Council of theEuropean Union
Brussels, 19 September 2019
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AG 42NOTE
From:
To:

General Secretariat of the Council
Delegations

Subject:

Values of the Union - Hungary - Article 7 (1) TEU Reasoned Proposal Report on the hearing held by the Council on 16 September 2019As a foreseen in 10641/2/19 REV2 (paragraph 23 of the Annex), delegations will find in the Annex
the formal report on the hearing of Hungary, held on 16 September 2019, in accordance with Article
7(1) TEU.

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ANNEX
On 16 September 2019, the Council heard Hungary in accordance with Article 7(1) TEU. Thehearing was conducted during the meeting of the General Affairs Council and lasted approximately
two hours.
At the start of the hearing, the Presidency briefly reminded the participants how the procedure
would be conducted (10641/2/19 REV2). It also informed the Council about its contacts with theEuropean Parliament.
On 4 September 2019, the Presidency together with colleagues from Croatia and Germany met theChair of the Committee on Civil Liberties, Justice and Home Affairs (LIBE), Mr Juan Fernando
López Aguilar, and the newly appointed rapporteur, Ms Gwendoline Delbos-Corfield. TheEuropean Parliament welcomed this opportunity and stressed the importance of well-articulated
inter-institutional cooperation on such an important matter. It also stressed the widespread support
within the European Parliament for the Reasoned Proposal on Hungary. The European Parliament
expressed the view that side-meetings could not substitute a formal presentation of the Reasoned
Proposal by the rapporteur before the Council. It stated that it should be granted equal footing withthe Commission. Accordingly, the European Parliament asked for the opportunity to intervene inCouncil and stated that this would apply on this occasion only. It added that it would not need to be
directly involved in the rest of the hearing process. As regards the issues covered by the hearings,
the European Parliament welcomed the general scope of the first hearing. It stated that, althoughfurther thematic hearings would be useful, it was essential not to lose sight of the wider picture. The
European Parliament stressed the fact that the scope and the number of changes in Hungary werecreating systemic threats to the rule of law and posed a concrete risk that the rights of minorities,
across the board, would be endangered by the ruling majority. In particular, the European
Parliament pointed out that the situation did not appear to have improved in recent months. Indeed,
there were serious concerns in several areas, especially in relation to: media pluralism; academic
freedom; the independence of the judiciary and the reform of administrative courts; the fundamental
rights of migrants, asylum seekers and refugees.
The Hungarian delegation was then given the floor. The Hungarian delegation referred to its
updated information note of reply of 12 September 2019 (12133/19) and stated that it was ready toprovide further information and clarification. It stated that the European Parliament's Reasoned
Proposal did not contribute to the unity of the Union and that it had been adopted in such way as to12345/19
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breach the European Parliament's rules of procedure. The delegation expressed the view, therefore,that the procedure pursuant to Article 7(1) TEU lacked a legal basis. Nevertheless, it stated that
Hungary would participate constructively in the procedure, in a spirit of cooperation, and in thehope of avoiding undue delay and of facilitating a timely closure. The scope of the procedurepursuant to Article 7(1) TEU should be limited to issues covered by the European Parliament'sReasoned Proposal and take into account that some of these were subject to procedures and others
were pending. The delegation stated that there should be no interference between those ongoingprocedures and the procedure pursuant to Article 7(1) TEU. It stated that Hungary had been subjectto unprecedented international scrutiny and that the resources and reports were available to allinterested parties.
The delegation stated that, although the Union's values were founded on common constitutional
traditions, Hungary did not expect all Member States to follow exactly the same trajectory. Thisapplied, for instance, in the matter of the creation of constitutional courts. In Hungary, there was
overwhelming public support for EU integration, and EU membership was seen as beneficial. In thearea of migration there was, however, a need to restore the balance between individual rights andthe public interest, and the state could not be indifferent towards those who were entering Union
