Merging the EU’s Common Agricultural Policy (CAP) into the single National and Regional Partnership (NRP) Fund raises more than just the fungibility of resources between the different priorities in that Fund (though this is largely neutralised for the CAP by ring-fencing a minimum amount for CAP income support and fisheries interventions, for further details see my post on this topic). The CAP is also subject to a new set of management regulations that will have important implications for the governance of the policy.
Elements of governance that are affected include the division of competences between the Commission and Member States under shared management, the preparation, approval and monitoring of the CAP chapter in the NRP Plans, performance monitoring, and the role of partnerships. One important change is that the design of CAP interventions will now be even more clearly subject to several horizontal principles such as the rule of law and compliance with the Charter of Fundamental Rights of the European Union, the ‘do no significant harm’ (DNSH) principle, climate and environmental mainstreaming, and gender equality. We explore what that might mean in this post.
The relevant provisions are contained, first, in Articles 7 through 9 of the proposed European Fund Regulation which define the obligation of Member States to comply, in implementing Fund expenditure including the CAP, with the principles of the rule of law and the Charter of Fundamental Rights. In addition, it requires Member States to take steps to avoid any discrimination “based on gender, racial or ethnic origin, religion or belief, disability, age or sexual orientation during the preparation, implementation, monitoring, reporting and evaluation of the Plans. In particular, accessibility for persons with disabilities shall be taken into account throughout the preparation and implementation of the Plans” (Article 7).
Second, relevant provisions related to horizontal principles in the draft Budget Performance and Tracking Regulation are relevant. One of the objectives of this Regulation is to have consistent provisions across EU budget programmes on applying horizontal principles such as DNSH and gender equality. These relate to climate and biodiversity (Article 4), the DNSH principle (Article 5), social policies (Article 6) and gender equality (Article 7). This Regulation also introduces a tracking and performance-based framework to assess compliance (Article 8) and includes obligations on implementing these principles in the Plans in Article 13.
The current governance of horizontal principles in EU spending rests on a tiered legal architecture that distinguishes binding obligations from tracked political commitments. At the strictest level, the Conditionality Regulation (EU, Euratom) 2020/2092 adopted under Article 322(1)(a) TFEU empowers the EU to suspend funds where breaches of the rule of law affect the sound financial management of the budget.
Other commitments relate to setting, monitoring and reporting of budgetary expenditure on a set of horizontal priorities across all programmes, embedding requirements like climate-proofing, DNSH, and gender mainstreaming into financial governance. In the current MFF, the political commitments are set out in the Inter-Institutional Agreement 2020 Article 16 which defines the objectives to be mainstreamed and sets targets for them. These commitments are then given legal standing in the Financial Regulation Article 33 which mandates performance tracking and monitoring of mainstreamed objectives.
Rule of Law and the European Charter horizontal principles
Recital (27) and Articles 7 through 9 of the draft European Fund Regulation require Member States to demonstrate compliance with the Charter of Fundamental Rights and rule of law principles as part of the validation of their National and Regional Partnership (NRP) Plans. This includes identifying deficiencies and proposing remedial actions based on the Rule of Law Report, European Semester findings, infringement proceedings, and judgments of the Court of Justice. A mid-term review mechanism ensures that new deficiencies that arise during implementation can be addressed.
Recital (27) sets out the philosophy.
“This Regulation should include strong safeguards to ensure that the Fund is implemented in a way that ensures respect with the rights, freedoms and principles set out in the Charter of Fundamental Rights of the European Union and of the principles of the rule of law as set out in Article 2(a) of Regulation (EU, Euratom) 2020/2092 of the European Parliament and of the Council. Therefore, as part of the validation process of their NRP Plans, Member States should provide assurance on the fulfilment of these two horizontal conditions, with an identification of potential deficiencies and remedial actions based, in particular, on the country-specific challenges identified in the context of the Rule of Law Report and European Semester, as well as infringement proceedings and judgments of the Court of Justice of the European Union. All Member States should be required to review their NRP Plans halfway through implementation, as part of the mid-term review, to address any new deficiencies identified, in particular, in the context of the latest Rule of Law Report. At any time during the implementation and following exchanges with the Member State concerned, there should be a possibility to block part or all of the payments made to a Member State if one or more of the Rule of Law and Charter horizontal conditions is not fulfilled. With due regard to the principle of proportionality, the determination of the non-fulfilment and identification of the specific measures concerned should take into account the actual or potential impact of the non-fulfilment on the sound financial management of the Union budget or on the financial interests of the Unions as well as the nature, duration, gravity and scope of the breach.”
