April 26, 2012
This Blog entry relates to a Washington Post Article “EU to start aid talks with Hungary after concessions on central bank independence”
The Manager of the LinkedIn group “Friends of the European Union” shared it there and following an interesting discussion, I decided to publish my opinion as a Blog entry, as well.
I am a lawyer so I try to formulate an objective, legal opinion rather than a political one.
The real debate is not between the IMF and Hungary. The IMF has no rights to refuse to enter into official negotiations with an IMF member state. This was clearly visible when the IMF gave loans to Belorussia, Egypt, Chad etc. (under strict financial conditions I won’t cover now since it would broaden my comment over its limits). When the IMF did not start the official negotiations, it obviously followed the instructions of the Commission.
A question mark: it would be interesting to pursue a throughout legal analysis of the international treaties establishing and governing the IMF. Is it compatible with those treaties providing such a power to the Commission to have the possibility of blocking the start of the negotiations of an EU Member State?
Therefore, this is a legal (and political) debate between Hungary and the Commission.
The legal discussion shall be based on the law of the Union. The law of the Union contains indeed principles, fundamental rights but also strict procedural conditions. The Commission shall follow the formal and the material law of the Union.
Let’s be clear: the question is whether Hungary infringed the fundamental rights of the Union.
There is no evident answer to it, yet, since a deep and fructuous discussion and negotiation is still ongoing not only between the Commission and Hungary but also between the Council of Europe and Hungary. At the very end of these procedures, we will be in the position to answer this question properly.
Who is wrong or right?
It depends. In my opinion, the responsability is shared almost in every single cases. But may I remind you that although the Commission is the defender of the treaties, the final, most appropriate organ to decide upon the law of the Union is the independent Court of Justice of the European Union in Luxembourg. Only its decision can be regarded from a legal point of view as final and definitve.
Regarding the role of the IMF
If the EU had concerns on Hungary (it may have concerns and these concerns might be – in some cases – founded), the law of the Union shall provide the appropriate legal framework to pursuit this legal discussion. In other words: this game shall be played at home rather than in foreign playing fields such as the International Monetary Found.
Every IMF member states – even dictatorships – have given their financial contributions to the IMF and from purely economic point of view, they have the right to start at least the official negotiations. Afterwards, it is up to the concerned member state and the IMF to agree upon a financial agreement.
I am not stating that Hungary is going to the right or wrong direction. I am just saying that the IMF should be left out from the discussions which flow within the EU.
(Editorial remark: one day before the meeting of president Barroso and PM Orbán, the Hungarian PM made a public presentation about his philosphy concerning the “renewal” of Hungary.
I participated in that event and I tryed to explain in my earlier (4/23/2012) Blog entry the main messages of the Hungarian PM to make possible to better understand his motives for everyone who did not have the chance to be present. In the light of this new press article, this earlier entry would be interesting since the question of the kick-off of the HU-IMF negotiations were still open at that time)
I remain at your disposal.
Related earlier updates:EU ZMK's Diary