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EU budget: Poland and Hungary are suing EU rule of law clause

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After Hungary and Poland vetoed the longstanding EU budget, a last-minute compromise was reached at the end of 2020. The crux of the dispute was the new rule of law clause. Now the two countries are taking action before the ECJ.

Poland and Hungary are suing the European Court of Justice (ECJ) against the new rule of law clause in the EU budget. The government announced in Warsaw on Thursday. The Hungarian Justice Minister Judit Varga wrote on her Facebook page on Thursday: "We cannot allow this EU provision, which seriously violates EU law, to remain in force". The ECJ confirmed receipt of the complaints.

The top EU judges should examine whether the new mechanism for reducing EU funds in the event of certain violations of the rule of law is permissible. Hungary and Poland's trial of strength with the EU is now entering the next round.

The two countries reject the new rule of law mechanism in the EU's multiannual financial framework for the years 2021 to 2027. They fear that the mechanism aims to cut EU funds for them because of controversial political projects. Both countries receive billions of euros net from the EU budget. A constitutional state proceeding according to Article 7 of the EU treaties is currently underway against both of them for alleged disregard of EU fundamental values.

Lawsuit already announced

Because of the dispute at the end of 2020, Warsaw and Budapest temporarily blocked the new EU budget, including the planned Corona aid with a total volume of 1.8 trillion euros. As a compromise, Germany - at that time in the Council Presidency - negotiated an additional declaration on the rule of law mechanism, which all 27 EU states ultimately accepted. The central point was the clarification that the mechanism should be checked by the ECJ. Hungary and Poland had already announced that they would make use of it.

It is assumed that this solution has no legal basis in the EU treaties, said Polish government spokesman Piotr Müller. It affects the competences of the EU states and violates EU law.

Whether the lawsuit weakens, delays or even nullifies the rule of law clause was assessed differently after the compromise at the end of 2020. EU Commission President Ursula von der Leyen did not see the effect limited. "Not a single case is lost," she said at the time. The EU Commission will consider possible cases under the new mechanism. "If there is a breach of the rule of law, then this case will be included." As soon as the ECJ ruled, these cases would be dealt with. Critics fear, however, that the application of the clause will be postponed for many months.

The supplementary declaration on the rule of law mechanism also explains that the determination of a rule of law violation alone is not enough to reduce EU financial aid. Rather, it must be shown that the breach has a negative impact on the use of EU money. In contentious issues, the Council of Heads of State and Government must deal with the issue.

dpa / acr / LTO editorial team