Grand Rule of Law

A multiparty coalition runs the rule of law debate that will have CE countries marginalised and divided.

Takeaways

• The S&D and ALDE link the rule of law condition to the next multiannual financial framework with the purpose of changing the budgetary mechanism and redirecting some of the funds away from Central Europe to Southern and other member states.
• This divide boosts the move towards the emancipation of the eurozone, including the setting up of a separate eurozone budget and even its own distinct parliament.
• With Poland, Hungary and Romania being pushed to the periphery, the remaining Central European states have to choose their allegiance.

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A Triumvirate

Over the last three years, the rule-of-law debate has become the new dividing line between ex-communist Europe and the rest of the EU.

Poland and Hungary have both been subjected to the Article 7 procedure (investigation of rule of law violation) by the European Commission. Shortly after the election, the procedure is enacted against Romania as well.

Whilst the other ex-communist countries are safe for the time being, most of them show solidarity with those that are under scrutiny. There is a growing perception in Central Europe that the rule of law procedure and its consequences may be used as an instrument to stigmatise newer member states and draw new lines of division.

In the new EP, the issue is picked up on by the Socialists and Democrats (S&D), who were expected to lose heavily in the election but suffer less than anticipated. Still, they see their overall result dropping below 20 per cent. This will mean that S&D will lose their ability to form a grand coalition with the EPP, diminishing their status as co-owner of the majority.

Subsequently, ALDE is invited to join the coalition promoting the party to one of the three co-deciders in setting the EP agenda.

Hard times for Central Europe

ALDE’s inclusion pushes the fraction towards an even more aggressive stance against rule of law violations. Hans Timmermans leading the S&D faction remains the standard-bearer of the rule of law procedure against the Polish and Hungarian governments and the key target of smear campaigns from Warsaw and Budapest.

Nevertheless, Timmermans proposes to tie the disbursement of EU structural and cohesion funds to the observance of the rule of law and the independence of judiciary calling for the withdrawal of judges placed in the Constitutional Courts and other courts as the result of the politicisation of the judicial system in Hungary and Poland.

Warsaw and Budapest refuse and frame the decision as blackmail. This would escalate the conflict further and Timmermans would become to be seen across the region as an EU bully.

Under this scenario, non-eurozone Central Europeans – Poland, Hungary and Czechia – will lose out both economically and strategically. The budget based on leftovers for non-eurozone members will be considerably less generous with major implications for the modernisation resources for these countries.

Even more painful will be their relegation to the periphery of Europe, with limited to no ability to influence the decision-making process at the core of the EU. For these countries, this amounts to nothing short of reversing their “return to Europe”.

Preying on the illiberals

An aggressive position on the issue is likely to be adopted by liberal ALDE, which is expected to be reinforced by Emmanuel Macron’s En Marche. Macron has positioned himself as the key critic of the rule of law violations in Poland and Hungary.

Adopting a critical position towards Central European members of the EU has also been helpful for Macron domestically.

French public opinion has always been sceptical of enlarging the EU to the East, and the prospect of a “Polish plumber” was one of the main factors why the French voters rejected European constitution in the referendum in 2005 (even though the constitution had nothing to do with the prospect of labour migration from the new entrants to the EU).  

Macron played the populist card of targeting industrial relocation to Central Europe and an EU directive on temporary workers from other EU countries (mostly Poland) during the presidential elections and shortly after.

With ALDE and S&D taking on a more robust stance against the governments of Poland, Hungary and Romania, the EPP will be pushed to follow suit. Several implications are likely to emerge from this scenario, of which the following are most important.

A crack in the foundations

In response, those marginalised unite or become tactically united on specific votes aiming at blocking EU processes, like the new EU Commission and budget; as a result, the eurozone countries consolidate politically within the EU and push towards establishing new eurozone institutions.

This leads to a separation of budgets and eventually the creation of a separate eurozone commission and a Parliament that has a scrutinising role on budgetary matters.

The eurozone countries – led by France – will resist the current situation in which non-eurozone states retain an influence on the eurozone matters through the existing institutions.

We have seen an early indication of this trend in some of President Macron’s existing and proposed initiatives. France’s support for the European defence initiatives was always conditioned by Paris’s preference for an exclusive nature of this policy.

French connection

In the past, France had a preference for creating an exclusive club based on capabilities, which would have included the UK and Poland. President Macron is clearly also favouring an exclusive method of European integration but his benchmarks are different: capabilities remain important but they are augmented by value-based elements.

Hence France has successfully pushed for the establishment of the European Intervention Initiative that excludes both Poland and Hungary (which Macron had criticised for departing from European values) whilst it includes Estonia, which is considered both capable in the defence field and comprised of “good” Europeans.

Macron’s recent proposal, in which he calls for a European Renaissance, is again focused on creating new institutions, such as the European Agency for the Protection of Democracy or the Council of Internal Security.

Macron has also proposed to develop a Defence and Security Treaty, which would contain a mutual defence clause. If these and other proposed by the French President were ever to come into being, it is most likely that he would seek to exclude Poland and Hungary – and perhaps other Central European states – that have had breaches to the rule of law and European values.

Pointedly, Macron’s proposal also includes provisions for the European minimum wage and tax harmonisation – both of which are clear disadvantages for lower-wage based Central European economies.  It would seem therefore that Macron would use the value argument to undermine economic competition from Central Europe and score some points domestically. It is likely that other Western European states would see the same logic and embrace Macron’s ideas.

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About:
Visegrad Insight 2 (14) 2019
European Parliamentary #Futures
Download the report 

Published by Res Publica Foundation
Partner: Konrad Adenauer Foundation
Supported by: ABTSHIELD

Authors:
Wojciech Przybylski, Editor-in-Chief
Marcin Zaborowski, Senior Associate

Team:
Magda Jakubowska, Director of Operations
Galan Dall, Managing Editor
Anhelina Pryimak, Editorial Assistant
Anna Kulikowska-Kasper, Contributor
Paweł Kuczyński, Illustrations
Rzeczyobrazkowe, Graphic Design