Does the EU have any teeth?

We look at the ways the EU can affect policies in member states ranging from diplomatic suasion to legal challenges and financial penalties, or changes to the EU budget, in the context of controversial laws passed recently in Poland.

Three new laws passed recently by the Polish parliament would give politicians wide-ranging powers over the judiciary. This led to widespread protests in Poland and criticism from the European institutions.


This is not the first time that the EU showed concerns over changes introduced by the Law and Justice party (or PiS), in power since late 2015. The EU even started a ‘monitoring procedure’ in 2016 after the PiS-controlled parliament changed the rules governing the Constitutional Tribunal.


Yet, despite the strongly worded criticism, the Polish parliament proceeded with the vote. Two of the new laws were eventually vetoed by the Polish President but the other key bill, and many controversial bills before it, went unchallenged.

 

This begs the question: does the EU have effective tools for stopping member states from implementing measures that are considered antidemocratic or going against the core values of the EU?

Does the EU have effective tools for stopping member states from pursuing policies that go against the EU values?


The EU, in general, tries to influence member states through diplomatic means and discussion. This sometimes leads to complex outcomes but helps build consensus. Abstaining from harsher methods also avoids feeding anti-EU sentiment. In the Polish case, the threat of using them might have contributed to the President’s decision to veto two of the laws.


Yet, the EU could use more direct tools. Article 7 of the Treaty allows the EU to suspend some of the rights of a member state – like voting rights or even financial transfers - in case of violations of the EU laws or values. A suspension of funds or their reduction in the future EU budgets would be painful, both for the currency and growth, as Poland receives more than 2.5% of GDP on average per year in cohesion funds.


Article 7 has two parts. Part one allows a majority of member states to start an investigation into the violations, and there may be enough support to pass that decision (22 votes). But an investigation is not effective without sanctions. These, however, require unanimity. But the Hungarian government, itself criticised in the past for controversial changes to the constitution and the judiciary system, has already said it would veto any sanctions against Poland. Other governments may also be wary of creating a precedent.


A way around the Hungarian veto would be to vote on triggering Article 7 against Poland and Hungary at the same time. But to do so against Hungary only now, a few years after the most controversial changes, could damage the credibility of the very measure. This could also feed anti-EU sentiment in both countries. It is also unclear whether the EU could consider cases against two countries together.

The EU has more tools at its disposal than using the 'nuclear option' of Article 7


But the EU has more ways of challenging a member state than the ‘nuclear option’ of Article 7. The Commission could contest the compliance of individual laws with the EU legislation, as it has done many times in the past, against various countries. If the European Court of Justice finds laws non-compliant, it may impose financial penalties on a member state (they can be subtracted from transfers if a country refused to pay). And this path has worked in the past. For example, the EU challenged a Hungarian law forcing judges into early retirement on the grounds that it violated their employment and non-decimation rights.


But the legal path takes time. The Commission may shorten its normally lengthy submission but, on average, it then takes the Court two years to deliver a ruling. A fast track is possible; the Court could then decide within six months.

 

Another option is to wait for the next round of budget negotiations. Some states have already proposed a formal link between observance of the rule of law and EU transfers. Such concerns may also lead to extremely detailed monitoring of the use of the EU funds and delays in disbursements – a measure used by the Commission in the past.

 

Thus, the EU has some teeth. The question now is whether it will use them, or whether the threat of force is sufficient.

 
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