Year XXXVII, Number 2, July 2024

Catherine Vieilledent
Independent expert in EU affairs, Secretary General UEF Group Europe,
member of UEF Federal Committee, Delegate to the WFM Membership Council

Respecting the Rule of law has become a problem in the EU, as results from the tense dialogue between the Union and some Member States who have challenged the European values in the past few years. A dismantling of democratic institutions is at work in these countries in order to control justice and put a gag on dissenting voices. Worse still, some of them threaten to block key decisions on the European budget and aid to Ukraine. The article looks back at the recent developments that led the European Union to reaffirm its values and uphold them in front of internal attacks. It reviews the response and the legal innovations the EU had to resort to, stressing the fact that rule of law is no mere formal commitment of the Member states. Last, the article attempts to draw the lessons for the future, with a view to the Union’s political and geopolitical interests, while European elections are near, enlargement is looming and national-populist one-upmanship is on the rise.

Rule of law is one of the values listed in Article 2 TEU[i], together with democracy, freedom and respect for human rights, and further codified in the EU Charter of Fundamental Rights. As regards human rights, the treaties (Article 6(3)TEU) close any supposed gap between the Union’s law (they are defined as “general principles of the Union’s law”), the European Convention for the protection of human rights and “the constitutional traditions common to the Member States”. A recent addition to this array of principles was made with Article 2 of Regulation 2090/2020, which describes in detail the legal and institutional parameters of the rule of law, which “includes the principles of legality implying a transparent, accountable, democratic and pluralistic law-making process; legal certainty; prohibition of arbitrariness of the executive powers; effective judicial protection, including access to justice, by independent and impartial courts, also as regards fundamental rights; separation of powers; and non-discrimination and equality before the law. The rule of law shall be understood having regard to the other Union values and principles enshrined in Article 2 TEU”.

These common standards, however, seem no longer to be taken for granted and the EU’s long commitment to rule of law and common values has recently been tested from within. Though candidate countries cannot ignore what they commit to[ii], the newly elected Hungarian and Polish governments from 2010/2015 questioned the Union’s competence on these matters, leading to an open confrontation in 2018. Both governments took successive measures to disable internal and external checks and balances, hiding behind the alleged primacy of the national constitution (as interpreted by a constitutional court they controlled). In Hungary, with the Fidesz party in power, the government adopted successive reforms, first on the media (with the creation of a control body composed of party members), then on justice (changing the retirement age of judges), on the authority in charge of protecting personal data and finally on foreign influences (aiming at private higher education institutions). Each time Hungary was condemned, it retreated and went on to another reform.

The Polish government, after the PiS conservative party took power in 2015, targeted the judicial system and freedom of opinion. The Court, in a ruling of July 2021[iii],  considered that the Polish reforms, and the disciplinary chamber of the constitutional tribunal infringed on several treaty articles, among which Article 19(1)[iv]. It held that a judicial system that does not comply with the rule of law and that fails to guarantee the independence of justice is a risk for the Union, and with regard to the protection of financial interests Poland was sentenced to a penalty of 1 million euros per day until it changed its laws on the judicial system, which it refused to pay. Once condemned, Poland took to frontal attacks on the primacy of EU law (it wanted preliminary questions from national judges to be abolished), claiming the Polish constitution was supreme[v], and refuted the Court of Justice’s authority. Two months later, the European Commission launched infringement proceedings. In February 2023, the Commission lodged another appeal to the Court, following rulings by the Polish constitutional tribunal that challenged the primacy of EU law.

Faced with repeated provocations, the European Union reacted with a combination of existing and innovative instruments: besides launching a raft of infringement proceedings, as we have seen above, it wielded threats of political sanctions under Article 7 TUE, introduced new budgetary conditionality rules, and an embedded mechanism to monitor rule of law[vi]. In parallel to infringement proceedings, the Commission activated Article 7 TEU[vii] on the proposal of the European Parliament: against Poland in December 2017, against Hungary in September 2018. The purpose of Article 7 is to determine a clear risk of a serious breach of the values referred in Article 2 TEU, a decision made by the Council with four fifths of the Member states not including the country concerned, and possibly followed by recommendations to the Member state. The second step involves a sanctions mechanism which can be triggered if the European Council concurs by unanimity (minus one) on the existence of a serious and persistent breach of Article 2, leading to the suspension of membership rights for the country concerned. However, the sanction mechanism did not go through in the European Council, because Poland and Hungary supported each other to defeat unanimity, and because of political pressures: in November 2020, just as the European Council was reaching final consensus, the two countries blocked the decision on the multiannual financial framework and on the recovery plan (NextGenEU).

Such obstructionism, blackmail and blocks to the EU decision-making, including on essential issues, jeopardized the EU mechanisms of cooperation and solidarity that enable the EU to operate key processes and defend its interests in times of peril. An innovative instrument was devised at the time, and that was Regulation 2020/2092[viii] based on a simple principle: should a country infringe on rule of law and democracy, the Union could decide suspending the various financial aids it receives. The purpose was twofold: apply financial penalties on the Member states that infringe rule of law on the one hand, and on the other avoid the misuse of the European budget. The European Commission triggered the new procedure, based on the observation of a confirmed infringement of rule of law, jeopardizing the sound management of European funds. It could also trigger it in a preventive manner, in case there was a clear and serious risk of such violations. Once penalties were proposed, it was up to the Council to adopt the corresponding measures by qualified majority within a month.

