As of 2024, enlargement policy,
foreign affairs, taxation, and the budget was “bound by the principle of
unanimity,” which means that each state government has a veto in the European
Council.[1]
With 27 states, the E.U. could in effect be held hostage quite easily. Even in
the context of the Russian invasion of Ukraine, the state of Hungary was
blocking €55 billion in E.U. aid to Ukraine as of June 24, 2024, although revenue
from frozen Russian financial assets in the E.U. could be used (because Hungary
had not participated in the G7 decision) and Hungary had just reversed its veto
against further sanctions against Russia. However, the €1.4 billion from the
investment revenue pales in comparison and sanctions do not deliver desperately
needed military hardware to the besieged country.
That Hungary’s de facto pro-Russian
stance in E.U. foreign policy was contrary to the interest of the E.U. as a
whole can be discerned from S&P Global’s report at the time, which states, “The
geopolitical conflicts in the Middle East and Ukraine remain the main risks
weighing on our immediate economic outlook.”[2]
That the E.U. could ill-afford these foreign geopolitical headwinds
economically is clear also from the report, which also claims “that European
financial markets are too fragmented, too national, too expensive for issuers
and for retail investors.”[3]
The report then recommends that capital markets be federalized. What could
stand in the way of that is the same residual problem underlying the antiquated
principle of unanimity: namely, states’ rights, or, in European parlance, Euroskepticism,
which in turn is rooted in nationalism ideology. That in turn had been
responsible for so much war in the twentieth century. Indeed, the main rationale
of the Shuman Plan in the wake of World War II had been to stave off another war.
The European Coal and Steel Cooperative was intended to keep an eye on possible
German re-militarization. Whether intentionally or de facto, the E.U.
state of Hungary in 2024 was enabling Putin’s Russia and indirectly possibly
increasing the risk of war within the E.U. by allowing Putin to divide the
union.
That the E.U. had to go to the G7 decision to
spend the revenue on frozen Russian funds in order to go around the opposition
of Viktor Orban of Hungary is itself an indication that a “bug” was in the E.U.’s
“software.” That János Bóka, Hungary’s Minister for European Affairs, “made it
clear” that during Hungary’s presidency of the Council of Ministers during the
second half of 2024, Hungary “would not help Kyiv open any of the 35 chapters
that make up the six thematic clusters” of accession talks.[4]
Instead, accession talks of Baltic states would be encouraged. Whether
pro-Russian or anti-Ukrainian, the Hungarian state government’s use of its veto
and temporary presidency of the Council on the federal level seems to put the
interest of a part (of the union) above that of the whole.
That the E.U.’s supreme court,
the European Court of Justice, had recently found the state of Hungary guilty
of violating the E.U.’s basic law and ordered a significant fine be taken from
the state’s allocation of federal money may be a factor in the active use of the
state’s veto. At the very least, being fined by the E.U. put the state
government in a conflict of interest in obstructing federal foreign policy.
This is yet another reason why the E.U. could not afford the principle of
unanimity. More bad news. Unfortunately, even efforts to correct this problem
are fraught with a conflict of interest, as state governments would have to
agree to give up the power they enjoy under the principle. Even if retiring the
principle is in the interest of the whole (i.e., the E.U.), the political
interests of the parts are not likely to subordinate their respective interests
even for the good of the whole. Future enlargement of the union (which is not a
“bloc” because the union is permanent and based in law) would most likely
exacerbate the problems ensuing from putting the interest of a part, or the
parts, above the good of the whole. And as argued above, belligerent foreign
actors, such as Putin of Russia, could easily exploit this fundamental flaw in
the E.U. for their own interests.
Who, therefore, is there to stand up for the E.U.’s interest? Perhaps as E.U. citizens, rather than the states, elect the representatives of the European Parliament, the way out of this pretzel may be to transfer some of the Council’s power to the Parliament, or at least to give the latter chamber more power as a check against excesses by state officials acting in the Council, including the Council’s presidency. That is to say, perhaps the conflicts of interest and the over-heavy interests of the parts at the expense of the whole in the E.U. are indicative of a need for a shift in power not only from the states to the union, but also within the union’s government itself.
2. Idrabati Lahiri, “European Financial Markets ‘Too Fragmented,’ Warns S&P Global,” Euronews, June 24, 2024.
3. Ibid.
4. Jorge Liboreiro, “Ukraine Heading for Accession Impasse during Hungary’s EU Council Presidency.