THE STATE OF THE EUROPEAN UNION. Reforming Europe in a time of war

The Rule of Law Situation in the European Union 65 In addition, the Regulation is furnished with a defi- nition of what is understood by the rule of law in its sphere of action: “The rule of law’ refers to the Union value enshrined in Article 2 TEU. It includes the prin- ciples of legality implying a transparent, accountable, democratic and pluralistic law-making process; legal certainty; prohibition of arbitrariness of the ex- ecutive powers; effective judicial protection , in- cluding 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 (Article 2.a.)”. With regard to the functioning of the conditionality mechanism established in the Regulation, this is not the place for a comprehensive review, for which I refer to the recent work by Alberto DE GREGORIO MERINO 39 , rather I would simply like to highlight four points: − Circumstances that enable its activation. Ac- cording to Article 4.1, these circumstances are: the breach of one of the principles of the rule of law (laid down in Article 3: independence of the judiciary, ar- bitrary decisions by public authorities, or limiting the channels of legal remedies); and that they affect or seriously risk affecting the sound financial manage- ment of the EU budget in a sufficiently direct way. − Criteria on the measures to adopt. These measures, which according to Article 5 may consist of the suspension of payments or commitments, of disbursement of instalments already approved, or of the suspension of programmes, must be adopted, as regards their size and importance, in accordance with the criterion of proportionality determined in light of the real or potential impact, their duration and the gravity of the breaches of the state in question (Article 5.3) 39  De Gregorio Merino, Alberto: El nuevo régimen general de condicionalidad para la protección del presupuesto de la Unión. Revista de Derecho Comunitario Europeo 2022, nº 71, pp. 11 and ss. − Protection of the final beneficiaries of pro- grammes or funds. This was one of the most con- troversial subjects of the negotiations, but as Point 19 states: “It is essential that the legitimate interests of final recipients and beneficiaries are properly safe- guarded when measures are adopted in the event of breaches of the principles of the rule of law”. Article 5.2 of the Regulation resolves the issue by estab- lishing that when a measure is imposed on a state, its authorities are still responsible for ensuring the fulfilment of the financial obligations towards final recipients or beneficiaries. − Procedure for adopting measures. According to Article 6 of the Regulation, this begins with a written notification sent by the Commission to the state con- cerned, setting out the factual elements and specific grounds that have led it to find that the conditions set out in Article 4 are fulfilled, following which it enters into a dialogue with the authorities of the state for a maximum period of three months. If the Commission ultimately concludes that the required circumstances exist and that the state has not pro- posed remedial measures, it submits a proposal for an implementing decision to the Council, after giving the state an extra month to conform, an implement- ing decision that the Council must adopt by qualified majority within a maximum period of three months 40 . We can conclude by stating that this Regulation has been the object of highly complex compromises and the establishment of a great many formal requirements in order, above all, to avoid the threat of Poland and Hun- gary vetoing the Regulation determining the Multiannual Financial Framework, which, in accordance with Article 312 TFEU, requires the unanimity of the Council. Proof of that were the decisions adopted by the Eu- ropean Council in its meeting of 10 and 11 December 2020, reflected in the conclusions under the heading “Multiannual Financial Framework and Next Generation 40  These measures shall be lifted following the same procedure as for their adoption, in accordance with Article 7 of the Regulation.