What legal action is the Commission taking against Hungary?

The Commission has announced that it will be taking legal action against Hungary, but only so much can be done under EU law. While people point out that:

"Viktor Orbán's regime combines the extreme centralisation of economic assets (including the expropriation of the private pension funds, of several public foundations and the forthcoming centralisation of the municipal government's assets) and the monopolisation of power in a single party that intends to dominate every aspect of social and private life, turning citizens into subjects. The improvised nature of many of the new laws creates a wide margin for arbitrary decisions that increase dependence and insecurity.

In addition to a frontal attack on civil liberties, the government has redistributed economic assets (particularly through the tax system and investment allocations) in favour of interest groups close to Fidesz and a restricted layer of the well-to-do. This group zealously defends the party's power and executes its guidelines.

At the same time – through the unilateral rewriting of the labour code, the restriction of union action and collective bargaining rights, the radical dismantling of social welfare nets and independent social care institutions – the government exposed the most vulnerable social groups (the poor, the unemployed, Roma, pensioners, sick and handicapped) to the unfolding economic crisis. Life is precarious for those who live on wages and have no reserves or additional revenue."

...the Commission doesn't have the jurisdiction (and neither does the European Court of Justice) to take Orban's government to task over all these issues. The Commission has decided to focus on the areas of the independence of the judiciary, the independence of the central bank, and the independence of Hungary's data protection authorities: probably because the EU legal case is strongest here. Let's look at some of the reasons behind the legal action:

"1) Independence of the national central bank

"The Commission has identified several breaches of primary law, notably breaches of Article 130 TFEU stipulating full independence of the central bank and of Article 127(4) TFEU requiring consultation with the ECB "on any draft legislative provision in its field of competence".

•Article 130 TFEU states that: “neither the ECB, nor national central bodies, from bank … shall seek or take instructions from Community institutions or any government of a Member State or from any other body”.

•Article 127(4) TFEU stipulates that "the ECB shall be consulted […] on any draft legislative provision in its field of competence"

Moreover, 14.2 of the Statute of the European System of Central Banks and of the ECB as well as Article 4 of Council decision (98/415/EC) on timely consultation of the ECB were not respected. On a number of elements, the Commission has invited the Hungarian authorities to provide clarification.

The infringements identified in the letter of formal notice concern both the MNB law ('Magyar Nemzeti Bank') but also the new constitution.

Under the MNB law, the Minister can participate directly in the meetings of the Monetary Council, offering to the government the possibility to influence the MNB from the inside. Similarly, the agenda of MNB meetings needs to be sent to the government in advance, thus impeding its capacity to hold confidential discussions. Also, changes in the remuneration scheme for the Governor are made again immediately applicable to the incumbent, while they should apply only as of a new term to avoid using salaries to put pressure on the MNB. Finally, the Governor and the members of the Monetary Council have to take an oath (of fidelity to the country and its interests) whose text is problematic given that the Governor of the MNB is also a member of the General Council of the ECB.

The Commission has doubts on the rules of dismissal for the Governor and the members of the Monetary Council which are prone to political interference (even the Parliament can propose to dismiss a member of the Monetary Council) and possible misuse. Also the frequent changes of the institutional framework of the MNB raise doubts, for instance via the increase in the number of Monetary Council members together with the possibility of increasing the number of deputy governors without due consideration of the MNB’s needs.

Moreover, a constitutional provision regulates the possible merger of the MNB with the financial supervisory authority. While the merger is not a problem as such, the MNB Governor would become a simple deputy chairman of the new structure, which would structurally encroach on his independence.

2) Independence of the judiciary

The infringement case affecting the judiciary focuses on the new retirement age for judges and prosecutors and relates to Hungary's decision to lower the mandatory retirement age for judges, prosecutors and public notaries from 70 years to the general pensionable age (62 years) as of 1 January 2012.

EU rules on equal treatment in employment (Directive 2000/78/EC) prohibit discrimination at the workplace on grounds of age. Under the case-law of the Court of Justice of the EU, an objective and proportionate justification is needed if a government decides to reduce the retirement age for one group of people and not for others. This principle was affirmed when the Court ruled on 13 September 2011 that prohibiting airline pilots from working after the age of 60 constitutes discrimination on grounds of age.

