Abstract
The EU, like any other legal or political framework, is relevant insofar as it is capable of adapting to the needs and challenges that it faces. While this is accepted by its different branches, it has generally been shy in endorsing the significant, structural change that it requires, rather opting for short-term, sticking plaster responses. This approach has led to the uneven development of integration and the establishment of an unrecognisable governance framework incapable of mirroring the features that citizens commonly associate with similar institutional frameworks. This has ultimately fostered a gap between the Union’s undeniably strong functional power and resource capacity, on the one hand, and its popular legitimacy and support on the other. While this has not been particularly problematic up to now and citizens have generally accepted the covert growth of the Union’s power (without constitutional accompanying), there will come a point where the Union will be incapable of further stretching its reach due to the evident lack of legitimate authority.
This paper therefore argues that the EU must urgently improve its integration through law strategies and its communication with citizens so as to mitigate this growing gap and ensure future legitimate authority. By first demonstrating how the EU has continuously increased its functional power without substantiating it in sufficiently strong constitutional structures, this paper will show how the future challenges that the Union will face will no longer allow for analogous developments as they will be met with greater popular scrutiny. At this point, if no action is taken, the Union will regret not having taken a different approach to its relationship with citizens and disregarding stronger state-building initiatives. In the end, the paper will show what the EU can and should do to change its paradigm now and expand its opportunities and legitimate space for integration.
1. Increasing downplay of legitimate authority
Over the past few years, the EU has evinced very little caution as to whether its political decisions are framed in a sufficiently democratic way that dignifies the values enshrined in Article 2 of the Treaty on European Union (‘TEU’). Its decision-making processes have failed to meet and mirror the expectations that citizens traditionally impose on states, thus yielding more opaqueness. While the consequences of such little submission towards legitimacy have not yet been felt, since there has always been a recognition of the need to balance other competing interests, their cumulative effect will undoubtedly be suffered in the future.
The starkest example of such attitudes was the unfreezing of around €10 billion from Hungary’s cohesion funds at the end of 2023. While, admittedly, very vaguely articulated, Article 2 TEU sets out the main values upon which the EU was founded and which are meant to guide its actions, but also the conduct of every individual member state. In a communication released in 2018,[1] the Commission expressly reinforced the close relationship between the rule of law (amongst other Article 2 values) and the management of its operating budget. This represented an attempt to bridge the two facets of which the EU is composed: a functional institution which plays a crucial role in the financial and operational management of member states, and a ‘union of values’ which guarantees the protection of its citizens. Furthermore, this was accompanied by a series of legal instruments which translated this political commitment into a solid governance framework capable of actively guaranteeing a widespread upholding and respect for Article 2. One such mechanisms was Regulation 2020/2092, known as the Conditionality Regulation, upheld by the Court of Justice of the European Union (‘Court of Justice’ or ‘CJEU’) amidst the actions for annulment brought by Hungary and Poland.[2] Once triggered, this mechanism allows for the suspension of payments under EU funding programmes to member states who fail to comply with the rule of law obligations of a democratic, European country. While open to objection on the ground of its slight deference to functionalism (due to the need for the rule of law breach to be directly linked to a budgetary mismanagement),[3] this was an important step forward for the Union which clearly met popular expectations and desires.[4]
While the mechanism was successfully implemented in response to Hungary’s judicial reforms in 2022, this success was short-lived. Initially, the Commission alleged ‘shortcomings in the control and use of EU money, in audit and transparency obligations, and in public tender procedures’ as well as ‘widespread corruption and lack of independence of the judiciary’.[5] However, less than two years later, these blocked funds were unblocked – a decision announced by the Commission in a press release without any prior justification either to the European Parliament or the Council. Hungary’s failure to concretely implement any of the conditions laid out by the Commission has strengthened the suspicion that the Commission’s decision was politically motivated. This notion becomes clearer when it is appreciated that the unfreezing took place shortly before a summit where European leaders were due to discuss an increase in financial aid to Ukraine.[6]
This retreat in its position therefore represents a recognition that political incentives and the needs of the Union as a whole are liable to trump the rule of law considerations set in place to protect citizens and uphold values. The lack of transparency and institutional involvement with which the decision was taken contrasted with the solid regulatory process pursued in establishing the Conditionality Regulation, and therefore risked staining the Commission’s image as a rule of law-abiding branch itself. However, the consequences of this decision were not felt directly by either the Commission or the EU as a whole. While the European Parliament clearly opposed this decision, triggering Article 265 of the Treaty on the Functioning of the European Union (‘TFEU’) and bringing the Commission before the ECJ,[7] no immediate political or legal consequences followed. This is because there was, indeed, a pressing competing interest – the Russian invasion of Ukraine – which was considered more politically relevant than a budgetary decision. However, and especially given the Commission’s prior failure to actively oppose the Hungarian and Polish regimes,[8] this decision undermined public confidence by disfiguring its status as a legitimate, legal, and democratic executive body capable of upholding the values which underpin its existence.
