Europe tightens purse strings in an attempt to put pressure on Poland and Hungary

BRUSSELS – In recent years, Hungary and Poland have repeatedly opposed the long-established rules and values ​​of the European Union, even though they are members of it.

They challenged the supremacy of EU law and circumvented the rulings of the bloc’s highest court. Brussels responded with reprimands and warnings, but in Budapest and Warsaw they were received as empty threats.

Now, however, Brussels is using another tool at its disposal: money.

As Europe tries to recover from the pandemic, the European Union has withheld tens of billions of dollars in grants from Hungary and Poland, and Poland is considering heavy fines for flouting decisions to the highest court in the bloc, the European Court of Justice.

For the European Union, the fight is an existential issue. For the bloc to function properly, all member nations must obey the same principles. But Hungary and Poland are ruled by right-wing populist parties for whom defying Brussels has often made good politics.

The two countries are now hit by increased financial pressure from the European Union’s executive, the European Commission, which has long been frustrated by the repeated failure of its legal efforts to tackle their violations of the EU. Rule of law, particularly in judicial matters. system changes, press freedom and minority rights, over the past six years.

The European Commission admitted this month that it was withholding $ 42 billion in payments to Poland from an $ 857 billion coronavirus recovery fund due to that country’s challenges to the rule of EU law . The committee also said it could further cut funding for Polish regions that have declared themselves “LGBT-free zones”.

The virus fund’s $ 8.4 billion payments to Hungary were also frozen after the European Commission said Budapest had not done enough to fight corruption.

And the two countries stand to lose even more money due to a mechanism agreed in December that ties all EU funds to rule of law standards such as judicial independence and anti-justice measures. -corruption. The rules are already in force, but Hungary and Poland have challenged the mechanism in the European Court of Justice.

As these challenges continue, the committee faced intense pressure from the European Parliament to immediately use the mechanism against Hungary and Poland.

Sophie in ‘t Veld, Dutch Member of the European Parliament, said: “This is a crucial phase of European integration, because if we fail to enforce EU law by all the governments of the Member States , then everything will fall apart. . “

“We have to sort of get out of this impasse” with Hungary and Poland, she added.

Last year, the commission blocked funding for several Polish municipalities that had declared themselves “LGBT-free”. The committee also took legal action against Poland on the grounds that these areas were contrary to EU values. This month, the commission sent a letter to governors in those regions saying it was deferring additional funding of around 130 million euros, or roughly $ 150 million.

The efforts appear to be paying off: On Wednesday, the Polish news agency reported that one of the targeted regions was withdrawing its LGBT-free statement due to withholding of EU funds.

Didier Reynders, Commissioner for Justice of the European Union, said in a recent interview that the bloc’s objective was “to install a real culture of the rule of law”. The democratic retreat in Poland and Hungary is an opportunity to draw attention to the rule of law in all member states, he added.

To counter any accusation of double standards, the commission recently began to assess the democratic standards of all member nations. But in countries where violations are more systemic, the reports have had little effect.

Poland dramatically escalated the conflict in July by refusing to implement two rulings from the bloc’s highest court effectively ordering the dismantling of a disciplinary “chamber” which critics say has been used by the country’s government to intimidate the judges he didn’t like.

Warsaw argued that national judicial systems do not fall under the jurisdiction of the EU, which is a direct challenge to the supremacy of the European Court. The decision was “illegal,” said Sebastian Kaleta, Polish deputy justice minister, in an interview, citing a recent ruling by a constitutional court in his country.

“The European Court of Justice is illegally extending its jurisdiction,” said Mr Kaleta. “This is not a lawsuit, but a political process. “

“Poland has a different ideological view from the European Union, and we are blackmailed because of it,” he added.

The Hungarian government said the commission was withholding the money for political reasons. “EU funds are not aid-type donations, this money is owed to Hungary, which should be provided by the European Union on a contractual basis, in the principle of mutual benefit,” Zoltan said. Kovacs, Secretary of State for the Prime Minister’s Office. .

Poland is not the only country to question the legal order of the bloc. Last year, Germany’s highest court launched a similar challenge, arguing that the European Court had exceeded its jurisdiction to rule on the legality of the issuance of European bonds.

For the European Commission, challenging the supremacy of European law threatens the core of the bloc. According to Reynders, “If you want to have a union, you have to enforce the same EU law in the same way in all member states.

The commission does not appear to intend to back down and has asked the European Court of Justice to impose heavy fines on Poland of up to $ 1.2 million per day. “It is normal that Member States do not agree with the committee,” Reynders said. “But when there is a final court decision, it’s game over.”

This week, Poland refused to cease operations at a coal mine in Turow, in the southwest of the country, despite a daily fine of 500,000 euros, or about $ 590,000, which was ordered by the European court. “We cannot afford to turn it off,” Polish Prime Minister Mateusz Morawiecki said, adding that “the health and lives of Poles” were in danger.

Analysts say legal action to tackle rule of law violations is too slow to be effective.

“The real problem is that the commission always comes too late,” said Sophie Pornschlegel, analyst at the European Policy Center, a Brussels-based think tank. “Once freedoms are banned in a country, it’s really hard to go back. The EU is therefore still one step behind.

The committee says proceedings are slow because the European institutions themselves are bound by the rule of law and cannot speed up court cases.

Although Hungary has largely complied with rulings by the European Court of Justice, respect for democracy and the rule of law continues to deteriorate in the country, critics say.

“They claim to apply the ordinances, but continue to adopt new regulations contrary to EU law,” said Laurent Pech, professor of European law at Middlesex University in London. “They want to exhaust criticism with a tsunami of laws. Then the damage is done.

This is why the fund retention strategy could prove to be more effective, according to analysts.

“There is momentum building,” noted Professor Pech. “A lot of people have had enough excuses from the commission and council, and Poland and Hungary have burned enough bridges.”