The Rule of Law in the European Union: Judicial Independence, Article 7 TEU, and Enforcement Mechanisms

The Rule of Law in the European Union: Judicial Independence, Article 7 TEU, and Enforcement Mechanisms

1. Introduction

The rule of law is one of the foundational values of the European Union and a fundamental condition for the functioning of its legal and political system. It requires public authorities to exercise power within the limits established by law, subject to independent judicial control and meaningful accountability. Neither governments nor public institutions may exercise authority arbitrarily, and individuals must have access to effective remedies when their rights are infringed.

Within the European Union, the rule of law has a particularly important constitutional dimension. The Union is founded on the assumption that its Member States share certain fundamental values and that their legal systems provide sufficient guarantees of legality, judicial independence and effective protection of rights. These guarantees make possible the mutual recognition of judicial decisions, the uniform application of EU legislation and the operation of the internal market.

The principle is expressly recognised in Article 2 of the Treaty on European Union (TEU), which identifies the rule of law as one of the values on which the Union is founded. Article 7 TEU establishes procedures for responding to serious threats to those values, while Article 19 TEU requires Member States to provide effective judicial protection in the fields covered by EU law.

The Court of Justice of the European Union (CJEU) has played a decisive role in transforming these provisions into enforceable constitutional obligations. Its judgments have clarified that judicial independence is not simply a matter of national institutional preference. Member States may organise their own judicial systems, but they must ensure that courts responsible for applying EU law satisfy the requirements of effective judicial protection.

The Union has also developed several complementary enforcement mechanisms. These include infringement proceedings, the annual Rule of Law Report, the Commission’s Rule of Law Framework, the EU budget conditionality mechanism and procedures connected with the protection of the Union’s financial interests.

These instruments have different legal foundations and purposes. Some are preventive and political; others are judicially enforceable. Their combined operation reflects the EU’s attempt to protect its constitutional values without replacing the national constitutional systems of its Member States.

2. The rule of law as a foundational value under Article 2 TEU

Article 2 TEU provides that:

“The Union is founded on the values of respect for human dignity, freedom, democracy, equality, the rule of law and respect for human rights, including the rights of persons belonging to minorities.”

The provision identifies the fundamental values that define the constitutional identity of the European Union. It also establishes the normative basis for the relationship between the Union and its Member States.

The rule of law cannot be understood in isolation from the other values listed in Article 2. Democracy requires that public authority derives from legitimate constitutional arrangements and that political power remains accountable. Equality requires that public institutions apply the law without arbitrary distinctions. Fundamental rights require that governmental action respects legally protected individual freedoms. Judicial independence ensures that disputes concerning the exercise of public power can be resolved impartially.

The rule of law therefore operates as a structural principle connecting legality, democracy, institutional accountability and the protection of rights.

Although the Treaties do not provide a single exhaustive definition, the EU institutions and the CJEU have identified several essential components:

• Legality, including transparent, accountable, democratic and pluralistic law-making.
• Legal certainty, requiring laws to be clear, accessible and reasonably foreseeable.
• Prohibition of arbitrary exercise of executive power.
• Effective judicial protection by independent and impartial courts.
• Respect for fundamental rights.
• Equality before the law.
• Separation of powers and institutional checks and balances.

These elements are interdependent. Legislation may be formally valid but still undermine the rule of law if it allows arbitrary executive interference with judicial proceedings. Similarly, an independent judiciary cannot provide meaningful protection if its decisions are systematically disregarded or if individuals cannot obtain access to an effective remedy.

The rule of law also has an institutional dimension. Public authorities must operate within their legally defined competences, and their decisions must be capable of review where the legal system requires it.

The principle applies to the Union institutions themselves as well as to the Member States. EU institutions must respect the Treaties, fundamental rights and the limits of their conferred powers. Member States must respect the same foundational values when exercising their own public authority, particularly where their actions affect the application of EU law.

Article 2 is therefore more than a political declaration. The CJEU has recognised that it provides the constitutional foundation for more specific obligations contained elsewhere in the Treaties, particularly Article 19 TEU.

The provision can be consulted in the consolidated Treaty on European Union.

3. The relationship between Article 2 and Article 19 TEU

Article 2 establishes the rule of law as a foundational value. Article 19 gives that value concrete legal expression in the field of judicial protection.

Article 19(1) TEU provides that the Court of Justice of the European Union shall ensure that the law is observed in the interpretation and application of the Treaties. It further requires Member States to provide remedies sufficient to ensure effective legal protection in the fields covered by Union law.

The second requirement is particularly important. EU law is not applied exclusively by EU institutions or courts. National courts are responsible for resolving a substantial proportion of disputes involving EU legislation, Treaty provisions and rights derived from Union law.

The effectiveness of the EU legal order consequently depends on the independence and impartiality of national courts.

If a national court is subject to political instructions, arbitrary disciplinary proceedings or external pressure, individuals may be unable to obtain effective judicial protection. The uniform application of EU law may also be compromised because national judges must be able to interpret and apply EU provisions independently.

Article 19 therefore creates an obligation for Member States to maintain judicial systems capable of providing effective protection in the fields covered by EU law.

The importance of this provision is that its scope is not identical to the scope of the Charter of Fundamental Rights.

Article 51 of the Charter generally applies to Member States when they are implementing EU law or otherwise acting within its scope. Article 19(1) TEU has a broader institutional reach: it applies to national courts and tribunals that may rule on questions concerning the application or interpretation of EU law, irrespective of whether the particular national measure implements EU law in the narrower sense of Article 51.

This distinction was central to the CJEU’s judgment in Associação Sindical dos Juízes Portugueses (Case C-64/16).

