Democracy Digest: Loss of EU Funds a Step Closer for Poland and Hungary

Ahead of a legal opinion from the advocate general of the CJEU on the EU’s new rule-of-law mechanism, Brussels fires a warning shot in a letter to both. Poland’s riposte is to say the EHCR has no power to question its appointment of judges.

The European Commission showed it is serious about bringing Hungary and Poland to heel over their democratic backsliding, when at the end of last week the EU executive reportedly sent a letter to both countries posing several specific questions about the most problematic issues.

The move is seen as an unofficial first step to triggering the so-called conditionality mechanism that allows the EU executive to withhold EU funds from member states over rule-of-law concerns. And given the Advocate General of the European Court of Justice will present on December 2 a legal opinion on the legality of this new rule-of-law mechanism, the timing of the Commission’s letter is probably no accident.

The letter, which was leaked to Politico but also obtained by the Brussels correspondents of some key Hungarian media, describes a systemic problem with corruption and lack of accountability, and poses 16 questions to the Hungarian government, which now has two months to answer them.

Although, officially, the letter is not the first stage of this procedure to withhold EU funds, most experts regard it as such: if the governments fail to provide adequate answers to the Commission’s questions, a suspension of EU funds will be a step closer.

Hungary’s independent media are taking it for granted that the country will not receive its first tranche of its money from the EU’s 750-billion-euro coronavirus recovery fund this year, and it can’t be ruled out now that the money will still be on hold when the next parliamentary election takes place in April 2022.

Judging from the questions, it seems quite clear that the Commission has done its homework and is targeting the Achilles’ heel of the system set up by Viktor Orban’s government: a lack of transparency and competition in public procurements, where half the tenders result in a procedure containing a single bidder. Beneficiaries of the EU’s agricultural and regional development funds are also suspiciously close to the government.

In addition, the letter refers to the surprisingly high number of projects that Hungary has had to withdraw from EU funding when OLAF, the EU’s antifraud office, found irregularities, but anyway continued to finance from the national budget. The Commission regards that as having a “negative impact on the deterrent effect of Commission controls and audits, and of OLAF investigations.”

One of those projects criticised by the OLAF was linked to Orban’s son-in-law, Istvan Tiborcz, whose ELIOS company won a number of public procurements for city lighting projects between 2011 and 2015, worth altogether 40 million euros, financed by EU funds. When OLAF in 2018, after two years of investigation, found serious irregularities, Hungary had to return the money to the EU, yet the government decided to foot the bill using taxpayer money. The police closed the investigation claiming no crime had been committed.

The European Commission is also concerned about more recent events, such as the radical transformation of Hungarian universities into private entities governed by trust funds chaired by government allies, and new tourism-related investments funded by the EU or national budget at Lake Balaton.

As far as the independence of the judiciary is concerned, the Commission has found the “excessive powers” of the president of the National Office for the Judiciary highly problematic. It also questions whether a Hungarian judge would be able to seek advice at the Court of Justice of the European Union (CJEU) without suffering any repercussions. The Hungarian Supreme Court ruled in a criminal proceeding at the Pest Central District Court that a request by the judge to the CJEU was unlawful, but Europe’s top court decided that all judges have to right to seek advice and cannot be sanctioned.

“The issues identified could affect the effectiveness and impartiality of judicial proceedings on cases related to the irregularities in the management of the Union funds, and this could create a serious risk to the protection of the financial interests of the European Union,” Politico quoted the Commission’s letter as saying.

The Hungarian government has not commented on the reported letter, but said it has sent its own letter to Brussels in which the prime minister demands that the Commission suspend all infringement procedures that could “undermine Member States’ actions aimed at the protection of their territorial and national integrity, as well as the security of their citizens.”

According to Orban, this is necessary because a new legal environment is needed to address the migration situation at the Polish border. The request was supported by Polish Prime Minister Mateusz Morawiecki, but the Commission swiftly rejected the proposal.

“There is no political room for manoeuvre in the infringement procedures. It is a strictly defined, by-the-book process. The only way to close such a procedure is if the underlying case is resolved,” Commissioner for Promoting our European Way of Life Margaritis Schinas said. “You cannot stop an infringement procedure for political reasons or by sending letters.”

Warsaw also hasn’t commented on the reported letter, though Poland’s politically controlled Constitutional Tribunal has turned up the heat by taking aim at another key target of the government: the European Court of Human Rights (ECHR).

In a ruling on Wednesday, Poland’s top court ruled that an article of the European Convention on Human Rights was incompatible with the Polish Constitution. The ruling can be seen as a response to a previous verdict by the ECHR, in which the court had said judges sitting in the Polish Constitutional Tribunal had been illegally appointed.

At the heart of this dispute lies the goal of the governing Law and Justice (PiS) party to establish full control over the judiciary. To do so, the ruling party needs to be able to ignore decisions by the CJEU and the ECHR that it doesn’t like, legal experts explain. After getting the puppet constitutional court to rule that parts of the EU treaty granting the CJEU the right to intervene are unconstitutional, Warsaw is now trying to do the same with the ECHR.

