The European Union may definitively adjust subsidies for member states if there is an erosion of the rule of law. The governments of Poland and Hungary had filed a lawsuit against a new law that makes that possible, but their objections were declared unfounded by the European Court of Justice on Wednesday.

At the beginning of December, The Advocate General of the court already concluded that the European Commission may adjust or discontinue subsidies if a member state violates the principles of the rule of law. That judgment has now been adopted by the highest European Court, allowing EU countries to be cut if, for example, judges cannot do their work independently or if there is corruption.

President Von der Leyen of the European Commission welcomes the decision. “This statement shows that we are on the right track.” She points out that it is EU citizens’ tax money, and that the rule of law Test better protects the EU’s financial interests against violations of the principles of the rule of law.

According to Hungarian Justice Minister Judit Varga, the ruling is “an example of how Brussels is abusing its power”. She calls it a “political decision”. A spokesman for the Polish government says the ruling “proves a dangerous tendency to go beyond the borders of the EU treaties”.
Law in force for over a year

Since 1 January 2021, a law (the conditionality regime) has been in force to prevent EU money from falling into the wrong hands due to corruption or favoritism, for example.

EU leaders agreed on the introduction of such an EU money mechanism in 2020. The Netherlands was one of the pioneers. The Polish and Hungarian leaders agreed on the condition that the EU court would rule on it.

The new rule has been in force for more than a year, but Poland and Hungary have not yet cut their subsidies. The European Commission has already reported to both countries in November what it believes is lacking in their dealings with the principles of democracy and the rule of law. Poland undermines the independence of judges and in Hungary the committee finds conflicts of interest and corruption.