Monday, June 24, 2024

On the E.U.’s Principle of Unanimity: The Case of Hungary

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.