Analysis EU Budget and Recovery plan

To save the Rule of Law EU leaders may well have broken it

During their latest summit, EU leaders adopted the proposal for making the granting of European aid conditional on respect for the rule of law, as well as how the mechanism should be interpreted. While it may have helped overcoming Hungary and Poland’s veto to the EU Budget and Recovery package, it violates the checks and balances of the EU legal order, and hence of the Union’s own Rule of Law, argues lawyer and good lobbyist Alberto Alemanno.

Published on 17 December 2020 at 13:17

During its 10-11 December summit, the European Council (EUCO in the EU jargon) broke the deadlock regarding the Multiannual Financial Framework (MFF), Next Generation EU and the Rule of Law (RoL) Regulation. In this analysis, we focus on the EUCO Conclusions, notably on the ‘interpretative declaration on the new rule of law mechanism’.  

Originally crafted by the German Presidency in close contact with Budapest and Warsaw, this text has enabled the remaining EU member states to overcome the veto posed by Hungary and Poland on the adoption of the entire package, thus reaching a ‘mutually satisfactory solution’. In its unusual declaration, the European Council agreed that “the Commission intends to develop and adopt guidelines on the way it will apply the Regulation” and that “[u]ntil such guidelines are finalised, the Commission will not propose measures under the Regulation.” As to when these guidelines may be deemed to be finalized, the European Council agreed that “[s]hould an action for annulment be introduced with regard to the Regulation, the guidelines will be finalised after the judgment of the Court of Justice.”

We argue that despite its political nature, this interpretative declaration entails major legal consequences. At a deeper level, it also shows an unprecedented disregard for the Rule of Law, and its principles and corollaries, governing the Union. Let’s translate these into more intelligible terms offered by a national legal order. When looking at it through the prism of the nation state, this declaration amounts to a scenario in which the head of state agrees with the executive to suspend the application of a legislative act until the Constitutional Court has greenlighted it. […] Everyone sees how this would be legally questionable and the situation is no different when this scenario plays out in the EU, rather than a national, legal order.

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Cynical conclusion

The rather cynical conclusion is that the EUCO’s brinkmanship in ‘saving’ the Rule of Law mechanism results in a violation of the checks and balances of the EU legal order and hence of the Rule of Law. Which scenarios can then be envisaged to ensure the full application of the Rule of Law Regulation and remedy the breaches of the EU’s system of checks and balances?

A first approach, which is dominating the public discourse, is for the European Parliament to simply ignore the EUCO Conclusions and to take the principled position that only the actual text of the Regulation matters. It could – similarly to the Commission, but this time on its own initiative – adopt a Declaration to be annexed to the Regulation stating the obvious, meaning that it is the Commission’s duty, as guardian of the Treaty, to implement the mechanism in compliance with the terms of the Regulation and without succumbing to political pressure from the European Council, other institutions or Member States.

Regardless of whether this document will be challenged before Court, it represents an unprecedented attempt by the Member States – gathered within the European Council – to disregard the rule of law as their dominant organisation principle.

A second approach is more daring and would see the European Parliament file an action for annulment against the EUCO’s interpretative declaration. This would be legally possible. A counterargument here could be that the EUCO conclusions being, by their nature, political statements without legal value and therefore without legal effects, would not be reviewable and any action against them would be rejected as inadmissible.

This formalist reading of the interpretative declaration underpins the approach currently undertaken by the EU Parliament, and most commentators. Yet, taking a more realistic approach would have us recognize that by becoming increasingly dominant in the EU’s institutional setup the European Council no longer limits itself to merely giving political impetus to the integration project. 

Even if the EUCO were to insist that its Conclusions are non-binding and the Court would accept this, it would not necessarily result in the inadmissibility of the Parliament’s action. As some recent cases have shown, the Court seems “prepared to be less rigorous on admissibility in interinstitutional disputes where an important issue of principle needs to be resolved.”

A third, and ideal scenario, would try to reconcile – at the time of adoption of the new Rule of Law mechanism – the EUCO interpretative declaration and the actual RoL Regulation. This is left to the loyal cooperation of the EU Commission while adopting the act.

Legal limbo

The interpretative declaration of 10 December 2020 is set to go down in history as a dark page for the Rule of Law in the Union legal order. Regardless of whether this document will be challenged before Court in the coming sixty days, it represents an unprecedented attempt by the Member States – gathered within the European Council – to disregard the rule of law as their dominant organisation principle. The Union being a “Community based on the rule of law”, its members paradoxically seem to have damaged the Union in their effort to save it.  Not only the Rule of Law Regulation finds itself in an unprecedented legal limbo, but as a result of the European Council’s interventions this mechanism has also been reframed, with the Commission’s tacit assent, under new terms that might relegate it into yet another rule of law oversight ghost.

👉 This is an edited version of the paper published on the Verfassungblog on 11 December 2020. Read the full version here.


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