LUXEMBOURG ― Internal EU spats don’t get much bigger than the European Commission facing off in court against the European Parliament.
Played out during a three-hour hearing before 14 red-gowned judges in Luxembourg on Tuesday, the Court of Justice of the EU examined the Parliament’s allegations that the Commission broke its own rules when it unfroze funding to Hungary in December 2023. MEPs accuse officials of political expediency because the decision came on the eve of a crucial summit of EU leaders where the bloc was desperate for Hungarian Prime Minister Viktor Orbán to play ball on aid to Ukraine.
“The Commission rushed” the unblocking of EU funds, which it based on a “premature and incomplete” assessment of Hungary’s adherence to rule-of-law and judicial independence standards, the Parliament’s lead lawyer Richard Crowe told the court.
At the heart of the conflict ― and the key case law the court will produce when it issues a judgement ― is how much discretion the Commission has in assessing rule-of-law violations. Four lawyers from the Commission, backed in court by a lawyer from Hungary’s government, strongly defended its approach, arguing that its decision was based on detailed and objective legal analysis.
In the days after the decision, MEPs derided the move. It came just hours before a summit in Brussels at which Orbán dropped his objections to Ukraine’s EU membership talks and a €50 billion aid package for Kyiv. At the time, Katalin Cseh, a Hungarian MEP who opposes Orbán, told the Parliament the Commission was “selling out” EU values.
“The timing of the decision was not due to political consideration, but simply to the fact that the Commission, after a lengthy investigation procedure, which had already lasted several months, had no further grounds to prolong the procedure,” the Commission’s lead lawyer Bernd Martenczuk said.
Tamara Ćapeta, the advocate general assigned to the case, pressed both sides during the hearing and expressed skepticism about the Commission’s decision-making.
“I am still puzzled by the outcome,” Ćapeta said, questioning why the Commission had deemed judicial independence sufficiently restored to release one tranche of funds while keeping another €6.8 billion frozen under a separate conditionality mechanism that also deals with judicial independence and rule of law.
Ćapeta, who will issue a non-binding legal opinion on Feb. 12, also probed the Parliament’s accusation that the Commission had failed to publish a detailed assessment justifying its decision. Her opinion will help guide the Court’s final ruling, expected several months later.
Milestones
At the heart of the legal dispute is the interpretation of the Common Provisions Regulation (CPR) and its “Charter Conditionality,” which sets strict conditions — most notably, judicial independence — for the release of cohesion funds. The Parliament’s lawyers argued that the Commission should have taken a broader view of systemic rule-of-law deficiencies in Hungary, not just whether pre-established technical “milestones” had been formally met.
They argued the Commission had “turned a blind eye” toward Budapest’s controversial sovereignty protection bill, which was being discussed when the Commission unfroze the funds. Crowe also argued the Commission had ignored a bill passed in 2023 that intimidated judges to stop them from requesting assistance from the European court on how to apply EU law in Hungary.
Martenczuk dismissed the Parliament’s concerns over the sovereignty protection bill, saying that at the time of the decision there was no evidence the bill would undermine judicial independence. He characterized other objections raised by the Parliament as either speculative or irrelevant.
Hungarian government lawyer Miklós Zoltán Fehér emphasized the broader stakes: “This case raises general questions that will certainly have an impact on the future functioning of the EU budget and EU funds.”
EU airs dirty laundry in public as Parliament fights Commission in court
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