A “Rule of Law Mechanism in Action” to strengthen Legitimacy and Authority in the EU

Recently, the scientific debate in the EU has been stimulated by the adoption of the “Regulation on a general regime of conditionality for the protection of the Union budget”. Regulation 2020/2092 establishes a new legal instrument aimed at protecting the financial interests of the EU against violations of the rule of law. It is part of a scenario where rule of law backsliding has produced structural changes within the EU Member States affected by this phenomenon. This new mechanism represents an additional tool to protect the rule of law, but it may not be sufficient to reverse or stop the process of challenging the rule of law within the European multilevel legal system. The framework is more complex and a single legal mechanism or conditionality tool is not sufficient to improve the protection of the rule of law in the EU.

The Background

In the last decade, the European Union has had to face the phenomenon of “rule of law backsliding”. It happens in different ways. The cases of Hungary and Poland are the EU’s most significant examples. They suggest a worrying change in the fate of European constitutional democracies. The literature suggests some key elements that characterise the regression of the rule of law. Initially, the retreat of the rule of law arises when a significant number of citizens lose confidence in their system of government for a variety of reasons ranging from rising inequality, persistent unemployment, or predatory practices of the ruling elites.

Furthermore, all EU Member States arrive at a regression of the rule of law through different steps. In 2017, Pech and Scheppele identified that the consolidation of power is the first step of rule of law backsliding. After that, the autocrats act quickly to inhibit institutions that might oppose them such as the independent judiciary, the media, coercive institutions such as the security services, and the prosecutor’s office. In order not to lose their popularity, these autocrats lavish benefits on their supporters and control public debate. They eliminate alternative views by lobbying civil society groups and by using state institutions against their opponents. Another important step is to change the electoral law to push the opposition out of elective assemblies or by suppressing the freedom to vote, or both. When this happens, it is too late for the citizens to overthrow this autocratic regime. Indeed, an authoritarian government has now destroyed any institutional channels through which alternative views can be expressed, and the opposition have few options to resist because their constitutional system has been weakened and there is no constitutional procedure left to effectively challenge the government. Furthermore, autocrats change democratic rules from within by changing electoral regulations. Autocrats thus get the votes they need to win subsequent elections by cornering imaginary enemies or bestowing electoral advantages. Therefore, the alternation of power becomes a thing of the past. In other words, the regression of the rule of law is the process by which elected public authorities deliberately take actions that aim to systematically weaken, annihilate or acquire internal control over power to pull apart the liberal democratic State and strengthen the government’s long-term hegemony.

The EU’s Options

The EU has three main options for addressing rule of law problems in the Member States: activate an institutional procedure, initiate a legal procedure, and start with a mixed political-institutional procedure. Institutional actions against rule of law backsliding may be promoted by the Commission, the Court of Justice of the EU, and the Fundamental Rights Agency. The Commission has a double responsibility. It is both the main guardian of the Treaties and the institution responsible for the protection of the values articulated in Article 2 of the Treaty on European Union (TEU). Furthermore, its action is not limited to the political sphere, but also includes legal instruments such as infringement procedures, which only confirm that a value is a political concept with procedural-legal elements. The most important tool for defending the rule of law in the EU is contained in Article 7 TEU. Indeed, the procedure set out in Article 7 TEU is the key tool for managing a systemic threat to EU values. The Article 7 TEU procedure aims to counter serious violations of the values contained in Article 2 TEU committed by a Member State. In this case, the Council may decide to suspend certain rights arising from EU membership, including the voting rights of the Member States concerned. These violations include those committed by the Member States in the course of rule of law backsliding. By involving the Commission, monitoring under Article 7, paragraph 1, TEU is both a political procedure and an institutional procedure. In particular, Article 7, paragraph 1, TEU has been triggered against both Hungary and Poland. Unfortunately, Member States have a heterogeneous position through their veto power that does not allow the procedure to be completed and sanctions to be issued.

