The last legal hurdle has been taken, but is the road really clear now? On Wednesday, the European Court of Justice ruled that there are no legal objections to financially cutting EU countries that violate the rule of law.
Although this statement comes as no surprise, it has been eagerly anticipated in recent months. After all, the green light from the Court in Luxembourg was a precondition for the European Commission to actually start freezing subsidies for violators of the rule of law. In doing so, she primarily focuses on Poland and Hungary, also the two EU countries that had challenged the so-called ‘conditionality mechanism’ at the Court.
Does it mean that the money tap to Warsaw and Budapest will now close really quickly and the fight against the rule of law will actually enter a new phase? That is not yet certain. These are the factors that will determine that in the coming weeks and months.
Also read: European Court could give Poland a serious financial loss
Political pressure is rising – but enough?
Prime Minister Mark Rutte (VVD) repeated it several times in the House of Representatives last year: as soon as the European Court of Justice would give a positive ruling, the European Commission had to start with the financial sanctions.
“We expect that the Commission will now start the procedure as soon as possible to suspend or stop the payment of EU funds,” said Minister Wopke Hoekstra (Foreign Affairs, CDA) on Wednesday.
It is not only the Netherlands that exerts pressure. A much firmer tone has also been heard from Germany since a new coalition took office in December. There is also pressure from the European Parliament, which has been pressing for the use of the new instrument for more than a year now. At the end of last year, she even filed a lawsuit for this.
But while Member States are pointing furiously at Brussels, the Commission is still hesitant, also because governments are often a lot less tough behind the scenes. For example in France: while President Emmanuel Macron constantly emphasizes that the rule of law must be proudly defended, he is currently not interested in another escalation that could disrupt the French presidency and his own election campaign.
Geopolitical tensions surrounding Ukraine and Russia are also playing a role. While Europe is already struggling to speak with a single voice, there is little incentive to fuel new conflicts. Certainly not with Poland, strategically crucial in the attitude towards Russia.
Also read: Battle between judges shakes Polish rule of law
Will Poland still go down on its knees?
Even before the new instrument is actually deployed, one Member State is cautiously starting to notice what the effects could be: Poland. In recent months, the European Court has imposed unprecedentedly hefty fines on that country in two separate lawsuits. It concerns millions, which Brussels will deduct from the subsidy flow to Poland from this week.
It is small beer compared to the billions that Warsaw could lose if the new rule of law conditions actually apply: in total up to more than 100 billion euros. But it has already led to cautious Polish concessions in recent times. President Andrzej Duda recently promised that he would dissolve the controversial disciplinary chamber of the Supreme Court – in order to avoid a fine.
For the time being, skepticism about these Polish promises prevails in Brussels. Moreover, the disciplinary chamber is by no means the only way in which the independent judiciary in Poland is curtailed. But now that the negotiations with Warsaw are underway, there is at the same time hesitation to disrupt that fragile process by turning off the tap even further now.
Will Hungary choose Orban again?
Although he lost the lawsuit on Wednesday, Viktor Orbán has achieved his real goal, according to critics: delay. The Hungarian prime minister feared that European financial sanctions could jeopardize his re-election in early April, in a country where a vast majority of the population is strongly pro-European. That risk has been averted: even if the Commission were to act immediately, it would still take at least nine months before the money is really frozen.
In Brussels, meanwhile, it is being considered whether it is wise at all to start the procedure quickly, now that the Hungarian elections are fast approaching. Couldn’t that be seen as meddling in a campaign? And doesn’t it help Orbán to present himself as a victim if Brussels is heading for a new escalation?
The Hungarian government eagerly fed that hesitation on Wednesday. In a response, Justice Minister Judit Varga accused the European Court of taking a “political decision because of our upcoming referendum on protecting children”. With this, Varga was referring to the referendum planned at the same time as the elections on the controversial new legislation that prohibits the distribution of ‘LGBTI propaganda’ in schools.
A version of this article also appeared in NRC on the morning of February 17, 2022
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