By Olivier Bault.
This article was originally publishedon Kurier.plusby the Felczak Institute of Polish–Hungarian Cooperation
European Union – While Poland and Hungary can hardly count on the new European Parliament constituted after the May 23–26 elections to take a less offensive line than the previous one against their current governments, their leaders seem to believe that the new European Commission led by Ursula von der Leyen, which will replace the Juncker Commission from November 1, will be more accommodating. However, even if the EC’s current first Vice-President for the rule of law Frans Timmermans is given other responsibilities in the next Commission, there will still be a range of issues, some of which have already been or soon will be referred to the Court of Justice of the European Union (CJEU) by the outgoing European Commission. Some of those issues are normal matters concerning the Single Market and fair trade, where the Commission may take action against member states which it sees as not complying with established common rules, or where member states may protest decisions taken by the Commission or directives adopted by the Parliament and the Council, as in the case of the 2018 directive concerning the posting of workers in the framework of the provision of services, attacked by both Poland and Hungary. But others are highly political, such as the cases concerning the reforms of the judiciary in Poland and the laws against illegal immigration and on higher education in Hungary, as well as the case brought by the Commission against Poland, the Czech Republic and Hungary concerning the mandatory relocation of asylum seekers. The European Council has now officially given up the relocation scheme – although a group of member states led by the Franco-German duet are trying to give it a second life – but the case of the refusal by those three countries to take their quota of asylum seekers is still pending in the CJEU.
Article 7 proceedings against Poland and Hungary stuck in the Council
There are also the Article 7 proceedings launched against Poland by the Commission in December 2017 and against Hungary by the European Parliament in September 2018, regarding an alleged “clear risk of a serious breach by a Member State” of the rule of law. The proceedings are still pending in the Council, which must determine by a majority of four-fifths of its members that there is indeed “a serious and persistent breach” of the rule of law in those two countries before proceedings can be taken forward. In the meantime, Hungary has brought to the CJEU a case against the European Parliament, asking the CJEU to “annul the European Parliament’s resolution of 12 September 2018 on a proposal calling on the Council to determine, pursuant to Article 7(1) of the Treaty on European Union, the existence of a clear risk of a serious breach by Hungary of the values on which the Union is founded”, claiming that the exclusion of abstentions from the final count of the vote on the Article 7 proceedings in the European Parliament “seriously infringed Article 354 of the Treaty on the Functioning of the European Union and its own rules of procedure”. The case is still pending in the CJEU (as of August 2019).
Whatever the outcome, the European Council would eventually have to act unanimously to impose sanctions under Article 7, which makes the eventuality of the proceedings started by the Commission and the Parliament leading to sanctions highly unlikely, and even impossible as long as PiS and Fidesz remain in power in their respective countries, as both Poland and Hungary have promised to veto any sanction against the other.
Nonetheless, Finland, which currently has a leftist-liberal government, has said that it aims to put the rule of law at the centre of its six-month EU presidency, which began on 1 July, and the Finnish government seems to be targeting in particular Poland’s and Hungary’s conservative right-wing governments. It is also campaigning with others to link the payment of European funds to perceived compliance with the principles of the rule of law. This in turn has led, since July, to a bitter exchange of verbal attacks between Finnish and Hungarian officials.
Polish judicial reforms in the Court of Justiceof the European Union
The European Commission’s 2016 decision to block a progressive retail tax introduced by PiS in Poland as promised in its election manifesto led to an embarrassing defeat for Competition Commissioner Margrethe Vestager in April this year, in the wider context of a series of serious setbacks (17 cases out of 41 state aid cases taken to the Luxembourg courts by member states lost by the Commission between November 2018 and May 2019, according to a calculation by Politico). Warsaw had repealed its law, whose purpose was to levy higher taxes on big chain stores (often foreign-owned), as the PiS government believed the Juncker Commission was seeking all possible pretexts to attack Poland after the party’s election victory in October 2015. And indeed the EC did appeal against the CJEU ruling last July, so this issue remains at the centre of one of several ongoing disputes between the Commission and the Polish government.
