Suspension of EU Funds Paid to Member States Breaching the Rule of Law – A Dose of Tough Love Needed?

Abstract

The view from Brussels and some European capitals is that some Member States need a dose of tough love. These Member States have been pleased to take the benefits of EU membership, but their commitment to European values, particularly the rule of law (Article 2 TEU), has been lacking. Suspending transfers of EU funds to these recalcitrants has been touted as the type of tough love needed. Accordingly, the Commission has presented a Draft Regulation that authorises the EU institutions to suspend EU funds if a Member State is found to engage in systematic breaches of the rule of law. In other words, the transfer of EU funds to the Member State would be made conditional upon their continuous respect for the rule of law (therefore known as ‘the conditionality mechanism’). This paper comments on this Draft as first proposed by the Commission and amended during the first reading in the European Parliament. The analysis reveals that, although the conditionality mechanism could be lawfully introduced in EU law, the proposed model of its application raises serious doubts in terms of legal certainty. In addition, rather than being solely targeted at Member States that systematically breach the rule of law, its application may inadvertently lead to a loss of EU funds by those who should benefit from them.