The EU’s anxieties of guaranteeing the rule of law

Recent developments in particularly Hungary, Poland, and Romania show that the rule of law is under severe pressure in the EU. Last December the European Commission triggered the so-called ‘nuclear option’ against Poland: the Article 7 procedure of the EU Treaty which can ultimately lead to the suspension of voting rights in case of a serious breach of European values. On April 12 the European Parliament produced the Sargentini Report which could lead to proposing Article 7 against Hungary in September as well. In combination with the refusal of Visegrád countries to implement the EU’s majority decision to redistribute refugees, the conflicts are also tied up in a ‘West’ versus ‘East’ clash.

This does not mean that rule of law issues are confined to Central and Eastern Europe, nor that there is no common concern of EU rules not being properly enforced across the EU. Yet it is undeniable that this region systemically scores worse in the rule of law as a component of national democratic governance (see various monitoring organisations such as Freedom House, World Justice Project, World Governance Indicators and the EU’s Cooperation and Verification Mechanism regarding Bulgaria and Romania). Moreover, troublesome application of (more specific) EU law (such as budget deficit rules or EU directives) is incomparable to the ramifications of rule of law backsliding. A rule of law abiding democracy is a pre-condition for membership and precedes EU decision-making. Having ‘illiberal democracies’ operating in the EU leads to systemic effects on the democratic nature of EU decisions themselves. National decisions taken in context of such regimes threaten furthermore the legal certainty and democratic guarantees of EU-citizens, companies and investments - both within and outside the scope of EU-law. Finally, the credibility of the EU’s value-based foreign policy (in particular the efforts of the EU to induce reform in the Balkans) is being jeopardized.

This article briefly reflects upon the role of the rule of law in the EU, followed by three different rule of law challenges as well as the latest efforts set in motion to potentially preserve the rule of law.

European values
The EU  -  not a fully-fledged democratic federation or state -  would show democratic deficits if it were to proscribe the constitutional identity of a member state in detail. Nevertheless, its members have committed themselves in Article 2 of the EU Treaty to its founding European values, of which the rule of law. In addition, the EU acquis, the Charter of Fundamental Rights and the jurisprudence of the European Court of Justice have produced various fundamental rights and references to the rule of law. EU member states are also obliged to accept human rights scrutiny of their constitutional systems by the Council of Europe and its Court in Strasbourg.1

The credibility of the EU’s value-based foreign policy is being jeopardized.

At the same time, the judicial enforcement mechanism of the Commission in tandem with the European Court of Justice (the infringement procedure) is in practice only focused on the legality of specific EU-legislation and directives, and not (yet) the wider context of European values. The Court has so far been unable to directly judge on Article 2 values. The Charter of Fundamental Rights is also only applicable in relation to the implementation of (secondary) EU law, or at best when member states act ‘within the scope of EU law.’2  The mandate in protecting European values (Article 2 TEU) lies in Article 7 TEU in which the Court plays no role.3  The Commission, one third of the member states or the European Parliament (acting with qualified majority) can bring proof of ‘a clear risk of a serious breach’  to the EU Council of Ministers which decides by four-fifths majority (Article 7.1). The Commission and one third of the member states can also bring proof of ‘the existence of a serious and persistent breach’ of European values to the European Council, which decides by unanimity (Article 7.2). After establishing a breach of European values, sanctions by qualified majority are possible by the EU Council, including the suspension of voting rights. The Union is thus responsible to act, but in full effect only through Article 7.2 - requiring (political) unanimity by its member states in the European Council.

Rule of law challenges in the EU
Currently, several challenges can be observed for the EU to protect its founding values.

Minor challenges
Minor deficiencies of the rule of law, such as (individual cases of) corruption, can and should be addressed over time by the rule of law institutions of the member states. Corruption involving the EU’s financial interests is investigated by the European Anti-Fraud Office and the new European Public Prosecutor’s Office is a welcome development to actually make sure fraud is prosecuted. Rule of law issues that affect (secondary) EU-law lead to infringement procedures by the Commission, which can end up before the Court with binding judgements (imposing financial penalties on the member states). In addition, the EU can support the resilience of national institutions by providing (additional) funds to improve governance and facilitating European networks of professionals that exchange best practices and develop a professional culture of norms.

