Rule of law: EU blocking €18bn funding to Hungary over legislation concerns
The government of Viktor Orbán has come into conflict with Brussels again following a series of legislative manoeuvres that the European Commission (EC) considers contrary to EU laws and values. €18bn in funding remains withheld from Hungary as the impasse continues.
In May, the EC made a referral to the Court of Justice of the European Union (CJEU) over a decree adopted by the government in Budapest allowing for the release of migrant smugglers which, the EC argues, is contrary to the EU Facilitators Package. In April 2023, Hungary released a number of foreign detainees who had been imprisoned for smuggling migrants, arguing that it could not justify the high detention costs in the country’s overcrowded prisons. The EC argues Hungary is failing to honour pledges to prevent people smuggling.
Zoltán Kovács is the Secretary of State for Public Diplomacy and Relations of Hungary. He says the EC’s latest referral is ‘extremely comical,’ and that ‘if anyone is a supporter of human trafficking with its measures, it is the European Commission [sic] itself.’
Brussels is also scrutinising a Bill recently put before Hungary’s parliament, where Orbán’s Fidesz-KDNP coalition has a majority. The Transparency in Public Life Bill directs that civic organisations have to register if they receive financial support from abroad and must get official authorisation to accept foreign funds. According to the Hungarian Government, the law is part of a series of measures to promote the country’s sovereignty alongside the creation of a Sovereign Protection Office. ‘It is about defending Hungary’s right to self-determination in the face of coordinated international pressure,’ says Kovács.
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There has been no progress on the rule of law reforms. In fact, more anti-democratic laws and efforts are being seen
Tahera Mandviwala
IBA Rule of Law Forum Advisory Board
Watchdogs believe the Bill will result in investigations, blacklisting of legitimate NGOs, and that it copies similar rules introduced in Russia. Tineke Strik, Hungary rapporteur of the European Parliament, told the media the Bill was designed to ‘dissolve all organisations, all media outlets, even punishing all individuals, that criticise the government. This is exactly what Russia does.’ Kovács says the proposed law ‘takes its inspiration from the US,’ comparing the Bill to the US’s Foreign Agents Registration Act 1938: ‘Foreign-financed organisations … [there] must also register and face oversight if they act under the influence of foreign powers. In essence, the idea doesn't come from Moscow, but from Washington.’
These measures come at a time of continued tension between Brussels and Orbán, not least over funding to support Ukraine in its war against Russia. Orbán has held out over the European Union’s proposed financial support to Ukraine – with which Hungary shares a border and has had historically good relations – and met President Putin last summer. This follows incidents in Hungary over the past decade that have troubled the EC, such as forcing the retirement of judges and a lack of media freedom. The EC’s most recent Rule of Law Report still has a long list of outstanding recommendations. Tahera Mandviwala, member of the IBA Rule of Law Forum Advisory Board, says: ‘The EU classifies Hungary as an “electoral autocracy” and not a democracy…There has been no progress on the rule of law reforms. In fact, more anti-democratic laws and efforts are being seen.’
For now, Hungary has delayed the Transparency Bill until the autumn, while the EC has requested that it be withdrawn.
In addition to the €18bn currently withheld, there are more financial restrictions planned that could, potentially, induce Member States to toe the line. The European Commissioner responsible for rule of law issues, Michael McGrath, is currently tasked with building ‘stronger safeguards on the rule of law’ in relation to the upcoming multi-annual financial framework, the long term EU budget. In a statement, he hinted at ‘a closer link between rule of law and access to EU funding’, though no further detail is currently available on this.
Orbán’s rhetoric has proven popular at home, however, taking a socially conservative stance on migration, and gender and LGBTQI rights. But, for the first time in many years, there is an increasingly viable opposition in the form of Peter Magyar, leader of the opposition Tisza (Respect and Freedom) Party. For its part, the EC’s position is uncomfortable. It needs Hungary’s buy-in on key EU matters but must also try and keep the country aligned with the EU’s democratic vision. In 2018, the EC started the complicated 'Article 7' procedure against Hungary. This sets out the process and powers whereby a Member State’s voting rights can be suspended if that member is not upholding the fundamental values of the EU as set out in the Treaty on European Union. ‘This would put great pressure on the Hungarian Government,’ says Mandviwala. But, for now, the process appears to be in something of a limbo in the European Council.
Image credit: Hungarian Parliament building, Yuriy Kobets/AdobeStock.com