EU pandemic recovery package stokes rule-of-law dispute

Hungary’s prime minister Viktor Orban hailed a big win after EU leaders emerged from four days of gruelling talks with a deal for a €750bn coronavirus recovery package.

Mr Orban insisted he had won a “huge victory” by stopping an effort to make cash handouts dependent on good governance, thwarting those who view him as an authoritarian menace to be tamed. 

While his take is disputed by others in the EU, the compromise struck in the early hours of Tuesday has left open the question of whether the 27-country bloc has the appetite or tools to take on those member states accused of sliding into autocracy. It has also set the stage for future internal battles between governments branded authoritarian and their accusers.

Rosa Balfour, director of the Carnegie Europe think-tank, said that, while “pessimists” would argue that Mr Orban had “won on all fronts”, the outcome still left scope to pursue an “incisive mechanism” to safeguard the rule of law.

“It will require a solid [European] Commission and member states — or at least a few with weight — to make sure it is applied in practice,” she said. 

The deal agreed this week will task the commission to propose measures to stop funding from the recovery package or the bloc’s new €1.07tn seven-year budget going to countries in the event of rule-of-law breaches.

The proposed sanctions would then require the approval of national governments under the qualified majority voting system, which needs 55 per cent of member states representing 65 per cent of the EU’s population to vote in favour.

Ursula von der Leyen, European Commission president, said the inclusion of the mechanism in the deal underlined the EU’s “clear commitment” to the rule of law. Some analysts hope the majority voting provision will deny individual countries or small groups of them the chance to veto. 

“It was a make-or-break moment but it positively incorporated rule of law,” Daniel Hegedus, a researcher at the German Marshall Fund of the US think-tank, said of the summit outcome.

“It was a clear commitment to a more effective protection of rule of law, and it is a great opportunity that a harder rule of law conditionality can be introduced in the future.”

European Commission president Ursula von der Leyen, left, with Germany’s chancellor Angela Merkel at the summit European Commission president Ursula von der Leyen, left, with Germany’s chancellor Angela Merkel at the summit © Francois Lenoir/POOL/EPA-EFE/Shutterstock

But critics pointed out that the compromise deal also gave the European Council of EU leaders an as yet undefined role in the process, which raises the prospect that Budapest, Warsaw or any other capital could try to block or tone down action there instead. 

Mateusz Morawiecki, Poland’s prime minister, said the new system would require support from all national heads of government, including those of the “Visegrad Four” alliance of Hungary, Poland, the Czech Republic and Slovakia. 

“Without the agreement of Hungary, without the agreement of Poland, without the agreement of the Visegrad group, nothing will happen,” he said.

The debate has revived a fundamental doubt about whether the EU is — as it claims — a project of values as well as economics, despite flourishing corruption and crackdowns on the judiciary, media and civil society in some member states.

The answer has implications not just for the governance of Europe but also the credibility of the EU’s pitch as a better political partner and model than autocracies such as China and Russia. 

The limits of the EU’s action to uphold the rule of law have been exposed in recent years by the shortcomings of the so-called “Article 7” bloc disciplinary proceedings launched against Poland in 2017 and Hungary in 2018.

The imposition of sanctions such as the suspension of EU voting rights requires unanimity among member states. Both Warsaw, under pressure over its judicial overhaul, and Budapest — which was targeted after it introduced new laws on the judiciary, media and foreign universities — have said they will protect each other. 

Some analysts also fear that the definition of the rule of law is so weak as to risk being meaningless — and will lay the ground for arguments about whether countries are in breach or not. 

Jean Pisani-Ferry, senior fellow at the Bruegel think-tank, has expressed worries about the “vague reference” in the summit conclusions to Article 2 of the foundational EU treaty, which only deals with the rule of law in brief and abstract terms.

Chancellor Angela Merkel of Germany, which holds the EU’s rotating presidency, added to the uncertainty over the new proposals by declaring her support for Hungary’s efforts to end the existing Article 7 proceedings against it, if Budapest took unspecified “decisive steps”.

Critics say this prompts questions about whether Berlin will ease the pressure on Mr Orban by pushing to abort the Article 7 process without demanding substantial concessions.

Franziska Brantner, the German Green party’s spokesperson for European affairs, described Ms Merkel’s wording as “alarming”. 

“When she talks about ‘ending’ Article 7 during the German presidency, the risk is that Orban just does the bare minimum to make it go away,” she said.

Ms Brantner added that the failure of EU leaders to make a clear link between the rule of law and the allocation of funds was “tragic” — and meant that the final summit deal was essentially a “weak compromise”. 

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