EUCO Debrief February 2024

Some of them, such as the EU Justice Scoreboard, allow the Commission to monitor the state and the functioning of the national judicial systems; others, like the European Semester or the Annual Rule of Law Report, provide recommendations to strengthen the efficiency, quality, and independence of the justice systems in all EU Member States. [...] By the end of 2022, the EU was withholding money from Hungary on three accounts - the budget conditionality mechanism, the Recovery and Resilience Funds and the horizontal principles of the Multiannual Financial Framework - that could not be completely separated from each other, and the aspect of the protection of the rule of law was present in all of them. [...] The ECJ has clarified that only the violations that “are relevant to the sound financial management of the Union budget or to the protection of the financial interests of the Union” come within the scope of the regulation. [...] Although this mechanism can be applied only when rule of law infringements risk hampering the financial interests of the Union, the use of economic sanctions to increase the respect of the rule of law has been boosted in the aftermath of the COVID-19 pandemic. [...] More specifically, in the European Council conclusions from 17-21 July 2020, it was noted that the “Union’s financial interests shall be protected in accordance with the general principles embedded in the Union Treaties, in particular the values in Article 2 TEU,” and that the protection of the financial interests of the EU is to be tied to the respect of the rule of law.