In the current MFF, rule of law conditionality in principle applies to CAP spending under the Conditionality Regulation. Rule of law breaches might include systemic deficiencies in judicial independence (e.g., compromising courts’ ability to adjudicate fraud or corruption cases involving CAP funds), anti-corruption frameworks (e.g., weak oversight allowing misappropriation of agricultural subsidies), or procurement integrity (e.g., biased awarding of CAP-related contracts). Enforcement has been hampered by high evidentiary thresholds (proving breaches put at risk the sound financial management of EU funds) and political delays in Council decisions (see my discussion of the application of the rule of law mechanism in Poland following the previous government’s undermining of judicial independence).
The Commission proposal creates parallel but distinct conditions for Charter compliance (Article 8) and rule of law (Article 9). This is structurally different from the Conditionality Regulation which only covers rule of law. The Charter condition is entirely new; it mandates proactive national mechanisms to ensure Fund implementation respects fundamental rights.
The penalty for a breach is that the Commission is empowered not to make the corresponding payments until the breaches of the Charter or rule of law conditions have been remedied. Notably, Article 8 allows direct Commission decisions on Charter breaches without Council approval, unlike rule of law suspensions under Article 9 which still require Council adoption. Procedurally, the two-month remedial period for both conditions (Articles 8(3)/9(3)) is tighter than the current three-month window in Regulation 2020/2092. This significantly speeds up enforcement for rights violations.
When the Commission assesses that some element of the Charter or rule of law horizontal conditions is not fulfilled, and having received the Member State comments, it identifies the specific measures of the NRP Plan affected by the non-fulfilment, taking the following aspects of the non-fulfilment into consideration: (a) the actual or potential impact on the sound financial management of the Union budget or on the financial interests of the Union; and (b) the nature, duration, gravity, and scope of the non-fulfilment.
This appears to be a more flexible trigger than in the Contingency Regulation. Here, the measures taken “shall be determined in light of the actual or potential impact of the breaches of the principles of the rule of law on the sound financial management of the Union budget or the financial interests of the Union. The nature, duration, gravity and scope of the breaches of the principles of the rule of law shall be duly taken into account”.
The new language that the actual or potential impact on the sound financial management of the Union budget or the financial interests of the Union should be “taken into consideration” rather than “shall be determined” strikes me as a much weaker requirement. It potentially opens the possibility to suspend payments in the case of system human rights violations (e.g. discrimination) even without immediate financial risk.
The big fear of CAP beneficiaries has been that CAP payments could be interrupted or withheld if either of these two horizontal conditions were activated for reasons that were not the responsibility or under the control of farmers. One safeguard is that the Commission is empowered to reduce proportionately the EU payment “as regards the specific measure of the Plan concerned.” So any measures taken that could affect agricultural payments would have to concern the way agricultural policy was implemented in a Member State.
Also, under the Contingency Regulation, there is an obligation on governments to implement the programme or fund affected by the measure by continuing to make payments to beneficiaries. As a legal obligation, it creates a litigation risk that beneficiaries could sue Member States if payments are no longer made. Under Article 22(l) of the Regulation, Member States will in future have to specify the arrangements in place to ensure that they will continue to make payments to beneficiaries in the event of the suspension of Union funding. This responds to the criticism that current rules could harm innocent end-recipients, but it creates new national fiscal burdens – countries must design contingency funding mechanisms, for example, through national budgets or emergency reserves.
The Do No Significant Harm (DNSH) principle
In the case of EU budgetary programmes, the commitment to respect the DNSH principle is laid down in the European Green Deal Communication and the Inter-institutional Agreement accompanying the 2021-2027 MFF. It was formalised in the Taxonomy Regulation (EU) 2020/852 in 2020. The EU Taxonomy defines six environmental objectives (climate change mitigation, climate change adaptation, sustainable use and protection of water and marine resources, circular economy, pollution prevention and control). For an activity to be considered sustainable under the Taxonomy, it must substantially contribute to at least one of these six environmental objectives, while at the same time not significantly harming any of the other environmental objectives (Article 3).