A systemic challenge ‘by stealth’
Next to minor challenges, the EU is also faced with grave systematic challenges. The practices of the Hungarian government demonstrate for example that the EU can only attempt to formally enforce (secondary) EU-law, but not the rule of law: i.e. also the system of checks and balances in a democracy. With a super majority in parliament, Fidesz (the party led by Viktor Orbán) has rapidly changed and amended the constitution to by-pass a critical Constitutional Court4 , weakened the Court itself and implemented or produced numerous new laws, appointments or bodies to get a political grip on various state bodies that hitherto were to serve as a check on the executive.5  While the Commission expressed concern in most of the cases, the EU could effectively do little. One illustrative example is the Hungarian government’s action to suddenly lower the retirement age of judges and fire around 274 senior judges to install its own. The Commission reacted with an infringement procedure to protect the independence of the judiciary. However, the infringement was based only on specific EU-law; in this case non-discrimination - specifically age discrimination on the workplace. Hungary lost the case at Court but the Fidesz judges were already appointed. Legally, a great deal of the  fired judges could, and were, to an extent compensated with money or other positions (instead of being reinstated).6  As a consequence, the real issue, the independence of the judiciary, was not effectively addressed. Orbán’s government has in this regard taken numerous individual measures which did not violate EU law per se (or did not even end up at the EU’s Court), but taken together they have undermined the system of checks and balances on which the rule of law is based. Officially, the Commission had to state that most concerns have been solved. In reality, European values came to mean only formally and procedurally following the rule of law, implying in multiple cases rule by law in Hungary.7

While the Commission expressed concern in most of the cases, the EU could effectively do little.

 A systemic challenge ‘in plain sight’
The government in Poland has directly violated its own constitution and ignored legal judgements of its own national Constitutional Court in 2015. The governing PiS politicians also expressed publicly that ‘of course the law is not the most important. The life of people and security is.’8  The government has gradually taken control over the Constitutional Court by packing it with additional elected judges, despite a former Constitutional ruling rendering this illegal. Again, legally speaking the Commission in tandem with the European Court of Justice could do little. Nevertheless, the Commission, having learned from the above described  experience with Hungary, did however set up a Rule of Law framework to monitor the developments in Poland with expertise from European judicial networks and the Council of Europe’s Venice Commission in Strasbourg. For over two years it repeatedly admonished Poland, judging measures taken by its government as a threat to the rule of law. After 13 highly controversial laws,9 the Commission finally felt politically strong enough to trigger Article 7.1 last December. Poland has started to make some cosmetic concessions in the face of continuous EU criticism, but so far effective remedies have failed to materialize. Unanimity in the European Council is needed to determine a breach of European values and make subsequent voting on sanctions possible. Hungary had already expressed its veto, while recently at least six other Central Eastern European member states have rejected a vote on Article 7.1 as well.

Seeking ways to guarantee the rule of law
Poland, which is facing a(nother) deadline, will be discussed in the EU Council on June 26.10  Yet as it stands, the EU’s main tool to protect European values (Article 7) seems a half-baked naming and shaming tool. Several options are explored to better guarantee the rule of law.11  The question is to what extent they are effective, desirable and possible.

Sanctioned multi-speed Europe 
If not formally through Article 7, several member states could admonish a deficient member via exclusion of new European cooperation until the rule of law has improved (as for example instigated in the case of the rejection of Schengen accession by Romania and Bulgaria due to concerns about the rule of law). The Commission has now also warned Romania that its Schengen accession is at risk in relation to new laws that politicize its national anti-corruption prosecution.12  Nevertheless, while there are several new legal disputes with Hungary, the Commission is faced with a previous fait accompli and has even stated that systematic rule of law concerns are not present in Hungary.13  Therefore, member states have currently less ‘arguments’ and require more political capital to act against Hungary (whose government is also a member of the largest political family in the EU). This comes in addition to having less ‘political tools’, since Hungary (and Poland) is currently not so much interested in new EU-policies (such as the euro) or already takes part (e.g. Schengen and now PESCO).  

