VISEGRAD BLOG: The EU finally gets tough with Hungary and Poland

VISEGRAD BLOG: The EU finally gets tough with Hungary and Poland
Polish Prime Minister Mateusz Morawiecki (left), PiS leader Jaroslaw Kaczynski, and Hungarian strongman Viktor Orban (right).
By Robert Anderson in Prague July 29, 2021

Ever since Viktor Orban, Hungary’s radical rightwing leader, seized power in 2010 and began to consolidate his regime, the European Commission has not known how to handle him, particularly when he was joined in the bad boy corner by Poland’s Jaroslaw Kaczynski in 2015.

The EU had never had to deal with a state that was trashing EU values, and there were no effective tools for forcing it to behave.

But now there are signs the Commission has finally found the political will – and the tools – to punish and perhaps stop Hungary and Poland’s slide into authoritarianism.

Over the past decade Orban has been able to thumb his nose at the Commission largely because he was defended by Germany and other states led by fellow members of the European People’s Party (EPP) grouping. Rightwing German politicians, especially from Bavaria’s CSU, had forged close links with the up and coming Fidesz politician soon after the collapse of Communism, and Bavarian-based carmakers Daimler and Audi made the low-tax country their main base in Central Europe.

At first, Orban’s democratic depredations during his previous term in 1998-2002 were quickly forgotten, and he was given the benefit of the doubt after the chaotic collapse of the previous Socialist-led government during the global financial crisis.

Eventually, the EU woke up to the threat he posed, and there are currently some 60 active infringement proceedings against his government’s breaches of EU law.

Yet Orban is a past master of evading punishment. Typically, he fights back by pointing out some superficially similar policy in a Western European state, ignoring the fact that when enacted in the Hungarian context of already weakened democratic checks and balances, the policy has a very different impact.

Often he would perform what he himself called a ‘peacock dance’, putting forward an extreme proposal and then eventually backing down, either in a cosmetic way or when the policy had already served its purpose, enabling him to achieve what he intended all along, such as the expulsion of the Central European University (CEU) from Budapest.

In this way, he was able to nibble away at democratic safeguards and human rights, without appearing to mount a frontal attack on the fundamental values of the Union.

Defending each other's backs

The Commission did not dare to use its nuclear weapon of using Article 7 to suspend Hungary’s rights as a member of the EU, and this option became completely unusable when Kaczynski returned to power as Poland’s de facto ruler in 2015.

Article 7 proceedings, where there is a “clear risk” of the state breaching the bloc’s “fundamental values”, require unanimity among EU members and after 2015 Hungary and Poland could defend each other’s backs. Both Hungary and Poland have finally been put under the Article 7 procedure but no-one expects this to go anywhere.

Poland’s takeover by the Law and Justice (PiS) party drew fire away from Hungary because Kaczynski has been clumsier about breaching EU rules. Poland now has racked up some 85 active infringement proceedings since PiS returned to power.

PiS does not enjoy Orban’s constitutional majority in the lower house and has also faced a hostile Senate. Therefore to consolidate its power it often had to bend Poland’s constitution, rather than simply pass a constitutional amendment, leaving it open to legal appeals. This explains the importance PiS has placed on neutering the country’s judiciary, which in turn has become a red flag for Brussels.  The Commission has now demanded Poland suspend the Supreme Court's new disciplinary chamber by mid August.

PiS also lacked the protection of the EPP, as it was also only a member of the European Conservatives and Reformists (ECR) grouping in the EU, a shunned rabble of far right and eurosceptic parties, of which it formed by far the largest contingent.

Poland gave Orban extra heft in European politics. With Poland’s backing, Orban was able to weaponise the Central European Visegrad Group and mount a direct challenge to EU values. His once ludicrous claims to represent a new national conservative force that would overthrow the bankrupt liberal Western European elite began to be almost credible with the rise of Matteo Salvini’s Lega in Italy and the renewed threat from Marine Le Pen’s National Rally (formerly Front National) in France.

But Europe’s radical right was put back on the defensive when it failed to make a much anticipated breakthrough at the 2019 European Parliamentary Elections. Janez Jansa’s return to power in Slovenia in March 2020 is the populist right’s only clear national victory in Europe since then, and this is balanced by Boyko Borissov’s defeat at the April 2021 Bulgarian general election.

The pandemic has enabled many European governments to demonstrate the state’s effectiveness, and shown that the radical right wing has little constructive to say on what is Europe’s biggest current challenge. Poland and Hungary have been among the bloc’s worst performers in terms of infections and deaths.

Looking more widely, Brexit removed both a traditional rightwing ally (and fellow ECR member) in the shape of the British Conservatives, and posted a warning of the cost of leaving the EU. At the same time, the defeat of US President Donald Trump has created an impression that rightwing populism’s moment may have come and gone.

Given their failures in the pandemic and their length of time in office, Orban and Kaczynski now both face a serious challenge to retain power at their next general elections, in 2022 and 2023 respectively. In Hungary the opposition has formed a broad coalition, while in Poland former premier Donald Tusk has returned to reinvigorate the Civic Platform party (though if this works, it may also paradoxically stymie attempts to bring the opposition together).

Neighbouring Slovakia, which threw out the populist leftwing Smer party after two terms of office in 2020, shows that new party formations together with civic protests can bring about swift political transformation.

Removing Orban's 'protection'

The events of the past two years, together with Orban’s increasingly arrogant attacks on the EU, seem to have finally given the bloc the self-confidence to confront his hybrid regime, one that would never have passed muster as a EU candidate country if it were to apply to join today.

The first key step was Fidesz’s expulsion from the EPP, which he pre-empted by quitting the grouping in a tantrum in March 2021.

Fidesz is now homeless. This has removed the last vestige of Orban’s political ‘protection’. He is now casting around for potential allies in the European Parliament, and has typically grandiose plans to create a broad rightwing group with Salvini or Kaczynski, though the rival nationalist leaders are currently struggling to come to a deal.

The second sign that the EU is getting real was the way it attached the new rule of law mechanism to the 2021-27 budget deal and the Recovery Fund in November 2021. This should enable the Commission to claw back funding from the two states if they degrade the rule of law sufficiently to imperil the use of EU money.

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 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.

If the Commission does hold firm on the independence of Poland's judiciary, forces changes before it pays out the Polish and Hungarian Recovery Fund money, and really uses the rule of law mechanism,  most observers expect Poland and Hungary to back down and make some kind of compromise. If they don’t, it could be the first step in a long drawn out exit from the EU that would be seen as a defeat by all sides.