Article 17 of the EU Taxonomy Regulation defines what constitutes ‘significant harm’ of economic activities as regards six environmental objectives. Specifically, Article 17 provides that an economic activity is considered to do significant harm to:
a. climate change mitigation if it leads to significant greenhouse gas (GHG) emissions;
b. climate change adaptation if it leads to an increased adverse impact of the current climate and the expected future climate, on the activity itself or on people, nature or assets;
c. sustainable use and protection of water and marine resources if it is detrimental to the good status or the good ecological potential of bodies of water, including surface water and groundwater, or to the good environmental status of marine waters;
d. the circular economy, including waste prevention and recycling, if it leads to significant inefficiencies in the use of materials or in the direct or indirect use of natural resources, or if it significantly increases the generation, incineration or disposal of waste, or if the long-term disposal of waste may cause significant and long-term environmental harm;
e. pollution prevention and control if it leads to a significant increase in emissions of pollutants into air, water or land;
f. protection and restoration of biodiversity and ecosystems if it is significantly detrimental to the good condition and resilience of ecosystems, or detrimental to the conservation status of habitats and species, including those of Union interest.
In 2022, the Commission proposed to update the Financial Regulation, the main point of reference for the principles and procedures governing the establishment, implementation and control of the EU budget, to ensure that budget implementation effectively helped achieve the European Green Deal. To that end, it proposed to introduce an explicit reference to the DNSH principle, in line with the Commission’s commitment to sustainable financing and the green transition. This is now included in Article 33(2)d in the 2024 revision of the Financial Regulation. As such, it sets an overall aspiration that EU spending should be implemented to achieve its objectives without doing significant harm to the six environmental objectives in the Taxonomy Regulation.
The Budget Performance and Tracking Regulation (Article 5) mandates that a streamlined application of the DNSH principle in the Financial Regulation should be facilitated by Commission guidance. This would set out general principles and criteria and, where necessary, specific criteria at the level of relevant policy areas. It would distinguish between policy areas or activities that are always deemed to be in line with the DNSH principle, and policy areas or activities that are considered to do significant harm to one or several environmental objectives and can therefore not be financed from the EU budget. Article 13 requires that each Member State should provide a DNSH assessment for each activity in its national Plan, except where otherwise exempted by Commission guidance.
In the current CAP framework, DNSH is not explicitly referenced in the CAP Strategic Plans Regulation (EU) 2021/2115. The proposed CAP Regulation (COM(2025) 560) introduces a new compliance framework: the farm stewardship mechanism. Recital (8) and Article 3 of that Regulation establish that support subject to farm stewardship conditions is deemed to comply with the DNSH principle.
Recital (8) reads: “The farm stewardship should be established to guarantee compliance of the CAP support with the “do no significant harm” principle laid down in [the 2024 Financial Regulation]”. Article 3 of the proposed CAP Regulation provides legal certainty by stating: “Support subject to the farm stewardship conditions shall be deemed to comply with the principle of ‘do no significant harm’…”. To make absolutely sure, Article 7(3) of the draft European Fund Regulation declares that “Payments subject to the farm stewardship requirements referred to in [the CAP Regulation] shall be deemed to comply with the principle of “do no significant harm” as set out in [the 2024 Financial Regulation]”.
CAP income support payments (except for payments to small farmers) are subject to farm stewardship so will automatically meet the DNSH principle under these provisions. Investment supports for farmers and forest holders are not covered, so could still be challenged under this principle.
Climate and Environmental Objectives
Climate mainstreaming was first introduced in the 2014-2020 MFF with the overall aim of allocating 20% of spending under the EU budget to climate goals (mitigation and adaptation). In the December 2020 Inter-Institutional Agreement that accompanied the 2021-2027 MFF, the Commission, Council and Parliament set an overall target of at least 30% for climate-relevant expenditure. It introduced a ‘climate adjustment mechanism’ allowing for action to be taken in case expenditure levels are likely to be insufficient to reach (programme-specific) climate spending targets. It also set down the ‘climate tracking mechanism’ that would be used to track the level of expenditure. This applies climate coefficients (0%, 40%, 100%) to different interventions based on their expected contribution to climate objectives. There is a detailed explanation of the climate mainstreaming architecture applied in the current MFF in the Commission’s Staff Working Document SWD(2022) 225.
