Europe

When the EU found the political will to act on the rule of law

ProDentim

In 2022, the EU has changed in more ways than one. One of the changes had been in the works for a decade – upholding the rule of law.

EU governments are now ready to sanction one of their own over rule of law issues.

In EU jargon, the controversial and long-awaited ‘conditionality mechanism’, a new tool to tie funds to the rule of law, has survived and proven effective in 2022 – not just ahead the highest court of the EU, but also within the Council of the Member States.

This victory may seem like a small nuance of Brussels from the outside. But in fact, it is a sure political triumph for those who think governments that deviate from EU rules should face financial sanctions.

The mechanism is also a victory over the hypocrisy that so often creeps into EU politics.

So what exactly happened?

In mid-December, in a dramatic episode in the EU’s struggle to control judicial independence and all the other goods that make a democracy a democracy, member state governments sanctioned the government of Viktor Orbán.

The clash was anti-climactic. At the last minute, Orbán backed down from a veto threat on two crucial EU policies – joining the global minimum corporate tax and a joint EU aid package to beleaguered Ukraine. by war.

Before that, the patience of EU governments was running out of steam – a plan to bypass Hungary in joint aid and thus render Orbán’s veto threat insignificant had already been mooted. Simultaneously, the deep quagmire of the Hungarian economy is under Orbán’s leverage.

In the end, EU member states decided to suspend 55% of cohesion funds, worth €6.3 billion, of the €22-23 billion Hungary is expected to receive between 2021 and 2027 in EU grants. The vote was unanimous. Even Poland, a close ally, was not on Hungary’s side.

In addition to this, the countries also approved the Hungarian Covid-19 pandemic recovery fund. With a big caveat though, as Budapest will not receive any money from the allocated €5.8 billion until it has reached 27 “super milestones” focusing on the rule of law, corruption and judicial independence.

Why is this important?

The EU has struggled to deal with governments that have challenged judicial independence and other elements of democratic checks and balances at home.

First, it took some time for the EU to take seriously the way Orbán’s regime was undermining the pillars of democracy.

At first, it sounded a lot like an over-ambitious prime minister from a small, poor country on the periphery that didn’t understand democracy, and that he would be towed away soon enough. Not Orbán though.

In 2012, then European Commission President Jose Manul Barroso announced three judicial inquiries into Hungarian legislation in a dark hallway of the European Parliament building in Strasbourg. But his successor, Jean-Claude Juncker, always joked with Orbán about being a “dictator”.

Painfully slowly, it became clear that Orbán’s actions, such as restricting the freedom of the media and the courts, were not one-off, but rather part of a systematic dismantling of democratic institutions.

More alarming for Brussels, Orbán and the non-reaction of EU-inspired supporters, especially in Warsaw.

As a senior EU diplomat confessed years later, “we just didn’t expect an EU government to start dismantling democracy.” This thinking was reflected in the lack of tools the EU had to discipline its own members on such non-economic issues.

The deplorable Article 7 could suspend the right to vote of a member state that violates EU values, but there have never been enough member states or the political will to act on it.

As Orbán’s supermajority passed one controversial piece of legislation after another, the EU began rolling out several tools: the Rule of Law Framework in 2014, the Rule of Law Scoreboard, the “peer review” of the rule of law between Member States in 2019.

Peer pressure, the EU’s traditional soft power, however, did not work.

The EU is getting real

The conditionality mechanism was worked out at length, especially as media, and Olaf, the EU’s anti-corruption agency, uncovered what appeared to be the pattern that cemented Orbán’s power: siphoning off the EU money to allies and proxies.

In 2018, the European Commission proposed the mechanism, and in 2020 it became the focal point of difficult negotiations between parliament and member states. Feeling the pressure, Poland and Hungary have threatened to veto the entire Covid-19 stimulus fund over the mechanism.

After a request from Poland and Hungary, the legislation was reviewed by the European Court of Justice, which declared it to be good. But the real test came later: whether the commission would invoke it and whether member states would approve it – a decision that would guarantee its political survival.

In this process, both the European Parliament and the national parliaments have played a crucial role.

The EP has become more united in its support for tools that could discipline governments over the rule of law after the largest party, the European People’s Party (EPP), dumped Orbán, or vice versa – in such a tumultuous split , it is always difficult to know for sure.

National parliaments, for example in the Netherlands and Germany, have kept the issue on the agenda and the pressure on governments.

And now?

Let’s not forget that the mechanism is not a miracle solution. This has to do with how governments handle EU money and whether the institutions – such as prosecutors – tasked with ensuring that the money is not misused, are working independently.

Orbán’s erosion of democratic checks and balances will not be reversed by the 27 supersteps, but it could slow it down. Additionally, Hungary could still challenge the decision in the EU’s highest court.

Nevertheless, the significance here is that the EU has, to some extent, overcome its aversion to exposing intra-governmental internal conflicts and sanctioning one of its own at the expense of rule of law and democratic concerns.

It showed that the tool can be used and used again – in a warning to others.

By the way, it was against Orbán’s Hungary that the EU first proposed in 2012 to suspend cohesion funds under tougher fiscal rules after Budapest failed to step up efforts to end the country’s excessive public deficit.

At the time, Hungary lost no subsidies, as Orbán toed the line. Whether that would happen again remains to be seen.

However, the EU has found the political will to act. This has the potential to change the dynamic around impunity for democratic erosion within the bloc.

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