This becomes even more concerning in light of a recent report concluding that the EU has categorically failed to adequately punish EU law violations across all member states,[9] instead preferring a ‘politicised’ approach. The report further notes that the majority of decisions are taken by President von der Leyen and a close number of legal advisors rather than channeled through the appropriate institutional routes. According to Ombudsman O’Reilly, this has undermined the efficiency and quality of infringement proceedings which are vital for the legal functioning of the Union. Beyond the further staining of the EU’s image as a law-abiding institution, these concomitantly evidence the Union’s inconsistency as most of these violations concern environmental matters. Thus, upon expressing an unprecedented commitment to a sustainable transition, in the form of the Next Generation EU Programme (largely funded through green bonds), the EU has undermined the significance of environmental compliance by ignoring infringements.
Again, however, it has not yet directly faced the due political and legal repercussions in the form of popular resistance and scrutiny, for two main reasons. Firstly, these balancing decisions and compromises between political support or unity and legal compliance have, arguably, enabled it to act swiftly in light of growing external threats. This means that while the EU’s image is undoubtedly stained, its ability to act rapidly and efficiently has masked the negative impacts. Secondly, the impact of this inaction and failure to act in a law-abiding way has not yet reached the point where it directly affects a significant amount of the member states’ population.
Thus, even though these situations have collectively construed a negative image for the EU (and, particularly, the Commission) in the eyes of citizens, this has not yet translated into concrete opposition or a strong enough demand for scrutiny. As such, the EU has managed to avoid resistance and continue pursuing its political (or functional) goals freely.
2. Changing Paradigm
This will, however, soon enough cease to be the case. The challenges that the EU currently faces, both from a regulatory and a political perspective, have increasingly called for more integration and cannot be responded to under the radar of public scrutiny. Therefore, the relationship between functional necessity and legal legitimacy can no longer be seen as a tension, as two competing interests, but rather must be viewed as interdependent ones.
EU concerns have escalated significantly in view of the recent Draghi report on EU competitiveness (requested by the Commission). In a report that emphasises the various lacunae that have haunted the EU in the past few years, ranging from its inability to compete with other major economic powers such as the United States to its urgent defence needs, Draghi essentially calls for an urgent, structural reform of the bloc in order to ensure its very survival.[10] It calls for unprecedented, joint spending and investment which totals around 5% of the Union’s GDP and doubles the recommendations drawn up in the Marshall Plan,[11] coupled with a coordinated redefinition of Europe’s main industries and a smoothening of intra-European trade and commerce. This involves a stronger commitment to truly achieve a single market and remove national barriers that have endured in certain sectors (including technological and financial services) through collective, collaborative policy-making. More importantly however, as Buti and Messori have pointed out, these conclusions are followed by two crucial implications: the need to ‘make fundamental economic and institutional changes in order to radically redesign the production model’ and the need to concomitantly ‘safeguard the European social model.[12]
On the former implication, precedent shows that whenever the EU seeks to paper structural decisions over with a political or technocratic rhetoric, its conduct emerges as weak, opaque, and potentially even unconstitutional. This was evidenced the Public Sector Purchase Programme ruling.[13] The incident arose in light of an attempt by the European Central Bank (‘ECB’) to issue more collective bonds in order to respond to the economic difficulties felt during the financial crisis. This was considered by the German Federal Constitutional Court to be a potential violation of Article 123 TFEU – in essence, a violation of European monetary policy that went beyond the level of integration agreed upon by member states. Upon review and clearance by the CJEU, the German court further contended that the decision by the ECB was ultra vires, interfered with German constitutional identity in contravention of Article 4 TEU, and the CJEU had failed to adequately review it.[14] While the situation was eventually resolved, this resolution came about politically, through a joint effort by the Commission, the ECB, and the German Bundestag. Moreover, the CJEU, too, emerged from this dispute appearing weak and at the mercy of prevailing political winds, having deferred ‘the last word… to the political branches’.[15] These problems were identified by De Witte and Dawson as having been present throughout the whole of the Euro-crisis. The failure to achieve sufficiently adequate ‘constitutional balance’ and to manage between competing interests eroded the Union’s legitimacy and clearly flashed the need to renew its legal frameworks.[16]
