Explainer: Rule of Law and De Facto Differentiation in the EU
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Explainer: Rule of Law and De Facto Differentiation in the EU

In October 2021, Poland’s Constitutional Tribunal [‘Tribunal’] ruled that in the event of a conflict between the Constitution of Poland and the treaties of the European Union, the Polish Constitution will reign supreme. The Tribunal concluded that Article 4(3) of the Treaty on European Union, in conjunction with Article 279 of the Treaty on the Functioning of the European Union, are inconsistent with Articles 2, 7, 8(1), 90(1) and 4(1) of the Polish Constitution.

The Tribunal ruling sparked massive protest in Poland and was criticized by member states and institutions including the European Parliament and European Commission’s President, Ursula von der Leyen, who expressed serious concerns and contended that the ruling threatens to undermine the legal framework within which the EU functions, as well as the Rule of Law and protection for human rights, including for Poland’s LGBTQ+ community. This concern was shared by the 26-retired judges of the Constitutional Tribunal, who argued that the Tribunal’s rulings were full of erroneous assertions, including its oral rationale, and the opinions of political actors.

De Facto Differentiation Against EU

Poland and Hungary both entered the EU in 2004, but both have experienced democratic deterioration since then. The two have conflicted with EU institutions on several subject matters since Poland’s conservative Law and Justice [‘PiS’] party rose to power in 2015. In Poland, Jarosaw Kaczyski, the leader of the europhile PiS party, appears to have been influenced by Hungarian Prime Minister Viktor Orbán’s notion of ‘illiberal democracy.’  The PiS has systematically manipulated and tempered the autonomy of Poland’s Constitutional Court by replacing judges, forcing judges to retire early, and giving extensive powers. There have been disagreements over women’s rights,LGBTQ+ rights, environmental protection, and, most prominently, the autonomy of the judiciary

When the European Parliament declared that the European Union was an ‘LGBTQ+ Freedom Zone’, Poland took a distant approach and introduced its own “LGBTQ+ Free Zones”, while the Hungarian Parliament passed an anti-LGBTQ+ statute.  Such deliberate and sustained efforts of non-compliance with EU laws have been termed de facto differentiation. The Polish case of deterioration in democracy is not something that voters supported; rather, it is an abuse of authority that leaders have continued after 2015, and the status quo of the rule of law and Authoritarian Clientelism in Poland.

Michel Barnier, a French presidential candidate, who was a strong supporter of the free movement of people and the EU’s integrity as a leading Brexit negotiator, also ruffled feathers by vowing to restore France’s sovereignty from European courts. Other potential French presidential candidates, such as Valérie Pécresse and Eric Zemmour, also openly questioned the precedence of EU law, calling for a French exit from the EU, or a ‘Frexit’. Moreover, the UK is also engaged in its dispute with the EU over the role of the CJEU in the Northern Ireland Protocol. After the 2004 EU enlargement, in 2005 citizens of France and the Netherlands also disrupted the move at unambiguous constitutionalization of the EU in a constitutional referendum. Whereas the Constitutional Treaty’s successor, the Lisbon Treaty, would have formalized the notion of EU legal supremacy, the provision was later removed, demonstrating that unanimity on EU legal supremacy is not as strong as is commonly believed.

An (Invisible) Elephant in the Room

The notion of the EU as a de facto federation wherein the non-majoritarian institutions including the Court of Justice of the European Union [‘CJEU’] have the ultimate word on the principles of democracy in member states is now being challenged more explicitly, particularly following the United Kingdom exiting the EU. Notwithstanding the attempts to not recognize EU primacy and disrespect CJEU’s authority, Poland is not the first country to do so. Danish Supreme Court in Ajos, Czech Constitutional Court in Landtova and Germany’s recent Bundesverfassungsgerichts ruling, have taken so-called bold decisions.

The CJEU’s self-empowerment is characterized as a “quiet revolution” and was facilitated by the “permissive consensus” among member states, which allowed judicial integration to proceed virtually uncontested. However, this is changing as politicians and national courts alike are becoming more inclined to confront what they perceive to be a judicial overreach. The debate over the rule of law has been metamorphosing into a series of inter-institutional conflicts between the European Parliament, the EC, and the European Council, where Poland and Hungary still have a say. For the time being, there are no apparent effects of the EU’s actions in non-compliant countries that are now brazenly opposing the EU even more. Temperatures have escalated after the tribunal’s ruling, and discussion no longer appears to be a plausible solution. In the post-pandemic scenario, this position creates uncertainty and raises fears about the European Union’s future.

