Divergence on rule of law reveals deeper crisis for EU

Polly BotsfordTuesday 2 February 2021

The EU has adopted a number of strategies to tackle what it terms rule of law breaches in Member States Hungary and Poland. Global Insight assesses the EU’s tactics as it attempts to re-build consensus on rule of law among States.

Header pic: Prime Minister of Poland, Mateusz Morawiecki and Prime Minister of Hungary, Viktor Orban arrive for a meeting with European Commission President Ursula von der Leyen in Brussels, Belgium, 24 September 2020. REUTERS/Francois Lenoir/Pool

If a member of a tennis club breaks the laws of the tennis club, they can expect consequences – as well as some frosty stares across the court tramlines. Taking action against a European Union Member State for reported breaches of the rule of law – and thus the Treaty on European Union (the ‘EU Treaty’) – is proving significantly more complex.

When Germany took over the presidency of the European Commission in July 2020 it pushed forward a proposal, first mooted in 2018, to tackle the now longstanding problem of Member States threatening the rule of law in their countries. The idea was to create a mechanism that could prevent such a State from receiving EU funding if a violation occurred.

This proposal eventually became the ‘condition regulation’, a mechanism now found in the EU budget for 2021.

As initially proposed, it was a powerful mechanism that could deliver real penalties against state attacks on the judiciary or constitutional overhauls that consolidate power for a ruling party.

But during EU Council budget negotiations, Hungary and Poland, the most likely recipients of such a penalty, chipped away at the condition, threatening to veto the entire EU budget itself if their demands were not met. A compromise was reached in the final hours of discussions in early December.

Experts argue that the condition regulation has been watered down so much it will not do its job. The European Commission appears to have conjured up another instrument that sounded like a good idea on paper but may turn out to be a mirage.

So far, the Commission has been powerless to stop what it terms rule of law breaches within Member States. It’s losing the public discourse about what the rule of law means and what the implications are when it’s breached.

This divergence on the rule of law is symptomatic of wider political fissures within the EU in which Member States have seen populist and autocratic parties emerge in the face of economic and social upheavals, namely the financial crisis, Eurozone crisis, refugee crisis, growing societal inequalities and rising unemployment.

In certain Member States, the ‘will of the people’ is seen in opposition to an entrenched elite that includes the judiciary, universities and the media. These institutions are then, in the language of populism, ‘reformed’.

Roadmap away from the rule of law

The roots of the current situation can be found in the early 2010s, when Viktor Orbán’s Fidesz Party in Hungary introduced a new constitution, made changes to how judges were appointed and passed laws to reduce the retirement age of judges from 70 to 62.

European Commission President Ursula von der Leyen and Poland’s Prime Minister Mateusz Morawiecki attend the first face-to-face EU summit held during the Covid-19 pandemic in Brussels, Belgium, 1 October 2020. REUTERS/Olivier Hoslet/Pool

The European Commission responded by setting up a new Rule of Law Framework in 2014. This was a mechanism for dialogue with Member States where potential rule of law breaches had occurred. This mechanism did not solve the issues.

At the same time, Poland followed a similar trajectory to Hungary, with the election victory of the Law and Justice Party in 2015. Its win led to a crisis around the appointment of justices to the Constitutional Tribunal.

Other changes were then introduced. Poland’s justice minister was given the role of prosecutor general, a new nominations body for judges was instigated – giving more appointing powers to politicians – and the government put forward new proposals for the country’s Supreme Court.

The Polish Minister of Justice, Zbigniew Ziobro, argued that the reforms were to introduce ‘the oxygen of democracy’.

The European Commission launched an inquiry into these events, at the time an unprecedented act. This led to reports being published and talks pursued, but with little decisive effect on what was happening in these Member States.

Entering the unknown

In 2017, the Commission took a step into the unknown and looked to the powers set out in Article 7 of the EU Treaty. This previously unfamiliar Article sets out a ‘preventive’ and ‘sanctioning’ pathway in situations where the Commission believes there is a risk of a serious breach of the EU’s values, including the rule of law, democracy, and human rights.

If this procedure is followed through to its conclusion, a Member State loses its voting rights. It looked as if, at last, the EU was going to take action.

But the Article 7 process has stalled, with the European Council increasingly uncomfortable in pursuing it. This is despite broad acknowledgement that there is sufficient evidence of breaches of the rule of law to do so.

This reluctance is down to the fact that any suspension of voting rights can only go ahead if all the other EU Member States agree. Hungary has publicly stated that it would not support any suspension of Poland’s rights. The Article 7 process has all the hallmarks of a dead end.

The EU has repeatedly tried to frame any actions against the rule of law as a legal or constitutional problem, to which there should be legal and procedural solutions. Alongside the Rule of Law Framework and the Article 7 procedure, the European Commission has brought several infringement proceedings before the Court of Justice of the European Union (CJEU) against specific acts and legislative changes made in Hungary and Poland, with the intention of getting legislation reversed.

This approach was helped by a CJEU ruling in 2018, in which the Court found that the EU Treaty imposes an obligation on States to provide remedies ‘sufficient to ensure effective legal protection in the fields covered by EU law’.

The ruling clarified that Member States must maintain independent courts. As a result of this decision, the CJEU went on to rule that Poland’s changes to its judiciary were in breach of EU Treaty obligations.

But the public rhetoric around such CJEU decisions is rapidly deteriorating. Criticism within Poland, for instance, suggests the CJEU has no right to decide on matters of what is seen as national sovereignty, and further that the CJEU itself lacks independence.

When the European Commission started talking about controlling EU payments it seemed like a fresh approach. Money talks, after all, and both Hungary and Poland are net recipients of EU funds, which make up between two and three per cent of their gross domestic product.

But the Commission has already conceded to Hungary and Poland by agreeing that the conditionality regulation will not go live until after any legal challenge has been brought against it. Such a challenge could take over a year to process. Experts say this delay is critical because it could see Hungary’s Fidesz Party through the next round of national elections in 2022.

So, what now? There is still hope that the budget condition will be deployed to good effect. In the meantime, the European Commission will publish an annual update on the rule of law in each Member State. The first report, published in September, named and shamed Romania and Slovakia alongside Hungary and Poland.

Such reports highlight but do not solve problems, and are usually a deliberate distraction, argue experts. ‘When the Commission doesn’t know what to do it writes a report’, says Laurent Pech, Professor of European Law at Middlesex University London.

The EU must finally act. If a club has rules and members don’t obey them, there must be consequences. If there aren’t, then all the other members will start to wonder what the rules are for, and indeed what the club is for, in the first place.

Polly Botsford is a legal and current affairs journalist. She can be contacted at polly@pollybotsford.com