According to a statement from the European Court of Justice, Poland and Hungary have lost their appeal to an EU mechanism that punishes rule-of-law transgressions in member states by withholding money.
The ECJ determined on Wednesday that the “mechanism was adopted on an appropriate legal basis” and dismissed Poland and Hungary’s proceedings “in their entirety.”
Hungary and Poland obstructed the EU’s 2021-2027 budget because it included a provision tying money to nations’ compliance with the rule of law. They ultimately agreed to the idea on the condition that it be reviewed by the European Court of Justice.
The court argued that democratic backsliding has an influence not just on politics but also on fiscal problems.
“Breach of the principles of the rule of law committed in a member state may seriously jeopardize the sound financial management of the Union budget and the financial interests of the Union,” it stated.
Many had accused the two countries of democratic backsliding and saw the linking measure as the EU’s most powerful weapon in preventing a democratic legitimacy schism inside the group from growing.
When it comes to democratic ideals, the court stated that “the European Union must be able to defend those values within the limits of its powers.”
The EU’s executive Commission had stated that it would wait for the verdict on Wednesday before deciding whether to withhold payments.
In a Facebook post on Wednesday, Hungary’s Minister of Justice, Judit Varga, claimed the court judgment “is living proof that Brussels is abusing its power.”
On Twitter, Poland’s Deputy Minister of Justice Sebastian Kaleta described the measure as “blackmail.”
“We must defend ourselves against an attack on our sovereignty, and Poland must defend its democracy against blackmail aimed at robbing us of our right to make our own decisions,” he stated.
“Especially since Poland is expected to lose funds for policies that are commonplace in Spain or Germany.”
For years, Poland and Hungary have been chastised in the EU for allegedly undermining judicial and media independence, among other democratic ideals.
When it became clear that it wouldn’t be possible to change the trajectory of either country, the EU moved to tying money to democratic behaviour.
Respect for democratic rule-of-law values is a key EU entrance requirement, and the court underlined that once a country is admitted, such standards must be adhered to.
“First, the Court specifies that adherence to those values cannot be reduced to a requirement that a candidate state must meet in order to join the European Union and then ignore after accession,” it stated.
Prime Minister Viktor Orban of Hungary has pushed for “illiberal democracy,” which his detractors believe amounts to suffocating democracy.
The Law and Justice Party, which controls the government in Poland, has come under growing fire from other EU member states.
To obtain political influence over courts and judges, the right-wing leadership has breached the country’s own laws.