The report adopted by the European Parliament highlights the need for changes to the rule of law conditionality mechanism. Past experience with blocking EU funds for Hungary due to the country's violation of the rule of law shows that in the new perspective, the mechanism requires a number of changes to operate more effectively. However, there are many voices that it should be abolished altogether because it is a tool of political pressure on member states.
The conditionality mechanism is effective from January 1, 2021. It introduces the so-called the “money for the rule of law” principle, which means that it allows the disbursement of EU funds to be conditional on the assessment of compliance with the rule of law in a situation where their violation may threaten the financial interests of the European Union. It is just one element of the EU's instruments for protecting the rule of law and the EU budget, alongside the European Commission's annual reports, infringement procedures and controls by the Court of Justice of the EU.
– This is a strictly legal mechanism, consistent with the treaties, as confirmed by the Court of Justice in the case of Hungary, Poland v. European Commission, but it also undoubtedly has a political aspect, i.e. it is a signal that a given country violates the values of the European Union and loses its credibility. It also plays a role in the international arena within the European Union – says Michał Wawrykiewicz, Member of the European Parliament from the Civic Coalition, to the Newseria agency.
So far, it has been formally applied once – to Hungary, which irretrievably lost EUR 1 billion due to suspended payments of European funds. As indicated by the EP Research Office (EPRS), this case revealed, among others, unclear criteria for initiating the procedure, long decision-making processes and a limited role of the European Parliament in the entire process. In December 2025, a report adopted by the parliamentary committees on budget (BUDG) and budgetary control (CONT) assessed that the implementation of the mechanism requires improvements. The need to simplify procedures, increase transparency and effectiveness, and better protect the EU's financial interests was highlighted.
– The most important conclusions from the functioning of the conditionality mechanism so far are that we have some shortcomings in the effectiveness of our actions. In fact, this mechanism was only tested in Hungary and it actually worked – says Michał Wawrykiewicz. – The goal of the European Union and its institutions is to ensure that sanctions are applied to the government of a given member country that has problems with the rule of law and that is at odds with the values of the European Union, but at the same time that citizens of the European Union, who are not guilty of anything, do not suffer because of it.
Work is underway in the European Parliament on a possible strengthening of the mechanism, including: by introducing “smart conditionality”. According to EPRS analyses, this solution would enable funds to be directed directly to final beneficiaries – local governments, universities, non-governmental organizations and enterprises – bypassing the central administration of the country subject to sanctions.
– Principles of respecting the independence of the judiciary are also to be added to this conditionality mechanism, also at the request of the Committee on Civil Liberties, Justice and Home Affairs (LIBE). This aspect is also to be taken into account when applying this mechanism. After all, an independent judiciary and prosecutor's office guarantee that EU funds can be distributed correctly and that the state controls them. Corruption mechanisms simply cannot function if there is an independent judiciary and prosecutor's office, says a member of the European Parliament from the Civic Coalition.
Some MEPs point out that the lack of clear thresholds for activating the mechanism and lengthy procedures weaken its effectiveness, especially in situations requiring a quick response.. The report by the parliamentary committees highlighted the obstacles that make it difficult to activate the mechanism and stressed that any decision to suspend European Union funds must be based on “clear, objective and transparent criteria” and not on negotiations. The majority of MEPs are in favor of the frozen funds being released only after the Member State concerned has fully implemented the reforms.
Possible changes to the conditionality mechanism will have a direct impact on the shape of the new EU financial perspective after 2027, in which linking funds with the rule of law assessment may be extended to further budget instruments.
– Any decision under the mechanism may be subject to judicial review by the Court of Justice of the European Union. So we have a balance between political and strictly legal elements, and I believe that the mechanism works, although it should be improved in some respects – emphasizes Michał Wawrykiewicz.
The mechanism has a large group of opponents
– The greatest threat to the rule of law mechanism is primarily its politicization and open use against countries that do not comply with the main political line of the European Commission. We have seen this example in Poland, when Polish funds were blocked many times during the rule of Law and Justice, says Tomasz Buczek, a member of the European Parliament from Confederation. – We see what is happening today to the government of Viktor Orbán, and we are afraid of what will happen next, because the European Commission, under its current leadership, is pressing its knee more and more into all kinds of harmful policies. It does this in opposition to countries with conservative values that can contest the adopted line, e.g. in the field of climate policy, trade agreements with Mercosur countries or loans to Ukraine.
The MEP calls this mechanism a tool to intimidate member states. – This mechanism should be abolished. It's a carrot and stick approach – if you are polite and docile, you will get a reward, we will not block your money, but you must accept the main line that we propose to you, and if you protest, if you raise your head, you will be hit with this stick, we will block your money. We do not agree to such a policy of the European Commission towards Poland, Hungary and other countries – emphasizes Tomasz Buczek.
As he adds, the EC's task is only to distribute funds that come from the Member States, and the control tools provided by the European Parliament are sufficient to monitor the management of the funds.
– I don't see any need to multiply institutions and create the mechanisms we are talking about. “Money for the rule of law” is not the direction the European Union should follow, and this direction chosen by the European Commission and the European Parliament is causing a wave of Euroscepticism to grow in Europe, says the Confederation's MEP.