The expected contribution of individual spending programmes to the overall target of at least 30% was specified in the recitals to their basic acts. In the case of the CAP, the expected contribution to climate-related objectives is set at 40%. In addition, another recital specified that CAP support should contribute to mainstreaming biodiversity action in Union policies and to the achievement of the overall ambition of providing 7.5% of annual spending under the MFF to biodiversity objectives in 2024 and 10% of annual spending under the MFF to biodiversity objectives in 2026 and 2027. There has been much criticism of the climate marker methodology, not least as applied to CAP interventions, despite updates made by the Commission between the two MFF’s (see, for example, this 2021 ECA report).
The proposed Budget Performance Regulation (COM(2025) 545) would introduce climate and environmental tracking as a horizontal obligation for European Fund expenditure. It would establish an overall target that at least 35% of the overall MFF budget should be spent on climate and environmental objectives. Annex III sets a minimum allocation of 43% of the financial envelope of NRP Plans for combined climate and environmental goals (Article 4). A climate and environment adjustment mechanism is introduced in Article 4(5) whereby, where there is insufficient progress towards the target in a specific spending programme, “the Institutions… will consult with each other on appropriate measures to be taken to ensure that Union spending on climate and environment objectives over the 2028-2034 multiannual financial framework corresponds to at least 35% of the total amount of the Union budget”.
The tracking methodology is set out in Article 8. It builds on the general budget tracking and performance framework whereby each activity financed by the budget is assigned an intervention field that closest represents the substance of the activity financed. Each intervention field is then assigned a series of EU coefficients to determine their contribution to specific policies. These coefficients are set out in Annex 1 to the Regulation. Table 1 shows a selection for specific agricultural policy interventions.
There are four specific policy areas to which EU coefficients are assigned: climate change mitigation, climate change adaptation, environment, and social. The contribution of the intervention to the 43% target for climate and environmental spending in the single European Fund will be the highest coefficient amongst the climate mitigation, climate adaption and environment coefficients in Annex 1 (thus not including the social coefficient). For example, spending on CAP income support will contribute 40% of the amount to the climate and environment target (presumably because of the link with farm stewardship), coupled support to ruminant livestock will also contribute 40%, while 100% of support to farmers in mountain areas, 40% of support to farmers in areas with other natural constraints, and 100% of support for environment and climate practices, will contribute to the overall target.
These percentage contributions suggest that, if agricultural spending is taken on its own, it will have little difficulty in reaching and exceeding the 43% target. Thus, the climate and environment spending target would not seem to require additional Member States allocations of CAP funds to agri-environment-climate actions to fulfil this target. However, the target is established at the national Plan level. If other spending priorities have difficulty in showing a sufficiently high contribution to the climate and environment spending target (defence and security spending is excluded for this purpose), there could be an incentive for Member State managing authorities to favour additional CAP spending on agri-environment-climate actions to reach the overall target given that the latter can contribute 100% to this target.

Source: Extracted from Annex 1, draft Budget Performance and Tracking Regulation, COM(2025) 545.
Social and Gender Equality
The Treaty on the Functioning of the European Union (TFEU), Article 8 is the primary legal foundation for gender equality across EU activities. It states: “In all its activities, the Union shall aim to eliminate inequalities, and to promote equality, between men and women.” This treaty-level commitment underpins gender mainstreaming but does not itself impose operational obligations on specific programmes like the CAP.
Gender equality in the current CAP is addressed in the CAP Strategic Plans Regulation (EU) 2021/2115 through planning and evaluation requirements. Gender equality is one of the specific objectives that the CAP must address. Member States should integrate gender analysis into their Strategic Plans and report on gender-disaggregated indicators. However, there is no binding spending target or enforcement mechanism. The obligations are spelled out in Recital (33) of that Regulation:
“Equality between women and men is a core principle of the Union and gender mainstreaming is an important tool in the integration of that principle into to the CAP. There should therefore be a particular focus on promoting the participation of women in the socio-economic development of rural areas, with special attention to farming, supporting women’s key role. Member States should be required to assess the situation of women in farming and address challenges in their CAP Strategic Plans. Gender equality should be an integral part of the preparation, implementation and evaluation of CAP interventions. Member States should also strengthen their capacity in gender mainstreaming and in the collection of data disaggregated by gender”.
The proposed Budget Performance Regulation (COM(2025) 545) strengthens these obligations. Article 7 codifies gender equality as a horizontal principle. Article 13 requires that there should be a gender equality assessment for each activity in a Member State’s national Plan. This means providing an explanation of how each activity in the Plan is expected to contribute to gender equality, as well as assigning an appropriate gender score and providing an adequate justification.
