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The controversy over the rule of law in the EU is reaching a climax. Hungary and Poland want to block the big financial package next week. It contains a mechanism by which the two countries could be financially punished for violating the rule of law. This would mean that the EU would not have a new budget for the moment, but above all it would make it impossible for a quick disbursement from the Corona reconstruction fund, which countries like Italy and Spain urgently want. A solution must be found, there is no plan B, says Prime Minister Charles Michel. The Union is threatened by the next great crisis and by division. The most important questions and answers at a glance:
What is the dispute about?
Since national populists Viktor Orbán and Jarosław Kaczyński set the tone there, EU members Hungary and Poland have taken a significantly different political path than the rest of the Union. The Hungarian government restricts freedom of expression by buying and promoting friendly media, while allowing for the prosecution of critical media. Harasses and threatens critics of civil society and limits the freedom of science, religion and assembly. Poland, on the other hand, places its hand on a central pillar of the rule of law: the independence of the judiciary from government instructions. There is not much left of this independence after recent reforms, not least by the Supreme Court. This affects everyday legal life. Critical judges or lawyers in Poland are increasingly being pushed aside by colleagues loyal to the government. The judgments of the EU judiciary are ignored. The rest of the EU cannot and will not accept this and is exploring various options, which have so far proved difficult to implement.
What is the political context?
It’s not just about securing power, it’s about a fundamental difference of opinion. Viktor Orbán has repeatedly made it clear that he rejects the “Brussels” conception of liberal democracy. The “illiberal” democracy that Orbán propagates is essentially a negation of the pluralism that is constitutive of liberal democracy. Pluralism means that there is no “single” political vision that is “right” or “good” for a community. Rather, a spectrum of opinion is admissible, even desirable. The state ensures that everyone can express themselves as long as they remain within the framework of the free democratic order.
Orbán apparently sees it differently. According to his own statements, he believes in a kind of “popular will” that he himself is able to recognize. All other opinions then “harm” the “people” by definition and must therefore be suppressed.
Why is this such a serious problem for the EU?
There are many and often very tough discussions in the EU, mainly about money or political decisions. But these are more fundamental issues: the basis of the Union’s values, human rights, democracy, the rule of law. As stated in Article 2 of the EU Treaty, these principles are “common to all Member States (…)”. Poland and Hungary undermine the guarantee of Article 2; If you apply for membership today, you will no longer be accepted. This is not only problematic in itself, but also calls into question the functioning of the internal market, which inevitably requires a functioning legal community. In the long run, all this gnaws at the foundations of the EU, there is a risk of collapse.
What can the EU do about it?
As a voluntary club, the EU is not really prepared for such a challenge. But you have no choice. Since the usual set of rules for punishing treaty violations (“infringement procedures”) is not enough, it has a new tool to correct deviations like those of Hungary and Poland: the Article procedure 7. It is initiated in the event of systematic violations of the rule of law and may lead to the revocation of the country’s voting rights in the Council of the European Union, the decision-making body of the Member States. The EU Commission has initiated such proceedings against Poland and the European Parliament against Hungary. Both have not advanced very far. So far, even “the obvious risk of a serious violation” of EU values has not been identified – due to a lack of political will, but also because everyone knows that the company is hopeless.
Because it does not work?
The tool is called the “atomic bomb” less because it is so powerful, but because only one threatens it and would rather not use it. It corresponds to a termination of affiliation, which the contracts do not provide with good reason. Anyone who is faced with this tool should go voluntarily. In this respect, the Article 7 procedure is fundamentally contrary to the system as soon as it is applied. Unfortunately, it is also a blunt weapon. Because to pronounce the punishment, all member states (except the “sinner” of course) must agree. If the “sinner” finds an ally, the procedure remains ineffective. Poland and Hungary have promised to protect each other in this case.
Which path did the EU choose instead?
The way out is obvious: Hungary and Poland are among the EU’s largest net recipients. Receive large donations from various funds. In 2019, transfers contributed 4.5% to Hungary’s gross domestic product, compared with three% for Poland. This is why the EU proposed in 2017 that the new EU budget for the years 2021-2027 should be subject to one condition: money should only flow from the funds if the recipients do not violate the rule of law. The idea, which also met with goodwill in Berlin, became all the more popular when there were no signs of abating from Warsaw or Budapest. The original legislative proposal, also from the Juncker Commission, provided for a strong mechanism: the Commission itself could identify a violation that would have resulted in a reduction in funding; This could only be stopped by a qualified majority of Member States.
Little has happened for a long time. When the time for the adoption of the new EU budget was running out, Council President Michel put forward a proposal for the benefit of Hungary and Poland. A qualified majority of states should now be required to impose financial sanctions for violations of the rule of law. There must also be a “sufficiently direct” link with the financial interests of the EU. Both increase the obstacles to sanctions. At an EU summit in July, they agreed on the new budget, a € 750 billion crown reconstruction fund and also the rule of law mechanism. Its specific design was left open. In September, the German EU presidency presented a “compromise”, as it was said, based on Michel’s proposal. The European Parliament managed to get another slight tightening.
How do Hungary and Poland react?
In Brussels, many thought that the two countries would not put an end to the struggle because they too received a lot of money from the Corona fund. But it did not go like this: Orbán and his Polish colleague Mateusz Morawiecki recently reaffirmed their position and renewed their oath of allegiance. The proposed mechanism, they say, is a “political tool” full of “vague definitions”. Slovenian Prime Minister Janez Janša has declared himself a supporter.
How could the EU get out of the impasse?
Several laws and related legal acts are being voted on. Qualified majority is sufficient for the regulation on the rule of law mechanism. The new budget proper, on the other hand, must be approved unanimously, as well as the new “decision on own resources”, which wants to allow the EU to take on its debts for the reconstruction fund for the first time. Several possibilities are under discussion to circumvent the announced veto of the two.
The EU could adopt the rule of law mechanism, postpone the budget agreement (without a decision, the money will continue to flow on the basis of the previous one) and set up the reconstruction fund as a kind of intergovernmental treaty, similar to the establishment of the euro stability mechanism during the rescue of the euro. The downside: it would almost be a declaration of war in Warsaw and Budapest. Furthermore, the European Parliament would remain out. A solution within the EU treaties would make more sense: through “greater cooperation”, which allows a group of states to move forward when it threatens a blockade. This solution is favored by the European Commission and Chancellor Angela Merkel is said to be inclined to it. Or by creating the fund based on the rules that apply specifically to euro zone members.
What will happen in the coming days and weeks?
All suggestions have already been tried, they are not just theory. In terms of negotiating tactics, however, it is more a question of signaling to Hungary and Poland that they really do not have “real” veto power. But everyone else should stick together and show a clear advantage, which is hardly expected. In the coming days, behind the scenes, it will be exhausted how far both sides are willing to go. Think of the car trip to the abyss in the movie “Because They Don’t Know What They Are Doing”: whoever jumps out of the car first loses.
The heads of state and government will therefore meet for a summit at the end of next week and seek a solution. Merkel is in a key position because Germany holds the Presidency of the Council. He has already signaled his readiness to further welcome Hungary and Poland. Other countries, such as the Netherlands, are not ready to do so. You shouldn’t have to compromise on the rule of law, they say. The Dutch parliament forced Prime Minister Mark Rutte to veto even a weakening of the mechanism.
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