Rule of Law Conditionality

Over the last decade, the European Union’s (EU) rule of law instruments have grown exponen- tially. This development was commensurable to the rule of law challenges that the EU faced from several Member States – Hungary and Poland being the main perpetrators. However, more instruments have not led to better results. As Christina Fasone points out, ‘[t]he growing set of rule of law instruments is not necessarily promoting better results, as the detachment between the theory and the practice of the rule of law seems to prove.’ As a result, financial conditionality has become the EU’s instrument of choice to safeguard the rule of law in the Member States. This chapter analyses the main conditionality instrument that the EU adopted at the end of 2020 – the Regulation (EU) 2020/2092 on a general regime of conditionality for the protection of the Union budget (the Conditionality Regulation).4 The chapter argues that due to the failure of legal mechanisms and lack of political will, the EU has shifted rule of law protection to the budgetary realm. With the Conditionality Regulation, the EU walks a fine line by protecting fundamental values via budgetary means. In the short term, this strategy seems to work. In the long term, however, it must be proven to be sustainable