The Court explained that the requirement of effective judicial protection derives from the constitutional traditions common to the Member States, Articles 6 and 13 of the European Convention on Human Rights, and Article 47 of the Charter. It also confirmed that Member States must ensure judicial independence in the fields covered by EU law.

The judgment established a constitutional connection between Article 2 and Article 19: the rule of law is a foundational value, while judicial independence is one of the institutional guarantees necessary to make that value effective.

4. Judicial independence as a requirement of EU law

Judicial independence is an essential element of the rule of law. Courts must be able to decide disputes without interference from the executive, legislature, political parties, private interests or other external actors.

Independence is not merely a question of whether a judge personally acts impartially. It also concerns the institutional structure in which judicial functions are exercised.

The CJEU has identified two principal dimensions of judicial independence.

4.1 External independence

External independence requires courts to exercise their functions autonomously, without hierarchical constraints, instructions or pressure from external bodies.

Judges must not be exposed to interventions that could influence the content of their decisions. The institutional arrangements governing judicial appointments, promotion, disciplinary responsibility and removal must therefore contain adequate safeguards against improper interference.

The existence of political institutions involved in judicial appointments does not automatically establish a violation of EU law. National constitutional systems may adopt different appointment models. The decisive question is whether the arrangements provide sufficient guarantees of independence and prevent reasonable doubts about the impartiality of the courts.

4.2 Internal independence and impartiality

Internal independence concerns the relationship between judges and the parties to proceedings.

A court must maintain an equal distance from the parties and their respective interests. Its decisions must be based on the law and the evidence rather than personal, institutional or political considerations.

Impartiality also has an objective dimension. The institutional arrangements must be capable of excluding legitimate doubts about whether the court is independent and neutral.

The appearance of independence matters because public confidence in judicial institutions depends not only on the actual conduct of judges but also on whether the legal system provides credible safeguards against interference.

4.3 Judicial appointments and tenure

The process of appointing judges is a particularly important safeguard.

EU law does not impose one uniform model of judicial appointments on every Member State. Some systems rely on judicial councils, others involve executive or parliamentary institutions, and many use combinations of different mechanisms.

Nevertheless, appointment procedures must respect the requirements of independence, impartiality and a tribunal previously established by law.

Security of tenure is equally significant. Judges must not face arbitrary removal or premature retirement designed to alter the composition of courts or influence judicial outcomes.

Disciplinary systems also require safeguards. Disciplinary proceedings must not become instruments for punishing judges because of the legal interpretation they adopt or the preliminary questions they submit to the CJEU.

A disciplinary framework may legitimately address misconduct, but its composition, procedures and grounds for liability must not create a risk of political control over judicial decision-making.

4.4 Judicial councils and institutional safeguards

Many Member States have established judicial councils or comparable bodies to protect judicial independence.

Such institutions may participate in judicial appointments, promotion, disciplinary proceedings and the administration of courts.

Their composition and powers vary between national systems. EU law does not require every Member State to establish the same institutional model, but the arrangements must provide genuine safeguards against political interference.

The European Commission’s 2026 Rule of Law Report identifies judicial councils, appointment procedures, dismissal safeguards and adequate institutional resources as important elements in assessing judicial independence.

The relevant standards are also informed by the work of the Council of Europe and the Venice Commission.

5. The CJEU’s principal judgments on judicial independence

The Court of Justice has progressively developed the legal framework governing judicial independence. Several judgments are particularly important.

5.1 Associação Sindical dos Juízes Portugueses, C-64/16

In Associação Sindical dos Juízes Portugueses v Tribunal de Contas, the CJEU examined temporary reductions in the remuneration of Portuguese judges as part of broader public-sector austerity measures.

The Court held that Article 19(1) TEU requires Member States to ensure that national courts capable of ruling on EU law satisfy the requirements of effective judicial protection.

It recognised that judicial independence is essential to the functioning of the EU legal order.

Importantly, the Court did not conclude that the general salary reductions at issue necessarily violated judicial independence. The measures applied broadly within the public administration and were not shown, in the circumstances, to constitute targeted interference with the judiciary.

The wider constitutional significance of the judgment lies in its interpretation of Article 19. Judicial independence became an enforceable EU-law requirement capable of supporting infringement proceedings against a Member State.

5.2 Minister for Justice and Equality (Deficiencies in the System of Justice), C-216/18 PPU

This judgment concerned the European Arrest Warrant and the question of whether a person surrendered to another Member State might face a real risk of a breach of the right to an independent tribunal.

The CJEU recognised that systemic or generalised deficiencies affecting judicial independence may be relevant when assessing whether surrender should proceed.

However, a general concern about the judiciary of the issuing state does not automatically justify refusing every European Arrest Warrant.

The executing judicial authority must also examine whether there are substantial grounds for believing that the individual concerned would face a real risk of a breach of the essence of the right to a fair trial.

The judgment demonstrates the connection between judicial independence and mutual trust in judicial cooperation.

5.3 Commission v Poland, C-619/18

In Commission v Poland, the Court examined national legislation lowering the retirement age of judges of the Polish Supreme Court and granting the President of the Republic discretion to extend the judicial service of individual judges.

The Court found that the measures infringed the requirements of judicial independence and the principle of irremovability of judges.

It emphasised that Article 19 TEU gives concrete expression to the rule of law under Article 2 TEU.

The judgment also clarified that Member States must respect judicial independence when exercising their national competence to organise their justice systems.

National constitutional autonomy does not permit measures that undermine the requirements imposed by EU law.

5.4 Repubblika, C-896/19

In Repubblika, the Court examined Malta’s system for appointing members of the judiciary.

The judgment recognised that Member States retain discretion to determine their judicial appointment systems, provided that the arrangements satisfy the requirements of EU law.

