THE STATE OF THE EUROPEAN UNION Towards a new legislative term

THE STATE OF THE EUROPEAN UNION 38 – The development of the budget conditionality mech- anism following the Court of Justice judgment of 16 February 2022 dismissing the actions for annulment brought by Hungary and Poland. – The implementation of the recommendations to the states in the third annual report on the Rule of Law in the EU of 13 July 2022.” 2 While acknowledging that the procedures in course against Poland and Hungary, opened within the frame- work of article 7 of the Treaty of the European Union (TEU), continue to “sleep the sleep of the just”, these three instruments have constituted a turning point in how European institutions address respect for the val- ues of article 2 TEU as a central element of the EU’s action and legitimacy, both internally and in its role as a global player in international relations. The central objective of this essay will be to exam- ine the Rule of Law Mechanism which, since 2019, has constituted a mechanism of collective supervision which inspires institutions and states to promote a legislative agenda with concrete proposals to guarantee a shared framework of respect for the values of a strengthened article 2; to argue for the use of all possible tools in- cluding the jurisdictional activity of the CJEU and the application of budgetary rules; and, finally, to contribute to serious debate on the best way to halt the erosion of the European constitutional consensus. As the Report on the Rule of Law 2023 states: “The rules-based order is central to the credibility of the EU and a broader toolbox has been developed over recent years to safeguard respect for the rule of law. Infringement procedures, institutional mechanisms such as Article 7 proceedings, and policy drivers such as the Recovery and Resilience Facility all have significant rule of law dimensions. The general regime of condi- tionality offers a targeted tool to protect the EU budget where breaches of the rule of law affect or seriously risk affecting its sound financial management or the EU’s financial interests. These tools seek to ensure that the rule of law is not just a principle, but a tangible reality 2 FONSECA MORILLO, Francisco: “The Rule of Law Situation in the European Union”; in LÓPEZ GARRIDO, Diego (director): THE STATE OF THE EUROPEAN UNION. Reforming Europe in a time of war. Fun- dación Alternativas and Friedrich Ebert Stiftung, Madrid 2022, p. 55 and ss. on which each and every person and business in the EU can rely. The rule of law and a rules-based international order are a key protection against the spread of authoritarian regimes and the violation of international law. Uphold- ing the rule of law is therefore a crucial element of the EU’s external action, alongside consolidating democrat- ic structures and protecting human rights. It is central to the EU’s engagement with candidate countries and po- tential candidates through the enlargement process, its work with partners in the neighbourhood, and broader EU engagement with countries worldwide.” 3 The fourth rule of Law Report A well-designed instrument with its own space In the fourth report, adopted by the Commission on 5 July 2023, it is clear from a methodological perspective that the procedure is well grounded and occupies an important position in inter-institutional planning and activity. Firstly, with respect to the structure of the report it- self, its articulation into four pillars has been consolidat- ed since 2019, and now constitutes a well-established, agreed, pan-European format for the elements to be taken into consideration in the 27 Member States to evaluate the health of the rule of law in the European Union as a whole. These four pillars, as defined in the report itself, are: – “Justice systems in the Member States, focusing on their independence, quality and efficiency. These are key parameters to ensure that the application and enforcement of EU law is effective and that the rule of law is upheld. Well-functioning and fully in- dependent justice systems are crucial for ensuring that justice works to the benefit of citizens and of businesses. They are also essential for judicial coop- eration across the EU, as well as for the functioning of the Single Market and the EU’s legal order as a whole. 3 COM(2023) op. cit., 800 final, p.1-2.