Tag Archives: infringement procedure

Full-court press against the Orbán government

Foreign Minister Péter Szijjártó compared the European Union to an old gent with halting steps, but lately the old man has quickened his stride. At least as far as Brussels’ relation with Hungary is concerned. Patience seems to have run out with Hungary’s maverick prime minister, Viktor Orbán. One after the other, officials of the EU and the Council of Europe have called on the Hungarian government to explain its past unlawful or at least legally questionable moves.

First came, on November 19, the official announcement that “the European Commission decided to launch an infringement procedure against Hungary concerning the implementation of the Paks II nuclear power plant project.” The reaction of the Hungarian government was predictable. János Lázár, instead of talking about the actual case–the lack of an open tender, which is an EU requirement–talked about the EU allegedly prohibiting Hungary from signing bilateral commercial agreements with so-called third countries. For details see my post titled “Infringement procedure against Hungary on account of the Paks nuclear power plant.” Hungary has two months to give a satisfactory answer. If the answer is not satisfactory, the case will go to the European Court of Justice.

Four days later, on November 23, it was announced that “the European Commission has opened an in-depth state aid investigation into Hungary’s plans to provide financing for the construction of two new nuclear reactors in Paks.” The question is “whether a private investor would have financed the project on similar terms or whether Hungary’s investment constitutes state aid.” Margrethe Vestager, commissioner in charge of competition policy, and her staff think that “this investment may not be on market terms, as Hungary argues.”

Two days after the announcement of the second in-depth investigation, on November 25, Chancellor Angela Merkel delivered a speech in the Bundestag in which she talked about solidarity as “the acid test” for the maintenance of the borderless Schengen area. She stressed that “a distribution of refugees according to economic strength and other conditions … and the readiness for a permanent distribution mechanism … will determine whether the Schengen area will hold in the long term.” The speech was interpreted as a sharp warning aimed at the new EU members. Hungary’s immediate reaction was that Hungary couldn’t possibly take any refugees because its economic situation wouldn’t allow such generosity. The government spokesman talked about 15,000 possible “migrants,” who in time would bring other family members. Within a few years Hungary would be stranded with close to 200,000 Syrians, Iraqis, and Afghans.

On November 27 Nils Muižnieks, Council of Europe Commissioner for Human Rights, after spending three days in Hungary, issued a statement about Hungary’s response to the current refugee crisis and came to the conclusion that “Hungary has not lived up to this challenge.” He complained about the “accelerated asylum procedure lacking essential safeguards.” Under this new procedure “asylum-seekers have seen their claim processed in less than a day and sent back to Serbia directly from the Röszke transit zone.” Muižnieks also noted that the crisis measures Hungary introduced are still in effect although hardly any refugees are in Hungary. After detailing all the reproachable and outright illegal pieces of legislation and practices, he called on the Hungarian government “to refrain from using xenophobic rhetoric linking migrants to social problems or security risks.”

By that time Szijjártó became convinced that “a mysterious conspiracy is unfolding against Hungary.” According to the foreign minister, “it is evident that some people would like see an opaque and confused situation in Hungary.”

On the very same day it was reported that the European Commission had given the green light to a citizens’ initiative launched by the European Humanist Federation (EHF) to strip Hungary of its voting rights in the European Union. What is a citizens’ initiative? According to the official explanation, “a European citizen’s initiative is an invitation to the European Commission to propose legislation on matters where the EU has competence to legislate. A citizens’ initiative has to be backed by at least one million EU citizens, coming from at least 7 out of the 28 member states. A minimum number of signatories is required in each of those 7 member states.” A list of these minimum numbers can be found online. In Hungary’s case only 15,750 valid signatures are needed.

Call of the European Humanist Federation for a citizens' initiative on their website

Call of the European Humanist Federation for a citizens’ initiative

The European Humanist Federation launched its initiative called “Wake up Europe!” on October 2. Its official website outlines the reasons for the initiative. Nine individuals from eight countries charge Viktor Orbán’s government with “anti-democratic and xenophobic measures that openly violate the basic principles of the rule of law.” In response, “a committee of EU citizens has launched an ECI to call on the European Commission to trigger Article 7 of TEU and bring the Hungarian issue to the Council.”

The Commission approved this citizens’ initiative on a day when Tibor Navracsics, the commissioner representing Hungary, happened to be away. Navracsics “in a strongly-worded letter criticized the decision to hold the meeting in his absence as well as the substance of the initiative.” He claimed that this was “a sensitive political issue” which could result in consequences reaching “far beyond the aim of the initiative.” Szijjártó considered the acceptance of the citizens’ initiative by the Commission to be a case of “revenge by Brussels” for “the successful migration policy of Hungary.”

The most fanciful explanation for the launch of the citizens’ initiative in the first place came from Magyar Idők. The editorial board of this pro-government paper is convinced that, once again, it is George Soros who is behind this attack on Hungary and Viktor Orbán. The explanation, according to Magyar Idők, is simple. Since the European Humanist Federation’s affiliated partners all share Soros’s concept of an Open Society, the EHF must be a front organization for Soros. Moreover, since the Commission accepted the EHF’s citizens’ initiative, “IN ADDITION TO THE CIVIC GROUPS THE EU COMMISSIONERS ARE ALSO IN SOROS’S POCKET.” Yes, in boldface caps. Magyar Idők accuses the commissioners of purposely picking a date when Navracsics would not be present.

