"ReDCE Especial The rule of Law 1/2024 (Francisco Balaguer Callejón and Miguel Azpitarte ed.)"
"ReDCE Especial The rule of Law 1/2024 (Francisco Balaguer Callejón and Miguel Azpitarte ed.)"
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The European Union exists essentially as a community of law and values. The European Coal and Steel Community of 1951 already had a parliament, a council of representatives of the Member States, an executive body and a court of justice in line with a democratic separation of powers based on the rule of law. The European Economic Community of 1957 was intended to lay the foundations for an even closer union of the participating nations. Since 1992 the European Union has developed principles of democracy, the rule of law and fundamental rights.
Gradually it has grown into a Union of law which, together with its Member States, is based on the aforementioned values. These include, in particular, human dignity, freedom and equality, democracy and the rule of law, and respect for human rights. These common values are supplemented and specified by the fundamental rights as guaranteed in the Charter of Fundamental Rights of the European Union, in the European Convention on Human Rights and in the constitutional traditions common to the Member States. The Union must also respect the equality of the Member States before the treaties and their national identities. On the other hand, it can suspend certain rights of a Member State that seriously and persistently violates common values. The Member State concerned, in turn, can withdraw from the Union at its own request, but cannot be forced to do so.[01]
For the effective enforcement of its law, especially its common values, the Union has various instruments at its disposal, in particular legal protection by institutions and procedures, imposition of sanctions on Member States and imposition of sanctions on public and private individuals.
2.1. Legal instruments and institutions
For their observance and protection, the common values require institutions with effective enforcement powers. The separation of powers between legislative, executive and judicial institutions of government as well as between central and regional institutions has proven its valuable support of a sustainable democracy. In addition, all government institutions, and also all private individuals, are obliged to observe the common values as required by law.[02]
The institutions of the Union and of the Member States and, in the last instance, the Court of Justice of the Union are entrusted with safeguarding these common values. The citizens of the Union are also actively involved by participating in the election of the parliament, the European citizens' initiative and the use of judicial protection. The Union relies solely on law instruments to enforce its fundamental rights and values. It has no sovereign means to execute its law by force if necessary. In this respect, it is dependent on the Member States and their representatives in the Council and the European Council.
In a democratic system of separation of powers and based on the rule of law, the decisive function of law is entrusted to the judiciary. In unclear or controversial cases, the courts have the "last word" and thus the responsibility to find a solution conforming to the law. The associated trust in the decision-making power of the "final instance" requires its highest possible organizational and personal quality, especially as regards the competence and independence of the judges.
2.2. Recourse to judicial protection.
In case of violation of their fundamental rights, the persons concerned are entitled to legal protection by the courts of the Member States and by the Court of Justice of the Union. The national courts are responsible for the observance of national and European fundamental rights, the Court of Justice in the last instance for the observance of European fundamental rights. The protection of fundamental rights by the Court of Justice is essentially guaranteed by three types of proceedings. The infringement action makes it possible to review violations of Union law by Member States. The Commission and the other Member States may bring an action, but not private individuals. The actions for annulment and for failure to act make it possible to review infringements of Union law by Union institutions. The Member States, other Union institutions and also private individuals are entitled to bring an action. The preliminary ruling procedure serves to promote cooperation and coordination between the courts of the Member States and of the Union.[03]
A national court has the right and, if it is the court of last instance, the obligation to refer questions concerning the interpretation of Union law to the Court of Justice. Subsequently, it decides on the application of Union law in the specific case. If a judgment of the Court of Justice finds that a Member State has failed to fulfil its obligation, the Member State is obliged to remedy the situation without delay. If the judgment is not complied with, the Commission can refer the matter to the Court a second time and obtain an order that the Member State pay a financial penalty.
