Poland challenges EU law which links budget to rule-of-law

‘The Union does not have the competence to define the term ‘rule of law’ or to define whether its values are observed’

Hungary said it too would file a complaint to the EU’s top court (Getty Images)

Poland filed a complaint on Thursday to the European Union’s top court against an EU regulation that makes access to the bloc’s funds conditional on respecting the rule of law, and Hungary said it would follow suit this week.

The legal action from Warsaw and Budapest is aimed at postponing the application of the regulation by the European Commission for as long as the European Court of Justice (ECJ) takes to issue a verdict.

Both countries, under formal EU investigation for undermining the independence of courts and media, fear they risk losing access to tens of billions of euros over the next seven years, once the law is applied by the European Commission.

Budapest hopes the ECJ verdict could take two years, postponing its application until after Hungary’s next election.

Prime Minister Viktor Orban, during a decade in power, has used public spending to build a loyal business elite which includes some members of his family and closest friends, partly using billions of euros worth of state and EU funds.

“The Union does not have the competence to define the term ‘rule of law’ or to define whether its values are observed,” the Polish government said in a statement, adding that its complaint to the ECJ held that the regulation did not comply with EU treaties.

Hungary will also seek to annul the rule-of-law condition in court this week, Orban’s chief of staff said. In a separate development on Thursday, the European Parliament called on the Commission, guardian of EU treaties, to start applying the regulation, in force since 1 January, or itself face a lawsuit for failing to uphold EU law.

But the Commission said it would only start applying the regulation after writing up guidelines on how to do that, and these would have to wait until the ECJ verdict.

Officials said that was the informal agreement reached by EU leaders in December and the condition under which Poland and Hungary agreed to the law in the end.

But members of the European Parliament said the regulation was in force already and should be applied as is, and if the ECJ verdict changed it in the future, it could then be amended.

Reuters