territory. In addition, Hungary had always enforced ECJ judgements and had never been subject tofinancial penalties. The delegation stated that Hungary was committed to Union's values but thatthose values were currently being used as political leverage. It added that the European Parliament
had failed to fulfil its duty of cooperation and that the European Parliament's Reasoned Proposal
was biased and comprised a number of mistakes. There were no elements that demonstrated a clear
risk of a serious breach of the Union's values.
The delegation stated that Hungary's cooperation with the Venice Commission was excellent andthat the justice scoreboard gave Hungary a favourable ranking. In addition, GRECO reports were inline with this view and scored Hungary as being above the average. The delegation went on toassert that academic life in Hungary was flourishing. In this regard, it stated that Member States had
significant room for manoeuvre in this area: it was not unprecedented that institutions based inanother country were subject to regulation in the interests of ensuring "a level playing field" and ofverifying that they were carrying out genuine activities in their country of origin. On the issue of
religious organisations, Member States reserved the right to differentiate between the legal status ofhistoric (traditional) churches and the status of other religious communities; all regulatory issues
raised by the Commission in this area had been resolved. In addition, Hungary recognised thecontribution of NGOs. Nevertheless, it was legitimate to take measures to ensure transparency of12345/19
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LIMITEENfunding, whilst avoiding the imposition of disproportionate burdens. The approach on illegal
immigration was in line with EU standards, too. This applied, for instance, in the need to address
the problem of entities that intentionally support illegal migration. This was of particular relevancein view of Hungary's geographical position and its EU external border. The delegation asserted thatfamilies were a priority in government spending; work-life balance and equal treatment wereassured, as well as the effective protection of women against violence. Sound policies were in placeagainst racism and particular attention was devoted to the integration of Roma people. On the issueof migration, Hungary was striving to address its causes - also through cooperation with thirdcountries - and to fully protect external borders. The delegation stated that European Parliament's
Reasoned Proposal did not address economic and social rights in a systematic way. Accordingly,
none of the statements in the Reasoned Proposal, individually or as a whole, demonstrated a clear
risk of a serious breach by Hungary of the values on which the Union was founded.
The Commission was then given the floor. It stated that it appreciated the Presidency's efforts toinvolve the European Parliament in the hearing process. Even so, there was a need to ensure a fairhandling of the issue, also considering that the Commission could not be a proxy for the Parliament
and that it was for Member States to ask questions. The Commission shared the concerns of theEuropean Parliament on the issue of judicial independence, which also GRECO and the Council ofEurope had pointed out in recent reports. This had resulted in the request made by the National
Judicial Council to the Hungarian Parliament for the removal of the President of the National Officefor the Judiciary. The postponement of the reform of the administrative courts was not a long termsolution. On the issue of corruption, as indicated by GRECO's compliance reports, Hungary's levelof compliance had remained unsatisfactory, across the board. The Commission was using all theinstruments available: value-related infringement procedures, audits, and investigations on the useof EU funds. The Commission welcomed the fact that the first hearing would cover all the groundsof the Reasoned Proposal, as these indicated that there was a systemic threat. There was no legal
reason to exclude items under infringement proceedings: the Member States needed to examine adynamic, changing situation, and to receive all the elements so as to make an informed assessment.
Follow-up hearings could be organised, focusing on the detail of selected topics. On thoseoccasions, international bodies could be invited to contribute, and provide their assessments, basedon authoritative and independent sources.
The Swedish delegation asked how a plural landscape could be ensured, considering that 80% of
media in Hungary were controlled by one single entity, which was exempt from scrutiny bycompetition authorities.
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LIMITEENThe Hungarian delegation replied to the Commission that corruption was a recurring issue in thepress and in political debates, but that Hungary had a positive record in this regard. A very complex
