Hungary, Poland Veer Off Course as EU Weighs Covid Bailouts

European Union renegades Poland and Hungary were singled out yet again in an EU report pointing to the widening chasm between the duo’s populist regimes and the bloc’s democratic standards.

The two nations remain a cause of “serious concern” after a swathe of new rules curtailed the independence of courts and judges, according to a European Commission report on the “rule of law” across the 27-nation bloc.

The document adds to the clamor for the EU’s executive arm to quickly start using recently won sanctioning powers to freeze funding including Covid-19 bailouts for errant member states.

Sweeping judicial reforms in Poland have led to “lowering safeguards for judicial independence” with the creation of a controversial Disciplinary Chamber of the Supreme Court that “continues to take decisions with a direct impact on judges and the way they exercise their function,” the report said.

In Hungary, “the direction of change continues to be towards lowering previously existing safeguards,” adding “to existing concerns on judicial independence,” it said.

The EU could start punishing rule-of-law offenders this year by using a so-called conditionality mechanism freeze funds from its 1.8 trillion-euro ($2.12 trillion) pandemic stimulus package before they’ve been disbursed. The commission still hasn’t approved national recovery plans -- which provide access to the relief money -- from several countries, including Hungary and Poland.

That means Hungary Prime Minister Viktor Orban’s government could potentially miss out on as much as 7.2 billion euros of grants from the EU recovery plan and Poland could lose out on as much as 23.9 billion euros of grants.

Poland added fuel to the debate about the rule of law when its Constitutional Tribunal last week openly defied a crucial pillar of the 27-nation bloc’s legal system by ruling that interim orders by EU courts on judicial matters weren’t enforceable.

Tuesday’s report will be “one of the most important sources for the possible application of the new conditionality mechanism,” EU Justice Commissioner Didier Reynders told reporters in Brussels on Tuesday.

He said the commission had written to Poland threatening further legal action, including seeking financial penalties if the nation doesn’t abide by EU rulings telling it to dismantle a system for disciplining judges who don’t tow the line. Poland was given an Aug. 16 deadline to respond to the EU’s letter.

Poland’s government will “analyze documents sent by the commission,” spokesman Piotr Muller said on Twitter. “It’s worth noticing that Polish laws are similar to those which exist in other EU nations,” he said.

Tuesday’s report also highlights the “limited” track record in Hungary to investigate allegations of corruption by high-level officials despite the indictment rate for such cases being “high, and some new high-level cases involving politicians have been opened since 2020.”

‘Political Influence’

Concerns remain about the independence of prosecutors in Poland, where the minister of justice has a double role also as prosecutor general, and in Hungary, where the EU sees “insufficient safeguards against political influence,” the report said.

The EU has for years been battling against Poland and Hungary over numerous issues from the rule of law to climate policy that have, so far, led to little by way of concrete punishment. The pair are the only two EU states subject to a so-called Article 7 procedure, which could lead to the suspension of their EU voting rights.

Both nations have until now been able to shield each other from punitive measures because some of the bloc’s sanctions require the assent of 26 of the 27 members.

Officials in Hungary and Poland argue that cutting off EU funding for democratic backsliding would violate a compromise text the bloc’s leaders adopted in December to convince Budapest and Warsaw to lift a veto threat. They also say no action can happen before the EU’s top court has ruled on their challenges to the legality of the mechanism.

The rule of law assessment “shouldn’t be used for ideological purposes nor for blackmailing member states,” Justice Minister Judit Varga told reporters in Brussels before the publication of the report, according to MTI state news service. She added the issues covered in it were “arbitrary.”

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