanctions in the event of non-compliance with certain sound economic governance rules (see ibid., Art 10 and recital 29) – but these sanctions do not directly concern the rule of law.
38 It seems that the European Commission has an obligation to suspend the EU’s financial contribution in that art. 24(6) of the RRF regulation uses the term “shall.”
39 Ibid., Art 24(6).
40 Ibid., Art 24(6).
41 Ibid., Art 24(8).
42 Ibid., Art 24(9).
43 On the Conditionality Regulation, see, among a vast body of literature: A. Baraggia and M. Bonelli, “Linking Money to Values: The New Rule of Law Conditionality Regulation and its Constitutional Challenges” (2022) German Law Journal, pp. 131–156; N. Kirst, “Rule of Law Conditionality: The Long-awaited Step Towards a Solution of the Rule of Law Crisis in the European Union” (2021) 6 European Papers 1, pp. 101–110; J. Lacny, “The Rule of Law Conditionality Under Regulation No 2092/2020–Is it all About the Money?” (2021) Hague Journal of the Rule of Law, pp. 79–105; T. Tridimas, “Recovery Plan and Rule of Law Conditionality: A New Era Beckons?” (2020) Croatian Yearbook of European Law and Policy, pp. VII–XXI.
44 Art 4 Conditionality Regulation.
45 Ibid., Art 3.
46 The RRF Regulation refers twice to the need to implement the RRF in accordance with the rules adopted on the basis of Art 322 TFEU, in particular with the Conditionality Regulation. See recital 71 and Art 8 RRF Regulation.
47 For a critical assessment of the European Council conclusions, see A. Alemanno and M. Chamon, “To Save the Rule of Law you Must Apparently Break It”, VerfBlog, 11 December 2020; K. L. Sheppele, L. Pech and S. Platon, “Compromising the Rule of Law while Compromising on the Rule of Law”, VerfBlog, 13 December 2020. Contra: T. Nguyen, “The EU’s new rule of law mechanism: How it works and why the ‘deal’ did not weaken it”, Hertie School – Jacques Delors Centre Policy Brief, 17 December 2020, pp. 1–6; P. Lindseth and C. Fasone, “Rule-of-Law Conditionality and Resource Mobilization. The Foundations of a Genuinely ‘Constitutional’ EU?”, VerfBlog, 11 December 2020.
48 European Commission, Guidelines on the application of the Regulation (EU, EURATOM) 2020/2092 on a general regime of conditionality for the protection of the Union budget, (2022) OJ C 123/12, para. 34.
49 Art 22(5) RRF Regulation.
50 Art 6 Conditionality Regulation. This allows Hungary to obtain a 55% suspension of some Union commitments – rather than the 65% proposed by the Commission – in exchange for the lifting of its veto on a minimum tax on multinationals and on financial aid to Ukraine. See M. Steinbeis, “We are Viktor Orbán”, VerfBlog, 2 December 2022.
51 Case C-156/21 Hungary v Parliament and Council EU:C:2021:974; case C-157/21 Poland v Parliament and Council EU:C:2021:978. On these cases, see M. Bonelli, “Constitutional Language and Constitutional Limits: The Court of Justice Dismisses the Challenges to the Budgetary Conditionality Regulation” (2022) 7 European Papers 2, pp. 507–525; M. Fisicaro, “Protection of the Rule of Law and ‘Competence Creep’ via the Budget: The Court of Justice on the Legality of the Conditionality Regulation” (2022) European Constitutional Law Review, pp. 334–356.
52 Case C-157/21 Poland v Parliament and Council, supra note 51, para. 137.
53 Ibid., para. 125. The “sufficiently direct way” requirement was already present in the case law of the Court of Justice. See, for example: Case C-385/13 P Italy v Commission EU:C:2014:2350.
54 Case C-157/21 Poland v Parliament and Council, supra note 51, para. 127.
55 A. Baraggia and M. Bonelli, supra note 43, p. 141.
56 Such as Art 7 TEU, the rule of law dialogue or, to a certain extent, infringement procedures. See on this issue, among a vast body of literature: C. Closa and D. Kochenov (eds.), Reinforcing rule of law oversight in the European Union (Cambridge University Press 2016); A. Jakab and D. Kochenov (eds.), The enforcement of EU law and values: ensuring Member States’ compliance (Oxford University Press 2017); A. von Bogdandy and M. Ioannidis, “Systemic Deficiency in the Rule of Law: What It Is, What Has Been Done, What Can Be Done” (2014) Common Market Law Review, pp. 59–96; K. L. Scheppele, “Enforcing the Basic Principles of EU Law through Systemic Infringement Actions”, in C. Closa and D. Kochenov (eds.), Reinforcing Rule of Law Oversight in the European Union (Cambridge University Press 2016), pp. 105–132.
