In the beginning the European Parliament adopted some resolutions and initiated a few infringement proceedings. These were the first steps taken by the European Union as a response to some of the most concerning measures put in place by the Fidesz government since 2010. However, as the rule of law decline in Hungary proved persistent and Poland’s ruling Law and Justice Party (PiS) joined the Hungarian government’s illiberal democracy-building project, the EU institutions’ reactions multiplied. The number of EP resolutions and infringement proceedings increased – although the most important elements of the nascent illiberal regime flew under the Commission’s radar. Simultaneously, new rule of law monitoring instruments were introduced, starting with the Commission’s EU Justice Scoreboard in 2013, continuing with the Commission’s Rule of Law Framework and the Council’s Annual Rule of Law Dialogue in 2014. It took 8 years in the case of Hungary and 3 years in the case of Poland to finally activate the Article 7 procedure in 2017/18, the mechanism specifically designed to tackle the systemic violation of EU values, including the rule of law. However, none of these tools proved adequate to halt, let alone reverse, the rule of law decline in the two rogue Member States.
It is against this backdrop that yet another proposal was made by the Commission in 2018 leading eventually to the adoption of a new instrument usually dubbed ‘Conditionality Mechanism’, making the availability of EU funds dependent on a Member State’s compliance with some basic rule of law requirements. Due to a political compromise, the application of Regulation 2020/2092 (‘Conditionality Regulation’) was practically suspended until the outcome of the European Court of Justice’s review of the mechanism’s conformity to EU law. On 16 February 2022, Kirchberg finally gave the long-awaited green-light to move forward with the procedure.
The Commission’s proposal published already in 2018 laid dormant until 2020 when it re-emerged in the context of the European Union’s recovery plan for the Covid-19 pandemic. Due to the pressure exerted by the so-called “frugal” Member States, the European Council recommended attaching the conditionality mechanism to the EU funds. Hungary and Poland, the only two Member States subject to an Article 7 procedure, were obviously against the idea.
The tricky part is that the Conditionality Regulation could have been approved with a qualified majority decision in the legislative procedure. However, the Hungarian and Polish Prime Ministers repeatedly threatened to veto the EU budget, namely the Multiannual Financial Framework (MFF) and the NextGenerationEU – the basic pillars of the recovery plan – requiring unanimous vote in the Council. The German presidency proposed a watered-down version of the regulation, and a new draft was published after intensive trialogue meetings between the Council, the Parliament and the Commission. But the two leaders persisted until they finally forced the Council to adopt a set of declaratory statements regarding the adoption, application and interpretation of the Conditionality Regulation. Only this concession opened the way for the enactment of the Regulation in December 2020.
The concession given by the German presidency of the Council to the governments of Hungary and Poland, namely the EUCO Conclusions, were strongly criticized by scholars for weakening the Regulation and delaying its application by practically amending the normative text in a legally non-binding instrument. Two points of this interpretive document were found particularly problematic: first, the Commission’s obligation to develop and adopt guidelines on the Regulation’s application before proposing any measures, and second, the finalization of the guidelines only after the review of the Regulation’s legality by the ECJ.
Several authors pointed out that the EUCO Conclusions, despite the political nature of this document, entailed major legal consequences and therefore constituted a de facto legislative act. It means that the Council exercised legislative functions without going through the adequate legislative procedure regulated by the Treaties, so it acted ultra vires. What is more, by instructing the Commission to adopt guidelines on the Regulation’s application, the Council also violated the principle of institutional balance because it infringed the Commission’s prerogatives.
Shortly after the adoption of the EUCO Conclusions, scholars started to brainstorm about the possible legal avenues that could potentially be used to neutralize its suspensory effect and force the Commission to activate the Conditionality Mechanism. It soon became evident that the Parliament was the most likely candidate for carrying out this task. Two main options emerged in the discussion. The first one was to seek annulment of the Conclusions on the grounds that the Council had acted ultra vires. However, the Parliament’s Legal Service – in a very contested opinion – considered it “highly probable that such an action would be declared inadmissible” and added that “even if a case were to be declared admissible, it is not guaranteed that it would succeed”.
Instead, the European Parliament opted for the second option: to initiate judicial proceedings against the Commission for failure to act. After having sent a resolution in March 2021 and a follow-up resolution in June calling on the Commission to adopt the guidelines (foreseen by the Conclusions) in order to make the Regulation applicable, the Parliament finally decided to sue the Commission in October 2021. Many expressed doubts about the potential success of this legal action not only because it is a relatively rarely used procedure but also because of the difficulties of proving the Commission’s manifest error in not applying the Regulation – Ursula von der Leyen, for example, kept repeating that the Commission was applying the Regulation by monitoring the situation. Parliament’s intention was to accelerate the preliminary process leading to the activation of the Conditionality Mechanism, but the ECJ’s judgment on the Conditionality Regulation was delivered on 16 February 2022, while the case brought against the Commission is still pending.
The EUCO Conclusions delayed the application of the Conditionality Regulation until the review of its legality by the ECJ. The observers’ suspicion that this was simply a strategy to gain some time was confirmed by the fact that it took almost four months for Hungary and Poland to finally submit their applications in March 2021. To save some time and mitigate the negative effects of the two governments’ maneuvering, the Parliament requested that the case be determined in an expedited procedure. The ECJ granted the request and delivered its judgment in less than a year.
Although the Hungarian and Polish applicants relied primarily on formal and procedural arguments in their petition, the ECJ seized this opportunity to convey some important substantive messages. Faraguna and Drinóczi have emphasized the judgment’s contribution to the clarification of the concept of constitutional identity, sending a clear warning to those European leaders who have been abusing the national identity-based arguments to justify their illiberal projects and elaborating on the identity of the EU.
After the confirmation of the Conditionality Regulation’s legality by the ECJ, the focus of attention has shifted back to the Commission. Right after the delivery of the judgment, MEPs called on the Commission to act without delay and proceed to the application of the Conditionality Mechanism. However, the Commission quickly announced that it “will now analyse carefully the reasoning of the judgments and their possible impact on the further steps” and “will adopt in the following weeks guidelines providing further clarity about how we apply the mechanism in practice.” As it was spottedby Priebus, several MEPs decided to search for new possibilities to put pressure on the Commission, such as cutting the Commission’s budget or postponing the approval of the discharge of the budget.
Whether it was due to the MEP’s pressure or not remains unknown, but the Commission finally published the guidelineson 2 March 2022. Timing is a crucial factor now given the upcoming Hungarian parliamentary election in April 2022. Especially if we consider that after 12 long years of political apathy, the electoral race between Fidesz and the alliance of the opposition parties is actually competitive. Activating the Conditionality Mechanism or at least sending a very clear warning to the Hungarian government as quickly as possible would be highly necessary; indeed, if not for practical reasons, but at least as a symbolic move, it would be important to make sure that the mechanism gets activated under the Fidesz government.
As the Polish and Hungarian cases have illustrated, the rule of law cannot defend itself; it needs protective mechanisms. The effectiveness of these mechanisms is influenced to a large extent by the attitude of its operators, but it also depends heavily on procedural factors: the process of their adoption and their application. As the Constitutionality Regulation saga shows perfectly well, if the process leading to the introduction of a rule of law protection mechanism and its subsequent implementation are not designed and calibrated carefully, and if the EU institutions concerned act ultra vires and infringe the institutional separation of powers, the whole endeavor can easily become pointless. It is tempting to fall into the trap of treating procedural questions as having secondary importance, but the defense of even the most fundamental values needs adequate procedures.