In 2020, the Commission received 3727 new complaints about treaty infringements by Member States, including 1243 from the public for violations in the areas of justice and consumers. The Commission opened 903 new infringement cases, including 12 before the Court of Justice. The Court ruled on 28 cases, 27 of which were in favor of the Commission.[04] In the area of common values, in particular the rule of law, the Court proceedings since 2018 included the independence of the courts,[05] the freedom of expression,[06] the right to private life,[07] the relocation of third-country nationals between Member States,[08] equal treatment at work[09] and data protection.[10]
3.1. Imposition of penalty payment and lump sum.
Financial sanctions against Member States were introduced in 1992 by the Maastricht Treaty.[11] Previously, in the event of infringements by a Member State, the Commission could only bring an action before the Court of Justice. In the event of non-compliance with the judgment, further proceedings were therefore increasingly necessary. However, all judgments had only declaratory effect and could not be enforced against the will of the Member State. In 2020, two secondary proceedings still had to be initiated for 112 judgments that had not been implemented.[12]
If a judgment of the Court of Justice is not complied with, the Court may now, at the request of the Commission, impose a daily penalty payment or a lump sum payment on the Member State concerned. The sanction procedure thus complements the infringement procedure. The imposition of a penalty payment serves as a means of pressure to end the infringement as soon as possible. The imposition of a lump sum is intended to act as a deterrent, in particular to prevent similar breaches from happening again. Fault on the part of the Member State or other justifications are irrelevant. On the contrary, due to their autonomy, the Member States are solely responsible for enforcing Union law.[13]
The scope and amount of the financial sanctions depend on the seriousness and duration of the violation of the law and the solvency of the Member State. In order to ensure transparency and legal certainty, the Commission, with the approval of the Court of Justice, has specified the procedure for calculating the financial penalties. In 2022, the penalty payment for each day of delay can be between around EUR 200 and EUR 13,100 in the case of Malta and between around EUR 13,600 and EUR 820,000 in the case of Germany. The lump sum is based on a fixed minimum amount between around EUR 165,000 for Malta and EUR 10,200,000 for Germany.[14]
In practice, financial sanctions, sometimes of considerable amounts, have been imposed. Examples of lump sums are Italy (EUR 60 million), Greece (EUR 35 million) and Spain (EUR 33 million), of penalty payments for each half-year of further non-compliance with the judgment Poland (EUR 90 million), Italy (EUR 77 million), Greece (EUR 28 million) and Spain (EUR 15 million). The main reasons were deficiencies in waste and wastewater disposal. Under other treaty provisions, the Council fined Spain[15] and Austria[16] EUR 19 million and EUR 27 million, respectively, for manipulating deficit data. Furthermore, Portugal[17] and Spain[18] narrowly escaped fines of around EUR 360 and EUR 2.000 million, respectively, for failing to take effective action to correct their excessive deficits.
The judgments of the Court of Justice of the Union are generally enforceable. It is disputed whether enforcement can also take place against Member States, but it is not excluded and should therefore be possible. Enforcement is governed by the rules of civil procedure of the Member State in whose territory it takes place. If enforcement is not successful, it would be possible to offset the amount owed by the Member State against an amount the Union owes the Member State. Although the compulsory enforcement of amounts owed is controversial, the financial sanction procedure has proven to be successful in principle. As far as can be seen, the Member States have made the payments imposed on them. In the budget years 2020 and 2021, the Union’s revenue from these sanctions totaled around EUR 139 million and EUR 61 million, respectively.[19]
3.2. Limitation of rights of Member States.
Since the Amsterdam Treaty, the Council of the Union can decide to suspend certain rights of a Member State resulting from its membership in the Union.[20] This applies in the event of a serious and persistent breach by the Member State of the common values of the Union, in particular democracy, the rule of law and fundamental rights.
On the one hand, the Council, acting by a four-fifths majority after Parliament has given its consent, may decide, on a reasoned proposal by a third of the Member States, Parliament or the Commission, that there is a clear risk of a serious breach by a Member State of the values of the Union. On the other hand, the European Council, acting unanimously on a proposal by one third of the Member States or the Commission and after Parliament has given its consent, may determine the existence of a serious and persistent breach of the values of the Union by a Member State. Subsequently, the Council, acting by a qualified majority, may decide to suspend certain rights of the Member State, taking into account the possible impact on the rights and obligations of natural and legal persons.[21]
Except for the right to vote in the Council, the rights that can be suspended are not specified. However, the treaty obligations of the Member State concerned remain binding. In the event of subsequent changes in the situation, the Council, acting by a qualified majority, may modify or revoke the measures taken. An exclusion of the Member State from the Union cannot be inferred from this sanction. At most, it could be considered because of a material breach of a treaty under the Vienna Convention on the Law of Treaties.[22]
