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The Hungarian government before the courts of theEuropean Union: rationales and results

ERNŐ VÁRNAY

INTRODUCTION

The transmission mechanisms between the EU legal system and thelegal orders of the Member States carry impulses from the EUtowards national legal orders, for instance, in the form oflegal harmonization obligations or obligations concerning theprotection of fundamental rights, and also from the MemberStates towards the EU, for example, in the form of EU lawborrowing principles and institutions from national legalorders. The coexistence of the two systems is not withoutfriction, even conflict. These are negotiated and resolvedwithin the framework offered by the different procedures beforethe courts of the European Union.The infringement procedures under Articles 258 to 260 TFEU

and the preliminary ruling procedure under Article 267 TFEU, byenabling the legal enforcement of Member State compliance withEU law, provide an important link between the EU and nationallegal orders. In infringement procedures, as the guardian ofthe Treaties the Commission – and extremely rarely a MemberState – challenges Member State non-compliance and may bring anaction to the EU Court asking for a judicial declaration thatthe Member State concerned has failed to observe its Treatyobligations (most often by failing to harmonize national lawwith EU law). In preliminary ruling procedures, national courtsturn to the EU Court for guidance on the interpretation of EUlaw provisions and on how to proceed in case they identify aconflict between national and EU law. In the first procedure,the Member States – represented by their governments –participate as a party (defendant) or an intervener,1 and, in

1 Article 41(1) of the Statute of the Court of Justice of the European Union, OJ C83/210.

the second, they may represent their interests by submittingwritten observations.2

The Member States are not without defence against unlawful EUlegislative and administrative action. In the action forannulment under Article 263 TFEU, the Member States haveprivileged locus standi and they are allowed to bring an actionagainst EU measures which they regard as unlawful and which mayviolate their political, economic and social interests. Thisprocedure also gives a legal framework for the resolution ofconflicts between the EU institutions which conflicts maypresent themselves as conflicts between the interests of the EUand the Member States.3

The friction and conflicts between the two legal orders mayarise from the differences between the perception of the finalitéof the European integration or the constitutional order of theEU, in particular, concerning the delimitation of powersbetween the Union and the Member States, the choice between asupranational or an intergovernmental solution in Europeangovernance, the differences between the preference scale of thetwo entities, or between differing concepts of democracy.Member State governments may fight in the front lines, asrespondents in infringement procedures or as applicants in theaction for annulment, or they may try to promote their own casefrom the second line by means of intervening in directprocedures or by making observations in preliminary rulingprocedures. Their systematic presence in this latter transformsthe bilateral dialogue of preliminary references betweennational and EU courts into a genuine multi-actor discourse.4

The participation of national governments in the proceduresbefore EU courts depends to a great extent on their owndecision. This is evident in the case of interventions,observations and actions initiated by the Member States. Ininfringement procedures, the progress of that procedure islargely determined by the attitudes and behaviour of the MemberState government concerned. In case the government complies,the Commission closes the file, and if compliance occurs after

2 Ibid. Article 23(2).3 For example, in Case C-121/10, Commission v Council, not yet reported, the subject matter is the legality of the state aid granted by Hungary.4 T. de la Mare and C. Donelly, ‘Preliminary Rulings and EU legal Integration: Evolution and Status’, in P. Craig and G. de Burca (eds.), The Evolution of EU law, Oxford: Oxford University Press, 2011, pp. 363-406, p. 378.

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the case has reached the Court, the Commission may revoke theapplication.The behaviour of Member State governments is far from

uniform. There are (pro)active and less active players. One canobserve different motives behind the participation of differentgovernments. Their involvement also differs in terms of theirefficiency. Arguably, the particular organizational anddecisional background of Member State participation, and thequantity and quality of the human resources involved are atleast partly responsible for these differences. In twoimportant articles, Marie-Pierre Granger5 laid down the main tenetsof a conceptual framework for examining the behaviour ofgovernments before EU courts. While her research mainlyconcerned the preliminary ruling procedures, we consider thatthe typology and the categories suggested may also help us toanalyse the issues arising in other procedures. Her resultsprovide the conceptual starting points of this Chapter in whichwe discuss the motives, attitudes and the efficiency of theparticipation of the Hungarian government in procedures beforethe EU courts. We hope that our investigations will contributeto an understanding of the nature of the friction and conflictsbetween the legal system of the EU and the Hungarian legalorder and the role played by the Hungarian government in thatregard. We also try to assess to what extent has theparticipation of the Hungarian government in EU courtscontributed to the promotion of the interests of the EU and ofHungary, in particular of Hungarian businesses and citizens, orto the protection of the Hungarian legal order. In ourresearch, we relied on primary legal documents, such as legalprovisions, opinions of the Advocate Generals, judgments of theEU courts, reports for the hearing before EU courts, and theonline databases of the Commission and the Hungarian Ministryfor Public Administration and Justice, and we conductedinterviews with officials in the ministries who are responsiblefor the preparation of the documents submitted to the EU courts

5 M.-P. Granger, ‘When governments go to Luxembourg…: the influence of governments on the Court of Justice’, European Law Review 29, 2004, pp. 3-31 (Granger (2004)) and M.-P., Granger, ‘States as successful litigants beforethe European Court of Justice: lessons from the ‘Repeat Players’ of European litigation’, Croatian Yearbook of European Law and Policy 2, 2006, pp. 1-20(Granger (2006)).

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and/or those who represent the Hungarian government inLuxembourg.

GENERAL ATTITUDES

Member State governments, regarding their participation beforeEU courts, may adopt an indifferent attitude, or they may bemore or less (pro)active. If a Member State wishes to influencethe decisions of EU courts it has to be present relativelyoften in procedures in Luxembourg and it has to organize itsparticipation in an efficient way. The attitude of theHungarian government is reflected in the figures concerning theparticipation of the Hungarian government in procedures beforeEU courts. This provides an adequate starting point for thediscussion on the organizational and decision-making structuresadopted in this regard by the Hungarian government.As Table 1 shows, from 1 May 2004 – the date of Hungary’s

accession to the European Union – until the end of 2012 theHungarian government was relatively active in procedures beforeEU courts. It submitted observations in 115 preliminary rulingprocedures (of which 53 were introduced by Hungarian courts and62 by the courts of other Member States), it brought 10 actionsfor annulment against EU (Commission) legal acts and intervenedin 24 direct action cases. Hungary was a respondent in 13infringement cases and initiated one infringement actionagainst another Member State. Five years after the accession,the Hungarian government attained its ‘standard’ participationfrequency with a number of cases slightly over twenty per year.

Table 1. The participation of the Hungarian government inprocedures before the Court of Justice of the European Unionfrom 1 May 2004 to 31 December 2012*

2004

2005

2006

2007

2008

2009

2010 2011

2012

Asapplicant

1 1 5(McSl)

2 1 10

Asdefendan

2 3 1 3 4 13

4

tIntervener

4 1 1 3 3 1 4 3 4 24

Observations inpreliminaryrulingprocedures (references fromHungariancourts)

2 2 2 1 6 9 6 12 13 53(46percentofthesub-total[115]

Observations inpreliminaryrulingprocedures (references fromotherMemberStates’courts)

5 2 6 5 9 9 6 11 9 62(54percentofthesub-total[115]

Total 11 6 10 11 21 20 22 28 24 162* Joined cases are counted as one case.Source: Annual Reports of the Court of Justice of the European Union andMinistry of Public Administration and Justice, available at<http://eujog.kim.kormany.hu/admin/download/7/ca/60000/magyar-reszvetel-az-europai-birosag-elotti-ugyekben-20130416.pdf> (downloaded 25 April 2013).

Looking at the figures on the number of observations made,one should observe that Granger’s earlier remark on the‘disappointing(ly) low number of observations made by theHungarian government’6 can no longer maintained. The overallrelatively active participation of Hungary could be explainedin part by the general conviction that the government regards6 Granger (2006), p. 14.

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itself as quasi obliged to submit observations in preliminaryreference procedures initiated by Hungarian courts.7 This alsocharacterizes the approach of Member States, such as France, ina lesser extent the United Kingdom, among the older largerMember States, and the Czech Republic and Poland among the 2004entrants.8

In Hungary, the procedural codes oblige the courts to sendthe order for reference for preliminary ruling to the EU Courtof Justice and simultaneously to the ministry responsible forjustice. This provision allows the administration to considerthe possibility of making observations in the case and to beginpreparations for the participation at an early stage in theprocess.9

The figures also show that the Hungarian government does notlimit itself to participating in cases referred by Hungariancourts. Frequently, it makes observations in preliminary rulingprocedures initiated by courts in other Member States. Grangerargued regarding Member State attitudes in general that ‘thecombination of a relatively high number of observations with arelatively low number of these being submitted in ‘national’cases can signal an active yet selective, therefore moreeffective, litigation strategy.’10 We are inclined to believethat the figures in Table 1 confirm that the participation of7 There are only two exceptions to this: In Case C-16/12, Hermes, the reference concerned the lawfulness of a piece of primary legislation, and it should have been obvious to the Hungarian government that the EU Court –because the case was not related to EU law – had no jurisdiction to answer the question (Order of the Court of Justice of 6 July 2012. Not yet reported). In Joint Cases C-33/12, C-38/12, Körös-vidéki Környezetvédelmi és Vízügyi Igazgatóság (Order of the Court of Justice of 6 November 2012. Not yet reported) the litigants in the main proceeding were both administrative bodies, and probably the government did not wish to influence the Court’s decision in favour of one or the other agency.8 T. de la Mare and Donelly, op.cit., pp. 401 and 403.9 The Ministry responsible for justice receives the order for reference at least two months earlier than it can be obtained from the Court of Justice.It may be interesting to note that the constitutionality of this obligationwas questioned before the Hungarian Constitutional Court. The petitioner suggested that the independence of the courts and the right to the protection of personal data had been violated by the obligation, however, the Constitutional Court decided otherwise (Decision 61/B/2005). The question of the compliance of the provision with EU law was raised in the reference to a preliminary ruling in VB Pénzügyi Lízing where the EU Court heldthat it does not breach EU law (Case C-137/08, VB Pénzügyi Lízing [2010] ECR I-10847).10 Granger (2006), op. cit., p. 10.

