Regulation (EU, Euratom) 2020/2092 on a general regime of conditionality for the protection of the Union budget

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Series Details L 433I, Pages 1-10
Publication Date 22/12/2020
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Summary:

Regulation (EU, Euratom) 2020/2092 - adopted by the co-legislators on 16 December 2020 - setting out protective measures of the European Union's own budget in case of generalised deficiencies as regards the rule of law in the Member States.

Further information:

This original proposal was adopted by the European Commission on 2 May 2018 to establish rules necessary for the protection of the EU's budget in case of generalised deficiencies as regards the rule of law in the Member States. The proposed procedure would be launched with an investigation by the Commission. Upon the establishment of a deficiency on respecting the rule of law, a proposal for an implementing act would be submitted to the Council of the European Union. The adoption would take place unless the Council decided - by qualified majority - to reject the Commission's proposal within one month of it being submitted for appreciation. The Council could also amend the Commission’s proposal and adopt the amended text as a Council decision.

The draft initiative was discussed by the co-legislators in the framework of the discussions for the Multiannual Financial Framework (MFF) 2021-2027. The European Parliament's plenary session discussed its position in January 2019 and referred it back to the relevant committees for further discussion. A negotiating position was eventually adopted by the plenary session on 4 April. In July 2019, the Commission published a Communication on strengthening the rule of law within the Union, which calls on this proposal to be adopted as soon as possible. The European Council provided in July 2020 political guidance on this matter. The Council of the European Union later held discussions based on such guidance. An informal agreement between the co-legislators on a compromise text was reached on 5 November.

However, three Member States later announced the opposition to the text and threatened the veto the whole MFF package. A further political agreement was reached during a meeting of the European Council on 10 December 2020. It states that the Commission is to adopt guidelines on the way to apply the Regulation, including a methodology for carrying out the assessments. Following the formal endorsement by the co-legislators, the Act was signed on 16 December 2020 and published in the Official Journal on 22 December 2020.

The Court of Justice of the European Union (CJEU) announced on 11 March 2021 that Hungary and Poland had launched legal action against this Regulation. On 25 March, the European Parliament adopted a Resolution threatening the Commission with legal action over the delay in applying the rule of law conditionality mechanism.

Related Link(s)
Commentary and Analysis
Human Rights Watch: News, 03/05/2018: EU Looks to Rein in Funding to Abusive EU Governments https://www.hrw.org/news/2018/05/03/eu-looks-rein-funding-abusive-eu-governments
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Intereconomics: Vol 53, No 6 (Nov-Dec 2018): Going for the Wallet? Rule-of-Law Conditionality in the Next EU Multiannual Financial Framework https://archive.intereconomics.eu/year/2018/6/going-for-the-wallet-rule-of-law-conditionality-in-the-next-eu-multiannual-financial-framework/
EUObserver, 02/05/2019: Rule of law: it's time the EU Council said 'yes' https://euobserver.com/opinion/144766
EUCRIM: The European Criminal Law Associations' Forum (02/2019): Compliance with the Rule of Law in the EU and the Protection of the Union’s Budget https://eucrim.eu/articles/compliance-with-the-rule-of-law-in-the-eu-and-the-protection-of-the-unions-budget/
EPRS: Briefing, June 2020: Protecting the EU budget against generalised rule of law deficiencies http://www.europarl.europa.eu/thinktank/en/document.html?reference=EPRS_BRI(2018)630299
Euro|topics, November 2020: Deal on the EU rule of law mechanism https://www.eurotopics.net/en/250829/
Balkan Insight: Review, 06/11/2020: Democracy Digest: Rule of law showdown approaches https://balkaninsight.com/2020/11/06/democracy-digest-rule-of-law-showdown-approaches/
Euro|topics, November 2020: Deal on the EU rule of law mechanism https://www.eurotopics.net/en/250829/
EUObserver: Opinion, 14/12/2020: The rule-of-law deal that saved Merkel's legacy https://euobserver.com/opinion/150365
EPRS: At a Glance, December 2020: Protection of the Union's budget in case of 'rule of law' deficiencies https://www.europarl.europa.eu/thinktank/en/document.html?reference=EPRS_ATA(2020)659409
TEPSA, 15/12/2020: The European Council and the Rule of Law https://www.tepsa.eu/the-european-council-and-the-rule-of-law/
The Economist, 16/12/2020: The EU gives itself a weapon to battle against rule-of-law violations https://www.economist.com/europe/2020/12/16/the-eu-gives-itself-a-weapon-to-battle-against-rule-of-law-violations
CEPS: Blog, 17/12/2020: The European Council’s compromise on the Rule of Law Regulation https://www.ceps.eu/the-european-councils-compromise-on-the-rule-of-law-regulation-capitulation-to-the-forces-of-evil-or-misplaced-expectations/
Hertie School: Jacques Delors Centre: Policy Brief, 17/12/2020: The EU’s new rule of law mechanism https://www.delorscentre.eu/en/publications/detail/publication/the-eus-new-rule-of-law-mechanism
Vox Europ: Analysis, 17/12/2020: To save the Rule of Law EU leaders may well have broken it https://voxeurop.eu/en/to-save-the-rule-of-law-eu-leaders-may-well-have-broken-it/
Verfassungsblog, 22/12/2020: How to Quantify a Proportionate Financial Punishment in the New EU Rule of Law Mechanism? https://verfassungsblog.de/how-to-quantify-a-proportionate-financial-punishment-in-the-new-eu-rule-of-law-mechanism/
Heinrich Böll Foundation: Commentary, 04/01/2021: European Rule of Law in crisis – is it too late for the EU to save it? https://eu.boell.org/en/2021/01/04/european-rule-law-crisis-it-too-late-eu-save-it
ECFR: Commentary, 08/01/2021: Why Poland threatened to veto the EU recovery fund https://ecfr.eu/article/why-poland-threatened-to-veto-the-eu-recovery-fund/
Verfassungsblog, 25/02/2021: The EU Parliament’s Abdication on the Rule of Law (Regulation) https://verfassungsblog.de/the-eu-parliaments-abdication-on-the-rule-of-law-regulation/
Carnegie Europe: European Democracy Hub, 04/03/2021: How the EU Can Better Avoid Bankrolling Authoritarianism https://carnegieeurope.eu/2021/03/04/how-eu-can-better-avoid-bankrolling-authoritarianism-pub-83992

