‘If there’s a lawsuit in any Member State regarding EU funds e.g. spending without competition or in a corrupt way, the Commission will look into how the police is handling it, how the investigation is proceeding and who the prosecutor and the judges are. If they are unable to react properly to the misuse of funds – because they are not independent – we will have a case for suspending the funds,’ says Petri Sarvamaa, Finnish MEP of the European People’s Party (EPP) and chief negotiator for the rule of law conditionality regulation on behalf of the European Parliament.

Poland and Hungary withdrew their preliminary veto to the long-term EU budget and the Recovery Fund on Thursday, 10 December 2020, at the EU summit in Brussels. Mateusz Morawiecki and Viktor Orbán eventually accepted the regulation linking payments from the EU budget with the rule of law on the condition that ‘interpretative declarations’ of the European Council are added to it.

Most PiS politicians are praising the prime minister for his successful negotiations. But Solidarna Polska – PiS’ coalition partner and Justice Minister Zbigniew Ziobro’s party – is arguing that the declarations are meaningless, and that the EU wants to strip Poland of its sovereignty.

In fact, despite the declarations of the European Council, the rule of law conditionality regulation will enter into force on 1 January 2021, unchanged. The draft was formally passed in the EU Council on 14 December and accepted by the European Parliament.

Maria Pankowska, OKO.press: When the European Council agreed to the compromise declaration for Poland and Hungary last week you wrote on Twitter: ‘This is an important win for the #RuleOfLaw and the EU’. But most commentators seem pessimistic. Many of them say that Poland and Hungary won at the summit.

Petri Sarvamaa, MEP: The critics are asking how we can be so happy when the result is not going far enough, when everything was given to Morawiecki, Orbán and Kaczyński. I don’t understand them.

It was really no victory for PiS and Fidesz. It was everything but a victory for them. I know for a fact that, until Wednesday, Morawiecki, with Kaczyński behind his back, was still saying to Merkel that ‘no, we need to open the rule of law regulation’, ‘we need to change that’. They have given up.

But the European Council made some official promises in the declaration.

Everybody’s asking what it is that the European Council has decided on. They haven’t decided on anything.

The declaration for Kaczyński and Orbán was purely a face-saving document for domestic use in Poland and Hungary. There are 11 points on the rule of law issue. Not a single one of these points changed the legislation which we had negotiated between the Parliament and the Council. We gave nothing to Kaczyński and Orbán.

As the Parliament, we made sure all the necessary points are in the regulation.

We put the preventive scope into the text, so the ‘risk’ of the negative impact on financial management is there. We included a list of possible breaches of the rule of law, with the threats to the independence of the judiciary being part of this. We insisted on the protection of the final beneficiaries, so there is no need for the citizens to suffer unnecessarily if their government is breaching the rule of law. We also managed to shorten the timeline for the whole procedure from 13 months to 5–9 months.

This is the result. When, on Wednesday [9 December] afternoon, we got the text of the declaration, we realized that only one point was relevant. We already had all the other points in the regulation.

One point can give Orbán enough time to get safely reelected. Because Poland and Hungary will institute proceedings before the European Court of Justice with regard to the regulation and the whole procedure will be delayed.

This is in the Treaty, Article 263! Every Member State has the right to institute proceedings before the ECJ against any regulation. Nothing is new here.

It will not last two years. I have this from people who know, who make the decisions in Luxembourg and Brussels. I know for a fact that the Court of Justice will give priority to a challenge raised by Poland and Hungary. Look what happened with Article 50 of the Treaty when the Brits started to mess around 4 years ago. It took a month to get the verdict on what the article means from Luxembourg.

Mark my words. You will see the same thing happening with this regulation. They will not waste any time, they will push every case aside and come up with the ruling very quickly. The two governments have already declared that they will file an action. They will be able to file it on 2 January. The Court will be ready. They are already reading the regulation word for word.