The Court also developed the principle of non-regression in the protection of judicial independence.

Once a Member State has established safeguards required to ensure effective judicial protection, it cannot subsequently adopt measures that undermine the protection of the rule of law in a manner contrary to its obligations under Article 19 TEU.

This does not freeze every national judicial system in its existing form. Reforms remain possible, but they must not compromise the essential guarantees of judicial independence.

5.5 Commission v Poland, C-791/19

This infringement judgment concerned the disciplinary regime applicable to judges in Poland.

The Court found that the disciplinary arrangements did not provide sufficient guarantees of independence and impartiality. It also examined the effect of disciplinary rules on judges who questioned whether a court satisfied the requirements of an independent and impartial tribunal established by law.

The Court held that the system infringed Article 19(1) TEU and relevant requirements of Article 267 TFEU.

The judgment is important because it recognised that disciplinary mechanisms can undermine judicial independence even where they are formally presented as ordinary systems of professional accountability.

A disciplinary framework must not discourage judges from applying EU law or making preliminary references to the CJEU.

5.6 Commission v Poland, C-204/21

In its judgment of 5 June 2023, the Court examined further Polish measures affecting judicial independence, judicial review and the authority of national courts to assess whether a tribunal was independent and impartial.

The Court found violations of Article 19(1) TEU, Article 47 of the Charter and Article 267 TFEU, among other provisions.

The judgment addressed restrictions on national judges examining the independence of courts, as well as the disciplinary consequences associated with such examination.

It reaffirmed that national courts must be able to verify compliance with the EU requirements governing independent and impartial tribunals.

The Court also emphasised the importance of the preliminary reference procedure and the primacy of EU law.

These judgments collectively demonstrate that judicial independence is not simply a domestic constitutional matter. Where national courts perform functions within the EU legal order, their institutional independence is protected by enforceable obligations under the Treaties.

Official judgments can be accessed through the CURIA case-law database.

6. Article 7 TEU: the Union’s constitutional safeguard

Article 7 TEU provides a mechanism for addressing serious threats to the values listed in Article 2.

It is commonly described as the Union’s principal political safeguard against serious breaches of its foundational values.

The procedure is unusual because it combines political decision-making with specific legal thresholds and voting requirements. It is designed to address situations in which a Member State’s conduct threatens the constitutional principles on which EU membership is based.

Article 7 contains two principal stages:

• A preventive procedure under Article 7(1), addressing a clear risk of a serious breach.
• A sanction-related procedure under Article 7(2) and Article 7(3), addressing the existence of a serious and persistent breach.

These stages must be distinguished carefully. A finding of risk under Article 7(1) does not establish that a serious and persistent breach has occurred.

6.1 Article 7(1): clear risk of a serious breach

Article 7(1) allows the Council to determine that there is a clear risk of a serious breach by a Member State of the values referred to in Article 2.

The procedure may be initiated through a reasoned proposal submitted by:

• One third of the Member States.
• The European Parliament.
• The European Commission.

The Council acts by a majority of four fifths of its members, after obtaining the consent of the European Parliament.

Before making its determination, the Council must hear the Member State concerned. It may also address recommendations to that state.

The procedure is preventive. Its purpose is to identify a serious institutional risk and encourage corrective action before the situation develops into a persistent breach.

The Council must regularly verify whether the grounds for its determination continue to apply.

Article 7(1) therefore combines political assessment with an institutional dialogue intended to protect the Union’s common values.

6.2 Article 7(2): determination of a serious and persistent breach

Article 7(2) establishes a substantially higher threshold.

The European Council may determine that a Member State is responsible for a serious and persistent breach of the values referred to in Article 2.

The procedure may be initiated by one third of the Member States or by the European Commission. The European Parliament must give its consent.

The European Council must act unanimously, excluding the Member State concerned from the vote.

The Member State must be invited to submit its observations before the determination is made.

The unanimity requirement makes this stage particularly difficult to complete. It reflects the gravity of the constitutional determination and the intention that such a decision should have broad agreement among the remaining Member States.

6.3 Article 7(3): suspension of membership rights

Once a determination under Article 7(2) has been made, the Council may decide to suspend certain rights deriving from the application of the Treaties to the Member State concerned.

This may include the voting rights of that state’s government representative in the Council.

The decision is taken by qualified majority.

The Council must take account of the possible consequences of the suspension for the rights and obligations of natural and legal persons.

A crucial safeguard appears in Article 7(3): the obligations of the Member State under the Treaties remain binding.

Suspension of certain membership rights does not release the state from its legal obligations under EU law.

6.4 Article 7(4): variation or revocation of measures

Article 7(4) allows the Council to vary or revoke measures adopted under Article 7(3) if the circumstances that led to their imposition change.

The mechanism is therefore not necessarily permanent. Its application must remain connected to the situation that justified the suspension.

6.5 Article 7 does not provide for expulsion

Article 7 does not authorise the expulsion of a Member State from the European Union.

It permits the suspension of certain rights deriving from the Treaties, but membership obligations remain in force.

The Treaties contain no general procedure allowing the Union to remove a Member State through Article 7.

The distinction is important because Article 7 is a mechanism for protecting the Union’s constitutional values within the existing membership structure, not a procedure for terminating membership.

The full text is available in Article 7 TEU.

7. Article 7 in practice: the procedures concerning Poland and Hungary

Article 7 has been used in relation to serious rule-of-law concerns involving two Member States.

In December 2017, the European Commission submitted a reasoned proposal concerning Poland under Article 7(1), identifying a clear risk of a serious breach of the rule of law.

The proposal followed concerns regarding changes to the organisation of the judiciary, judicial appointments, disciplinary arrangements and the functioning of the constitutional framework.