It therefore becomes clear that even with relatively minor issues concerning monetary integration, there will be an immense national legal resistance if the current regulatory frameworks are not clarified or changed to suit the Union’s current needs. Thus, it will be impossible to achieve the level of integration that Draghi has called for without major constitutional change and a drastic reform in the relationship between member states and the EU. Buti and Messori also recognised this when acknowledging that integration needs ‘require transfers of national sovereignty’.[17]
Furthermore, as mentioned above, such constitutional change must be accompanied by a protection and preservation of the ‘European social model’.[18] This is perhaps the first moment in the Union’s history where the constitutional change in question (or failure to implement it), may have a deep effect on European society at large. The continent’s increased exposure to external threats and competition undoubtedly puts its social cohesion and protection at stake.
This was seen in light of the EU’s attempted platform regulation initiatives, which have yielded, among other mechanisms, the Digital Services Act. Here, the Union perceived the potential threats that external action can have on domestic democratic affairs. The failure to uphold its Article 2 values in platform monitorisation allowed for foreign interference in the Romanian elections which were posteriorly annulled. Moser and Hempel recognised this as proof that the ‘democratic foundations of European societies have been seriously threatened’,[19] blaming the Commission’s inertia and the undue deference to responsibility that the DSA confers on gatekeepers for self-regulation. In a similar vein, the French foreign minister threatened the commission, claiming that it has been incapable of enforcing the existing legislation and adequately responding to external digital threats. Thus, in an attempt to balance its pro-economic, functional objectives with citizen protection and the maintenance of the rule of law the bloc has created a regulatory mechanism that has proven incapable of protecting its citizens from external risks.
This case therefore serves as a good example of the nature and seriousness of the threats the EU currently faces and how directly the impact of the EU’s actions is and will be felt by its citizens. This seriousness thus calls for a different approach to the one that has been adopted so far and renders the EU’s traditional political strategies, based on compromise and consensus, insufficient and constitutionally weak. The compliance structures that the EU has to adopt and the coordinated strategy that it will necessarily have to endorse in order to respond to these large threats and maintain social stability call for unprecedented constitutional change and revamped institutional dialogue.
3. State-building Necessities
This paper therefore argues that, in order to achieve the due constitutional change, the EU has to re-think its relationship with citizens. The transfer of sovereignty and competence from domestic to supranational institutions will only be accepted if there is sufficient confidence that the transferee is able to live up to its constitutional, rather than merely functional, expectations. Thus, unlike previous situations where the desired functional needs were met with a dubious stretching of the interpretation of Treaty provisions, the current challenges that the Union faces are unattainable without stronger public participation and compliance mechanisms. Contrary to Fabbrini’s belief that federalism will allow the EU to ‘meet its democratic expectations’,[20] this paper rather argues that federalism and integration result from the recognition that the Union is capable of meeting its expectations. It is only once citizens perceive that the EU, as a federalist or quasi-federalist state, can present itself as a democratic institution that abides by the rule of law in a procedurally sound way that mirrors the traditional conception of a Western state, that they will accept a potential discussion of such transition.
The EU’s current approach therefore becomes highly unproductive. By responding to the sporadic challenges with which it is faced with political manoeuvres which (albeit not officially) prima facie develop integration in an uneven way, the Union virtually creates an asymmetric bureaucratic machine which fails to resonate a state-like structure. This was recently recognised by Kelemen and McNamara who accurately emphasise that state-building is rarely mentioned when the political development of the EU is debated.[21] They call for a greater conceptualisation of the EU through the lens of a traditional state and a homogeneous, sustainable scheme of integration rather than an unpredictable, ad hoc one.
