The EU's rule-of-law mechanism remains a problem for Hungary

HUNGARY - In Brief 01 Oct 2020 by Istvan Racz

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The rule-of-law mechanism, the intended new set of rules under which member countries' access to EU financial transfers (grants and loans) could be suspended in case of serious wrongdoings by their governments in the area of the domestic rule of law, is not on the agenda of the European Council's extraordinary meeting of today and tomorrow. It will be discussed, aiming at an immediate decision, most likely at the next regular Council meeting on October 15-16. Making a decision will be urgent for the now seriously delayed 2021-2027 EU budget and the supplementary Next Generation EU instrument to go ahead. And for the political agreement on common fiscal policies to be complete, any decision made by the Council will have to be negotiated with the European Parliament, the decisive majority of which is still holding back its approval to the fiscal package on the condition that a clear and tough rule-of-law mechanism is introduced as a new procedure attached to it.The German Presidency of the EU has just come forward with its proposal for the rule-of-law mechanism. It would be less tight than the EU Commission's original proposal in two respects. First, it could lead to blocking access to EU funds only if rule-of-law wrongdoings at the national level affect the use of EU transfers. Second, the EU Council should approve any financial penalty with a qualified majority vote, requiring support from two-thirds of member states, representing at least 55% of EU population. Originally, the EU Commission proposed a reverse qualified majority vote, meaning that qualified majority would have been required to block a penalty rather than to approve it.Part of analysts and of the media h...