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the Hungarian government in proceedings before EU courtsreflects such an ‘active yet selective, therefore moreeffective litigation strategy.’ This, however, needs to besupported with further evidence.According to the Rules of Procedure of the EU Court, the

intervener has the right to be served every document the Courtserves on the parties.11 This provision might make itreasonable for the national government to intervene not only totry to influence the Court’s decision, but also to be informedof the pleadings of the parties in cases where the legalproblem is similar or identical to one which has also arisen atthe domestic level.12

Hungary is amongst the Member States against which so faronly a relatively small number of infringement procedures havebeen initiated.13 Very often, the file is closed in theprejudicial (administrative) phase of the procedure. Even incases which have reached the Court, it declined to deliver ajudgment because Hungary had eventually fulfilled its Treatyobligation(s) and the Commission discontinued the litigation.14

11 Article 131(2) of the Rules of Procedure of the Court of Justice adopted on 25 September 2012, OJ L265/1.12 For example Case C-118/07, Commission v Finland [2009] ECR I-10889; Case C-205/06, Commission v Austria [2009] ECR I-1301; Case C-249/06, Commission v Sweden [2009] ECR I-1335; Case T-32/07, Slovakia v Commission (Removal Order of 14 May 2008); Case T-194/07, Czech Republic v Commission (Removal Order of 26April 2013); Case C-504/09 P, Commission v Poland, not yet reported; Case C-47/08, Commission v Belgium [2011] ECR I-4105; Case C-50/08, Commission v France [2011] ECR I-4195; Case C-51/08, Commission v Luxemburg [2011] ECR I-4231.13 In the period 2007-2011, the Commission brought 762 actions against the Member States for failure to fulfil their obligations. In the same period, the highest number of procedures was brought against Italy (69), Spain (68), Portugal (67), Belgium (58), and France (53). Amongst the new Member States the highest number of actions was brought against Poland (44) and the Czech Republic (23). The first action against Hungary was brought on 29January 2007. Source: European Court of Justice, Annual Report 2011, pp. 102-3.14 In 6 cases, the Court ordered the removal of the case from the register because the Commission withdrew its action. However, in all of these cases the Court ordered Hungary to pay the costs because Hungary only took the measures necessary to comply with its obligations after the Commission had withdrawn its action.

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As of mid-April 2013, the Court found in only three cases thatHungary had failed to fulfil its obligation(s).15 In one othercase, the Court dismissed the action of the Commission.16

Table 2 Number of formal steps taken by the Commission ininfringement proceedings against Hungary 2005-2012

Letter offormalnotice

Reasonedopinion

Referralto theCourt ofJustice

2012 50 13 42011 77 11 02010 65 15 32009 46 9 12008 53 17 32007 60 0 22006 54 18 02005 52 10 0Total 431 87 13Source: Commission Staff Working Paper Statistical Annexes I-IIIAccompanying the document Report from the Commission’s 28th Annual Reporton monitoring the application of EU law (2010), COM (2011) 588 final. For2012, Commission decision on application of EU law, available at<http://ec.europa.eu/eu_law/infringements/infringements_decisions_en.htm>(accessed 13 April 2013).

We suggest that the positive record of Hungary ininfringement proceedings shows the thorough legal work andsuccessful coordination, and also the discipline with which theadministration has been approaching the country’s EUcommitments. Although recent years suggest the emergence of adifferent trend, we have to agree with the observation that

In general, it can be said that the threat of initiating a Commission procedure doesstimulate the national level to render its national legislation compatible with EC law.This is confirmed by the fact that even once the Commission signals potentialbreaches of implementation obligations, the national level responds quickly and

15 Case C-274/10, Commission v Hungary 2011 ECR I-7289; Case C-473/10, Commission v Hungary, not yet reported; Case C-286/12, Commission v Hungary, not yet reported.16 Case C-253/09, Commission v Hungary, not yet reported.

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aims to resolve the issue, as soon as the issue allows – depending on its politicalsensitivity (…).17

We may add to this that this positive attitude vis-à-visobserving the obligations stemming from the EU law means thatin the procedural phase before the Court the Hungariangovernment has never admitted an infringement and chose insteadto comply.As hinted earlier, the positive attitude of Hungary towards

compliance has been overshadowed recently by some uneasy eventswhich have led the Commission to initiate infringementprocedures against Hungary on matters of high constitutionaland political importance.18 A further disappointingdevelopment, which can hardly be reconciled with the abovementioned ‘compliance-driven’ attitude of the Hungarianadministration towards its transposition obligations, was thaton 21 June 2012 the Commission brought an Article 258 TFEUaction against Hungary19 and under Article 260(3) TFEU it askedthe Court to order Hungary to make a penalty payment. This isbecause Hungary failed to notify the measures implementing theWaste Directive.20

Concerning the interventions made by Hungary in the narrowsense, as a trend, the Hungarian government is almost neveralone in any particular case. It actively supported otherMember States and it was actively supported by them. In the

17 T. Takács, ‘The Application of EU Law in Hungary: Challenges and emergingpractices’, in A. Lazowski (ed.) Brave New World: Application of EU Law in the New Member States, The Hague: T.M.C. Asser Press, 2010, pp. 379-419, pp. 409-10. For a detailed presentation of the transposition system in Hungary, see theChapter by R. Sommisch in this volume.18 Case C-286/12, Commission v Hungary, supra n. 15, concernming the national rules requiring termination of the service of judges, prosecutors and notaries public on reaching the age of 62 and Case C-288/12, Commission v Hungary (case in progress) on the independence of the data protection supervisor. For an analysis of the political and legal background, see A. von Bogdandy et al., ‘Reverse Solange – Protecting the essence of fundamental rights against EU Member States’, Common Market Law Review 49, 2012, pp. 489–519 and Editorial Comments, ‘Hungary’s new constitutional order and European unity’, Common Market Law Review 49, 2012, pp. 871–83. See also U. Belavusau, ‘On age discrimination and beating dead dogs: Commissionv Hungary – Case C-286/12, Commission v. Hungary, judgment of the Court of Justice (First Chamber) of 6 November 2012, nyr.’, Common Market Law Review 50, 2013, pp. 1145-60.19 Case C-310/12, Commission v Hungary (Removal Order of 20 August 2013).20 Directive 2008/98/EC on waste, OJ L312/3.

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early ‘financial sanctions’ case against France,21 16 MemberStates – including Hungary – felt necessary to makeobservations. In Commission v Council,22 not less than 19 MemberStates intervened – without success – in support of theCouncil’s submissions. In Kadi,23 11 Member States intervened onthe respondents’ side. In Commission v Council and EuropeanParliament,24 Hungary intervened on the Council’s side in thecompany of six other Member States. In Commission v Poland,Hungary intervened with seven other countries.25

The same is roughly valid for the observations made inpreliminary ruling procedures arriving from other MemberStates. In the majority of the cases, besides the Hungariangovernment, more than one other Member State also madeobservations. This is perhaps not only because the questionshad particular relevance for individual Member States, but alsobecause the issues raised are relevant for the application ofEU law in general. In the latter case, the observations made bygovernments could enable the EU Court to develop interpretativesolutions on the basis of taking into account multipleviewpoints.

THE DOMESTIC COORDINATION OF THE HUNGARIAN GOVERNMENT’SPARTICIPATION IN EU COURT PROCEDURES

Securing the impact of Member State interventions before EUCourts requires more than an active presence in courtprocedures. A powerful presence in EU litigation necessitatesthat pleadings are drafted and presented by lawyers withextensive knowledge in EU and national law who are also well-versed in EU procedural law. From an institutional perspective,this necessitates setting up an adequately resourced litigationtask force within the national administration to draftobservations and prepare pleadings in strong collaboration withexperts from the line ministries or from other coordinatingbodies.26

21 Case C-304/02, Commission v France [2005] ECR I-6263.22 Case C-440/05, Commission v Council [2007] ECR I-9097.23 Case C-584/10 P, Commission v Kadi, not yet reported.24 C-43/12, Commission v Council and European Parliament (case in progress).25 C-48/12 Commission v Poland (Removal Order of 8 January 2013).26 See Granger (2006), op. cit., p. 12.

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In the Hungarian administration, the InterdepartmentalCommittee for European Coordination (ICEC) (EKTB) is chargedwith the preparation of European integration policy and withthe coordination and control of the preparation and executionof the tasks stemming from Hungary’s EU membership. Its primaryresponsibility is to prepare and coordinate the government’sposition in EU decision-making processes. It also controls thecompliance with EU, and in this regard it supervises thedetermination of the draft positions to be represented in theEU procedures relating to the enforcement of Member Stateobligations. The ICEC is presided over by the secretary ofstate of the Ministry of Foreign Affairs (MFA) responsible forEU matters. His or her deputy is the deputy secretary of stateof the MFA charged with EU affairs. The ICEC consists of seniorcivil servants on deputy secretaries of state level chargedresponsible for EU affairs in the line ministries or in theOffice of the Prime Minister. The ICEC is assisted by 53 expertgroups specialized in the different fields of activity of theEU.In matters relating to the procedures before the EU Court –

the decision on whether to bring an action, intervene in adirect action, or submit observations, and the decisionsconcerning the content of the submissions – the basiccoordination organ is the expert group called ‘Proceduresbefore the European Court of Justice and pre-litigationprocedures’. The leadership of this expert group is shared bythe representatives of the MFA and the Ministry of PublicAdministration and Justice (MPAJ). The other ministriesdelegate one civil servant competent in EU matters. Based onthe position taken by the expert group, the ICEC adopts aproposal which will be forwarded to the government withoutfollowing the normal preliminary coordination procedure. Inpractice, the drafts very often acquire their final form in theexpert group, and approval by the ICEC and the government is apure formality. As Somssich writes in her Chapter in thisvolume,

If the need for alignment arises in an ongoing infringement procedure initiated bythe European Commission under Article 258 TFEU or in connection with a state aiddeclared incompatible with EU law under 108 TFEU, the legislative programming andthe legal approximation proposal will be approved under the procedure approvingthe government’s position represented in the procedure.

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In infringement procedures, the representation of the country(the government) is divided between two ministries. In theprejudicial (or administrative) phase, the MFA together withthe MPAJ coordinates the preparation of the submission and, onthe basis of the outcome of the coordination, prepares thesubmissions. In the judicial phase, the MPAJ, together with therepresentatives of the MFA and of the line ministries ifnecessary, represents the government.27 Unlike in Britain andin Ireland, the preparation and representation of thesubmissions are never entrusted to practitioners.In the line ministries, there are special units charged with

EU legal matters. In the MFA, this is the Department for theInternal Market and EU law which contains a specialized unitfor EU law. In the MPAJ, this is the Department for EU lawwhich contains a specialist unit for EU court representation.In both ministries, four to five civil servants are directlyinvolved in the preparation of the documents in infringementprocedures, such as drafting answers to the letter of formalnotice and the reasoned opinion of the Commission, and draftingthe defence and the counter claims in the judicial phase, inthe preparation of applications in actions for annulment, andin the preparation of observations in preliminary rulingprocedures. The MFA and the MPAJ examine all references forpreliminary ruling, not only those submitted by Hungariancourts.This organisational solution requires an intensive

cooperation between the two main ministries responsible for thecoordination, preparation and representation of the governmentin the procedures before EU courts and in the prejudicial phaseof infringement procedures and also in state aid procedures. Sofar, their cooperation has proved to be relatively troublefree. The civil servants working at different levels havemanaged to develop appropriate working practices andcooperative arrangements. In some cases, the civil servantsinvolved could also rely on an informal network of theircolleagues in other Member States, especially when they facesimilar problems.28

27 Government Decree 1084/2004 on the representation of the Republic of Hungary before the European Court of Justice and the related tasks.28 This was the case for example in the casea concerning VAT, and pontentially in the investment agreements cases, C-205/06, C-249/06 and C-118/07, supra n. 12.

