Committee on Civil Liberties, Justice and Home Affairs – LIBE DRFMG Working Group Meeting
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LIBE European Parliament
Follow its sittingsAlessandro Nucara
The report also highlights a number of barriers related to cross-border investment protection. To further develop this dimension the questionnaire for the rule of law report has been supplemented with questions on single market related issues. The Commission has also to deepen its engagement with business stakeholders including in the context of the country visit. In addition we have developed our work in the Justice Scoreboard to improve data collection and comparative knowledge. For example we have presented Eurobarometer data included already since 2022 on the perceived level of investment protection, data on perceived independence of national competition and procurement authorities and information on certain aspects of structural independence of these regulatory authorities.
For example, terms of office of procurement bodies or appointment and dismissal of members of the boards of national competition authorities. To explore these areas, we cooperate closely with different services inside the Commission, highlighting the transversal and cross-cutting importance of this topic. It's also important to bear in mind that this process is carried out in complementarity with other workstreams such as the European Semester and the Single Market Scoreboard. There are also important infringement proceedings that clearly show the interconnection between internal market rules and respect for the rule of law or a lack thereof. This could notably be seen in the case of Hungary regarding discriminatory measures that particularly affect foreign companies.
Before I conclude, let me give you an outlook of what's coming up, at least from the Commission perspective. As you may know, in the Commission's proposal for the next EU long-term budget, the report and its recommendations will play an important role to help ensuring that strong safeguards are in place for the protection of the Union's budget. In particular, we have proposed that new national and regional partnership plans address challenges identified in the Rule of Law Report. Moreover, the report will also be one of the sources of information for the Commission's assessment of Member States' respect of the horizontal conditions related to the rule of law and the Charter of Fundamental Rights. The single market focus of the Rule of Law Report together with the European Semester will help indeed Member States identify rule of law reforms to be supported in their national plans that are economically relevant.
This can include also certain measures that were included in recovery and resilience plans and were not fully implemented yet. To conclude, all of this underlines more than ever that we need a strong rule of law for a strong single market, and I look forward to listening to the other speakers' intervention and to our discussion afterwards. Thank you very much.
Veronika Cifrová Ostrihoňová
Thanks a lot to Mr. Nukara. And we will now have the intervention by Ms. Annemie Turtelboom, who's the member and Dean of Chamber II, Investment for Cohesion, Growth and Inclusion of the European Court of Auditors. She will also intervene remotely for seven minutes. Welcome.
Annemie TURTELBOOM
Thank you very much, Madam Chair, and also for me apologies that I can't be in Brussels, but I also have back-to-back meetings here in Luxembourg, so but very happy that I can participate remotely. Now you can wonder why something, what is the relation between the rule of law and the European Court of Auditors, and actually that is quite a simple answer. We are the guardians of the EU finances, and we check the EU budget for errors. And that money is being spent correctly depends on the rules being followed. Where rules are not followed or are arbitrary or unbalanced, that means money may be spent wrongly, and that has an impact on the EU finances.
And as you can see on the next slide, on the on the graph, you can see that actually the situation of the rule of law is quite dependent depending on the Member State.
So, the Court of Auditors' role in this context is to assess how the Commission performed its role as the executive, as the guardian of the treaties, as the initiator of legislation, as a performance audit in accordance with the principles of economy, efficiency, and effectiveness. And that's what we did in our 2024 special report that we published on the Commission's new framework for protecting the rule of law, which will form an important part of my points today. And we all know that Draghi noted in the report on the EU competitiveness that was also published in 2024 that the EU's approach has delivered outstanding outcomes in terms of governance and that, of the world's ten top-scoring countries for the application of the rule of law, eight are EU member states. So, we do have very high standards for the rule of law in the EU, but that does not mean that we cannot backslide, and it does not mean that those standards are universal across all the member states. So, in our rule of law special report last year, we noted that indicators showed that the rule of law situation in some member states has deteriorated over the past decade, and the Commissioner and the President of the Commission has constantly said that the EU needs to complete the single market.
Now, completing that single market means also that the member states are agreeing on mutual rules, but how can you do that when the rule of law is not in place? So, the foundation of the single market is a functioning of a rule of law environment. So, in a paper that we published in 2018 on EU competitiveness enforcement, we also emphasized that fair competition on equal terms is essential for the single market to function properly. Now, this single market only works if rules are consistent, predictable, and as you can see on the next slide, and are trusted across all the member states. Now, businesses rely on knowing that the same principle applies everywhere, that they will be treated fairly, that decisions will be predictable, and that enforcement will be impartial.
Now, as you may know, the Commission published a rule of law annual report on the situation in all the member states, and the Court published a review on this reporting in 2024. Now, meanwhile, I note that in the latest edition, the Commission introduced for the first time a single market dimension, recognizing in its communication that the rule of law is an essential precondition for a stable and predictable economic environment, giving the EU and its member states a global competitive edge. And that is exactly right, competitiveness depends on trust, on courts that are fair and efficient, on administrations that act impartially, and on companies that can operate across borders on a level playing field. Now, what you can see is that we published two years ago a report on public procurement in the EU, and we found that competition for public contracts has declined over the past decades, and all indicators are deteriorating. Many authorities continue to rely heavily on direct award, where contracts are awarded without a bidding procedure, and every rate above 10% is considered a red flag, and we found that 23 out of 27 member states were above this threshold.
The single bidding rate across the EU single market increased significantly from 23% as you see on the slide to 48.1% of all procedures. And at the same time, the number of bidders per procedure almost halved, decreasing from an average of 5.7 bidders to 3.2 bidders per procedure. And of course, it goes without saying that such trends are worrying. They weaken trust, they reduce efficiency, they increase the risk of mismanagement of EU funds, and this is why continuous effects are needed across all the Member States to make procurement truly open and competitive. Now, going back to our special report of 2024, we looked at how the European Commission used three tools: the 2020 conditionality regulation for the protection of the EU budget against breaches of the rule of law, certain RRF milestones such as in the case of Hungary the setting up of an integrity authority and in Poland the entry into force of a reform strengthening the independence and impartiality of the courts, and the horizontal enabling conditions on the Charter of Fundamental Rights including in the CPR.
And when there is a tender, the average number of bids fell and the share of single bidding procedures increased.
And as you can see on the next slide, there was that different stage approach by saying how you can go, this is on looking at the toolbox, how you can go from strengthening from breaches in the rule of law in the different stages till the last stage where the Commission where they started a procedure and actually back then the Commission only started it for Hungary. Now, on my next slide, I will tell you what were our key messages. The first message of our report was that the new Commission instruments represent a clear step forward. Previously, the EU relied mainly on infringement procedures and on Article 7, but both procedures to be fair were very lengthy and hard to apply. The new tools, they allow to act faster, more preventive by linking the EU funding to the rule of law compliance.
But we still said and that was our second finding that there is a lack of clear criteria and documentation and that may undermine the consistency and the transparency of the process among across all the Member States. And third, when applied the financial impact of these measures, that remains actually quite limited. Most of the suspended money concerned future payments and meanwhile advanced funds continued. In the shorter term, real effect include reduced access to EU programs such as Erasmus, consequences likely felt more by citizens than by governments. Our fourth message was that there is a risk of a box-ticking exercise, which means that reforms might be reversed once funds are released, and so that new problems may arise in other areas since unblocking of funds is easier than suspending them, long-term monitoring is really essential.
And our fifth recommendation was or finding was that actually there is a risk of political interference, that that remains a concern and that decisions should rely on legal and technical criteria, yet often they coincide with political negotiations and of course such bargaining can weaken the effect or the good effect of the entire system. Now, on the next slide, we also took a look during in one of our opinions on the European fund because there is the proposal of the Commission for the 2028-2034 European budget.
With regard to the rule of law, we noted really an improvement which partially addresses concerns we previously expressed. On the one hand, new provisions may result in the definitive loss of EU funding for the member states, but at the same time, funding that is lost may be redeployed by the Commission for the benefit of the EU citizens. But we also raised some concerns about the proposal. Most importantly, the proposal does not change the overall picture. The main risks we identified in our report will remain, such as the risk of the box-ticking, the reversal, or the political interference.
And this brings me, Madam Chair, to my conclusion, that in the light of current geopolitical tensions, the importance of stability and predictability of a strong rule of law environment gives is becoming even clearer. To conclude, the rule of law is not only a legal or an abstract ideal, it's a core European value enshrined in Article 2 of the Treaty, and it is also a core economic asset. When the rule of law falters, confidence in the European project suffers, competition becomes distorted, and the single market's integrity erodes. That's why reinforcing government's transparency and accountability is not a bureaucratic exercise, and even also a responsibility to audit for the European Court of Auditors, because it's the foundation of a strong, fair, and competitive Europe. So by upholding these principles, we ensure that public money is well spent, that markets remain open and fair, and that trust in the single market endures.
I will leave it here, Madam Chair, and of course I'm very much looking forward to the Q&A session after the intervention. Thank you very much for listening.
