The European Court of Justice ruled on Wednesday that the rule of law conditionality mechanism was adopted on an appropriate legal basis and respects the limits of the powers conferred on the EU and the principle of legal certainty.
It is now up to the Commission to finalise its guidelines on the mechanism and start activating it after months of delays.
In its ruling, the Court (ECJ) dismissed the actions brought by Hungary and Poland against the conditionality mechanism which makes the receipt of financing from the EU budget subject to the respect by the member states for the principles of the rule of law.
As already reported, European Commission President von der Leyen welcomed the ruling which followed the position of the Commission, the European Parliament, the Council and 10 member states that defended its position in the court proceedings (Belgium, Denmark, Germany, Ireland, Spain, France, Luxembourg, the Netherlands, Finland, Sweden).
In her statement, she added that “the Commission will now analyse carefully the reasoning of the judgments and their possible impact on the further steps we will take under the Regulation. Taking into account these judgments, we will adopt in the following weeks guidelines providing further clarity about how we apply the mechanism in practice.”
At a hearing in the Parliament after the ECJ ruling, MEPs demanded that the Commission applies the conditionality mechanism as soon as possible to protect EU values and the EU budget. Many underlined that the Commission had now run out of excuses for delays.
MEPs said they had had enough of hearing bureaucratic excuses, while some member states were being taken over by authoritarian rule, with justice systems degrading, freedom of press restricted and minorities’ rights curtailed. They recalled that the Commission’s role is to guard the EU treaties and protect the founding values to which all EU countries have committed.
Budget Commissioner Johannes Hahn, who replaced the Commission President in the debate, said that the Court’s ruling is now being analysed by the Commission and that it will swiftly finalise its guidelines on how to apply the regulation. He could not tell how much time it would take but assured that the parliamentary elections in Hungary in April was no reason for delaying the mechanism.
In fact, the Commission has already consulted the Parliament and the member states on the guidelines on the application of the mechanism and was only waiting for the ECJ ruling to finalise them.
Gwendoline Delbos-Corfield, Greens/EFA MEP and European Parliament rapporteur on the situation in Hungary, commented that, “The Court has only reaffirmed what we already know, but the inaction of the European Commission and EU member states is deeply worrying."
Asked by The Brussels Times why the Commission needed to spend weeks on analysing the ruling, the Commission’s spokesperson replied that it is normal for the Commission to study the reasoning behind legal rulings to ensure that the steps it is taking will be in line with them and to provide clarity. “We need first to study the ruling before we’ll know how long time it will take but we’ll act as quickly as possible.”
Court ruling on principles
The ECJ ruling deals with principles and the conditions for applying the conditionality mechanism without discussing the practicalities and procedures in implementing it. The procedures were laid down by the regulation which established the conditionality mechanism more than a year ago.
The Court found, that the mechanism can be initiated only where there are reasonable grounds for considering not only that there have been breaches of the principles of the rule of law in a member state, but, in particular, that those breaches affect or seriously risk affecting the sound financial management of the Union budget or the protection of the financial interests of the Union in a sufficiently direct way.
The measures that may be adopted under the regulation relate exclusively to the implementation of the Union budget.
Accordingly, the regulation is intended to protect the Union budget from effects resulting, in a sufficiently direct way, from breaches of the principles of the rule of law and not to penalise those breaches as such.
The Court underlined the issue of mutual trust between the EU member states in spending EU funding as a condition for enjoyment of all the rights deriving from the application of the Treaties to a member state.
Importantly, it specified that compliance with EU values cannot be reduced to an obligation which a candidate state must meet in order to accede to the EU and which it may disregard after accession. In this the Court referred indirectly to those new member states that have been backsliding in their commitments after joining the EU.
It highlighted the importance of sound financial management of the Union budget and warned that the financial interests of the Union may be seriously compromised by breaches of the principles of the rule of law committed in a member state.
The Court concluded that the conditionality mechanism falls within the power conferred by the Treaties on the EU, does not circumvent other procedures and respects the limits of those powers. Contrary to what Hungary and Poland claimed in their appeal, the rule of law principles are well-defined and have been developed extensively in case law.
The Brussels Times