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12th Aug 2022

Top EU court OKs funding cuts for rule-breaking states

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The EU's top court on Wednesday (16 February) gave the green light to the EU to suspend funds to states like Poland and Hungary that break rule of law principles.

The European Court of Justice (ECJ) dismissed a challenge by the Warsaw and Budapest governments against new powers granted to Brussels to freeze payments.

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The court said the new powers do not go beyond the treaties nor create parallel sanctions structures.

The judgement puts pressure on the EU Commission to start the process of suspending funds to Poland and Hungary — two countries where nationalist governments are under scrutiny for rolling back judicial independence and eroding democracy.

Hungary and Poland say the scrutiny is unmerited, and instead claim the EU is imposing liberal values on their more conservative societies.

All eyes now turn to the European Commission, which is expected to launch the so-called rule of law mechanism that was approved on Wednesday by the court and that leads to the suspension of funds.

EU Commission president Ursula von der Leyen welcomed the judgement. But she sought to row back against pressure to use the new procedure immediately.

It would take "weeks" to prepare "guidelines providing further clarity about how we apply the mechanism in practice," she cautioned in a statement.

Von der Leyen, who will miss a debate in the European Parliament later on Wednesday on the issue, made no mention of Hungary and Poland in her statement.

Polish government spokesman Piotr Muller said after the judgement that the decision by the court and the push by the EU institutions to introduce funding-freezes go beyond the EU treaties.

Those amounted to a "dangerous trend that may result in legal uncertainty within the EU," Muller said.

Hungary's justice minister Judit Varga accused the EU of "abusing its power" following the court ruling on Wednesday.

But for Germany's foreign minister Annalena Baerbock, the ruling "upholds the legality of this important tool for the EU to protect and strengthen our community of values."

Billions are at stake for Poland and Hungary, where prime minister Viktor Orbán is facing elections in April.

The commission has already refused to approve Covid-19 recovery funds for the two countries – there are €36bn earmarked for Poland and €7bn for Hungary – because of concerns about corruption and judicial independence.

EU top court slams Poland and Hungary again

In a joint letter, five European Parliament groups - from centre-right to far-left - called on EU Commission president Ursula von der Leyen to defend EU law and take all necessary measures.

Top EU court rejects Hungary's challenge to sanctions probe

Hungary has lost a legal challenge against a European Parliament vote that opened the way for the Article 7 sanctions probe into the erosion of democratic standards under prime minister Viktor Orbán's rule in the country. Budapest queried the abstentions.

MEPs urge EU states, commission to act now on Hungary

European lawmakers urged the EU Commission and governments to act on Hungary after the EU executive said it would start a legal probe against the Orbán government which could lead to the suspension of EU funds.

Von der Leyen seen dragging heels on Hungary and Poland

Lawmakers vented frustration that the EU Commission might delay action against the nationalist leaderships in Poland and Hungary despite a court victory. Experts on EU affairs sounded a more cautious note.

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