By Krisztina Than
BUDAPEST (Reuters) - Hungary's new justice minister warned Budapest will resist any European Commission effort to condition EU development funding to rule-of-law standards, which Brussels sees as being undermined by the nationalist Hungarian authorities.
Hungary under Prime Minister Viktor Orban since 2010 and its ally Poland have been at odds with the European executive for years over policies it says are eroding democratic checks and balances in the formerly Communist east of the EU.
In presenting her programme for the next five years, new Commission President Ursula von der Leyen, a German conservative, has stressed that respecting fundamental EU values would be at the heart of her policies.
The European Commission is working on making EU handouts conditional on respecting democratic rules.
Hungarian Justice Minister Judit Varga, sworn in earlier this month, told Reuters in an interview that the EU already had enough tools to safeguard the rule of law and the distribution of EU funding. Hungary and Poland are both big beneficiaries of billions of euros in development funds every year.
"We don't have to (re)invent the wheel," Varga, 38, said.
She cited the risk of a special clause in the EU's 2021-27 budget draft being used for political ends as the definition of "generalised deficiency" with respect the rule of law was vague.
"So my objective is to completely drop this proposal and we should also keep in mind that there is a package principle when we adopt the (EU budget) - nothing is agreed until everything is agreed. And this is a red line," Varga said.
The Commission proposal for conditioning development funding refers to a "widespread or recurrent practice, or omission, or measure by public authorities, which affects the rule of law."
Hungary could, in theory, refuse to approve the general budget outline unless it gets enough guarantees that there would be no special conditions attached to EU handouts. But the pressure on Budapest would be immense as any such move could hold up billions of euros of other funding for 2021-27.
Hungary and Poland's ruling nationalist party have tightened control over the media, academics, courts and advocacy groups, spurring European Parliament to launch an Article 7 legal process against both eastern EU countries.
The move could theoretically lead to the two countries losing their voting rights in the EU although in practice that is highly unlikely, as any actual sanctions would require unanimous support from all 28 member states.
Orban has said his Fidesz party's large majority in parliament entitled it to make changes in Hungary and his government was empowered by repeated election victories.
Varga denied Hungary was violating rule of law principles.
She also dismissed a proposal from the outgoing Commission that would introduce a regular rule of law review akin to the one Brussels already runs for member states' national budgets, saying it was "completely contrary to the treaties".
Varga, a lawyer who spent the past 9 years in Brussels, most lately as state secretary in charge of Hungary's EU relations, voiced hope the new Commission would "build bridges instead of making gaps" between member states.
"I do hope that we are at the beginning of a new era as regards the future behaviour of the Commission," she said.
ADVERTISEMENTDiplomats and officials told Reuters, however, that the new Commission would keep up pressure on Poland and Hungary over rule of law deficiencies.
Varga said member states had varying constitutional histories that required "a comparative vision...when it comes to the rule of law."
She also said Hungary still wanted to set up a new administrative court system sometime in the future, even though the government suspended the scheme in May.
It would involve new courts overseen by the justice minister to handle cases about government business, a move critics said could allow political interference in judicial matters.
Hungary had requested the Venice Commission, a European panel of constitutional law experts, to issue an opinion on the legislation and earlier this year amended the law incorporating those recommendations.
ADVERTISEMENTVarga said the plan had been shelved while the European Parliament's Article 7 procedure against Hungary was ongoing.
"We will get back to the issue later."
(Reporting by Krisztina Than; Editing by Mark Heinrich)