“This moves Poland’s crisis firmly beyond EU law and the CJEU,” commented Jakub Jaraczewski, a European law expert at the think tank Democracy Reporting International. “It should be now clear that this isn’t about Warsaw versus Brussels, it’s about the Polish authorities versus the rule of law and human rights, with the CJEU and ECHR trying to protect these values.”

Polish birth control

The Polish government intends to keep a record of all pregnancies as of January next year, according to a draft law, which is already in the consultation stage despite information about it only being made public on Wednesday by Senator Krzysztof Brejza of the opposition Civic Coalition.

Under the draft law, the list of information that medical service providers are expected to file to a central data base would be expanded to include pregnancies, implants (this can also give information about the use of birth control by the respective woman), alongside blood type and allergies.

Women’s rights groups are, understandably, up in arms and already calling for street protests. According to them, including this information in a government register would hypothetically allow prosecutors to chase those cases where the pregnancy did not result in a birth.

Abortion on demand has been illegal in Poland for three decades but, last year, a decision by the puppet Constitutional Tribunal banned even abortion in the cases where the foetus is seriously ill or malformed. Polish women are increasingly resorting to having abortions abroad – no doubt a reason behind this law, say critics.

A libertarian pandemic; Czech public enemy No.1

No lockdowns, no school closures, no mandatory vaccination and no restrictions for those refusing a jab: the incoming Czech government promised the country a particularly libertarian pandemic on Wednesday.

Predicting that COVID-19 “will be with us and we must learn to live with it” over the government’s four-year term, prime-minister-in-waiting Petr Fiala declared that “this wave can no longer be stopped, we must protect the healthcare system.”

However, the new government will not close schools while it is in office, he pledged, possibly somewhat rashly. Babis finally bowed to the dangers of the fourth wave to restrict access to services and events for the unvaccinated, but even that measure will be scrapped, Fiala has promised.

Like the outgoing government, the new five-party coalition has declared that vaccination is the only route towards normality. However, mandatory jabs are not an option, incoming health minister Vlastimil Valek insisted. The new government will instead convince the 40 per cent or so of the population as yet unvaccinated to take a jab. Valek did not explain how this campaign would work.

Having told the country what they won’t do, the incoming government’s plans for action appear somewhat lacking. Testing capacity and regimes will be improved, health system efficiency boosted, and the gap between second dose and booster reduced by a month to five. The population will also be asked to reduce social contact, while kids will get an extra week’s holiday at Christmas.

There were 25,864 new COVID-19 cases detected on Tuesday, the largest increase since the start of the pandemic and just the latest in a series of record highs over recent days. Over 5,650 people are hospitalised with the virus, with 799 in serious condition.

One of those in hospital is President Milos Zeman, who on Thursday enjoyed a very brief taste of freedom.

The head of state was released from Prague’s Central Military Hospital (UVN) in the morning, nearly seven weeks after he was rushed to intensive care. The first job on his schedule was to finally appoint Fiala as prime minister on Friday. However, after just a few hours the president was back at UVN having tested positive for COVID-19.

Reports say that the triple-jabbed head of state is asymptomatic, but required to remain in the hospital for observation. Fiala will thus have to wait still longer to launch the new government. No new date for his appointment has been announced by the presidential office.

Not every part of the state apparatus is so confident about fighting the impact of the pandemic. Czech spy catchers complained this week that the coronavirus has made their life much more complicated. “The COVID-19 pandemic can simply be described as the perfect black swan of intelligence operations,” the Czech Information Security Service (BIS) said in its annual report for 2020.

The counterintelligence agency said that although the coronavirus had caused significantly reduced activity in the spy business just like any other, it had also impacted its own work in trying to fight the threat from Russia, China and, increasingly, Iran.

“Even though restrictive measures hindered the arrivals and travelling of agents and officers of foreign intelligence services in our territory, they also strongly interfered in the intelligence operations of the BIS,” the report reads.

Russia and China remain top of the list of threats, BIS says, noting in first place efforts to meddle in Czechia’s preparation of a tender for the expansion of the Dukovany nuclear power plant. Both eastern giants were thrown out of the competition earlier this year.

Cyberattacks linked to foreign powers and disinformation activities aimed at weakening democracy were the other main topics that BIS dealt with in 2020. In particular, the pandemic produced a surge in disinformation, which added to the standard criticisms of liberal democracy and membership of the EU and NATO.

These same threats are likely to be the major issues for BIS in the future, the security service warns.

BIS spent 2020 fighting Russian efforts to paint itself as a defender of freedom and to secure equipment banned under EU sanctions. China was also busy trying to boost its image among Czechs at the same time as seeking to disrupt contacts between Czech politicians and Taiwan.

In a rather stark warning, BIS pointed the finger at all Chinese citizens. “The question of who is and who is not a Chinese intelligence officer is becoming obsolete,” the report stated. “According to Chinese law on national intelligence, every Chinese citizen might be obliged to carry out the will and interests of Chinese intelligence services.”

