Dr Niels Kirst (Assistant Professor of EU Law, Brexit Institute & School of Law & Government, Dublin City University)
History never repeats itself. However, it seems as if it rhymes sometimes. The European Council Summit last week seemed very much like a repeat of the European Council Summit in December 2020, when Hungary blackmailed the European Council to include declaratory statements and thereby deferred the rule of law Conditionality Regulation application. This year, again, Hungary successfully blackmailed the EU to get what it wants. In this case, it got €10.2 bn from the European budget in exchange for an abstention from the decision to open accession talks with Ukraine.
It is important to recall that Hungary is currently subject to three different conditionality policies under which EU funds to Hungary are frozen. First, Hungary is subject to the remedial measures under the rule of law Conditionality Regulation, under which € 6.3 bn is frozen. Second, the horizontal enabling conditions of the Common Provisions Regulation, under which € 17.7 bn are frozen. Third, the milestones and targets attached to the Hungarian National Recovery and Resilience Plan (NRRP) under the Next Generation EU (NGEU) Fund, under which € 7.2 bn of grants are frozen. Ahead of this European Council Summit, Hungary unlocked € 10.2 bn from the second pot.
By exercising maximum pressure upon the European Commission (Commission) and the other EU 26 Heads of State, Hungarian Prime Minister Viktor Orbán gained €10.2 bn in cohesion funds and showed the world that the EU in its current form can be blackmailed and is in a dysfunctional state. But what happened exactly?
European Commission Releases Ten Billion Euros to Budapest
In the run-up to the European Council Summit, the Commission found that Hungary had magically fulfilled four so-called super-milestones regarding restoring the judicial independence in the country, which led the Commission to the Assessment that the so-called horizontal enabling conditions under the Common Provisions Regulation are fulfilled, and money from the Cohesion policy fund could be reimbursed. Commentators and analysts saw this as a charm offensive to persuade Hungary to give up its veto on accession talks and macro-financial assistance to Ukraine.
In its press release, the Commission stated that “after a thorough assessment, […] the Commission considers that Hungary has taken the measures it committed to take in order for the Commission to consider that the horizontal enabling condition on the EU Charter of Fundamental Rights is fulfilled in what concerns judicial independence.” This can only be interpreted as sarcasm as simultaneously with the release of EU funds, the Hungarian Parliament enacted a concerning “Sovereignty Protection Act“, which resembles Russia’s foreign agents’ legislation and grants the Government the authority to investigate and imprison individuals accused of being “foreign agents”. This shows that the Hungarian Government has no interest in restoring the rule of law in the country.
Moreover, the changes Hungary undertook in its judicial system to get the funds released have been analysed as merely cosmetic or even worsening the state of judicial independence in Hungary. Indeed, they are not getting to the root of more than a decade of rule of law backsliding in the country. It shows that the criteria under the Common Provision Regulation to freeze and unfreeze funds are more political than objective and are used as they may suit the Commission. This is a bad development for transparency and the rule of law in the EU.
While releasing funds under the Common Provision Regulation, the Commission found that the suspension under the Conditionality Regulation (€ 6.3 bn) shall stay in place. In its findings, the Commission stressed that “[…] Hungary has not addressed the breaches of the principles of the rule of law that led to the adoption of measures by the Council in December 2022”. This statement seems even more obscure, as the aims under the enabling conditions of the Common Provisions Regulation and the remedial measures under the Conditionality Regulation partly overlap.
As a takeaway, this seems to suggest that a government may choose parts of the rule of law it likes and dislikes. However, Member States’ governments cannot only restore some parts of the rule of law in a country while sidelining others. Therefore, the Commission’s decision to release Cohesion funds to Hungary is unreasonable, undermines the Commission’s integrity, and goes against its role as Guardian of the Treaties according to Art. 17 TEU.