The rule of law dialogue in the Council is another political practice to strengthen the rule of law in the EU. Since 2014, the Council has committed itself to establish a dialogue between all Member States to promote and safeguard the rule of law within the framework of the EU Treaties. It was organised as a dialogue based on the principles of mutual cooperation and non-discrimination between all Member States and other EU institutions. The annual rule of law dialogue has proved to be a useful mechanism. The Council organises an annual evaluation and seminar with stakeholders. Another soft law tool is the rule of law 2020 report. This first rule of law report is “part of the new annual rule of law cycle – the Rule of Law Mechanism”. In this report, the Commission studies the context of the rule of law in the EU. The rule of law report aims to initiate an inclusive debate and a culture of the rule of law across the EU. It should help all Member States to examine how to address the challenges and how they can learn from each other’s best practices. Furthermore, it shows how the rule of law can be further strengthened while fully respecting national constitutional systems and traditions.

Study of EU practice on the protection of the rule of law highlights the attempts of the EU institutions to address the current crisis of the rule of law. However, numerous critical issues remain. Despite some successes, legal practices concerning infringement actions alone are unable to improve the whole framework for the protection of the rule of law.

The New Regulation

In December 2020, the EU adopted a new policy instrument (regulation EU 2020/2092) aimed at protecting the financial interests of the EU against breaches of the rule of law. According to the new mechanism, appropriate measures shall be taken when breaches of identified characteristics of the rule of law in a Member State risk affecting the management of the EU budget, or the protection of the financial interests of the EU in a “sufficiently direct way”. It is not clear what this prescription means in practice. Unquestionably, corruption or the presence of non-independent courts can mean that there is no real protection against the misuse of EU funds destined for a Member State. In such cases, the Commission will submit a proposal for an implementing act to the Council, for adoption by a qualified majority.

Given the implementation of the Next Generation EU economic recovery plan, the regulation 2020/2092 could be more useful in combating fraud against European funds than in strengthening the rule of law in the EU. Indeed, the mechanism envisaged by regulation 2020/2092 will not act in relation to the structural problems that have caused rule of law backsliding and affect the functioning of national constitutional orders. Through the mechanism, the European institutions will try to avoid in every way the misuse of funds from the Next Generation EU plan. They propose harnessing the potential of the EU budget to mobilise investment and focus European financial support to revive the European economy after the COVID-19 pandemic. The Next Generation EU is based on three pillars. The first is composed of tools to support the efforts made by the Member States to recover from the crisis, overcome its effect, and reemerge stronger. The second provides measures aimed at stimulating private investment and supporting companies in difficulty. The third is a strengthening of EU strategic programmes to learn from the crisis and make the single market stronger and more resilient, and accelerate the dual green and digital transition. Despite these initiatives, surely it is possible to do more to protect both the rule of law and financial interests.

In the new framework outlined by Next Generation EU, protection of EU values should be ensured through a “rule of law mechanism in action”. The developments in monetary and economic policy may be balanced with a mechanism that verifies the quality of the rules, their functioning and, when necessary, allows adequate actions to be taken to improve the system. It could provide the institutions with a real picture of what the current rule of law situation is like in the EU and will also allow us to take the necessary actions to improve European legislation. The growing impact that EU rules have on the lives of European citizens also requires a careful examination of the actions of European institutions and European standards. In other words, the exercises that the Commission has undertaken beyond the new Regulation on monitoring the degree of respect for the rule of law in the Member States, including listening to stakeholders, should be extended. It must be carried out with great scientific attention and take into account all the actors involved such as civil society and financial institutions.

Conclusion

In conclusion, the European institutions should develop a mechanism to protect the rule of law in action based on empirical evidence and on a scientifically rigorous and transparent evaluation exercise that is open to citizens. This is not the only way to resolve the structural problems of the rule of law in the Member States, but it may be a promising way to start effectively protecting the rule of law.