set of measures had been adopted - both in the public and private sector - which included very
stringent rules on conflicts of interest concerning politicians and civil servants. In its view, anincreasing rate of indictments and a record high in foreign direct investment demonstrated thatefforts were being made to crack down on corruption. The implementation of only 5 out of 18
GRECO recommendations was due to technical difficulties. In addition, GRECO advice wasproblematic in some instances. This concerned, for instance, the recommendation to reduce thescope of immunity for judges.
On the issue of media freedom, the Commission and the Council of Europe had examined thecurrent media regulation in 2011. They had made a positive assessment at the time. In particular,freedom of expression was guaranteed, even vis-à-vis the media owner. Journalists' sources werefully protected; on the basis of a qualified majority, the Hungarian Parliament elected a media
council that was subject to a long mandate and strict rules designed to ensure an independent
oversight of the media. In addition, sanctions were applied by the media council on a progressive
basis. The media holding in question had been set up by independent market operators and, inreality, its market share was well below 80%. 55% of television broadcasts were critical of thegovernment, a corresponding 80% of online sources were critical of the government, too. Media
concentration was similar or higher in other Member States.
The Belgian delegation asked how it was possible to ensure academic freedom and the freedom ofexpression following the reform of the Hungarian Academy of Sciences and the creation of a new
body - in which the government appointed 7 of the 13 members - to oversee research institutes.
The Hungarian delegation stated that the European Parliament had not raised this issue, but that in aspirit of cooperation Hungary was prepared to provide an answer to the question. The new bodyhad, in fact, 15 members. 7 of these were nominated by the government, 7 by the Hungarian
Academy of Sciences; the president was chosen by common accord by its members. Reforms
related only to the research network attached to the Academy, which dated back to the communism
era. This was inefficient and included only roughly one third of members chosen by actual
researchers. The new president had made it clear that all the directors of the 15 existing research
institutes would retain their positions. The focus of the new body would be on securing an even12345/19
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wider autonomy and increased funding in the framework of effective management: it would not beresponsible for deciding on specific research projects.
The Netherlands delegation asked whether Hungary was taking into account the Country Specific
Recommendations (CSR) of July 2019, which highlighted the point that Hungary should reinforce
its anticorruption system.
The Hungarian delegation replied that the CSR were not based on hard facts - but rather on thecitation of opinions. According to OLAF, Hungary was in the top tier of Member States. Several
measures had been taken - including the training and screening of all officials - and efforts had been
stepped up in 2019, as reflected in milder language in the CSR of 2019, as compared to 2018.
Efficiency in the use of EU funds was improving: Hungary was the first Member State toimplement the new EU rules on public procurement and to introduce e-procurement.
The Spanish delegation inquired about freedom of expression, variety and diversity in the media
landscape (and the risk of excessive concentration) and academic freedom - and the guarantees theHungarian legislation offered in these areas.
The Hungarian delegation stated that it had already replied on the issues of freedom of expression
and the media. With regard to academia, the new law on higher education had been adopted in 2012
and an assessment was necessary after 5 years. The aim of this was to provide quality highereducation. Amendments had been introduced to create a level playing field between Hungarian
institutions and institutions that were based in another country. Requirements were no more
stringent than in other Member States. The government had always consented to the extension ofdeadlines for compliance by institutions.
The Danish delegation stressed the point that several international bodies and organisations hadidentified violations. The cumulative impact of these constituted a serious threat to democracy andthe rule of law. The delegation inquired about judicial independence and the steps taken in relation
to the request made by the National Judicial Council to the Hungarian Parliament for removal of thePresident of the National Office for the Judiciary, following the disciplinary procedures the latter
had advocated be taken against members of the National Judicial Council.

