Table of Contents: I. Introduction. – II. Differentiation: From pragmatic problem-solving to mode of governance. – II.1. Differentiated governance: The normalization of disintegration. – II.2. Getting to “a community of values and of laws”. – III. The rule of law crisis: From dialogues to conditionality. – III.1 Muddling through political dialogue: From art. 7(1) TEU to annual reports. – III.2 From dialogues to budgetary conditionality: On veto threats and flexible legal frames. – IV. Differentiated governance and the sovereigntist challenge to the primacy of EU law. – V. Halting disintegration: The CJEU on the Union’s legal foundations. – IV. Conclusion.
Abstract: The EU’s decade-long rule of law crisis has normalized into an everyday constitutional and political experience. The lens of differentiated governance calls for a close inquiry into the legal and political dynamics – processes, incentive structures and inter-institutional conflicts – that are consequential for the future of the Union as a “community of values and of laws”. Tracing the debate on financial sanctions (budgetary conditionality) in the broader context of the rule of law crisis, this Article argues that the future of Europe hinges on attributing practical, political and legal significance to the founding values set forth in art. 2 TEU. Without respect for these founding values differentiated governance as a set of political or legal practices and as an academic-intellectual project has no purpose or endpoint.
Keywords: art. 2 TEU – conditionality – crisis – differentiation – rule of law – values.
* Professor, Central European University (Vienna), email@example.com.