To anyone looking in from the outside, the ongoing argument between Budapest and Brussels over EU subsidies, which flared up again this week, looks both drearily legalistic and eye-glazingly boring. However, as often happens with the EU and its member states in eastern Europe, there is a good deal more to all this than meets the eye.
At issue is a tad over €13 billion: €7.5 billion in ‘cohesion funds’ (i.e. regular subsidies to help out poorer states) and €5.8 billion in Covid recovery funds. Both would normally have gone to Hungary without serious question. However, these are not normal times. Brussels has arguments with Hungary about what it refers to as rule of law issues: judicial independence; areas seen as corrupt or nepotistic; public procurement laws; and accounting for EU funds. There are also points of disagreement on matters of social policy: notably LGBT rights and migration.
In these areas, the EU claims that Hungary is in breach of the bloc’s norms and has made it clear that it would like to condition both cohesion and recovery payments on Budapest reaching EU standards (something which, it must be admitted, the European Court would almost certainly hold permissible under EU law). But the standards are vague and therefore, in practice, a good deal is left to negotiation. A little time ago there was an informal agreement that, provided Hungary undertook some 17 legal measures such as setting up an independent anti-corruption body and allowing the (admittedly rather ineffective) European fraud office to carry out investigations in the country, the funds should be released.
The difficulty was that this did not satisfy a number of hawks in Brussels, who just over a week ago persuaded the European parliament to pass a resolution demanding that the EU ask a great deal more. The result is the present impasse. The 17 measures have become 27 so-called ‘super milestones’, and now include changes to judicial appointments and the function of the Supreme Court, and curbing certain powers of the Constitutional Court, which is seen to favour the ruling party. There are also hints that there would be more careful supervision of the actual results of any measures taken. And until the Commission is satisfied, Hungary is out of its money.
Fidesz will not give up without a fight; and it is in Brussels’s vital interest to keep the EU together
Liberals in western EU countries, who hate Viktor Orbán’s Fidesz party with a vengeance, have rejoiced at these measures, which they see as long overdue steps to bring into line a maverick state they regard as a democratic backslider. But anyone concerned for the future of Europe should think more carefully about the possible complications they may cause.
Most obvious is that they involve an attempt to impose a style of EU uniformity, which works in the original EEC states but is problematic elsewhere. Orbán-style politics is something which to a tidy-minded, legalistic Eurocrat in Berlaymont is not only unattractive but, more importantly, fairly incomprehensible. It is unashamedly populist rather than technocratic; nationalist and not particularly communautaire; easy-going rather than aggressively liberal in social matters; and fairly blasé about rules and court judgments, especially European ones.
It is this difference in outlook that has caused Budapest to dig its heels in, and also the fact that Hungarians, like many other eastern Europeans with social memories of Soviet bullying, are fiercely defensive about interference in matters they see as their business and not the EU’s. More clear-minded than many European officials and deeply aware of the need to track public opinion in their own country, Hungarian politicians will, if asked for their views, tell you that they see two rather important features of the EU pressure.
One is that when the EU talks of the rule of law, what it really means is politics by other means. More particularly, behind the rule of law rhetoric lies a bid to use lawfare to expand the powers Brussels has over social and political affairs within member states. Article 2 of the EU treaty, the body’s constitutive legal document, refers, in a fairly open-ended way, to such things as freedom, democracy, equality, the rule of law and respect for human rights. The indications are that the European Court is looking for an opportunity to use these in earnest to extend the reach of EU constitutional law at the expense of member states’ autonomy. This is understandably very unwelcome in Hungary, a state with a long history of fighting for independence and an international outlook different from that of most other EU states. (It includes more intimate relations, not only with an uncomfortably nearby Russia, but also to the east, with Turkey and other Turkic-speaking states.)
The second point is pragmatic, if cynical. If the EU is ready to adjust its demands as it goes along (as it has here), this could well presage a bid to exert longer-term control over states such as Hungary: a little more money if you will do this, another tranche if you do that, and so on. A number of Hungarian ministers mentioned to me a month or so ago that, despite the apparent earlier agreement for release of the EU funds, they feared just this: the Hungarian state being played like a fish on the end of the EU financial line. They are beginning to look all too right.
Where will this end? Despite the huffing and puffing from Brussels and the hotheads in the European parliament, probably with an agreement for disbursement of a proportion of the funds. Fidesz will not give up without a fight; and it is in Brussels’s vital interest to keep the EU together. It is also in its interest to prevent others buying influence within the bloc if it turns the financial screw too hard. One thing is sure. If Brussels fails to come up to the plate, there are plenty of others, such as China, who will be only too happy to oblige. Indeed, it well knows that the Hungarian government is already more receptive to Beijing’s blandishments than many other EU states.
It is in the vital interest of the EU and its members to stop developments like these. If it means spending a few billion euros, it seems a bargain for Brussels.
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