Hungary vs. the EU
Hungarian Political History II: Communism's Consolidation to Modern Hungary
Chapter 9 · Hungary vs. the EU: Real Rule-of-Law Disputes and Article 7
Chapter 8 closed with a deliberate deferral: the "Stop Soros" laws and the European Union's own formal Article 7 rule-of-law procedure against Hungary. This chapter delivers on that deferral directly — the specific real legislation, the specific real EU vote, and the specific real financial consequences that followed the illiberal-democracy doctrine's own move from speech into law.
Lex CEU
On 28 March 2017, Hungary's education minister submitted a bill imposing new operating conditions on foreign-affiliated universities — requiring a formal intergovernmental agreement with the university's home country, a functioning campus in that home country as well, and work permits for non-EU academic staff. Central European University (CEU), founded in Budapest in 1991 by George Soros, stated the new rules would "make it impossible for the University to continue its operations as an institution of higher education in Budapest." When the Hungarian government refused to sign the required agreement, CEU announced on 3 December 2018 that it would relocate the majority of its US-accredited programs to Vienna, effective September 2019 — keeping only its locally-accredited programs in Budapest. The European Court of Justice ruled on 6 October 2020 that the "Lex CEU" was incompatible with EU law, a real legal vindication that arrived nearly two years after the university itself had already relocated.
The "Stop Soros" Package
As Hungary's 2018 election campaign got underway, the government introduced the "Stop Soros" package — a set of measures restricting NGOs that provided volunteer assistance related to the ongoing refugee and migration crisis. The government's own campaign materials framed this directly around George Soros personally, with posters reading "Soros wants millions of migrants to live in Hungary" and "Soros wants to dismantle the border fence," tying the domestic legislative push explicitly to Soros's real, documented involvement in responding to the 2015 European migrant crisis. In May 2018, Soros's own Open Society Foundations announced it was relocating its Budapest office to Berlin, citing an "increasingly repressive" environment in Hungary.
The Sargentini Report and the Article 7 Vote
On 12 September 2018, the European Parliament voted 448 in favor, 197 against, 48 abstentions to adopt a report — commonly known by the name of its rapporteur, Dutch MEP Judith Sargentini — recommending that the EU Council determine whether Hungary posed "a clear risk of a serious breach" of the Union's founding values, formally invoking Article 7 of the Treaty on European Union. The report's own real, documented concerns spanned constitutional and electoral systems, judicial independence and corruption, freedom of expression and academic independence, and the rights of minorities, migrants, and refugees; it also raised concerns about antisemitic rhetoric and the proper application of terrorism and fair-trial standards.
| What Article 7 Actually Does | What It Does Not Do |
|---|---|
| Lets EU institutions formally determine whether a member state risks seriously breaching the Union's founding values (democracy, rule of law, human rights) | Does not automatically remove a country's EU membership |
| Can, at a later stage and with unanimous Council agreement, lead to suspension of certain EU voting rights | Requires unanimity among the other member states to reach its most severe sanction — a real, high bar that gives any single sympathetic government an effective veto |
| Functions primarily as a formal, public political and legal pressure mechanism | Has never, as of this course's own writing, actually reached the stage of suspending any member state's voting rights |
Money as Real Leverage
Beyond Article 7 itself, the European Union developed a separate, real mechanism directly tying EU budget disbursements to rule-of-law compliance. Under this conditionality approach, roughly €1 billion in EU aid was withheld from Hungary over documented allegations of corruption, particularly in public procurement — a specific, concrete real figure separate from Article 7's own political process. Transparency International, tracking the broader dispute, noted that a cumulative total of around €20 billion in EU funds had been withheld from Hungary at various points without succeeding in compelling the government to fully restore the rule-of-law standards the EU's own institutions were seeking.
Hands-On Exercises
Explain why CEU's relocation and the Open Society Foundations' relocation, occurring within about eighteen months of each other, should be read as one connected pattern rather than two coincidental, unrelated events.
Explain why Article 7's own requirement of unanimous Council agreement to reach its most severe sanction is a real, structural limit on its own effectiveness, not merely a procedural formality.
Explain why the EU's rule-of-law fund conditionality mechanism represents a genuinely different kind of pressure than the Article 7 procedure, even though both respond to the same underlying real concerns.
Quick Reference
- 28 March 2017: the "Lex CEU" bill introduced, targeting Central European University's own operating conditions
- 3 December 2018 / September 2019: CEU announces relocation of most programs to Vienna; the move takes effect
- 6 October 2020: the European Court of Justice rules the Lex CEU incompatible with EU law
- 2018 election period: the "Stop Soros" NGO-restriction package introduced; May 2018, the Open Society Foundations relocates from Budapest to Berlin
- 12 September 2018: the European Parliament votes 448–197–48 to adopt the Sargentini Report, formally invoking Article 7 TEU against Hungary
- Real financial consequence: roughly €1 billion withheld over a corruption case; a cumulative ~€20 billion cited by Transparency International across the broader dispute