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Mar 22, 2019 | 17:30 GMT

4 mins read

EU: Brussels Mulls What to Do About Hungary and Romania

(Stratfor)
The Big Picture

In recent years, the European Union has become increasingly concerned about governments, especially in Central and Eastern Europe, adopting measures that allegedly weaken the rule of law. The bloc, however, has limited tools to use to sanction its member states, while Brussels constantly faces a dilemma between being too lenient, which undermines its credibility, and pushing too hard, which risks alienating the sanctioned country. For Central and Eastern European governments, the main threat is that their actions could eventually reduce their access to much-needed EU funds. 

What Happened

These are troubled times for some of the most controversial governments in the European Union. On March 20, the European People's Party (EPP), the largest political group in the European Parliament, decided to suspend the membership of Hungary's governing Fidesz party. The EPP's decision came after months of debate over Fidesz's constant attacks on EU institutions and leaders, including EU Commission President Jean-Claude Juncker — himself an EPP member. As a result of the suspension, Fidesz will no longer receive invitations to EPP meetings or be able to exercise the right to vote in the group or propose candidates for party posts. 

The EPP made the announcement on the same day that Romanian President Klaus Iohannis said he was considering calling a referendum for May 26 on some of the reforms that Romania's center-left government — an administration with which he frequently clashes — has introduced regarding the country's judiciary that some believe weaken the fight against corruption.

Why It Matters

The EPP's decision is symptomatic of a broader issue facing the European Union. In recent years, the bloc has had to contend with a surge in popularity for nationalist and euroskeptic parties that are critical of the process of EU integration. It has also faced governments, particularly in Central and Eastern Europe, that have introduced reforms in such areas as the judiciary, raising concerns about the rule of law. This has created a dilemma for the European Union: if it is too lenient, these governments and parties will feel free to continue with their policies and actions — and even inspire others to follow suit; if it sanctions them, they could reassess their ties with the bloc and look to deepen their strategic links with other countries (for example, Russia or China).

This dilemma explains why the EU Commission has begun disciplinary processes against countries like Hungary and Poland over recent reforms in the judiciary, and warned Romania against weakening the fight against corruption, but not yet implemented any concrete sanctions. To complicate matters more, some of the sanctions (such as suspending a country's voting rights in the European Union) require unanimous approval — something that makes these punishments almost impossible to apply as targeted countries can band together to block the measures.

There are at least two reasons why countries accused of breaking EU rules or weakening the rule of law are not completely off the hook.

But there are at least two reasons why countries accused of breaking EU rules or weakening the rule of law are not completely off the hook. First, Central and Eastern Europe have witnessed a wave of protests in recent months demanding more transparent governments, as well as a stronger fight against corruption. Second, several EU governments have backed a plan to link the disbursal of EU funds, of which countries in Central and Eastern Europe are net recipients, to adherence to EU rules. Winning approval for such a plan would be quite difficult, and the EU budget (which includes items like agricultural and structural funds) again requires a unanimous vote. But the mere fact that the bloc is considering such a plan poses a threat to countries that have been accused of failing to respect the bloc's values.

A Referendum in Romania?

Romania is one of many European countries where people have taken to the streets to protest corruption. The European Union and other institutions have warned that recent reforms in the judiciary and to the criminal code could weaken the fight against corruption. While Iohannis did not give details about what, exactly, the referendum would ask, such a vote could become an unofficial poll on Prime Minister Viorica Dancila's government. For years, Romania has been pushing to join the passport-free Schengen area, while the government in Bucharest recently expressed interest in potentially joining the eurozone. But the European Union will be reluctant to accept Romania in either of these groups as long as the bloc harbors concerns about issues like the rule of law in the country. Whether in Bucharest or Budapest, Brussels has a lot of thinking to do.

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