ECJ rules in favour of making EU cash handouts conditional on a country's respect for rule of law
The European Court of Justice (CJEU) has ruled in favour of making EU cash handouts conditional on a country's respect for rule of law.
The so-called rule of law mechanism will see money withheld if an EU country does not respect the bloc's core values.
That includes areas like rule of law, democracy, press freedom and an independent judiciary.
It comes amid long-running disputes Brussels is having with Poland and Hungary, who have been accused of failing to adhere to core EU values.
Budapest and Warsaw initiated the case after the European Commission introduced this rule of law mechanism.
In December, the court's advocate general gave an opinion and rejected the arguments of Hungary and Poland, saying the policy was compatible with EU treaties.
The CJEU on Wednesday followed this opinion.
The regulation allows EU funds to be withheld from a country where there are violations of the rule of law that "prejudice or threaten to prejudice" the EU's financial interests "in a sufficiently direct manner".
A suspension or reduction of payments must be proposed by the European Commission and endorsed by at least 15 out of 27 Member States.
The mechanism applies to funds paid out under the EU budget — substantial amounts for Poland and Hungary which are among the largest net recipients of EU funds — as well as to post-COVID recovery plans.
A judicial approval of this new instrument will increase the pressure on the European Commission, which is responsible for activating it.
The EU executive had agreed with the 27 Member States to wait for the Court's opinion before acting, even though the regulation has been in force since 1 January 2021.
But the European Parliament has been impatient for months and even sued the Commission for its
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