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How do you deal with EU countries that undermine the rule of law and do not respect democratic norms? There was a long dispute about this in the EU; now an agreement has been reached on a sanction mechanism. In the future, EU countries are threatened with cutting EU funds if they violate the rule of law. This was confirmed by MEPs and the German Presidency of the Council of the EU after approximately three weeks of negotiations in Brussels. Therefore, the government representatives of the EU countries and the European Parliament agreed on the mechanism.
This should make it possible, for the first time in the history of the European Union, to financially punish disregard for the fundamental values of the EU. For example, when the lack of independence of the courts of a host country clearly allows or promotes the misuse of EU funds.
The president of the PPE Group, Manfred Weber, spoke of a historic agreement for all Europeans. “Citizens expected us to act and we did,” said a statement. EU Commissioner for Budget and Administration Johannes Hahn described the deal on Twitter as a “breakthrough”.
The agreement essentially follows a proposal from the German Presidency of the Council of the EU. Consequently, the EU Commission would propose to sanction an EU country. Member states would have to confirm this with a qualified majority. These would be 15 EU countries, representing 65 percent of the EU population.
Therefore, the obstacle to reducing EU funds is greater than required by Parliament and the Commission. They suggested that sanctions recommendations should only be avoided by a qualified majority. Hungarian Prime Minister Viktor Orbán had previously called for a veto right for all EU countries, but could not get away with it. Hungary and Poland cannot avoid sanctions on their own, not even together with their allies Slovakia and the Czech Republic.
Due to pressure from European parliamentarians, the instrument will now be even stricter than most EU states intended. The original proposal was to allow cuts in EU subsidies only if breaches of the rule of law have “a sufficiently direct impact” on the financial management and financial interests of the Union.
From parliamentary circles it was now said that sanctions would also be possible, for example, if the independence of the judiciary was in danger. Parliament also made it possible for sanctions to be imposed more quickly and action to be taken even if there is a threat of misuse of EU funds due to a violation of the rule of law.
Hungary and Poland reject the mechanism
The compromise that has now been reached must be confirmed by the plenary parliament and in the Council of Member States.
Hungary and Poland in particular have been repeatedly accused of expanding the government’s influence in the judiciary. The two countries strictly reject the rule of law mechanism and already threaten to block important EU decisions. However, they are likely to be canceled again between Member States. Therefore, they could try to torpedo the EU budget in the long term. This could also mean that the EU’s planned crown economic stimulus program cannot start.
The Hungarian government rejected the EU agreement on financial sanctions against sinners of the rule of law as “unacceptable extortion”. Justice Minister Judit Varga told Facebook that it was unacceptable “that the European Parliament, despite the current pandemic and the serious challenges for the European economy, continues its political and ideological blackmail against Hungary.”
