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European Union values, Rule of Law and the Multiannual Financial Framework 2021-2027

The Commission’s Proposal to protect the EU budget against threats to the Rule of Law

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Abstract

This article examines the Commission’s proposal to strengthen the protection of the Rule of law in EU Member States through a new mechanism making EU funding conditional on a certain level of respect for the Rule of law. This mechanism proposed as part of the new MFF package is presented rather technically as a tool ‘to protect the EU budget from financial risks linked to generalised deficiencies as regards the RoL’, but it is apparently meant to complement the procedure foreseen in Article 7 TEU which is considered insufficiently effective. The article concludes that the newly proposed mechanism gives a strong role to the Commission which would be in a key position to impose sanctions which would bypass the Article 7 procedure in a way difficult to reconcile with primary law.

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Notes

  1. Communication ‘A new Framework to strenghten the Rule of Law’, COM(2014) 158 final.

  2. Conclusions of the Council of the European Union and of the Member States within the Council on the control of the respect of the Rule of Law of 16.12.2014 – the structured dialogue.

  3. P8_TA(2016)0409 of 25.10.2016 (2015/2254(INL)). This resolution inviting the Commission to present an initiative before September 2017 (No. 1) was preceded by Initiative Report 2015/2254(INL) with recommendations to the Commission on the establishment of an EU mechanism on democracy, the rule of law and fundamental rights, Sophie in’t Veld, LIBE Committee, 10.10.2016.

  4. Reasoned Proposal in accordance with Article 7(1) TEU regarding the rule of law in Poland - Proposal for a Council Decision on the determination of a clear risk of a serious breach by the Republic of Poland of the rule of law – COM (2017) 835 final, 20.12.2017 (2017/0360). See also press release IP/17/5367 of 20.12.2017, 1. Motivated proposal for a Council Decision.

  5. Resolution on the Commission’s decision to activate Article 7(1) TEU as regards the situation in Poland P8_TA-PROV(2018)0055 – 2018/2541(RSP). In this Resolution the EP, considering its previous Resolution of 15.11.2017, welcomes and supports the Commission’s decision to launch Art. 7(1) TEU, asks the Council to adopt the measures foreseen in this Article and invites the Commission and the Council to keep it informed of the progress achieved as well as of the measures adopted at each stage of the procedure.

  6. EP Draft report on a proposal calling on the Council to determinate pursuant to Art. 7(1) TEU the existence of a clear risk of a serious breach by Hungary of the values in which the EU is founded (2017/2131 (INL), in which several issues were addressed, namely functioning of the constitutional system, independence of the judiciary and of other institutions and fundamental rights of migrants, asylum seekers and refugees.

  7. Communication from the Commission to the European Parliament, the European Council, the Council, the European Economic and Social Committee and the Committee of Regions – A Modern Budget for a Union that protects, Empowers and Defends – The Multiannual Financial Framework for 2021-2027 (COM (2018) 321 final, 2/5/2018), cfr. 2. Modernising the EU Budget, p. 4. The ‘modern budget’ is guided by the principles of prosperity, sustainability, solidarity and security, for a EU of 27.

  8. COM(2018) 324 final of 2.5.2018 (2018/0136 (COD)), to be adopted on the base of Art. 322(1 a) TFEU – the proposal draws upon the Commission’s 2014 Communication on the RoL Framework, the Communication ‘A new, modern Multiannual Financial Framework for a European Union that delivers efficiently on its priorities post-2020, The European Commission’s contribution to the Informal Leaders’ meeting on 23.2.2018 (COM(2018) 98 final of 14.2.2018 – see in particular ‘4. Modernising the EU Budget’, p. 15, as well as the standards and principles developed by the Council of Europe.

  9. Procedure close to the ‘inverted consensus’ foreseen in Art. 17(14) of the WTO Dispute Settlement Understanding according to which an Apellate Body Report shall be adopted by the DSB and unconditionnaly accepted by the parties to the dispute unless the DSB decides by consensus not to adopt it within 30 days following its circulation to the members.

  10. According to Art. 293 TFEU amendments require unanimity except in the cases foreseen in Arts. 294(10 and 13), 310, 312 (MFF), 314, and 315(2) TFUE.