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The Hungarian Parliament does not take part in the decision-making procedures concerning the formation and representationof the governmental position in Luxembourg. The system createdto ensure the involvement of Parliament in matters of staterelating to the EU does not provide the correspondingcompetences.29 In certain cases of particular importance,government officials were asked to explain the procedure to theStanding Committee on European Affairs.It is not excluded at all that major interest groups or large

firms find their way to the administration and try to convincethem to follow a certain path in procedures before EU courts.30

Arguably, the institutional and resources arrangements of thedomestic preparation and coordination of Hungary’sparticipation in Luxembourg should enable Hungary to act as apotential repeat player with good persuasive force.

THE MOTIVES FOR HUNGARY’S PARTICIPATION IN PROCEDURES BEFORE EUCOURTS

As the statistics presented earlier demonstrate, the Hungariangovernment is a relatively active participant in proceduresbefore the courts of the European Union. The motives behind itsparticipation are less certain. Exploring the potentialmotivations is necessary as the government’s decision toparticipate involves mobilizing considerable human andfinancial resources and the risk of losing in Luxembourg.In preliminary reference proceedings, Granger identified

three types of basic motivations,31 which in our view can beused in other procedures as well. The first, and perhaps themost important, is the defence of the domestic or nationalinterest. Governments are keen to defend domestic laws orpolicies which are challenged by the EU, and they are notafraid to step up to protect the economic interests of domesticactors, either public or private. The second is the promotionof national visions of Europe which are also used to influenceEU law and practices or to promote a particular vision of EUlaw This can be exemplified by the battle over the access todocuments in the EU, where no national interest was at stake,29 On this matter, see the Chapter by A. Juhász-Tóth in this volume.30 This was probably the case in Sfakianakis, Joined Cases C-23/04 to 25/04, Sfakianakis [2006] ECR I-1265.31 Granger (2004), op. cit., pp. 10-13.

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rather the Member States were interested in evening out thedifferent concepts of transparency and accountability in theEU.32 The third motivation sees governments as acting as amicuscuriae assisting the Court in clarifying important questions ofEU law or of the national legal system, and thus furthering EUinterests.Following these categories, in the next section we will try

to identify the actual motivational categories of the Hungariangovernment’s participatory strategy.

The most obvious motive: defence of direct financial(budgetary) interests

In a considerable number of cases, the Hungarian governmentdecided to take matters to the General Court because it soughtto annulment of acts of the Commission concerning theexpenditure of concrete amounts of money from the EU budgetunder different support programmes.33 In other instances, theimpact of EU law on the domestic tax system promptedintervention by the Hungarian state in EU litigation. Thedefence of a direct financial (budgetary) interest was the mainmotivation of the government when it submitted – unsuccessfully– observations in order to maintain the registration duty onused vehicles in force.34 The revenues of local governmentswere under threat when the compliance of the local business taxwith EU law was questioned before Hungarian courts.35 When thematter reached the EU Court, the Hungarian government –successfully – argued that the tax does indeed meet therequirements of the relevant EU directive.36

32 D. Adamski, ‘How wide is “the widest possible?” Judicial interpretation of the exceptions to the right of access to official documents revisited’, Common Market Law Review 46, 2010, pp. 521-49; P. Leino, ‘Just a little sunshine in the rain: The 2010 case law of the European Court of Justice onaccess to documents’, Common Market Law Review 48, 2011, pp. 1215-52.33 Case T-89/10, Hungary v Commission, not yet reported; Case T-407/10, Hungaryv Commission, not yet reported; Case T-320/11, Hungary v Commission, not yet reported.34 Joined Cases C-290/05, Ákos Nádasdi v Vám- és Pénzügyőrség Észak-Alföldi Regionális Parancsnoksága and C-333/05, Ilona Németh v Vám- és Pénzügyőrség Dél-Alföldi Regionális Parancsnoksága [2006] ECR I-10115. Another taxation case with unsuccessful observations made by Hungary, Case C-96/08, CIBA [2010] I-2911.35 Case C-283/06, KÖGÁZ, Case C-312/06, OTP Garancia Biztosító [2007] ECR I-8463.36 The Hungarian government submitted observations in a very similar preliminary ruling procedure in Case C-475/03, Banca Popolare di Cremona [2006]

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In Hungary, as in a number of other Member States, there arelegal instruments in place against the different kinds ofabuses of the value added tax (VAT) system, which are regulatedlargely on the basis of the relevant EU directive. Theirpurpose is to enable Hungarian tax authorities to combatfraudulent activities. The various legal solutions andadministrative practices have been subject to a number of legalchallenges in national courts.37 Sometimes it is the Commissionwhich is convinced that Hungarian law or administrativepractice is incompatible with the relevant provisions of EU taxlaw. In these instances, the Hungarian government is preparedto defend its position relying on the interpretative leewayavailable to member States under the legal classification ofdomestic taxes in EU law. The first infringement case in whichthe Court declared that Hungary had failed to fulfil itsobligations under EU law was a VAT-related case.38 The Courtfound that Hungarian tax law – which allows the refund ofexcess VAT only if it exceeds the amount of input taxcorresponding to transactions not yet paid for – breaches the2006 ‘VAT Directive’.39The Hungarian government, seeking the‘useful’ interpretation of EU law, felt it important to submitobservations on VAT-related preliminary reference questionspresented to the EU Court by other Member States’ courts.40

In Nationale Loterij,41 the motivation of the Hungarian governmentfor submitting observations was perhaps that in Hungaryorganized gambling is reserved by statute for a state monopoly,and the state budget relies considerably on gambling revenueswhich would be seriously jeopardized if other, foreign economicoperators could enter the market. Similarly, in Vodafone Malta,42

ECR I-9373.37 Case C-74/08, Parat Automotive [2009] ECR I-3459; Case C-368/09, Pannon Gép Centrum [2010] ECR I-7467; Case C-392/09, Uszodaépítő [2010] ECR I-8791; Joined Cases C-80/11 and C-142/11, Mahagében and Dávid, not yet reported; Case C-273/11, Mecsek Gabona, not yet reported; Case C-324/11, Tóth, not yet reported; C-444/12, Hardimpex, not yet reported; Case C-563/12, BDV Hungary (case in progress).38 Case 274/10, Commission v Hungary, supra n. 15; C-191/12, Alakor, not yet reported.39 Directive 2006/112/EC on the common system of value added tax, OJ L 347/1.40 Case C-91/12, PCF Clinic, not yet reported; Case C-125/12, Promociones y Construcciones, not yet reported.41 Case C-525/06, National Loterij [2009] ECR I-2197.42 Case C-71/12, Vodafone Malta, not yet reported.

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the compatibility with EU law of a charge to be paid solely bymobile telephone operators and not by other undertakingsoffering electronic communications services was interesting forthe Hungarian government given that a similar tax had just beenintroduced in Hungary, which was also challenged by theCommission in an infringement procedure.43

Arguably, the motive in Franklin Templeton Investment44 was againthe defence of Hungarian income tax legislation whichdistinguishes between residents and non-residents concerningthe exemption from tax on dividends.45 In Vorel, the expenditureside of state and local government budgets was at stake.46 Thenational court referred questions about the concept of ‘workingtime’ in EU law, with specific regard to periods of inactivityduring ‘on-call’ duty provided by a physician at his/her placeof work, and also about the effect of these concepts on theremuneration of physicians doctors. The similar Hungarianprovisions had already been challenged in domestic courts andthe relevant legislation had also been questioned before theConstitutional Court. This made the Court’s judgement of havingprimary importance for Hungary. The expenditure side of thenational purse was also at stake in Bábolna.47 In that case thecompetent authority ordered the repayment of a certain amountof agricultural aid which had been granted to the firm which atthat time faced serious financial difficulties.

The defence of the economic (financial) interests of nationaleconomic actors

The other motive for Hungary`s participation in the role of thedefence lawyer is when the defence of the financial interestsof national economic actors is at stake. This was the subjectmatter in the case Hungary v Commission48 in which the Hungariangovernment – successfully – sought the annulment of aCommission regulation concerning the purchase of cereals byintervention agencies.49 The protection of the economicinterests of the Hungarian wine producers lies behind the

43 Case C-462/12, Commission v Hungary (case in progress).44 Case C-112/12, Franklin Templeton Investment (Removal Order of 5 December 2012).45 See also Case C-292/04, Meilicke [2007] ECR I-1835.46 Case C-437/05, Vorel [2007] ECR I-331.47 Case C-115/10, Bábolna [2011] ECR I-5017.48 Case T-310/06, Hungary v Commission [2007] ECR II-0015.

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Hungarian vigilance in the litigation affecting the worldfamous Tokaji wine. The Hungarian government defended the use ofthe valuable geographical name and in one case the name of theterritory where the wine can be produced legally.50 The samemotive led the Hungarian government to intervene in Poland vCouncil51 concerning a decision on direct subsidies to farmers.Besides the health concerns, the interests of Hungarian potatoproducers could have induced the Hungarian government to bringan action for annulment against the decisions of the Commissionauthorizing the marketing of genetically modified potato and offeed produced from genetically modified potato in the EU.52

Hungary was also among the mainly new Member States whichopposed the Commission’s policy concerning the nationalallocation plans of emissions allowances for greenhouse gases.The Hungarian government brought an action against theCommission and intervened in three cases launched by otherMember States, supporting the appellant Member State.53 Theinterests of Hungarian economic operators might have been oneof the indirect reasons for the government submittingobservations in Sfakianakis54 where the reference from the Greekcourt concerned the imports of automobiles into Greece fromHungary. This motive in Elenca55 was obvious since the Italianrules under challenge precluded the marketing of productsoriginating from Hungary. Similar motives may be involved inthe cases concerning the supplementary protection certificate

49 According to the estimate made by the Hungarian government, half of the Hungarian harvest that year was not eligible to be bought under the intervention framework.50 Case C-347/03, Regione Autonoma Friuli Venezia [2005] ECR I-3785; Case T-417/04,Regione autonoma Friuli-Venezia Giulia v Commission [2007] ECR II-0641; Case T-418/04, Confcooperative, Unione regionale della Cooperazione Friuli-Venezia Giulia Federagricole and others v Commission [2007] ECR II-0024; Case T-431/04, Italy v Commission [2007] ECR II-0064; Joined Cases C-23/07, Confcooperative Friuli Venezia Giulia and Case C-24/07 Cantina Produttori Cormons [2008] ECR I-4277; Case T-194/10, Hungaryv Commission, not yet reported, appealed before the Court of Justice in CaseC-31/13 P, Hungary v Commission (case in progress).51 Case C-273/04, Poland v Council [2007] ECR I-8925.52 Case T-240/10, Hungary v Commission, not yet reported.53 Case T-221/07, Hungary v Commission (Removal Order of 23 April 2013); Case T-32/07, Slovakia v Commission (Removal Order of 14 May 2008); Case T-194/07, Czech Republic v Commission (Removal Order of 23 April 2013); Case C-504/09 P, Commission v Poland, supra n. 12.54 Joined Cases C-23/04 to 25/04, Sfakianakis, supra n. 30.55 Case C-385/10, Elenca, not yet reported.

