Brussels triggers rule of law mechanism for very first time against Hungary

Описание: Brussels on Wednesday triggered its rule of law mechanism for the very first time, warning Hungary it could lose out on European Union funds. Johannes Hahn, the EU's Commissioner for Budget and Administration said that Budapest must now reply to the Commission's concerns.

The process is now expected to take several months.

The mechanism was approved by the European Court of Justice earlier this year following a challenge by Hungary and Poland, which have drawn the Commission's ire in recent years over reforms curbing the independence of the judiciary and civil society, or targeting the rights of minorities including women and LGBTQI+ citizens.

EU officials stressed that if it proceeds with the mechanism and withholds funds from Hungary, these will not be sanctions or fines but "measures to protect the budget."

Payments withheld will have to be "strictly proportionate to the impact of the breached on the (European) Union's budget", officials added, and will thus depend on "the nature of the breach and the gravity of the breach."

In the Commission's crosshairs are corruption and allegations that Hungarian Prime Minister Viktor Orban and his allies have funneled EU money away from their intended recipients including NGOs.

But concern is growing that the requirement that the breaches must have had an impact on the EU's budget may leave the bloc unable to use the mechanism over less quantifiable breaches -- including pressure exerted on the media, the judiciary or attacks on minorities' rights.

#eudebates #Hungary #Orbán #EUfunds #RuleofLaw #ViktorOrban #Fidesz

In its resolution of 25 March 2021 (1), the Parliament gave the Commission a deadline of 1st June 2021 to respond to our call for immediate application of the Regulation, which entered into force on 1 January 2021. We maintain that no guidelines are necessary for application of the Regulation because the Regulation itself does not require any. We also maintain that the Commission need not wait for the Court of Justice to rule on the actions for annulment lodged by Hungary and Poland challenging the legality of the Conditionality Regulation. An EU regulation does not cease to be applicable simply because it is subject to a pending annulment action; it ceases to be applicable only if and when the Court of Justice finds the action to be well founded and declares the nullity of the contested act. We now call upon the Commission to fulfil its duty as the Guardian of the Treaties and to apply the
regulation against Hungary immediately.

To facilitate this process, we have done the Commission’s work for it. We have prepared a model of the written notification under the Conditionality Regulation that the Commission should send to the Hungarian government immediately, documenting A) the lack of transparent management of EU funds, B) the lack of an effective national prosecution service to investigate and prosecute fraud, and C) the lack of guarantee of independent courts to ensure that EU law is reliably enforced, including measures affecting the Union’s budget and financial interest.


We have also performed an analysis of the various EU legal instruments designed to ensure the proper spending of EU funds and have determined that the problematic stewardship of EU funds in Hungary is best addressed through the immediate application of the Conditionality Regulation.

Because the Rule of Law Conditionality Regulation applies only to EU funds awarded after 1 January 2021, some observers have assumed that it cannot be triggered until and unless specific instances of fraud against these new EU funds are detected. This is plainly incorrect. Rather, the Regulation explicitly demands the Commission take a proactive, risk-based approach to protect the EU budget. This does not require the Commission to wait until specific instances of fraud or abuse of EU funds under the new budget can be documented, but instead requires the Commission to act to address serious risk of such fraud or abuse created by existing breaches of rule of law principles enumerated in the Regulation.

The model notification we are publishing today demonstrates that this serious risk already exists in Hungary because Hungary has already engaged in grave breaches of the rule of law as defined in the Regulation, which requires that Member States ensure:

… a transparent, accountable, democratic and pluralistic law-making process; legal certainty; prohibition of arbitrariness of the executive powers; effective judicial protection, including access to justice, by independent and impartial courts, also as regards fundamental rights; separation of powers; and non-discrimination and equality before the law. The rule of law shall be understood having regard to the other Union values and principles enshrined in Article 2 TEU. (2)