Changes from plenary report to adopted text

The European Parliament,

– having regard to the Treaty on European Union (TEU), and in particular Articles 2, 4(3) and 7 thereof,

– having regard to the Treaty on the Functioning of the European Union (TFEU),

– having regard to the Charter of Fundamental Rights of the European Union (the Charter),

– having regard to the European Convention on Human Rights and the protocols thereto,

– having regard to Regulation (EU) 2021/241 of the European Parliament and of the Council of 12 February 2021 establishing the Recovery and Resilience Facility (RRF Regulation),

– having regard to Regulation (EU) 2021/1060 of the European Parliament and of the Council of 24 June 2021 laying down common provisions on the European Regional Development Fund, the European Social Fund Plus, the Cohesion Fund, the Just Transition Fund and the European Maritime, Fisheries and Aquaculture Fund and financial rules for those and for the Asylum, Migration and Integration Fund, the Internal Security Fund and the Instrument for Financial Support for Border Management and Visa Policy (Common Provisions Regulation),

– having regard to Regulation (EU, Euratom) 2024/2509 of the European Parliament and of the Council of 23 September 2024 on the financial rules applicable to the general budget of the Union (Financial Regulation),

– having regard to Council Implementing Decision (EU) 2022/2506 of 15 December 2022 on measures for the protection of the Union budget against breaches of the principles of the rule of law in Hungary,

– having regard to the Commission communication of 12 January 2024 on the application of 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 (COM(2024)0017),

– having regard to its resolution of 18 June 2025 on the Commission’s 2024 Rule of Law Report,

– having regard to its resolution of 7 May 2025 on a revamped long-term budget for the Union in a changing world,

– having regard to its resolution of 17 January 2024 on the planned dissolution of key anti-corruption structures in Slovakia and its implications for the rule of law,

– having regard to its resolution of 24 November 2022 on the assessment of Hungary’s compliance with the rule of law conditions under the Conditionality Regulation and state of play of the Hungarian RRP,

– having regard to its resolution of 8 March 2022 on the shrinking space for civil society in Europe,

– having regard to its resolution of 8 July 2021 on the creation of guidelines for the application of the general regime of conditionality for the protection of the Union budget,

– having regard to European Court of Auditors (ECA) special report 03/2024 of 22 February 2024 entitled ‘The rule of law in the EU – An improved framework to protect the EU’s financial interests, but risks remain’,

– having regard to the judgments of the Court of Justice of the European Union (CJEU) of 16 February 2022 in Cases C-156/21, Hungary v European Parliament and Council of the European Union and C-157/21, Poland v European Parliament and Council of the European Union,

– having regard to the Commission Decision of 13 December 2023 on the reassessment, on the Commission’s initiative, of the fulfilment of the conditions under Article 4 of Regulation (EU, Euratom) 2020/2092 following Council Implementing Decision (EU) 2022/2506 of 15 December 2022 regarding Hungary (C(2023)8999),

– having regard to the Commission Decision of 16 December 2024 pursuant to Article 7(2) of 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, concerning a written notification from Hungary with regard to Article 2(2) of Council Implementing Decision (EU) 2022/2506 of 15 December 2022 (C(2024)9140),

– having regard to the Commission’s annual rule of law reports,

– having regard to the observations of its Committee on Budgetary Control’s fact-finding missions to Hungary from 15 to 17 May 2023 and to Slovakia from 26 to 28 May 2025,

– having regard to the opinion of the European Committee of the Regions of 2 April 2025 entitled ‘The local and regional perspective in the implementation of the Rule of Law in the European Union’,

– having regard to the opinion of the European Economic and Social Committee of 30 April 2025 entitled ‘The economic dimension of the Rule of Law’,

– having regard to the report on the implementation of the rule of law conditionality regulation published by its Directorate-General for Parliamentary Research Services in July 2025,

– having regard to the study requested by its Committee on Budgets entitled ‘The tools for protecting the EU budget from breaches of the rule of law: the Conditionality Regulation in context’,

– having regard to Rule 55 of its Rules of Procedure,

– having regard to the joint deliberations of the Committee on Budgets and the Committee on Budgetary Control under Rule 59 of the Rules of Procedure,

– having regard to the opinion of the Committee on Civil Liberties, Justice and Home Affairs,

– having regard to the report of the Committee on Budgets and the Committee on Budgetary Control (A10-0240/2025),

A. whereas the EU 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, as set out in Article 2 TEU; whereas these values are reflected in the fundamental rights spelled out in the Charter, such as equality between women and men, non-discrimination, and the right of collective bargaining and action, in accordance with EU law and national laws and practices, and embedded in international human rights treaties; whereas adherence to these shared values constitutes the foundation of the rights enjoyed by those living in the EU; whereas civil society organisations and other stakeholders play an important role in fostering the rule of law in actual practice;

B. whereas the CJEU has established, in various rulings, that all EU funds, programmes and financing are an expression of the principle of solidarity among the Member States and must be based on mutual trust, which presupposes respect for the Article 2 TEU values, for the Charter and for the principle of sincere cooperation affirmed in Article 4(3) TEU; whereas it has furthermore confirmed the clear relationship between respect for the rule of law and the efficient implementation of the EU budget, in accordance with the principles of sound financial management and the protection of the EU’s financial interests;

C. whereas any clear risk of a serious breach of the rule of law by a given Member State can affect the fundamental rights of EU citizens in all Member States, trust, solidarity and sincere cooperation between the Member States, and key EU achievements, such as the free movement of people, the functioning of the single market and the independence of the media;

