EU executive faces lawsuit unless it acts fast on rule of law in Poland, Hungary

FILE PHOTO: EU Commission President Von Der Leyen debates COVID-19 vaccination strategy in Brussels
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By Jan Strupczewski

BRUSSELS (Reuters) - The European Parliament is set to pass a resolution on Wednesday warning that it will sue the European Commission unless the EU executive arm applies new legislation that makes access to billions of EU funds conditional on respecting the rule of law.

The law, agreed in December but suspended in practice, is to safeguard EU money from misuse in cases where, for example, politicised courts do not guarantee a fair trial for a complaint about a tender for an EU-funded project.

The law came into force on Jan. 1, but the Commission said it would only start acting on it once it prepares appropriate guidelines -- a process that could be delayed by legal challenges to the regulation from Poland and Hungary.

The two countries, both under formal EU investigation for breaking the rule of law, stand to lose billions in EU funds when the law is applied. Their challenge in the EU court could take years and the Commission does not want to issue its guidelines until the ruling.

The Commission's guidelines are not necessary to apply the law, but officials said they are part of a deal struck with Warsaw and Budapest, effectively postponing the application of the law until after parliamentary elections in Hungary in 2022.

The European Parliament said in the draft that such deals went against the Commission's role of the guardian of EU laws.

"The European Parliament believes that the situation as regards respect for the principles of the rule of law in some Member States warrants immediate consideration," it said.

Hungarian Prime Minister Viktor Orban, during a decade in power, has used public spending to build a loyal business elite which includes some members of his family and closest friends, partly using billions of euros worth of state and EU funds.

In Poland, the opposition and local governments say the ruling eurosceptic and nationalist coalition could be using the billions of euros from the EU's post-pandemic fund to finance their strongholds, while starving opposition regions of cash. The government has not addressed such concerns.

The European Parliament gave the Commission until June 1 to write its application guidelines, so that the law could be applied, or face lawsuit in the EU's top court for failing in its duties as guardian of EU laws.

Its draft resolution said that if it did not fulfil its obligations, "parliament will consider this to constitute a failure to act and subsequently shall take action".

(Reporting by Jan Strupczewski; Editing by Alison Williams)