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for medicinal products56 given that there is a significantpharmaceutical industry in Hungary. It is also evident that inKer-Optika57 the observations of the Hungarian government indefence of national legislation concerning the sale of contactlenses were closely related to the economic interests ofnational economic operators. The intervention in the caseCommission v Council58 on the Council’s side was evident becausein this case the Commission asked for the annulment of theCouncil decision on granting state aid by Hungary to economicoperators for the purchase of agricultural land.In cases involving matters under the Common Customs Tariff,

the interests of the economic operators (exporters andimporters) and national and EU interests are all affected.59 InRuma,60 the Hungarian government wanted firstly to specify thatno official information from the competent Hungarianauthorities was given to Ruma – the producer and exporter –concerning tariff classification, and secondly, it wished toinform the Court of its official position regarding the legalissues raised.It is not easy to categorize the motivation of the Hungarian

government in the infringement cases concerning the impositionof a nationality condition for access to the profession ofnotary.61 Hungary intervened on the defendant’s side, arguing –without success – that the nationality condition, which is alsoprescribed by Hungarian legislation, does not breach thefreedom of establishment under the Treaties. By so doing, itindirectly attempted to defend the coherence of the Hungarianlegal system and the national market from foreign competitors.Arguably, a similar concern played a role in Rani,62 where thegovernment tried to defend the provision of the Labour Codeallowing the posting of workers in the framework of theprovision of services in Hungary only for economic operatorshaving their head office in this country. Given that Hungary56 Case C-66/09, Kirim Amgen [2010] ECR I-7943; Case C-125/10, Merck Sharp & Dohme, not yet reported.57 Case C-108/09, Ker-Optika [2010] ECR I-12213.58 Case C-121/10, Commission v Council, supra n. 3.59 Case C-16/08, Schenker [2009] ECR I-5015; Case C-667/11, Paltrade, not yet reported; Case C-182/12, Fekete, not yet reported.60 CaseC-183/06, Ruma [2007] ECR 1559.61 Case C-47/08, Commission v Belgium [2011] ECR I-4105; Case C-50/08, Commission v France [2011] ECR I-4195; Case 51/08, Commission v Luxemburg [2011] ECR I-4231.62 Case C-298/09, Rani [2010] ECR I-0081.

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(i.e. Hungarian producers) was deeply concerned with therestructuring of the sugar industry in the framework of thecommon agricultural policy, the interest to participate isquite understandable in a recent preliminary ruling procedureinitiated by the Consiglio di Stato concerning this sector.63

The Hungarian government as a defence lawyer and/or amicus curiae

In preliminary reference procedures initiated by nationalcourts, the real question is very often the adequateinterpretation of the national legislation in the light of EUlaw. This is particularly the case when the legal act wasadopted in the EU legal harmonisation process. The preliminaryreference procedure has developed into a significant means forindividuals, with the support of national courts, forchallenging domestic legislation incompatible with EU law.64 Inother instances, the disputed issue before the national courtis not the interpretation of national legislation but theapplication of (directly applicable) EU law by nationalauthorities. In infringement cases, the Hungarian governmentmay decide to put forward a defence because the nationalmeasure under challenge is similar or identical to national lawin force in other Member States. In these kinds of situation,the Hungary can play the role of the defence lawyer (defendingits own interpretation of the law) and that of the amicus curiaetrying to explain the wider legal (and economic) context of thepiece of legislation in question. These two roles are notalways distinguishable. The amicus curiae function isparticularly important for the administration of the workloadof the EU Court as, according to civil servants at the Court,the references arriving from Hungarian courts are not alwayssufficiently clear in terms of their legal and factualcircumstances.65

The following cases provide an excellent example of Hungaryacting in either or both of these functions. In LidlMagyarország,66 the non-recognition in Hungarian legislation ofthe declaration of conformity issued by the manufacturerestablished in another Member State was called into question.

63 Joined Cases C-187-189/12, SFIR, not yet reported.64 Granger (2006), op. cit., p. 33.65 Anonymous, personal interview conducted on 06 March 2012.66 Case C-132/08, Lidl Magyarország [2009] ECR I-3841.

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In Ker-Optika,67 national legislation authorising the sale ofcontact lenses solely in medical supply shops was challenged.In Ebert,68 legislation passed by Hungary reserving thepossibility of practising law and using the Hungarianprofessional lawyer’s title to lawyers that are registered withthe Bar Association in that Member State was alleged to beincompatible with EU law by the applicant. In Katz,69 thereference for a preliminary ruling concerned the Hungarianregulation of criminal procedures initiated under thesubstitute private prosecutions scheme. The scheme enablesvictims of crime to exercise prosecutorial functions in lieu ofthe public prosecution office. The Hungarian government statedthat the referring court’s doubts concerning the possibility ofthe party bringing a substitute private prosecution being heardas a witness in criminal proceedings are based on an incorrectinterpretation of Hungarian law and that, according to acommentary on criminal procedural law and an opinion of theSupreme Court, a party bringing a substitute privateprosecution may, under Hungarian criminal procedural law,appear as a witness in that procedure.70 In Cartesio,71 thereferring Hungarian court called into question the nationalmeasure which confers a right to bring an appeal against ordersfrom national courts making a reference for a preliminaryruling. In an another question, the referring court essentiallyasked whether ex Articles 43 and 48 TEC on the freedom ofestablishment preclude national rules which make it impossiblefor a company constituted under national law to transfer itsoperational headquarters to another Member State. The Hungariangovernment – in order to prevent the EU Court deciding againstthe relevant provisions as was suggested by the referring court– argued that the case falls outside the scope of the abovementioned Treaty provisions.The clarification of the interpretation of Hungarian law in

the light of EU law has been a constant concern for Hungariancourts applying the law on unfair terms in consumer contracts.One of the central questions was whether national courts areallowed to examine of their own motion the unfairness of a67 Case C-108/09, Ker-Optika [2010] ECR I-12213.68 Case C-359/09, Ebert [2011] ECR I-0269.69 Case C-404/07, Katz [2008] ECR I-7607.70 For the amicus curiae role played by Hungary see also Case C-273/11, Mecsek Gabona, supra n. 37, para 37.71 Case C-210/06, Cartesio [2008] ECR I-9641.

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contractual term. Not less than six preliminary references haveso far been sent by Hungarian courts in this matter.72 On thisbasis, it is hardly surprising that the Hungarian governmentwas prepared to submit observations in preliminary referenceprocedures initiated by other Member States' courts in the samematter.73 The aim of these submissions was to ensure that theEU Court accepts the government’s interpretation of theHungarian law in effect.Hungary, like many other Member States, faces constant

pressure from the requirement of adequate management of asylumapplications under the Common European Asylum Policy and itsauthorities are often confronted with the difficulty ofinterpreting the qualification conditions of refugee statusunder EU law. The government regularly makes observations inproceedings initiated by Hungarian74 or other national courts.75

In Abdullahi,76 Hungary’s intervention was prompted by the factthat the asylum seeker submitted before the referring Austriancourt that the treatment of asylum seekers in Hungary suffersfrom systemic inadequacies violating the substantive and humanrights requirements of EU asylum law.Other policy areas where the Hungarian government has been

particularly active include jurisdiction and the enforcement ofjudgments in civil and commercial matters, which is of primaryimportance to a well-functioning common market, and labour law.In both areas, it has regularly submitted observations in casesoriginating from Hungarian courts and from other nationalcourts.77 Quite recently, the Hungarian government was given72 Case C-302/04, Ynos [2006] ECR I-0371; Case C-243/08, Pannon GSM [2009] ECR I-4713; Case C-137/08, Pénzügyi Lízing [2010] ECR I-10847; Case C-472/10, Invitel, not yet reported; Case C-397/11, Jőrös, not yet reported; Case C-472/11, Banif Plus, not yet reported.73 Case C-168/05, Mostaza Claro [2006] ECR I-10421; Case C-40/08, Asturcom [2009] ECR I-9579; Case C-488/11, Asbeek Brusse, not yet reported; Case C-435/11, CSH Tour Services, not yet reported; Case C-509/07, Scarpelli [2009] ECR I-3311; Case C-32/12, Duarte Hueros, not yet reported.74 Case C-31/09, Bolbol [2010] ECR I-5539; Case C-364/11, Abed el Karem, not yetreported.75 Case C-19/08, Petrosian [2009] ECR I-0495; Case C-245/11, K., not yet reported; Case C-648/11, M.A., not yet reported; Case C-277/11, M.M., not yet reported.76 Case C-394/12, Abdullahi, not yet reported.77 Cases before Hungarian courts: Case C-490/11, IBIS (Removal Order of 19 April 2012); Case C-519/12, OTP Bank not yet reported. Cases before foreign courts: Case C-168/08, Hadadi [2009] ECR I-6871; Case C-14/08, Roda Golf [2009] ECR I-11677; Case C-256/09, Purrucker [2010] ECR I-7353; Case C-

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the opportunity to make observations concerning the powers ofnational courts in intellectual property (invalidation of autility model and invalidity of a patent) litigations.78 InCommission v Hungary, the aim of the Hungarian government wasmuch more the protection of the coherence of the Hungarian taxsystem than to secure the actual revenues resulting from thetax in question.79 In the infringement procedures initiatedagainst a number of Member States concerning investmentagreements concluded with third countries, the intervention byHungary on the side of the defendants80 was prompted by Hungaryhaving similar international agreements in force. In a recentinfringement case against Hungary, the government tried todefend the law on the obligatory retirement of judges, stateprosecutors and notaries which was alleged to breach EUequality law. The intellectually otherwise remarkable attemptfrom the representatives of Hungary to save a politicallycontroversial and sensitive piece of legislation proved to beunsuccessful.81