While the threats posed by Russia and China have become a mainstay of BIS’s yearly media splash, Iran is something of a new name on the block.

The report notes that activity by Tehran has been quiet for some decades, but that the Islamic republic is now getting much busier. The main target in the Czech Republic is Radio Farda, which is operated by the Prague-based, US-government-run Radio Free Europe/Radio Liberty. Academia, especially the technical sciences, is another major area of concern.

As ever, this year’s BIS report is unlikely to be welcomed by President Zeman, who has in the past called the agency’s members “bozos” for daring to contradict his efforts to build links with Russia and China. However, the election victory of the Democratic Bloc makes it highly unlikely that his bid to oust BIS Director Michal Koudelka will now succeed.

Slovakia flirts with mandatory vaccination amid lockdown; plans for a ‘hydrogen future’
After weeks of political hesitation, Slovakia finally entered another nationwide lockdown as daily COVID-19 infections continued to break records, pushing the number of hospitalised patients above breaking point and sidelining all non-essential healthcare.

With the country edging closer to a health catastrophe, being the hardest hit in the world from the perspective of the relative weekly incidence of new cases, reinstituting a national emergency that mandates a strict lockdown and curfew “is better now than later”, Prime Minister Eduard Heger was quoted by the Dennik N daily as saying.

“If such a strict lockdown doesn’t work, it would be a world phenomenon,” Heger later added, according to the Slovak Spectator.

But for some, the measures are too little – and too late. Experts have been calling for a lockdown for weeks on the back of estimates predicting an imminent collapse of the public health system.

“We are highly unlikely to avoid a lockdown and generally stricter conditions. We will call on the government to declare a national emergency that will limit the movement of both vaccinated and unvaccinated people,” epidemiologist Zuzana Kristufkova, who sits on the health minister’s advisory body, told the SME daily days before the government got its head around the idea of another lockdown.

The delay, the price of which is being counted in the dozens of new daily deaths related to the coronavirus, were the result of a protracted political wrangling between members of Heger’s cabinet. Expert voices advocating mandatory vaccination along the lines of obligatory jabs recently announced in Austria were left unheard by political elites who consider the strategy too much of a political risk.

“In no circumstance can I imagine such thing,” claimed Parliamentary Speaker Boris Kollar, who heads Sme rodina, the second largest coalition party, despite the country’s alarmingly low vaccination rate below 50 per cent.

Kollar, known for his uncompromising efforts to frustrate government politics, later added that he would have none of Prime Minister Heger’s conciliatory political offer to only mandate the vaccine for select groups of society, including essential workers and the elderly.

President Zuzana Caputova, a vocal proponent of vaccination, reacted to the coalition-wide infighting with disbelief after a visit to an over-stretched COVID-19 hospital ward.

“We are losing the battle against COVID-19 in the sense that we are the worst in the world with regards to the number of newly infected people per million citizens,” she was quoted by as saying. “Our approach is also the worst in the world. I feel like I’m living in a country that I don’t understand.”

Elsewhere, Economy Minister Richard Sulik announced that Slovakia was preparing for a future based on the “use of hydrogen in transport and the energy sector”.

Using hydrogen as a fuel to replace fossil fuels is a key part of the world’s move to a low-carbon economy, because whether hydrogen is burned to produce heat or reacted with air in a fuel cell to produce electricity, the only byproduct is water. While hydrogen is the most abundant element in the universe, producing it in pure form for industrial processes – ranging from producing synthetic fuels and petrochemicals to manufacturing semiconductors and powering fuel cell electric vehicles – is energy intensive with a significant carbon footprint.

The country has immense potential to exploit hydrogen technologies, Sulik said, adding that a carbon neutral economy by 2050 was “not possible without hydrogen.” Train lines and an extensive network of hydrogen “gas stations” all feature in the country’s National Hydrogen Plan, dubbed “Ready for the Future”.

Slovakia already has a working infrastructure that uses hydrogen as fuel, the minister pointed out, with the Technical University of Kosice in the eastern part of the country constructing a hydrogen-run bus and sports car. Another part of the equation is rising energy prices, Sulik said. In his view, hydrogen can act as a buffer against skyrocketing costs and decrease the country’s energy dependency on Russia.

In less positive news for the economy, Slovakia dropped two places in the latest edition of the Global Corruption Index, ranking 42nd – the fifth worst result in the EU. The country slipped in the rankings despite an ongoing clampdown on graft among the top echelons of the police and judiciary that resulted in a number of formerly high-ranking officials serving time for crimes committed during their time in office.

“We already have tools to fight corruption in Slovakia, such as mandatory internal systems that protect whistleblowers and investigate alleged wrongdoings,” read a statement by the recently set-up Office for Protecting Whistleblowers.

“We want to see these tools being implemented in practice and helping to eliminate corruption,” the press release continued, but conceded that “Slovakia’s ranking is not flattering, though it’s a reason for change.”

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