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Press release: 16 February 2022
The Court of Justice of the European Union dismissed today the requests of Poland and Hungary to get rid of EU rules that allow for the suspension of EU funds when Member States breach rule of law principles.
ClientEarth lawyers have applauded this decision which reaffirms that respect for the rule of law is fundamental to access EU money.
The EU conditionality regulation safeguards the core values of the European Union and allows EU funds to be blocked in cases of breach of the rule of law.
But Poland and Hungary, which are both currently facing an infringement procedure for violating EU rule of law principles, argued that this mechanism goes against the EU Treaties.
This Court ruling may trigger the EU to activate this conditionality mechanism and deny the two countries billions of euros of EU funding.
Head of ClientEarth Poland Zuzanna Rudzińska-Bluszcz said:
“EU countries must urgently act to tackle climate change. Climate action will not be possible without enormous funds for green transformation or without empowered citizens enjoying the freedom and rights of a proper democracy.
“The conditionality mechanism helps to defend the rule of law and a safe environment, and secures funds for green investments and energy transition that might otherwise be misspent. Without these funds, the green transformation will not be possible. ”
Poland is violating EU rule of law principles for - among other - having lifted the system of guarantees of judicial independence and politicised the prosecutor's office - the Minister of Justice and the Prosecutor General being currently the same person.
Lawyers argue that the lack of an independent judiciary system is posing serious risks of misuse of EU funds.
The general regime of conditionality for the protection of the EU budget (also known as the conditionality regulation) is in force since January 1st, 2021. It is a response to the non-compliance with the standards and values of the Union by some Member States, mainly Poland and Hungary, and the lack of effectiveness of the instruments used so far, such as the infringement procedure of Art. 258 of the Treaty on the Functioning of the European Union, or the procedure under Art. 7.
Measures under the conditionality regulation can only be proposed if the Commission finds out that breaches of the rule of law principles directly affect or seriously risk affecting the sound financial management of the Union budget or of the financial interests of the Union in a sufficiently direct way. Under the conditionality regulation, the Commission will propose appropriate and proportionate measures to the Council in case rule of law breaches in a given Member State threaten the EU financial interests. The Council will then take a final decision on the proposal of measures.
In case of infringement, the Member State must face financial penalties. It cannot pass the fines on to citizens and is obliged to pay out guaranteed funds, such as farming direct payments.
ClientEarth is a non-profit organisation that uses the law to create systemic change that protects the Earth for – and with – its inhabitants. We are tackling climate change, protecting nature and stopping pollution, with partners and citizens around the globe. We hold industry and governments to account, and defend everyone’s right to a healthy world. From our offices in Europe, Asia and the USA we shape, implement and enforce the law, to build a future for our planet in which people and nature can thrive together.