2021-09-24 08:50:11 Europe Tightens Purse Strings to Try to Pressure Poland and Hungary

Europe Tightens Purse Strings to Try to Pressure Poland and Hungary

BRUSSELS, FRANCE — Despite being members of the European Union, Hungary and Poland have repeatedly violated the EU’s long-established rules and values in recent years.

They have contested the supremacy of EU law and evaded rulings by the bloc’s highest court. Brussels has issued reprimands and warnings, but they have been interpreted as empty threats in Budapest and Warsaw.

However, Brussels is now employing another tool at its disposal: money.

At a time when Europe is still trying to recover from the pandemic, the European Union has withheld tens of billions of dollars in grants to Hungary and Poland, and Poland faces large fines for violating decisions of the bloc’s highest court, the European Court of Justice.

The fight is a matter of life and death for the European Union. For the bloc to function properly, all member countries must adhere to the same principles. However, Hungary and Poland are led by right-wing populist parties that have a history of defying Brussels.

The two countries are now facing increased financial pressure from the European Union’s executive arm, the European Commission, which has long been frustrated by their repeated stymieing of its legal efforts to counter their rule of law violations, particularly regarding judicial system changes, press freedom, and minority rights, over the last six years.

This month, the European Commission admitted that it was withholding $42 billion in payments to Poland from a $857 billion coronavirus recovery fund due to that country’s challenges to the supremacy of EU law. The commission also stated that it may reduce funding to Polish regions that have declared themselves to be “L.G.B.T-free zones.”

Payments from the virus fund to Hungary were also halted after the European Commission stated that Budapest had not done enough to combat corruption.

And both countries are at risk of losing even more money as a result of a December agreement that ties all EU funds to rule of law standards such as judicial independence and anti-corruption measures. The rules are already in effect, but Hungary and Poland have filed a complaint with the European Court of Justice.

While those challenges continue, the European Parliament has put intense pressure on the commission to use the mechanism against Hungary and Poland right away.

“This is a critical phase in European integration,” said Sophie in ‘t Veld, a Dutch member of the European Parliament, “because if we are unable to get all member state governments to respect E.U. law, the whole thing will disintegrate.”

“We have to find a way to break this impasse” with Hungary and Poland, she added.

Last year, the commission denied funding to several Polish municipalities that declared themselves “LGBT-free.” The commission also filed a legal action against Poland, claiming that such zones violated EU values. The commission informed the governors of those regions earlier this month that it was postponing additional funding of approximately 130 million euros, or approximately $150 million.

The efforts appear to be working: the Polish Press Agency reported on Wednesday that one of the targeted regions was withdrawing its L.G.B.T.-free declaration due to the withholding of European funds.

In a recent interview, Didier Reynders, the European Union’s justice commissioner, stated that the bloc’s goal was to “install a true culture of the rule of law.” He went on to say that the democratic backsliding in Poland and Hungary is an opportunity to draw attention to the rule of law in all member states.

To avoid accusations of double standards, the commission has recently begun evaluating the democratic standards of all member countries. However, in countries where violations are more widespread, the reports have had little impact.

In July, Poland dramatically escalated the conflict by refusing to implement two decisions of the EU’s top court, effectively ordering the dismantling of a disciplinary “chamber” that critics say has been used by the country’s government to intimidate judges who do not agree with it.

In a direct challenge to the European Court’s supremacy, Warsaw argued that national judicial systems fell outside the scope of E.U. authority. In an interview, Sebastian Kaleta, a Polish deputy justice minister, said the ruling was “unlawful,” citing a recent decision by his country’s constitutional tribunal.

Mr. Kaleta stated, “The European Court of Justice is illegally expanding its jurisdiction.” “This is not a legal proceeding; it is a political process.”

“Poland has a different ideological vision of the European Union, and as a result, we are being blackmailed,” he added.

The Hungarian government claimed that the commission withheld the funds for political reasons. “EU funds are not aid-type donations; this money is owed to Hungary and should be provided by the European Union on a contractual basis, on the basis of mutual benefits,” said Zoltan Kovacs, secretary of state in the prime minister’s office.

Poland is not the only country that has questioned the legal order of the EU. Last year, Germany’s highest court filed a similar challenge, claiming that the European Court had overstepped its authority by ruling on the legality of European bond issuance.

The European Commission believes that challenging the supremacy of EU law jeopardizes the bloc’s core. Mr. Reynders believes that “if you want to have a union, you need the same E.U. law applied in the same way in all member states.”

The commission appears to have no intention of backing down, and has requested that Poland be fined up to $1.2 million per day by the European Court of Justice. “It is normal for member states to disagree with the commission,” said Mr. Reynders. “However, when the court renders a final decision, that is the end of the game.”

Despite a daily fine of 500,000 euros (approximately $590,000) imposed by a European court, Poland refused to halt operations at a coal mine in Turow, in the country’s southwest, this week. “We cannot allow ourselves to turn it off,” Poland’s Prime Minister Mateusz Morawiecki said, adding that the “health and lives of Poles” were in jeopardy.

Legal action to address rule of law violations, according to analysts, is too slow to be effective.

“The real issue is that the commission is always too late,” said Sophie Pornschlegel, an analyst at the European Policy Center in Brussels. “Once liberties are prohibited in a country, it is extremely difficult to revert. As a result, the EU is always one step behind.”

According to the commission, procedures are slow because EU institutions are bound by the rule of law and cannot expedite legal cases.

Although Hungary has mostly followed the European Court of Justice’s rulings, critics say the country’s respect for democracy and the rule of law is deteriorating.

Laurent Pech, a professor of European law at Middlesex University in London, said, “They pretend to implement the orders, but keep passing new regulations that violate EU law.” “They intend to wear down critics with a flood of legislation. Then the damage has been done.”

As a result, analysts believe that withholding the funds may be more effective.

“There is a building momentum,” Professor Pech observed. “Many people have had enough of the commission and the council’s excuses, and Poland and Hungary have burned enough bridges.”

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Europe Tightens Purse Strings to Try to Pressure Poland and Hungary