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12th Apr 2021

Poland and Hungary challenge rule-of-law tool at EU court

  • EU budget commissioner Johannes Hahn was urged by MEPs to act - and not wait for the court's ruling, as the legislation has been in force since January (Photo: European Parliament)

Poland and Hungary on Thursday (11 March) launched a legal challenge against a new rule linking EU funds to the respect of rule of law at the EU's top court.

Warsaw and Budapest had previously promised to test the rule of law conditionality's legality - which has meant the application of the new rule will be delayed.

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The two governments had also previously threatened to veto the seven-year EU budget and the Covid-19 recovery fund, last December, over the rule-of-law conditionality.

At the EU leaders' summit before Christmas, Warsaw and Budapest agreed to the budget and recovery fund by securing guarantees on how the new rules will be implemented - even if the legislation itself was not modified.

One of those guarantees sets out that the EU Commission will draw up "guidelines" on how the conditionality will be used, before the EU executive proposes any measures to sanction a member state.

The guidelines will incorporate the ruling by the European Court of Justice (ECJ) - essentially delaying any action the commission would take. ECJ rulings can take over a year.

Announcing the legal challenge, Hungarian justice minister Judit Varga said in a Facebook post that "the Left went too far when it launched an attack on Hungary in the middle of the pandemic".

"We can't keep that EU legislation in force, which seriously infringes legal certainty, thus, as we promised last year, we are challenging the rule on conditionality before the Court of Justice of the EU, together with Poland," she wrote.

"The EU has no competence to define the concept of 'the rule of law' or to lay down the conditions for assessing compliance with underlying principles," the Polish government said in a statement on Thursday.

The conditionality is the first time the EU has linked the distribution of funds to concerns over the rule of law, even though critics say the focus of the new rules is too narrow, since only issues related to the use of EU budget can be investigated.

Poland and Hungary are already under scrutiny by the EU for backsliding on democratic principles and the rule of law.

Next steps

In a debate on Thursday, MEPs pledged that the parliament will request an expedited procedure at the ECJ to speed up deliberations of the court.

The parliament - and the council of the member states - the two legislators challenged by Poland and Hungary's complaint, will have two months to mount their defences and ask for a swift procedure.

The court's president, Koen Lenaerts, will decide on whether to conduct a fast-track procedure, which is rare: it has only been used 24 times since its introduction in 2000.

EU officials said Nordic and Benelux governments have signalled that they would support the parliament's defences in court. However, any additional participants in the case could further delay the court's deliberations.

MEPs on Thursday said they expected the commission not to wait and apply the legislation, which came into force on 1 January.

Centre-right Finnish MEP Petri Sarvamaa, who oversaw the legislative file, said that the leaders' December agreement is "legally superfluous".

"The applicability of this regulation cannot be subject to the adoption of any guidelines as the text agreed is sufficiently clear," he told fellow MEPs.

"We expect the EU Commission, as the guardian of the treaties, to ensure that the regulation is fully applicable from the date agreed, January 1, and we will use all tools at our disposal to make sure this happens," he added.

"The EU must take countermeasures by imposing sanctions now - not two years from now. The rule of law in Europe cannot wait," German Green MEP Daniel Freund, who was also part of the parliament's negotiating team last year, said.

"If the commission remains inactive and fails to implement existing law, the European Parliament will file a lawsuit against the commission before the European Court of Justice," he added.

Budget commissioner Johannes Hahn pledged to MEPs that no cases will be lost.

However, he confirmed that the "commission does not envisage to propose measures before adopting this guidelines" which will also wait for the court's ruling.

Deal reached on linking EU funds to rule of law

The deal means MEPs and the German EU presidency unblocked a major political hurdle to agreeing on the €1.8 trillion long-term EU budget and coronavirus recovery package.

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After gruelling five-day talks, EU leaders agreed on €390bn in grants and €360bn in low-interest loans to hardest-hit member states - after much opposition from the Dutch-led 'frugal' bloc of countries.

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The Hungarian tax initially imposed a rate of 50 percent of sales on the biggest networks. Critics saw this as an attack on RTL Klub, the country's most-watched commercial broadcaster, and as a way of undermining the free press.

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