Veronika Cifrová Ostrihoňová
Thanks a lot to you for a comprehensive overview. I'm sure we'll have some questions later on. And now we have the next speaker, who's Mrs. Christa Schweng. She's from the permanent group on fundamental rights and the rule of law of the Economic and Social Committee. She will also intervene remotely for seven minutes.
Ms. Schweng, you are invited to share the EESC's views on the topic, drawing on its work as well as on your role as a member of the EESC's permanent group on fundamental rights and the rule of law, and as rapporteur of the EESC opinion on the economic dimension of the rule of law, which you adopted on April 30th, 2025. You now have the floor for seven minutes. Thank you for being with us.
Christa Schweng
Thank you very much, Mrs. President, honorable members of the European Parliament, ladies and gentlemen. First of all, let me thank you for the opportunity to speak today and to share the perspective of the European Economic and Social Committee on the economic dimension of the rule of law. Mrs. Stöltel-Baum just said it, the economic dimension is not just an abstract concept, but is indeed the foundation of a well-functioning European economic society. For those who are unfamiliar with the EESC, we are an advisory body representing roughly around 90 million employers, workers, and civil society organizations from all walks of life across the European Union. Our role is to advise the European institutions and member states through what we call opinions, and since 2018, we have a specific group in place dedicated to questions connected to fundamental rights and the rule of law.
Today I would like to focus on why the rule of law is not just a legal or political concept, but a crucial economic factor. As we all know, the values of the European Union are enshrined in Article 2. It's respect for human dignity, freedom, democracy, equality, the rule of law, the respect for human rights. And these values are the backbones of a society built on pluralism, non-discrimination, tolerance, justice, and solidarity.
The rule of law requires that public authorities act within the boundaries set by law, in accordance with democratic values and under the control of independent and impartial courts. And respecting and enforcing fundamental rights and the rule of law are essential for mutual trust between Member States. But beyond that, the rule of law is a key prerequisite for economic activity and the location's attractiveness to businesses. Investment and trade within the internal market can only flourish if all economic actors can rely on legal certainty and fair competition. The ESC has repeatedly emphasized that respect for the rule of law ensures a level playing field for business initiatives, innovation, investment, and fair competition, which benefits both enterprises and citizens.
Unfortunately, we see numerous examples where the rule of law is undermined with direct negative consequences for the economy. Let me give you just some of these examples. Special taxes are introduced that in practice only affect foreign investors. National creditors and suppliers of systemic importance are favored over foreign companies, violating principles on equal treatment and legal certainty. Authorizations for foreign investors are withdrawn after projects are completed, threatening investments and undermining legitimate expectations.
Large fines are imposed for minor infringements, while the suspensive effect of appeal is abolished in certain sectors. Takeovers are prohibited at short notice by emergency decrees. And foreign companies are disadvantaged in public tenders for raw materials. Export bans are imposed and then withdrawn before review. Price caps are set only for companies above a certain turnover, typically affecting foreign firms.
And tax laws targeting foreign companies are enacted retroactively. And such practices erode trust in the internal market and create uncertainty for businesses operating across borders. Quite some of these cases have a connection with the previous Hungarian government. And some of these practices, unlawfully collected taxes in mining royalties and carbon dioxide quota taxes, both of which the EU Court on Justice ruled must be refunded. Abolishing other practices which counter the rule of law is slower due to the fact that the Magyar government has inherited a huge budget deficit.
Another major issue is the slow pace of legal proceedings. Tools like SOLVIT and infringement procedures often take up to 49 months, which is much longer than the European Commission's own benchmark of 36 months. In reality, it can take years for complaints to be resolved, which means that businesses, workers, and consumers are often unable to reinforce their rights. Moreover, complaints sometimes come to nothing because states simply rescind the law in question, leaving no legal base for compensation or further action. And this undermines the credibility of the whole system.
Moreover, companies, complaints sometimes come to, no, sorry for this. Corruption and impunity for unlawful acts continue to undermine the rule of law throughout the internal market. Even when legislation exists, its uneven application allows some actors to disregard legal norms without consequence.
It is crucial to strengthen monitoring and enforcement mechanisms to ensure that those who break the rules are held accountable. And this is especially important in areas like tax avoidance and the circumvention of social rights through letterbox companies. We as EESC strongly advocate for the economic dimension of the rule of law to be more prominently reflected in the European Commission's annual rule of law report. Ideally, as a separate fifth pillar. Only then can the challenges faced by businesses, especially small and medium-sized enterprises operating across borders, be properly addressed.
Furthermore, existing enforcement measures and instruments must be accelerated and the independence of the judiciary as well as resources for public services must be strengthened. The rule of law is the backbone of our internal market and the European economy. It guarantees fair competition, protects investments and strengthens trust in European institutions. We need to reinforce the economic dimension of the rule of law and better protect the cross-border investment for the benefit of businesses, workers, and citizens across Europe. Thank you very much, looking forward to the Q and A session.
Veronika Cifrová Ostrihoňová
Thanks to you, Mrs. Schweng, and now I open the floor to the members for a round of questions. Please indicate who your question is directed to. I'm looking at Mr. Freund. I guess he would like to take the floor, Mr. Freund.
Daniel Freund
Yes, and sorry for being a bit late, I still had to vote in another committee. I think, I mean, what I would like to hear, and I'm not sure who of the expert is best placed, but you know, now that we have a new government in Hungary, a bit more details about how much has actually changed for business. I have, as part of different other committees, I mean, when we visited Hungary with the budget control committee, we had a lengthy exchange with different companies that described the bullying, the constant checks through all kinds of different administrations, the special taxes that were also just mentioned. And is this now all gone and all is peachy? Or where do we still see that certain things remain?
Because as far as I'm aware, for example, the mining royalties for cement makers, as far as I'm aware, have not been lifted. But if I could hear a bit more on this, as far as the expert know, that would be very interesting. Thank you.
Veronika Cifrová Ostrihoňová
Thank you, Mr. Freund. I think we can start with the European Commission, with Mr. Nokara, if he wants to take the floor and maybe have a shot at the answer.
Alessandro Nucara
Thanks a lot. I'm told that I need to speak more slowly for the interpreters, so I will try to do that. So, thanks for the question. I think it's, in general terms, I think it's a bit early to say what the impact of the measures that have already been taken and that will be taken also in the coming months by the new Hungarian government. What is the impact on businesses?
We do believe that there is certainly a change of landscape, not least for the many reforms that have been already adopted in Hungary in the last couple of months. Maybe I can say something about the mining fee that was mentioned in particular.
As far as we are aware, the new government is not collecting anymore that fee since June 2026. However, there is indeed a pending, well there is indeed a judgment of the Court of Justice and the Commission in July of this year still called on Hungary to comply with the judgment. So for if you want for practical effects, we understand that the fee is not being collected anymore by this government, but of course the requirements are that this fee is legally abolished and not just from a de facto perspective not collected. So that is on the mining fee. On other issues, we do have again judgments of the Court of Justice, including pending proceedings under Article 260, for example, in relation to measures on exports of raw materials and construction materials, or as regards a retail tax regime, we have also a pending infringement.
So this year 2026, the Commission was indeed active in infringement cases related to all these measures that affect businesses. So that's I think as much as I can go in reply to this question.
Daniel Freund
If I can follow up, I mean on this experience that we've had now with this Hungarian case, and I have to admit as well, I mean I have talked to these companies for years. I felt a lot of hesitation on the part of companies to go public on these cases because they felt, you know, it might make their relationship with the previous government even worse. And I mean, if we take the mining royalty just as an example, I mean as far as I'm aware, the companies have early on contacted the Commission and seeked help in this. But it's sort of, I mean, if you lose a million euros per month and then the Commission first takes six months to assess, and then they write the first letter to the government, and then it takes a couple of months for the Hungarian government to reply, and then the Commission decides for three months whether they take this to court, and then we all know that a normal court proceeding at the ECJ how long that takes, and then finally it's established, and then the next day the Hungarian government adopts a law that changes the legal basis that was... I mean, what I'm saying is in a case like that, which luckily now is over, but you know, not every company, not every entrepreneur can afford or has the pockets to just, you know, survive a situation like that.
And I'm wondering, has the Commission started any kind of reflection on how we can speed up these kind of procedures to make sure, you know, that companies are not just pushed into bankruptcy, you know, while they're waiting for the legal situation to clear up, and sometimes as I said, this never arrives. So how can we make sure that companies in our single market are actually protected even in cases where we have such hostile governments that themselves try to take over these companies or their allies and friends are doing that?
Veronika Cifrová Ostrihoňová
Thank you. So Mr. Nukara, maybe announced on your side for the lessons forward, just to sum it up.
