The Recovery and Resilience Facility reflects the generalisation of spending conditionality and the economisation of the rule of law in EU governance. The RRF performance-based approach also applies to measures related to rule of law protection, meaning that recovery funds can only be disbursed as long as the related conditions are met. While the academic literature has already highlighted the difficulty of applying performance frameworks to values, this article assesses how the RRF performance-based approach integrates the safeguard of the rule of law, based on a comparative study of the Slovak, Hungarian and Polish plans. Rule of law protection is set as a priority in the RRF. Yet, the economic and financial framing – in line with New Public Management and neoliberal governmentality – limits the potential impact of rule of law reforms. Overall, the effectiveness of rule-of-law spending conditionality depends more on the features of the performance regime and the attitude of political actors than the degree of financial pressure.

The European Semester is an economic governance tool that the European Union (EU) uses to monitor and coordinate national policies, but it has also evolved into a mechanism to address rule-of-law risks in Member States. By linking financial support to reforms, particularly through the Recovery and Resilience Facility (RRF), the Semester helps enforce rule-of-law standards and represents an innovative approach to safeguarding EU values. However, this process raises concerns about democratic accountability, and it overlooks broader societal concerns.

The Covid-19 crisis provided an opportunity for the European Union to offer an alternative regulatory response to the crisis of values by systemically linking European funding to respect for the rule of law. A rule of law conditionality mechanism for spending was introduced in the Recovery and Resilience Facility and in Regulation 2020/2092. It is both positive – in that it encourages Member States to implement reforms and investments aimed at improving the rule of law – and negative – in that it takes the form of financial sanctions. However, the development of the rule of law conditionality is leading to an economisation of the concept of the rule of law, insofar as it mainly concerns those dimensions of the rule of law that are conducive to growth – such as justice systems and the fight against corruption. As a result, it could paradoxically exacerbate the very crisis it is designed to resolve.

The EU's Recovery and Resilience Facility (RRF) represents a bold integrationist step in European economic governance. Besides the size of the fiscal envelope, the novelty also lies in the new governance. Member states prepare integrated investment and reform plans and need to fulfil milestones and targets to access funding. This article assesses the balance of power in negotiating the plans and the effect on domestic policymaking. Based on five case studies, we show that the RRF has enhanced the steering capacity of the European Commission on reforms and investments, while member states remain ultimately in charge of the plans. Second, we argue that, while the RRF enhances the efficiency of the policymaking process and allows the fast-forwarding of reforms, it has also led to a contractualization of the relationship with the EU and a centralization of decision-making processes within member states. This latter aspect may hamper ownership and legitimacy in policy implementation.