In Hungary's case, the Commission has not found any objective justification for treating judges and prosecutors differently than other groups, notably at a time when retirement ages across Europe are being progressively increased and not lowered. The situation is even more legally questionable because the government has already communicated to the Commission that it intends to raise the general retirement age to 65.

As regards the independence of the judiciary, the Commission is also asking Hungary for more information regarding new legislation on the organisation of the courts. Under the law, the president of a new National Judicial Office concentrates powers concerning the operational management of the courts, human resources, budget and allocation of cases. There is no longer collegial decision-making of the operational management of the courts or other appropriate safeguards. One person alone now makes all important decision on the judiciary, including as regards the appointment of judges. In addition, the mandate of the former president of the Supreme Court, who was elected for six years in June 2009, was prematurely terminated at the end of 2011. In contrast, other former judges of the Supreme Court continue their mandate as judges of the new Curia, which has replaced the Supreme Court. The Commission expects detailed answers of the Hungarian authorities to be able to decide whether further infringement proceedings are needed.

3) Independence of the data protection supervisory authority

The case on the data protection supervisor relates to Hungary's recent decision to create a new National Agency for Data Protection, replacing the current Data Protection Commissioner's Office as of 1 January 2012. As a result, the six-year term of the Data Protection Commissioner currently in office, who was appointed in 2008, will be prematurely put to an end. There are no interim measures until the term of the current Commissioner's term ends in 2014.The new rules also create the possibility that the prime minister and president could dismiss the new supervisor on arbitrary grounds.

The independence of data protection supervisors is guaranteed under Article 16 of the Treaty on the Functioning of the EU and Article 8 of the Charter of Fundamental Rights. In addition, EU rules on data protection (Directive 95/46/EC) require Member States to establish a supervisory body to monitor the application of the Directive acting in complete independence. This has been confirmed by the Court of Justice. In its ruling in a case concerning Germany (C-518/07 of 3 March 2010), the Court underlined that data protection supervisory authorities have to remain free from any external influence, including the direct or indirect influence of the state. The mere risk of political influence through state scrutiny is sufficient to hinder the independent performance of the supervisory authority's tasks, the Court ruled."

The outcry over what is going on in Hungary has been very political - in the sense that it's been about the high politics of rights and what makes a fair democracy - and rightly so. The Commission's response reveals the nature of the EU's power when it comes to protecting these key rights: as an organisation of sovereign Member States, the EU can only act where the Member States have contravened EU law. The EU treaties don't define a specific governing structure that Member States have to have, such as a presidential or parliamentary system or how their judiciary is organised (though it does set human rights and democratic tests for candidates to pass before they join), so the points of EU law can be quite narrow. This is especially obvious when it comes to the Commission's action over the judiciary laws - the action focuses on the unfair dismissal of serving judges, rather than the general separation of powers between the judiciary and the executive. The press release references these wider questions and demands answers, but whether or not there will be further legal action depends on whether or not the measures breach EU law.

The Commission (and the EU) is therefore not well placed to become a crusader for liberal democracy in its Member States, so there's a limit to what we can expect. The EU can, however, remove Hungary's EU voting rights via Article 7 TEU as a last resort, but this would require a super-majority. The Commission should investigate the changes to the electoral system and judiciary with an eye to using Article 7 if Hungary refuses to reverse any abuses. While the EU and the Commission's power might be limited (and we need to bear this in mind when Hungary claims it has changed its judicial rules in line with EU requirements), we should demand that all Member States live up to minimum democratic standards if they want to stay in the EU.

Today the European Parliament will be debating the Hungarian situation.

Schengen Wars 2

Romania and Bulgaria's Schengen aspirations are being put on hold again, with the Netherlands and Finland opposing the phased introduction of the two countries into the border-free zone due to concerns over their levels of corruption. Before the vote, Romania blocked tulips from being imported across its border. Their accession was blocked earlier this year in January, which also saw inept diplomacy by Romania.