News
EurActiv, 23/01/2018: EU mulls new link between budget and rule of law https://www.euractiv.com/section/future-eu/news/eu-mulls-new-link-between-budget-and-rule-of-law/
Politico, 01/05/2018: Brussels unveils battle plan to hit ‘illiberal democracies’ https://www.politico.eu/article/mff-commission-eu-budget-proposal-brussels-looks-to-link-eu-payouts-to-justice-standards/
Reuters, 02/05/2018: EU commission says it will cut funds for member states that undermine rule of law https://uk.reuters.com/article/idUKKBN1I32GN
RFE/RL, 02/05/2018: Long-Term EU Budget Plan Would Punish 'Rule Of Law Deficiencies' https://www.rferl.org/a/eu-long-term-budget-plan-would-punish-rule-of-law-deficiencies/29204662.html
EurActiv, 03/05/2018: Bulgaria dislikes Commission plan to link EU funding to rule of law https://www.euractiv.com/section/future-eu/news/bulgaria-dislikes-commission-plan-to-link-eu-funding-to-rule-of-law/
Politico, 07/05/2018: Jourová: Law-abiding countries have nothing to fear from funding-cut plan https://www.politico.eu/article/eu-funds-budget-poland-hungary-rule-of-law-budget-jourova-law-abiding-countries-have-nothing-to-fear/
EUCRIM: News, 29/06/2018: Commission Proposes Loss of EU Money if Rule of Law is Not Respected https://eucrim.eu/news/commission-proposes-loss-eu-money-if-rule-law-not-respected/
The Guardian, 17/01/2019: MEPs back plans to cut funds for EU states who weaken rule of law https://www.theguardian.com/world/2019/jan/17/meps-back-rule-of-law-plans-freeze-funds-to-corrupt-eu-states
Politico, 17/01/2019: European Parliament backs plan to link EU funds to rule of law https://www.politico.eu/article/budget-hungary-poland-rule-of-law-european-parliament-backs-plan-to-link-eu-funds/
Hungary Today, 17/01/2019: Member States Jeopardizing the Rule of Law Risk Losing EU Funds https://hungarytoday.hu/ep-voted-member-states-jeopardizing-the-rule-of-law-risk-losing-eu-funds/
Radio Poland, 17/01/2019: MEPs back plan to link EU funds to rule of law http://thenews.pl/1/10/Artykul/402035
France24, 17/01/2019: EU states breaching rule of law could lose funds: Parliament https://www.france24.com/en/20190117-eu-states-breaching-rule-law-could-lose-funds-parliament
Euronews, 18/01/2019: MEPs vote to impose financial sanctions on countries that flout rule of law https://www.euronews.com/2019/01/18/meps-vote-to-sanction-countries-that-flout-rule-of-law
EurActiv, 18/01/2019: Parliament seeks financial punishment for countries breaching rule of law https://www.euractiv.com/section/eu-elections-2019/news/parliament-seeks-financial-punishment-for-countries-breaching-rule-of-law/
EurActiv, 30/09/2019: Finnish PM says EU ready to tie funding to rule-of-law criteria https://www.euractiv.com/section/economy-jobs/news/finnish-pm-says-eu-ready-to-tie-funding-to-rule-of-law-criteria/
EurActiv, 05/11/2020: EU institutions strike budget deal on rule of law mechanism https://www.euractiv.com/section/all/news/eu-institutions-strike-deal-on-rule-of-law-mechanism/
Deutsche Welle, 05/11/2020: EU agrees to link rule of law to budget fund access https://p.dw.com/p/3kvHj
The Guardian, 05/11/2020: Deal struck to enable EU to block budget payments to rogue members https://www.theguardian.com/world/2020/nov/05/deal-struck-enable-eu-block-budget-payments-rogue-members
Politico, 05/11/2020: ‘Historic’ EU rule of law deal faces challenges https://www.politico.eu/article/historic-rule-of-law-deal-faces-challenges/
EUObserver, 06/11/2020: Deal reached on linking EU funds to rule of law https://euobserver.com/institutional/149967
Associated Press, 06/11/2020: EU negotiators clinch deal tying rule of law to fund access https://apnews.com/article/europe-841aa4ae120ab7629925d217a18ea98a
Politico, 17/12/2020: EU top court gears up for rule-of-law battle (of its life) https://www.politico.eu/article/poland-hungary-rule-of-law-court-of-justice-of-the-european-union-gears-up-battle-of-its-life/
EUObserver, 17/12/2020: Von der Leyen pledges to use rule-of-law tool next year https://euobserver.com/political/150408
EurActiv, 11/03/2021: Hungary, Poland refer controversial rule of law mechanism to court https://www.euractiv.com/section/justice-home-affairs/news/hungary-poland-refer-controversial-rule-of-law-mechanism-to-court/
Euronews, 11/03/2021: Poland and Hungary file complaint over EU’s rule of law requirements https://www.euronews.com/2021/03/11/poland-and-hungary-file-complaint-over-eu-s-rule-of-law-requirements
Deutsche Welle, 11/03/2021: Poland and Hungary file complaint over EU budget mechanism https://p.dw.com/p/3qTdL
Kathimerini, 26/03/2021: EU Parliament votes to sue Commission unless it acts fast on rule of law in Poland, Hungary https://www.ekathimerini.com/news/1157927/eu-parliament-votes-to-sue-commission-unless-it-acts-fast-on-rule-of-law-in-poland-hungary/