European Council greenlights Accession talk with Ukraine
The European Council Summit itself, which was held on Thursday and Friday last week, held good news for Ukraine and the Republic of Moldova, as the European Council decided to open accession talks with both. Both countries, therefore, seemed to have leapfrogged a usually lengthy process and outpaced candidate countries from the Western Balkans (some of them candidates since 2005). Moreover, the European Council also agreed to grant candidate status to Georgia. This is a massive step, as Georgia waited for this a long time, and it can be seen as a sign of support for the pro-EU forces within that country.
However, the price for getting unanimity on opening the accession talks with Ukraine was high and might be paid through the Cohesion funds. In a remarkable turn of events during the Council Summit, Viktor Orbán, the Hungarian Prime Minister, would not give in on its veto to open the accession negotiations with Ukraine. Therefore, as a last resort, he was asked to leave the room where the vote took place, and all the other 26 Member States agreed to open the accession talks. The vote in the European Council shall be taken by consensus according to Art. 15 (4) TEU. In the given case, Orbán, therefore, formally abstained from the vote in the European Council. According to Art. 6 (3) of the Rule of Procedure of the European Council, it can vote when two-thirds of its members are present.
However, with this manoeuvre, the European Council has shown that the rule of law in the EU is negotiable. The EU cannot expect that aspiring members outside the Union now expect it to be any different for them. Moreover, the last months have shown that enlargement is not a merit-based process but rather a geopolitically driven procedure. Given the unsavoury rule of law deal the EU did, the European Council Conclusions highlighting that “aspiring members need to step up their reform efforts, notably in the area of rule of law, in line with the merit-based nature of the accession process” must sound hollow and dishonest for aspiring members.
Military Assistance to Ukraine: Adjourned
At the same time, the decision to grant Ukraine € 50 bn macro-financial assistance (so-called Ukrainian Facility) was adjourned since Orbán would not lift his veto (and would not leave the room) for this decision. While the EU successfully got a unanimous vote on opening accession talks with Ukraine, it was not regarding further financial assistance to the war-torn country. This is, therefore, good and bad news for Ukraine simultaneously.
The Commission President hailed the Summit as a “landmark in our common history” while acknowledging that no agreement on military assistance to Ukraine could be found. In her remarks, Von der Leyen said, “[…] unfortunately, we did not manage to reach unanimity yesterday. Hungary was unable to support it. There is now a new rendezvous early next year. We will […] ensure that whatever happens at this next EUCO, we will have an operational solution.” These statements hint at a potential solution outside the Treaty framework should Hungary continue to block military assistance to Ukraine. The Commission would be wise to do so, as history shows that the Hungarian veto will not go away in the future.
What to make of this strange Council Summit? Overall, it gives the message that the European leaders seem to think that it is more likely that Ukraine will win the war against Russia than that Hungary will ever return to liberal democracy, as it traded the rule of law in Hungary against support for Ukraine. Commentators have understandably criticised the EU for once giving in to the rule of law. According to Laurent Pech, this could even become the new normal for the EU. Moreover, Tommaso Pavone has convincingly argued that the EU betrayed Ukraine and the rule of law.
In the end, the start of the accession talks with Ukraine might not be much of a win, given that nearly all of the decisions to proceed and finally conclude accession talks with a prospective Member State need unanimity. Therefore, there will be ample opportunity for Orbán to block the accession talks with Ukraine at further points down the line. During the accession process, suppose the EU does not want to have the constant threat of a veto from a trojan horse within the EU. In that case, the only long-term solution is finally depriving the Hungarian Government of its voting rights via the Art. 7 TEU procedure, as Daniel Hegedüs has highlighted.
As a glimmer of hope, the Commission can still revoke its findings that the enabling conditions under the Common Provisions Regulation are met and thereby halt the disbursement of € 10.2 bn to the Hungarian Government. It should seriously consider doing so if it wants to regain credibility and make clear that the EU rule of law is non-negotiable.
Copyright: European Union
The views expressed in this blog reflect the position of the author and not necessarily that of the Brexit Institute Blog.