Alessandro Nucara
Well, I think what I can say is that infringement proceedings are well established and sometimes it is possible to speed them up, sometimes it is not possible because of the complexity of the assessment, because the case once it is launched and it reaches the Court of Justice, it's in a way outside the hands of the Commission. So if the Court of Justice then takes a year, two years to reach the judgment, and as you know, before we can actually, how can I say, impose penalties and propose that the Court of Justice imposes penalties, we first need a judgment, then we need a non-implementation of the judgment, and then we can bring the Member State to court under Article 260. So all of that the Commission does and is well aware of the problems that some companies face because of these issues. I'm not sure what I can say actually on the future. The procedures are there, are well established, there are many, many infringement cases on all areas of EU law.
So that's, I think there are necessary times for the assessment of a complaint that can be very complex, can involve many parties to the administrative procedure. So I'm not sure how far I can actually, certainly I cannot promise that in one or the other case this will go faster.
Veronika Cifrová Ostrihoňová
Thank you, Mr. Nukara. So if there are no other questions from Mr. Freund, I'll add my own. So I think it is very good that we have experts looking at the issue of the rule of law in a slightly different angle and from a different perspective. So I will use the opportunity to pick your brains today. We have a little bit of time, so I would like to hear from all three of our guests pertaining to the debate we are having in the Member States, and also in my Member State, to be honest, in Slovakia.
And my question is, how does the questioning or fragmentation of EU law primacy by national constitutional amendments, as we've seen in Slovakia by the Article 7 of the Slovak Constitution, which prompted really the European Commission to start an infringement procedure that cites breaches of primacy, autonomy, and uniform application of EU law, how does this directly impact cross-border business operations, contract enforcement, and the level playing field across the internal market that we've been talking about here for the last few minutes? And then I have a very short, although probably quite a complex question for Mr. Oertelbaum. You said that all the sanctions are still in your recommendations, your conclusions, are felt more by citizens than by the governments. How to change this? How to do it better?
How to do it in a different way? How to do it more effectively so that we don't come across the problem that when it comes to sanctions or to infringements to stopping funds, it is really felt by more by the citizens, not really by the governments. Thank you, and we can start with the European Commission with Mr. Nukara.
Alessandro Nucara
As you mentioned on primacy of EU law for Slovakia, we have a pending infringement case, so I cannot comment on the pending infringement case. I can give you my personal opinion of whether these issues affect the business environment. And I think also from what I mentioned in my intervention, an efficient justice system, which includes also the respect of fundamental principles as primacy of EU law, does have an impact on business environment and business investment decisions.
So from my point of view, yes, it is important to respect also these fundamental principles in order to have a business environment which is stable and predictable, which is needed for businesses.
Annemie TURTELBOOM
Hi. Okay. Yes. Voilà. Okay.
So indeed, if you I referred in my intervention also to the new proposal of the Commission for the new MFF and where there is written and where we clearly state that actually it is an improvement because the funds can be for the new okay, it depends of course what will be the final outcome of the negotiations at a certain moment and that is we said that there will be an improvement because it on the one hand new provisions may result in a definitive loss of EU funding for the Member States which can avoid that actually you block funds then you unblock funds after a political bargaining, but at the same time and that is quite important and actually partially an answer to your question is that funding that is lost may be redeployed by the Commission for the benefit of the EU citizens and that is I think something that because the citizens might not agree with their government that is actually violating the rule of law and therefore funds are blocked. So I think there is quite some potential in the new MFF and the new proposal of the MFF to address that question and to give an answer to that concern.
Christa Schweng
Thank you very much. I think indeed if you have if the the primacy of EU law is broken, then trust between Member States is broken and that means bad conditions for mutual investment and that means lack of confidence. And if you have lack of confidence, how will you continue to work together? Thank you.
Veronika Cifrová Ostrihoňová
Thank you very much. Do we have any more questions from the side of our members? I think not. Now, no. So with this being said, we are a bit of ahead of time but we can take a little break.
So thank you to all our speakers that were connected remotely. I would please ask you to leave the room and disconnect online and as this meeting is webstreamed you are most welcome to follow it online. Thank you so very much. Have a good rest of the day. And now I can hand it over to my co-chair who arrived in the meantime, Michal Wawrykiewicz, who will take over for the second part of the session.
But we still have a few minutes probably for for our guests to arrive so maybe a little break is in order. But Michal I leave it in your capable hands.
Speaker 10
Thank you very much, Veronika. So we'll have a short break until the beginning of next session.
Michał Wawrykiewicz
Okay, ladies and gentlemen, we'll start next session of today's meeting. This is the exchange of views on the single market and the rule of law, building trust, ensuring fairness, business, civil society, and academic perspective. So, we'll now move to the exchange of views which will allow us to engage directly with business, civil society, and academic and their perspective. So I will start giving the floor to Mr. Federico Martins, head of the single market Eurochambres, Association of European Chambers of Commerce and Industry, who is here in the room. So, Mr. Martins, it would be interesting to hear from you the views of the Association of European Chambers of Commerce and Industry on the topic, drawing on its expertise and activity.
So I am giving the floor to you, Mr. Martins. Thank you.
Frederico Martins
Thank you very much. I hope you can all hear me. So, I'm representing Eurochambres, the European Federation of Chambers of Commerce and Industry. We have over 40 members, most of them are from member states, but we also have members from the neighboring and enlargement region. So we have the Balkans, Ukrainian chamber, Turkish chamber.
And I wanted to highlight this because to show the importance that business support organizations such as ours, but also other types of organizations, the way that they uphold and contribute to the rule of law in countries that are doing their best towards achieving and finalizing the chapters regarding the acquis. A lot has been said about how important the rule of law is for businesses. It's an economic asset for Europe, a fair competition. I was writing down the notes in the previous session. And I would actually like to say that we really appreciate that the European Commission decided to include the single market dimension in the rule of law report.
There are aspects that matter to businesses, such as the reduction of organized crime, matters related to public procurement, the fight against corruption. And actually, this is an area that Chambers of Commerce have been working extensively throughout the years. There are projects that I would actually be very happy to share with MEPs and everybody around the room on tools that we developed for SMEs particularly, codes of conduct that companies need to abide by regarding corruption, bribery, discrimination, transparency. And we also consider the rule of law report as part of a wider body of evidence that the European Commission works on and matters a lot to us, namely the annual single market and competitiveness report, the single market scoreboard, the European Semester has been mentioned before. But we are quite alarmed with the lack of integration, especially in the free movement of goods and services.
For instance, matters that KPIs that matter I think for this discussion: the ease of regulatory compliance, stagnant; conformity deficit, decreased; length of standard setting procedures, decreased; trade restrictiveness index, stagnant. So, yeah, this is alarming for for businesses, and I'm happy to discuss about about this if you so wish. Specific concerns regarding the rule of law report. I think we we need to reflect on the lack of effective enforcement of European legislation because this puts businesses at risk because of the lack of level playing field. There are areas which I think are very we should be looking closely to: data protection, market surveillance.
There is ample evidence that we have reached a plateau in single market integration.
Also, I would like to highlight the frequent legislative changes that happened in national parliaments or the non-notification of laws by certain member states that often lead to gold plating, which is a I would almost say an abusive practice from from our point of view. And this erodes the fundamental rule of law principle. And since member states are sort of hiding controversial national measures inside the transposition, for instance, of directives, they are bypassing proper parliamentary discussions and public scrutiny. And I think this touches upon the question on institutional checks and balances that is faltering. I was also a bit surprised, I've always been a bit surprised, but this the last edition, that there is an absence of reference to SMEs in the report and the impact that the rule of law or the lack thereof when it comes to SMEs' interests.
Now, what could be done? And I think this is a long discussion that we can have, what how MEPs could contribute, how the Commission, Council representatives. I think that it's important that everybody does their job when it comes to correctly implementing and enforcing single market rules. We discussed previously about the MFF. Maybe guarantee that from the operational side, national authorities and the European Union has the the the professionals in place to monitor and enforce European legislation.
Another aspect that is mentioned in the rule of law report but should be I think strengthened is the reflection and strengthening the use of alternative dispute resolutions. There are many we could speak about conciliation, arbitration, mediation. And despite the legal framework that is already in place and that provides a baseline for all member states, the fact of the matter is that it's still very much underutilized, especially in some member states where litigation is a lengthy, problematic, and costly. I'm Portuguese, in Portugal it's a nightmare. So it would be very good if we could strengthen dispute resolution through alternative means.
And a last point that I would like to highlight, a bit more general, is it is essential for European institutions and I think to the Parliament in particular to examine whether the recent slowdown, as I mentioned, of the free movement of goods and services could be linked to deficiencies in in the rule of law. Because cross-border trade depends extensively on mutual trust among member states and authorities. Maybe there is a case for more analysis, maybe the EPRS could jump in and do this refinement in terms of the information that needs to be gathered. But I'd be very very happy to liaise with MEPs and other organizations around the table. Thank you.
Michał Wawrykiewicz
Thank you very much, Mr. Martins. And now we'll move to Mr. Adrian Stadnitski, who should be with us remotely, regional director of Central and Eastern Europe at the German Eastern Business Association. And he will intervene for the next seven minutes. We welcome your organization's insight into this matter. So I'm giving you the floor, Mr. Stadnitski.