So are the concerns over the levels of corruption in Bulgaria and Romania justified? The Commission helps and monitors the reform and implementation of changes in the justice system required by EU membership through the "Co-operation and Verification Mechanism" (or CVM). The latest reports on Bulgaria (PDF) and Romania (PDF) were delivered in July. Both reports documented progress, but there's still a long way to go.

The Bulgarian report raises concerns over corruption and over accountability of the judiciary (p.3-4):

"Since last summer, a number of acquittals in cases involving high-level corruption, fraud and organised crime have exposed serious deficiencies in judicial practice in Bulgaria. These deficiencies have not been properly analysed or followed up by the leadership of the judiciary, the Supreme Judicial Council, the General Prosecutor and the President of the Supreme Court of Cassation. Although the revised Judicial System Act adopted in December strengthens the judiciary's accountability, the law has not yet been implemented as intended. The quality and transparency of several important appointments within the judiciary since the beginning of this year have been questioned, leading to unprecedented public protests and a debate on possible constitutional amendments. In addition, allegations of corruption within the judiciary are still not pursued in a systematic way as recommended by the Commission.

[...]

Judicial appointments still lack the necessary level of transparency and credibility. An important senior appointment by the Supreme Judicial Council in November 2010 raised concerns as regards the lack of transparency and competitive character. The entry into force of the newly amended provisions of the Judicial Systems Act in
January 2011, has unfortunately not yet improved the situation as regards senior appointments, which have been still carried out under the old rules and lacked real assessment of the professional qualifications, managerial skills and personal integrity of candidates. Furthermore, a recent nomination was followed by allegations of conflict of interest and procedural irregularities in an ongoing trial handled by the successful candidate. As a protest, two members of the Supreme Judicial Council resigned and criticised the appointment decisions as pre-determined. The subsequent mobilisation of professional associations of magistrates and civil society calling for reform of the Supreme Judicial Council sends an important signal of support for judicial reform. Recommendations by civil society to hold public debates and announce the names of candidates at an earlier stage are laudable. The appointment of highly competent and motivated magistrates of unquestionable integrity via transparent procedures, in particular for the new specialised court for organised crime, is indispensable to successfully implement judicial reform.

[...]

Criminal investigations against magistrates are still not systematically launched by the
prosecution upon allegations of corruption. The decision of the Supreme Judicial Council in June to involve a magistrate with a disciplinary record in the recruitment panel for the new specialised criminal court raises serious concerns. Overall, there is a lack of consistent disciplinary practice. These problems remain a major factor undermining public trust in the judiciary."

Policing in the area of organised crime is also an area of concern (p.5):

"In spite of persevering police actions to tackle organised crime, the overall results need to be significantly improved. Although the joint team on organised crime achieved several indictments related to important organised crime-groups and some convictions have been rendered, other important cases have been concluded with acquittals since the Commission's last annual report. In appeal, severe detention sentences have been pronounced but not yet enforced in one emblematic organised crime case. Weaknesses exist in the collection of evidence, the protection of witnesses as well as in investigative strategies, comprehensive financial investigations and the securing of assets. The General Prosecutor should systematically analyse the reasons for acquittals in high level cases, make recommendations for the handling of future cases when shortcomings in the procedure have been identified and appeal the acquittal decisions when it appears that the Courts did not properly assess the evidence provided."

The report notes a lack of "convincing results" regarding corruption, with cases against former ministers and MPs, and cases involving fraud of EU funds ending in acquittal (p.6):

"The analysis of some of these cases by the Commission and independent experts demonstrated serious weaknesses in judicial and investigative practice. These weaknesses mainly concern the collection of evidence, the protection of witnesses and the general lack of investigative strategies, comprehensive financial investigations and securing of assets. Coordination within the prosecution and between the prosecution and the police should be improved. These weaknesses are compounded by an out-dated Penal Code. Court practice is permissive and excessively cautious, overly attentive to procedures at the expense of delivering justice. While the revision of the Penal Code is advancing, immediate corrective measures, such as the use of interpretative rulings by the Supreme Court of Cassation or legislative amendments should be considered, since the new Penal Code cannot be expected to enter into force before late 2013."