In September 2018, the European Parliament initiated an Article 7(1) procedure concerning Hungary. Its reasoned proposal addressed a range of concerns involving constitutional and institutional safeguards, judicial independence, corruption, fundamental rights, academic freedom and other aspects of democratic governance.

These procedures illustrate the breadth of Article 2. A rule-of-law assessment may involve more than the formal structure of courts. It can also concern the institutional environment necessary for democratic accountability and effective protection of fundamental rights.

However, Article 7(1) and Article 7(2) must not be confused. The initiation of a preventive procedure does not itself establish a serious and persistent breach under Article 7(2), nor does it automatically produce sanctions.

The procedures also demonstrate the political complexity of Article 7. The high voting thresholds, particularly the unanimity requirement under Article 7(2), make the mechanism difficult to use at its most consequential stage.

In May 2024, the Council formally closed the Article 7(1) procedure concerning Poland following the Commission’s assessment of developments and the commitments and measures presented by the Polish authorities.

The closure of that procedure did not mean that every rule-of-law issue had automatically been resolved or that Poland became exempt from ordinary EU legal obligations. Infringement proceedings, judicial judgments and the other instruments available under EU law continued to apply.

As of November 2026, the Article 7(1) procedure concerning Hungary remains an important part of the Union’s institutional response to rule-of-law concerns.

The Council maintains an official record of these proceedings on its Article 7 procedures page.

8. Infringement proceedings under Articles 258–260 TFEU

Article 7 is not the only mechanism available to the Union when a Member State undermines the rule of law.

The European Commission may also initiate infringement proceedings under Articles 258–260 of the Treaty on the Functioning of the European Union (TFEU).

These proceedings are particularly important because they allow the Commission to challenge specific breaches of enforceable EU legal obligations before the CJEU.

Article 258 TFEU authorises the Commission to bring proceedings where it considers that a Member State has failed to fulfil an obligation under the Treaties.

The procedure generally involves several stages.

First, the Commission identifies a possible breach and may request information or observations from the Member State.

Second, it sends a formal notice giving the state an opportunity to respond.

Third, if the Commission considers that the breach has not been adequately addressed, it may issue a reasoned opinion identifying the alleged infringement and requiring compliance within a specified period.

Finally, if the Member State fails to comply, the Commission may refer the matter to the CJEU.

The Court examines whether the Member State has breached its obligations under EU law.

If the Court finds an infringement, the state must take the necessary measures to comply with the judgment under Article 260(1) TFEU.

If the Member State fails to comply, the Commission may bring a further action under Article 260(2), seeking financial sanctions in the form of a lump sum or penalty payment.

Article 260(3) also allows the Commission, in certain circumstances involving failure to notify measures transposing a directive adopted under a legislative procedure, to request financial sanctions in the initial infringement proceedings.

In the rule-of-law context, infringement proceedings are particularly useful when a specific national measure violates a concrete Treaty obligation.

For example, legislation that undermines the independence of courts responsible for applying EU law may be challenged under Article 19(1) TEU.

This is an important difference from Article 7. An infringement action does not require a prior political determination that a Member State has committed a serious and persistent breach of Article 2.

It requires the Commission to establish a breach of an enforceable EU-law obligation.

The two mechanisms can therefore operate in parallel. Article 7 addresses serious threats to foundational values at a broader constitutional level, while infringement proceedings address specific legal violations.

9. The Rule of Law Framework and preventive dialogue

In March 2014, the European Commission introduced its Rule of Law Framework.

The purpose was to establish a structured process for responding to systemic threats to the rule of law before the situation required the use of Article 7 TEU.

The framework is based on dialogue between the Commission and the Member State concerned.

It generally involves three stages:

1. The Commission assesses whether there are clear indications of a systemic threat to the rule of law.
2. The Commission issues a recommendation identifying the concerns and proposing measures to address them.
3. The Commission monitors the Member State’s response and assesses whether further action is necessary.

The framework is preventive rather than judicial. It does not itself create a new category of infringement proceedings or impose the sanctions available under Article 7.

Its importance lies in the possibility of identifying institutional problems at an earlier stage.

For example, concerns about judicial appointment procedures, the independence of disciplinary bodies or the effectiveness of constitutional review may be addressed through dialogue and recommendations before they develop into a more serious institutional crisis.

If the dialogue fails to produce an adequate response, the Commission may consider other instruments, including Article 7 or infringement proceedings.

The framework therefore forms part of a broader preventive and enforcement system.

10. The annual Rule of Law Report

Since 2020, the European Commission has published an annual Rule of Law Report examining developments across the Member States.

The report is an important monitoring instrument. It provides a structured assessment of national legal and institutional arrangements and identifies areas where reform or further safeguards may be necessary.

The report is organised around four principal areas:

10.1 Justice systems

This section examines judicial independence, the quality and efficiency of justice systems, access to justice, judicial appointments, disciplinary arrangements and the effectiveness of judicial review.

It considers whether national institutions provide adequate guarantees for independent and impartial adjudication.

10.2 Anti-corruption frameworks

The report examines the legal and institutional measures used to prevent and combat corruption.

Relevant issues include the independence and effectiveness of anti-corruption authorities, the prosecution of corruption offences, public-sector integrity, conflicts of interest and the transparency of public decision-making.

10.3 Media pluralism and freedom

Independent media contribute to democratic accountability by enabling public scrutiny of government and institutional conduct.

The Commission therefore examines the legal protection of journalists, the independence of media regulators, media ownership transparency, the allocation of state advertising and safeguards against undue political or economic influence.

10.4 Other institutional issues related to checks and balances

This area concerns the broader institutional environment in which public power is exercised.