Hervé Stadnitzky
Hervé-Kevič, vielen Dank. So I hope the translation is working. Viele Grüße aus Berlin. Ich bin heute zugeschaltet. Ich konnte leider nicht nach Brüssel kommen.
Ich arbeite beim Ost-Ausschuss der Deutschen Wirtschaft. Der Ost-Ausschuss ist eine Regionalinitiative der deutschen Wirtschaft mit dem Schwerpunkt Mittel- und Osteuropa. Und ich werde heute ein bisschen über die Case Study Ungarn berichten. Herr Freund hat es ja schon angesprochen. Zum Einstieg ein paar Fakten.
Als Einheit betrachtet ist die Visegrád-Gruppe der wichtigste Handelspartner Deutschlands, also vor China und auch vor den USA. Der Handel Deutschlands mit der Visegrád-Gruppe umfasst 400 Milliarden Euro. Der Handel mit den USA beläuft sich auf 250 Milliarden Euro. Warum sage ich das eingangs? Ich möchte einfach unterstreichen, was für ein großer Gewinn die EU-Osterweiterung 2004 für Deutschland und auch für die deutsche Wirtschaft und deutsche Unternehmen war.
Und ich glaube, wir stimmen alle darüber ein, wenn wir sagen, der Binnenmarkt war neben dem Frieden eine unserer größten Errungenschaften in Europa. Der Grund für diesen Booster seit der EU-Osterweiterung in der wirtschaftlichen Zusammenarbeit mit den Ländern der Visegrád-Gruppe ist, ich glaube, man kann das runterbrechen, die Rechtssicherheit für die deutschen Firmen, also die Zugehörigkeit zum Binnenmarkt, einfach dieses Add-on, was Rechtssicherheit angeht. Und jetzt zur Case Study Ungarn. Also während der Orbán-Regierung haben sich Tendenzen gezeigt, die uns große Sorgen bereitet haben. Denn die Regierung, also die frühere ungarische Regierung, hat Investoren, also ausländische Investoren, unterteilt in gute und schlechte Investoren und hat dabei die Unterscheidung getroffen: Zu den guten Investoren gehörte das produzierende und exportierende Gewerbe, also Maschinenbau und Automotives, wir kennen das alles.
Und zu den schlechten Investoren, die wurden in die strategischen Branchen zusammengefasst. Zu diesen Sektoren zählten eingangs Energie, Banken, Telekom, Medien, der Einzelhandel, später auch die Kreislaufwirtschaft, die Infrastruktur und auch Baustoffe. Also ich habe einige aufgezählt. Was ich sagen will, es ist immer mehr geworden. Irgendwann konnte man die Linie auch nicht mehr richtig ziehen: Gehöre ich jetzt zu den Guten oder zu den Schlechten?
Und falls Sie aber als Unternehmen zu den schlechten Sektoren gehören, hatten Sie mit mehreren Dingen zu kämpfen. Also im Prinzip wurden Sie von der Regierung schikaniert, schikaniert und nochmals schikaniert. Und wir haben hier auch eine Arbeitsgruppe gebildet, wo wir uns mit den betroffenen Firmen ausgetauscht haben. Und wir haben festgestellt, dass es in diesen Sektoren sektorspezifische Sondersteuern gab, also gerade im Bereich Baustoffe oder Lebensmitteleinzelhandel. Sie haben als Unternehmen auch keine neuen Genehmigungen mehr erhalten, also Sie konnten Ihr Business nicht mehr ausbauen.
Dann mussten Sie mit immer neuen Wellen von Regulierungen kämpfen. Es gab vermehrt Kontrollen. Und am Ende kam jemand und hat Sie gefragt, ob Sie Ihr Unternehmen nicht verkaufen möchten. Also ich glaube, wir sind uns alle einig, das ist nicht im Sinne des Binnenmarktes. Und als Ergebnis lässt sich festhalten, dass unter der früheren ungarischen Regierung ausländische Unternehmen in den strategischen Sektoren systematisch diskriminiert wurden.
Und die Rechtssicherheit und Investitionssicherheit war für diese Unternehmen in Ungarn, und das heißt natürlich auch in der Europäischen Union, nicht mehr gegeben. Also wir haben hier intern auch viel mit Kollegen gesprochen. Und im europäischen Binnenmarkt sollte sowas ja eigentlich nicht möglich sein.
Der Binnenmarkt wurde ja für den Best Case geschaffen, also Kooperation, Ausbau der wirtschaftlichen Zusammenarbeit, das was ich eingangs beschrieben habe. Und jetzt ist aber in einem Land der Worst Case eingetreten. Also es gibt ja Möglichkeiten, die die Kommission hat. Wir haben auch den Kontakt mit der Kommission gesucht, mit der Bundesregierung, auch mit Herrn Freund und anderen hilfreichen Parlamentariern im Europaparlament. Und die Vertragsverletzungsverfahren sind langwierig, aber haben letztendlich auch einen starken und guten Effekt gehabt.
Und uns war es wichtig, wir sind auch einmal mit Delegation nach Brüssel gekommen mit den betroffenen Unternehmen, um Gespräche zu führen, allerdings alles natürlich sehr vertraulich, weil kein Unternehmen sich da auch äußern und exponieren möchte. Genau. Also die neue ungarische Regierung anerkennt diese EU-Urteile. Also gerade im Bereich Baustoffe gibt es eigentlich keine großen Baustellen mehr. Im Bereich Lebensmitteleinzelhandel ist noch ein bisschen Arbeit umzusetzen.
Für viele Firmen war das eine sehr schwere Phase. Und also ich glaube, als Staat sitzt man einfach in diesem Fall am längeren Hebel. Die Firmen hatten keine andere Möglichkeit als viele Schikanen auch zu ertragen. Einigen Firmen waren das dann auch zu viele Schikanen. Also es gibt drei prominente Beispiele von ausländischen Unternehmen, die ihre Assets in Ungarn veräußert haben.
Dazu zählt die Firma Auchan, also der französische Retailer, Vodafone aus Großbritannien und auch der Flughafen Budapest hat letztendlich das Geschäft unter dem großen Druck dann auch verkauft. Einige Firmen haben sich lange gewehrt. Mit dem Regierungswechsel hat sich diese Problematik, die ich jetzt skizziert habe, ein bisschen erledigt. Also es ist sozusagen das Ende der Case Study, aber es war auch ein extremer Case. Und also wir als Ostausschuss hoffen natürlich sehr, dass sich in der EU keine Nachahmer finden.
Und wenn ich einen Wunsch für die Zukunft äußern darf, dann also wie gesagt, der Binnenmarkt ist super wichtig für die deutsche Wirtschaft. Aber ich denke, der Binnenmarkt müsste weiterentwickelt werden und wir brauchen auch so eine Art richtig wehrhaften Binnenmarkt, würde ich das nennen. Also die Vertragsverletzungsverfahren sind sehr gut. Die neue ungarische Regierung implementiert auch dieses Recht, also die Urteile, aber es ist sehr langwierig. Und ich denke, wir brauchen vor allem, um ausländische Firmen und deren Assets zu schützen, Instrumente, die ein bisschen schneller funktionieren.
Vielleicht kann man da auch die Fristen kürzen. Genau. Das wäre dann erstmal soweit der Bericht aus Berlin und ich gebe das Wort dann wieder zurück. Dankeschön.
Michał Wawrykiewicz
Thank you very much, Mr. Stadnitzky. And our next speaker is Mrs. Kirsty McCourt, here in the room, senior advocacy advisor at Civil Liberties Union for Europe. So we are very much interested in your expertise in that respect, having in mind safeguarding of fundamental rights and the rule of law across Europe. So Madam McCourt, the floor is yours.
Kirsty McCourt
Thank you very much and it's very nice to be here with you this morning. We're a network of civil liberties organizations across the European Union. Our head office is in Berlin. I'm based here in Brussels and we have members in nearly all of the member states. And they tend to be kind of broad-based human rights organizations who are day-to-day monitoring the situation of the rule of law in their countries.
And we then work together with our members to annually produce a sorry I'm just flicking through the slides so they get back to the beginning. So annually we produce a rule of law report now in its seventh edition as a shadow report to the European Commission's report but also to give ourselves our members and any other organizations and individuals who are using the research an idea of the trends and the developments across the region. What we've found is that you can look at member states in in roughly four categories. Those member states that are taking active steps to dismantle the rule of law and in the last edition we found five member states in that category. We published the report in March so ahead of the Hungarian government's election.
Those that are sliding in the wrong direction and this is a very important category to watch because it's showing the early warning signs and it's showing where we need to take early action. And you see traditionally kind of rule of law respecting countries now emerging into that category so this time including France, Germany, Belgium, Denmark, Sweden, Malta. And that's really an area where we need to pay a lot of attention. The large group is of stagnators where they're not really moving in in either direction and every year there's like one or two countries that seem across all of the different chapters of the report to be making some progress. So the report looks across the four chapters of the Commission's rule of law report and our members then analyze on a kind of improvement, stagnation or decline in the different areas.
