Rules enforcement in the EU: “Conditionality” to the rescue? Bertelsmann Stiftung Policy Paper 28.05.2019

Schneemelcher, Pola and Haas, Jörg (2019) Rules enforcement in the EU: “Conditionality” to the rescue? Bertelsmann Stiftung Policy Paper 28.05.2019. [Policy Paper]

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Abstract

• Since the 1990s, the EU has used its budget not just to implement policies, but also to influence member state behaviour. Payments to governments and regions can be increased as an incentive or suspended as a punishment. In EU circles, this is called “budget conditionality”. It is a little known but common instrument. Today, budget conditionality covers such diverse areas as fiscal policy rules, economic reforms, human rights standards and environmental protection. • Recent years have highlighted the EU's weak position vis-à-vis member states that refuse to implement EU rules and decisions, for example on fiscal policy, refugees and democratic standards. Budget conditionality is now being discussed as one way to remedy this problem. • In preparation of the next long-term budget (MFF) starting in 2021, the European Commission has published proposals to strengthen existing conditionality mechanisms and to introduce a new procedure aimed at suspending EU payments to those countries that do not respect the rule of law. • We review the proposed instruments and evaluate whether they are likely to help the EU achieve its goals. We argue that, in principle, the EU budget can be useful as a carrot or stick to influence member state behaviour but it cannot fully make up for a lack of political will.

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