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27th May 2022

Rule-of-law issues still hold up Hungary-Poland recovery plans

  • Economic commissioner Paolo Gentiloni said the discussions are still ongoing with Warsaw, but 'we are not yet there' (Photo: European Commission)
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The EU Commission remains locked in negotiations with Hungary and Poland over the approval of their Covid-19 recovery plans over concerns regarding the rule of law.

Justice commissioner Didier Reynders already said in July that for Hungary, conditions for approval are adequate guarantees on corruption - including that cases uncovered by the EU anti-fraud agency (OLAF) will be properly investigated by the national authorities.

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On Wednesday (1 September), economic commissioner Paolo Gentiloni said that Poland's challenge to the primacy of EU law over national law is also partly holding up the approval of the recovery plan.

This was the first time the commission has specified that the legal case in Poland over the EU's legal supremacy plays into the talks over the recovery plan.

The commission has already given the green light to 18 national plans but has so far withheld approval for Poland and Hungary, which are also under EU scrutiny over their backsliding on judicial independence and democratic principles.

Gentiloni said the discussions are still ongoing with Warsaw, but that "we are not yet there".

"We know that this is about the requirements of the regulation, and about the country-specific recommendations, and also the discussion, as the Polish authorities know very well, includes also the issue of the primacy of EU law and the possible consequences of this issue on the Polish recovery and resilience plan," he explained.

The commission has been pushing Poland to respect a ruling by the European Court of Justice that a disciplinary chamber for judges is not compatible with EU rules.

Deepening the rule-of-law concerns, the Polish government has asked the constitutional tribunal to rule that EU law does not trump national law. Such a ruling would undermine the bloc's legal framework. On Tuesday the tribunal postponed the procedure until 22 September.

On Thursday (2 September), Poland's justice minister Zbigniew Ziobro retorted by tweeting that "No EU official may use blackmail against Poland."

Poland's deputy minister for regional policy, Waldemar Buda, insisted in another tweet that "the recovery fund adoption procedure is not related to other EU procedures".

Tadeusz Koscinski, Poland's finance minister, was quoted by the Financial Times on Thursday saying he believed the judicial stand-off should be "decoupled" from the pandemic recovery financing, and that he was hopeful of approval for the money this month.

Safeguards

If approved, Poland could get €23bn in grants and €34bn in loans, while Hungary can expect €7.2bn in grants.

"In two cases, however, we will require assurances that the plans meet requirements for a positive assessment, concerns specifically Hungary and Poland," EU Commission vice-president Valdis Dombrovskis told MEPs on Wednesday.

"We are seeking additional clarifications from Poland and Hungary concerning compliance, making sure that all conditions of the regulation are being met. We need to receive those assurances before we are able to conclude positively on this," he added.

Hungary's negotiator Szabolcs Ágostházy told Hungarian media in July that he expects an agreement in the autumn - the deadline for the approval has been pushed back until the end of September.

"Our plan meets all the required conditions, and therefore it is up to the EU institutions to decide whether they want to comply with their own sets of rules or to go beyond them to interpret their own room for manoeuvre and include issues that have nothing to do with the debate," Ágostházy said, arguing that Hungary's anti-LGBTIQ law triggered a tougher line from the commission.

Gentiloni said the two are not directly linked.

Dombrovskis said the assessment of the Hungarian plan is ongoing, and concerns "further safeguards for example in areas regarding anti-corruption, transparency, and quality and predictability of lawmaking, among others".

Gentiloni added that the commission is working with Hungary on several aspects related to "corruption, public access to information, judicial independence, an increase of competition, and oversight of public procurements".

EU rule-of-law report slams Poland and Hungary

The rule-of-law report comes in a crucial moment as Brussels is currently approving member states' recovery plans, conditional on having a robust justice system and anti-corruption framework.

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