And you can see that in the yellow that there's quite a lot of stagnation, very limited improvements across the different member states in in green and then quite a lot of decline. And what is also particularly concerning is that in that bottom line the checks and balances which is the chapter that looks at oversight, at civic space, at independent institutions, rule-making processes you see the greatest amount of decline but you also then if you compare that to the number of recommendations in the Commission's report that's the area where there are the fewest number of recommendations. So we see a kind of disjoint between the reality of what we see happening and the areas that are being focused on in the rule of law report. And then the other real concern that we see is in the implementation gap where if you then look at the recommendations that the Commission has been making now since 2022, 98% of the recommendations remain unimplemented. 93% of those recommendations as a consequence are repetitions from the previous years.
71% of those date all the way back to the first year of recommendations in 2022 and if you look at the report published this July there were only seven new recommendations. And that's not because there are not new issues arising in the member states.
And if you then look at the progress across the different recommendations, 29% showed no or no further progress, 24% limited progress, and only 10% of the recommendations showed any significant progress. And, you know, we will publish a gap analysis that looks at the findings of our report that we published in March and the Commission's Rule of Law report. And in the next few weeks, probably the first week of October, we'll publish a short report that takes these figures and looks at the changes and the differences in a bit more detail. We don't have a specific chapter on the single market, but I think you can draw out from the different areas quite a lot. And a lot of what was said this morning in the previous interventions, we see very much reflected in the findings of our members.
And if you look broadly as well, and you consider the importance of the single market in terms of the predictability, the consistency, the non-discrimination of different actors, then predictable implementation of the Rule of Law toolbox itself is also very important. And so if you have, you know, roughly 120 recommendations that are made, but as a business you have no idea when any of those recommendations are going to be implemented, there are no timelines, there are no benchmarks in terms of how those recommendations should be implemented along a period of time, then the report in itself and the follow-up of the report is creating an unpredictable environment for the single market. Similarly, if a violation is raised in the Rule of Law report, again as a business you want to know whether action is going to be taken, and you don't want to wait based on a decision as to whether there's kind of political will or not to take action in a particular member state. And if you look across the four different chapters, and in the introductory chapter the Commission sets out the kind of importance of the four different chapters and the linkages to the single market, then a lot of the key issues aren't really raised. There's not really a sense from that summary and from looking through the reports as to what are the really critical issues, where are the risks for the single market, and where is it really important to focus.
So justice is a very obvious area. There's a lot of focus on questions around delays and efficiency of the court system. Malta was particularly flagged as a country that had problems with delays and efficiency of the system. But if you also look at the recent case that took place and where there was a judgment just last week in the case of Daphne Caruana Galizia, the journalist who was investigating corruption cases and was murdered in Malta, that case left a continued sense and a continued reality of impunity in the country. But some of the very key issues around non-implementation of judgments.
Again as a business you would want to know that if a judgment is handed down, particularly from the Court of Justice of the European Union or from the European Court of Human Rights in Strasbourg, that it's going to be implemented.
Yet 650 leading ECHR cases are not implemented within a period of five years, and 80% of CJEU cases are unimplemented two years later. And there's not a real focus on what are those the implications of that for the single market. Similarly, the independence of the judiciary and all of the structures that guarantee that independence, and the hostile discourse and the lack of trust that is being built in many states around the judiciary. If you look to corruption, there's limited progress in a lot of the indicators, but specifically, for example, in a lot of member states, there's a lack of willingness and a lack of progress on prosecuting high-level corruption cases, which again is a problem for the level playing field for businesses. Media freedom, there's a change in a way in the Rule of Law Report this year because there are no recommendations any longer on media freedom issues that relate to the European Media Freedom Act, but there's an analysis that there's limited progress in the area and as well limited progress in the implementation of the EMFA.
And then if we look at the final chapter on the checks and balances, as I said before, this is the area where there is the least focus, and it might seem to be it's in some ways it's a bit of a catch-all chapter, it might seem to be the area that is the kind of least related to business. But for example, if you look at the overuse of fast-track legislation, that, and it was mentioned by several speakers earlier, is a huge problem in a number of member states. In Slovakia at one point at the beginning of 2025, over 80% of laws were being passed through fast-track processes. That doesn't create the possibility for businesses and civil society and others to effectively contribute to the process and it doesn't create predictability. The huge restrictions on civic freedoms make it far less attractive for workers, individuals, families to want to move and move around the single market.
I'll close with one final element that we've included in the last two Rule of Law Reports and is also covered in a report that is published every year by the Central European University and the Rule of Law Institute in Budapest, and that is the rule of law within the EU institutions. And it's of course essential that the guardian of the treaties, that the standard-bearer, that the one who is carrying out the monitoring and the enforcement is itself abiding by the rule of law. And as I said, the whole process around monitoring and implementation is in itself a rule of law issue and with the need for predictable and effective enforcement of recommendations, of Court of Justice judgments, etc. But what we're also seeing is that what we see in the member states is being mirrored at EU level. So I mentioned the fast-track legislation in many member states, the example for example of Slovakia, we're also seeing now a process of fast-track legislation within the EU.
Initially it was one omnibus proposal, in the end during the course of 2025, nine omnibus proposals were pushed through in a fast-track process and more are expected. A group of civil society organisations brought a case before the European Ombudsman who found maladministration in the process of that first omnibus legislation, but it's not clear in terms of the follow-up and the changes that are being made to ensure that that practice doesn't continue. Similarly, smear campaigns and undermining and scrutiny of civil society organisations that are acting as watchdogs and working, you know, as you see within the report to bring evidence and information and track the trends and practices are being undermined again building a lack of trust.
And we're seeing this as well in this very house with smear campaigns against civil society and the creation of a scrutiny group against civil society, investigating civil society organizations, despite a European Court of Auditors report which found no wrongdoing on the part of civil society organizations, but a continued practice to put in place this scrutiny group. So I think you see a lot of issues both around the enforcement of the recommendations, the general environment for the rule of law, and the creeping of similar practices into the institutions themselves. Thank you.
Michał Wawrykiewicz
Thank you very much, Madam McCourt. And now our final speaker in this session is Dr. Guillermo Iñiguez, assistant professor of the Public Law Department at IE University. So we'd like to hear your perspective on this matter, especially that you are the author of a PhD thesis entitled "Beyond a Crisis of Values: Understanding the Impact of Democratic Backsliding Upon the Operation of European Union Law". So I'm giving you the floor for seven minutes. Thank you.
Guillermo Iñiguez
Many thanks. Thank you, Mr. Chairman, and thanks for the thanks for the invitation to this event. It's a great pleasure to be here today. As you were saying, the link between the rule of law crisis in the EU and the internal market was the subject of my of my PhD research, defended earlier last year at at Oxford. However, I will make sure to be very brief because I know I'm the last speaker today and that academics tend to go on for very long, so I will be very, very brief.
Just a very few quick remarks from my end. We have all discussed how the subject matter of this session could not be timelier, both because the internal market is an often neglected aspect when discussing the rule of law, but also because the rule of law has often been sidelined in conversations surrounding the internal market's future and the Union's economic growth. As previous speakers have said, and I don't want to repeat myself on that end, the link between these two concepts is of existential relevance for the EU's economic and democratic health. For the architecture of the internal market to work, and the internal market is a very big beast, for businesses and citizens to enjoy the benefits of the internal market, we need legal certainty, predictability, and above all the uniform application of EU law. And I think this is the most problematic aspect in what we've witnessed across the Union in the last ten years.
As George Town professor Dan Kelemen has written, one backsliding member state is enough to create a legal black hole in the EU single judicial area which undermines this uniformity. Now, the best way to illustrate this point in the in the very few minutes I have left is by focusing on these three concepts: mutual trust, mutual recognition, and effective judicial protection, which have all been raised in this session. Mutual recognition, we know, is essential for the free movement of goods. For goods to be able to circulate across the internal market, member states must generally be able to recognize each other's standards, for example on health and safety or on product compositions, subject to certain exceptions which EU law allows for. Now, this is not possible in a Union in which certain member states have captured the executive agencies tasked with setting those standards, or in which those agencies operate in an arbitrary or in a discriminatory manner.
We can all think of the example of the Orbán government in Hungary and how executive agencies were captured or were asked or requested to prioritize national standards or national products over foreign ones. That is one manifest example of this violation.
If member states stop trusting themselves on on such matters, we enter a scenario in which there's increasing friction in cross-border trade, which is highly detrimental to the internal market. Mutual trust is also important in the context of civil justice. When we think of the internal market, we think of the fundamental freedoms. We don't often think of the recognition and enforcement of judgments across borders. However, the civil justice pillar of the area of freedom, security and justice is crucial both for citizens and for businesses living and operating across borders.