It includes legislative procedures, constitutional safeguards, the role of independent authorities, civil society participation and the effectiveness of institutional oversight.

The report is based on information gathered from national authorities, civil society organisations, professional bodies and other stakeholders. The Commission also conducts country visits and consultations.

Its findings are accompanied by recommendations addressed to individual Member States.

These recommendations are not equivalent to binding CJEU judgments. They are intended to encourage institutional improvements, facilitate dialogue and identify areas requiring attention.

The report should also be read with an understanding of its methodology. It is a monitoring and assessment instrument, not a comprehensive judicial determination of every allegation concerning a national legal system.

The 2026 edition continues the assessment across all 27 Member States and includes four enlargement countries: Albania, Montenegro, North Macedonia and Serbia.

It examines the same four principal areas and evaluates progress against recommendations made in earlier reports.

The official publication is available through the European Commission’s 2026 Rule of Law Report.

11. The EU budget conditionality mechanism

One of the most significant developments in the enforcement of the rule of law is the connection between institutional compliance and the protection of the Union’s financial interests.

Regulation (EU, Euratom) 2020/2092 established a general regime of conditionality for protecting the EU budget where 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 its financial interests in a sufficiently direct way.

The mechanism recognises that serious rule-of-law deficiencies may compromise the proper use of EU funds.

For example, ineffective judicial review of decisions involving public procurement, inadequate investigation of corruption or the inability of independent authorities to investigate financial misconduct may create risks for the Union budget.

The regulation does not establish a general power to withhold EU funding whenever the Commission identifies any rule-of-law concern.

There must be a sufficiently direct connection between the relevant breach of the rule-of-law principles and the protection or financial management of the EU budget.

This requirement is essential to the legal character of the mechanism. It is a budget-protection instrument, not a general political sanction.

11.1 The procedure

The mechanism may be initiated by the Commission where it identifies breaches of the rule-of-law principles that affect or seriously risk affecting the EU budget in the required manner.

The Commission must notify the Member State and give it an opportunity to submit observations.

It must assess the available information and determine whether the conditions for adopting measures are satisfied.

The proposed measures are submitted to the Council, which adopts the relevant decision under the procedure established by the regulation.

Possible measures include:

• Suspension of payments or commitments.
• Prohibition on entering into new legal commitments.
• Suspension or reduction of certain financial obligations.
• Other measures affecting the implementation of the Union budget.

The measures must be proportionate to the actual or potential impact on the budget and take account of the nature, duration, gravity and scope of the breach.

11.2 Protection of final beneficiaries

The regulation contains an important safeguard for individuals and organisations that receive EU funding.

The adoption of measures against a Member State does not automatically release that state from its obligations towards final recipients or beneficiaries.

For example, a public authority may remain responsible for making payments to a university, research institution, business or other beneficiary under an existing funding arrangement.

The state cannot simply transfer the financial consequences of the EU-level decision to the final beneficiary.

11.3 The CJEU’s confirmation of the mechanism

The legality of Regulation 2020/2092 was challenged before the CJEU by Hungary and Poland.

In February 2022, the Court dismissed the actions in Cases C-156/21 and C-157/21.

It confirmed that the regulation had a valid legal basis and that its purpose was to protect the EU budget rather than impose general sanctions for breaches of Article 2 TEU.

The Court also clarified that the mechanism must operate within the limits established by the regulation, including the requirement of a sufficiently direct connection between rule-of-law breaches and the Union’s financial interests.

These judgments are constitutionally important because they confirmed that the protection of the rule of law can have direct financial consequences where institutional deficiencies threaten the proper management of EU funds.

The regulation and judgments can be consulted through the following official sources:

• Regulation (EU, Euratom) 2020/2092.
• Hungary v European Parliament and Council, C-156/21.
• Poland v European Parliament and Council, C-157/21.

12. Rule-of-law requirements and EU funding programmes

The conditionality mechanism is not the only way in which EU financial instruments interact with the rule of law.

Other funding arrangements contain requirements relating to institutional capacity, effective controls and compliance with fundamental rights.

The Recovery and Resilience Facility, established in response to the economic and social consequences of the COVID-19 pandemic, connects financial support with agreed reforms and milestones.

Where a Member State has committed to judicial or institutional reforms as part of its recovery and resilience plan, the fulfilment of the relevant milestones may affect the availability of payments.

The EU’s cohesion policy framework also includes horizontal enabling conditions relating to the Charter of Fundamental Rights.

These conditions require Member States to establish effective mechanisms to ensure that programmes supported by EU funds comply with applicable Charter requirements.

This can be particularly relevant where weaknesses in judicial protection or other fundamental-rights safeguards affect the implementation of funded programmes.

The distinction between these mechanisms is important.

The budget conditionality regulation addresses breaches of the rule-of-law principles that have the required connection to the EU budget.

The Recovery and Resilience Facility operates through agreed national plans, milestones and targets.

The cohesion policy enabling conditions establish requirements for the implementation of programmes financed through EU funds.

Although these instruments may address overlapping institutional problems, their legal bases and procedures are different.

13. The relationship between Article 7, infringement proceedings and budget conditionality

The EU’s rule-of-law toolbox contains several mechanisms that may address the same institutional developments from different legal perspectives.

Their coexistence does not mean that they are interchangeable.

Article 7 TEU is directed at serious threats or breaches of the Union’s foundational values. It contains political decision-making procedures and demanding voting thresholds.

Infringement proceedings under Articles 258–260 TFEU concern specific breaches of EU legal obligations. They allow the Commission to obtain a binding judgment from the CJEU and, where necessary, seek financial sanctions.

The budget conditionality mechanism under Regulation 2020/2092 protects the Union’s financial interests where rule-of-law breaches have the required sufficiently direct connection with the budget.

