The Hungarian Parliament passed legislation on Tuesday (16 June) calling on the government to rescind the state of emergency, which would end the controversial powers granted to Viktor Orbán’s government at the height of the coronavirus pandemic.
The parliament also approved a separate bill on “transitional arrangements,” which several prominent NGOs warned in a joint statement is an “optical illusion” leaving the authorities with enhanced powers.
The rule of law is high on the agenda as the European Commission prepares its first annual rule of law report on all member states to be presented in the autumn.
The Commission has proposed linking the disbursement of EU funds to rule of law issues in the next seven-year budget, the Multiannual Financial Framework (MFF).
Germany takes over the rotating EU presidency from July and its chief representative to the EU, Michael Clauss, told a recent event that “for us, rule of law in the MFF is very important”.
Under the EU executive’s proposal, the rule of law conditionality could be blocked in the Council if the majority of EU countries are against it.
“We think this is a very strong signal and we would very much like to see this part of the MFF,” Clauss said.
Hungary and Poland oppose introducing budget conditionality and say they have been unfairly targeted by the Commission.
“The devil is in the details,” said MEP Gwendoline Delbos-Corfield (Greens/EFA), the lawmaker leading Hungary’s file in the European Parliament, who is concerned that the mechanism could be watered down.
“I am a bit annoyed it [the conditionality] is sometimes flagged as the magical solution to everything,” Delbos-Corfield told EURACTIV.
“I also don’t want the Germans or the next presidencies to use this to avoid tackling what is at stake now, and what can be done under the Article 7 procedure.”
Hungary has been subject to an Article 7 procedure, supposed to tackle alleged breaches of judicial independence, academic freedom and freedom of expression, for nearly two years.
The first hearing was held last September by the Finnish presidency, almost a year after the European Parliament triggered the proceedings in 2018.
The Croatian presidency put the issue on the back-burner during the pandemic, and Berlin has so far not committed to organising hearings on rule of law.
Hungarian MEP Márton Gyöngyösi, from the far-right Jobbik party, complained that Orbán “builds his autocratic regime from European funds and will continue to do so while German businesses and other Western investors find themselves comfortable in Hungary and get preferential treatment”.
This, he said, referring to Hungary’s thriving car industry is evident in the form of low wages, flexible labour law, state benefits and low taxes.
Car manufacturing represents 4.5% of Hungary’s GDP, with plants of big European automotive players such as Mercedes-Benz and Audi located in the country.
Audi alone employs nearly 13,000 Hungarians and with annual revenue of €8.5 billion represents about 1.5% of the country’s GDP.
German Green MEP Daniel Freund warned that not all Western businesses get the ‘red carpet treatment’.
“When it comes to other types of businesses, and I’m thinking particularly about supermarket chains… they are very clearly seeing the degradation of the rule of law as a huge issue,” Freund said.
“If you’re a company that is more directly in competition maybe also with Hungarian firms, or with a firm of someone who is a close ally of Orbán, then you’re really feeling the heat, the pressure and shortcomings of the system,” said Freund, who suggested that Hungary and Poland should be forced to join the European Public Prosecutor’s Office.
Hungary, Poland, Denmark, Ireland and Sweden are not participating in the new structure tasked with investigating and prosecuting fraud against the bloc’s budget and other crimes against the EU’s financial interests.
“Given that with the recovery fund now is handing out so much additional money to feed into Hungary and Poland, I think we should make it conditional that they become members,” Freund told EURACTIV.
[Edited by Zoran Radosavljevic and Benjamin Fox]