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EC rule of law proposal threatens funding to Hungary

The European Commission has unveiled a proposed mechanism to protect the EU budget from financial risks linked to "deficiencies regarding the rule of law" in member states. The mechanism would allow the EU to "suspend, reduce or restrict access" to EU funding "in a manner proportionate to the nature, gravity and scope of the rule of law deficiencies."

On Wednesday, the European Commission put forward its earlier mooted plan to link distribution of EU funds in member states to respect for the rule of law, according to a report by EUobserver.com, an independent online newspaper reporting on the European Union. 

Under its proposals for the next seven-year EU budget for 2021-2027, the EC wants to introduce a new mechanism to discipline countries where the judiciary has been put under political pressure. The executive, led by EC President Jean-Claude Juncker, wants to be able to "suspend, reduce or restrict access to EU funding" in a proportionate manner to protect EU investments and European taxpayersʼ money.  

"Only an independent judiciary that upholds the rule of law and legal certainty in all member states can ultimately guarantee that money from the EU budget is sufficiently protected," the commission said.

"Importantly, the proposed mechanism would not affect the individual beneficiaries of EU funding, since they cannot be held responsible for the overall functioning of the rule of law," stressed the EC. "Member states would continue to be obliged to implement the affected programs and make payments to Erasmus students, researchers, civil society or any other end user recipients or beneficiaries," it added.   

A decision implementing the mechanism would be adopted by the Council through reverse qualified majority voting, meaning the proposal would be deemed to be adopted by the Council unless it decides by qualified majority to reject the ECʼs proposal. 

Under investigation

The proposal is seen as a way to sanction EU members, including Poland and Hungary, two countries which the EU has investigated in recent years for curbing the judiciaryʼs independence.

Poland is currently subject to an Article 7 probe, with negotiations still ongoing between Brussels and Warsaw on a political and legal compromise, noted EUobserver.com.

Juncker insisted that the proposed measure is not directed against any specific member state. Nevertheless, Belgian Liberal MEP Guy Verhofstadt, a fierce critic of Hungaryʼs Prime Minister Viktor Orbán, was quoted as welcoming the commissionʼs proposal.

"If a government of a member state of the EU doesnʼt want to apply and respect European values, it doesnʼt need European money," he told fellow MEPs.

EUobserver.com commented that EU member states have proven reluctant to sanction one another, undermining any effort by the commission to rein in countries challenging EU values. Under the new plans, the commission could trigger the procedure, after which the EU country concerned would have one month to respond. The EC would then decide on whether to suspend funds, with only a majority of EU member states able to overturn the decision.

The report noted that such broad commission power could upset member states, making a deal difficult.

Orbán ready to negotiate

Official Hungarian government website kormany.hu reported Thursday that the prime minister is "prepared to negotiate" over Brussels’ proposal on disbursement of European Union funding.

Speaking to journalists in Budapest on Thursday, Minister of Foreign Affairs and Trade Péter Szijjártó said the ECʼs proposed mechanism should be considered "fiction" for the time being, and that introducing such "subjective" criteria would go against the EU treaties, state news wire MTI reported.

The rights and obligations of all member states are clearly spelled out in regulations and treaties that are already in force, Szijjártó was cited as saying. Hungary is opposed to any proposal that could give somebody the chance to "blackmail" member states using EU funding, he added.

Commenting on the EC plan, a legal expert speaking on pro-government Hungarian public television Wednesday said he thought it "doubtful" that the European Union would link funding payouts to the rule of law in member states, state news wire MTI reported.

István Kovács, director of strategy for the Center For Fundamental Rights, an organization that prepares assessments and research on the functioning of the rule of law and the protection of fundamental rights in Hungary, told news channel M1 that the Visegrád Group - Hungary, the Czech Republic, Poland and Slovakia - should do everything in their power to prevent the draft proposal from becoming a regulation.

The rule of law is a legal category that is difficult to grasp, Kovács said, adding that one could read into the ECʼs proposal an attempt to exercise some degree of control over member states. He remarked that the proposal is not expected to win the support of a majority of member states.