A 5 billion Euro penalty to save the rule of law – How infringement penalties are set

5 August 2021

The full version of this report is available in PDF format

When member states violate EU law or refuse to implement judgements by the European Court of Justice (ECJ) EU institutions are not powerless: the European Commission can propose, and the ECJ impose, financial sanctions.

On 20 July 2021, European Commission Vice-President Vera Jourova, determined to see the ECJ judgement on the Polish judicial system from 15 July implemented, announced just this:

“We will ask for financial sanctions if Poland does not remedy the situation by 16 August. The rights of EU citizens and businesses must be protected in the same way across all Member States. There can be no compromise on this.”

In a recent essay ESI recommended the Commission request a sanction of € 5 billion unless Poland fully implements the ECJ judgement.  But how would this work? If European institutions can impose sanctions, why are they doing this so rarely? Why are most sanctions relatively low? Do they change behaviour? Here is a quick guide to financial penalties for breaking EU law.