LUXEMBOURG (CN) — The European Union's attempt to rein in Poland and Hungary’s deteriorating judiciary is facing a major challenge before the bloc’s highest court.
In two days of hearings before the European Court of Justice that kicked off Monday, Warsaw and Budapest are fighting against the so-called rule-of-law mechanism, a 2020 regulation that ties funding from the EU to the independence of member states' judiciary and their anti-corruption measures.
Brussels and the Central European countries have been at odds for several years, as Hungary and Poland’s far-right, ultra-nationalist governments have gradually curtailed the independence of their judiciaries. Last week, the Court of Justice found that Poland set up an illegal judicial disciplinary chamber to remove judges it doesn't like.
Mechanisms in EU law to punish countries for failing to operate independent legal systems require unanimous support and Poland and Hungary have promised to block any resolution targeting the other. Budgetary approval, however, only requires a qualified majority.
“There is no adequate legal basis for such a rule,” Miklós Zoltán Fehér, a senior official at the Hungarian Justice Ministry, told the Luxembourg-based court on Monday. The court is sitting in full due to the importance of the case.
The rule-of-law mechanism is included in the five-year budget approved last year by the EU, which includes the bloc's 800 billion euro ($925 billion) Covid-19 support package. Hungary and Poland vetoed the budget last November, and after it passed they filed a complaint with the Court of Justice alleging the mechanism violates EU law.
Poland has 57 billion euros ($66 billion) in EU grants and cheap loans at stake and Hungary could lose up to 7.2 billion euros ($8.3 billion).
“Breach of rule of law has a serious impact on the financial interests of the union,” lawyer Tamas Lukacsi argued on behalf of the European Parliament on Monday.
The parliament was joined in defending the mechanism by the European Commission, the EU’s executive body, and the Council of the Union, a group of government ministers from each EU country. They are joined by 10 EU countries, including France, Germany and Ireland.
“Rule of law is one of the defining characteristics of the European Union,” lawyer David Fennelly told the court on behalf of Ireland.
If it survives the legal challenge, the rule-of-law mechanism would apply to all funding going forward, including the EU’s considerable Common Agricultural Policy, the largest section of the union’s 160 billion euro ($189 billion) budget.
A 2019 investigation by the New York Times found that this funding is used to prop up Hungarian Prime Minister Viktor Orban and Polish Prime Minister Mateusz Morawiecki, among others, by enriching friends and punishing enemies.
Orban has called the rule-of-law mechanism “a political and ideological weapon.” Both he and Morawiecki are facing tough upcoming elections - Hungary in April 2022 and Poland in 2023 - and see the money as a way of shoring up support.
The case is getting extra attention following Friday’s ruling from the Polish constitutional court that found Poland's laws take precedence over EU law. Many are now worried about a potential “Polexit" if the Central European country tries to leave the EU, just as the United Kingdom did at the start of the year. Widespread protests broke out in Poland over the weekend, with more than 100,000 people gathering in Warsaw to show support for staying in the EU.
Hearings over the budget mechanism will continue on Tuesday.
Follow @mollyquell
Subscribe to Closing Arguments
Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.
Additional Reads
-
-
Wayne LaPierre corruption trial fuels efforts to rebuild NRA April 19, 2024
