Rule of Law Conditionality: The Sharpest New Tool in the Box?

In an interview with Oliver Garner, Professor Petra Bard argues that the new Regulation on budget conditionality could strengthen the EU’s enforcement prong in response to Rule of Law violations.  

Petra Bard is one of the heads of the Rule of Law Section of the Review of Democracy, and a lecturer in the Law department of the Central European University as well as being an Associate Professor at the Eötvös Loránd University in Budapest. She is also one of the work-package leads for the RECONNECT project which seeks to reconcile citizens with the European Union, through law and democracy. 

Oliver Garner: At a recent CEU Democracy Institute event, Commissioner Didier Reynders, MEP Katalin Cseh and Professor Laurent Pech all agreed that this new Regulation could be a game-changer. Do you believe that the regulation will achieve greater compliance with EU values where other mechanisms have failed? And if so, why? 

Petra Bard: The conditionality Regulation is not a magic tool to solve all the rule of law issues in the EU, but this is a promising one.  The common provisions Regulation from 2013 already allows the Commission to suspend European structural and investment funds where a Member State did not uphold the rule of law. So instead of making better use of this tool, now European institutions have come up with a general rule of law conditionality. 

It does have potential because it’s regular, it has a clear methodology, it clearly states what the rule of law is and what the expectations are, but I don’t think that this instrument, or in fact, any other instrument could solve all the rule of law problems in the European Union. 

Do you believe that there is a risk that citizens may see the Regulation as an attempt to buy rule of law compliance? If so, does this undermine the idea of EU values? 

I would reverse the question, if you allow. So, does it not undermine the European idea that illiberal, non-democratic regimes are being built from EU money in sharp contrast to EU values? Should we be allowed to continue the approach followed so far? Should we not attach dissuasive legal consequences to systemic violations of the rule of law?  

It will have severe consequences primarily for the Member State in question because life in a democracy is much happier than the life in a non-democracy, but also the effects of rule of law backsliding extend way beyond the borders of the problem child of the EU, beyond the borders of the illiberal states and they spill over to the European Union as a quasi-federal entity as well.  

“One rotten apple may spoil the whole barrel.” Essential presumptions behind EU law, such as mutual trust and mutual recognition will not hold which are based on the presumption that every Member State is a state based on the rule of law and that everyone will get a fair trial by an independent judiciary.  

One way or another, these illiberal states are poisoning the European project and then it’s more consequential not to finance them out of EU taxpayers’ money than to do so.  

Do you think that the institutions will be successful in showing that this is a Regulation that applies equally to all Member States rather than being a measure purely against Hungary and Poland? 

I do believe that there is a sincere attempt on the side of the EU institutions to make it a tool that is equally applied to all the Member States. This should be communicated to the people all over the European Union including the citizens of the illiberal states. But one shouldn’t overdo it because one way or another the tool will be presented by the illiberals as an ideological tool whereby the European Union is trying to impose on them a certain ideology, certain policies with regard to migration or with regard to other issues and that will be easily communicated to the people especially in countries where there is already a captured media. So, I don’t think that the EU has the tools to fight this fight, it should try of course, but I firmly believe that this will be misconceived anyway by the illiberals.  

And what I have seen so far on the side of EU institutions and EU politicians is that they try to compensate this illiberal rhetoric too much in communicating to the public. Looking at the Rule of Law report again, it gives a lengthy analysis of all the Member States. So what the Hungarian and Polish governments are claiming is that we are all having equal problems because we have almost equal length analysis of rule of law problems.  There will be an audience that is respondent to this misconstruction of European attempts to restore the rule of law. There will be people who will believe that the rule of law doesn’t exist, it’s just a ‘blah blah’ (I was quoting a prime minister here, sorry!) and they will believe there are double standards being used.  

But there is a huge group of voters who cannot translate their votes into power because of the distorted election system. There are those who do believe in the values that the EU and the Member States are supposed to share, and that EU action would correspond to the expectations of these citizens from the backsliding states, who had high hopes to join the West, not only economically, but also in terms of democracy, rule of law and fundamental rights.  

We shouldn’t forget this huge body of voters who currently feel alone because they do not see effective and dissuasive responses to rule of law backsliding on the side of EU institutions. 

How do you think the “rule of law reports” and the new regime of budget conditionality will interact together? Will soft law and hard law mechanisms complement one another or will they clash? 

I think that these two mechanisms should be complementary, they are not inter-changeable. One is designed for monitoring and the other is designed to attach consequences to rule of law backsliding. You cannot impose sanctions or legal consequences to backsliding without first having a thorough analysis of what is happening in a Member State.  

The Annual Rule of Law Report is a very promising exercise, this is “learning by doing” as the Commission already saw and responded to the criticism well, namely that certain issues have been downplayed or not even mentioned by the rule of law reports. It should be highlighted in the reports in a much clearer way when there is a systemic rule of law backsliding in one country and where there are “just” deep problems, but which are not systemic in other Member States.  

My worry  is that this approach emphasizes that sanctions must be a last resort and they always demand more dialogue. This might work with the Member States that respect the rules of the game and the concept of liberal democracy. 

But when it comes to systemic rule of law backsliding the strength of any EU reaction will depend on the response prong attaching dissuasive consequences  to systemic and illiberal violations of the rule of law.

