Page 69 - bne magazine September 2021_20210901

bne September 2021
The flow of EU money has been vital for the consolidation of both radical rightwing governments, despite their constant railing against Brussels, and if it were interrupted this would imperil their re-election hopes. It is important to note, however, that the mechanism will only apply to new rule of law cases.
Both Poland and Hungary are currently challenging the mechanism at the European Court of Justice (ECJ) but this is regarded as merely a time-wasting exercise, with Orban just hoping to delay its implementation until after next spring’s general election.
Vera Jourova, Commission Vice-President for Values and Transparency, told a CEU online debate earlier this year that the European Commission hopes to use the new rule of law conditionality tool this year to contain the erosion of democracy in Hungary and Poland. She said that the EU relied on mutual trust but that “this trust has been shattered” and some courts
in the bloc no longer trusted decisions made in states where democracy and the rule of law had come into question.
The third sign of the EU’s new ‘get tough’ policy is the annual Rule of Law reports, which were launched last year but have now become much more incisive. Last week’s reports on Poland and Hungary show there is enough evidence on both countries to activate the mechanism because their degraded rule of law threatens the proper use of EU funds.
The report bore out widespread evidence that Hungary is now a kleptocracy in which Fidesz uses EU money to enrich its allies and keep itself in power. There is no transparency about this spending, and no proper investigation of the widespread frauds. "Risks of clientelism, favouritism and nepotism in high-level public administration as well as risks arising from the link between businesses and political actors remain unaddressed," says the report summary.
Meanwhile, Poland’s report highlighted how PiS is already in several infringement proceedings for damaging the independence of the judiciary, casting doubt on the fairness of any court process, a vital requirement for ensuring the proper use of EU funds.
The final piece of evidence which gives encouragement to the idea that the Commission will really stand firm this time is the scrutiny it is giving to Poland and Hungary’s Recovery Plans. The Commission has issued stiff demands before it approves the plans, in a kind of practice run for when the rule of law mechanism enters into force. Both plans represent significant sums of money – grants of €7.2bn for Hungary and €24bn for Poland – so delays in paying them out will hurt.
Hungary’s plan has been sent back once and EU Justice Commissioner Didier Reynders said last week that the Commission won’t approve Hungary’s plan until it carries out judicial reform and guarantees that corruption cases are investigated. The Commission has pencilled in the end of September for the new deadline for approving Hungary’s
Opinion 69 plan; Poland’s deadline has already been put back to the end
of August.
Orban, of course, has insisted that he will start paying out the Recovery Fund money anyway. He blames the delay on the quite separate issue of his new law banning teaching about homosexuality in schools.
"Legal Polexit"
The Polish government has been less outspoken about the Recovery Fund because of the much more urgent issue of judicial independence, which is likely to come to a head in the next few weeks and will give an indication how firm the Commission is going to be on the whole rule of law dossier.
The Commission has issued an ultimatum that Poland must comply with an ECJ ruling from last week that found Warsaw’s disciplinary procedures for judges violate European law by damaging judicial independence. Poland must implement
the decision and suspend the operations of its Disciplinary Chamber of the Supreme Court by August 16.
However, the Polish Constitutional Tribunal, which has been packed with PiS nominees, ruled on July 14 that the preliminary measures imposed by the ECJ were not in accordance with the Polish Constitution.
The Constitutional Tribunal is also scheduled to continue hearings on August 31 in a case – initiated by Prime Minister Mateusz Morawiecki – on whether the Polish Constitution takes precedence over EU law. The government has now doubled down by asking the Tribunal to examine whether a judgement of the European Court of Human Rights against the judicial disciplinary procedures violates the Polish constitution.
To some observers the aggressive Polish government tactics represent a clear danger of a “legal Polexit”.
“The Polish judgment says: we do not respect that European law has precedence and we do not care what European courts say about our checks and balances. Authorities with that approach are not functioning properly as partners in spending EU funds,” Michael Meyer-Resende and Jakub Jaraczewski of Democracy Reporting International wrote in an op-ed for EU Observer on July 21.
The Commission now has the tools and the evidence to confront Poland and Hungary; the question therefore is whether it will stand firm this time.
There is a growing coalition in favour of strong action. Four countries, all net contributors – the Netherlands, Denmark, Sweden and Finland – are demanding guarantees that their contributions to the two miscreants will not be misspent. The European Parliament has called on the Commission to use the rule of law mechanism already, even before the ECJ approves its legality. Several Commissioners – notably Jourova – have been much more confrontational than expected.
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