23 June 2023

Can the Hungarian Council Presidency be Postponed – Legally?

By now, it is commonly agreed that Hungary is no longer a democracy (see e.g. the Resolution of the European Parliament, the assessments of V-Dem or Freedom House). I will offer in this blogpost some legal underpinnings to the argument that occupying the Council presidency must rotate only among those states that are in compliance with Article 2 TEU values including the rule of law, those that are fully fledged representative democracies in line with Article 10 TEU, that have been in line with Article 49 TEU at the time of accession and never regressed, in line with the CJEU case C-896/19 Repubblika.

Thereby I will join the recent brainstorming by the Meijers Committee and others including the European Parliament on whether and if so, how to prevent Hungary (and perhaps also Poland) – Member States unfit to represent common EU values and interests – from holding the EU presidency in the second half of 2024 (and consecutively in the first half of 2025, respectively).1)

I will show – following the argumentation in the CJEU twin judgments on the Conditionality Regulation – that postponing the Council presidency would not be a punishment of Hungary (unlike a sanction under Article 7(3) TEU if it ever got invoked), but a way of the EU protecting itself, which is a direct legal consequence of the Hungarian government systemically, repeatedly and gravely violating common European values. Not only will I show that the EU has the power to do so, but I will argue that it is a category error to pretend that democracies are to be treated equally with hybrid or authoritarian regimes.

The meaning of ‘equal rotation’

You must not fight the rule of law by breaking it. So, the question whether a postponement of the Hungarian presidency was in line with the rule of law is a highly relevant one.

The Treaties say little about presidency of Council configurations: Article 236 TFEU and Article 16(9) TEU are circularly pointing to each other, the latter only saying that the presidency be held by Member States “on the basis of equal rotation” – a manifestation of the principle of equality of Member States. This does not mean that the same order must be followed every 13-14 years (or more generally the number of Member States divided by two). In the past, this period has already been extended and shortened. The change in the number of Member States obviously results in an automatic change in the distance between two presidencies of a given Member State, but even beyond that the treaties give ample room of manoeuvre. As long as it respects the principle of equal rotation and some other vague requirements, such as diversity and geographical balance, the Council determines the presidency configurations – other than that of the Foreign Affairs – by a qualified majority, so it does not require the consent of the Member States that might need to be side-lined.2) The Council presidencies for the period between 2016-2030 are laid down in Council Decision (EU) 2016/1316, and the Council can change this by a qualified majority.

In the past such changes in the agreed order of presidencies only occurred upon the request of a Member State or due to a change in the number of member countries. Therefore, it is questionable whether the proposal to postpone the Hungarian presidency – obviously not upon the request of the Hungarian government itself – was a comparable situation. Martijn van den Brink argues it wasn’t, and only a sanction under Article 7(3) would provide a legal basis for doing so. Albeit the “equal rotation” requirement leaves some room of manoeuvre for the Council, if the Hungarian presidency was indeed to be postponed until the sanctioning procedure under Article 7 comes to an end (a procedure that has not even been triggered), as van den Brink suggested, he is certainly right that we would run out of a timeline that still qualifies as ’equal rotation’. Irrespectively of an Article 7 procedure, also from a substantive perspective, if we connect Council presidencies to the restoration of the rule of law, the ’equal rotation’ requirement is unlikely to be met. And here we only talk about restoring black letter law, procedures and institutions, and not a rule of law culture, the rebuilding of which takes even longer.3)

So, is the idea of a change in the order of Council presidencies dead on arrival?

