Orban Loses Top Court Challenge Over EU Sanctions Vote

(Bloomberg) -- Hungary lost a legal challenge to overturn a European Parliament vote that opened the way for a probe into the erosion of democratic standards under Prime Minister Viktor Orban’s rule.

The EU Court of Justice on Thursday dismissed Hungary’s challenge, saying the Parliament vote followed the correct procedures. The decision can’t be appealed.

The European Parliament in September 2018 adopted a proposal with a two-thirds majority that said Hungary posed “a clear risk of a serious breach” of principles including the rule of law.

The vote helped trigger the so-called Article 7 procedure into Hungary for allegedly undermining the rule of law, which technically could lead to the suspension of its EU voting rights. Hungary, along with Poland, are the only two nations currently subject to such a probe.

In reality, though, the threat from the procedure is marginal for both Hungary and Poland, since it takes the support of 26 of 27 member states to suspend voting rights. The governments in Budapest and Warsaw, close allies, have vowed to shield each other from such an outcome.

That’s partly what propelled EU leaders to agree last year on a new rule of law mechanism, which allows the EU executive to withhold funding from member states that flout its norms, especially if the bloc’s financial interests are deemed at risk. Only a qualified majority of EU member states need to agree for sanctions to kick in.

Vera Jourova, the European Commission vice president in charge of values, said this week the EU’s executive body plans to aggressively implement its sanctioning powers and may trigger the mechanism later this year. Countries that run afoul of the new rules stand to lose out on funds from the EU budget, including disbursements from a new 1.2 trillion-euro ($1.5 trillion) stimulus package.

In its Article 7 challenge, Hungary said the EU Parliament “seriously infringed” procedural rules during the voting session, arguing that if abstentions had been counted as well, the result would have been different. It also said doubts about the way votes were counted violated the principle of legal certainty, and that the democratic rights of the members of the European Parliament were infringed.

The case is: C-650/18, Hungary v. European Parliament.

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