3.3. Suspension of payments from the European Union budget.
From the beginning of the year 2021, in addition to the fines and legal restrictions imposed on them, the Member States can also be deprived of funding from the Union budget for breaches of the rule of law. In 2014, at the request of Parliament and the Council, the Commission presented a new Union framework to strengthen the rule of law.[23] This was intended to fill a gap by averting dangers to the rule of law in the Member States before the conditions for a limitation of the rights of the Member States were reached.
Following several recommendations regarding the rule of law in Poland,[24] the Commission submitted a proposal for a Council decision on the determination of a clear risk of a serious breach of the rule of law by the Republic of Poland.[25] Specifically, it concerned the independence of the judiciary in Poland. Parliament agreed with the Commission and called on the Council to determine a corresponding threat to the constitutional and electoral system, the independence of the judiciary and numerous fundamental rights in Hungary.[26] A lawsuit against this request filed by Hungary before the European Court of Justice was unsuccessful.[27]
In 2020, Parliament was critical of the hearings started by the Council but not disclosed to Parliament in the cases against Poland and Hungary sought by the Commission and Parliament.[28] Furthermore, in its 2020 Rule of Law Report, the Commission found that the independence and hence the effectiveness of the judiciary was also a concern in Member States other than Poland and Hungary, such as Bulgaria, Croatia, Romania and Slovakia.[29] Finally, in July 2020, the European Council stated that the Union's financial interests should be protected, in line with the common values of the Union, in particular respect of the rule of law.[30]
As early as 2018, the Commission – based in particular on the duty of sound financial management – proposed a regulation on the protection of the Union budget.[31] The regulation was to apply in the event of general deficiencies as regards the rule of law in the Member States. A general deficiency was understood as a widespread or recurring misconduct by public authorities that impair the rule of law. This included endangering the independence of the courts, impeding the prevention, correction and punishment of illegal public decisions or limiting the accessibility and effectiveness of the legal recourse. Other provisions were to regulate the possible sanctions and the procedure.
At the end of 2020, Parliament and the Council – with the exception of Poland and Hungary – agreed, in accordance with the European Council and the Commission, on the “Regulation on a general regime of conditionality for the protection of the Union budget”.[32] It largely follows the Commission's original proposal, but drops the term general deficiencies. Also, the protective measures are decided by the Council with a qualified majority and not just rejected with a "reverse" qualified majority.
Following the conclusions of the European Council of December 2020, the Commission also intended to draw up guidelines for the application of the regulation in close consultation with the Member States. However, if a Member State were to bring an action for annulment of the regulation, the guidelines would be finalized only after the decision of the Court of Justice; nor would the Commission propose any measures under the regulation before the guidelines were finalized.[33]
Poland and Hungary brought an action for annulment of the regulation before the Court of Justice on March 31, 2021.[34] Parliament took the view that the regulation, which came into force at the beginning of 2021, is directly applicable and that this cannot be made dependent on the adoption of guidelines to be drawn up by the Commission. It called on the Commission to apply the regulation as soon as possible and referred to the possibility of an action for failure to act,[35] which it did bring before the Court of Justice on October 29, 2021.[36] It also criticized the Commission's draft guidelines.[37]
On February 16, 2022, the actions of Poland and Hungary were dismissed by the Court of Justice (Full Court).[38] In its extensive reasoning, the Court states in detail that, contrary to the allegations of the applicants, the regulation was not enacted without the necessary competence (legal basis, form of action) of the Union nor against the legal principles of the Union to be observed, such as subsidiarity and proportionality, national competence and identity, individual authorization and legal certainty. On March 2, 2022, the Commission published the guidelines on the application of the conditionality regulation.[39]
The aim of the regulation is to protect the Union budget – including the Covid recovery instrument "NextGenerationEU"[40] – in the case of breaches of the principles of the rule of law in the Member States, in particular the independence of the judiciary and access to legal remedies. The breaches must sufficiently affect the sound financial management of the Union budget (Art. 317 TFEU) or the financial interests of the Union (Art. 325 TFEU). Even if the new term "breaches" is to be understood more narrowly than the term "general deficiencies" in the proposal of the Commission, it may serve as a preliminary step to a restriction of the rights of the Member State according to Art. 7 TEU, which requires a serious breach of the Union values by the Member State.[41]
The sanctions against a Member State for breaches affecting the budget or the financial interests of the Union must be proportionate to the nature, duration, gravity and scope of the misconduct, include the suspension of payments from the Union budget, the prohibition of entering into new legal commitments and the suspension of the approval of programs or commitments. Moreover, in principle, a sanction measure does not release the Member State from its obligation to continue implementing the affected program and, in particular, to make payments to the beneficiaries. The decision on sanctions shall be taken by the Council, acting on a proposal from the Commission and after informing the Member State and Parliament. No later than one year after the adoption of the sanctions, a reassessment shall be made by the Commission with the aim of proposing to the Council that the measures be adapted or lifted.
