Rule-of-Law Conditionality in EU Spending: Reflections from a Public Finance Perspective

Abstract

Article 2 of the Treaty of European Union (TEU) sets forth the founding values on which the EU is based, including respect for human rights, the rule of law and tolerance of minorities.2 In recent years, numerous developments have made it increasingly questionable whether these values are still accepted by governments and electorates in all Member States. In the case of Poland, after years of failed negotiations, the European Commission deemed in December 2017 that the country was at clear risk of seriously breaching the rule of law. In particular, Polish legislation is perceived as seriously damage the independence of the Polish judiciary, including the Supreme Court, thus abrogating the separation of powers. As a consequence, the Commission has triggered an Article 7 TEU procedure which, in its last escalation, foresees the suspension of the country’s voting rights. In the case of Hungary, as well, after many years of failed attempts to moderate the government, the European Parliament now sees a clear risk of a serious breach of the EU’s founding values and, in September 2018, requested the Member States to initiate an Article 7 procedure against that country. The concerns in relation to Hungary are judicial independence, freedom of expression, corruption, the rights of minorities, and the circumstances faced by migrants and refugees.3 A.