The Tribunal’s rulings might not be about a potential Polexit, but rather about reclaiming national sovereignty and enabling Poland’s ruling party [PiS] to pursue its political agenda without encountering opposition from EU courts and the EU itself. In other words, while a future Polexit appears unlikely, the EU is beset with a rule-of-law catastrophe. It is undeniable that Polish judgment K 3/21 uncovered a potential weakness in the EU legal structure and cast a shadow over the EU’s viability as a political and legal institution. That’s even more alarming since it happened at a point when the EU was grappling with the accession of several Western Balkan states, But how can the EU expect candidates to adhere to principles that it cannot enforce in its member states?

Therefore, EU member states must move outside of their status quo and openly reaffirm that outright opposition of CJEU decisions, particularly on matters about the bloc’s structural foundations, is a red line that must not be crossed. They must contribute work and attention to engaging in a dialogue with Polish society to ensure that their pivotal response is understood, zero tolerance for those who refuse to obey collectively accepted rules is not aimed at Poles, but is requisite to protect what they value most, a well-functioning and consistent EU. 

EU’s Reverse Cards

The EU has hitherto possessed the mechanisms required to keep member states from descending towards authoritarianism if their governments choose otherwise. However, if a member state does not maintain European standards, the EU retains the power to withhold essential assistance, such as agricultural subsidies and infrastructure. While the EU’s Article 7 TEU proceedings against the two Member States has stagnated owing to the necessity for agreement in the Council, the EU can consider financial pressure alternatives such as the “conditionality mechanism” or the termination of the COVID-19 EU recovery fund. The CJEU’s preliminary referral procedure is also an effective vehicle for ensuring adherence to EU principles in Poland and Hungary.

Moreover, the European Court of Human Rights [ECtHR] in Dolińska-Ficek and Ozimek V. Poland ruled that Poland violated a judge’s right to a fair hearing, concerning their applications to change posts being blocked by Poland’s National Council of the Judiciary [‘NCJ’]. The ECtHR held that NCJ and the Supreme Court’s Chamber of Extraordinary Review and Public Affairs, both intuitions are neither impartial nor independent and fined €15,000 (the US $17,000) to each judge and demanded “rapid remedial action” and judicial independence in the country. The CJEU in July 2021, in C-791/19 also ruled that Poland violated EU laws on constituting a disciplinary chamber for its Supreme Court judges and fined Poland €1 million per day for neglecting to abide by the order. The ECtHR and CJEU rulings further add to the International attention on Poland’s rule of law.  

Both of these rulings were criticized by the Polish authorities, who complained that the ECtHR and CJEU lacked respect for the Polish Constitution.  Poland is unwilling to pay both the fines and in the dispute over access to €36 billion in Covid-19 pandemic aid and accused the EU of operating in “bad faith’ and of engaging in bureaucratic centralism. As a result, Poland also threatened to stop paying its membership costs if the situation worsens over COVID-19 funds because PiS wants these funds to enhance its popularity ahead of the 2023 parliamentary elections in Poland and economic projects, like the ‘Polish Deal’, cannot be implemented without such massive support.

EU’s Future

In February 2022, the European Commission initiated an unprecedented procedure to withhold EU funds from Poland over an unpaid CJEU fine. The CJEU also began its hearings on the legitimacy of the rule of law conditionality directive in Poland and Hungary’s cases C-156/21 and C-157/21 in 2021. Judgment in these cases is expected to be delivered in 2022. The implementation of Rule of Law conditionality would be conceivable in the Poland case, and it could be a significant opportunity to explore the EU’s novel mechanism. However, the implementation of Rule of Law conditionality may not be so straightforward. The Commission must establish that the Tribunal’s ruling has a bearing on the EU budget’s efficient financial administration or has a relevant correlation to preserving EU financial interests underneath the Rule of Law Conditionality Regulation.

Sarthak Gupta is a B.A., LL.B. (Hons.) student at Institute of Law, Nirma University, India.