Think of a company in member state A which is seeking the recovery of a debt from a company in member state B, or a company trying to have a commercial judgment enforced in another member state. These frameworks are central for cross-border commercial activities, and yet they depend on businesses trusting courts and on courts across a member states trusting each other. I will return to this issue in the last two minutes of this intervention. The third pillar, and I'm very grateful to the previous speaker from the European Court of Auditors because she very eloquently made this point, is effective judicial protection. And effective judicial protection is especially relevant in the context of cross-border public procurement.
In fact, procurement is the area in which the link between the rule of law or rule of law backsliding and the internal market becomes most obvious. And this is best understood if we think of the judicial reforms that have taken place in certain member states, and again, I'm thinking particularly of the court's judgments in relation to Poland and the need for public contracts to be subject to effective judicial protection. If a company from a certain member state wishes to operate across a cross-border, but does not trust the other member state's courts to be able to adjudicate on disputes, that company is less likely to wish to operate beyond its national borders. And as the colleague, as the speaker from the Court of Auditors was mentioning, we have seen a rise in single bidder contracts and in awards issued in processes in which competition has been very deficient. Now, in the light of these three points, which inevitably have been very brief, how can the EU institutions proceed and how can the European Parliament proceed?
The following are some some suggestions from the ivory tower of academia, which I think might be helpful in in thinking of a way forward. Including a discussion in the Commission's rule of law report mentioning the internal market is welcome, but it's not enough. It's welcome because it helps us talk about these matters, but it's not enough to effect real change. Nor is the single market scoreboard in itself enough, although once again this is a welcome development. From the Parliament's point of view, it's worth thinking about how the intersection between the rule of law between the rule of law and the internal market can be addressed in existing legislation and in forthcoming legislative projects.
The first point that's worth bearing in mind by, I think, legislators is whether we need more or less mutual recognition in the internal market of the 2020s. In other words, is a mechanism that was devised in the 1980s still appropriate in a union in which there is growing political and legal distrust, or or are there other ways we could negotiate or we can make the internal market work? This is one question I think which is a longer-term one which is worth addressing. The second point is how can we best incorporate rule of law concerns into new internal market-related bills, such as yesterday's proposal, for example, for a public procurement act? I've had a chance to read yesterday's proposal by the Commission and I haven't been able to find a single reference to the rule of law, either in the explanatory memorandum or in the actual text of the legal instrument.
I might be wrong, but if this omission has taken place, I think it's something where the Parliament could play a very important role in scrutinizing the Commission's action. Finally, and perhaps most interesting, I want to very briefly discuss the role of public policy clauses in EU legislation. These clauses, which we see in many different instruments, allow the EU legislator to channel any concerns about national that national courts may have about compliance with internal market rules into a specific framework. And we see this, for example, in the Brussels regulation, we see this in some internal market instruments. They also allow courts to suspend that trust in limited circumstances, but it allows the EU legislator to control what those circumstances are.
And they provide in my opinion, and I will finish in 20 seconds, a very underrated mechanism by which to strike a balance between upholding the integrity of the internal market, but making sure that national courts and Member States can respond to actual backsliding in circumstances involving the internal market. I therefore think that this, analyzing mutual recognition, looking at the new procurement act and making sure it's an appropriate instrument, and focusing on public policy clauses are three potential ways in which the Parliament can address the link between the rule of law crisis and the internal market. Thank you very much.
Michał Wawrykiewicz
Thank you very much, Mr. Inigues, and finally we'll have the floor for discussion. So, Mr. Freund, the floor is yours.
Daniel Freund
Thanks Michal and thank you so much to to all these experts and what you have shared with us. I want to start with the representative from the Ost-Ausschuss and I'll I'll do that in German if you if you allow. Danke für die Ausführung und vor allen Dingen zum Fall Ungarn. Kann ich als erstes noch mal nachfragen, also Sie haben gesagt, dass bei Zement zum Beispiel die die Probleme jetzt weitestgehend geregelt sind, in anderen Bereichen gibt es noch Probleme, wenn Sie da noch ein Ticken ausführlicher sein könnten, das würde uns glaube ich sehr helfen. Das zweite ist, und Sie haben ja die prominentesten Beispiele genannt, wo Unternehmen ihr Ungarngeschäft verloren haben, gibt da ja noch, das ist ja leider eine sehr sehr lange Liste.
Die neue ungarische Regierung hat ja jetzt eine neue Behörde ins Leben gerufen, um um diese geklauten Vermögenswerte wieder wieder zurückzubringen. Ich glaube, da geht es hauptsächlich darum, die für ne die geplünderten Staatswerte zurückzuholen, aber inwiefern gibt's bei Ihren Mitgliedern oder insgesamt in der Wirtschaft jetzt Bestrebungen, ne, dass diese Verkäufe von Unternehmensanteilen unter ja Mafiamethoden, das in Frage zu stellen, rückabzuwickeln, welche Möglichkeiten sehen Sie da oder oder ist das verloren und das das bleibt jetzt sozusagen bei den Verwandten und Verbündeten von von Orbán hängen. Und die dritte Frage, die ich an Sie hätte, ist, also wir haben viel über Ungarn gesprochen und da sehen wir jetzt eine sehr positive Entwicklung, aber in in den Ländern, in denen der Ost-Ausschuss sonst noch arbeitet, sehen Sie, wenn auch nicht so schlimm wie in Ungarn unter Orbán, aber sehen Sie sonst Entwicklungen, die wir die wir auf dem Schirm haben sollten, Länder oder bestimmte Sektoren auch, wo es ganz besondere Probleme gibt, dass wir noch mal drauf schauen sollten. And then I have a question to the representative from Eurochambres. You talked about the declining KPIs for the single market.
I mean, I myself, I come from a border area between Germany, Belgium, and the Netherlands. I see this. I see the market distortions of how different products are priced in supermarkets one or the other side of the border where as a consumer you can't really understand why toothpaste costs twice as much in Belgium than in Germany and these kind of things. But I obviously also see that the reintroduction of border checks, long lines on the border for commuters every morning, when what the government says this is all for to prevent illegal crossing of the border, the number of cases that we have seen from the Netherlands to Germany, for example, I mean, this is a non-problem. So we have these kind of populist measures, and I don't think the German government is the only one doing this.
What's your take on these? And also how outspoken are you and your members then to make sure that we stop these nonsense things that don't help and make sure that the single market and the free flow of goods and services, as you say, but obviously also of people, of your workforce, can happen in the Union. Thank you very much.
Michał Wawrykiewicz
So now we are looking forward for your answers in the previous order, so Mr. Martins will start, yes.
Frederico Martins
Thank you very much. Well, at Eurochambers we don't deal with immigration issues, so I cannot really extend myself on that. We did see barriers to the free movement of workers starting during COVID, and a lot was done in a very fast period of time to allow for goods and services to be able to be provided. I will not mention much about this introduction of border checks, also because this goes against European legislation in general terms. I guess that member states have the possibility to do so in specific, very specific cases, but from the business perspective we would also be against this.
I don't see why we would be for this.
Hervé Stadnitzky
So Herr Freund, besten Dank der Nachfrage. Also kurz eingangs zur ersten Frage. Also wir sehen, dass sich die neue ungarische Regierung sehr konstruktiv verhält in diesen Belangen. Also Herr Magyar hat auch kurz nach den Wahlen bei der ersten internationalen Pressekonferenz angekündigt, dass er für alle Investoren ein Level Playing Field schafft. Und die am stärksten betroffenen Sektoren zuletzt unter Orbán noch waren ja die Baustoffe und der Lebensmitteleinzelhandel.
Kurz zu den jeweiligen Sektoren. Zum Bereich Baustoffe ist es so, gegen die drei größten Maßnahmen der ungarischen Regierung damals, das waren Exportkontrollen, die CO2-Tax und die Supplementary Mineral Royalty, gibt es EuGH-Urteile. Die sind recht eindeutig. Also da ist auch die Rechtsprechung des EuGH sehr konsistent und sehr kohärent. Und dort ist die ungarische Regierung einfach dran, das EU-Recht zu implementieren.
Es ist auch so, dass bei der CO2-Tax zum Beispiel schon ein Modus gefunden wurde, wie die an die Firmen zurückbezahlt wird. Also da sind wir sehr weit, einfach aufgrund der Tatsache, dass es da eindeutige Urteile des EuGH gibt. Deswegen habe ich bei der ersten Intervention gesagt, dass das auch so wichtig war, dass es diese Urteile gibt. Diese Urteile gibt es einfach noch nicht im Bereich Lebensmitteleinzelhandel. Da ist jetzt gerade das Verfahren beim EuGH anhängig, was die Retail-Tax betrifft.
