Wednesday

17th Aug 2022

Column

Why the European Parliament should reject the rule-of-law deal

The struggle over democracy and the rule of law in the EU has reached a new climax.

It has become inextricably linked to the question of the EU's funding, in particular through the conditionality between EU values and funds that EU governments agreed to in July. The devil lies in the details of that conditionality.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

  • Translated from legalese, this means the EU will keep sending European funds to a member state even if it completely dismantled independent courts – as long as it avoided that a direct link could be drawn to mismanagement in spending EU funds

Afraid of a Hungarian and Polish veto, the German presidency has watered down a previous Commission proposal to link the budget and the rule of law - in a way that makes it toothless. That proposal has now been approved as the negotiating position by the Council.

As widely discussed, the proposal reversed the voting arrangements by which a suspension of budget payments could be decided.

The council would now need a qualified majority vote of member states to actively approve such measures, while in the prior commission proposal they could only have vetoed them with that same majority. In short, it requires a stronger commitment from member states.

Yet, the member states are the weakest link in the defence of democracy in the EU. They have been sitting on the Article 7 procedure against the Polish government for almost three years.

But there is another less-discussed aspect in which the council proposal weakened the original. It now says that a suspension of the rule of law should be proportionate to the impact of the rule of law breaches on the EU's budgetary interests.

Translating from legalese, this means the EU will keep sending European funds to a member state even if it completely dismantled independent courts – as long as it avoided that a direct link could be drawn to mismanagement in spending EU funds.

Hungarian street lamps

To take a concrete example: the EU sponsored a programme to modernise street lamps in Hungarian cities. A company co-owned by Viktor Orbán's son-in-law won 35 contracts to build the lamps at a total cost of €40m. If public tenders are designed in a way that there is no serious competition, nobody will go to court to challenge funding decisions.

And if nobody goes to court, one cannot even start an assessing whether the lack of independent courts was a key element in the financial mismanagement.

Furthermore, if a breach of the rule of law could be substantiated in this particular case, the financial impact and consequent sanction would amount to no more than the value of these contracts - €40m. Such sums will not have any deterrent effect on governments that receive billions of euros from European taxpayers.

An extreme concentration of power in the government, which means a weakening of checks and balances, should be a concern in itself - even if it is not accompanied by flashing warning lights like the enrichment of people who are close to the prime minister, as in the case of Hungary.

The commission should not be obliged to dig into each and every case of mismanagement to identify a financial impact.

Indeed, that idea would bring it into overlap with the EU's anti-fraud office, OLAF. OLAF indeed raised serious concerns over the streetlamp contracts.

The Hungarian authorities did not launch significant investigations into this alleged fraud. Instead, the government quickly agreed to pay the streetlights from Hungarian taxpayers' money, thereby removing the whole embarrassing story from the EU's jurisdiction.

This illustrates a second problem of the German conditionality proposal: by honing in on possible impacts on the EU budget, it will only achieve that member states will be more diligent in avoiding corruption or wrongdoing when they spend EU money, making their shady deals with national funds instead.

It is already happening: judging by its aggressive rhetoric, you would expect that the Hungarian government fought tooth and nails to make sure Hungarians benefit from the European support as much as possible. Not so.

When OLAF found last year that Hungary had severely mismanaged EU funds, the government meekly agreed to lay the issue to rest for a penalty payment of more than €1.65bn.

OLAF's work has not stopped the drive to authoritarianism. And more commission attention to similar problems will not do so either. The problem remains the overall systemic deficiency resulting from authoritarianism, whatever the budgetary impact may be.

Massive damage can be done to EU obligations with no measurable financial impact.

How do you determine the financial impact when minorities are openly and officially discriminated against in Polish towns and regions? What is the financial impact for the EU when publicly-funded state media in Poland and Hungary have become propaganda channels of their governments and no independent court available to correct the abuse?

OSCE election observers have found that Hungarian elections are no longer fair. They do not conform to what Hungary obliged itself to do in the OSCE. What is the financial impact? What is the price of democracy?

The German position was endorsed in the council against the votes of the Polish and the Hungarian government. The governments of Finland, Sweden, Denmark, the Netherlands, Belgium, Austria and Luxembourg are currently opposing the proposal because they think it is too weak. They want a stronger mechanism.

They are right. The European Parliament should stand firm in demanding a stronger mechanism.

The realpolitik case of avoiding a budgetary slowdown when Europe needs a fiscal injection against the Covid-19 recession is clear. But the damage to the EU will be much bigger if it does not find effective ways to ensure that all its member states return to becoming functioning, rule of law-based democracies.

Authoritarian governments, which are also overwhelmingly nationalistic, will throw ever more spanners into the EU's policy processes.

And the EU will lose its most important constituency: Europeans who believe in democracy and support European integration.

Author bio

Michael Meyer-Resende is the executive director of Democracy Reporting International, a non-partisan NGO in Berlin that supports political participation.

Disclaimer

The views expressed in this opinion piece are the author's, not those of EUobserver.

Corruption failures also highlighted in rule of law report

The European Commission's first report on the rule of law has raised concerns over the lack of effective anti-corruption efforts in some members sates - while it considers Denmark, Finland, Sweden and the Netherlands have good governance measures.

A year of Taliban — only aid is keeping Afghan kids alive

It's a year since the Western military presence in Afghanistan ended. A year since panic-stricken people flocked to Kabul airport, trying to flee the country, and girls and women waited fearfully for the disintegration of their hard-won rights.

Column

Is this strange summer a moment of change?

It is a strange, strange summer. The war in Ukraine continues, 60 percent of Europe is in danger of drought, and Covid is still around and could rebound in the autumn. At the same time, everyone is desperate for normalcy.

Russia puts EU in nuclear-energy paradox

There's unprecedented international anxiety about the safety of Ukraine's nuclear reactors, but many European countries are also turning to nuclear power to secure energy supplies.

News in Brief

  1. Tens of thousands of Jews quit Russia since start of war
  2. Russia says GDP forecasts better than expected
  3. Spain 'hopeful' for new gas pipeline
  4. German troops return to Bosnia over instability fears
  5. Next UK PM candidates reject Scottish independence push
  6. Russia will not allow British spy plane overflight
  7. Discrimination in Germany remains high, new figures show
  8. US weighs plan to revive Iran nuclear deal

Stakeholders' Highlights

  1. Nordic Council of MinistersNordic prime ministers: “We will deepen co-operation on defence”
  2. EFBWW – EFBH – FETBBConstruction workers can check wages and working conditions in 36 countries
  3. Nordic Council of MinistersNordic and Canadian ministers join forces to combat harmful content online
  4. European Centre for Press and Media FreedomEuropean Anti-SLAPP Conference 2022
  5. Nordic Council of MinistersNordic ministers write to EU about new food labelling
  6. Nordic Council of MinistersEmerging journalists from the Nordics and Canada report the facts of the climate crisis

Join EUobserver

Support quality EU news

Join us