In other cases, the government pursued the task of defendingdomestic administrative practice In Allianz,82 the positionrepresented by the Hungarian government appears to have beentailored to support the legal reasoning put forward by theHungarian Competition Authority. In another case, thegovernment’s observations sought to influence the EU Court toanswer the question concerning public procurement law to matchthe interpretation given earlier by the Hungarian PublicProcurement Arbitration Board. In the Sió-Eckes case,83 the

312/09, Michalias [2010] ECR I-0082; Case C-292/10, G, not yet reported; Case C-327/10, Hypotecni Banka [2011] ECR I-11543; Case C-396/07, Juuri [2008] ECR I-8883; Case C-323/08, Rodríguez Mayor [2009] ECR I-11621; Case C-499/08, Ingeniørforeningen i Danmark [2010] ECR I-9343; Case C-232/09, Danosa [2010] ECR I-11405; Joined Cases C-611/10 and C-612/10, Hudzinski and Wawrzyniak, not yet reported; Case C-342/12, Worten, not yet reported.78 Case C-180/11, Bericap, not yet reported and Case C-349/12 Peró Gáz (RemovalOrder of 14 February 2013). Both preliminary ruling procedures were initiated by Hungarian courts.79 Case C-253/09, Commission v Hungary, supra n. 16. See the detailed discussion of the case below.80 Cases C-205/06, C-249/06 and Case C-118/07, supra n. 12. For a detailed analysis of the jurisprudence see the Chapter by I. Bartha in this volume.81 Case C-286/12, Commission v Hungary, supra n. 15. The act in question had been declared unconstitutional by the Hungarian Constitutional Court in Decision 33/2012 before the ECJ delivered its judgment.82 Case C-32/11, Allianz Hungaria Biztosító, not yet reported.83 Case C-25/09, Sió-Eckes [2010] ECR I-1409.

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submission of observations by the government aimed atconfirming the position taken by the Hungarian authorityinvolved in the particular circumstance when the mainproceedings involved a direct confrontation between a publicadministrative body and a private party. The situation was verysimilar in Uzonyi84 where an individual sued the same governmentbody submitting that it had interpreted and applied therelevant EU regulations erroneously. In Shomodi,85 thepreliminary reference concerned the adequate application of therelevant EU Regulation86 by the Hungarian border police and inUPC,87 the decision of the National Media and Info-communications Authority was attacked in ordinary courts.

Hungary seeking to influence the interpretation of EU law

In a number of cases, the participation of the Hungariangovernment was not prompted by the necessity of protectingdirect financial or economic interests. Instead, it sought toinfluence the resolution of questions by the EU Court which hadan impact on the coherence and operation of the EU legalsystem. The classic example of these cases is Bourquain88, wherethe meaning of the ne bis in idem principle and the concept of a‘penalty which can no longer be enforced’ needed to beclarified. In Heinrich,89 the binding force of provisions of anon-published Commission regulation imposing obligations onindividuals was in question, and in Commission v France case90

the Court decided on the parallel imposition of the financialpenalties available under Article 260 TFEU. The apparentreadiness of the Hungarian government to use its resources toinfluence matters of general importance must be contrasted withthe fact that Hungary remained absent in several importantcases concerning other, perhaps more fundamental questions of

84 Case C-133/09, Uzonyi [2010] ECR I-8747.85 Case C-254/11, Shomodi, not yet reported.86 Regulation 1931/2006/EC laying down rules on local border traffic at theexternal land borders of the Member States and amending the provisions ofthe Schengen Convention, OJ L405/1.87 Case C-475/12, UPC (case in progress)88 Case C-297/07, Bourquain [2008] ECR I-9425.89 Case C-345/06, Heinrich [2009] ECR I-1659.90 Case C-302/02, Commission v France [2005] ECR I-6263.

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the EU legal order, while other Member States felt it necessaryto express their positions.91

Hungary did in fact intervene in some cases of generalconstitutional importance in the EU. The Hungarian government,alongside 19 other Member States, also intervened in support ofthe Council in Commission v Council92 concerning the question ofwhether the Council was entitled to follow decision-makingprocedures under the former third pillar instead of adoptingthe measure in the former Community pillar. Although theprotection of the national interest could have played a role inits intervention, the Hungarian government took part inHeemskerk and Schaap93 to influence the resolution of issuesrelating to the EU legal system in its wider sense. Regardingthe protection of bovine animals during transport, thereferring Dutch court asked several questions about the powerof an administrative authority of a Member State to find –contrary to the declaration of the official veterinarian – thatthe means of transport of the animals does not comply with EUlegislation, about the jurisdiction of national courts toexamine in their own motions of pleas in law derived from EUlaw and about the national rule prohibiting reformatio in pejus.Hungary joined six other Member States intervening on theCommission’s side in Commission v Kadi,94 where the standard ofjudicial review applied by the General Court and the GeneralCourt's findings on the infringement of the rights of thedefence, the right to effective judicial protection and theinfringement of the principle of proportionality were examinedby the EU Court. In Commission v Poland,95 Hungary intervened insupport of the Polish side. In this case, the Court was askedto answer an open question regarding Article 260(3) TFEU,namely how to interpret the notification obligation concerningnational measures transposing a directive. It was unclearwhether in order to comply with the notification obligationunder EU law it is sufficient for the Member States to notify

91 E.g. Case C-303/05, Advocaten voor Wereld [2007] ECR I-3633; Case C-341/05,Laval [2007] ECR I-1167; Case C-305/05, Ordre des barreaux francophones [2007] ECRI-5305; Case C-28/08 P, Bavarian Lager [2010] ECR I-6055; Case C-34/10, Brüstle[2011] ECR I-9821; Joined Cases C-411/10 and 493/10, N.S., not yet reported.92 Case C-440/05, Commission v Council, supra n. 22.93 Case C-455/06, Heemskerk and Schaap [2008] ECR I-8763.94 Joined Cases C-584/10 P, C-593/10 P and C-595/10 P Commission v Kadi, not yet reported.95 Case C-48/12, Commission v Poland, supra n. 25.

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the measures adopted, or they also need ensure that theimplementation measures provide a substantially correcttransposition of the directive. The Hungarian government – withseven other Member States – argued for a less extensiveinterpretation of the obligation covering only the technicalelement of notification.

Pursuing a political motive: the Hungary v Slovakia case96

In the legal history of the European Union (EuropeanCommunities), so far only three judgements have been givenunder Article 259 TFEU (ex Article 227 TEC).97 This provisionenables the Member States to ask the EU Court of Justice todeclare an infringement of the Treaties by another MemberState. For Hungary, it took only a few years after itsaccession to the EU to initiate this procedure against itsneighbour, Slovakia. In the following, we will make an attemptto discuss the motivation of the parties in this unusualprocedure.

The background to the case98

On the invitation of an association based in Slovakia, thePresident of Hungary, Mr László Sólyom planned to visit the townof Komárno in Slovakia on 21 August 2009 to take part in theceremony inaugurating a statute of King Saint Stephen ofHungary. After several diplomatic exchanges between the twoMember States, the three highest representatives of the SlovakRepublic adopted a joint declaration in which they indicatedthat President Sólyom’s visit on that particular politicallysensitive date was considered as ‘inappropriate’ havingparticular regard to the fact that he was not planning to meetrepresentatives of the Slovak state. By note verbale of 21 August2009, the Ministry of Foreign Affairs of the Slovak Republicinformed the Ambassador of Hungary in Bratislava that theSlovak authorities had decided to refuse President Sólyom’sentry into the territory of the Slovakia on that date for96 Case C-364/10, Hungary v Slovakia, not yet reported.97 Case 141/78, France v United Kingdom [1979] ECR 2923; Case C-388/95, Belgium v Spain [2000] ECR I-3123; Case C-154/04, Spain v United Kingdom [2006] ECR I-7917.98 The facts of the dispute are presented according to paras. 5-21 of the judgment of the Court.

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security reasons. They relied on Directive 2004/3899 on theright of citizens of the Union and their family members to moveand reside freely within the territory of the Member States andon provisions of domestic law concerning the stay of foreignnationals and the policing of aliens. President Sólyom wasinformed of the terms of that note while en route to Slovakia.He acknowledged its receipt at the border and refrained fromentering Slovak territory.To understand the circumstances of this visit, it needs to be

borne in mind that 20 August is a national holiday in Hungary,commemorating Saint Stephen, the founder and first king of theHungarian state. Secondly, 21 August is a politically sensitivedate in Slovakia, since in 1968 the Warsaw Pact troops, whichincluded Hungarian troops, invaded Czechoslovakia on that day.For a deeper understanding of the conflict, we need to mentionthat as a consequence of the Trianon, and subsequently theParis Treaties100 regulating among others the borders ofEuropean states after the First and the Second World Wars, asignificant Hungarian ethnic population lives in Hungary’sneighbours, including Slovakia.101 King Saint Stephen in theHungarian historical imagination represents the foundation andthe integrity of the Hungarian state, the territory of whichcontained for more than thousand years the territory ofpresent-day Slovakia where the Slovaks were, and are, themajority ethnic group. Furthermore, when the invasion ofCzechoslovak Republic by the troops of the Warsaw Pactcountries occurred Hungary formed part of the Soviet bloc, andits sovereignty in foreign relations and in military affairs inparticular was extremely limited. In any case, the 1968invasion had a significance beyond Slovak-Hungarian bilateralrelations.After the political transformation of 1989-1990 in Hungary,

one of the central political aims of different governments was

99 Directive 2004/38/EC on the right of citizens of the Union and their family members to move and reside freely within the territory of the MemberStates, OJ L158/77.100 Treaty of Peace between the Allied and Associated Powers and Hungary signed at Trianon, 4 June 1920, 6 League of Nations Treaty Series and Treaty of Peace with Hungary signed in Paris, 10 February 1947, 41 United Nations Treaty Series 166.101 The census of 1921 recorded 637.000 Hungarians. The census of 2011 in Slovakia recorded 458.467 Hungarians (8.5 per cent of the total population).