Poland, on its part, suffered a major setback at the CJEU in June this year on an important component of its judicial reforms: the retirement age of sitting judges of its Supreme Court and Higher Administrative Court. The European Commission’s complaint submitted to the CJEU in September 2018 concerned the reduction of the term of office of sitting members of the Supreme Court and the Higher Administrative Court in Poland after the change in their retirement age. According to the Commission, “on the one hand, by lowering the retirement age of the judges appointed to the Supreme Court, and by applying that measure to the judges appointed to that court before 3 April 2018 and, on the other, by granting the President of the Republic of Poland the discretion to extend the period of judicial activity of judges of that court, the Republic of Poland had failed to fulfil its obligations under the combined provisions of the second subparagraph Article 19(1) of the Treaty on the European Union and Article 47 of the Charter of Fundamental Rights of the European Union”. Poland argued that under the European treaties neither the European Commission nor the Court of Justice had the power to challenge its reforms of the judiciary, as the organisation and the functioning of the national judicial system remains within the exclusive competence of each EU member state.
Nonetheless, Poland lost this case after, as it most often does, the CJEU followed the opinion of the Advocate General delivered on June 20, 2019. However, it had already changed its law – this was done in December 2018 after a temporary ruling of the CJEU demanding a suspension of the clauses concerning the age of retirement of sitting judges. Hence Poland had already complied, and the unfavourable ruling of June 24 by the CJEU should not lead to further conflicts between Brussels and Warsaw in that matter. The same goes for the differing retirement ages for male and female judges, also questioned by the Commission,which were made equal again when that aspect of the judicial reform was repealed earlier in 2018.
There is, however, a case which the European Commission intends to refer to the CJEU that could ruin chances for any improvement in the difficult relations between Warsaw and Brussels. This concerns the creation of a new Disciplinary Chamber in the Polish Supreme Court and the appointment of its members by the reformed National Council of the Judiciary (KRS), whose members had in turn been chosen for the most part by the current PiS-dominated Parliament.Indeed, the reforms enacted by PiS first amended the procedure for the appointment of the 15 judges sitting on the KRS, which has 25 members in all. They are no longer appointed by their peers, but by Parliament. In March, the Polish Constitutional Court (whose legitimacy was questioned by the Juncker Commission after its successive reforms by the Polish Parliament in 2016) confirmed that the change conforms with the Polish constitution. However, the European Commission and Vice-President Timmermans do not accept this, and they are now promising to refer this matter to the Court of Justice of the European Union as well. The procedure is already under way: the outgoing Juncker Commission has officially requested clarifications from Poland, and in mid-July it expressed its dissatisfaction with the answers received.
At the same time, the CJEU had already been invited to consider this aspect of the Polish reforms through questions referred for a preliminary ruling (requests for interpretation of European Law) submitted by Polish judges who are using this European mechanism to resist the laws approved by a parliamentary majority, thus inviting the CJEU to extend its competencies beyond the areas directly laid down in the European treaties.On June 27 the Advocate General of the Court of Justice delivered his opinion on this issue, and it was unfavourable to Poland. This strongly suggests that the CJEU may rule that the way judges are now appointed to the KRS is contrary to the general principle of judicial independence inscribed in the European treaties, namely in Article 19 (1) of the Treaty on the European Union, which states that “Member States shall provide remedies sufficient to ensure effective legal protection in the fields covered by Union law”, a sentence which Advocate-General Evgeni Tanchev, from Bulgaria, seems to consider as giving the CJEU the power to decide about the shape of the judicial system in member states.
However, it is difficult to imagine how Poland could move back on this issue. One point is that the reform has been validated by its own Constitutional Court, which under Polish law is the only competent court in this matter; another is that its reversal would invalidate all appointments of judges (not only those of the Disciplinary Chamber of the Supreme Court) made since the entry into force of the KRS reform last year. In addition, this reform is central to achieving the election promise made by PiS to put an end to the sense of impunity and corporatism in the judiciary.
The European Commission vs Hungary
As for Hungary, the Juncker Commission has also brought a number of judicial actions aimed at affirming the competences of the European Union in fields which do not derive directly from the European treaties, and which moreover are highly political.