According to the case-law of the Court of Justice, sanctions for infringement of fundamental rights, such as the right to an effective judicial remedy, may also be imposed on individual public officials, if their authority persistently refuses to comply with a clear and unconditional obligation arising from Union law. This applies even to the imposition of imprisonment, if there is a sufficiently precise and recognizable legal basis for this in the law of the Member State. In addition, particular attention must be paid to the right to liberty and security guaranteed in the EU Charter of Fundamental Rights and to the limits specified in the explanations relating to the Charter.[42]
Sanctions against private individuals also serve to enforce Union law and, indirectly, to protect fundamental rights. Sanctions have proven necessary, in particular, to protect the Union's financial interests. They are also used in other areas to enforce Union law, such as the environment, the internal market, undistorted competition or counterfeiting.
Sanctions against private individuals can also be applicable in the event of a violation of the fundamental rights of other private individuals. For example, the EU Charter of Fundamental Rights protects the right of workers to limitation of their working hours, certain rest periods and paid annual leave, not only in relation to public but also in relation to private employers.[43]
Insofar as Union law does not contain its own provisions on sanctions, the Member States are obliged to take all appropriate measures to ensure the full effectiveness of Union law and thus also the protection of fundamental rights.[44] Sanctions against private individuals include all measures for the effective enforcement of the protection of fundamental rights, in particular those that entail negative financial or economic consequences for the person concerned or even a prison sentence.
Resumen: Ya desde sus inicios, la Unión Europea surge como una comunidad de derecho y valores. Además, con el tiempo ha ido creando nuevos instrumentos para garantizar el respeto por estos postulados. Concretamente, mediante instrumentos jurídicos de protección, así como la posibilidad de imponer sanciones por vulneración de estos principios.
Respecto a los instrumentos legales e institucionales, la ciudadanía de la Unión Europea cuenta con la posibilidad de participar directamente, vía elecciones al Parlamento Europeo, así como con la vía jurisdiccional del Tribunal de Justicia de la Unión Europea. Por otro lado, se han generado instrumentos de imposición de multas a los Estados, limitación de la participación de los Estados miembros, además de la novedosa suspensión de ayudas de fondos “NextGenerationEU”. Además de existir la posibilidad de aplicar sanciones contra particulares y organismos oficiales vía TJUE.
Palabras claves: Valores comunes de la UE; instrumentos legales; protección judicial; sanciones; multas; limitación de derechos; suspensión de ayudas.
Abstract: From its very beginnings, the European Union was established as a community of law and values. In addition, over time it has created new instruments to ensure respect for these principles. Specifically, through legal instruments of protection, as well as the possibility of imposing sanctions for violations of these principles.
Regarding legal and institutional instruments, the citizens of the European Union have the possibility of participating directly, through elections to the European Parliament, as well as through the jurisdictional protection of the Court of Justice of the European Union. On the other hand, instruments have been created to impose fines on the States, limit the participation of the Member States, as well as the novel suspension of aid from “NextGenerationEU” funds. There is also the possibility of applying sanctions against individuals and official bodies via the CJEU.
