The EU Commission must freeze 100% of all payments to Hungary under the Rule of Law Conditionality Regulation. This measure is proportional and appropriate in view of the rule of law violations in Hungary and in line with the practice of suspending EU payments enshrined in several EU legal acts. These are the main findings of an independent legal opinion by legal scholars Prof. Kim Scheppele (Princeton University), Prof. Daniel Kelemen (Rutgers University), and Prof. John Morijn (University of Groningen), commissioned by Daniel Freund and presented today at the European Parliament in Strasbourg. 

The main findings in detail:

All EU payments affected by corruption: The violations of the rule of law in Hungary are so serious that not a single euro is safe in Orban’s system. All EU-funded programmes are affected by the rule of law violations, legal instability applies across the board and the oversight of the entire spending system is not meaningfully independent.

100% suspensions already common practice in EU legislation: In view of the serious violations of the rule of law in Hungary, a 100% suspension would be in line with the practice enshrined in several existing legislative acts. EU financial legislation and guidance, which existed uncontroversially before the introduction of the Conditionality Regulation, foresees a 100% suspension, reduction or interruption of payments as proportionate and thus appropriate in case of exceptionally fundamental problems in the use of EU funds.

Daniel Freund, Greens/EFA Shadow Rapporteur for the Rule of Law Mechanism in the Committee on Budgetary Control, comments:

“We will not fix the EU’s rule of law crisis with Sunday speeches. Viktor Orban has systematically destroyed the rule of law over the past 12 years. All EU funding pots are affected by corruption and thus contribute to the dismantling of democracy in Orban’s system. A complete suspension of payments to Hungary is logical. The EU Commission has no room for manoeuvre here: either it recognises the realities in Hungary and acts according to the existing legal situation. Or it proposes sanctions that don’t do justice to the problem, delay the procedure and contradict the existing legislation and guidance on the suspension of funds. The signal to enemies of democracy and the rule of law in the EU would be fatal: ‘There are no consequences for offences against the EU’s founding principles’. The legal situation requires the Commission to freeze 100% of EU funds to Hungary.”

The full study can be accessed via the following link: https://danielfreund.eu/wp-content/uploads/2022/07/100-suspension-Hungary.pdf  

What happens next:

After the Rule of Law Conditionality Mechanism was triggered on 27 April, the Hungarian government responded to the allegations on 27 June. Now the EU Commission has to propose a “penalty” that is proportionate and appropriate to address the rule of law violations in Hungary by mid-August. Subsequently, the Hungarian government has another month to react. Finally, the Commission’s proposal on the amount of funds to be frozen must be confirmed by a qualified majority in the Council within a maximum of three months.