Und es gibt auch einfach einige Sachen, die in Ungarn diskriminierende Wirkung haben, wie zum Beispiel das Ausbauverbot für ausländische Unternehmen. Aber das kann man nicht vor den EuGH bringen, denn das ist ja letztendlich eine Kommission, die die Entscheidungen fällt. Und da ist es einfach schwer. Also ich würde jetzt mal zusammenfassend auf die erste Frage so antworten, dass ich sage, im Bereich Baustoffe sind wir da schon kurz vor der Ziellinie. Im Bereich Lebensmittel-Einzelhandel gibt es da noch ein bisschen was zu tun, aber da könnte ich auch was nachreichen noch.
Und zur zweiten Frage, also sehr spannende Frage. Es gibt ja diese lange Liste. Es gibt aber auch viele Fälle, von denen wir gar nicht Bescheid wissen, weil die betroffenen Unternehmen Non-Disclosure Agreements...
Michał Wawrykiewicz
Excuse me, Mr. Stadnisky, but the sound is not clear. Could you maybe speak a little bit slower?
Hervé Stadnitzky
Okay. Genau. Und zur zweiten Frage, also es gibt ja diese lange Liste von Unternehmen, die schon die Assets in Ungarn verkauft haben, auch unter Druck. Es gibt aber auch viele Firmen, von denen wir gar nicht wissen, dass sie verkauft haben, weil sie NDAs, also Non-Disclosure Agreements unterzeichnet haben. Ich denke, es wird jetzt für die privaten Unternehmen nicht mehr die Chance geben, da noch an die Assets zurückzukommen.
Man hat ja letztendlich dann auch, na ja, diese Deals unterzeichnet. Also viele haben dann auch eher gesagt, lieber ein Ende mit Schrecken als ein Schrecken ohne Ende. Und wir wissen jetzt von keiner Firma, dass sie irgendwie versucht, die Assets zurückzuholen. Also ich glaube, das ist sehr schwer. Das wäre meine Einschätzung.
Speaker 25
No, I don't think I have anything on these specific questions. Thank you.
Guillermo Iñiguez
No, thank you. I think the question has been answered very well. I don't have anything much to add on it. Thank you.
Daniel Freund
Just a quick follow-up because the third question to the Ost-Ausschuss on, you know, we have good development in Hungary, but what are other worrying examples in other member states that the Ost-Ausschuss covers?
Hervé Stadnitzky
Also in dieser Systematik, wie wir es in Ungarn beobachtet haben, Herr Freund, gibt es keine weiteren Fälle. Es gibt mal hier und da Gesetzesentwürfe, aber wir versuchen das natürlich auch im Dialog mit den Regierungen vor Ort zu lösen. Und aus meinem Bereich fällt mir jetzt nichts Akutes ein. Also diese Systematik, wie es in Ungarn passiert ist, war wirklich einzigartig. Und also wir sind auch sehr froh und hoffen, dass das einfach keine weiteren Nachahmer findet.
Michał Wawrykiewicz
Any other questions? If not, then I will add one from myself. And I would like you to share your thoughts about this potential question because Mr. Stadnisky mentioned that actually today's toolbox of European Union toolbox is not efficient enough to protect the rule of law across the European Union and we need more effective measures.
and Mr. Iñiguez also mentioned that one member state that seriously violates the rule of law can create a black hole in the whole system. And I fully agree with that, especially when I'm coming from Poland that created that black hole in the system. And I have a impression that not everyone understands that impact of the one violator to the whole system. My question is, or my answer, my request for your opinion is about the potential situation when we connect closer the single market institutions, the principle of trust, with the violation of the rule of law. What would you say from the academic point of view, from the business point of view, from civil society point of view, what would you say for the idea of the closer connection between single market principles and the privileges for business being the part of the single market with the violation of the rule of law?
What I mean is that if the one country, one member state is violating the rule of law in a serious way, like Poland did between 2015 and 2023, and it was certified, I would say, by the Court of Justice in Luxembourg, if we provide the sanctions in the area of the single market. So if the country, the government is the violator, then the sanctions goes on the business area as a measure of the protection of the rule of law. What is your opinion on that? And maybe you have other ideas how to improve the toolbox protecting the rule of law in the member states. Thanks.
The floor is yours. Who would like to answer this question? Please, please do.
Guillermo Iñiguez
Maybe, maybe I can step in to break the ice on this. I think it's an interesting question. I hadn't thought of that link expressly before. I think more generally, and I'll get to your answer in a few seconds, but I think more generally the consensus seems to be that there is a good enough toolbox generally for rule of law enforcement. The problem has been that it hasn't been used as well as it could have been, particularly in the 2010s by the European Commission.
I think there's widespread academic and policy consensus on that. The more interesting problem for this session, and I think it links to your question, Mr. Chairman, is whether there are effective enough tools tailored to the internal market and to violations that affect the internal market. In other words, an infringement procedure, and I think Mr. Szatkowski was talking about this, an infringement proceeding may be helpful generally, but it's not going to help the day-to-day reality of those businesses until many years later. Hence why I was suggesting that perhaps fine-tuning the existing legislation, the Procurement Act, other free movement instruments with public policy clauses might give this flexibility. Public policy clauses that allow free movement to be suspended in individual cases might also be a way to answer your question, Mr. Chairman, in a way that maybe a broader approach might not be as well-suited to.
I think your consideration was interesting, but the risk that would have to be taken into account there is to what extent it ends up punishing businesses or customers or people exercising free movement in a way that's not very costly for the government. But if there were a way of developing that proposal that placed the burden on the government, on the infringing government, rather than on businesses and consumers, it could be an avenue worth protecting, even if just rhetorically, to make it more obvious that violating the rule of law has consequences for the internal market.
So it's an interesting proposal which would have to be considered, I guess, in detail to see where the impact lies at the end of the day.
Kirsty McCourt
Yes, I mean, I think we would agree with what the previous speaker said, and we've also said it many times, that the rule of law toolbox is relatively comprehensive and it is really a question of kind of speedy, timely, effective implementation. But I think one interesting element to look at are the new plans under the MFF and the idea that rule of law will be attached to the national plans. But our understanding is that there won't be any obligation to put anything in particular into those national plans. So there might be a series of recommendations in the rule of law report, but there's no obligation to translate those particular recommendations into the national plans. And so if it's totally up to the member state to say, well, I'll put five totally different elements into our national plan, or I'll maybe pick one recommendation from the rule of law report but I'll ignore the other five, then linking the rule of law report to those plans isn't such an effective process if there's pure choice on the part of the member state as to what is linked and what is not.
And I think that's an important discussion really to have as we're looking at the kind of technicalities and how that will feature in the next MFF and how that process will work, to really understand how there will be an effective process to link the rule of law recommendations to these plans. And so that's, you know, it's one element that I think we've all said it's useful to link the rule of law reports to the budget, but the detail of how that happens will indicate how effective or not the process is. Thank you.
Frederico Martins
Thank you. I don't have a lot to add on what was already added by the previous speakers, maybe focusing on the phenomenon of gold-plating, which I still think should be addressed in the rule of law report. We, some time ago, we published a position that was calling for a variety of topics on how to deal with gold-plating or non-notification of laws that member states were passing. And we brought to the floor the use of automatic push-up notifications for civil society, but in our case businesses, to be consulted before these laws are being put up for a vote. We also mentioned in this position to restrict the use of urgent mechanisms when these parliaments are trying to rush certain type of legislations, to allow for businesses to file preliminary injunctions claims for breaches of single market rules, and to perhaps reverse the burden of proof to ensure that it's the member state's responsibility to justify the adoption of a specific technical regulation rather than the opposite.
Hervé Stadnitzky
Ja ich also ich würde sagen die Toolbox ist gut also wie ich versucht habe zu zeigen die Vertragsverletzungsverfahren haben dann positiven Impact auch gehabt natürlich. Die Frage und die Variable an der es ein bisschen zu arbeiten gilt ist einfach die Zeit und die Dauer also vom Beginn bis zum Ende vergehen mehrere Jahre einige Firmen haben das gar nicht aushalten können weil sie während dieser Zeit Verluste eingefahren haben. Nee also wie gesagt Toolbox gut schneller wär super. Das wär so mein Wunsch.
Michał Wawrykiewicz
Thank you very much for this discussion. I believe that it is unquestionable that we need to protect the rule of law in the European Union effectively and the question still is is is relevant if this toolbox is effective enough or we need to improve it. We discuss about it quite often here in this house and we need to remember that the single market is built on the principle of trust and if this trust is broken we need as European institution to react because it attacks actually the single market and the business area itself. Thank you very much for today's very interesting exchange of view and I am closing this session. Thank you.
You are very welcome.
Good morning, everyone. Welcome to this meeting of the LIBE Democracy, Rule of Law and Fundamental Rights Monitoring Group. This is our first meeting of the year, and we have a very important topic on the agenda today, which is the situation of the rule of law in Greece. As you know, this is a topic that we have been following for quite some time now, and we have had several exchanges of views on this matter. Today, we have the pleasure of welcoming several guests who will share their views and expertise with us.