Yes, it seems that the whole world is against the poor, innocent Orbán government. But pulling the strings is one man who has the power to move twenty-seven commissioners and their staff to make a concerted attack not just against Hungary but against the very idea of the “nation state.” I don’t know how effective such simple-minded explanations are, but I guess they might resonate with some people, especially since Soros’s name is associated with Jewishness and financial speculation, notions that are anathema to the far right.

Well, George Soros may not be pulling the strings in Brussels, but Viktor Orbán definitely is in Budapest. And through his mouthpieces he’s sounding more and more like Jobbik (and as a result is siphoning off Jobbik supporters).

Infringement procedure against Hungary on account of the Paks nuclear power plant

Well, it’s official. The European Commission called on the Hungarian government to suspend all further projects in connection with the construction of the Paks II nuclear power plant because Budapest hasn’t followed EU rules governing open bidding procedures. Here is the official press release:

Commission opens infringement against HUNGARY for lack of compliance of the Paks nuclear power plant project with EU public procurement rules

The European Commission decided today to launch an infringement procedure against Hungary concerning the implementation of the Paks II nuclear power plant project. Following exchanges of information with the Hungarian authorities and a thorough assessment of the terms of the award, the Commission still has concerns regarding the compatibility of the project with EU public procurement rules. The Hungarian government has directly awarded the construction of two new reactors and the refurbishment of two additional reactors of the Paks II nuclear power plant without a transparent procedure. The Commission considers that the direct award of the Paks II nuclear power plant project does not comply with EU legislation on public procurement (Directives 2004/17/EC and 2004/18/EC). The Directives consolidate the basic principles of the Treaty on the Functioning of the European Union of transparency, non-discrimination, and equal treatment. These principles seek to ensure that all economic operators have fair chances to participate in a call for tender and to win a contract. The European Commission has decided to send a letter of formal notice to Hungary, which constitutes an official request for information and is the first step in an infringement procedure. The Hungarian authorities now have two months to respond to the arguments put forward by the Commission.

As expected, the Orbán government is defiant. János Lázár in his usual fashion expressed his total disgust with Brussels and promised to bring suit against the Commission if necessary. In his harangue against the EU he judiciously avoided talking about the actual case, the lack of an open tender, which is an EU requirement. Instead, he talked about the EU allegedly prohibiting Hungary from signing bilateral commercial agreements with so-called third countries or such country’s citizens. Hungary has “the right to sign agreements with China, the Arab countries, or for that matter with Russia.” But of course, this is not the issue here. After all, as we learned from José Manuel Barroso’s letter addressed to Viktor Orbán, which I published on Hungarian Spectrum today, the contract with Rosatom was considered to be legal as far as EU law was concerned. The way the contract was awarded, however, was another matter. Barroso in his letter made this eminently clear. Barroso did not, as Lázár now claims, “promise his support of the project in principle.” On the contrary, he called attention to the problem of “the rules on public procurement and state aid.” That was a signal of further probes into the legality of the deal.

Nuclear Power Plants in the European Union

Nuclear power plants in the European Union

Lázár is trying to divert the conversation from the real issue–defiance of EU laws that are on the books to ensure fair competition. Instead, he is trying to show that the controversy is the result of the outsize influence of western multinational corporations. After all, he said, Paks II is one of the largest projects underway in Europe. Large amounts of money can be made by being one of the contractors or suppliers. So, according to Lázár, the issue “is not political but commercial.” Well, indirectly it might be commercial, but what the EU is directly complaining about is an illegal process. The Hungarian government transgressed several European laws and directives that are supposed to ensure equal opportunities to all.

János Lázár was right on one point. He bitterly complained about the length of time it took to deliver the infringement procedure. After all, it was about two years ago that the Hungarian government began final negotiations on the Paks II project. Indeed, it is hard to imagine that it would take two years of solid work to come to the conclusion that Hungary was in the wrong when it signed a contract with Rosatom without open competitive bidding. Népszabadság noted that despite all his blustering, Lázár said nothing about Hungary’s total unwillingness to repeat the bidding process, this time with multiple applicants.

Attila Aszódi, the government commissioner in charge of the project, was asked by many media outlets to comment on the situation. Aszódi is described in his curriculum vitae as an “energy engineer” (energetikai mérnök). Before he was called to head this project he was a full professor at the Institute of Nuclear Technology at the Budapest Engineering University. So, I guess one cannot be terribly surprised that Aszódi is not well versed in legal matters. In his numerous interviews he painted a simplistic picture of the Hungarian position. In his opinion, since the European Union “raised no objections of principle to the agreement from the perspective of article 103,” it means that “the Paks II project itself must be legal.” A huge misunderstanding of the issue.

Meanwhile it turned out that the Hungarian government has spent a fair amount of money already on the project. Moreover, it has drawn on its loan agreement with the Russian government which, if the project comes to a halt, will have to be paid back immediately in one lump sum.

The most amusing news I read in the Hungarian media today was Rosatom’s reaction to the EU suspension of the Paks II project. The mammoth Russian firm announced that “Rosatom follows the dialogue [between EU and the Hungarian government] and fully shares the opinion of János Lázár concerning the legality of the project.” What a surprise.

The Hungarian government is desperately trying to find an effective way to make the problem disappear. One point they emphasize over and over is that no nuclear plant anywhere inside the European Union was built after an open bidding process. So far I have not heard any reporter who could prove or disprove this assertion. It would certainly be a worthwhile undertaking to find out whether the statement is true or not. And if true, what makes the Hungarian case different.