The concept of gender scoring is set out in Article 7 and comprises three categories:
(a) activities with gender equality as a principal objective (‘gender equality score 2’);
(b) activities with gender equality as an important and deliberate objective but not as its main objective (‘gender equality score 1’);
(c) activities anticipated to have no substantial contribution to gender equality (‘gender equality score 0’).
No target score is set, but gender scoring will allow the Commission to make comparisons across countries and activities in evaluating the contribution of EU spending to gender equality.
These various provisions relating to gender equality are summarised in the Explanatory Memorandum for the Regulation as follows:
The Regulation also supports the consistent implementation of the gender equality principle laid down in the Financial Regulation, ensuring that gender budgeting is strengthened for the next MFF through better programming and monitoring rules. Gender equality is included as a specific objective for programmes for which it is assessed as specifically relevant and appropriate. Specific gender equality provisions have also been incorporated into the design of programmes, for example by requiring Member States to demonstrate how their National and Regional Partnership Plans contribute to gender equality or by including this aspect in the procedure for evaluation of calls for proposals for programmes under direct management where appropriate. This Regulation codifies the gender tracking methodology based on a system of gender scores. Performance indicators will be disaggregated by gender where relevant, in line with the Financial Regulation. The single expenditure tracking and performance framework will also make it possible to measure the budget’s contribution to gender equality more accurately.
Social objectives are similarly reinforced. Article 6 of the Regulation requires that programmes respect working and employment conditions under EU, national, and international law, including ILO conventions. This obligation already exists in the Financial Regulation Article 33 but it is now made directly applicable in the operational Regulation. The contribution of the budget to social policies will be monitored by means of EU coefficients in the budget expenditure tracking and performance framework (see Table 1). These provisions apply to CAP and other programmes, introducing a more consistent and enforceable framework.
Conclusions
EU spending is subject to horizontal principles of two kinds. Some are incorporated into legal instruments that permit the suspension of payments where the principles are breached. Others are political commitments to promote certain priorities in budget spending which are given a legal basis through the Financial Regulation.
The Commission’s proposal for the next MFF marks a shift toward a more integrated and enforceable framework for horizontal principles. An explicit objective is to make consistent the provisions for supporting horizontal principles across the EU budget, which is deemed to reduce complexity for beneficiaries and to increase the coherence of EU action. These horizontal principles have been shifted from the Financial Regulation to either the draft European Fund Regulation (for rule of law and Charter obligations) or the draft Budget Performance and Tracking Regulation (for other principles). For the CAP, this means greater scrutiny of programme design and implementation, with legal obligations tied to rule of law and Charter compliance, quantitative targets for climate and environmental spending, and more structured oversight for DNSH, social inclusion and efforts to achieve gender equality.
CAP spending will in future be subject both to the Charter of Fundamental Rights, which forbids discrimination, as well as the rule of law. The trigger for designating a breach has been relaxed and may no longer require a risk to the financial management of the Union budget. Member States will be required to demonstrate in their national Plans the arrangements they have made to ensure payments to beneficiaries even if their payments from the Union are suspended.
CAP spending will in future be formally subject to the DNSH principle though, in a balance between project-level screening and administrative burden, CAP payments that are subject to farm stewardship obligations are automatically deemed to comply with this principle.
CAP spending will also be required to contribute to the overall 43% target for spending on climate and environment-related objectives in Member State’s National and Regional Partnership Plans.
The obligation to promote gender equality requires that Member States must demonstrate how their NRP Plans including the CAP contribute to gender equality. There will be more extensive obligations for gender budgeting, performance indicators disaggregated by gender, and gender scores for programme evaluation.
Other horizontal principles, such as alignment of spending with the Sustainable Development Goals (SDGs), support for a just transition, and digitalisation, are not explicitly codified in the new regulations but remain influential. They are reflected in strategic documents such as the Vision for the Future of Agriculture and Food and the Long-Term Vision for Rural Areas and may also shape future revisions of the CAP framework.
This reframing of the horizontal principles marks a very small step towards eroding the CAP’s historical exceptionalism. CAP spending is treated the same as other shared management spending in the National and Regional Partnership Plans. The impact of the new architecture on the way CAP money is spent remains to be seen.
This post was written by Alan Matthews.
Photo credit: Alan Matthews
O artigo foi publicado originalmente em CAP Reform.