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8th Aug 2022

EU legal threat to Hungary over failure to obey ECJ

  • 2017 saw protests against the 'foreign-funding' law - which was seen as a tool to stifle NGOs (Photo: Eszter Zalan)

The EU Commission on Thursday (18 February) launched legal action over Hungary's failure to implement a judgement from the European Court of Justice (ECJ), which ruled that legislation on restricting foreign-funding of NGOs was against EU rules.

The EU executive said that Hungary "has not taken the necessary measures to comply with the judgment, despite repeated calls from the commission to do so as a matter of urgency".

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Hungary has two months to respond, after which the commission can again turn to the EU's top court and ask for Hungary to be fined.

The ECJ last June ruled that Hungary's Transparency Act - adopted in 2017 - went against EU law.

The law requires NGOs with donations from abroad above a certain amount to be publicly labelled as "foreign-funded", with violators could be forced to close. The law was boycotted by several NGOs in protest.

Critics of prime minister Viktor Orban said the law's purpose was to stifle civil society, which has stood up against the democratic backsliding in Hungary.

Hungary's government at the time argued that it wants to make funding more transparent within the law. NGOs perceived it as a targeted attack, and attempt at stigmatisation.

Orban has also repeatedly accused NGOs funded by US billionaire George Soros of political meddling.

The commission, meanwhile, said the ECJ concluded that the "Hungarian legislation threatens the role of civil society as an independent actor in democratic societies, undermining their right to freedom of association, creating a climate of distrust towards them as well as limiting the privacy of donors".

The EU executive had already sent two letters to Budapest asking it to comply with the ruling.

The commission also said rulings need to be implemented by member states immediately.

Civil organisations said that despite the ruling, Hungarian authorities tasked with coordinating EU funds (specifically the Erasmus+ educational program) denied a human-rights educational NGO funding over non-compliance with the transparency law.

"All this serves a single purpose: to exclude NGOs from EU tender funds by administrative means," the Civilisation Coalition said in a statement last November.

The coalition is a joint campaign of 34 Hungarian organisations, founded in 2017 in response to the law, which includes Transparency International and Greenpeace.

The Hungarian government on Thursday said in a statement that "as in all previous cases without any exception, the Hungarian government will perform all necessary measures to comply with the judgement" of the ECJ, and that "there are currently ongoing negotiations" between Hungarian authorities and the commission on the issue.

"During the consultations the Hungarian government informed the European Commission on the government's readiness to repeal the current Transparency Law, followed by a new regulatory framework based on the findings of the ECJ," the statement said.

European Commission vice president Vera Jourova said in a tweet that the "ECJ was clear - restrictions imposed by Hungarian government on financing of NGOs do not comply with EU law. We take a firm step to ensure compliance with this judgement. Civil society organisations are key part of our democracies. We must support them, not fight them".

Not first time

However, the NGO law is not the only issue where Hungary has so far failed to comply with an ECJ ruling.

Frontex, the EU's border-patrol agency, suspended operations in the country last month after saying that Hungary failed to implement a court order from December to change its procedures on asylum requests.

Last October, the ECJ also ruled that that changes by Hungary to its higher education law, which forced a university founded by Soros to quit the country, was in breach of EU law, but no steps have been taken by Budapest so far.

On Thursday, the commission also stepped up another probe into Hungary over a legislation, adopted in the context of the Covid-19 pandemic, that the executive considers illegally restricts access to the asylum procedure.

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