Luxembourg, which hosts the Court of Justice of the European Union (CJEU), isn’t known for its snowy altitudes – but the avalanche it subjected the Hungarian government to on 12 February was certainly noteworthy.
It started with the Advocate-General’s (AG) opinion on Hungary’s Sovereignty Protection Act – which established a Cold War-reminiscent surveillance and intimidation apparatus – arguing that Hungary infringed EU law, including several fundamental freedoms.
Simultaneously, the AG opinion on the inter-institutional dispute Parliament v Commission called on the CJEU to throw out the Commission’s 2023 decision to payout Hungary in return for lifting Ukraine-related vetoes.
Though there’s no guarantee that the CJEU’s judgments will mirror these views, both make the case for the Commission’s strange dual role as the ‘Guardian of the Treaties’ and as an increasingly politicised body that has become more politically influential by bargaining with the very Treaty principles it’s supposed to protect.
Sue me once, sue me twice
Inter-institutional disputes aren’t uncommon. In 2021, the European Parliament (EP) brought action against the Commission over its inaction on applying the Conditionality Regulation. The Commission had been waiting for the CJEU to uphold the Regulation before applying it, after Hungary and Poland took it to Luxembourg. The EP’s case was eventually withdrawn following the Court’s judgment and the Commission began to apply it.
Nevertheless, the 2021 dispute shows a long-standing effort from MEPs to push the Commission to enforce the rule of law. But, unlike in the previous case, the one currently on the docket is about what the Commission did and not what it didn’t do.
It’s difficult to untangle the complex web of the conditionality regime, as there are multiple, mutually reinforcing instruments – most being applied to Hungary – and budgetary programmes at play. Simply put, disbursing funds from the EU’s long-term budget and the post-Covid Recovery and Resilience Facility is contingent upon Member States’ respect of the rule of law, including an independent judiciary. Hungary has consistently not met such basic requirements.
In 2022, the Commission determined that Hungary wasn’t applying the Charter of Fundamental Rights effectively and thus it didn’t meet all the horizontal enabling conditions (‘Charter HEC’) to fully access cohesion funds. Some of these funds were subsequently suspended until Hungary undertook certain reforms, including on judicial independence.
A year later, the Commission decided that Hungary’s reforms fulfilled the Charter HEC on judicial independence and lifted the suspension, unblocking about EUR 10.2 billion. This was immediately highly contested and eventually led to the EP filing for its annulment.
The enemy of my enemy…is also my enemy?
Hungary’s government, long engaged in a bitter feud with the Commission – if the ever-evolving propaganda billboards featuring Ursula von der Leyen are any indication – found itself between a rock and a hard place. Usually, the Commission and Hungary are opposing parties, not allies. Yet once the EP brought the Commission to the CJEU, the case made the two frenemies strange bedfellows – Hungary decided to intervene on the Commission’s side, supporting the argument that unblocking the reimbursements was lawful.
Teaming up with its long-standing nemesis wasn’t a Kumbaya moment but a matter of necessity – the Hungarian government must stand by the Commission to have a fighting chance of not having to pay back some EUR 10 billion. At the same time, it’s not like Viktor Orbán has a better relationship with the EP’s ruling majority – those billboards also feature Orbán’s former group-mate and ally, Manfred Weber.
Beyond an uneasy truce with roadblock Hungary, the case reflects badly on the Commission for two major reasons.
First is the technically unrelated Sovereignty Protection case, where the Commission launched infringement proceedings over several breaches of EU law. In a sour twist of fate, the Sovereignty Protection Act was adopted only a day before the Commission concluded that Hungary’s ‘reforms’ appear to satisfy the Charter HEC.
It’s almost like the Hungarian government thanked the Commission for the vote of confidence by then unveiling its most outrageous rule of law violation yet. The SPA – which was being closely monitored by the Commission ever since it was first mentioned – established a new Sovereignty Protection Office (SPO) tasked with investigating just about anyone, but particularly civil society, election candidates and independent media outlets suspected of ‘serving foreign interests’ or ‘threating national sovereignty’. Those subjected would have to hand over all manner of sensitive information and personal data and could be investigated on the grounds of receiving ‘foreign funding’.
As many have pointed out, the targets of these investigations are intimidated, stigmatised and silenced – and once deemed a threat, the SPO’s actions and reports cannot be challenged. With the SPO operating outside the realm of judicial oversight, one would be hard-pressed to find ample procedural safeguards or judicial independence in Hungary.
The second issue for the Commission is the why of the December 2023 decision. At this point, it’s basically undisputed that the funds were unblocked to stop Orbán from vetoing aid for Ukraine. The government made no secret that it might reconsider its veto if Hungary could access some previously blocked funds.
There’s no denying that not only did the Commission use the rule of law – a core EU ‘value’ – as a bargaining chip to find a solution to a pressing geopolitical situation, it also allowed itself to be blackmailed. Using Article 2 TEU values as political leverage is a controversial move, especially as it’s the Commission’s number one duty to enforce them.
Ultimately, this led the Commission into a situation where it simultaneously failed to respect its own detailed conditions for unlocking EU funds and stood on the losing side of a doomed gamble with the rule of law.
These two fronts – against Hungary, against the EP – highlight a growing tension in the Commission’s own functioning: the duality of an increasingly politicised institution that’s often unable (or sometimes unwilling) to fulfil its own legal obligations due to mounting geopolitical pressure and internal disunity.
The Commission’s politicisation puts it at odds with the Treaty framework. Until the Lisbon regime is reformed, the priority should still be on enforcing EU law – especially core Treaty values.
As the Commission becomes more of a powerbroker, it must reassess what it’s willing or even allowed to sacrifice to achieve a consensus. Because the rule of law – pending the CJEU’s judgment – should be fully off limits.
About the Author:
Júlia Pőcze is a Researcher in the Institutions unit at CEPS.