Key words: Common values of the EU; legal instruments; judicial protection; sanctions; penalty pay; limitation of rights; suspension of payments.
Recibido: 2 de mayo de 2024
Aceptado: 2 de mayo de 2024
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[01] Art. 2, 4, 7 and 50 TEU.
[02] For example, the preamble of the EU Charter of Fundamental Rights: "Enjoyment of these rights entails responsibilities with regard to other persons, to the human community and to future generations."
[03] Art. 258, 263, 265 and 267 TFEU.
[04] Commission Staff Working Document, Monitoring the application of European Union law – 2020 Annual Report, SWD(2021) 212, p. 15 et seq.
[05] ECJ, C-192/18 (Commission v Poland), ECLI:EU:C:2019:924; ECJ, C-272/19 (VQ v Land Hessen), ECLI:EU:C:2020:535; ECJ, C-354/20 PPU (L and P), ECLI:EU:C:2020:1033; ECJ, C-748/19 (Prokuratura Rejonowa), ECLI:EU:C:2021:931; ECJ, C-357/19 (Euro Box Promotion), ECLI:EU:C:2021:1034; ECJ, C-430/21 (RS), ECLI:EU:C:2022:100.
[06] ECJ, C-625/17 (Vorarlberger Landes- und Hypothekenbank), ECLI:EU:C:2018:939.
[07] ECJ, C-310/16 (Dzivev), ECLI:EU:C:2019:623.
[08] ECJ, C-715/17, C-718/17, C-719/17 (Commission v Poland, Commission v Hungary, Commission v Czech Republic), ECLI:EU:C:2020:257.
[09] ECJ, C-507/18 (NH), ECLI:EU:C:2020:289.
[10] ECJ, C-511/18 (La Quadrature du Net), ECLI:EU:C:2020:791.
[11] Art. 171 EC Treaty; now Art. 260 TFEU.
[12] Commission Staff Working Document, Monitoring the application of European Union law - 2020 Annual Report, SWD(2021) 212, p. 25.
[13] ECJ, C-828/18 (Commission v Slovenia), ECLI:EU:C:2021:1; ECJ, C-658/19 (Commission v Spain), ECLI:EU:C:2021:138.
[14] Commission, Updating the data for calculating the lump sums and penalties proposed by the Commission to the Court of Justice of the European Union, OJ 2022 C 74/2.
[15] Council Decision (EU) 2015/1289 of 13 July 2015 imposing a fine on Spain for the manipulation of deficit data in the Autonomous Community of Valencia, OJ 2015 L 198/19.
[16] Council Implementing Decision (EU) 2018/818 of 28 May 2018 imposing a fine on Austria for the manipulation of debt data in Land Salzburg, OJ 2018 L 137/23.
[17] Council Implementing Decision (EU) 2017/2350 of 9 August 2016 on imposing a fine on Portugal for failure to take effective action to address an excessive deficit, OJ 2017 L 336/24.
[18] Council Implementing Decision (EU) 2017/2351 of 9 August 2016 on imposing a fine on Spain for failure to take effective action to address an excessive deficit, OJ 2017 L 336/27.
[19] Final Decree (EU, Euratom) 2022/182 of the general budget of the European Union for the financial year 2022, OJ 2022 L 45/110.
[20] Art. 7 EU Treaty of 1997 (Amsterdam); now Art. 7 TEU and Art. 354 TFEU of 2007 (Lisbon).
[21] For the voting procedure – without the participation of the Member State concerned – see Art. 354 TFEU.
[22] Art. 60 Vienna Convention on the Law of Treaties (VCLT) of 1969.
[23] Commission,A New EU Framework to strengthen the Rule of Law, COM(2014) 158; endorsed by ECJ, C-619/18 R (Commission v Poland), ECLI:EU:C:2018:1021.
[24] Commission, Recommendation (EU) 2017/1520 of 26 July 2017 regarding the rule of law in Poland complementary to Recommendations (EU) 2016/1374 and (EU) 2017/146, OJ 2017 L 228/19.
[25] Commission, Proposal [based in particular on Art. 7(1) TEU] 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.
