Comparing Three Financial Conditionality Regimes and their Application to Hungary: The Conditionality Regulation, the Recovery and Resilience Facility Regulation, and the Common Provisions Regulation

Abstract

For many years, democracy and the rule of law (including the respect for fundamental rights) have been systematically eroding in certain Member States of the European Union. After a long series of missed opportunities, halfhearted, smokescreen and postponed EU actions, in these last two years, we have been witnessing the application of three regulations – primarily focused on EU finances and specific policy priorities – that may have some potential to effectively react to the departure from Article 2 TEU values. Whether a reversal – even partially – is actually realistic at all, or whether all this is now too little and already too late, cannot exhaustively be dealt with here. The effectivity of these measures will depend anyway, to a very large extent, on the continuing existence of the necessary political will among the EU stakeholders concerned – mostly the Commission and sometimes the Council – about which we cannot speculate. What we offer here is a comparison of the differences and similarities of three, complicated regulatory regimes: the Conditionality Regulation, the Recovery and Resilience Facility Regulation, and the Common Provisions Regulation. As an example, we are going to focus on Hungary, as this has so far been the only EU Member State for which EU funds have been frozen and withheld under all three regulations.

Keywords: Article 2 TEU values, conditionality mechanism, Common Provisions Regulation, Conditionality Regulation, enforcement of EU law, horizontal conditions, Hungary, illiberalism, Recovery and Resilience Facility, rule of law