Official
EUR-LEX: COM(2018)324: Proposal for a Regulation on the protection of the Union's budget in case of generalised deficiencies as regards the rule of law in the Member States https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=COM:2018:324:FIN
European Parliament: Legislative Observatory: Procedure File for Proposal on Protection of the Union's budget in case of generalised deficiencies as regards the rule of law in the Member States https://oeil.secure.europarl.europa.eu/oeil/popups/ficheprocedure.do?reference=2018/0136(COD)
European Parliament: Legislative Train Schedule: Proposal for a Regulation on the protection of the Union's budget in case of generalised deficiencies as regards the rule of law in the Member States http://www.europarl.europa.eu/legislative-train/theme-new-boost-for-jobs-growth-and-investment/file-mff-protection-of-eu-budget-in-case-of-rule-of-law-deficiencies
European Commission: General regime of conditionality for the protection of the Union's budget https://ec.europa.eu/info/strategy/eu-budget/long-term-eu-budget/2021-2027/spending/conditionality-regime_en
European Parliament: Press Release, 17/01/2019: Member states jeopardising the rule of law will risk losing EU funds http://www.europarl.europa.eu/news/en/press-room/20190109IPR23011/
European Parliament: Press Release, 05/11/2020: Rule of law conditionality: MEPs strike a deal with Council https://www.europarl.europa.eu/news/en/press-room/20201104IPR90813/
Council of the European Union: Press Release, 05/11/2020: Budget conditionality: Council presidency and Parliament's negotiators reach provisional agreement https://www.consilium.europa.eu/en/press/press-releases/2020/11/05/budget-conditionality-council-presidency-and-parliament-s-negotiators-reach-provisional-agreement/
European Parliament: Press Release, 16/12/2020: Parliament approves the “rule of law conditionality” for access to EU funds https://www.europarl.europa.eu/news/en/press-room/20201211IPR93622/
European Parliament: Press Release, 17/12/2020: Rule of Law mechanism applies without further delay as of 1 January, MEPs stress https://www.europarl.europa.eu/news/en/press-room/20201215IPR94024/
Renew Europe: Newsroom, 18/03/2021: Renew Europe requires the European Commission to fulfil its obligations on the Rule of Law mechanism https://reneweuropegroup.eu/en/news/1847-renew-europe-requires-the-european-commission-to-fulfil-its-obligations-on-the-rule-of-law-mechanism/
Greens/EFA Group: Press Release, 24/03/2021: Rule of Law Mechanism: Quotes from Terry Reintke MEP & Daniel Freund MEP https://www.greens-efa.eu/en/article/press/rule-of-law-mechanism-quotes-from-terry-reintke-mep-daniel-freund-mep/
GUE/NGL Group: Newsroom, 24/03/2021: Left supports resolution to uphold rule of law in EU https://www.guengl.eu/left-group-supports-resolution-to-uphold-rule-of-law-in-eu/
European Parliament: Legislative Observatory: Procedure File for Resolution on the application of Regulation (EU, Euratom) 2020/2092, the rule-of-law conditionality mechanism https://oeil.secure.europarl.europa.eu/oeil/popups/ficheprocedure.do?reference=2021/2582(RSP)
European Parliament: Press Release, 25/03/2021: MEPs ready to take Commission to court for failing to protect EU budget https://www.europarl.europa.eu/news/en/press-room/20210322IPR00523/

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