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The Exclusivity of the Article 7 Procedure in Protecting the Rule of Law? Some Reflections on the CJEU’s Rulings on the Conditionality Regulation


In recent years, the monitoring of the rule of law in the Member States has moved to the forefront of the EU institutional agenda, particularly within the European Commission (hereinafter: the Commission), which has developed a range of instruments to address emerging challenges. The EU’s so-called Rule of Law Toolbox comprises of hard, Treaty-based procedures and newer, soft law mechanisms that aim to respond to rule of law challenges in the Member States.[i] First, infringement procedures as laid down in Article 258 of the Treaty on European Union (TEU) may also be used to address rule of law related issues, such as the independence and impartiality of courts. Furthermore, Article 7 of the TEU envisages an instrument specifically designed to sanction serious breaches of the values enshrined in Article 2 of the TEU, including the rule of law, by, for instance, the suspension of voting rights of the representative of the government of the Member State. In addition to the so-called “nuclear option” of Article 7,[ii] the Commission launched the rule of law framework in 2014, an early-warning tool aimed at preventing the Article 7 procedure. Furthermore, since 2020, the Commission prepares a Rule of Law Report with country-specific recommendations, in the framework of the rule of law mechanism. Remarkably, this tool also plays an important role in the enlargement procedure, as it also covers four EU candidate states since 2024 (Albania, North-Macedonia, Montenegro, and Serbia). The EU’s Rule of Law Toolbox further includes the EU Justice Scoreboard and the European Semester as tools for the prevention of problems.

Against this background, in 2018, the Commission proposed a new mechanism to protect the EU budget in case of generalised deficiencies. According to the Explanatory Memorandum of the proposal,[iii] the EU should be granted the possibility to adopt appropriate measures in case generalised rule of law deficiencies risk the Union’s financial interests. The Commission’s proposal served as a starting point for the adoption of Regulation 2020/2092 on a general regime of conditionality for the protection of the Union budget, the so-called Conditionality Regulation, which is in force since 2021.[iv] The Regulation envisages the suspension of EU funds for a Member State, if the breaches of the principles of the rule of law affect or seriously risk affecting the sound financial management of the Union budget or the protection of the financial interests of the EU. Furthermore, the Conditionality Regulation is also remarkable for being the first binding piece of EU legislation to provide a definition of the rule of law. Notably, Article 2 of the Regulation provides that the rule of law, as referred to in Article 2 of the TEU includes the principles of legality implying a transparent, accountable, democratic and pluralistic law-making process; legal certainty; prohibition of arbitrariness of the executive powers; effective judicial protection, including access to justice, by independent and impartial courts, also as regards fundamental rights; separation of powers; and non-discrimination and equality before the law.

In this light, it is worth therefore examining the relationship and the compatibility of the Conditionality Mechanism with the Article 7 procedure, particularly from the point of view of EU institutions’ competencies in monitoring and sanctioning the rule of law in Member States.


The Conditionality Mechanism in the EU’s Rule of Law Toolbox – The CJEU’s Approach


The compatibility of Regulation 2020/2092 with the procedure established in Article 7 of the TEU was subject to two CJEU rulings. Namely, on 11 March 2021, both Hungary and Poland brought an action for annulment under Article 263 of the TFEU, seeking the annulment of the mentioned Regulation. The Court adopted the judgments in C-156/21(Hungary v European Parliament and Council of the European Union) and C-157/21 (Republic of Poland v European Parliament and Council of the European Union) on 16 February 2022.

Both claims contested the legal basis of the Regulation, also arguing its incompatibility with the Article 7 procedure, as it is the only Treaty provision on the basis of which it may be determined that there is a risk of a serious breach of the rule of law, and, based on this Article, such a breach can be determined only by the European Council. Thus, it was argued that the Regulation circumvents the Article 7 procedure and establishes a parallel mechanism to address rule of law issues.[v]

The CJEU acknowledged that the EU legislature cannot establish, without infringing Article 7, a parallel procedure having the same subject matter, pursuing the same objective and allowing the adoption of identical measures. However, the Court noted that it is permissible for the EU legislature to establish other procedures in secondary legislation that are related to the values contained in Article 2 of the TEU, provided that such procedures are different, in terms of their aim and subject matter, from the Article 7 procedure. Notably, the Court referred to its earlier case law by analogy where it established that two procedures were independent of each other as they served different aims and were subject to different rules, although these cases did not concern the rule of law but agricultural issues.[vi]

Regarding the aim of the Conditionality Mechanism, the Court found that it was to ensure the protection of the Union budget in the event of a breach of the principles of the rule of law, and not to penalise such serious and persistent breaches. Furthermore, the Court pointed out that the subject matter of the two procedures was also different, as the Article 7 procedure allows the assessment of all breaches of the values contained in Article 2 of the TEU, whereas the Conditionality Mechanism covers only the rule of law, in so far as its breaches have budgetary implications.

Thus, the Court confirmed the compatibility of the Conditionality Mechanism with the Article 7 procedure by finding that the two mechanisms are different in subject matter and pursue different aims. However, even a few years later, certain considerations may still be raised. First, regarding the subject matter, it can be noted that, although the Article 7 procedure addresses serious breaches of the values contained in Article 2 of the TEU, not only the rule of law, it has been triggered in practice only in connection with the rule of law: in 2017 against Poland and in 2018 against Hungary. While the procedure against Poland ended in 2024, it is still ongoing against Hungary, along with the Conditionality Mechanism that was launched in 2022. Furthermore, it is also worth noting that the Commission’s abovementioned rule of law framework intended to prevent the Article 7 procedure specifically focuses on the rule of law – as the title suggests – and not on other values. Second, the fact that the Conditionality Regulation is the first Regulation (thus, a binding legal source) that defines the rule of law is certainly remarkable. Furthermore, regarding the aims, it is worth noting that both mechanisms project strong sanctions: the suspension of voting rights in the Council in the Article 7 procedure and the suspension of EU funds in the Conditionality Mechanism. However, the latter mechanism does not aim to restore the rule of law situation in the Member State but to protect the financial interests of the EU against alleged breaches of the rule of law.

In light of the above, it can be concluded that while the Article 7 procedure remains central in the EU’s Rule of Law Toolbox, the CJEU confirmed that it may not be the only path to adopt hard law sanctions against a Member State based on the rule of law. The judgments, therefore, may open the door to further parallel mechanisms that risk blurring the limits of competencies enshrined in the Treaties.


[ii] See the speech of the President of the Commission, José Manuel Durão Barroso in 2012: https://ec.europa.eu/commission/presscorner/detail/en/SPEECH_12_596 (Accessed: 31 March 2026).

[iv] 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.

[v] Judgment of the Court (Full Court) of 16 February 2022.Hungary v European Parliament and Council of the European Union, ECLI:EU:C:2022:97, paras. 67-96; Judgment of the Court (Full Court) of 16 February 2022.Republic of Poland v European Parliament and Council of the European Union, ECLI:EU:C:2022:98, paras. 63-110.

[vi] Hungary v European Parliament and Council of the European Union, paras. 155-198 and Republic of Poland v European Parliament and Council of the European Union paras. 191-229. See in particular, paras. 168 and 207, respectively.

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