The EU’s new “rule of law” regulation after the AG’s opinion and some of its Hungarian aspects

In recent days, events around the EU’s new rule of law instrument seem to have accelerated, following the publication of the Advocate General’s Opinion of the European Court in the annulment proceedings brought by the Polish and Hungarian governments. This did not, in essence, brought any surprise, the AG has found all the arguments of these governments as essentially unfounded.

These are understandably summarized in the opinion, so I would not go into them in detail here. At the same time, it is necessary to draw attention again to the fact that the new mechanism is informally called a “rule of law” procedure, in fact it is a control-sanctioning tool for the protection of the EU budget, EU public funds, as even the title of an early 2019 shorter study of mine on the subject has shown it: “Better protection of the rule of law – or of European taxpayers’ money” Linking the mechanism to EU budget was necessary for more reasons: 1) to create the link to EU competence, 2) to distance the new mechanism from Article 7 procedure, often criticized for its ineffective and political nature.

If the court reaches the same conclusion as the Advocate General (as in most cases) this means that the regulation adopted last year, which entered into force on 1 January 2021, will not be annulled by the court. As a result, all obstacles will be removed from the European Commission to take already well-visible formal steps in this procedure towards Hungary. So far, only one communication has been made public, which is obviously the first step in such a procedure anyway. When is this expected? I think the court’s verdict is expected in February at the earliest, so the proceedings will end roughly in a way that the 2022 Hungarian elections are unlikely to be affected by it. Contrary to the hopes of many, and sadly to the rampant corruption situation within the country, the campaign period will not see vast amounts of support money withdrawn by the EU yet. Obviously one of the most important strategic goals of the Orbán-led government was to avoid this anyway, that is why Viktor Orbán has threatened with the use of the veto during the 2020 negotiations of the MFF, cleverly using the immense political mistake of linking the adoption of MFF and the legislative process of the regulation creating this proceeding, initiated in 2018.

This is shown by reviewing the rules of the procedure itself. It is not particularly complicated: if the European Commission encounters a rule of law-related problem in the management of EU funds (detailed by the regulation itself), it can propose to the Council to adopt certain measures, including withholding of funds. This is one of the most significant changes from the original proposal of 2018, according to which, in essence, the Commission itself could have taken these measures (with the presumption of adoption by the Council), now it requires a separate decision.

Before making its proposal to the Council, the Commission must formally notify the Member State concerned, giving it at least one month to submit its position, additionally it also has to inform the European Parliament and the Council itself. Of course, some time already passes before this, as informal communications, collection of information etc. must take place, as the current Hungarian situation shows, requesting information and other communication is possible even before the formal notification. In the case of the Member State concerned fails to comply with the problems identified by the formal notification, the Commission may propose various measures, which it shall also communicate to the Member State concerned, allowing again at least one month to react to it. After that it sends its proposal to the Council, which has a period of one, exceptionally two months to adopt the proper decision, and if it wants to change it, it can do so by a qualified majority.

From this it is logical, that even if we optimistically expect the Court’s judgment to come in February, and that the Commission and the Council will act immediately, it will still take at least three-four months until the needed decision is adopted, which is already slipping out of the election campaign period of the 2022 elections.

The most unfortunate fact is, that if the elections bring a change in the Hungarian government, the new government will get all the trouble coming with this mechanism – well, at least You can be sure that there will be a serious political ambition to get things right with rule of law in Hungary. Based on communications of the opposition, it seems clear that they are ready to implement serious steps to handle these issues, e.g. there is seemingly a strong commitment to join the EPPO – which I am sure that the Constitutional Court (filled up with hand-picked orbanist jurists) will do its best to try to block, but this is a battle for that time…