In 2022, European Union institutions entered a new phase in the fight over the rule of law in the EU.   Using three new laws enacted as part of the EU’s budgetary framework, the institutions froze virtually all funds that would otherwise have been sent to both Hungary and Poland (all except agricultural funds).  About €28 billion of EU funds are frozen for Hungary and about €110 billion are frozen for Poland.   Getting the funds to flow again requires that each Member State take concrete steps to improve judicial independence, fight corruption and honor the Charter of Fundamental Rights.  While the funding freezes are a giant step forward in the fight against rogue states inside the EU, the manner in which the funding freezes have been accomplished lacks transparency.  Moreover, the EU institutions may be satisfied with Potemkin change rather than serious reform.  We explain how this policy shift came about, assess its impact and propose improvements in the system of using fiscal pressure to generate change within Member States.

John Morijn is a professor of law and politics in international relations at the University of Groningen and a fellow in law and public policy at SPIA. He is also the chair of the Scientific Committee of the EU Fundamental Rights Agency. Between 2009-2018 he worked as a civil servant and diplomat for the Dutch Ministry of the Interior and the Dutch Permanent Representation to the EU, focusing on advise on rule of law, democracy and human rights issues.

Kim Lane Scheppele is the Laurance S. Rockefeller Professor of Sociology and International Affairs in School of Public and International Affairs and in the University Center for Human Values at Princeton University. He recent work has documented the rise of autocratic legalism first in Hungary and then in Poland within the European Union, as well as its spread around the world.  Her book Destroying Democracy by Law will be published by Harvard University Press in 2024. Scheppele is an elected member of the American Academy of Arts and Sciences and the International Academy of Comparative Law as well as the recipient of the Law and Society Association’s Kalven Prize for influential scholarship.