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to achieve some kind of symbolic ‘re-unification’ of theHungarian nation without actually questioning the post-warfrontiers in Central and Eastern Europe. Article 6(3) of thenew, 1989 Constitution stated that ‘The Republic of Hungarybears a sense of responsibility for the fate of Hungariansliving outside its borders and shall promote and foster theirrelations with Hungary’.102 The means adopted to achieve thisobjective are manifold. They include financial and politicalaid for the development of Hungarian language education abroad,political support for collective minority rights etc.103

In our view, the only aim of President Sólyom’s visit was forthe head of state to express solidarity with the Hungarianminority living in Slovakia and to support the idea of theunity of the Hungarian nation.104 This important circumstancecould explain why the president did not wish to meet therepresentatives of the host state. For him, this visit was an‘intra- national’ occasion.The refusal of entry of a head of state is diplomatically

highly controversial and taking some kind of countermeasure wasalmost unavoidable for Hungary. Because the Slovakian claimthat their decision was based on Directive 2004/38/EC seemed tolack justification, the opportunity was open for the Hungarian

102 The Constitution of Hungary 1949 as amended by Act XXI of 1989. Article D of the Fundamental Law of Hungary (entered into force first of January 2012) provides that ‘Hungary, guided by the notion of a single Hungarian nation, shall bear a sense of responsibility for the fate of Hungarians living outside her borders, shall foster the survival and development of their communities, shall support their efforts to preserve their Hungarian identity, and shall promote their cooperation with each other and with Hungary.’103 The efforts of the Hungarian delegation in the Convention concerning theintroduction of collective minority rights into the Constitution for Europefailed. On the Hungarian governmental policy in this regard, see N. Bárdi, ‘The Policy of Budapest Governments towards Hungarian Communities Abroad’, in N. Bárdi et. al. (eds.) Minority Hungarian Communities in the Twentieth Century, NewYork: Columbia University Press, 2011, pp. 456-67.104 This assumption is paradoxically supported by the public statement made by the Slovak Prime Minister, Mr Fico after the opinion of the Commission, according to which official visits do not come under EU law, in which he, responding to an opinion expressed by President Sólyom on the teaching of languages in primary schools, said that ‘in these circumstances, refusing to allow Mr … Sólyom to enter the country on 21 August 2009 was completely justified in our view. In our opinion, it is even more so now than it was then’. This statement diminishes significantly the value of the reference to the sensibility of the particular date, 21 August.

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government to initiate an infringement procedure againstSlovakia. First, the Hungarian Minister for Foreign Affairssent a letter to Mr Barrot, the Vice-President of theCommission, seeking the Commission’s opinion on the possiblebreach of EU law by the Slovak Republic. Mr Barrot’s answer wassomewhat ambivalent. While he acknowledged that the case mightbe judged on the basis of the directive, he invited the partiesto avoid the repetition of such situations and to resolve thedispute on a bilateral basis. Subsequently, because Hungary didnot see that bilateral dispute resolution would produce ameaningful result, the Hungarian Minister for Foreign Affairssent a complaint to the President of the Commission requestingthe Commission to examine whether it is appropriate to initiateinfringement proceedings against the Slovak Republic underArticle 258 TFEU for the violation of Article 21 TFEU andDirective 2004/38.105

The response of the Commission presented a turning point – ora U-turn rather – in the unfolding of the case. As revealed inthe judgement,

the Commission confirmed that ‘Union citizens are entitled to move and reside freelywithin the territory of the Member States pursuant to Article 21 TFEU and Directive2004/38’. However, the Commission pointed out that ‘under international law, theMember States reserve the right to control the access of a foreign Head of State totheir territory, regardless of whether that Head of State is a Union citizen’. In itsopinion, the Member States of the European Union continue to arrange official visitsthrough bilateral political channels, so that this is not a sphere in which EU lawapplies. The Commission considered, therefore, that it was not in a position to findthat the Slovak Republic had failed to observe the provisions of EU law on the freemovement of Union citizens, even if the Slovak Republic had been wrong, in its noteverbale of 21 August 2009, to rely on Directive 2004/38 and the legislation adoptedfor its implementation in national law.106

The Slovak Minister for Foreign Affairs considered that theletter from the Commission as a confirmation that the Slovaklegal position was correct.107 The Hungarian government couldnot accept this position, which would, in practical terms, haveled to the end of the process on the one hand, and would haveredirected the case into the Procrustean bed of public105 Para. 14, Case C-364/10, Hungary v Slovakia, supra n. 96.106 Paras. 15-17, ibid.107 Para. 16, Opinion of Advocate General Bot in Case C-364/10, Hungary v Slovakia, not yet reported.

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international law on the other. The only option left forHungary was to start an infringement procedure under Article259 TFEU. After receiving the reasoned opinion of theCommission which repeated the position described above andstated that the alleged infringement is unfounded,108 Hungarybrought an action before the EU Court. In its application itasked, firstly to find that the Slovak Republic had failed tofulfil its obligations under Directive 2004/38/EC and Article21(1) TFEU by not allowing the President of Hungary, Mr Sólyom,to enter its territory, secondly, to declare that the positionof the Slovak Republic, namely, that it is entitled underDirective 2004/38/EC to prohibit the entry to the territory ofthe Slovak Republic of a representative of Hungary, such as thePresident of that Member State, violates EU law, thirdly, todeclare that the Slovak Republic applied EU law wrongfully inthat its authorities did not allow President Sólyom to enter,and, finally, in the event that a specific provision ofinternational law may limit the personal scope of Directive2004/38/EC, to define the extent and scope of such derogations.The Slovak Republic contended that the EU Court should dismissthe action and order Hungary to pay the costs. In thecircumstances of the case, the intervention of the Commissionin support of the order sought by the Slovak Republic wassomewhat predictable.109

On the legal reasoning of the Hungarian government

As a preliminary point, it could be argued that in this casethe aim of the Hungarian government was to influence – to saythe least – the outcome of the EU Courts’ decision. Accordingto Granger ‘(G)overnments’ ability to influence judicialoutcomes is … not only a matter of frequency. Less frequent butconsistent and persuasive interventions will in fact be moreinfluential than frequent, inconsistent, or inopportuneobservations.’110 Granger also stated that

(G)overnments’ views are more likely to be taken on board by judges if they fallwithin their paradigms, that is, if ‘normal’, as opposed to ‘revolutionary’ reasoning isused. Government must thus refer to recognised sources of EU law (e.g. Treaty

108 Para. 19, Case C-364/10, Hungary v Slovakia, supra n. 96.109 Order of the President of the Court of 28 January 2011.110 Granger (2004), op cit., p. 13.

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provisions, secondary legislation, international agreements and general principles),adopt the interpretative methods favoured by the Court and make references to EUcase law. Political, economic or social arguments may also have their place, becausethey may help choosing between equally lawful alternatives, constitute afundamental element of a judicial test, or justify temporal limitations to the effects ofjudgments, although the Court prefers to stick to legal arguments in its reasoning.111

Arguably, the ability of Member States to influence the EUCourt depends on more than one factor, and the overallconsistency and persuasiveness of the reasoning put forward bygovernments are the genuinely decisive factors. Before weexamine the submissions of Hungary in the case againstSlovakia, we need to take a look at the general consistency andpersuasiveness of the Hungarian government’s interventions112

before EU courts. From a methodological point of view, such ageneral overview of in court performances faces almostinsurmountable difficulties. The pleadings before EU courts areconfidential. We had to base our findings on relatively limitedresources – the texts of the judgments, the opinions of theAdvocates General and the reports for the hearings, which haveonly limited explanatory force.In this regard, we also need to take into account that as

seen in the previous section the Hungarian governmentsystematically submits observations in preliminary referenceprocedures initiated by Hungarian courts. In these cases, theobservations mainly serve the defence of Hungarian legislationand/or administrative practices challenged in the reference.This attitude inevitably makes the legal reasoning of thegovernment’s agents somewhat one-sided. Also, the motivation ofthe position taken by the Hungarian government could be purelypolitical. This entails that the legal reasoning put forward byHungary is largely determined by the political goal to beattained. In such instances, the government takes theunnecessary risk of an almost certain dismissal of itsaction.113 We believe that the legal reasoning followed by

111 Ibid., p. 21.112 By ‘intervention’, we mean in this section not only intervention as a procedural act, but all submissions presented to the courts, such as applications, pleadings, observations etc.113 Case T-37/11, Hungary v Commission, not yet reported. The General Court dismissed the action as inadmissible because the act in question was not challengeable. Case T-320/11, Hungary v Commission, supra n. 33. The General Court dismissed the action as inadmissible because the actionwas outside

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Member States before EU courts is partly determined by themotivation of the participation. This could manifest infocusing – generally unsuccessfully – on the question ofadmissibility when the motivation of the interference, as itoccurred in many instances with Hungary, is to defend nationallegislation in force or the practice of national administrativeauthorities.114

For example, in Ynos, the Hungarian government argued thatthe preliminary question is not admissible because the facts ofthe case occurred prior to Hungary’s accession to the EuropeanUnion.115 In Vajnai, the government expressed doubts as towhether the Court had jurisdiction to answer the question.116 InKatz, Hungary considered that the reference for a preliminaryruling is inadmissible, as the questions posed werehypothetical.117 In Allianz, the Hungarian government argued thatthe reference is not admissible, because the facts of the casedo not include all the elements necessary for the EU Court togive a useful answer.118 In Nádasdi the Hungary submitted thatthe reference is inadmissible because the question of the mainproceedings is a question of national law, the decision torefer does not indicate how the interpretation of EU law wouldinfluence the outcome of the case (the question ishypothetical), and the reference did not give adequate detailsof the national legislation applicable in the case.119 InJakubowska, Hungary once again argued against the applicabilityof EU law suggesting that the Italian legal measure identifiedby the national court falls outside the scope of the provisionsof EU law.120

the two-month timelmit regulated in the Treaties.114 T. Tridimas, ‘Knocking on Heaven’s Door: Fragmentation, Efficiency and Defiance in the Preliminary Ruling Procedure’, Common Market Law Review 40, pp. 9-50, p. 23. Tridimas also notes ‘That this may be taken as an indication of mistrust towards the ECJ, their fear being that the Court is more likely to find against State interest.’, ibid., p. 23.115 Para. 31, Case C-302/04, Ynos [2006] ECR I-0371.116 Para. 9, Case C-328/04, Vajnai [2005] ECR I-8577.117 Para. 28, Case C-404/07, Katz [2008] ECR I-7607.118 Para. 24, Case C-32/11, Allianz, supra n. 82. It must be noted that unlike governments in similar cases, the Hungary accepted that the Court has jurisdiction to answer the question submitted even though Article 101(1) TFEU is not applicable to the main proceedings because the agreements at issue in those proceedings do not have an impact on intra-community trade.119 Joined Cases C-290/05 and C-333/05, Nádasdi, supra n. 34. See also paras. 57-63, Case C-180/11, Bericap, supra n. 78.120 Para. 25, Case C-225/09, Jakubowska [2010] ECR I-12329.