[26] European Parliament, Resolution of 1 March 2018 on the Commission's decision to activate Art. 7(1) TEU as regards the situation in Poland (P8_TA(2018)0055); European Parliament, Resolution of 12 September 2018 on a proposal calling on the Council to determine, pursuant to Art. 7(1) of the Treaty on European Union, the existence of a clear risk of a serious breach by Hungary of the values on which the Union is founded (P8_TA(2018)0340).
[27] ECJ, C-650/18 (Hungary v European Parliament), ECLI:EU:C:2021:426.
[28] European Parliament, Resolution of 16 January 2020 on ongoing hearings under Art. 7(1) of the TEU regarding Poland and Hungary (P9_TA(2020)0014); European Parliament,Resolution of 17 September 2020 on the 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 (P9_TA(2020)0225).
[29] Commission, 2020 Rule of Law Report, COM(2020) 580, p. 12 et seq.
[30] European Council, Special meeting (17, 18, 19, 20 and 21 July 2020) – Conclusions, EUCO 10/20, para. 22 et seq.
[31] Art. 310, 317, 322 TFEU; Commission, Proposal for a regulation of the European Parliament and of the Council on the protection of the Union’s budget in case of generalized deficiencies as regards the rule of law in the Member States, COM(2018) 324; cf. also European Parliament, Legislative resolution of 4 January 2019 on the proposal for a regulation ... on the protection of the Union’s budget ... (P8_TA(2019)0349).
[32] Regulation (EU, Euratom) 2020/2092 of the European Parliament and of the Council of 16 December 2020 on a general regime of conditionality for the protection of the Union budget, OJ 2020 L 433 I/1; cf. also European Council, Conclusions (10 and 11 December 2020), EUCO 22/20, para. 1 et seq; Council, Adoption of the Council’s position at first reading … (14 December 2020), doc. 14018/20; European Parliament, Legislative Resolution of 16 December 2020 (P9_TA(2020)0356).
[33] European Council, Conclusions (10 and 11 December 2020), EUCO 22/20, p. 2.
[34] ECJ, C-156/21 (Hungary v Parliament and Council); ECJ, C-157/21 (Poland v Parliament and Council).
[35] European Parliament, Resolution of 25 March 2021 on the application of Regulation (EU, Euratom) 2020/2092: the rule-of-law conditionality mechanism (P9_TA(2021)0103); European Parliament, Resolution of 10 June 2021 on the rule of law in the European Union and the application of the Conditionality Regulation (P9_TA(2021)0287; European Parliament, The President, Letter to the President of the Commission, 23.06.2021, doc. D 303117.
[36] ECJ, C-657/21 (Parliament v Commission).
[37] European Parliament, Resolution of 8 July 2021 on the creation of guidelines for the application of the general regime of conditionality for the protection of the Union budget (P9_TA(2021)0348).
[38] ECJ, C-156/21 (Hungary v Parliament and Council), ECLI:EU:C:2022:97; ECJ, C-157/21 (Poland v Parliament and Council), ECLI:EU:C:2022:98; cf. also European Parliament, Rule of Law and the Consequences of the Judgment of the ECJ, Resolution of 10 March 2022 (P9_TA(2022)0074)._
[39] Commission, Guidelines on the application of the Regulation (EU, Euratom) 2020/2092 on a general regime of conditionality for the protection of the Union budget, C(2022) 1382.
[40] Council Regulation (EU) 2020/2094 of 14 December 2020 establishing a European Union Recovery Instrument to support the recovery in the aftermath of the COVID-19 crisis, OJ 2020 L 433 I/23.
[41] Cf. above, section III.2.
[42] ECJ , C-752/18 (Deutsche Umwelthilfe eV), ECLI:EU:C:2019:1114.
[43] Art. 31 EU Charter of Fundamental Rights; ECJ, C-569/16 and C-570/16 (Bauer and Willmeroth), ECLI:EU:C:2018:871.
[44] ECJ, C-418/11 (Texdata Software), ECLI:EU:C:2013:588; ECJ, C-535/15 (Pinckernelle), ECLI:EU:C:2017:315.