The Romanian report shows some significant improvements, as well as highlighting areas that need a lot of progress. I won't quote from the report to the same extent as the Bulgarian one - I'd recommmend reading both to get a fuller picture of the situation in both countries - but I'll quote to summary paragraphes from the start (p.3):

"Since the Commission's last annual report, Romania took significant steps to improve the efficiency of judicial procedures and continued preparations for the entering into force of four new codes which are the foundation for a modern judicial process. In advance of the implementation of the new codes, the Small Reform Law has brought improvements for the celerity of the judicial process. Romania also responded swiftly to the Commission’s recommendation by adopting a new legal framework for the National Integrity Agency. The National Integrity Agency has been operational under this new legal framework and started to re-establish its track record of investigations. Although not part of the CVM benchmarks, the authorities decided to carry out reviews of the judicial system and of public procurement and to make an evaluation of anti-corruption policy. During the same period, the National
Anticorruption Directorate (DNA) showed a continuously convincing track record in the investigation of high-level corruption cases.

Despite this progress since July 2010, consistency and results in a number of areas remain a challenge. Progress in the fight against corruption still needs to be pursued. Several important high-level cases remain delayed in court for several years and have also seen little movement during this period. Urgent action must be taken to accelerate these trials and prevent them being struck down because of reaching statute-barred periods. The fight against corruption should remain a top priority and be coordinated with the help of a new comprehensive and robust anti-corruption strategy. Urgent measures are needed to improve the recovery of the proceeds of crime, the pursuit of money laundering and protection against conflict of interest in the management of public funds. Better results should be demonstrated in the confiscation of unjustified assets and in delivering dissuasive sanctions for incompatibilities."

Though the domestic reasons for blocking Romania and Bulgaria's phased entry into the Schengen Zone may have more to do with political pressure from the far-right, there are real concerns over the handeling of corruption in romania and Bulgaria. It's true that both countries meet the technical requirements for entry, and that adding this judicial and policing requirements is moving the goalposts, but these issues do need to be tackled as obligations of EU membership. While the politicking might be distasteful - and condemned by both the EPP and the S&D groups in the European Parliament - there is truth to the contention that it's harder to get EU Member States to comply with EU conditions once they're in the club.

UK: What's in a Constitution?

In the UK there is a certain pride in their legal traditions, but there seems to be a confusion about what it all means - the concepts of referenda and parliamentary sovereignty are increasingly uttered in the same breath, seemingly without the speakers' awareness of how much these concepts are incompatible. The UK is famous for its unwritten constitution. Of course it has a constitution, but it's not codified - and a lot of people don't seem to know what it is, exactly. And the bigger question is: is the old constitution, favoured for its flexibility, up to the task of serving today's Britain?

There are many factors to be considered in UK constitutional law, but the most famous one is the doctrine of Parliamentary Sovereignty (PS). PS basically means that parliament is all-powerful, just like god.* According to constitutional theory, if the Westminster Parliament repealed the India Independence Act 1949 tomorrow, then India would revert back to British control (who says constitutional law has to make sense? Or even be practical?).

The UK constitution is just made up of acts of parliament (so it can be changed by a simple majority vote in parliament). Parliament can do whatever it wants (except anything that restricts its ability to do whatever it wants in the future). PS also means that parliamentary Acts are superior to judge-made Common Law, which is quite sensible in a democracy. The problem is that PS rests on its recognition by... judges. Because the doctrine of PS is in itself a judge-made concept.

Confused? Well, it dates back to the Civil War and the Glorious Revolution,** the end result of which is that the King/Queen had the powers of an absolute monarch, provided that the Parliament was the only body that could exercise them. What parliament is, is the King, just divided up among several hundred people. It just happens to be the case that the lower House, the elected one, is now the most powerful part of the Parliament.

So the UK has a constitution which is at odds with the more modern idea of popular sovereignty (the idea that the people are sovereign, and delegate their power upwards), because it is based on the sovereignty of the monarch, which was essentially (though not completely) stolen by parliament. Referenda go, therefore, against constitutional theory in the UK.

The UK has only ever had one referendum: over EEC entry (referendum introduced by Labour).