  11. Regulation (EU) No. 1303/2013 of the EP and of the Council of 17.12.2013 (‘Common provisions Regulation’) [2013] OJ L 347/320, as amended by Regulation (EU) No. 2015/1839 of the EP and of the Council of 14.10.2015 [2015] OJ L 270/1. (‘Common provisions Regulation’). The measure was considered to be applied in the case of Portugal (and Spain), but finally that was not the case.

  12. According to the English version of Art. 23 (‘Measures linking effectiveness of ESI Funds to sound economic governance’) 9 ‘The Commission shall make a proposal to the Council to suspend part or all of the commitments or payments for the programmes of a Member State in the following cases: (a) where the Council decides in accordance with Article 126(11) TFEU that a Member State has not taken effective action to correct its excessive deficit’. Those measures can also be proposed and adopted in the cases foreseen in Art. 29(9b to e). See further Article 29(10 to 12) for procedure and ceilings and Annex III.

  13. Moreover, the outcome of the concrete application of the measures foreseen in the 2013 Regulation should not be forgotten. Application of sanctions within the rules of EU structural funds was an issue in the Portuguese (and Spanish) case of excessive deficit procedures: in the Portuguese case, despite of the fulfilment of the required conditions, in the framework of the ‘structured dialogue’ procedure under Art. 23(15) of Regulation 1303/2013, the EP (Economic Affairs and Regional Development committees) was against the suspension of structural funds for (both Spain and) Portugal. See Press Release No. 20161107IPR50344 and the document ‘Exchange of views with Spain and Portugal on possible suspension of European Structural Funds’ – REGI-CON on 8.11.2016.

  14. Art. 12(2)(a) to (d) of Council Decision of 1.12.2009 adopting the Council’s Rules of Procedure (2009/937/EU), OJ L 325, 11.12.2009, p. 35 (as amended, consolidated version 02009D0937 – EM - 01.01.2018 – 011.001, 1 and following).

  15. Case C-64/16 Associação Sindical dos Juízes Portugueses v. Tribunal de Contas, preliminary ruling of 27.2.2018, EU:C:2018:117, in particular paras. 31, 40-41, 32-36, 40-41. According to the CJEU, Art. 19 TEU, which gives concrete expression to the value of the RoL stated in Art. 2 TEU, requires MS to provide effective judicial protection for individual parties in the fields covered by EU law including those relating to the implementation of the EU budget (cfr. 32-34).

  16. See Case C-441/17 Commission/Poland (Białowieza Forest), Order of 20 November 2017, EU:C:2017:877, in particular paras. 80-84. The conclusions of Advocate General Yves Bot were presented on the 20.2.2018 (EU:C:2018:80), where he proposes that the CJEU will rule that Poland did not fulfil its obligations deriving from several articles of Directives 92/43/CEE of the Council of 21.5.1992 and 2009/147/CE of the PE and the Council of 30.11.2009 – see VI, Conclusion, 180, 1). The CJ decision was finally adopted on 17.4.2018 confirming the failure of Poland to fulfil those obligations.

  17. The Commission has also launched an infringement procedure based on Art. 226 TFUE against Poland in the sequence of the publication of the law on the organisation of national common tribunals in the Official Journal on 28.7. 2018 on the grounds of discrimination based on gender regarding the retirement age, in breach of Directive 2006/54 on equal treatment between men and women regarding employment and also a violation of Articles 19,1 and 47 of the Charter of Fundamental Rights of the EU. See Press release IP/17/2205 of 29.7.2017, Press release IP/17/2161 of 26.7.2017, No. 2. Infringement procedure on the basis of EU Law, and also Press release IP/17/3186 of 12.9.2017 (Letter of Formal Notice and Reasoned Opinion).

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Correspondence to Maria José Rangel de Mesquita.

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Maria José Rangel de Mesquita is a member of the Constitutional Court of Portugal, Lisbon, and of ERA’s Board of trustees and Professor at the Faculty of Law of the University of Lisbon.

The present paper is an updated version of a speech at a meeting organised by the Portuguese chapter of the Friends of ERA Association in Lisbon on 22.5.2018.

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Rangel de Mesquita, M.J. European Union values, Rule of Law and the Multiannual Financial Framework 2021-2027. ERA Forum 19, 287–294 (2018). https://doi.org/10.1007/s12027-018-0523-6

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