Furthermore, even the authors who discuss the importance of framing integration through the lens of state-building fail to acknowledge the most important factor within this process: the relationship between the EU and its citizens. This relationship has been traditionally preserved through a mutual belief in the strength of the EU’s values, and rests in large part on the Habermassian notion of constitutional identity. At the Union’s foundation, there was a belief that a commitment and devotion to the EU’s principles would create an attachment by citizens towards the European project that would repress the growth of nationalistic sentiment after the Second World War.[22] Only constitutional identity was seen as capable of gluing citizens from different member states and generating sufficient momentum towards integration.
Over the past few years, however, this project has been gradually abandoned and replaced by a functional centralisation that lacks such commitment. The concept of constitutional identity has been distorted and adapted to different realities,[23] and has increasingly lost its place within the European project. Linden-Ratek, for instance, holds that post-civic attachment is a difficult concept and the European idea of mutual trust is unfeasible and fictional.[24] These accounts fail to consider the future reality of integration where political compromise will no longer be accepted by citizens who will feel increasingly ignored by the process.
This mutual dialogue, in turn, can only be achieved via the so-called process of ‘integration through the rule of law’ which entails, as Lenaerts contends, a ‘respect for the rules of the game’.[25] However, as this paper posits, this concept goes beyond the mere recognition, by domestic authorities and EU institutions, that the Court of Justice stands at the apex of the European legal and judicial system and that the procedural dialogue amongst institutions is strictly observed. In fact, this must rather be seen as a consequence of a stronger commitment to the rule of law, which must first be evidenced at an institutional level – where political decisions have to be accompanied by rigid compliance mechanisms capable of providing adequate, understandable justifications. Similarly, it requires greater and wider participation in decision-making processes, involving a more diversified range of stakeholders than is currently envisaged. Only if this is guaranteed can the strong axis formed by the Commission and the Court of Justice, for instance, preserve its strength and ensure the prosperous attainment of the Union’s objectives.
Conclusion
It has become clear that the nature of the challenges that the EU will face in the future render its current strategy insufficient. To continue this non-linear, ad hoc, functional strategy is to further sink the role of citizens in a vital moment in the Union’s history. Not only do we have to convert the political discourse of functionality into genuine constitutional commitment, under a formal re-examination of states’ relationships with the EU, but also find mechanisms through which to restore the role of citizens within these institutional networks.
In so doing, it is relevant to go back to Habermas’s idea of constitutional identity and to fully endorse notions of democratic state-building. Political and institutional decisions will only be validated and accepted once citizens fully comprehend them and feel a part of the decision-making process. It is therefore vital that the Union prioritises its communication with citizens and enhances transparency when endorsing decisions that will have such a profound impact on their lives.
[1] Commission, ‘Proposal for a Regulation of the European Parliament and of the Council on a Mechanism to Resolve Legal and Administrative Obstacles in a Cross-Border Context’ COM (2018) 198 final.
[2] Case C-156/21 Hungary v European Parliament and Council of the European Union [2022], ECLI:EU: C:2022:97.
[3] Iwona Jaskolska, ‘New Instruments Protecting the 2021-2027 Cohesion Budget Against Rule-of-Law Breaches’ (EUCRIM, 2023) <https://eucrim.eu/articles/new-instruments-protecting-the-2021-2027-cohesion-budget-against-rule-of-law-breaches> accessed 17 February 2025.
[4] European Parliament, ‘Resolution of 7 October 2020 on the establishment of an EU Mechanism on Democracy, the Rule of Law and Fundamental Rights (2020/2072(INL))’ (European Parliament, 7 October 2020) <https://www.europarl.europa.eu/resources/library/media/20201020RES89705/20201020RES89705.pdf> accessed 13 February 2025.
[5] Thomas Wahl, ‘Commission Triggers Conditionality Mechanism Against Hungary’ (EUCRIM, 27 April 2022) <https://eucrim.eu/news/commission-triggers-conditionality-mechanism-against-hungary> accessed 17 February 2025.