We have with us Mr. George Gerapetritis, Minister of State of Greece. Welcome, Minister. We also have Mr. Andreas Pottakis, the Greek Ombudsman. Welcome, Mr. Pottakis. And we have Mr. Christos Giakoumopoulos, Director General of Human Rights and Rule of Law at the Council of Europe.
Welcome, Mr. Giakoumopoulos. We also have several representatives from civil society organizations. We have Ms. Maria Gavouneli, President of the Greek National Commission for Human Rights. Welcome, Ms. Gavouneli. We have Mr. Lefteris Papagiannakis, Director of the Greek Council for Refugees.
Welcome, Mr. Papagiannakis. And we have Ms. Anna Alboth from Minority Rights Group International. Welcome, Ms. Alboth. Thank you all for being here today. We will start with a first round of interventions from our guests, and then we will have a Q&A session with the members of the monitoring group.
Each guest will have five minutes for their initial intervention. Minister Gerapetritis, the floor is yours.
Thank you very much, Madam Chair. It is a pleasure to be here today and to have this opportunity to discuss the situation of the rule of law in Greece with you. Greece is a country with a long and proud democratic tradition, and we are fully committed to the principles of the rule of law, democracy, and fundamental rights. We believe that these principles are the foundation of our society and our European identity. In recent years, we have taken several steps to strengthen the rule of law in Greece.
We have implemented reforms in the justice system, in the public administration, and in the fight against corruption. We have also taken measures to protect the freedom of the press and to ensure the independence of the judiciary. Of course, we are aware that there are still challenges and that more needs to be done. We are committed to continuing our efforts and to working closely with our European partners and with civil society to address these challenges. I would like to highlight some of the key reforms that we have implemented in recent years.
First, in the justice system, we have taken measures to improve the efficiency and the quality of justice. We have introduced new technologies, we have increased the number of judges and judicial staff, and we have implemented reforms to reduce the backlog of cases. Second, in the public administration, we have taken measures to increase transparency and accountability. We have introduced new rules on public procurement, we have strengthened the role of the National Transparency Authority, and we have implemented reforms to improve the quality of public services. Third, in the fight against corruption, we have taken measures to strengthen the legal framework and to improve the effectiveness of investigations and prosecutions.
We have also taken measures to promote a culture of integrity and to prevent corruption in the public and private sectors. Finally, I would like to mention the measures we have taken to protect the freedom of the press and to ensure the independence of the judiciary. We have introduced new rules on the ownership of media outlets, we have strengthened the role of the National Council for Radio and Television, and we have taken measures to ensure that journalists can work freely and without interference. In conclusion, I would like to reiterate our commitment to the rule of law and to the principles of democracy and fundamental rights. We are ready to continue our dialogue with you and to work together to strengthen the rule of law in Greece and in Europe.
Thank you very much.
Thank you very much, Minister, for your intervention. I now give the floor to Mr. Andreas Pottakis, the Greek Ombudsman. Mr. Pottakis, you have five minutes.
Thank you, Madam Chair. Thank you for the invitation to participate in this meeting. As the Greek Ombudsman, my role is to protect the rights of citizens and to ensure that the public administration acts in accordance with the law and the principles of good administration. In recent years, we have seen some positive developments in Greece, but we have also seen some worrying trends. One of the main challenges we face is the situation of refugees and migrants.
We have received many complaints about the conditions in the reception centers, the lack of access to basic services, and the use of pushbacks at the borders. We have also seen a worrying trend of criminalization of civil society organizations and activists who work with refugees and migrants. Another challenge is the situation of the media. We have seen a decline in media pluralism and an increase in pressure on journalists. We have also seen a lack of transparency in the allocation of public funds to media outlets.
Finally, I would like to mention the situation of the judiciary. While we have seen some reforms, there are still concerns about the independence of the judiciary and the length of judicial proceedings. In conclusion, I believe that there is a need for a more comprehensive and systematic approach to the rule of law in Greece. We need to ensure that the principles of the rule of law are respected in all areas of public life and that the rights of all citizens are protected. Thank you very much.
Thank you very much, Mr. Pottakis. I now give the floor to Mr. Christos Giakoumopoulos from the Council of Europe. Mr. Giakoumopoulos, you have five minutes.
Thank you, Madam Chair. The Council of Europe has been following the situation of the rule of law in Greece very closely. We have published several reports and recommendations on this matter, and we have had a regular dialogue with the Greek authorities. We have seen some progress in some areas, but we also have some serious concerns. One of our main concerns is the situation of the justice system.
We have seen a lack of efficiency and a lack of independence in some cases. We have also seen a lack of implementation of the judgments of the European Court of Human Rights. Another concern is the situation of the media. We have seen a decline in media freedom and an increase in attacks on journalists. We have also seen a lack of transparency in the ownership of media outlets.
Finally, I would like to mention the situation of human rights defenders. We have seen an increase in pressure and harassment of human rights defenders, especially those working on the rights of refugees and migrants. In conclusion, we believe that there is a need for more efforts from the Greek authorities to address these concerns and to ensure that the principles of the rule of law and human rights are fully respected. We are ready to continue our cooperation with the Greek authorities and with the European Parliament to support these efforts. Thank you very much.
Thank you very much, Mr. Giakoumopoulos. I now give the floor to Ms. Maria Gavouneli, President of the Greek National Commission for Human Rights. Ms. Gavouneli, you have five minutes.
Thank you, Madam Chair. The Greek National Commission for Human Rights is the independent advisory body to the Greek state on human rights issues. We have been monitoring the situation of human rights in Greece for many years, and we have published several reports and recommendations. In recent years, we have seen some positive steps, such as the adoption of a new law on the protection of human rights defenders. However, we also see many challenges.
One of the main challenges is the situation of refugees and migrants. We have documented many cases of human rights violations at the borders, including pushbacks and ill-treatment. We have also seen a lack of access to asylum and a lack of adequate reception conditions. Another challenge is the situation of vulnerable groups, such as Roma, persons with disabilities, and LGBTI persons. We have seen a lack of effective measures to combat discrimination and to ensure the full enjoyment of their rights.
Finally, I would like to mention the situation of the rule of law. We have seen some worrying developments, such as the use of surveillance against journalists and politicians, and the lack of accountability for human rights violations. In conclusion, we believe that there is a need for a more proactive and human rights-based approach from the Greek authorities. We need to ensure that human rights are at the center of all public policies and that the rights of all persons are respected and protected. Thank you very much.
Thank you very much, Ms. Gavouneli. I now give the floor to Mr. Lefteris Papagiannakis, Director of the Greek Council for Refugees. Mr. Papagiannakis, you have five minutes.
Thank you, Madam Chair. The Greek Council for Refugees is an NGO that provides legal and social support to refugees and asylum seekers in Greece. We have been working on the ground for many years, and we have seen firsthand the challenges faced by refugees and migrants. One of the main challenges is the lack of access to asylum. The asylum procedure is very slow and complex, and many people are left in a legal limbo for a long time.
We have also seen a lack of adequate reception conditions, especially on the islands. Another challenge is the use of pushbacks at the borders. We have documented many cases of people being illegally returned to Turkey, often with the use of violence. These pushbacks are a clear violation of international and European law. Finally, I would like to mention the criminalization of solidarity.
We have seen an increase in legal proceedings against NGOs and activists who provide assistance to refugees and migrants. This is a very worrying trend that aims to intimidate and silence those who speak out against human rights violations. In conclusion, we believe that there is a need for a fundamental change in the Greek migration and asylum policy. We need a policy that is based on the respect of human rights and the rule of law, and that ensures the protection of all persons in need of international protection. Thank you very much.
Thank you very much, Mr. Papagiannakis. And finally, I give the floor to Ms. Anna Alboth from Minority Rights Group International. Ms. Alboth, you have five minutes.
Thank you, Madam Chair. Minority Rights Group International is an international NGO that works to secure the rights of ethnic, religious, and linguistic minorities and indigenous peoples. In Greece, we have been following the situation of minorities, especially the Roma and the Turkish-speaking minority in Western Thrace. We have seen a lack of recognition and a lack of protection of the rights of these minorities. One of the main challenges is the lack of access to education and healthcare for Roma children.
We have also seen a lack of effective measures to combat hate speech and hate crimes against minorities. Another challenge is the lack of recognition of the ethnic identity of the Turkish-speaking minority in Western Thrace. This has led to several violations of their rights, including the right to freedom of association and the right to education. Finally, I would like to mention the situation of human rights defenders working on minority rights. We have seen an increase in pressure and harassment of these defenders, who are often accused of being anti-national or of working for foreign interests.
In conclusion, we believe that there is a need for a more inclusive and pluralistic approach to minority rights in Greece. We need to ensure that the rights of all minorities are respected and protected, and that they can fully participate in the social, economic, and political life of the country. Thank you very much.
Thank you very much, Ms. Alboth, for your intervention. And thank you to all our guests for their initial interventions. We will now start the Q&A session with the members of the monitoring group. I will take a first round of questions from the political groups. I give the floor first to the EPP group.
Mr. Lenaers, you have the floor.