A bridge too far? The Commission’s Rule of law Report and budget conditionality

The European Commission’s Annual Rule of Law Report (ARoLR) is an element in the ‘preventive’ arm of the EU’s toolbox to safeguard the observance of the rule of law. The ARoLR monitors member-states’ performance on several rule of law elements and raises concerns over breaches. Since its inception in 2020, the ARoLR has seen development in terms of including country-specific recommendations and a refinement of its methodology and scope. Yet, a key shortcoming of the ARoLR remains its weak link with the punitive arm of the EU toolbox, especially budget conditionality. While there are strong functional arguments for such a link and while the Commission has repeatedly announced its intention to strengthen the integration of the ARoLR and budgetary procedures, progress is limited to non-existent. Building on documentary analysis and elite interviews, this paper reviews the linkages between the ARoLR and the EU budget and discusses the reasons for the linkages to remain feeble. The paper first explores the feeble influence of country-specific ARoLR findings on discourses and decisions in the context of the European Semester and the adoption of national recovery and resilience plans. Next, the paper seeks to explain this finding by pointing to weaknesses in the ARoLR methodology, lacking transparency and publicity of the ARoLR as well as political opposition in the Council towards strengthening linkages between the report and the budget. A final section explores the likelihood for the current situation to change in the future.