Hungary’s constitutional “revolution” : a major challenge to the European Union’s evolution towards a constitutional and political entity
Hungary is walking off the road of constitutional democracy, the rule of law and the protection of fundamental rights, which it has firmly endorsed since its transition in 1989 from one-party system to a democratic society with checks and balances. While this is a worrying phenomenon in itself, it constitutes a major challenge to the European Union’s evolution towards a constitutional and political entity. This blog will first, briefly sketch the main changes in the Hungarian constitutional system. Then, it will analyze the EU’s legal toolkit for such situations and its likely course of action vis-à-vis Hungary.
By Kati Cseres
Those who have been following the last three years’ legal and political developments in Hungary will have witnessed a reckless constitutional turmoil since the elections of 2010, when the Fidesz (Federation of Young Democrats–Hungarian Civic Alliance, centre-right Hungarian political party) – KDNP (Christian Democratic People’s Party) coalition took two-thirds of the seats in the Hungarian parliament. During the first year in office, the winning coalition used its constituent majority to amend the Hungarian Constitution twelve times.
The Hungarian Basic Law (Alaptörvény) took effect as of first of January, 2012 and replaced the Hungarian Constitution (Alkotmány) of 1989. The Basic Law was drafted by the Fidesz government in secret, the Parliament was given a month for debate and it was adopted by the Fidesz bloc without properly consulting either the opposition parties, civil society organizations or the general public. The process of preparing and adopting the new Basic Law in Hungary raised serious concerns regarding lack of transparency, openness and inclusiveness. The adoption of the Basic Law was the first step in a major transformation process which established a new constitutional and institutional framework in Hungary. This process has gradually abolished the system of checks and balances guaranteeing separation of powers and thus the core legal institutions of a democratic state based on the rule of law.
Following the adoption of the new constitution, a wide set of cardinal laws were enacted that significantly modified most democratic institutions and governmental bodies such as the Parliament, the Constitutional Court, the judiciary system, the public prosecution service, the data protection authority, local governments, and the central bank.
The cardinal laws
The independence of the ordinary judiciary has been compromised through lowering the retirement age and removing most senior and many Supreme Court judges. The European Court of Justice and the Hungarian Constitutional Court both found this sudden change of age retirement illegal. The reaction of the government was the creation of the National Judicial Office for selecting, disciplining and assigning the workload of judges, which again raises serious issues on the independence of the Hungarian judiciary.
Other democratic institutions were also weakened by cutting their staff and jurisdictions or their offices were filled with people loyal to the Fidesz government. The new Freedom of Information Act of July 2011, abolished the institution of the Commissioner on Data Protection and Freedom of Information and his office was absorbed in the government’s new National Agency for Data Protection. The EU Commission has launched an infringement procedure because EU law requires an independent data privacy officer.
The state audit office, the fiscal council, the central bank and the competition office are now all headed by Fidesz party loyalists with little relevant professional experience. The recent appointment of György Matolcsy as central bank governor is perhaps the most extreme example of the culmination of Hungary’s prime minister, Viktor Orbán’s, campaign to abolish the Hungarian system of checks and balances. The central bank’s new governor moved from being minister of the economy and he used his ministerial power to unilaterally change the rules for the central bank. Without the need for parliamentary approval or Court review, Matolcsy, as the Fidesz economics minister, gave the office of Matolcsy, the new central bank governor, dramatically increased powers just before he moved from one job to the next. At the end of last year the Commission has expressed its serious doubts about the compatibility of the Magyar Nemzeti Bank (Hungarian National Bank) bills with Article 130 of the Lisbon Treaty on the independence of the European Central Bank.
Furthermore, the freedom of media has attracted substantial attention with regard to the very powerful Media Board, which has a chair appointed directly by the prime minister and a membership that consists exclusively of members elected by the Fidesz parliamentary two-thirds, both for nine-year terms. The media council has draconian powers to levy bankrupting fines based on a review of the content of both public and private media, including broadcast, print and internet media.
The Fourth Amendment
Then on 11 March 2013 the Hungarian Parliament has adopted the Fourth Constitutional Amendment, a 9 page long amendment containing 22 Articles. The Fourth Amendment integrated into the text of the Basic Law all transitional provisions with the exception of the provision requiring electoral registration, which were previously annulled by the Constitutional Court of Hungary on 28 December 2012 (decision No 45/2012).
More importantly, it removed the Constitutional Court’s power to evaluate on substantive grounds new constitutional amendments and thus insulates the government and its legislation from constitutional review and allows it to implement controversial proposals directly into the constitution. This means that in the future the Hungarian Constitutional Court will not be able to review the substance of any constitutional amendment and the substantive compatibility of constitutional amendments with fundamental constitutional principles. As former president and the first president of the Hungarian Constitutional Court, Sólyom has said, following the adoption of the Fourth Constitutional Amendment the Hungarian Constitutional Court is no longer the supreme organ of constitutional protection” as the Hungarian Parliament will from now on have the right to modify the Basic Law as it wishes even in the case its constitutional modifications contradict other constitutional rules and principles.