The annual Rule of Law Report and the Rule of Law Framework are primarily preventive and monitoring instruments.

These mechanisms can complement one another.

For example, a Member State may introduce disciplinary rules that undermine judicial independence. The Commission may identify the issue in its Rule of Law Report, initiate dialogue, bring infringement proceedings under Article 258 TFEU and, where the conditions are satisfied, consider financial measures connected with the protection of the EU budget.

An Article 7 procedure may also be relevant if the broader situation presents a clear risk of a serious breach of Article 2 values.

The existence of several instruments reflects the different legal dimensions of the rule of law. A systemic institutional problem may simultaneously affect judicial independence, the enforcement of EU rights, democratic accountability and the proper management of EU funds.

14. The role of national courts and preliminary references

National courts are central to the enforcement of the rule of law within the EU.

They apply EU law in domestic proceedings, protect rights derived from EU legislation and ensure that national authorities comply with their obligations under the Treaties.

Their independence is therefore a necessary condition for the effectiveness of the EU legal system.

Article 267 TFEU reinforces this relationship by allowing national courts to refer questions concerning the interpretation or validity of EU law to the CJEU.

A national judge must be able to make such a reference without facing disciplinary pressure or retaliation.

The CJEU has repeatedly emphasised that national rules cannot prevent courts from exercising their powers under Article 267.

Where a national measure attempts to restrict the ability of judges to refer questions to the CJEU, it may undermine both the preliminary reference system and the uniform application of EU law.

The relationship between judicial independence and preliminary references is particularly important because the CJEU does not normally determine the facts or decide the underlying national dispute. It relies on independent national courts to apply its interpretation of EU law.

If those courts are not independent, the entire system of judicial cooperation is placed at risk.

National courts may also be required to disapply national provisions that conflict with directly effective EU law, in accordance with the principle of primacy.

In A.B. and Others (C-824/18), the CJEU examined national rules affecting judicial appointments and the effectiveness of judicial review. The judgment reinforced the requirement that national arrangements must not undermine the practical effectiveness of judicial protection.

In RS (C-430/21), the Court further addressed the relationship between national constitutional courts, judicial independence and the primacy of EU law.

These cases illustrate that the rule of law is enforced not only through proceedings initiated by the Commission but also through ordinary judicial activity within national legal systems.

15. The relationship between the rule of law and mutual trust

Mutual trust is a foundational principle of cooperation between Member States.

It assumes that each Member State respects EU law and provides adequate guarantees for fundamental rights and effective judicial protection.

This principle is particularly important in the area of freedom, security and justice, where national authorities recognise and enforce judicial decisions originating in other Member States.

The European Arrest Warrant is a prominent example.

The system is based on mutual recognition, meaning that judicial authorities generally recognise and execute decisions issued by other Member States without repeating the entire underlying judicial process.

However, mutual trust is not absolute.

In Minister for Justice and Equality v LM, Case C-216/18 PPU, the CJEU considered whether systemic deficiencies in the independence of the judiciary of the issuing Member State could justify refusing surrender under a European Arrest Warrant.

The Court established a structured assessment requiring the executing judicial authority to examine:

First, whether there is objective, reliable, specific and properly updated information demonstrating systemic or generalised deficiencies affecting judicial independence in the issuing Member State.

Second, whether there are substantial grounds for believing that the individual concerned would face a real risk of a breach of the essence of the right to a fair trial because of those deficiencies.

This approach avoids two extremes.

It does not require automatic recognition where serious individual risks exist. Equally, it does not permit the general existence of institutional concerns to justify automatic refusal in every case.

The judgment demonstrates that judicial independence is not merely an abstract constitutional value. It directly affects the operation of cross-border judicial cooperation and the practical protection of individuals.

16. The limits of EU intervention and national constitutional autonomy

The protection of the rule of law raises an important question concerning the division of competences between the EU and its Member States.

The organisation of national justice systems generally remains within the competence of Member States. The EU does not possess a general power to redesign national constitutions or impose one uniform model of judicial administration.

Member States may therefore adopt different arrangements concerning judicial councils, appointment procedures, court structures and disciplinary systems.

However, national competence must be exercised consistently with EU law.

Article 4(3) TEU establishes the principle of sincere cooperation, requiring Member States to take appropriate measures to fulfil their obligations under the Treaties and to refrain from measures that jeopardise the Union’s objectives.

Article 19(1) TEU further requires effective judicial protection in the fields covered by EU law.

The CJEU has made clear that a Member State cannot rely on national constitutional arrangements to justify a failure to comply with its obligations under EU law.

This does not mean that the Union can intervene in every domestic institutional dispute. Its powers remain limited by the principle of conferral.

The relevant legal question is whether the national measure falls within the scope of an enforceable EU obligation or whether the conditions for applying a specific Treaty mechanism have been satisfied.

For example, a dispute concerning the general organisation of a national court system may not automatically fall within the scope of EU law. However, if the measure undermines the independence of courts responsible for applying EU law, Article 19 TEU may become relevant.

Similarly, the existence of a political disagreement between national institutions does not itself establish a violation of the rule of law. The legal assessment must be based on the applicable Treaty provisions, relevant evidence and the standards developed by the CJEU.

The distinction between national autonomy and EU obligations is therefore central to the constitutional balance of the Union.

17. The 2026 Rule of Law Report and the continuing monitoring system

The European Commission’s 2026 Rule of Law Report continues the annual monitoring process established in 2020.

It examines developments in all 27 Member States and evaluates progress in the four principal areas of justice systems, anti-corruption frameworks, media pluralism and freedom, and institutional checks and balances.

