Linking Money to Values: the new Rule of Law Conditionality Regulation and its constitutional challenges

Abstract

After a long and complex legislative process that started back in 2018, the European Parliament and the Council finally approved the new Regulation “on a general regime of conditionality for the protection of the Union budget” in December 2020. The final result remains in many ways controversial and the debate on the new Regulation is destined to continue for the most part of 2021, as the Court of Justice will be called to decide on the legality of the new piece of legislation in an action for annulment brought by Hungary and Poland. Even if the Regulation ultimately adopted is certainly less ambitious than the original Commission’s proposal, the introduction of this new instrument marks another important step in the strengthening of the Union’s toolbox to fight cases of rule of law (or constitutional) backsliding in the Member States. More broadly, it can be seen as another key contribution to the constitutional evolution of the EU, especially considering the link between the Regulation and the NextGen EU (NGEU) Recovery Plan.
In this contribution, we are interested in analyzing the Regulation and exploring the controversies surrounding its adoption from a different perspective. We look at the Rule of Law Conditionality Regulation as another example of the rise of conditionality in Union law, which further demonstrates how the use of conditionality tools is becoming truly pervasive in the Union legal and political framework. We believe this phenomenon raises several questions of a constitutional nature that are still unresolved, and the Rule of Law Regulation well shows these underlying tensions. From this perspective, we argue that the amendments adopted during the legislative process and, to a much lesser extent, even the final compromise reached by the European Council, where it anticipates the intervention of the Court of Justice, may be at least less negative than what they seem if one primarily concentrates on the protection of the rule of law and in general on the potential effectiveness of the instrument. The legislative process in fact contributed to addressing some of the more questionable elements that were present in the original proposal presented by the Commission, which had been already highlighted by the Opinion of the Legal Service of the Council on the Commission proposal. Furthermore, again seen from this perspective, the promised involvement of the Court of Justice is certainly positive, as it will be one of the first opportunities for the Luxembourg Court for a broader reflection on the use of, and eventually limits to, conditionality tools under EU law. Ultimately, we sketch some suggestions on what the adoption of the new Regulation means for the future of conditionality as an instrument of EU law and policy making, and in particular whether it may be a sign of a new and more positive conditionality, one better aligned with the basic values of the EU integration project.

Keywords: Rule of Law, Conditionality; EU values