Now the constitution of the UK is largely a political one: it depends on the political culture for its continued existence since it is built on custom and tradition, and because any parliament could overturn the entire constitution at a stroke with a simple majority (which, under First Past the Post, might only have the support of a third of the electorate). The political culture of the UK has changed a lot over the last century, and it is doubtful that the current constitution is suitable for the modern UK. The issue of Europe in British politics shows the gap in the current political culture from constitutional theory: that the Conservatives, (the traditionalist, constitutional-upholding party) are demanding a referendum suggests that they have lost all respect for the constitution - and yet are not putting forward recommendations for constitutional reform.

There are a number of issues that make constitutional reform more pressing; chief among these is devolution and human rights. Devolution has raised the well known question over English self-rule,*** and human rights has raised questions over how much the parliament should be able to overturn such rights at a whim - or even without meaning to under the doctrine of implied repeal.****

While there have been a few suggestions on these issues (mainly just the Conservatives demanding that only English MPs should be allowed to vote on legislation affecting only England - in my opinion this will just make the system more messy), but no serious attempt at a systemic overhaul. Until this is done, and until popular sovereignty is made part of the UK constitution, Eurosceptic demands for a referendum will ironically attack the British idea of sovereignty more than the EU does (Factortame resolves the tension between PS and the ECJ's doctrine of supremacy of Community law).

Given these issues though, and the lack of political attempts at reform, it has been left to the judiciary to deal with things the best they can. And over the last 40 years there has been a weakening of the judicial deference to parliament, and even (weak) limits being imposed on PS. The famous Factortame case (no.1), which confirmed the supremacy of EU law in the UK (by cleverly saying that EU law was supreme because the UK Parliament's European Communities Act 1972 really said it was, subject to the parliament's sovereign ability to withdraw such rights. ...Yes, I know, but it has to be done in such a way in law) and the Thoburn case (which started a trend of deeming some statutes to be "more constitutional", and therefore not subject to implied repeal) are good examples of this.

In fact, in Jackson v AG, Lord Steyn in obiter***** practically served notice on PS - stating that if parliament threatens access to the courts (etc.), then the courts could just dismiss the power of parliament to do so. The supremacy of the judiciary is a general feature of democracies (supreme courts being able to rule on laws being unconstitutional, etc), and the UK could be moving in that direction, albeit very slowly, and being moved there by the judges themselves.

If nobody discusses the pressing need for constitutional reform in the UK - in fact, the basic need for a codified constitution - then the judges will just have to do the job themselves, just as they did in the past.

This post doesn't have much direction to it, I'd admit. Sorry for that. In a way, I just felt like showing what a mess I think the UK constitution really is, and vent annoyance at some UK eurosceptics' lack of basic knowledge of how their country works, and what its sense of sovereignty is (basically the sovereignty of the rulers based on their control of a territory rather than popular sovereignty). However, I think that the UK needs a constitution in the traditional, write-it-down-somewhere, sense. The current constitution is out of touch with its people (though if you really like it, perhaps you'd say it's the other way around?) - and there needs to be a big effort to confront these challenges.

And if you think all this is messed up, just take a look at land law in Ireland and the UK!





*Depending on the religion. In some cases perhaps even more powerful than god.

**Where the King was fired and Parliament bought a new one.

*** Britain (more correctly the UK) isn't a nation-state. It's a collection of nations in one (historically very centralised) state. A bit like the old Austro-Hungarian Empire.

**** Parliament can't bind successive parliaments, so if two Acts conflict, the newest one is the right one - it "impliedly repeals" the old one. For human rights this could be a bit of a problem.

*****Obiter means that the judge is just saying it - it has no legal effect. But if other judges start agreeing with it, it could find its way into the legal orthodoxy.... [I think this part of Lord Steyn's judgment is at paragraphs 90+ - of the top of my head I'd say it's at 100-110].

[Note: the links for the cases are just to their wikipedia articles, which is definitely not academic. If you actually want to read the cases they should be in the House of Lord's website, though I'd say that they're so famous (ok, famous for court judgments) that you should be able to just google them.]