February 5. 2023. 7:19

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Top EU court dismisses Poland, Hungary challenge to rule of law

Poland and Hungary had challenged the so-called conditionality mechanism, which makes receipt of EU funding conditional on the recipient continuing to respect the rule of law and other principles in the European treaties. Photograph: iStock


Europe’s highest court said the European Union is entitled to freeze funding to member states that breach key principles of membership, throwing down the legal gauntlet to populist governments in Poland and Hungary.

They had challenged the so-called conditionality mechanism, which makes receipt of EU funding conditional on the recipient continuing to respect the rule of law and other principles in the European treaties.

While Warsaw and Hungary said the mechanism was illegal, and endangered billions in funding to which they were entitled, the European Court of Justice (ECJ) struck down their complaints in their entirety on Wednesday, saying the mechanism was legitimate once its use was clearly linked to concerns about the EU budget.

The court said that member state compliance with the EU’s core values, including respect for the rule of law, were fundamental to the union’s existence.

“Since that compliance is a condition for the enjoyment of all the rights deriving from the application of the treaties to a member state, the European Union must be able to defend those values, within the limits of its powers,” the court said. “Compliance with those values cannot be reduced to an obligation which a candidate state must meet in order to accede to the European Union and which it may disregard after accession.”

The EU’s budget is a practical example of mutual trust between member states, the court added, but “may be seriously compromised by breaches of the principles of the rule of law committed in a member state”.

In its ruling ECJ judges specified conditions to the use of the conditionality mechanism to ensure the protective measures taken are strictly proportionate to the impact of the breach found on the Union budget.

For years, Brussels has been engaged in legal battles with national conservative governments in Hungary and Warsaw over reforms of its courts, media and other sectors. The two governments reject these challenges as inadmissible interferences in their sovereignty.

Last November the European Commission sent formal letters flagging democratic shortfalls. In Hungary it noted problems with public procurement, corruption and conflict of interest cases. In Poland it criticised judicial reforms that undermined the independence of judges and a constitutional court’s declaration that Polish national law has primacy over EU law.

The timing of the ruling has immediate legal and political consequences, given national elections in Hungary are just six weeks away. In Poland, with parliamentary elections due next year, the government has been counting on EU money to bankroll its already launched multi-billion national recovery plan.

Poland is the largest net recipient of EU funding and, amid growing tensions with Russia in neighbouring Ukraine, had made moves in recent weeks to set aside its legal battles with Brussels.

Efforts by other EU member states to take action against Poland and Hungary, requiring a unanimous European Council vote, have been hobbled by the two governments’ promises of mutual support.

Poland’s highest court is expected to issue its own conclusions on the case on Thursday.

The European Parliament has been pressing the European Commission to act against Poland and Hungary.

“We expect the European Commission to start putting the mechanism into action right away”, said Manfred Weber, head of the parliament’s conservative European People’s Party bloc.

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