The 2026 report also continues the assessment of the single market dimension introduced in the previous reporting cycle. This recognises that legal certainty, effective judicial remedies and predictable public administration are relevant not only to constitutional governance but also to the functioning of the internal market.

The report draws on national contributions, stakeholder consultations, country visits and information from EU institutions and international organisations.

The Commission’s methodology is intended to identify significant developments rather than provide an exhaustive account of every issue within each national legal system.

Its recommendations are addressed to all Member States, with the intention of supporting ongoing reforms and identifying areas where additional safeguards may be necessary.

The report also illustrates an important distinction between monitoring and enforcement.

A recommendation in the Rule of Law Report does not have the same legal status as a binding judgment of the CJEU. Nevertheless, the report may identify developments that subsequently become relevant to infringement proceedings, budgetary measures or other EU mechanisms.

The annual cycle therefore provides a continuing institutional framework for identifying risks, following reforms and assessing whether Member States are maintaining the guarantees required by EU law.

18. The constitutional significance of the rule of law for the European Union

The rule of law is indispensable to the legal structure of the European Union.

The Union is based on the assumption that its Member States operate legal systems in which public authority is constrained by law and individuals can obtain effective judicial protection.

This assumption supports mutual recognition, the preliminary reference system, the internal market and the protection of fundamental rights.

If national courts are not independent, the effectiveness of EU law becomes uncertain. If public authorities can disregard judicial decisions, the principle of legality loses practical meaning. If corruption cannot be effectively investigated or public funds cannot be independently supervised, the financial and institutional foundations of the Union may be affected.

The EU’s response to rule-of-law concerns therefore operates at several levels.

Article 2 establishes the foundational value. Article 19 requires effective judicial protection. Article 7 provides a political and constitutional safeguard against serious breaches. Articles 258–260 provide judicial enforcement of specific obligations. Regulation 2020/2092 protects the EU budget against certain rule-of-law breaches. The annual Rule of Law Report and the Rule of Law Framework provide preventive monitoring and institutional dialogue.

The system is not without limitations. Article 7’s voting thresholds make the most serious political determinations difficult to adopt. Infringement proceedings require a legally identifiable breach and may take time. Budget conditionality cannot be used as a general sanction unrelated to the protection of the EU budget. Monitoring reports depend partly on dialogue, evidence and follow-up by national authorities.

Nevertheless, the existence of several complementary mechanisms reflects an important constitutional principle: membership of the European Union involves continuing obligations, not merely compliance with entry conditions.

The Union does not replace national constitutional systems, but national sovereignty is exercised within the legal commitments voluntarily undertaken through the Treaties.

The rule of law is therefore both a shared European value and a legally enforceable condition for the functioning of the Union.

19. Key Takeaways

• Article 2 TEU identifies the rule of law as one of the foundational values of the European Union.
• Article 19(1) TEU requires Member States to provide effective judicial protection in the fields covered by EU law.
• Judicial independence has external and internal dimensions, involving freedom from improper interference and impartiality in individual proceedings.
• Member States retain competence to organise their judicial systems, but must exercise that competence consistently with EU law.
• The CJEU has developed important judicial-independence standards in Associação Sindical dos Juízes Portugueses, Commission v Poland, Repubblika and related judgments.
• Article 7(1) TEU addresses a clear risk of a serious breach of Article 2 values.
• Article 7(2) requires a determination of a serious and persistent breach and involves unanimity in the European Council.
• Article 7(3) permits suspension of certain membership rights, including voting rights, but does not terminate the state’s Treaty obligations.
• Article 7 does not provide for expulsion from the European Union.
• Articles 258–260 TFEU allow the Commission to bring infringement proceedings and seek financial sanctions for continued non-compliance.
• The Commission’s Rule of Law Framework and annual Rule of Law Report provide preventive monitoring and recommendations.
• Regulation 2020/2092 establishes budget conditionality where rule-of-law breaches affect or seriously risk affecting the EU budget in a sufficiently direct way.
• The CJEU upheld the legality of the budget conditionality regulation in Cases C-156/21 and C-157/21.
• National courts and the preliminary reference procedure are essential to the enforcement of the rule of law.
• Mutual trust between Member States depends on adequate guarantees of judicial independence and effective judicial protection.

20. Frequently Asked Questions

1. What does the rule of law mean in the European Union?

The rule of law means that public authorities must exercise their powers within the limits established by law, subject to independent judicial review and effective accountability. It includes legality, legal certainty, judicial independence, equality before the law and effective judicial protection.

2. Which Treaty provision establishes the rule of law as an EU value?

Article 2 TEU expressly identifies the rule of law as one of the foundational values of the European Union, alongside human dignity, freedom, democracy, equality and respect for human rights.

3. What is the difference between Articles 2 and 19 TEU?

Article 2 establishes the rule of law as a foundational value of the Union. Article 19 gives that value concrete legal expression by requiring effective judicial protection in the fields covered by EU law.

4. Can the European Union interfere with the organisation of national courts?

The organisation of national justice systems generally remains within Member State competence. However, Member States must exercise that competence consistently with EU law, particularly Article 19(1) TEU. National measures that undermine the independence of courts responsible for applying EU law may therefore be challenged.

5. What is Article 7 TEU?

Article 7 TEU is a mechanism for addressing serious threats or breaches of the values listed in Article 2. It contains a preventive procedure for identifying a clear risk of a serious breach and a more demanding procedure for determining the existence of a serious and persistent breach.

6. Can a Member State be expelled under Article 7?

No. Article 7 does not provide for expulsion. It permits the suspension of certain rights deriving from the Treaties, including voting rights in the Council, while the Member State’s Treaty obligations remain binding.

