Conditionality and the Making of the EU Spending Power: The Question of Competence

In recent years, the European Union has increasingly leveraged its growing spending power to broaden the scope and intensity of its actions, leaving virtually no policy field untouched by the reach of EU funding. This evolution raises critical constitutional questions, particularly in light of the principles governing the system of competences. The Union’s exercise of spending powers, notably through the use of conditionality mechanisms, has indeed rapidly emerged as an attractive alternative to the standard procedures for enacting and enforcing rules in the EUlegal order, often without any genuine reflection on the limits posed by the principle of conferral. This article focuses on the competence issues deriving from the rise of governance through funding, identifying a set of constitutional constraints to the use of spending powers as an alternative regulatory or enforcement technique in EU internal affairs. Importantly, it goes beyond discussing, retrospectively, the legality of specific funding instruments adopted in recent years, but rather aims at providing a framework to examine, prospectively, whether and to what extent the use of spending powers remains within the realm of EU competences. The issue of ‘competence creep’ through funding is ever more salient nowadays, as the EU institutions enter tense negotiations on the future of EU funding under the next Multiannual Financial Framework.