Under the so-called rule of law conditionality, the EU could stop funding governments that disrespect EU values such as the rule of law.
In response the Hungarian government said it could now be “forced” to reject the next EU budget and the bloc’s Coronavirus recovery package if access to EU funding is “tied to political and ideological requirements.”
Hungary’s Justice Minister Judit Varga also accused the European Parliament of making a “reckless and mistaken move” by pushing for a stronger mechanism, saying it was “unacceptable” that “despite the current epidemic situation and the serious challenges facing the European economy, the parliament will not stop blackmailing Hungary politically and ideologically.”
She added, “There is no agreement on any element of the EU budget until all its elements have been agreed upon.”
The Commission also confirmed on Monday that it has received a letter of complaint about the mechanism from the Orbán-led Hungarian government. The letter, sent to Ursula von der Leyen and Council President Charles Michel, warns Hungary will block the long-term budget and recovery plan if the mechanism comes into effect.
It reads, “Although Hungary is committed to cooperation, in the light of developments, it cannot provide the unanimity required for the package adopted in July.”
“Despite the current epidemic situation and the serious challenges facing the European economy, the Parliament will not stop blackmailing Hungary politically and ideologically” Judit Varga, Hungarian Minister of Justice
Orbán, in the letter, says he cannot give his agreement to the compromise on conditionality, “because it doesn’t correspond to the package agreed in July.”
So far, there has been no official reaction from Poland, another EU member that has frequently found itself at odds with the EU over rule of law issues.
The mechanism, provisionally agreed last Thursday, will provide a link between the EU budget and compliance with the rule of law in Member States.
If an EU government violates democracy and the rule of law, the European Commission can impose financial sanctions. These must be confirmed by the Council by a qualified majority of member countries.
The deal mentions “endangering the independence of judiciary” as one issue that may be indicative of breaches of the principles of the rule of law.
MEPs succeeded in ensuring that the new law does not only apply when EU funds are misused directly, such as cases of corruption or fraud.
“Finally, we have a deal on a rule of law mechanism. This mechanism is not as strong as Parliament wanted and it will be a challenge, but we can make it work. Parliament will keep the pressure up to defend the rule of law”
Terry Reintke, Greens/EFA
It will also apply to systemic aspects linked to “EU fundamental values that all Member States must respect” such as freedom, democracy, equality, and respect for human rights including the rights of minorities.
Parliament’s negotiators also insisted that tax fraud and tax evasion are considered possible breaches, by including both individual cases and widespread and recurrent issues.
To ensure that the final beneficiaries who depend on the EU support – such as students, farmers, or NGOs – are not punished for the actions of their governments, Parliament insisted that they can file a complaint to the Commission via a web platform, which will assist them in ensuring they receive the due amounts.
MEPs also succeeded in shortening the time that the EU institutions will have for the adoption of measures against a Member State, if risks of breaches of the rule of law are identified, to a maximum of 7-9 months (down from 12-13 months as initially requested by Council).
The agreed compromise now needs to be adopted formally by Parliament and EU ministers.
Reaction from MEPs was swift with co-rapporteur, EPP Finnish member Petri Sarvamaa saying the agreement “is a milestone for protecting EU values.”
“The EU is shaking a cheque book rather than a gun at the head of democratically-elected governments in Poland and Hungary in order to bully them into doing Brussels’ bidding” Cristian Terheș, ECR
“For the first time, we have established a mechanism that enables the EU to stop funding governments that disrespect our values such as the rule of law.”
Co-rapporteur, Spanish Socialist Eider Gardiazabal Rubial, added, “For us it was crucial that final beneficiaries won’t be punished for wrongdoings of their governments and that they continue receiving funds that have been promised to them and that they rely on, even after the conditionality mechanism has been triggered.”
“We can proudly say that we achieved a strong system that will guarantee their protection.”
Elsewhere, Terry Reintke, Greens/EFA rapporteur on mechanism for the Civil Liberties, Justice and Home Affairs Committee, noted, “Finally, we have a deal on a rule of law mechanism. This mechanism is not as strong as Parliament wanted and it will be a challenge, but we can make it work. Parliament will keep the pressure up to defend the rule of law.”
Fellow Greens MEP Daniel Freund, said, “For the first time in Europe, we now have a mechanism that links the disbursement of EU funds to compliance with the rule of law. This is a step forward for the protection of European values.”
“The mechanism is not as powerful as we in Parliament would have liked. But the compromise is much stronger than what the German Council presidency presented a few weeks ago.”
However, support for Hungary and others came from Romanian ECR member Cristian Terheș, who said, “The EU is shaking a cheque book rather than a gun at the head of democratically-elected governments in Poland and Hungary in order to bully them into doing Brussels bidding.”
“This is a despicable interference in the lawful democratic decision-making of Member States. States have constitutions and parliaments which need to be respected by Brussels, rather than being whipped into line like a badly-behaved child.”
He added, “I suspect if the EU is allowed to do this to Poland and Hungary, other Member States in time will be threatened with the same sanctions. This is a very bad move for democracy in Europe.”
On Monday, a Commission spokesman, when asked about the new mechanism and the MMF, said, “I can confirm that the President Ursula von der Leyen had received a letter (of complaint) from Hungary.”
He told reporters, “Naturally, we will look at it and reply in due course. In the meantime, we will pursue our efforts to reach an agreement on the MMF package.”