7. Why is Article 7 difficult to apply?

The procedure requires demanding voting thresholds. Under Article 7(2), the European Council must act unanimously, excluding the Member State concerned. This makes the final determination of a serious and persistent breach institutionally difficult.

8. What happens if a Member State refuses to comply with a CJEU judgment?

The Commission may initiate further proceedings under Article 260(2) TFEU and request a lump sum or penalty payment. The Court determines whether the Member State has failed to comply and may impose financial sanctions.

9. What is the EU Rule of Law Report?

It is an annual European Commission assessment of developments in all Member States across four areas: justice systems, anti-corruption frameworks, media pluralism and freedom, and institutional checks and balances. It includes country-specific recommendations and monitors progress over time.

10. What is the EU budget conditionality mechanism?

Regulation 2020/2092 allows the Union to adopt measures protecting its budget where breaches of the rule-of-law principles affect or seriously risk affecting the sound financial management of the EU budget or its financial interests in a sufficiently direct way.

11. Can EU funding be withheld for any rule-of-law concern?

No. The budget conditionality mechanism requires a sufficiently direct connection between the relevant breach of the rule-of-law principles and the protection or financial management of the EU budget. It is not a general sanction for every institutional or political disagreement.

12. What role do national courts play in protecting the rule of law?

National courts apply EU law, protect rights derived from it and cooperate with the CJEU through the preliminary reference procedure under Article 267 TFEU. Their independence is essential to the uniform and effective application of EU law.

13. Does mutual trust mean that Member States must always recognise one another’s judicial decisions?

No. Mutual trust is a foundational principle of EU cooperation, but it is not absolute. Where there is evidence of serious deficiencies affecting judicial independence and a real risk of a fundamental-rights violation in an individual case, national authorities may be required to conduct a more detailed assessment.

21. Conclusion

The rule of law is one of the constitutional foundations of the European Union. It ensures that public power remains subject to legal limits, that individuals can obtain effective judicial protection and that the institutions of the Union and its Member States operate within a framework of accountability.

Its importance extends beyond the internal organisation of national courts. The rule of law supports the entire structure of European integration, including mutual recognition, the internal market, judicial cooperation and the protection of fundamental rights.

The Treaties establish several complementary safeguards. Article 2 identifies the foundational value, Article 19 requires effective judicial protection, and Article 7 provides a political mechanism for responding to serious threats and breaches. Infringement proceedings allow the CJEU to enforce specific legal obligations, while budget conditionality protects the Union’s financial interests where rule-of-law deficiencies create the required budgetary risk.

The development of the CJEU’s case law has been particularly significant. Judicial independence is no longer treated merely as an internal matter for national constitutional systems. Where national courts apply EU law, their independence is a requirement of the Union’s legal order.

At the same time, the EU’s enforcement powers remain subject to the principle of conferral and the specific legal conditions governing each instrument. The Union cannot treat every national institutional disagreement as an infringement, nor can it use budgetary measures without establishing the connection required by the applicable regulation.

The constitutional challenge is to maintain a balance between national institutional autonomy and the common obligations undertaken by all Member States. National systems may differ in structure and tradition, but they must provide the legal guarantees necessary for the effective application of EU law.

Ultimately, the rule of law is not simply a value that Member States promise to respect when joining the Union. It is a continuing constitutional obligation that sustains the legal order of the European Union itself.

22. Primary Legal Sources and Further Reading

EU Treaties and legislation

1. Article 2 TEU — establishes the foundational values of the European Union.
2. Article 4 TEU — provides for sincere cooperation and respect for Member State national identities within the framework of the Treaties.
3. Article 7 TEU — establishes the preventive and sanction-related procedures for protecting Article 2 values.
4. Article 19 TEU — requires effective judicial protection in the fields covered by EU law.
5. Articles 258–260 TFEU — govern infringement proceedings and enforcement of CJEU judgments.
6. Article 267 TFEU — establishes the preliminary reference procedure.
7. Regulation (EU, Euratom) 2020/2092 — establishes the general regime of conditionality for protecting the EU budget.

Important CJEU judgments

8. Associação Sindical dos Juízes Portugueses, C-64/16 — judicial independence and effective judicial protection under Article 19 TEU.
9. Minister for Justice and Equality, C-216/18 PPU — judicial independence, the European Arrest Warrant and mutual trust.
10. Commission v Poland, C-619/18 — judicial independence and the retirement arrangements of Supreme Court judges.
11. Repubblika, C-896/19 — national judicial appointment procedures and the protection of judicial independence.
12. Commission v Poland, C-791/19 — judicial disciplinary regimes and the independence of national courts.
13. Commission v Poland, C-204/21 — judicial independence, disciplinary liability, effective judicial protection and preliminary references.
14. Hungary v European Parliament and Council, C-156/21 — legality of the EU budget conditionality mechanism.
15. Poland v European Parliament and Council, C-157/21 — confirmation of the legal basis and operation of the budget conditionality regulation.
16. A.B. and Others, C-824/18 — judicial appointments, effective judicial protection and the right to refer questions to the CJEU.
17. RS, C-430/21 — national constitutional courts, primacy of EU law and judicial independence.

Institutional sources

18. European Commission: The 2026 Rule of Law Report — annual assessment of rule-of-law developments across the EU.
19. European Commission: The Rule of Law Framework — preventive dialogue and assessment of systemic threats.
20. European Commission: Rule of Law Toolbox — overview of the instruments available to the Commission.
21. Council of the European Union: Article 7 Procedures — official information on the procedures concerning Member States.
22. Council of Europe: European Commission for Democracy through Law (Venice Commission) — constitutional standards and expert guidance concerning democracy, judicial independence and the rule of law.
23. Court of Justice of the European Union: CURIA — official database of judgments and judicial documents.