The research focus of the paper is on the relation between general principles, fundamental rights and the rule of law in the EU. The role of the judiciary is evaluated through the prism of the jurisprudence of the Court of Justice of the EU (CJEU) with a particular focus on the formula, introduced in the Associação Sindical dos Juízes Portugueses judgment and subsequent decisions by the CJEU, related to the rule of law and independence of the judiciary. A thorough assessment of the relation between fundamental rights, foundational values of the EU such as the rule of law and effective judicial protection through the methodological evaluation of the effectiveness and functional interpretation is included. The core of the research reflects the functional approach of the CJEU with respect to judicial independence as the condition for effective protection of fundamental rights and EU law. Especially crucial is the role of national courts for upholding the rule of law on EU level. The role of the EU’s Rule of Law Report mechanism, introduced in 2020, is analysed as judicial independence forms an essential part of the reports. The EU Rule of Law reports serve as illustrations of the underlying problems, related to the rule of law and in particular the independence of the judiciary and effective judicial protection and related enforcement and implementation issues.