. European Parliament resolution of 25 October 2016 with recommendations to the Commission on the establishment of an EU mechanism on democracy, the rule of law and fundamental rights (2015/2254(INL)), recital J. After discussing the steps that led to the adoption of the new “Rule of Law Conditionality Regulation” – although the concept of rule of law, as already mentioned, does not appear in the title of the final regulation – this article places it in the broader context of increasing conditionality as an EU governance instrument. The idea of combining “EU money” and the rule of law did not come out of nowhere. Indeed, it is part of a wider trend to use the EU`s spending powers – at least before the NGEU – to achieve a wide range of policy and enforcement objectives, a trend that has accelerated over the past decade and will be discussed in the pages to come. Since the adoption of Regulation 2020/2092 in December 2020, the majority of political groups in the European Parliament have called for its implementation and criticised the inaction of the European Commission[9], with various political groups expressing their concerns during the 2021 State of the Union debate. As mentioned earlier, the European Parliament took legal action against the European Commission in October for failing to activate the mechanism. [10] Nevertheless, the conclusions of the European Council of 10.-11. Key guidelines of December 2020 on when and how to apply the Regulation (conditions imposed by the Polish and Hungarian governments for the approval of the 2021-27 Multiannual Financial Framework and the next generation of the EU).

This meant that the European Commission could not apply the regulation before the guidelines were prepared, which would have to be developed “in close consultation with member states”, and before a CJEU ruling on the inevitable annulment action by the Hungarian and Polish governments in March 2021. However, if interpreted correctly by the different political groups in the European Parliament, the European Commission should not have to wait for these conditions to be met, as the European Council cannot restrict the application of a regulation. Even if jurisdictional issues have been at least partially addressed during the legislative process, broader issues with the possible transformative effects of conditionality on the EU constitutional order remain relevant from a more normative perspective. And it is crucial and necessary to identify criteria that can also guide future discussions on the introduction of new and different conditionality mechanisms. Firstly, the impact of cross-compliance instruments on the principle of equality between Member States must be taken into account. Footnote 149 Expenditure conditionality is inherently an asymmetric instrument of governance and has a disproportionate impact in Member States, as it carries more weight vis-à-vis Member States receiving larger amounts of EU funds than those contributing significantly to the EU budget. Footnote 150 Finally, this was precisely the idea behind the rule of law proposal, although it cannot be explicitly formulated in the regulation for obvious reasons: to force Hungary and Poland – two of the largest recipients of EU funds – to comply with the “requirements of the EU rule of law” by threatening them with suspension of EU funding. In other words, while formal equality is always guaranteed because regulations containing conditionality clauses, including footnote 151 on the rule of law or the CPR, apply to all Member States, the situation is different from the point of view of substantive equality. Resources are unevenly distributed among Member States in order to achieve their objectives, including the promotion of solidarity and cohesion, footnote 152 and the link between other objectives – such as the protection of the rule of law or compliance with macroeconomic requirements – with these funds carries certain risks. First, such instrumental use of EU funds could ultimately have led to a misunderstanding of what these funds represent. They are not a form of charity between `Western` and `Eastern` Member States, but crucial support for the functioning of the internal market and for the balanced and fair functioning of economic governance. Footnote 153 Moreover, as Goldner Lang noted, adding additional targets to these funds can “indirectly modify and expand the objectives of EU funds” and even “contribute to the persistent backwardness of underdeveloped regions, leading to new divergences between EU member states and regions – rather than promoting cohesion.” Footnote 154 The measures to suspend funds could therefore have achieved even the totally opposite objective of the underlying policy and further widened the gap between the more developed and less developed regions of the EU, footnote 155, ultimately undermining substantive equality between Member States.