And it is absolutely airtight. The legal basis is Article 322 of the Treaties regarding the protection of the EU budget. There’s no question about it: a Polish and Hungarian action will fall. And in the meantime – in January, February, March and April – the Commission will prepare the guidelines for implementation. When Luxembourg presses the ‘send’ button with the verdict, the Commission will be ready.

So you’re saying we will be waiting for no more than a couple of months.

And now comes the best part. It doesn’t matter at all whether it’s in April, May, June or July. When Luxembourg is ready with the verdict and when the Commission finishes the implementation guide, they will start to work. They will look back at the actions of the governments of the Member States from 1 January 2021. Orbán and Kaczyński cannot hide. It will apply to the MFF 2021–2027 and to the Recovery Facility. All this money will be scrutinized.

How exactly will the mechanism work?

If there’s a lawsuit in any Member State regarding EU funds e.g. spending without competition or in a corrupt way, the Commission will look into how the police is handling it, how the investigation is going, who the prosecutor and the judges are. If they are unable to react properly to the misuse of funds – because they are not independent – we will have a case for suspending the funds.

If European funds are being used in public procurement, such public procurement had better be open and transparent. There was a classic case with Orbán and his friend’s company. Now, for the first time ever, we will have the tools, the mechanism to react to such misconduct. There is no doubt that the Commission will use this tool if it considers it appropriate.

The regulation ensures that you can simply click on a website to inform the EU that such and such a company is receiving public contracts in your town without competition. Of course you will have to present some evidence.

But Poland, unlike Hungary, does not have that many issues with the misuse of EU funds. Does that mean the mechanism will be relatively safe for PiS?

While creating the mechanism, we had to follow the rule of law ourselves. We couldn’t invent things that would be difficult to defend before the ECJ. It would be exactly what Orbán and Kaczyński are accusing us of doing, right? We had to have a sound legal basis for everything we legislated. The rationale for this mechanism was the protection of the Union’s budget.

It will be painstakingly difficult to stop these undemocratic reforms. I’m not saying it will be easy. But, for the first time, there will be a chance of turning the tide. At least to stop the governments from misusing EU funds through corrupt judiciary. This is the main achievement.

Some MEPs have complained that the mechanism has become useless. Because Parliament agreed that the funds can only be suspended once the Council has approved this through a qualified majority vote. You decided to abandon the reversed qualified majority, which would make it harder to reject the Commission’s proposal.

You have to remember that the whole of the EP, the Liberals and Greens included, signed the current version of the regulation. They can be as frustrated as they please now. I’m proud to say that, when you look at the text, it has all the necessary elements to protect EU money against breaches of the rule of law.

Our strategy was not to get stuck on the reversed qualified majority. The German presidency would have never agreed to a deal if we had. I don’t think there’s a single Member State in the Council that would have approved this because it would have meant taking a big part of their decision-making powers away. And on such an important issue! It would have meant automatic decisions coming from the Commission. It comes to the heart of the institutional division of powers in the EU. I fight for Parliament but I can totally understand the Council here.

If we insisted on the reversed qualified majority, we would have been stuck and we would have squandered a historical opportunity to secure a deal for a rule of law mechanism. The German presidency would have circumvented it and we would not have had a regulation. You know how happy Orbán, Morawiecki and Kaczyński would have been?

Well, Orbán’s party, Fidesz, is still part of the European People’s Party – your political group in the European Parliament. 

We need to get rid of Fidesz, I have been saying this for years. And now, we will finally be able to do it. Just wait a couple more months, perhaps even less than that, and you’ll see. It’s inevitable. You must have heard the remarks of the Hungarian MEP Tamás Deutsch. This was the last straw.

Just a couple of months ago, nobody believed that the EP would be united on the rule of law topic. But ultimately, only the extreme left and the far right were with Orbán and Kaczyński.

Because they are nationalist, populist and chauvinist anti-Europeans.

It’s hard to say if these countries are a step away from losing their democracy altogether. It’s a line that cannot be drawn clearly. To some extent, democracy is already over.