[6] Barbara Moens and Lili Bayer, ‘Commission blocks €10.2 billion for Hungary as EU tries to sway Viktor Orbán on Ukraine’ (Politico, 6 December 2023) <https://www.politico.eu/article/commission-unblocks-e10-2-billion-for-hungary-as-eu-tries-to-sway-viktor-orban-on-ukraine/> accessed 17 April 2025.
[7] Jorge Liboreiro, ‘European Parliament sues Commission over the release of €10.2 billion in frozen funds to Hungary’ Euronews (euronews, 14 March 2024) <European Parliament sues Commission over the release of €10.2 billion in frozen funds to Hungary | Euronews> accessed 17 April 2025.
[8] Daniel Boffey, ‘MEPs back action against European Commission over Poland and Hungary’ (The Guardian, 10 June 2021) <https://www.theguardian.com/world/2021/jun/10/meps-back-action-against-european-commission-over-rule-of-law-sanctions> accessed 12 March 2025.
[9] Pascal Hansens, Harald Schumann, and Maxence Peigné, ‘Infringement cold cases: Member States left unpunished for dozens of EU Law violations’ (Investigate Europe, 30 March 2023) <https://www.investigate-europe.eu/posts/infringement-cold-cases-member-states-left-unpunished-for-dozens-of-eu-law-violations> accessed 17 April 2025.
[10] Theo Leggett and Laura Gozzi, ‘EU facing existential risk without investment – report’ (BBC News, 9 September 2024) <https://www.bbc.com/news/articles/c4gq1e7k2j8o> accessed 17 March 2025.
[11] ibid.
[12] Marco Buti and Marcello Messori, ‘Draghi’s message: sharing economic sovereignty is hard but possible’ (Bruegel policy brief, 18 September 2024) <draghi’s-message:-sharing-economic-sovereignty-is-hard-but-possible-10305.pdf> accessed 18 April 2025.
[13] Case C‑62/14 Gauweiler and Others v Deutscher Bundestag [2015], ECLI:EU:C:2015:400.
[14] Christoph Maes, ‘The notion of constitutional identity and its role in European integration’ (European Parliamentary Research Service, February 2024) <The notion of constitutional identity and its role in European integration> accessed 18 April 2025.
[15] Teresa Violante, ‘Bring Back the Politics: The PSPP Ruling in Its Institutional Context’ (2020) 21 German Law Journal 1045.
[16] Mark Dawson and Floris de Witte, ‘From Balance to Conflict: A New Constitution for the EU’ (2015) 22 European Law Journal 204, 205-07.
[17] Buti and Messori (n 12).
[18] Fritz W Scharpf, ‘The European Social Model: Coping with the Challenges of Diversity’ (2002) 40 Journal of Common Market Studies 555.
[19] Carolyn Moser and Laurids Hempel, ‘Elon Musk’s Wake-up Call for Europe’ (Verfassungsblog, 27 January 2025) <https://verfassungsblog.de/elon-musks-wake-up-call-for-europe/> accessed 12 February 2025.
[20] Sergio Fabbrini, ‘Differentiation or federalisation: Which democracy for the future of Europe?’ (2022) 28 European Law Journal 9, 20.
[21] Daniel Kelemen and Kathleen McNamara, ‘State-Building and the European Union: Markets, War, and Europe’s Uneven Political Development’ (2022) 55 Comparative Political Studies 963, 966.
[22] Jürgen Habermas, ‘Citizenship and National Identity: Some Reflections on the Future of Europe’ (1992) 12 Praxis International 1.
[23] Jan-Werner Müller, ‘A general theory of constitutional patriotism’ (2008) 6 International Journal of Constitutional Law 72.
[24] Paul Linden-Retek, ‘Constitutional Patriotism as Europe’s Public Philosophy? On the Responsiveness of Post-national Law’ in Jan Komárek (ed), European Constitutional Imaginaries (Oxford University Press 2023).
[25] Koen Lenaerts, ‘New Horizons for the Rule of Law Within the EU’ (2020) 21 German Law Journal 29, 29.
António Vale
LLB (LSE) ’25 and Notes Editor of the LSE Law Review 2024/25