Rule of law is one of the fundamental values upon which the EU is based on. Direct reference to it is included in primary sources of EU law, the EU founding treaties, the Treaty on European Union (TEU) and the Treaty on the Functioning of the European Union (TFEU). Article 2 of the TEU sets out the EU’s values and objectives (respect for human dignity, freedom, democracy, equality, the rule of law and for human rights). Various articles of the TFEU set out the legal basis for EU action in various areas, emphasising importance of rule of law in all cases.
Additionally, this requirement does not only apply to the EU but it is also expected from the member states, being one element of the so-called Copenhagen criteria, being widely considered as the EU membership criteria today.
“Rule of law” in front of the EU judiciary
Rule of law is not only a question of politics but also of legal scrutiny. The supreme judicial body of the EU, the Luxembourg-based Court of Justice of the European Union (CJEU) has also developed its interpretation of rule of law via its rulings on related cases brought before it, both in preliminary decisions and in infringment cases. The first ones are the most common types of cases, where the court gives legally binding judgments on various aspects of cases in front of domestic courts, which involve the application of EU law. Domestic courts should interpret and apply Union law properly, but as courts in different countries might develop different practices, this specific procedure is needed to give the CJEU some control over practical application of Union law. On the other hand, infringment cases are exact complaints from the European Commission against certain member states being in violation of their EU obligations.
The CJEU has dealt with several cases related to the rule of law, and has shown a constantly growing interest, especially related to independence of the judiciary. Its case law often refers to the Wilson case, where the Court ruled that the concept of independence is twofold: the first aspect of this concept, which is external, presumes that judicial authorities are protected against external intervention or pressure liable to jeopardize the independent judgment of its members as regards proceedings before them; the second aspect, which is internal, is linked to impartiality and seeks to ensure a level playing field for the parties to the proceedings and their respective interests with regard to the subject-matter of those proceedings.
The Rule of Law Framework
The current legal basis for the EU to control the state of rule of law in member states has been created under the so-called „Rule of Law Framework”. It was created by the EU as a tool to identify and address systemic threats in EU member states, and it was needed as through the recent years, the European legal-political community has had to face threats in some member states, which have revealed systemic threats to rule of law. The institutions of the Union, at the initiative of the Commission have reacted by adopting this political-legal framework. Its main objective is to prevent emerging threats to the rule of law from escalating to the point where the Commission has to trigger the applicable mechanism under Article 7 of the TEU, via an intensive dialog with the concerned member state.
The “Article 7 procedure” has been created by the Treaty of Amsterdam, then it was reinforced by the Lisbon Treaty, and it aims the possibility of the employment of sanctions in case of violation of fundamental principles, including rule of law. It can be initiated on a reasoned proposal by one third of the member states, by the European Parliament or by the European Commission, claiming that a member state’s action pose a risk of a serious breach of Art. 2 values. Before making the decision, the Council has to hear the member state in question and may also address recommendations to it. The Council may bring a decision by a majority of four fifths of its members after obtaining the consent of the European Parliament about the existence of a clear risk of a serious breach of the values referred to in Article 2. After making this decision, the Council shall regularly verify that the grounds for it continue to apply or the concerned member state has made efforts to correct the situation. The idea behind this first phase is that the member state will draw the consequences from this condemnation, this strong political warning. But it is possible that it does not happen, what’s more, the situation gets worse – in this case, the procedure may continue.
The next phase of the procedure involves the highest political level, the European Council. Had the Council already decided about the risk of a serious breach, the existence of the breach itself has to be decided by the European Council, acting by unanimity (of course, not involving the member state concerned). For this phase, a proposal is needed either by one third of the member states or by the Commission. The European Council has to invite the member state in question to submit its observations and obtain the consent of the European Parliament again, and then unanimously it may determine the existence of a serious and persistent breach by the member state of the values referred to in Article 2. This is a very serious decision, firstly as it reflects the unanimous opinion of all member states, secondly as it practically qualifies the member state unsuitable for EU membership, which may have a very serious effect on investors and the business environment provided by that state. And it also opens up a possibility to employ a wide array of sanctions against the member state, much of which may be of economic and financial nature, having the same effect.
The third phase of this proceeding is the one when a decision is made about these possible sanctions. If the European Council unanimously had determined the existence of a serious and persistent breach, the Council, acting by a qualified majority, may decide about the legal consequences of the state’s misbehaviour. As possible sanctions, the TEU mentions the possibility “to suspend certain of the rights deriving from the application of the Treaties to the Member State in question, including the voting rights of the representative of the government of that Member State in the Council”.
This proceeding has been applied related to Poland and Hungary, but in both cases it has stuck in the first phase because of political reasons: member states are visibly unable to build even a limited consensus to reach the four-fifth majority to conclude the procedure.
The ambiguous and political nature of the Article 7 procedure have raised ideas and plans to try to reform this procedure, or to try to “bridge the gap” between the “nuclear strike” option of the Article 7 procedure and the “precision strike” option of the infringement procedure. Many have argued that the Article 7 procedure is actually a “toothless lion”, as it does not have real threatening power because of the requirement of anonymity for possible sanctions. As a consequence, the mechanism itself has also been criticised as nothing else than the possibility to summon the toothless lion, or pointing the finger to it – being practically a picture of a toothless lion.
This has lead to the creation of the so-called conditionality procedure, under which the Council – at the initiative of the Commission – may decide to withhold EU funds in case of rule of law-related problems that may lead to insecurities related to the use of EU funds. As the decision at the Council requires a qualified majority and not unanimity, this procedure is not a “toothless lion” any more. (Currently one of this kind of proceeding has been initiated, against Hungary, it is too early for an evaluation yet.)
The rule of law reports by the European Commission
The Rule of Law Report is the foundation of the European Rule of Law Mechanism. As the core objective of this mechanism is to stimulate inter-institutional cooperation and encourage all EU institutions to contribute in accordance with their respective institutional roles, the report serves as expression of the position of the Commission. It also sets an annual dialogue between EU institutions, EU member states and domestic parliaments and other stakeholders on the rule of law. And most importantly, they serve as indicators of possible actions of the Commission – with the existence of the conditionality procedure, this is not about pointing to a toothless lion any more.
The aim of the Rule of Law Report is to look at key developments in the area of the rule of law across the EU. The annual reports cover four areas: justice systems, in particular their independence, quality and efficiency; anti-corruption frameworks; media pluralism and freedom; and other institutional issues related to checks and balances. These are being evaluated in all member states, using the same methodology, even if some of those complain about “double standard” and being pinpointed for political reasons.
The 2023 report is available here:
https://commission.europa.eu/publications/2023-rule-law-report-communication-and-country-chapters_en