Blow to Hungary and Poland as ECJ adviser backs rule-of-law sanction

European Union authorities can cut the flow of funds to states where the flouting of the rule of law puts the financial interests of the union at risk, a senior adviser to the European Court of Justice (ECJ) has said.

ECJ advocate general Manuel Campos Sánchez-Bordona advised on Thursday that the judges should dismiss objections by Hungary and Poland to the new rule-of-law tool, in a blow to Warsaw and Budapest.

The opinion is not binding but is influential, and indicates that the court may well rule to dismiss the two countries’ objections to the new financial oversight measure in a final verdict expected early next year.

“The mechanism in the regulation resembles other financial conditionality and budgetary implementation instruments that exist in various areas of EU law,” a statement from the court read. “The advocate general proposes that the court should dismiss the actions for annulment brought by Hungary and by Poland.”

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Interfered

The development nudges the EU closer to being able to wield the threat of cutting off funds to Poland and Hungary, which have been hit by successive rulings by the ECJ suggesting they have interfered in the independence of their courts.

The rule-of-law mechanism was drawn up amid demands by other EU member states for better control of funds flowing to the two countries, both of whose governments are accused of overseeing democratic backsliding and crackdowns on civil society while increasing their control over the judiciary, allowing corruption and conflicts of interests to run unchecked.

The advocate general rejected arguments by Budapest and Warsaw that the tool has an inadequate legal basis and went against aspects of EU law.

But representatives of the two governments hit back, reiterating their criticisms that EU institutions were overstepping their powers.

"The opinion of the advocate general of the ECJ clearly aims to sanction an extra-treaty conditionality mechanism. It was naive to trust EU institutions that they would be capable of self-restraint," said Sebastian Kaleta, Poland's deputy minister for justice. "This is an assault on the rule of law that they want to defend."

Zoltán Kovács, the chief spokesperson for the Hungarian government, said: “This is not a verdict, just an opinion. We hope that ECJ will base its judgment solely on legal arguments, it won’t follow the AG’s erroneous arguments.”

Politically sensitive

The development comes at a politically sensitive time, as EU authorities hesitate over a crunch decision on whether to release billions of euro in recovery funds to the two countries.

While some political leaders are cautious that a confrontational approach could backfire by alienating the domestic public in each country, pressure has mounted from the European Parliament and member states including the Netherlands on EU authorities to enforce financial consequences.

Both regimes are accused of using EU funds to entrench their positions, with close family and friends of Hungary’s Viktor Orbán reported to have grown rich by being granted contracts paid with EU funds.

German Green MEP Daniel Freund declared in response to the advocate general's opinion that sanctions should already have been triggered "months ago". "Do not delay it any further," he urged.