The latest action brought by the Commission concerns Hungary’s so-called “Stop Soros laws” against illegal immigration that were enacted last year just after the Fidesz-KDNP coalition had won parliamentary elections for the third time in a row. Those laws had been at the centre of the electoral debate, and it can therefore be argued that they were approved by Hungarian voters, who gave a new landslide victory to the governing coalition. In spite of this, the European Commission referred Hungary’s asylum laws to the Court of Justice of the European Union in December 2018 claiming they were in violation of EU directives on asylum and of the Charter of Fundamental Rights, and at the end of July 2019 it announced it was taking Hungary to Court “for criminalising activities in support of asylum seekers” with “the so-called ‘Stop-Soros’ legislation”. The Hungarian government answered that it was ready to defend itself in court, as the legislation reflected the will of the Hungarian people, and it accused the European Commission of being “still working to complete the dirty work of pro-migration forces” and aiming at “pressuring Hungary to drop its more stringent immigration rules and eliminate transit zones which are crucial for border protection”.
The European Commission had already referred Hungary to the CJEU in December 2017 for its new law on NGOs funded from abroad, which stipulates that such NGOs should declare to the authorities and to the public all financing received from abroad except for European public funds and subsidies not exceeding 7.2 million forints (about €22,000). One reason for this legislation was that foreign-funded NGOs were said to be playing a key role in illegal immigration to Hungary, and the aim was to make their activities and motivations more transparent. The legal dispute has not yet been resolved by the CJEU.
Also in December 2017, the Commission took to the CJEU Hungary’s Higher Education Law, which was said to target the Central European University, an American private entity created and funded by George Soros –an American billionaire of Hungarian-Jewish origin, bent on promoting his liberal views worldwide, and a harsh critic of Viktor Orbán. The Central European University has since moved from Budapest to Vienna, as the Hungarian law on higher education requires that a non-EU foreign university having a branch in Hungary should also provide education services in its home country, which is not the case with the CEU.
As noted above, another pending case brought in December 2017 by the European Commission concerns the refusal of Hungary, Poland and the Czech Republic to take a number of asylum applicants as per the Council’s decision of September 2015 concerning mandatory quotas for the relocation of illegal immigrants stuck in Greece and Italy. The relocation mechanism is officially dead and most countries have failed to fulfil their quotas, but unlike others, those “three countries [had] given no indication that they will contribute to the implementation of the relocation decision”. Indeed, as the Commission stated in its press release announcing the referral of the case to the CJEU, “Hungary [had] not taken any action at all since the relocation scheme started, Poland [had] not relocated anyone and not pledged since December 2015. The Czech Republic [had] not relocated anyone since August 2016 and not made any new pledges for over a year.” The Commission’s action was taken three months after the Court of Justice had dismissed complaints filed by Hungary and Slovakia and supported by Poland against the mandatory relocation scheme.
In another case closely linked to the ongoing disputes over reforms which have been carried out since 2010 by Viktor Orbán’s successive governments and parliamentary majorities, it is Hungary which took the European Commission to the Court of Justice of the European Union. That case concerns a decision taken by the Commission in November 2016 to consider a tax on turnover from the broadcasting or publication of advertisements as state aid incompatible with the internal market. The tax had a progressive rate meant to favour smaller media (which are often Hungarian-owned) over large media (which are often foreign-owned), and its official aim was to reinforce media pluralism. Just as with the Polish law which introduced a progressive retail tax in 2016 (see above), the European Commission has now appealed the CJEU’s decision of June 2019 which overturned the Commission’s 2016 decision.
Other pending cases where the European Commission is opposing Poland and Hungary in the Court of Justice of the European Union are of a less political and more technical nature, so they should not prevent relations between the two Central European capitals and Brussels from improving. But generally speaking, the outgoing Juncker Commission seems to be trying to consolidate its action against Poland and Hungary by multiplying the proceedings brought before the CJEU before it has to step down to be replaced by the von der Leyen Commission. It remains to be seen whether the next European Commission will maintain the same level of efforts towards extending the powers of European institutions, forcing mass immigration on member states and putting right-wing Central European governments under special scrutiny.Having played a decisive role in the nomination of Germany’s Ursula von der Leyen to head the next European Commission, Poland’s and Hungary’s leaders have expressed their hopes for an improved relationship. Nonetheless, there remain difficult hurdles to overcome,and the outgoing Juncker Commission intends to leave a few powerful time bombs behind.