Legal consequences in a militant democracy, not sanctions: the twin judgments on the Conditionality Regulation

Two issues come to mind. First, the question emerges whether postponing the presidency was indeed a sanction or just a self-defence mechanism of the EU. The European Council website makes an analogy between Council presidencies and dinner hosts making sure that guests are having a good time and meaningful exchanges. How can someone create a good atmosphere and facilitate discussions when they themselves are hostile to the views of their own guests? How can Hungary as a “bad citizen” for more than a decade be a good host? It is repeatedly attempting to sabotage the ordinary work of the Council trying to use its veto on unanimity matters to leverage decisions on other points – e.g. blocking the budget in exchange for watering down the Conditionality Regulation, or blocking Ukraine sanctions to clear the way for it to continue to do business with Russia in violation of the very sanctions that the other EU member states were unanimous in agreeing to impose? How can it ensure smooth discussions on difficult topics, while fighting with virtually all the other countries on almost every issue – from showing hostility towards Sweden because the government there made the uncontroversial observation that there was little rule of law in Hungary, to challenging the use of gender in EU statements? How can Hungary act as a trustworthy conciliator when all funds except the agricultural funds have been suspended due to its total disregard of the values of the rest of Europe, and for having broken its own promise to protect and promote these same values?

In determining the legal nature of the postponement of the presidency, the twin judgments of February 2022 on the Conditionality Regulation are helpful. The CJEU emphatically stated that the values entrenched in Article 2 TEU “define the very identity of the European Union as a common legal order. Thus, the European Union must be able to defend those values, within the limits of its powers as laid down by the Treaties.”4) And Article 7 is not the only tool in the toolbox to protect Article 2 TEU values.5) The CJEU also laid down certain requirements for rule of law tools beyond Article 7 TEU to be legal: accordingly, the EU legislature must refrain from establishing a parallel procedure essentially duplicating Article 7 TEU.6) What made the Conditionality Regulation fundamentally different and thus legally permissible – apart from a genuine link to the EU budget –, was that it did not amount to a general rule of law mechanism, and did not even have a sanctioning objective, instead it attached legal consequences to rule of law decline, thus it did not create a parallel procedure to Article 7 TEU with the same objective.7) The fact that financial corrections are not penalties has long been established case-law.8) One could now similarly argue that postponing the presidency was not a sanction either, instead a natural consequence of rule of law decline which made Hungary ill-suited to become an ‘honest broker’. Hungary is not being punished (that is only possible under Article 7(3) TEU), but instead the Council is protecting itself from harmful influence, the same way that the conditionality mechanisms prevent the budget from being abused. The emphasis is not on the sanctioning effect, i.e. what rights Hungary would be deprived of by not holding the Council Presidency, but such a step could rather be qualified as militant democracy in action: the EU as a democratic entity is protecting itself from its internal enemies.

The twin CJEU decisions on the conditionality mechanism give a green light to attempts by the EU institutions to buffer themselves from the harmful effects of a rogue Member State, provided the procedure in question “has a legal basis for doing so”.((C-156/21, para.168, C-157/21, para. 207.)) And here we must address the Treaty basis of determining the order of Council presidencies and explore whether hybrid regimes should be treated equally to democracies.

Avoiding the category error: the force of Article 7 TEU

The second question is whether the ’equal rotation’ requirement applies to all Member States no matter what, or whether there is a chance of treating democracies and non-democracies differently. This problem is very apparent in the methodology of rule of law monitoring tools, such as the Commission’s Annual Rule of Law Report. In line with the principle of equality of Member States – also enshrined in Article 4(2) TEU – the same benchmarks are used to make the assessments. On paper that sounds good, but if you investigate the details, you will grasp the absurdity of the situation. Benchmarks that are relevant for democracies are dysfunctional in autocracies. For example, in a democracy the principle of judges’ irremovability or the decent financing of media authorities is a must; in autocracies or hybrid regimes respect for the same principles means irremovability of non-judges appointed via illegal procedures or granting state support to the main enabler of government propaganda.