EU funds
The Commission has expressed its desire to tie EU funds to the rule of law in the next EU-budget recently.14  It has now (creatively) proposed a regulation, on which a qualified majority by member states is needed instead of unanimity regarding the budget, which would allow the Commission to cut funding in case of generalised deficiencies as regards the rule of law in member states. The EU’s actions or funds do not need to be directly affected while only a qualified majority in the Council could reject the Commission’s sanctions (reversed qualified majority voting). What seems as a major improvement in the enforcement of the rule of law, one could be skeptical whether the Commission should have this competence. It would grant one EU institution, both executive and legislative in nature and increasingly political, predominantly the power to sanction member states with broad interpretable criteria on sensitive constitutional issues (e.g. the Stability and Growth Pact rules concerning budget deficits are more identifiable and policy orientated). For the sake of the EU’s legitimacy, great care should be taken that European values are enforced by a solid system of checks and balances within the EU itself, preferably with an important role for the judicial branch.15

Better legal enforcement
Improved judicial enforcement through the European Court of Justice seems highly desirable. This would lead to a rule of law discussion on more solid grounds, away from polarising debates regarding Article 7, the EU’s budget or other EU policies, which by definition are the subject of political horse trading. Indeed, care should be taken that the rule of law is not tangled up with other political differences. This is exactly the strategy by Hungary and Poland; they claim that since they have different views about the economy, migration and the EU and so forth, they are being criticized (by ‘progressives and liberals’) on their democratic and rule of law credentials. It is in this regard not particularly helpful  that the self-proclaimed ‘political Commission’ has initiated an Article 7 procedure against the Polish government (member of a marginal political family in the EU) and not Hungary (member of the biggest political family, providing the Commission president). Moreover, the forthcoming Article 7 proposal for Hungary led by a Green MEP feeds into this narrative;  the political groupings in European Parliament have proved to primarily defend their peers until now.

Therefore, it is crucial that on February 27 the Court judged a Portuguese case regarding the reduction of salaries of judges, which seems to pave the way for making judgements on Article 2 values possible.16  If EU law is to work properly across Europe, national judiciaries who potentially deal with EU law need to be independent, the Court claimed. In support, an Irish judge now refused to extradite a Polish national under the European Arrest Warrant. Doubting the quality of the Polish judiciary, it has send a request for a preliminariy ruling to the Court considering  if the Polish national should be extradited. Recently, a Greek court refused to extradite to Malta as well, building on the argument of a lack of trust in the Polish, and now Maltese, judiciary, as well.17

While it is risky if national judiciaries would increasingly be suspicious of each other and thus pause EU obligations and cooperation (undermining the direct effect and unity of EU law), a pan-European legal debate  -  instead of a less desirable ’West vs East’ political stand-off  -  might be in the making. For example, top Polish, Slovak, Czech and Estonian judges had earlier also voiced their concerns about the Polish developments in declarations, and in Hungary judges have also being critical on their own situation.18  A legal debate as such, with a possible pivotal role for the European Court of Justice, could expand the Court’s jurisprudence and bring forward more available rule of law criteria. This might allow the European Commission to tackle rule of law violations more effectively (without political horse trading) via (more creative use) of existing infringement procedures. The Court could then decide to suspend the principle of mutual trust.19  The principle requires that member states consider each other to be complying with EU law so as to ensure European cooperation and implementation of EU law. Suspending the principle would allow member states and the European Commission to withhold prior EU obligations towards the violating member state in many areas, potentially inducing systemic repair by a violating member state instead of cosmetic changes.

A pan-European legal debate  -  instead of a less desirable ’West vs East’ political stand-off  -  might be in the making.

Conclusion
The rule of law is under severe pressure in the EU. In May, more than 900 Romanian magistrates protested against amendments that would undermine the Romanian judiciary.20  In Poland, 40% of the Supreme Court judges could be fired upcoming July. Draft legislation produced in Hungary this week aims to further politicize the judiciary (the installment of new administrative courts to by-pass the Supreme Court).21  The European Commission and the European Court of Justice until now been unable to enforce the rule of law. Member states and political parties in the European Parliament clash in the rule of law debate among broader political differences. Meanwhile, the EU has also been partly dependent on the expertise of an ‘external’ Court and body in Strasbourg on its European values. The EU strongly needs (its own) proper criteria and mechanisms to guarantee its European values.

Following the Irish request for a preliminary ruling regarding the Polish judiciary, the opinion of the Advocate-General is expected June 28, the official ruling by the European Court of Justice early July/September. Time will tell if the upcoming Court’s judgment will enlarge the EU’s in-house legal expertise on its European values. This could serve as much needed extended material for the Commission and European political actors, either in support of an Article 7 procedure, (systematic) infringement procedure or the future creation of better monitoring rules.