Poland and Hungary challenged the regulation, claiming that it contradicted the principle of conferred competences (Articles 4 and 5 TEU), that the Union acted without competence and that the national judge was therefore entitled to invalidate ensuing actions. Poland went on to advocate the political and constitutional identity of the Member states and “constitutional pluralism”, in contradiction with the primacy of EU law and the exclusive competence of the European Court of Justice for the interpretation of EU law. The Court of Justice in February 2022[ix] dismissed the actions of Hungary and Poland, defending the adequacy of the legal base, the scope of conferred competences and the principle of legal security. It confirmed that the regulation complies with the principles of subsidiarity and proportionality and that infringements of the rule of law endanger, or risk endangering, in a sufficiently direct way the sound management of the EU budget or the protection of financial interests. In March 2022, the European Commission adopted the guidelines on the general regime of budgetary conditionality and the Regulation applied from 1 January 2021 as foreseen. 

The conditionality proceeding applied to Hungary in April 2022 focused on issues such as the transparency of public procurement, conflicts of interest and suspected corruption. In addition, the Commission proposed that the Recovery Plan should include milestones regarding reforms to be conducted by the Member states on a variety of subjects, in particular the operation of justice. This was approved, meaning that the Member states which did not comply with these milestones could not receive payments from the EU budget. As regards Hungary, though its national plan had been validated in December 2022, it did not receive the €5.8 billion, pending reforms, nor €6.3 billion in cohesion funds. No conditionality proceeding was launched against Poland but, though the national plan had been approved in June 2022 by the Council, payment of some 35.4 billion euros was suspended till reforms were adopted, as in the Hungarian case. In retaliation, the Hungarian government in December 2023 threatened to block enlargement negotiations, the decision on the €50 billion facility for Ukraine and the midterm review of the Multi-annual Financial Framework. In February 2024, Hungary relapsed and both aid to Ukraine and the MFF midterm review were approved by the European Council. As for Poland, the elections held in October 2023 led to a change of political majority, that paved the way for a new attitude on rule of law.

In addition to the budgetary conditionality mechanism and new rules in the management of the Recovery plan, the Commission introduced a new rule of law governance mechanism, based on annual rule of law reports (since 2021), dialogue and exchange of information with the Member States, national parliaments, civil society and stakeholders, input from the EU Justice scoreboard[x], and feeding into the European Semester yearly cycle. Considerations on the justice system, corruption framework, media freedom and pluralism and institutional balance were embedded in the Country specific recommendations for all the Member States. This enhanced European semester amounts to a mainstreaming of rule of law in the main EU budgetary and macroeconomic instruments.

What lessons can be drawn from the long confrontation between the European Commission, as the EU’s executive arm in charge of the budget and safeguarding EU law, and some rebellious Member states since 2017/2018? On the positive side, the judicial confrontation with the national courts has resulted in clarification of the relevance of rule of law by the European Court of Justice in its landmark ruling of February 2022 and the clearing of objections on behalf of national identity. The European Union has shown a real determination to uphold its values and demonstrated a remarkable capacity to innovate and devise powerful deterrence, in spite of the stalemate of unanimity under Article 7 which remains a lasting governance issue. Rule of law has now become a fully embedded, horizontal mechanism in financial procedures (in and off budget), based on a continuous monitoring of progress. Though the guerrilla war is not over.

On the less positive side, as the former Head of the Legal Service explained recently[xi], there is a risk of contagion which needs to be addressed promptly: first the existing backsliding in Hungary, Poland and Slovakia, but also with a view to the coming enlargement. Few among the candidate countries are democracies with a consolidated tradition of respecting human rights and rule of law.  An early warning system and a mechanism to immediately suspend the participation of Member states was suggested, where rule of law is not respected. These steps could be critical for the EU’s external action[xii] and the credibility of conditionality rules applying in these fields. Under rising geopolitical hazards, could the EU afford benign neglect of values inside, and, on the other hand, insist on its external partners’ effective compliance with rule of law? Consistency is a determining line for the EU’s external action in the regional and global environment.

[i] Article 2 TEU: «The Union is founded on the values of respect for human dignity, freedom, democracy, equality, the rule of law and respect for human rights, including the rights of persons belonging to minorities. These values are common to the Member States in a society in which pluralism, non-discrimination, tolerance, justice, solidarity and equality between women and men prevail.”

[ii]  Article 49(1) TEU: “Any European State which respects the values referred to in Article 2 and is committed to promoting them may apply to become a member of the Union”. This is part of the accession criteria established by the EU at the European Council meeting in Copenhagen in 1993.

[iii]   CJEU, 15 July 2021, Case C-791/19, Commission / Republic of Poland, ECLI:EU:C:2021:596 (EUR-Lex-62019CJO791).

[iv] “Member States shall provide remedies sufficient to ensure effective legal protection in the fields covered by Union law.” https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:12016M019

[v]  Judgement of the Polish Constitutional Tribunal of 7 October 2021, Ref. No. K 3/21 DZIENNIK USTAW 2021 R. POZ. 1852.

[vi]   Communication from the Commission, COM(2020) 790 of 3 December 2020 (European Democracy Action Plan).

[vii]  The provision was introduced in the Treaty of Amsterdam in 1997 and further enhanced with a preventive dimension by the Nice treaty of 2000.

[viii]  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 (JO.L. 4331, 22 December 2020, pp. 1-10).

[ix]  Cases C-156/21 Hungary/European Parliament and Council and C-157/21 Republic of Poland/ European Parliament and Council of 16 February 2022, . ECLI:EU:C:2022:97

[x]   Based on an annual report providing comparable data on the independence, quality and efficiency of national justice systems.

[xi]  Conference of 20 February 2024, organized in Brussels by UEF Group Europe and Graspe. Luis Romero Requena was head of the Legal Service of the Commission from 2009 to 2020.

[xii]  Article 21 TEU.