The findings behind the suspension of funds under the Conditionality Regulation, the Common Provision Regulations and the Charter horizontal enabling conditions, can be useful in proving that rule of law violators are indeed qualitatively different from the rest of Europe. How about the Article 7 procedure, especially its preventive prong, and especially if the process is still ongoing?9) The difficulty lies in the nature of the proceeding, which is much more political than legal, without a judicial decision in the end. Thus, the principle of res iudicata pro veritate habetur is of no help here. But the wisdom of Judge Donnelly sending the preliminary reference in the LM (Celmer) surrender case to Luxembourg is. She emphasised the political nature of Article 7 TEU and concluded that the outcome of an Article 7 procedure was less relevant for determining the state of the rule of law in another Member State. Instead, she reasoned that documents produced during the process may serve as persuasive evidence to be considered.10)

If Justice Donnelly is right, the Sargentini report from 2018, i.e. the document triggering the Article 7(1) procedure against Hungary, or the follow-up report by Delbos-Corfield, passed by an even larger margin in September 2022, could serve as pieces of evidence – especially if surrounded by other proofs such as the Conditionality Regulation procedure, the Commission’s Annual Rule of Law Reports, infringement procedures and European court judgments disregarded –, for the case to be made that Hungary is unequal to other Member States.

Broader consequence: a multi-speed Europe realised

Whether the Hungarian Council presidency will take place next year or not, the brainstorming around its postponement shows that Hungary is side-lining itself from the rest of Europe. The Hungarian and Polish rule of law declines are used as case studies to test other Member States’ own democratic resilience and rule of law sustainability, and indeed a series of workshops have been organised on militant democracy, checking whether other European countries’ legal systems would resist an illiberal challenge.

But EU Member States do more than rethinking their internal democratic resilience and rule of law sustainability. Measures are introduced at the supranational level to save the (rest of the) EU from its internal enemies, thus giving as little room and money to illiberal regimes as possible. Unlike the Council of Europe, the EU does not provide a legal basis for expelling a member country for violating its core values, and the various rule of law enforcement mechanisms are still being tested. Attempts for Member States to quit from the EU, leave the enfant terrible behind, and create an EU No. 2 is more of an entertaining intellectual exercise than a real option. Another possibility would be to do away with unanimity and revert to majority voting in all areas. Illiberal governments have proven that they will blackmail EU institutions and other Member States whenever it has a chance and demand something in return of giving its vote. But giving up unanimity, just like the insertion of an expulsion clause, requires unanimity, so this is also a theoretical option.

So instead, the EU seems to be going into the direction of a two-speed Europe: giving the problematic Member States as little room as possible to destroy the EU. This is not only happening in the form of classic enhanced cooperation, but Hungary is left behind in a more indirect and organic manner too, when it fails to fulfil certain rule of law conditionalities.

Taking up the point of the previous chapter, we see more and more legal consequences attached to rule of law backsliding and systemic violations of fundamental rights. None of these are sanctions, albeit they are often misrepresented as such by the illiberal governments. Pushing Hungary out of Erasmus+ and Horizon Europe was misrepresented by the Hungarian government as Brussels sanctioning (taking revenge against) students and researchers due to its controversies with Budapest. But again, this wasn’t a sanction, but a defence mechanism by the EU to stop funding Member States and their projects that do not respect Article 2 TEU values or the Charter of Fundamental Rights. Excluding Member States from holding the Council presidency – in whichever form – would smoothly fit into side-lining illiberal states by the rest of the EU.

Not making a choice is a choice, and remaining silent about the absurdity of illiberal regimes representing the EU would normalise the phenomenon. Irrespective of the odds that anything would happen, it is certainly beneficial that a broader debate evolves, and concerns are formulated doubting whether Hungary was fit to represent a common Europe.

References

References
1 For the auditory learners here is an excellent interview with John Morijn and Alberto Alemanno, for the rest of you, see here, here, and here.
2 As per Article 236 b) TFEU.
3 Cf. Ralf Dahrendorf’s overused observation that it takes six months to reform the political systems in Eastern Europe, six years to change the economic system, and sixty years to create the social foundations required.
4 CJEU, Case C-156/21 Hungary v Parliament and Council, para. 127, Case C-157/21 Poland v Parliament and Council, para. 145.
5 C-156/21, para. 159, C-157/21, para. 195.
6 C-156/21, para.167, C-157/21, para. 206.