EU Funds and Rule of Law: Can Hungary Follow Poland’s Path?

The Price of Democracy: Will Financial Incentives Actually Restore the Rule of Law?

For years, the European Union has used its most powerful tool—the purse strings—to combat democratic backsliding. The strategy is simple: freeze billions in subsidies until a member state restores judicial independence and respects the rule of law. But as we watch the current trajectories of Poland and Hungary, a critical question emerges: can money truly buy a functioning democracy, or does it merely reward political promises?

The current situation in Hungary, under the new leadership of Prime Minister Magyar, serves as a live experiment. Magyar has explicitly promised to reform the rule of law and return to EU values to unlock frozen funds. While his initial talks with European Commission President Von der Leyen were described as “constructive,” the shadow of the Polish experience looms large.

The Polish Cautionary Tale: When Funding Outpaces Reform

Poland provides a sobering lesson in the limitations of “conditionality.” When Prime Minister Tusk took power in 2023, Brussels moved quickly to release a large portion of frozen funds as initial reforms became visible. Suspended judges were reinstated and disciplinary systems were corrected.

However, critics argue this was a premature victory. Bartlomiej Przymusinski, a judge and chair of the organization Iustitia, suggests that Poland remains in a “deep crisis.” The core issue is that while the surface looks reformed, the deeper institutional roots of the previous PiS government remain entrenched.

The struggle is most evident in the Polish Constitutional Court. Here, a “judicial soap opera” is unfolding: President Nawrocki has refused to swear in several new judges, claiming their appointments are politicized. Meanwhile, the court’s chairman—a PiS loyalist—refuses to let those who took their oath in parliament operate, arguing they are not official judges.

As Przymusinski puts it, “In feite is dit een strijd om het Grondwettelijk Hof terug te krijgen,” describing the goal as establishing a court that defends citizens’ rights rather than serving as a political instrument.

Hungary vs. Poland: Different Paths to Restoration

While both nations face the challenge of democratic restoration, their paths are diverging due to two key structural differences:

• Legislative Power: Unlike the friction seen in Poland, Prime Minister Magyar is expected to hold a supermajority in the Hungarian parliament. This could allow him to push through sweeping reforms far more efficiently than the Tusk government.
• Executive Friction: In Poland, President Nawrocki continues to block legislation with his veto. In Hungary, the president holds significantly less power, potentially removing a major roadblock to the rule of law.

Future Trends: The Shift Toward “Plan B” Reforms

As the deadlock in Poland persists, we are seeing the emergence of “Plan B” strategies. When the official channels of appointment and swearing-in are blocked by a hostile presidency, governments are turning to unconventional methods—such as having judges take their oaths in parliament before a notary.

This trend suggests that the future of EU democratic restoration may not be a clean, linear process of “milestone $rightarrow$ payment.” Instead, it will be a messy, protracted struggle where governments must find creative legal loopholes to bypass institutional sabotage.

The EU now faces a dilemma: if it releases funds too slowly, it risks alienating a pro-EU government. If it releases them too quickly, it may signal that “milestones” are merely suggestions, encouraging future governments to offer superficial reforms in exchange for billions.

Frequently Asked Questions

Why does the EU freeze funds for member states?
The EU uses financial conditionality to ensure that member states adhere to the rule of law, specifically regarding judicial independence and the prevention of corruption, which are core EU values.

What is the main difference between the Polish and Hungarian judicial crises?
While both faced accusations of political influence over the courts, Hungary’s current leader has a stronger parliamentary majority and faces less presidential opposition than the government in Poland.

What are “milestones” in the context of EU subsidies?
Milestones are specific legal or institutional targets set by the European Commission (such as abolishing a disciplinary chamber for judges) that a country must achieve before frozen funds are released.