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In this context, it seems appropriate to note that in itslegal reasoning the Hungarian government relatively often makesreference to general principles of law. For example, in thespecific weight for maize case the government relied on thepleas that the Commission had breached the principles of theprotection legitimate expectations and legal certainty andproportionality.121 In Hungary v Commission, the Commission,according to the applicant, breached among others theprinciples of cooperation in good faith and the protection oflegitimate expectations in applying a financial reduction in asituation in which the Hungarian authorities had good reason tobelieve that their payment procedure complied with EU law.122 Inthe case concerning the national allocation plans for emissionallowances for greenhouse gases, Hungary as applicant claimedthat the Commission infringed the principle of faircooperation, in that first, it determined the method ofcalculation and the data to be used to establish the totalquantity of emission allowances without consulting the MemberStates, and secondly, it did not take into account theadditional information which was supplied by the applicantwhich the Commission itself had requested during theprocedure.123 In Commission v Sweden, Hungary as intervenerargued that the interpretation given by the Commission would beopen to challenge from the perspective of both legal certaintyand the separation of powers between the EU and the MemberStates, and that it would upset the balance created by thefirst and second paragraphs of ex Article 307 TEC.124 In a stateaid procedure before the Commission, Hungary argued that theCommission had breached the protection of legitimateexpectations, the protection of acquired rights and haddiscriminated with respect to the enterprise in question.125 Inits appeal against the judgment of the General Court in Hungaryv Commission,126 the Hungarian government alleged that theCommission had breached the fundamental principles of soundadministration, cooperation in good faith and legal certainty.

121 Case T-310/06, Hungary v Commission, supra n. 48.122 Case T-320/11, Hungary v Commission, supra n. 33.123 Case T-221/07, Hungary v Commission, supra n. 53.124 Para. 19, Case C-249/06, Commission v Sweden, supra n. 12.125 Commission Decision C(2010) 3553 final of 9 June 2010 concerning state aid C 1/2009 (ex NN 69/2008) granted by Hungary to MOL.126 Case C-31/13 P, Hungary v Commission, supra n. 50.

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Case studies on the submissions of the Hungarian government before the EUCourt

Before we return to the discussion of the Hungary v Slovakiacase, we need to examine the structuring of the legalargumentation of the Hungarian government in two cases in whichthe documents available in public revealed sufficientinformation. Both cases were won by Hungary. In theinfringement case dealing with the Hungarian tax provisions onthe purchase of residential property,127 the Commissionsubmitted that the tax, which is payable on purchases of realproperty in Hungary for use as a principal residence, but whichmay be reduced if the purchase takes place with some degree ofsimultaneity with the sale of the purchaser’s previousresidence, infringes EU law. It submitted that it places EU andEuropean Economic Area (EEA) citizens at a disadvantage who, inexercising their right to freedom of movement, wish to purchasea property in Hungary.The Hungarian government submitted three main points it its

defence. Firstly, and most importantly, it argued that thecircumstances of taxable persons of different nationality aredifferent and incomparable, and as a result the tax regime inquestion cannot contravene EU law. Secondly, it relied on thepublic interest exception allowed in EU law and argued that thecoherence of the national tax system needs to be preserved. Thethird – maybe the weakest – argument was that extending the taxadvantage to real property situated abroad would give rise topractical difficulties of such magnitude which would preventthe effective operation of the system and its ability toprevent abuses.To render its first argument convincing, the Hungarian

government asserted that the legislation in question isconsistent with the principle of territoriality in taxationissues.128 Hungary relied on the Court’s case law, which statesthat as regards the taxation of income and assets, thesituations of residents and of non-residents are not, as arule, comparable, and that denying non-residents certain taxbenefits which are available to residents is not, as a rule,127 Case C-253/09, Commission v Hungary, supra n. 16. It is worth noting that the Hungarian government intervened in Case C-250/08, Commission v Belgium, not yet reported, in which the alleged infringement was similar.128 Paras. 28-30 (implicitly) and paras. 31 and 33 (explicitly), Case C-253/09, Commission v Hungary, supra n. 16.

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discriminatory.129 The government then went on to state – alsorelying on the Court’s case law – that the Treaty offers noguarantee to an EU citizen that transferring his or heractivities to another Member State will be neutral as a matterof taxation.130

These arguments prepared the way for the statement that

those selling their principal residence situated in Hungary in order to purchaseanother property of that nature in that Member State are not in a comparablesituation to those selling their principal residence situated in another Member Statein order to purchase property of the same nature in Hungary. First, the residence fortax purposes of such persons may be different because those in the first category areresident in Hungary, whereas those in the second are resident abroad. Second, forthat latter category, the property previously owned falls outside the scope ofHungarian tax law, both territorially and materially, while that is not true of theproperty sold by the first category of residents.131

Regarding the second plea that the tax regime in question isjustified by the public interest relating to the coherence ofthe (national) tax system, Hungary relied on the Court’ssettled case law which accepts this justification if the taxadvantage and the corresponding tax levy relate to the sameperson and are part of the same tax, which was clearly the casein the circumstances of the case.132 This was recognized andaccepted in the opinion of Advocate General Mazák who proposedthe Court dismiss the action. The Court, however, followed adifferent line of reasoning. Accepting the position of theCommission it stated that the tax regime at issue may dissuadethose relying on their right to freedom of movement and theirfreedom of establishment from purchasing property in Hungary.133

The Court did not stop here. It went on to examine whether therestriction might be justified. It stated that the requirementsof the tax coherence test developed in its case law arefulfilled, so the restriction is justifiable.134 The Court

129 Relying on Case C-279/93, Schumacker [1995] ECR I-0225; Case C-376/03, D [2005] ECR I-5821 and Case C-512/03 Blanckaert [2005] ECR I-7685.130 Para. 55, Case C-387/01, Weigel [2004] ECR I-4981; para. 34, Case C-365/02, Lindfors [2004] ECR I-7183; para. 45, Case C-403/03 Schempp [2005] ECR I-6421.131 Para. 29, Case C-253/09, Commission v Hungary, supra n. 16.132 Para. 36, ibid.133 Para. 67, ibid.134 Paras. 69-85, ibid.

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dismissed the Commission’s action and the Hungarian government‘won’ the case.In Hungary v Commission,135 a 2006 Commission regulation

introducing a new criterion – the specific weight – of cereals,including maize, offered for intervention was challenged inorder to protect the financial interests of Hungarian maizeproducers. The period of time between the adoption of theregulation, its entry into force and its applicability wasunusually short (less than 2 weeks). Hungary believed that theCommission introduced the new criterion only to reduce thequantity of maize offered for intervention, which in theestimate of the Hungarian government would exclude about halfof the total Hungarian maize production (around 17 to 18 percent of EU maize production). The Hungarian government launchedits attack in two waves. First, it argued that the new rule wasintroduce without providing an adequate period of adaptation,and second, it claimed that it suffered from formal andsubstantial illegality. Concerning the legality of theregulation, the Hungarian government tried to establish theviolation of the general principles of legitimate expectations,legal certainty and proportionality, plus a breach of therequirement to state reasons. It argued that the legitimateexpectations of producers had been violated because the changesrelating to the quality of the product bought in interventionwere made after the Hungarian producers had already takendecisions involving considerable investment (buying seeds andsowing equipment, ploughing, etc.). The date on which thecontested provisions entered into force took producers bysurprise, for they had reasonably expected to have time inwhich to adjust to the introduction of such a novelobligation.136 In determining the criteria of legitimateexpectations in EU law, Hungary relied upon the Crispoltoni Icase.137

The General Court had no other option but to accept thesearguments. On the basis of the factual evidence provided mainlyby Hungary, it rejected the arguments put forward by theCommission and declared that the circumstances of the presentcase are altogether comparable to those in Crispoltoni I.138 Italso found that the regulation gave no indication whatsoever of135 Case T-310/06, Hungary v Commission, supra n. 48.136 Paras. 47-52, Case C-253/09, Commission v Hungary, supra n. 16.137 Case C-368/89, Crispoltoni [1991] ECR I-3695.138 Para. 66, Case C-253/09, Commission v Hungary, supra n. 16.

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the reasons why the new provisions at issue must applyimmediately after the harvest in the given year and it,therefore, found the breach of the requirement to statereasons.139 Accordingly, it annulled the contested provisions inso far as they fixed a new criterion of minimum specific weightimmediately applicable to the harvest of autumn 2006.140

In order to attain the annulment of the said provisions forthe years following 2006, Hungary claimed the breach of legalcertainty and the principle of proportionality in thepreparation and application of the common agriculturalpolicy.141 It argued that the fulfilment of the new criterionrequires a ten year preparatory period and that the newcriterion concerns approximately half of Hungarian maizeproduction. The General Court, however, turned down the plea.Concerning the principle of legal certainty, it held thatHungary had failed to explain in what manner were the contestedprovisions insufficiently clear and prevented the producersconcerned from ascertaining unequivocally what conditions mustbe satisfied in order for them to present their maize forintervention and, secondly, it found that Hungary had not beenable to set out the reasons why the affected producers wouldnot be able to take the steps needed if the maize they producedwas to meet the new regulatory condition in future years.142

The General Court was not convinced by the arguments that theCommission did not have the power to adopt the provisions onthe special weight requirement. It found that the text of thebasic regulation clearly empowers the Commission to regulatethe quality of the products eligible for intervention. Vinczenoted that the unsuccessful argumentation of the Hungariangovernment was due to the misunderstanding of the concept ofcompetence as such. He submitted that the concept of competencebasically concerns the legal ability to execute an act in termsof its substance and form.143 The General Court was of the

139 Para. 84, ibid.140 Paras. 90-91, ibid.141 According to Article 3 (2)(b) TFEU in working out the common agricultural policy and the special methods for its application, account shall be taken of the need to effect the appropriate adjustments by degrees.142 Para. 107, Case C-253/09, Commission v Hungary, supra n. 16.143 A. Vincze, ‘Egy megnyert ügy – az Elsőfokú Bíróság 2007. november 15-i ítélete a T-310/06. sz. Magyarország v. Bizottság ügyben’, Európai Jog, 2008, pp. 28-33, pp. 31-32.

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opinion that the line of reasoning of Hungary was more aboutthe misuse of powers or/and the manifest error of assessment.Fortunately, it was also asked to examine these pleas in law.Although the argumentation put forward by Hungary essentiallydealt with the misuse of powers, the General Court started withthe politically less sensitive plea of manifest error ofassessment.The applicant supported the argument that the special weight

is not a quality factor, at least when, as in the EU, maize isintended essentially for animal consumption. It also arguedthat, in any event, the contested provisions had fixed theminimum specific weight at an unnecessarily high level.144 Inorder to support its argument that the specific weight of maizehad no effect on the nutritional value of the produce foranimal or human consumption, the Hungarian government attachedto its application two scientific studies and further documentsfrom the FAO, the University of Minnesota and the CanadianGrain Commission.145 Given that the Commission could not presentconvincing arguments against this reasoning, the General Courtstated that the Commission had committed a manifest error inassessment, and annulled the contested provisions. As a result,there was no need to examine the other please submitted.Although, two of the pleas were rejected for good reasons bythe General Court, there were two well-established lines ofreasoning produced by Hungary, which led to a complete – andrelatively rare – success in an attack against a powerfuladversary.