The Fourth Amendment has also repealed 20 year of case law of the Constitutional Court, which was adopted before the entry into force of the Basic Law. In this regard it is worth recalling that several constitutional principles of Hungarian law are based solely on case law of the Court. For example, besides the obligations under international law, the domestic legal basis for the non-existence of the death penalty is decision 23/1990 of the Constitutional Court.
Reactions from the EU and beyond
These troubling constitutional developments raised criticism from various foreign governments, the US, Council of Europe and the EU Commission.
The first European Institution raising doubts on the compatibility of the new Hungarian Constitution with EU values has been the Legal Affairs Committee of the Council of Europe Assembly which asked a body of renowned constitutional experts (the “Venice Commission”) to analyze the new draft Constitution. The Venice Commission has issued two opinions, one requested by the Hungarian government before the text of the Basic Law became known and the second requested by the Monitoring Committee of the Parliamentary Assembly of the Council of Europe after the adoption of the Basic Law. 
Both the European Parliament and the European Commission have shown great interest in the constitutional developments of Hungary.
The European Parliament focuses its debates on political aspects and tries to highlight general positions as it has already done on Media Pluralism in Hungary. The European Parliament has condemned the Hungarian Media law in its resolution of 11 March 2011 and has adopted another resolution on the Hungarian Basic Law. Most recently the European Parliament has held a plenary debate on Hungary on 17th April, 2013.
The European Commission prefers to avoid political debates on general concepts such as the concept of “European values”. The Commission has intervened with regard to the Media Law which it considered not to respect EU law. It has launched a number of infringement procedures against Hungary over the independence of its central bank and data protection authorities as well as over measures affecting the judiciary.
Following the Fourth Amendment of the Hungarian Constitution on 11 March, the Head of the EU Commission, Mr Barroso, together with the Council of Europe Secretary General, Mr Jagland, issued a joint statement saying that the amendment raised concerns with respect to the principle of the rule of law, EU law and Council of Europe standards.
Hungary’s constitutional “revolution” is a notable challenge to the European Union’s evolution towards a constitutional and political entity and to its supranational constitutionalism. It is for the first time that an EU Member State so clearly violates the fundamental values and principles of democracy and the rule of law. It is for the first time that a serious breach of the European common values as laid down in Article 2 TEU is at stake.
Therefore, the question lawyers, politicians but also citizens ask and discuss today is: what can and will the EU do? What legal and political actions can the EU take?
And beyond these questions the Hungarian case tests the EU’s credibility and its commitment to democratic principles and fundamental rights vis-à-vis third countries. Can the EU demonstrate that it is based on a constitutional and political unity, that it takes European common values seriously and more importantly, that it is ready to sanction those Member States who clearly and persistently violate these rights and principles?
A Possible Mechanism
The European common values have formed an essential condition for becoming an EU Member as laid down now in Article 49 TEU and it is also an essential condition to preserve membership as confirmed by the specific procedure laid down in Article 7 TEU.
Article 7 contains the sanctioning and preventive mechanism against Member States’ violations of human rights in the Treaty on European Union. Sanctions were first introduced by the Treaty of Amsterdam and renewed and enhanced with a preventive mechanism in the Treaty of Nice, to be later confirmed without no changes in the Treaty of Lisbon.
Article 7(1) TEU grants the EU institutions the power to assess whether there is a clear risk of a serious breach of the common values referred to in Article 2 by a Member State, and to engage politically with the country concerned in order to prevent and redress violations. The purpose of the mechanisms laid down in Article 7(2) and (3) TEU is to penalise and remedy a serious and persistent breach of the common values.
Accordingly, the Hungarian case forms also a challenge to the use of the enhanced Article 7 (1) mechanism to demonstrate that it is a device which can be applied, when necessary.
This EU sanction mechanism for breaches of human rights was actually introduced as a result of the EU decision-makers concerns about the eastward enlargement of the EU. They believed that breaches of human rights would be more likely in the new EU countries with a past of undemocratic political systems and systematic violations of human rights. It was, therefore, ironic that the situation addressed by Article 7 first took place in one of the “old” Member States with long standing democracy: Austria. Austria was actually one of the Member States who actively argued for the adoption of Article 7 mechanism. In 2000 Austria came to be governed by a democratically elected coalition including the radically right-wing Freedom Party of Jörg Haider. While this political situation was not unique in Western Europe at that time, the other fourteen European governments took unilateral actions against Austria. While the unilateral sanctions did not last long they did have an important symbolic effect. The sanctions reinforced the image of a common European political identity and the “Haider” crisis has led to the inclusion of a new enhanced mechanism into Article 7. This is the early warning mechanism in Article 7 (1), which was seen as a strengthening of the Article 7 procedure.
