Why the EU has got in a mess on the Rule of Law and how to get out of it … a thread … (a long one, I'm sorry, but it is messy ... even if there is a simple solution)
A new Rule of Law mechanism has finally been agreed, but Poland and Hungary are threatening to veto the EU budget and recovery fund if it's adopted. These are high stakes for a bad mechanism that won't be used against Hungary and probably won't work against Poland.
How did we get here? The agreed mechanism ignored underlying realities: the Council will only move to sanction a fellow member state if it feels it really has to. We have seen for years, and are seeing again now, just how much trouble obstructive states can cause.
15 states (which must, in practice, include Germany and France) won't move against Hungary. Yes, what is going on there is bad: but try to pin this down: what is the existential threat to the EU that makes states feel they have to act - that it is worse for them if they don’t?
As things stand (of course they may well get much worse), other EU leaders think Hungary is manageable. The situation is recoverable through domestic political change: the EU is not threatened. This may be right, it may be wrong: but it is what everyone thinks.
Then there is Poland. The situation here is different. Poland has dismantled the independence of its judiciary and is currently defying the EU’s court. This IS an existential threat to the EU. But even here reactions have been muted.
Will this new mechanism help? Well, maybe. But 1. It wont be triggered until the CJEU rules on the pending infringement case on the Polish judiciary. Until then, the Poles will always be able to argue: well you say this is a problem, but what does the Court say? Makes sense.
And 2. It depends on the severity of the sanctions. They will need to be very high. They probably won't be. Lets assume, reasonably, that the CJEU finds key elements of PiS’s judicial reform in breach of EU law.
The Commission will able to request fines under Article 260 TFEU (nothing new about this) – but these fines are never very high. They would be dwarfed (in Poland’s case) by the amount it receives from the EU budget.
If the Commission triggers the new mechanism – which it probably would – and enough states back it – which they probably would – it can suspend transfers to Poland from the EU budget. This is what all the fuss has been about. But how would this work?
When agreement was finally reached, the European Parliament celebrated two things that are contradictory: a mechanism that would suspend EU funding but protect beneficiaries. These would, if necessary, be able to claim directly from the Commission.
Under the next (blocked) EU budget Poland stands to receive around 100bn Euros over 7 years. That’s a lot. Around 3% of its GDP. Withholding that amount of money would make people think twice.
But this mechanism would not even come close to that. Take the CAP. It accounts for almost 30% of Poland's EU revenue. It is distributed across 1.4 million farms, employing 1.6 million people (70% of whom voted PiS). (99% of all farms receive up to 20,000 euros p.a.).
So take this out … because these farmers would still be able to claim. So would students, so would small businesses, so would … the list goes on: in the end Poland would still be getting most of what it was due.
So: states and the European Parliament are currently fighting over a mechanism that won't be used for Hungary and won't work for Poland. This is unwise and unnecessary. There is a better mechanism that even Hungary (perhaps not Poland) would agree to, that would actually work.
This mechanism would limit funding freezes (rule of law related budget conditionality) to breaches of the rule of law established by the Court – this means: violations of Article 19 TEU (which requires independent judiciaries and the application of EU law through domestic courts)
This means that this mechanism would be used against Poland, just as the agreed one: and, in practice, no later. It would not be used against Hungary (yet). But then nor will the agreed mechanism be used either. So no loss.
So what’s difference? This mechanism, tied solely to Court judgments, would provide, automatically, for the suspension of ALL funding. This is the only sanction that is serious. Yes, it would be painful for some: but publics must be influenced, not just governments.
This mechanism would be sufficiently dissuasive for it to be unlikely to need to be used. It would not poison relations in the Council. It would bolster the authority of the CJEU. It would meaningfully protect the most important rule of law red-line: independent judiciaries.
As it is triggered automatically by the non-implementation of Court judgments (though still approved by a majority in the Council) it cannot be accused of being a political mechanism.
It uses the rule of law to defend the rule of law. It would replace a flawed political mechanism with weak sanctions, with a strong legal mechanism with serious sanctions.
What is required for this? Only the abandoning of illusions - that the agreed mechanism protects things it does not and that you can freeze funding while still paying out to beneficiaries.
The rule of law needs protecting in the EU. Access to funds should be conditional on its respect. But the mechanism must work - it must prevent problems, not add to them. This mechanism, lets call it an "Article 19 mechanism" does this ...

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