I would reverse the approach that the response prong should be the last resort. No, we should clearly discuss and explain what consequences may be attached to rule of law backsliding and then reverse the order and in light of these responses engage in a dialogue. And if it is not meaningful, there should be a halt put to the debate.  

Time is an absolutely crucial factor, so these procedures should be accelerated to  interfere fast enough so that the capture or the measures by the government would still be reversed. If necessary interim measures should also be imposed.  

When it comes to the actual instruments, it’s not only that the sanctions should be dissuasive. There is a need to suspend certain legal instruments that are based on the presumption that every state is a state based on the rule of law so as not to destroy the whole construct that we call the EU’s legal system.  

Katalin Cseh MEP argued that “if the new Regulation is just another piece of paper for legal scholars to study, then it won’t change anything.”  Is there now an overabundance of rule of law mechanisms in the EU? Are too many tools in the box?  

You will excuse me if I cannot pass by Katalin Cseh’s dig at legal scholars! I think this brainstorming exercise on what works and what doesn’t work against abuse of power is a joint responsibility of law and policy makers, civil society scholars and various other segments of society. So Dimitry Kochenov’s “biting intergovernmentalism”, meaning starting infringement procedures by one Member State against another Member State for rule of law backsliding, is currently being tested by the Dutch government.  

So perhaps the Dutch will just act in lieu of the Commission which is supposed to uphold the treaties. Also, if you look at Professor Kim Lane Scheppele’s systemic approach to infringement procedures, I wish it would also soon be tested, this time by the Commission. Anna Śledzińska and myself propose to have all rule of law related infringement procedures automatically accelerated, prioritized and interim measures should be used and the court is in most cases already doing that.  

So, I think this is a common exercise that we are doing here and I think it’s mutually beneficial to listen to each other. When it comes to your actual question about the tools, there is now a proliferation of tools and most of them are there for monitoring, for benchmarking. 

We don’t need yet another monitoring tool neither do we need yet another tool for a dialogue.  

I wish there were more exercises that actually attach consequences to rule of law backsliding, this is what we would need. The European Parliament’s resolution on the democracy, rule of law and fundamental rights pact is something that would combine a very thorough methodologically correct monitoring exercise with automatic consequences attached to the finding that a Member State departed from the path of the rule of law.  Instead of supporting this initiative, all the institutions came up with their own rule of law monitoring exercises. I wish there was an inter-institutional joint effort to create a regular rule of law supervision mechanism with proper follow up 

Will greater powers at the EU level to address criminal behavior, such as through the EPPO, affect citizens’ perception of the EU’s legitimacy? Would new measures such as a European “black-list” increase support for EU action or would there be a backlash against greater supranationalization? 

I agree, I think that the EPPO might increase citizens’ trust in the EU and in how their money is being spent. Several problem-children from the rule of law perspective failed to join the EPPO and they cannot be forced to sign up since the treaties foresee enhanced co-operation. Some Member States which wish to engage in closer co-operation can do so within the treaty framework, but they need to respect the rights of the member states that opted out.  

The role of the OLAF (European Anti-Fraud Office) could, for example, be strengthened in this regard. At the minimum the findings of OLAF could be publicly shared when the Member States are irresponsive to the mischiefs indicated in those reports. So I can imagine a system where the general rule is confidentiality, but once there is no sufficient follow-up by a Member State then they could be published. 

Also, an EU mechanism could be introduced which could lead to autonomous consequences attached to OLAF findings of corruption irrespective of whether the Member States are prosecuting these offences. These are all promising proposals that are also viable within the current treaty framework. 

What would be your key argument to voters – such as in the upcoming election in Hungary – about why it would be in their interests to vote for candidates who cohere with the EU’s vision of the foundational values? 

I think it’s a legitimate concern on the side of European taxpayers and all European citizens that autocracies are being built from their money. 

Lack of politics is simply not helpful here so I think that the debate itself should be more politicized whereas the rule of law monitoring exercise and also the supervision on behalf of the EU should be legal processes.  

Let me give you parallel example to what happened in the EU context and what happened in the national context. When certain mainstream politicians were co-operating with radicals in the national setting in Germany, voters heavily punished the CDU/CSU for cooperating with the right wing radical AfD party in the election of certain politicians.   

When the same thing happened with the extremist Hungarian government before the election of the current Commission President, the same German voters couldn’t care less because Hungary is just too remote and their problems are not seen to be European problems. It’s not translated to European voters. When the current Commission President was elected with the votes of these representatives of non-democracies then the vote was celebrated as a great success of European unity. More political engagement is of course beneficial in this regard.  

On the basis of your role as the lead of the RECONNECT Work Package that formulates recommendations, what would be the one reform to the Treaties that you would propose to address the value crisis in the EU? 

 There is a preliminary question, namely, which value should be addressed if we only had one go at a treaty change?  The rule of law, democracy and fundamental rights are inter-dependent, so one cannot function without the other. 

I would simply abolish Article 51 of the Charter of Fundamental Rights so that all Charter rights could become directly applicable and justiciable in all the Member States.

Such a move would make the Charter a Union standard, and it would be eventually applicable irrespective of whether the subject matter falls within the EU’s competence or not.  

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