CJEU lawsuit from Poland and Hungary: What does the rule of law mean – for whom?

Poland and Hungary are suing the rule of law mechanism – now the ECJ has to judge whether this is covered by the European treaties. The negotiation shows how great the leeway is.

The matter is obviously important: the Court of Justice met for one and a half days, with almost all the judges of the highest EU court, on a very fundamental question: Can the EU withdraw money from member states in the future if they violate the principles of the rule of law? So far this has already been possible, according to the so-called Article 7 procedure. But that requires unanimity – and that was difficult to achieve in the past.

Such proceedings were initiated against Hungary and Poland because they were accused of having massive control over the judiciary and wanting to silence the opposition media. But both states defended each other and blocked possible resolutions with their veto.

That is why the so-called rule of law mechanism has been in effect since January 1st. According to this, the Council can, by majority vote, withdraw EU budget funds from a member state if its government endangers the independence of the courts or if it is difficult for the people in the country to defend themselves against state measures.

Who defines the rule of law?

Now Poland and Hungary are suing the European Court of Justice, because both countries could face considerable sums of money: Poland recently received over twelve billion euros per year from EU funds, Hungary just under five billion. In addition, there is the prospect of billions in Corona aid, which could also be refused.

This new rule of law mechanism has not yet been applied: First of all, the ECJ has to decide whether it is compatible with the principles of EU law. Poland and Hungary both claim that the EU should not take such a step. The European Treaties did not allow that. In addition, everything is far too unclear – when a country violates the principles of the rule of law. “We are all for the rule of law and for democracy,” said the representative of Poland at the negotiation. But he does not know what exactly the rule of law mechanism requires of them. “At the end of the way the money tap will be turned off.”

When exactly will the money be cut?

In fact, the judges asked very intensively when exactly what measures were threatened and what was foreseeable for the government of a member state. In some cases it became very fundamental: Is it really only a question of ensuring that budget funds are used properly?

Yes, replied representatives from the Commission and the Council: European law would often have to be implemented with the money from the EU. If, however, the public prosecutor’s office and courts in a country are no longer independent, there is a risk, for example, that certain groups will make use of them and that no one will control it there.

And they received a lot of tailwind from various member countries: With the exception of Poland and Hungary, everyone was in favor of the new rule of law mechanism. Hungary also pointed out that a country might no longer be able to pay into the EU’s coffers if it no longer had any budget allocated.

Poland’s Constitutional Court ruling

The decision of the Polish Constitutional Court last week was also repeatedly discussed. Admittedly, there was no direct assessment from the Luxembourg judges’ bank. But President Koen Lenaerts insisted on bringing up the issue. His harmless question sounded like a threat: whether a court decision like the one from Poland would not automatically trigger the rule of law mechanism in the future? The Advocate General also invited the representatives of the Polish government to comment on this – although they did not respond specifically to it.

The Court of Justice will decide in a few weeks at the earliest whether the new rule of law mechanism is permissible – even if the whole thing is resolved in an accelerated procedure. On December 2nd, the Advocate General, the court’s expert who gives his opinion in advance, wants to publish his vote. A judgment would then typically come a few weeks later.

It is possible that the Commission will start the first procedure for budget cuts before the judgment. Because the European Parliament is putting pressure on: MPs have already threatened with an inaction complaint if the EU does not do something about the situation in Poland and Hungary soon.