Lawyers working on infringement proceedings launched by the European Commission against the Hungarian government must have been especially busy in the past few months. Yesterday the Orbán government received notices of three such infringement proceedings. Although infringement proceedings against Hungary are numerous, I have the feeling that three notices in one day is a record of sorts. One is a “letter of formal notice” and two are “reasoned opinions.”
Notices that bear the odd name “reasoned opinions” represent the second stage in the infringement proceedings. In these cases the European Commission had already sent a”letter of formal notice” concerning a piece of legislation but found the corresponding answers to their objections unsatisfactory. If the answers to the reasoned opinion are still unsatisfactory, the case will go to the European Court of Justice.
I will start with the odd man out here: the reasoned opinion concerning restrictions on loss-making enterprises in the retail sector. You may recall that recent Hungarian law prohibits supermarkets to continue operation if they operate at a loss for two consecutive years. Not surprisingly, the Commission considers such a measure unacceptable because it runs counter to “the freedom of establishment and the principle of non-discrimination” (Article 49 TFEU) and “the free movement of capital” (Article 63 TFEU). Hungary has two months to respond.
Although this is a horrendous piece of legislation and one very much hopes that it will be abolished one way or the other, it is taking back stage to the two other infringement proceedings. The first, another reasoned opinion, concerns the Higher Education Law, which as amended on April 4, 2017 in practical terms makes the continued existence of Central European University (CEU), founded by George Soros, impossible. The other infringement proceeding, this one a letter of formal notice, addresses the law, adopted on June 13, dealing with foreign-funded NGOs.
The European Union is often accused of dilatoriness, but this time such criticism cannot be leveled against “the bureaucrats of Brussels,” as Viktor Orbán likes to call the officials and politicians of the European Union. They acted quite promptly. In the case of the Higher Education law, the note the Orbán government received is a reasoned opinion and the Hungarian government has only one month to respond instead of the customary three. As for the foreign-funded NGO case, it took the EC only one month to send out a letter of formal notice. Again, the Hungarian government has only one month to respond. Zoltán Kovács, who is in charge of foreign communications, has already complained bitterly about the unfair treatment Hungary received in these cases because of the very short time limit given.
So, let’s see what the EC’s objections are to the amendment of the Higher Education Law. In the opinion of the European Union, “it is incompatible with the freedom for higher education institutions to provide services and establish themselves anywhere in the European Union.” In addition, it “runs counter to the right of academic freedom, the right to education and the freedom to conduct a business as proved by the Charter of Fundamental Rights of the European Union and the Union’s legal obligations under international trade law.”
The law on foreign-funded NGOs introduces new obligations for certain categories of NGOs, for example, to register and label themselves as “organizations supported from abroad.” Again, in this case the European Commission decided that this law doesn’t comply with EU law. (1) It interferes with the right to freedom of association. It could prevent NGOs from raising funds and would therefore restrict their ability to do their work. (2) The law introduces unjustified and disproportionate restrictions to the free movement of capital. (3) It raises concerns as regards the respect of the right to protection of private life and personal data. In plain language, the exact amounts of transactions and detailed information about donors would have to be reported to the Hungarian authorities, which in turn would make the data public.
Anyone who thought that the Orbán government would be terribly impressed by the legal arguments outlined above would be wrong. Zoltán Kovács told Politico that “we, of course, maintain our position.” If necessary, the government will go to court. Politico also got in touch with Márta Pardavi, co-chair of the Hungarian Helsinki Committee, who correctly pointed out that “infringement procedures alone are inadequate to redress the combined impact of retrogressive reforms that have taken place since 2010.” The European Parliament would need to vote on an appropriately damaging report which, if passed by two-thirds of the European Parliament, could trigger Article 7(1), which would result in the withdrawal of Hungary’s voting rights.
The Hungarian government’s response to these latest infringement proceedings is defiance. Pál Völner, undersecretary in the ministry of justice, said that “the government is ready to face infringement proceedings with relation to the NGO Act. These are organizations that want to weaken Hungary’s defense capabilities in the fight against illegal immigration.” The charge that organizations like Transparency International or the Hungarian Helsinki Commission want to weaken Hungary’s defense capabilities is of course nonsense. The Hungarian government wants to curtail their activities because it considers them opponents of the Orbán government’s unlawful modus operandi.
Márta Parvadi is right: the Orbán government cares not one whit about all these threats of legal proceedings under the aegis of the European Court of Justice. Viktor Orbán doesn’t mind paying fines, even heavy fines. For political gain he has no compunctions about spending billions of forints of the Hungarian taxpayers’ money. That’s why the only hope of the anti-Orbán forces is that the European Parliament report that may trigger Article 7(1) will be prepared soon. Well, there is good news on this front. On July 11 Judith Sargentini of the Greens/EFA was appointed rapporteur for the European Parliament’s investigation into whether Hungary is in breach of the values of the European Union. But more about that tomorrow.