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The EU Court Punts on the Rule of Law

In ruling against Hungary and Poland's challenge to the European Union's rule-of-law budget conditions, the EU Court of Justice has adopted a potentially problematic approach. Rather than focusing squarely on the principles at stake, it has met the applicants' "fake legalism" with textual legalism of its own.

NEW YORK – The European Union and the governments of two member states, Hungary and Poland, have been on a collision course for years now. The broader dispute is about what, if anything, the EU may do when a member starts backsliding on its commitments to a fundamental principle like the rule of law. The parties have been at loggerheads over whether the EU may withhold funds on these grounds. And now, the EU Court of Justice (CJEU) has ruled that it may.

Yet while the ruling has been hailed as a major victory for the rule of law, it might turn out to be a hollow one. Rather than taking a principled stand, the CJEU followed the parties down the rabbit hole of a narrow, formalistic textual analysis that avoids addressing the core of the issue.

In 2020, EU member states approved a $2.1 trillion long-term budget and recovery plan that included a condition requiring all recipients of funds to comply with the rule of law. The Hungarian and Polish governments then threatened to veto the entire budget unless the conditionality was removed. In the end, a compromise was reached: the budget would go forward, but the rule-of-law condition would be implemented only after the CJEU had reviewed and sanctioned them.

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