EU should crack down on breaches of the rule of law

Disbursement of EU funds, including the Recovery Fund, must be tied to respect for the rule of law in all Member States. Systematic deficiencies in the rule of law always undermine the implementation of EU-funded programmes, and the absence of a rapid and comprehensive EU response to this will jeopardise the EU’s credibility, warns the EESC

The European Economic and Social Committee (EESC) has taken a tough stance on breaches of the rule of law in the EU, declaring it is committed to ensuring that the Council of the European Union and the European Commission impose high dissuasive penalties on Member States which systematically disrespect the rule of law in a way that puts the EU budget at risk.

In the own-initiative opinion Rule of law and the recovery fund adopted at its plenary session on 20 January, the EESC welcomed the EU’s Regulation 2020/2092, which enables the Commission to impose financial penalties for systematic shortcomings in the rule of law in a given EU country, and called for the regulation to be applied strictly in all areas that are relevant to the budget.

The rule of law is the indispensable basis for a democratic, pluralistic society in Europe and for the continued existence of the EU. The EU is based on values such as individual dignity, equality, human rights and the rule of law, which should be guaranteed for everyone. These values are a part of our identity, said the rapporteur for the opinion, Christian Bäumler. This is why the EU needs a functioning rule of law and independent justice systems. Otherwise it will not be fit to work.

To act against systematic failure to comply with the rule of law, the EESC recommended that the EU use all other means of sanction at its disposal alongside the options provided for in the budget conditionality regulation (Regulation (EU) 2020/2092). These would include the infringement procedure provided for in Article 263 TFEU and the procedure set out in Article 7 TEU.

Last year, Poland and Hungary brought legal action against the regime of conditionality for the protection of the Union budget for breach of the principles of the rule of law, and called for the annulment of the regulation, which officially came into force in January 2021.

However, the Advocate General of the Court of Justice of the EU (CJEU) recommended last December that their pleas be dismissed, upholding the legality of the regulation. The CJEU’s final judgment is expected in the coming days.

The rule of law is also fundamental for the EU’s sustainable economic development as it guarantees investment certainty and respect for competition rules, thereby thwarting corruption and increasing trust in the legal system as a whole, which is crucial for private investment and cross-border trade.

In the EESC’s view, if an EU country systematically violates the rule of law, this always compromises or, at least, seriously jeopardises the implementation of EU-funded programmes and is detrimental to the EU budget.

Member States implement a lot of programmes disbursing a lot of EU money, which should be used where needed and not disappear without trace down dark channels. The EU’s own credibility is at stake here, Mr Bäumler said.

That is why it is essential that all beneficiaries of payments from the Union budget comply with transparency rules and are able to fully demonstrate what the funds are used for.

If a Member State is found to have systematically breached the rule of law, it should bear the burden of proving that it can guarantee the proper implementation of EU funds without compromising the EU budget. This should be clarified in the regulation, the EESC said.

The national recovery and resilience plans, which the Member States had to submit to the Commission in order to get their share of EUR 723.8 billion made available under NextGenerationEU and the Recovery and Resilience Facility, should also spell out the measures the governments will take to strengthen the rule of law.

However, most of the national plans submitted so far include too few initiatives in this respect. Moreover, in its assessment of these plans, the Commission did not attach enough importance to the rule of law, which the EESC finds regrettable.

Apart from recovery plans, all programmes supported by the EU budget should be subject to far‑reaching national laws on freedom of information and transparency, so that press bodies, non‑governmental organisations and civil society have easy, comprehensive access to information.

Civil society organisations promoting human rights and the rule of law should enjoy EU protection from undue influence and should receive EU funding for their work. 

In the opinion, the EESC urged all Member States to subscribe to the enhanced cooperation in the area of the European Public Prosecutor’s Office, and called for this to become a prerequisite for participating in EU‑funded programmes. This cooperation is already starting to yield results and is likely to contribute in the long term to a huge improvement in cross-border criminal prosecution.

Since the newly‑created European Public Prosecutor’s Office took over tasks previously assigned to the European Anti-Fraud Office (OLAF), the EESC called for OLAF to be developed into a European agency for the rule of law and administrative efficiency. Its new task would be to review the rule of law in the Member States and advise the EU institutions on this matter.

To bring the concept of the rule of law closer to citizens and to explain its relevance to everyday life, the EU should launch a communication campaign with civil society entitled My EU – My Rights, initiating EU-wide dialogue on the importance of the rule of law, the EESC concluded.