• 1See e.g. Hillion, C., ‘Overseeing the rule of law in the European Union. Legal mandate and means’, SIEPS European Policy Analysis (January 2016).  
• 2Ankersmit, L., ‘Implementation of Union law by member states: when does the Charter of Fundamental Rights apply?’, European Law Blog (14 June 2012). 
• 3Kochenov, D., ‘EU Law without the Rule of Law: Is the Veneration of Autonomy Worth it?’, p7: “Values are not the EU’s founding ideas, or – to paraphrase Joseph Weiler – not in the EU’s DNA.” 
• 4E.g., since 2010 there is a 250% rise of proportion of government wins in sensitive cases after judges were replaced in the Constitutional Court., see Democracy Reporting International, Judging by results. 5 facts on Hungary’s ‘illiberal state’ (9 March 2017). 
• 5See e.g., FIDH, ‘Hungary: Democracy under Threat. Six Years of Attacks against the Rule of Law’, FIDH No 684a (November 2016), https://www.fidh.org/IMG/pdf/hungary_democracy_under_threat.pdf  
• 6Scheppele, K.L., ‘Enforcing the Basic Principles of EU Law through Systemic Infringement Actions’ in Closa, C., and D. Kochenov (eds), Reinforcing Rule of Law Oversight in the European Union (Cambridge University Press: 2016), pp105-132. 
• 7See e.g., Bárd, P., ‘The Open Society and Its Enemies’ CEPS Policy Insights No 2017/14 (April 2017), p4: “The Prime Minister’s quote: ‘’our lawyers will fix it’’ became a bon mot describing the government’s misinterpretation of the rule of law as rule by law, law by rule.” 
• 8Brandlin, A-S., ‘Mateusz Morawiecki: EU 'completely misunderstood the situation’’, Deutsche Welle (14 February 2017), http://www.dw.com/en/mateusz-morawiecki-eu-completely-misunderstood-the-situation/a-37547967  
• 9European Commission, ‘Rule of Law: European Commission acts to defend judicial independence in Poland’, European Commission Press Release (20 December 2017), http://europa.eu/rapid/press-release_IP-17-5367_en.htm and European Commission, ‘Commission action on the Rule of Law in Poland: Questions & Answers’, European Commission – Fact Sheet (20 December 2017), http://europa.eu/rapid/press-release_MEMO-17-5368_en.htm  
• 10https://www.reuters.com/article/us-eu-poland/eu-gives-poland-new-deadline-for-rule-of-law-deal-idUSKCN1IF1YB 
• 11See for example Annex 11 in this Clingendael Report for a good overview: https://www.clingendael.org/sites/default/files/2018-01/Report_Missing_dimension_Rule_of_law.pdf  
• 12Zalan, E., ‘Romania's judicial overhaul risks Schengen hopes, Juncker warns,’ EUobserver (31 January 2018), https://euobserver.com/justice/140788
• 13No 'systemic threat' to rule of law - EU official on Hungary,’ Euronews (12 April 2017),http://www.euronews.com/2017/04/12/no-systemic-threat-to-rule-of-law-eu-official-on-hungary  
• 14Reuters, ‘EU pushes link between cash and rules, signals progress with Poland’ (14 February 2018)  https://www.reuters.com/article/us-eu-budget-commission-poland/eu-pushes-link-between-cash-and-rules-signals-progress-with-poland-idUSKCN1FY2E0 
• 15https://ec.europa.eu/commission/sites/beta-political/files/protection-union-budget-rule-law-may2018_en.pdf   
• 16https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%253A62016CJ0064
• 17‘High Court extradition refusal a ‘nuclear bomb’, say Warsaw judges’, The Irish Times (13 March 2018).
• 18http://birosag.hu/sites/default/files/allomanyok/obt_dokumentumok/osszefoglalo_2018.05.02.pdf  
• 19See e.g. Scheppele, K.L., ‘Enforcing the Basic Principles of EU Law through Systemic Infringement Actions’. 
• 20https://www.romania-insider.com/magistrates-resolution-rule-law/  
• 21https://verfassungsblog.de/judges-under-attack-in-hungary/