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European Commission has recently issued that it will subtract the fines for Poland from its subsidies. Is this the kind of decision that needs an approval of all the other member states prime ministers (a unanimous European council vote)? Or is there perhaps another way Hungary could intervene?

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No, Hungary cannot intervene unilaterally. However, a decision by the European Commission could cancel the penalty payments or cap them at a certain amount.

The fine was imposed in accordance with Article 260 of the TFEU, which grants the European Court of Justice the power to fine and impose penalty payments on member states. The ECJ made the following order on September 20th, 2021:

The Republic of Poland is ordered to pay the European Commission a penalty payment of EUR 500 000 per day, from the date of notification of the present order to the Republic of Poland until that Member State complies with the order of the Vice-President of the Court of 21 May 2021.

The ability to subtract these penalty payments from EU subsidies was delegated to the accounting officer of the Commission, currently Maria Rosa Aldea Busquets, in Commission Decision C(2018)5119.

Article 29
Recovery procedure and default interest applicable

  1. If the Member State upon which the Court of Justice has imposed a lump sum or penalty payment has not effected payment by the deadline specified in the letter requesting payment, the accounting officer shall immediately send a letter of formal notice, asking it to pay the amount owed within fifteen calendar days, plus default interest at the rate referred to in Article 9.
  2. If payment has still not been made on expiry of the fifteen calendar days following receipt of the letter of formal notice by the Member State, the accounting officer shall recover the amount by offsetting in accordance with the procedure set out in Article 31 after having informed the authorising officer responsible and having given the indebted Member State the opportunity to submit comments.

Article 31
Offsetting
In the circumstances provided for in Article 29(2), the total amount of the lump sum or penalty payment imposed by the Court of Justice, plus interest, shall be deducted from payments due to the Member State.

However, paragraph 2 of Article 30 of that Commission Decision grants the Commission the ability to determine the date on which Poland took measures to comply with the Court's judgement, and to cancel any penalty payments owed from that date forward:-

In the case of penalty payments, it is for the Commission to determine the date on which the Member State took measures to comply with the Court’s judgment against it for failure to perform its obligations and immediately put an end to the recovery procedure.

Any surplus penalty payments collected after that date shall be repaid to the Member State, and the recovery orders in question shall be amended or cancelled. In accordance with Article 116(5) of the Financial Regulation, surplus penalty payments collected shall be repaid without interest.

As such, a decision by the European Commission could technically determine that Poland began to take measures to comply with the judgement on September 21st, 2021, and cancel all subsequent penalty payments. Hungary acting alone, however, could not veto the decision to collect the payments by offsetting against subsidies.

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