D. whereas the Conditionality Regulation empowers the EU to adopt, in a timely manner, proportionate financial measures to safeguard its financial interests where breaches of the rule of law in a Member State affect, or seriously risk affecting, the sound financial management of the EU budget; whereas the regulation was adopted as part of the package on the 2021-2027 multiannual financial framework (MFF), following long and difficult negotiations between the co-legislators, notably because of attempts by some of the Member States to link the negotiations on the MFF with the negotiations on the rule of law conditionality mechanism; whereas it has been binding for all Member States since its entry into force on 1 January 2021;

E. whereas the Conditionality Regulation complements other instruments that protect the EU budget against risks deriving from breaches of the rule of law;

F. whereas the Conditionality Regulation requires the Commission to monitor the rule of law in all Member States, but measures have so far been proposed and adopted under the regulation only in the case of Hungary; whereas additional information has been requested from Poland;

G. whereas it is important to safeguard the legitimate interests of final recipients and beneficiaries of EU funds; whereas Member States affected by a decision under the Conditionality Regulation are required to report on their compliance with their obligations towards final recipients and beneficiaries;

H. whereas the Commission has issued guidelines to clarify the application of the Conditionality Regulation; whereas Parliament considered that the text of the regulation was clear and did not require additional interpretation in order to be applied;

I. whereas the Commission is legally required to keep Parliament informed about its notifications to a Member State in which it considers that breaches of the principles of the rule of law might exist and about any measures proposed, adopted and lifted in accordance with the Conditionality Regulation;

J. whereas the Commission issued a report in January 2024, in accordance with Article 9 of the Conditionality Regulation, to take stock of the application of the legislation; whereas the Commission’s analysis of the only available case confirmed the effectiveness of the protective measures adopted and their potential going forward, but the Commission found that it was too early to draw definitive conclusions, and that more extensive case practice would enable it to better identify possible improvements;

K. whereas in December 2024, for the first time, budgetary commitments that had been suspended as a result of the application of the Conditionality Regulation were ultimately lost for the affected Member State in line with Article 7(3) of the regulation, because the Member State had not remedied, by the required deadline, the deficiencies originally identified;

L. whereas on 16 July 2025, the Commission published its proposal for the MFF for 2028-2034; whereas there is clear interplay between the rule of law aspects included in the national and regional partnership plans (NRPPs) proposal and the conditionality mechanism;

M. whereas the purpose of this report is to scrutinise the implementation of the Conditionality Regulation, including also the interplay with other EU instruments, according to Parliament’s role as laid down in the regulation, by pointing to the benefits and shortcomings of its application, and by issuing recommendations for its future implementation;

Introduction of the conditionality regime and legal context

1. Recalls that the rule of law is one of the founding values of the EU and that respect for the rule of law is an essential prerequisite for the sound financial management and effective use of EU funding; stresses that this is crucial for safeguarding citizens’ trust in the EU and for ensuring that EU funds deliver tangible benefits across all Member States;

2. Highlights the fact that the adoption of the Conditionality Regulation in 2020 represents a core pillar for the protection of the EU budget against risks resulting from rule of law breaches, which applies across the whole budget and allows for cumulative application of various measures; stresses that the application of the Conditionality Regulation should respect the principle of proportionality; underlines that the regulation does not have a time limit and therefore applies to all current and future financing instruments of the EU budget; notes, however, that its practical implementation remains insufficient and calls for concrete improvements to ensure its full effectiveness;

3. Welcomes the affirmation by the CJEU that respect for the values enshrined in Article 2 TEU is an ongoing obligation of all Member States and a precondition for enjoying all Treaty rights and benefits deriving from EU membership, including access to EU funds; instructs the Commission to enforce the applicable legislation in full, reflecting the CJEU’s affirmation, and to highlight this point in all relevant communications;

4. Stresses that the Conditionality Regulation and any other available measures to protect the EU budget against breaches of the rule of law must not be regarded as substitutes for the Treaty-based mechanisms for safeguarding the values enshrined in Article 2 TEU; recalls that the suspension of voting rights under Article 7(2) TEU remains an option in cases of persistent and serious breaches of the rule of law; notes that citizens struggle to understand why Member States that persistently violate the rule of law continue to enjoy voting rights, thereby risking a loss of trust in the EU’s values and decision-making processes;

5. Recalls that the Commission’s ‘rule of law toolbox’ has evolved considerably over the last decade, with the inclusion of multiple instruments to protect the rule of law, including the annual rule of law report covering all 27 Member States, the horizontal enabling condition on the application and implementation of the Charter laid down in the Common Provisions Regulation, and the ‘super milestones’ related to the rule of law under the Recovery and Resilience Facility (RRF);

6. Stresses that the conditionality regime is budgetary in nature, as it aims to safeguard the sound financial management of EU funds and the EU’s financial interests, and it only applies where a rule of law breach affects or seriously risks affecting the EU budget; emphasises that it differs from the Article 7 TEU procedure, which penalises serious and persistent violations of the values set out in Article 2 TEU, regardless of any budgetary implication;

7. Underlines that infringement actions under Article 258 TFEU and Article 6 of the Financial Regulation remain complementary tools for systemic breaches of Article 2 TEU values;

8. Commends the CJEU judgments of 16 February 2022 in Cases C-156/21 and C-157/21, which dismissed in their entirety the actions by Hungary and Poland for the annulment of the Conditionality Regulation and unequivocally confirmed the validity, legal basis and compatibility of the regulation with the Treaty, as well as the EU’s competence concerning the rule of law in the Member States;