Credit: Shutterstock

Listen to the article:

On May 3, 2023, the Hungarian Parliament passed sweeping judicial reforms to gain access to the €13.2 billion European Union (EU) Recovery and Resilience Facility funds, the EU’s post-COVID stimulus plan. All EU countries are entitled to a piece of this €1.4 trillion fund. Since December 2022, however, the EU has withheld Hungary’s part until the federal government addresses the corruption and “severe breaches of the rule of law and human rights” rampant under Viktor Orbàn’s autocratic government. Until now, weak judicial independence and opaque administration have allowed Orbàn’s government to use courts to maintain structures of corruption and human rights violations

For Hungary, the stakes for the bill’s success are high. If successful, the reforms would unlock €27 billion in development and stimulus grants and loans in the next few years. Hungary greatly needs an initial €13.2 billion in short-term stimulus as the nation is suffering from the highest inflation rates in the EU, despite already being one of its poorest countries.

Bill T/3131

The reform bill — officially Bill T/3131 — attempts to implement four EU reforms designed to reduce political influence in the justice system. Part of this is due to having stronger judicial independence. The bill strengthens the National Judicial Council, an organization of judges supervising Hungary’s courts to ensure they operate ethically and fairly. This includes dialling back the powers of the National Office of the Judiciary, an organization meant to assist the Judicial Council. In reality, the Office concentrates far-reaching powers on its president, a political appointee that outranks the Judicial Council to ensure the country’s courts cooperate with Orbàn’s government. Under the new laws, the National Judicial Council has its own budget and legal autonomy to regulate the courts. 

The reforms also reaffirm the supremacy of the country’s top court, the Kúria. Until now, Parliament could challenge Kúria decisions at the constitutional court, a practice which effectively defanged Hungary’s highest judiciary. The reforms further include new transparency regulations which prevent public officials from manipulating who serves on the Kúria and which cases it hears.

 Why Does the Bill Matter to the EU?

With such ambitious changes, stakes are also high for the EU. The bloc has long butted heads with Hungary under Orbán’s leadership. Normal relations are challenging to maintain because the country’s ruling party, Fidesz, holds a hard anti-EU stance that claims the Union is part of a left-wing globalist trend undermining Hungary’s values. As a result, Hungary has outlawed the authority of judgements from the Court of Justice of the European Union in the Kúria since 2021, passed anti-LGBT social policies and restrictions on academic freedom violate the EU Charter of Fundamental Rights. If implemented, the bill would reassert the validity of EU law in Hungary and offer redress for violations of basic EU principles. It can begin a new era of stronger relations based on a common foundation of the rule of law and institutional structure.

Hungary’s cooperation is essential to the EU’s future. As BRIC countries play an increasingly important role in global affairs, the EU seeks an independent global political footing on par with China and the US. Following Emmanuel Macron’s vision for a “sovereign Europe” articulated at Sorbonne in 2017, some forces have increasingly attempted to intertwine the political futures of its members. Russia’s invasion of Ukraine in 2022 seemed to accelerate this attempt at unity. Since then, member-states have formed the European Political Community (EPoC), a bi-annual forum coordinating collective policy. Even the cautious German Chancellor Olaf Scholz spoke of a common European future while promising the expansion of Germany’s military in pursuit of an independent European defence policy. 

The architects of this policy know that their vision is impossible without central and Eastern Europe’s cooperation. Speaking at a global security conference in Bratislava on May 31, Emmanuel Macron — who heads Europe’s push for greater self-reliance — underlined the region’s strategic importance and called for an end to the continent’s east-west divide. 

Leveraging his advantageous position, Orbán complicates these aspirations. Despite their best efforts, the EU has not stopped Hungary’s strong relations with China and Russia, intolerance of LGBT+ and migrant rights, and mafia-like networks of corruption. Orbán has clarified that Hungary’s path is not with Europe alone. Still, Orbán relies on the EU for economic support. Currently, frozen EU funds account for 17 percent of Hungary’s economy.

Even if the EU sent the funds, it is important to question how far they would help ordinary Hungarians. This year, Transparency International ranked Hungary as having the worst perceived corruption in Europe. Corruption reaches the highest levels of government; Hungary has the highest number of single-bidder government contracts in Europe. Yet it also bleeds into everyday life. For instance, illegal “gratuity payments” to doctors and nurses are common despite recent campaigns to abolish them from the healthcare sector.

The unlocked funding would certainly increase economic activity in Hungary, already one of Europe’s fastest-growing economies. Growth could provide short-term respite for Hungarian working and middling people pressed with rising costs of living. How much of the funding benefits ordinary Hungarians depends on how the EU disburses them. The EU’s budgetary commission is debating payment methods that “[bypass] Orbàn’s control” to ensure the grants achieve broader social welfare. Disbursing funds that will be squandered through corruption creates ethical problems for the EU, but so does withholding money that could help working people struggling in one of Europe’s poorest countries. A botched disbursement or further withholding creates equal risks for deepening Hungary’s widespread political cynicism.

The judicial reforms alone will not fix Hungary’s corruption problems. The most they can do is build a legal foundation for a fairer society.

Are Orbán’s Judicial Reforms a Sign That Hungary is Finding Its Place in a More United Europe?

The reforms seem positive if they are a part of Orbán’s recent “u-turn” in EU relations. Since January, Hungary has cut major financial ties with Russia, reversed a decision to use Russian technology in a nuclear mega-project, and approved Finland’s ascension into NATO. 

Yet, problems dwell in the details. An analysis from Hungary’s largest human rights and transparency groups uncovered numerous shortcomings baked into the reforms. They maintain Orbán’s ability to rule by decree, something he has been doing since 2020. They also fail to address government control of Hungary’s constitutional court, which has authority over the National Judicial Council. These shortcomings threaten to undermine some of the bill’s most positive aspects. In addition, changes to the Kúria do not address numerous back-door methods for packing the court and do not protect the judicial freedom of judges “constantly undermined and stigmatized by government-oriented media attacks.” 

The shady circumstances in which Parliament adopted the bill symbolize its shortcomings. On March 3, 2023, Fidesz introduced the legislation as Bill T/3131 to avoid public consultation. It contained amendments to asset declaration rules unrelated to judicial reforms. Parliament debated the bill until March 14 and scheduled a vote for May 3. On April 27, less than three working days before the May 3 vote, Fidesz’s legislative committee gutted Bill T/3131 and turned it into the judicial reform bill. The new bill only became available hours before Parliament voted to adopt it without further discussion. This trick is both illegal and unconstitutional under Hungarian Law.

With the failures of the judicial reforms surfacing, the initially positive news seems to frustrate Europe’s aspiring global political independence and perpetuate a troubling cycle of conflict with Hungary. The EU symbolically defends its values with economic leverage, feeding Fidesz’s anti-EU rhetoric. Orbàn’s Justice Minister Judit Varga is already criticizing the EU for failing to hold up their end of the bargain. For the EU, Hungary is more than just a pain; they are exposing an existential flaw in the EU’s values and its hopeful future. Under these circumstances, it is unlikely the reforms will unfreeze any money. Moreover, the suspicious circumstances under which Orbàn passed Bill T/3131 damp optimism for reforms bringing about a free and fair Hungarian democracy.

Edited by Majeed Malhas