The relevance of the preventive mechanism should be well-understood. It can be initiated by one-third of the Member States, or the Commission, or the European Parliament – so no consensus is required at the stage of the initiative, while the end-result of this procedure, namely a determination of a ‘clear risk of a serious breach’ of Article 2 principles requires a majority of four-fifths of the Council and consent of the European Parliament. As Sadurski has explained, even if one-third of Member States is unlikely to be motivated to act to initiate the procedure and if the Commission is unlikely to act, the European Parliament may be the forum in which a serious debate leading up to such a trigger may be launched.
Despite these facts, the sanctioning mechanism in Article 7 has never been activated and there is a certain political unwillingness to use it against Member States. This is due to the highly political nature of Article 7 and to the fact that its outer limits extends the competences of the EU. As the Commission’s 2003 Communication, which provided a number of factors relevant to the interpretation of the criteria laid down in Article 7, has formulated: ‘the scope of Article 7 is not confined to areas covered by Union law… Article 7 is horizontal and general in scope”.  This is a relevant issue as there is no general competence for the EU with regard to national rules concerning human rights except the mechanism laid down in Article 7.
In sum, the question is whether the political nature, the extensive scope of Article 7 and the intensity of the sanctions laid down therein would indeed make the application of Article 7 mechanism “catastrophic” in case of the present Hungarian developments.
While a comparison with the Austrian political situation of 2000 is not legitimate because the EU did not yet have the more flexible preventive mechanism to react to such situations, it could be illuminative. That time the political declarations of Jörg Haider triggered the adoption of the early warning mechanism in order to set the limits of what is politically acceptable within the Union. The same general ideological declaration of Article 7 and the European common values laid down in Article 2 might remain a dead letter without proper enforcement mechanism.
The dramatic Hungarian constitutional and legal developments might just illustrate the textbook case for a ‘a clear risk of a serious breach’ to apply the preventive mechanism or even ‘the existence of a serious and persistent breach’ of the EU’s common values for the sanctioning mechanism.
This would be a major step in the EU’s evolution towards a complete constitutional unity based on human rights and democracy in its Member States.
Dr. Kati Cseres is Associate Professor of law at Amsterdam Centre for European Law and Governance. Her personal page can be accessed here.
 European Parliament, Committee on Civil Liberties, Justice and Home Affairs, Working Document 2 on the situation of Fundamental Rights: standards and practices in Hungary (pursuant to the EP resolution of 16 February 2012) – Fundamental principles and fundamental rights, DT\906320EN.doc, PE492.609v01-00.
European Parliament, Committee on Civil Liberties, Justice and Home Affairs, Working Document 4 on the situation of Fundamental Rights: standards and practices in Hungary (pursuant to the EP resolution of 16 February 2012) – The principles of democracy and the rule of law, DT\923929EN.doc – PE502.278v01-00.
 The independence of data protection supervisors is enshrined in Article 16 of the Treaty on the Functioning of the European Union and Article 8 of the Charter of Fundamental Rights. European Commission v. Hungary, Case C-288/12. The Commission asked the CJEU to declare that Hungary failed to fulfil its obligations under Directive 95/46/EC on the protection of individuals with regard to the processing of personal data and on the free movement of such data by removing the data protection supervisor from office before time.
 Article 130 says that neither the ECB nor a national central bank, nor any member of their decision-making bodies, shall seek or take instructions from Union institutions, bodies, offices or agencies, from any government of a member state or from any other body.
 László Sólyom,”Separation of powers terminated in Hungary”,publishedinNépszabadság,11March2013, http://nol.hu/lap/forum/20130311a_hatalo… Mr Sólyom was the first president of the Hungarian Constitutional Court(1990-98) and President of the Republic(2005-10).
 European Parliament, Committee on Civil Liberties, Justice and Home Affairs, Working Document 4 on the situation of Fundamental Rights: standards and practices in Hungary (pursuant to the EP resolution of 16 February 2012) – Concluding remarks by the Rapporteur, DT\ 932303EN.doc- PE PE508.190v01-00.
See the analysis by Professor Kim Lane Scheppele, U.S. Commission on Security and Cooperation in Europe (Helsinki Commission) hearing, 19 March 2013.
 Opinion no. 621/2011. CDL-AD(2011)016.
 European Commission launches accelerated infringement proceedings against Hungary over the independence of its central bank and data protection authorities as well as over measures affecting the judiciary.
Reference: IP/12/24 Event Date: 17/01/2012