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LIMITEENThe Hungarian delegation replied that measures were in place to ensure the independence of thePresident of the National Office for the Judiciary. He or she was elected by 2/3 majority inParliament and had to be a career judge with at least 5 years of judicial experience. The President
denied having received pressures and the disciplinary procedures against judges in the National
Judicial Council had been instigated before their election and were unrelated to their activities in theCouncil. The dismissal of the President of the National Office for the Judiciary could be decided
only by the President of the Republic or by a 2/3 majority of the National Judicial Council.
Institutional tensions had increased since 2018, but this only confirmed that checks and balanceswere working.
The French delegation (also on behalf of Germany) pointed out that each Member State wasresponsible for ensuring the respect of fundamental values and that a sound implementation of EU
common policies was paramount. Further hearings on specific issues could prove to be necessary.
The delegation asked about disciplinary measures, in particular why they were not handled in thecontext of the immediate hierarchical structure and what the role of the Prosecutor General was.

The Hungarian delegation reiterated that the prosecution service was completely independent fromthe judiciary and the executive; the Prosecutor General was appointed by 2/3 majority in Parliament
and was answerable to the Parliament only - the National Judicial Council had no oversight role. An
individual prosecutor, however, had to follow instructions issued by prosecutors who were theirhierarchical superiors. As regards disciplinary sanctions, fair process was guaranteed through thepresence of a disciplinary commissioner, who was not linked to the prosecutor who was thehierarchical superior.
The Italian delegation highlighted once more the importance of academic freedom.

The Luxembourg delegation stressed the importance of dialogue on rule of law issues and asked
whether, on the issue of immigrants, asylum-seekers and refugees, Hungary intended to adapt themeasures in the so-called 'stop Soros' package to ensure that these measures were proportionate andrespectful of human dignity, consistent with the Charter of fundamental rights and otherinternational instruments.
The Hungarian delegation replied that all conditions were met, notably those laid down by thereception conditions directive. Throughout all the procedures, rights were fully respected (namely:
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translation, legal counselling, as well as the requisite accommodation, food, access to health care,education and social assistance). Due attention was given to full compliance: a two-tier procedure
was foreseen, with final decisions rendered locally, in the transit zone.
The German delegation asked why, according to GRECO and Transparency International, Hungary
was performing poorly in the area of corruption and which additional measures were being takenagainst corruption.
The Hungarian delegation replied that there was a lack of solid evidence justifying the downgradingof Hungary. International assessments relied mainly on surveys of the public, and this approach wasquestionable from a methodological viewpoint. Additional measures taken included the creation ofa specific service, within the Prosecutor General office, focusing on high level corruption. The
implementation of the new whistle-blowers directive would not require any change to thelegislation in force in Hungary since 2015.
The Portuguese delegation inquired about the reform of administrative courts.
The Hungarian delegation replied that a debate on the issue had been ongoing since the fall of thecommunist regime, which had abolished administrative courts in 1949. Hungary had requested theopinion of the Venice Commission and, in essence, had taken on board all the comments made.
There was no legal controversy, but a highly toxic political debate was still ongoing, which had
prompted the government to postpone indefinitely the entry into force of the reform of theadministrative courts.

The French delegation asked about the extension of the Prosecutor General's mandate, the media
coverage of the electoral campaign and whether measures were envisaged to ensure wider pluralism
at the next elections.

The Hungarian delegation replied that the Prosecutor General's mandate had been extended until theappointment of the new Prosecutor General. This dependent on agreement in Parliament. On thequestion of elections, the turnout had been the highest ever at the last elections; citizens took anactive interest in the political process, and this proved they were able to express their views.

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LIMITEENA number of guarantees were in place to ensure the neutrality of public broadcasters. In particularthese related to a board of trustees responsible for overseeing the public service: here theopposition and the majority had the same number of representatives. Public television was required
to allocate the same airtime to different political parties, and instant measures could be taken toaddress any violation of the rules.
In its closing comments, the Hungarian delegation welcomed the fact that sufficient time had been
given to cover in sufficient detail the various issues discussed and to present the Hungarian context.
Only one conclusion was possible: there was no systemic risk of a breach of Union's values byHungary. All further procedural steps should have the support of a clear majority of Member States.

The Presidency concluded that the General Affairs Council would remain seized of this matter.

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