The legal reasoning submitted in the Hungary v Slovakia case

As we have seen earlier, the primary motivation for bringing anaction against the Republic of Slovakia was political innature. Given that the battlefield chosen was litigation withinthe EU legal framework, the Hungarian government was forced toproduce a legal reasoning capable of convincing the EU Court.The facts of the case seemed to favour the position of Hungaryas the relevant primary and secondary EU law includes clearprovisions on the right of citizens of the Union to move andreside freely within the territory of the Member States.146 TheSlovak authorities relied explicitly on the Directive

144 Para, 144, Case C-253/09, Commission v Hungary, supra n. 16.145 Paras. 161-163, ibid.

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2004/38/EC when they did not allow Mr Sólyom to enter Slovakterritory. It is a matter of law that there is no specificprovision of international law concerning the entry of heads ofstate into other states.147 As its opponents argued that theentry of heads of state is regulated by customary internationallaw, Hungary had to confront this argument. It relied on thecase law of the EU Court148 in which it ruled that ‘theprovisions of an agreement concluded prior to entry into forceof the Treaty or prior to a Member State’s accession cannot berelied on in intra-Community relations’. It contended that thisis equally valid in regard to the rules of customaryinternational law.149

For strategic reasons, the Hungarian government avoided thedifficult question of defining the nature of the planned visit.Its natural starting point was that the cross-border movementand residence in another Member State of all EU citizens fallswithin EU law. In the first step of the Hungarianargumentation, it was necessary to ascertain that EU lawconcerning the free movement of EU citizens is also applicableto heads of state. The main argument was that if the EUlegislator had excluded this category of persons, it would havedone so explicitly, as an exception to the general rule, as hadbeen done in the directive 2003/109/EC.150 Hungary also notedthat privileges and immunities granted to heads of state byinternational law do not limit the rights derived from their EUcitizen status but they supplement them.151 Although thisChapter does not deal with the argumentation of the defendantand the Commission, we must note that a reference was made tothe judgment in Commission v Belgium152 according to which the

146 Article 21 TFEU (ex Article 18 TEC) provides that ‘Every citizen of the Union shall have the right to move and reside freely within the territory of the Member States, subject to the limitations and conditions laid down in the Treaties and by the measures adopted to give them effect.’147 Opinion of Advocate General Bot in Case C-364/10, Hungary v Slovakia, supra n. 96.148 Para. 84, Joined Cases C-241/91 P and C-242/91 P, RTE and ITP v Commission [1995] ECR I-0743 and Para. 19, Case C-301/08, Bogiatzi [2009] ECR I-10185.149 Para. 28, Opinion of Advocate General Bot in Case C-364/10, Hungary v Slovakia, supra n. 96.150 Directive 2003/109/EC concerning the status of third-country nationals who are long-term residents, OJ L16/44.151 Para. 29, Opinion of Advocate General Bot in Case C-364/10, Hungary v Slovakia, supra n. 96.152 Case C-437/04, Commission v Belgium [2007] ECR I-2513.

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Member States retain the right to regulate their diplomaticrelations even after acceding to the European Union. TheHungarian government made no objections in this regard.Following these, the Hungarian government went on to prove thebreaches of the relevant provisions of EU law, especiallyDirective 2004/38/EC. According to Hungary, the substantialconditions for denying the entry of nationals of other MemberStates laid down in the directive were not met in the case athand as Mr Sólyom did not represent any threat to thefundamental interests of society and, in any case, the refusalof entry was manifestly disproportionate.153 The proceduralrequirements of the directive were also violated as the Slovakauthorities failed to inform Mr Sólyom of the grounds for theirdecision and of the remedies available to him under Article 30of the directive.154

In its next plea, the Hungarian government asserted that thevery fact of basing the note verbale of 21 August 2009 on the EUdirective falls under the concept of abuse of rights as definedby the case law of the EU Court, in particular the judgment inEmsland-Stärke.155 In reality, the authorities made use of thedirective to pursue explicit political aims. Hungary added thatif such conduct were to be considered compatible with EU law,there would be nothing to prevent the other Member States from‘settling’ their bilateral political disputes in the future byinvoking EU law, which would be contrary to the objectives ofthat law.156

Unfortunately, the publicly available documents open aresilent about the detailed reasoning on this particular point.However, if the claim is based on the Emsland-Stärke, theapplicant is required to demonstrate that the conditions of theabuse of right test are fulfilled. According to the Court,‘evidence of an abusive practice requires, first, a combinationof objective circumstances in which, despite formal observanceof the conditions laid down by the Community rules, the purposeof those rules has not been achieved, and, second, a subjectiveelement consisting in the intention to obtain an advantage fromthe Community rules by creating artificially the conditions

153 Para. 32, Opinion of Advocate General Bot in Case C-364/10, Hungary v Slovakia, supra n. 96.154 Ibid.155 Case C-110/99, [2000] ECR I-11569.156 Paras. 41-42, Case C-253/09, Commission v Hungary, supra n. 16.

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laid down for obtaining it.’157 We cannot be sure that Hungaryfully argued this point and did not raise the abuse of rightsas a bait for the EU Court to find itself a fault in theSlovakian position in this regard. What was rather unusual isthat at this point the Slovak Republic still maintained that itis entitled under Directive 2004/38/EC to prohibit in thefuture the entry of an official representative of Hungary,which it the view of the Hungarian government was an indicationthat the unlawful conduct by Slovakia may recur in the nearfuture.In the framework of the procedure under Article 259 TFEU, the

EU Court makes a declaration whether the alleged breach of theEU law has been committed. Interestingly, in substance theHungarian government asked the Court to provide a ratherdifferent decision, something which is closer to the judicialprohibition of carrying out a particular (illegal) activity. Ina declaratory judgment, such as that under Article 259 TFEU, itis difficult to find a place for this kind of ruling.158

As a rearguard action, the Hungarian government also askedthe EU Court to specify the personal scope of the applicablerules in order to clarify the limits to the application of EUcitizenship provisions so far as bilateral relations betweenMember States are concerned. It asked, in particular, whetherthose limits concern only heads of state, or whether they alsoapply to other categories of Union citizens.159 Given the abovementioned nature of judgments under Article 259 TFEU, it isquestionable that the Court even has jurisdiction to satisfythis kind of claim. Arguably, if this was raised to support theargument indirectly that international law does not contain anyspecific rules on the visit of heads of state,160 the questionwould also be redundant. In any event, the EU Court rejectedall four claims and Hungary was defeated in a politicallysensitive and altogether unnecessary case.

157 Paras. 52-53, ibid.158 Perhaps the only provision in EU law which allows an EU institution to prohibit an individual’s illegal activity is Article 7(1) of Council Regulation 1/2003/EC (OJ L1/1) according to which the Commission has the power to require by decision the undertakings and associations of undertakings concerned to bring the infringement of EU competition law to an end.159 Para. 65, Case C-253/09, Commission v Hungary, supra n. 16.160 Para. 29, ibid.

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CONCLUSIONS

Hungary (the Hungarian government) is a relatively activeparticipant in procedures before EU courts. The frequency ofits participation is determined by two main factors. First, theordinary courts in Hungary are quite active in askingpreliminary rulings from the EU Court and the government sharesthe conviction that it is ‘obliged’ to make observations inevery preliminary reference case initiated by Hungarian courts.Second, as a result of government policy, which – at least inthe time period under scrutiny – was basically complianceoriented, only few of the infringement procedures reached thejudicial phase and Hungary was called before the EU Court onlyon a limited number of occasions. The human resources and thedecision making procedures seem to be sufficient to allowHungary to play a modest repeat player role in Luxembourg.The motivation of its participation – as applicant,

defendant, intervener, and as a Member State makingobservations – is focused on promoting and protecting thenational interest. As is the case in other Member States, thegovernment defends its direct and indirect financial(budgetary) interests and the financial interests of nationaleconomic actors. The Hungarian government often acts as adefence lawyer protecting national legislation and/oradministrative practices in force. The presentation andinterpretation of the legal and factual environment of the caseby Hungary can help EU courts to give the right answer. In thisway, the Hungarian government plays the role of amicus curiae.While in some areas – consumer protection, labour law,intellectual property law, and asylum – the motive is toinfluence the interpretation and development of EU law tofollow that suggested by Hungary, we were unable to ascertainthat the interventions of the Hungarian government would bebased on a clear vision of European integration or the EU legalsystem. When it – rarely – takes a position in a question ofprinciples, it generally does so in concert with other MemberStates, or on the Council’s side.161 This could be explained bythe Hungarian government perceiving the European judicial161 Case C-440/05, Commission v Council, supra n. 22; Case C-121/10, Commission vCouncil, supra n. 3; Joined Cases C-274/11, Spain v Council and C-295/11, Italy vCouncil, not yet reported; Case C-43/12, Commission v Council and Parliament, supra n. 24.

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sphere mainly as a means for defending or promoting directnational interests. This suggests a rather weakly formulatedvision from the Hungarian government of the EU as anintergovernmental arena.As far as we can judge, the pleadings of the Hungarian

government are well-prepared and they are in general adequatelyreasoned. The submissions – if they are needed – are supportedwith scientific and/or statistical data. In some cases, we feltthat the pleadings were rather overcooked, i.e. they containmore claims and/or arguments than is necessary. The frequentreference to general principles is rarely efficient and theyare applied to win the ‘sympathy’ of the EU Court. Thereferences to case law are generally well-chosen. Governmentagents present the Hungarian position in oral proceedings withincreasing ease. If we consider that the Hungarian governmentwon one action for annulment and an infringement case againstthe Commission, and that in half of the 40 Hungarianpreliminary reference cases, in which Hungary submittedobservations and the EU Court delivered its judgment, the EUCourt took at least partly the same position as Hungary (thisis roughly true for the references from other national courtsand for the interventions), we can risk the conclusion that thesubmissions made by the Hungarian government have considerablepersuasive force. We are convinced that the ‘success rate’ inLuxembourg would be higher, and its modest repeat playerposition would be strengthened, if the Hungarian governmentlimited its interventions to cases where the success is morerealistic and refrained from intervention in legally ‘hopelesscases’. It is conceivable that the centre of gravity of theparticipation of the Hungarian government will modify somewhatin the near future. The current government has declared ondiverse occasions that in defence of national interests thereis a real option of not avoiding conflicts with the Commissionand it is prepared to defend national interests until thejudicial phase of infringement procedures.162

162 Case C-286/12, Commission v Hungary, supra n. 15; Case C-115/13, Commissionv Hungary (case in progress). See also Case C-385/12, Hervis Sport- és Divatkereskedelmi (case in progress) in which the national judge asked for preliminary ruling concerning the new Hungarian tax legislation creating a special tax on the store retail trade sector fixing the threshold tax rate resulting in greater impact on undertakings owned by foreigners than on those owned by Hungarian nationals.

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