The EU’s top court on Wednesday ruled that Brussels can cut funds to countries experiencing rule-of-law problems, rejecting a legal challenge from Poland and Hungary, according to Politico.
In the highly anticipated judgment with decisions read out loud in Hungarian and Polish, the Court of Justice of the European Union said it is dismissing Budapest and Warsaw’s cases.
The ruling is a critical moment in the EU’s ongoing efforts to police democratic standards among its own members.
At the request of EU countries, Brussels had agreed to wait for the ruling before making a final decision on whether to slash payments to countries like Poland and Hungary, which have long fought with EU leaders over democratic backsliding allegations. Now, with the ruling in its favor, Brussels will face even more pressure to act.
Wednesday’s ruling is the culmination of a long legal battle that emerged after the EU in 2020 authorized a new mechanism that allowed it to reduce funding to countries where rule-of-law breaches negatively affect European taxpayers’ money.
Hungary and Poland, the two countries most likely to lose funding under the new authority challenged the mechanism in court, arguing that the regulation violates the EU Treaties and fails to guarantee legal certainty to member countries.