57 See notably the European Commission for Democracy through Law, Report on the Rule of Law, CDL-AD (2011) 003rev.
58 European Commission, A new Framework to strengthen the Rule of Law, COM (2014) 158 final, p. 4. This definition was reiterated on several occasions, see, for example, European Commission, 2020 Rule of Law Report: The rule of law situation in the European Union, COM (2020) 580, p. 1. It has been well received in the literature. See, for example: D. Kochenov, L. Pech and S. Platon, “Ni panacée ni gadget : le ‘nouveau cadre de l’Union européenne pour renforcer l’État de droit’” (2015) Revue trimestrielle de droit européen, pp. 689–714; A. Magen, “Cracks in the Foundations: Understanding the Great Rule of Law Debate in the EU” (2016) 54 Journal of Common Market Studies 5, pp. 1050–1061.
59 European Commission, Annual Sustainable Growth Survey 2022, COM (2022) 740 final, p. 2.
60 Ibid.
61 Commission staff working document, Guidance to Member States – Recovery and Resilience Plans, SWD (2021) 12 final, p. 9.
62 European Commission, “Thematic analysis: Rule of Law – Judicial Systems”, supra note 26, p. 1.
63 Ibid.
64 See Art 4(1) and 18(4o) and recital 28 RRF Regulation.
65 Council Implementing Decision of 14 June 2022 on the approval of the assessment of the recovery and resilience plan for Poland, 9728/22. See also European Commission, “NextGenerationEU: European Commission endorses Poland’s €35.4 billion recovery and resilience plan”, press release, 1 June 2022, Brussels.
66 Council Implementing Decision of 15 December 2022 on the approval of the assessment of the recovery and resilience plan for Hungary, CM 5860/22. See also European Commission, “Commission finds that Hungary has not progressed enough in its reforms and must meet essential milestones for its Recovery and Resilience funds”, press release, Brussels, 20 November 2022.
67 Annex to the proposal for a Council Implementing Decision of 15 December 2022 on the approval of the assessment of the recovery and resilience plan for Hungary, COM (2022) 686 final – SWD(2022) 686 final, “Component 9: Governance and public administration”; Annex to the Proposal for a Council Implementing Decision of 14 June 2022 on the approval of the assessment of the recovery and resilience plan for Poland, COM (2022) 268 final – SWD (2022) 161 final, “Component F: ‘Improving the quality of institutions and the conditions for the implementation of the RRP’”.
68 Council Implementing Decision of 14 June 2022 on the approval of the assessment of the recovery and resilience plan for Poland, supra note 65, recital 19.
69 Annex to the Proposal for a Council Implementing Decision of 14 June 2022 on the approval of the assessment of the recovery and resilience plan for Poland, supra note 67, “Component F: ‘Improving the quality of institutions and the conditions for the implementation of the RRP’”, pp. 200 et seq.
70 Ibid.
71 Annex to the proposal for a Council Implementing Decision of 15 December 2022 on the approval of the assessment of the recovery and resilience plan for Hungary, supra note 67, “Component 9: Governance and public administration”, pp. 86 et seq.
72 European Commission, “Commission finds that Hungary has not progressed enough in its reforms and must meet essential milestones for its Recovery and Resilience funds”, press release, Brussels, 30 November 2022.
73 Council Implementing Decision of 15 December 2022 on the approval of the assessment of the recovery and resilience plan for Hungary, supra note 66, recital 2.
74 Annex to the proposal for a Council Implementing Decision of 15 December 2022 on the approval of the assessment of the recovery and resilience plan for Hungary, supra note 67, “Component 9: Governance and public administration”; Annex to the Proposal for a Council Implementing Decision of 14 June 2022 on the approval of the assessment of the recovery and resilience plan for Poland, supra note 67, “Component F: ‘Improving the quality of institutions and the conditions for the implementation of the RRP’”.
75 Communication from the Commission, 2022 European Semester – Spring Package, COM (2022) 600 final, p. 7.
76 Paradoxically, while the independence of the Polish and Hungarian justice systems has been at the centre of the political debate and numerous legal proceedings, Poland has received a CSR on the subject on only two occasions (in 2020 and 2022) and Hungary on three occasions (in 2013, 2014 and 2022). On other occasions, the lack of independence is mentioned in the explanations, but is not the subject of recommendations.
77 On the growth focus of the EU Justice Scoreboard, see L. Fromont, “La mise en chiffres de l’État de droit au sein du Semestre européen” (2023) Revue interdisciplinaire d’Études juridiques 2023, pp. 115–135.
78 Council Recommendation of 12 July 2022 on the 2022 National Reform Programme of Poland and delivering a Council opinion on the 2022 Convergence Programme of Poland, (2022) OJ C 334/171, recital 29.
79 In 2018, 2019, 2020 and 2022.
80 In 2018, 2019, 2020 and 2022.
81 Council Recommendation of 13 July 2018 on the 2018 National Reform Programme of Hungary and delivering a Council opinion on the 2018 Convergence Programme of Hungary, (2018) OJ C 320/72.
