How should the EU deal with ‘illiberal’ member states?

For the past decade now, certain EU member states have drifted away from the continent’s shared democratic values towards a kind of ‘illiberalism’. Namely, Hungary since 2010 and Poland since 2015.

In these populist, illiberal systems, the institutions of a constitutional state still, ostensibly, exist. Constitutional courts, ombudsmen, judicial and media councils have not gone anywhere. However, they’ve become a shell of their former selves, as their powers have been severely limited. While fundamental rights remain listed in the constitutions, they are endangered through a lack of independent courts.

If one considers liberalism as more than a simple limit on the public power of the majority, but also as a concept that encompasses the constitutive preconditions for democracy – such as the rule of law, checks and balances, and guaranteed fundamental rights – then Hungary and Poland are no longer liberal democracies. Since the victory of the current governing parties, almost all public powers have been vested in one party. Freedom of the media and religious rights, among others, have been seriously curtailed.

Of course, the problem with the Hungarian and Polish systems is that these countries are also members of the EU, which defines itself as a union based on the principles of liberal democracy. After some failed attempts to force these two member states to comply with the basic values outlined in Article 2 TEU, the EU decided to trigger the so-called ‘nuclear option’: Article 7 of the Treaty. The first action was taken in December 2017 against Poland, followed by a second against Hungary in September 2018.

But it turns out that this ‘nuclear option’ means too little. While ‘naming and shaming’ serves an important political function, the chances of reaching the corrective arm of the procedure are extremely low. Hence, alternative means need to be taken out of the ‘EU toolkit’.

Infringement actions have failed thus far. Neither the ‘EU Rule of Law Toolbox’ nor the ‘Rule of Law Review Cycle’ have reached what they set out to achieve. It may, instead, be time to start cutting off EU structural funds through a ‘value conditionality’ approach.

This ‘conditionality’ idea has been floated during the debates surrounding the Multiannual Financial Framework. The disbursement of EU budget funds could be linked to the respect for the values set out in Article 2, particularly in regard to respect for the rule of law. Opponents of this idea – including Budapest and Warsaw – claim that linking such funds to political conditions goes against the EU treaties.

However, one can argue that the Common Provision Regulation that regulates the European Structural and Investment Funds (which combines five funds, including the Cohesion Fund) requires governments to respect the rule of law as a condition for receiving money. Article 6 of the Regulation requires governments to ensure that funds are spent in accordance with EU and national law. Indeed, if a member state does not meet these requirements, it does not fulfil the legal conditions of the funds, and consequently cannot get them. Independent courts can be considered as essential institutions conditions, and one could certainly raise the question whether the captured courts in Hungary or in Poland qualify as ‘courts’ under Article 19 TEU.

The usual argument against such kind of financial sanctions is that it would punish the people of Hungary or Poland, instead of their leaders. This could push them further away from the EU and into the arms of their illiberal governments, so the argument goes. Academic critics also point out that the proposal could undermine Europe’s ‘union of citizens’ by leaving behind those individuals who have the misfortune of living in authoritarian member states.

Yet there is another way to look at this. Regions and citizens taken hostage by their own elected officials may, rightfully, attribute their loss of EU funds to their leaders’ policies. This could embolden them to stand up against such governments, and vote them out of office. Despite all EU efforts, at the end of the day – provided there are still democratic elections – only the Hungarian and Polish voters can get rid of their illiberal governments, if they wish to do so.