82 Council Recommendation of 20 July 2020 on the 2020 National Reform Programme of Poland and delivering a Council opinion on the 2020 Convergence Programme of Poland, (2020) OJ C 282/135, recital 26.
83 Council Recommendation of 9 July 2019 on the 2019 National Reform Programme of Hungary and delivering a Council opinion on the 2019 Convergence Programme of Hungary, (2019) OJ C 301/101, recital 19.
84 Council Recommendation of 12 July 2022 on the 2022 National Reform Programme of Poland and delivering a Council opinion on the 2022 Convergence Programme of Poland, supra note 78, recital 30.
85 In 2018, 2019, 2020 and 2022.
86 In 2013, 2014, 2016, 2017, 2018, 2019, 2020 and 2022.
87 In 2014, 2015, 2016, 2017, 2018, 2019 and 2022.
88 Council Implementing Decision (EU) 2022/2506 of 15 December 2022 on measures for the protection of the Union budget against breaches of the principles of the rule of law in Hungary, (2022) OJ L325/94.
89 The suspension concerns three operational programmes in cohesion policy: (1) Environmental and Energy Efficiency Operational Programme Plus; (2) Integrated Transport Operational Programme Plus; and (3) Territorial and Settlement Development Operational Programme Plus.
90 Annex to the proposal for a Council Implementing Decision on the approval of the assessment of the recovery and resilience plan for Hungary, supra note 67, “Component 9: Governance and public administration”, pp. 86 et seq.
91 Council Implementing Decision (EU) 2022/2506, supra note 88, recital 12.
92 Ibid.
93 For example, regarding the EU Justice Scoreboard, the European Commission uses studies from the International Monetary Fund, the Organisation for Economic Co-operation and Development, the World Economic Forum and the World Bank. See European Commission, 2022 EU Justice Scoreboard, COM (2022) 234 final, pp. 4–5.
94 D. Restrepo Amariles, “The mathematical turn: l’indicateur Rule of Law dans la politique de développement de la Banque Mondiale”, in B. Frydman and A. Van Waeyenberge (eds.), Gouverner par les standards et les indicateurs. De Hume aux rankings (Larcier 2013), p. 201. See D. M. Trubek and A. Santos, The New Law and Economic Development (Cambridge University Press 2010).
95 D. Kaufmann, A. Kraay and M. Mastruzzi, “The Worldwide Governance Indicators: Methodology and Analytical Issues” (2010) World Bank Policy Research Working Paper 5430, p. 4. See also World Bank, Legal and Judicial Reform: Strategic Direction (World Bank 2003), pp. 1–2.
96 S. Mancini and N. Palazzo, “The Body of the Nation: Illiberalism and Gender”, in A. Sajó, R. Uitz and S. Holmes (eds.), Routledge Handbook of Illiberalism (Routledge 2021), pp. 403 et seq.
97 C. Bernardo et al, supra note 29, p. 40.
98 Recital 4 RRF Regulation.
99 Ibid., recital 28.
100 European Commission, “Recovery and Resilience Scoreboard: Thematic Analysis – Equality”, supra note 29, p. 6. On equality between men and women, see the report from the Commission, Review report on the implementation of the Recovery and Resilience Facility, COM (2022) 383 final, pp. 26 and 27. See also C. Bernardo et al, supra note 29, p. 9.
101 European Parliament resolution of 10 June 2021 on the views of Parliament on the ongoing assessment by the Commission and the Council of the national recovery and resilience plans, P9_TA (2021) 0288, para. 26.
102 See on the rule of law report: European Commission, European Rule of Law mechanism: Methodology for the preparation of the Annual Rule of Law Report, 2022, available at https://commission.europa.eu/system/files/2022-07/rolm_methodology_2022.pdf.
103 European Commission, The EU Justice Scoreboard – A tool to promote effective justice and growth, COM (2013) 160 final, p. 1.
104 European Commission, The 2023 EU Justice Scoreboard, COM(2023) 309 final, p. 2.
105 Ibid.
106 A. Jakab and L. Kirchmair, “How to Develop the EU Justice Scoreboard into a Rule of Law Index: Using an Existing Tool in the EU Rule of Law Crisis in a More Efficient Way” (2021) German Law Journal, p. 950.
107 These tools are inherent in the New Public Management: see notably, C. Harlow, Accountability in the European Union (Oxford University Press 2002); C. Hood, “A Public Management for All Seasons” (1991) 69 Public Administration 1, pp. 3–19; R. Parenteau (ed.), Management public – Comprendre et gérer les institutions de l’État (Presses de l’Université de Québec 1992); B. G. Peters, “Nouveau management public”, in L. Boussaguet, S. Jacquot and P. Ravinet (eds.), Dictionnaire des politiques publiques (Presses de Sciences Po 2010), pp. 398–404.