Until recently, concern about a democratic recession mostly concerned countries outside the European Union.  That has changed.

The Economist Intelligence Unit (EIU) recently produced its Democracy Index2011 inwhich it noted a decline in the quality of democracy in 10 EU countries(Finland, Germany, Spain, Portugal, Italy, Greece, Estonia, Hungary, Bulgaria and Romania) while the score improved inPoland and Slovenia.

The main argument for the backsliding as stated by EIU, is the erosion of sovereignty and democratic accountability associated with the effects of and response to the euro zone crises.  Although the methodology of the Index and the argument to explain the erosion can be questioned, the evidence of a backsliding of democracy withinEuropeis only too obvious.

Hungary is a point in case.  Observers warned that the country is receding into authoritarianism.  At the start of 2012, 13 prominent Hungarians, all former dissidents against Communist rule, amongst them the well-known author Gyorgy Konrad, wrote an open letter askingEurope’s attention for the rise of perceived dictatorship in their country.

On January 1st of this year, a new Hungarian Constitution came into force which grants government unparalleled authority over media, the judiciary, the Central Bank, and diminishes the role of the legislature to cheerleaders of the government.   In the April 2010 elections, the party of prime minister Victor Orban, Fidesz, won an absolute majority of votes, 53%.  However, this 53% of the vote did not translate in 53% of the seats in parliament.  The electoral system was designed in a way that Fidesz gained 67% of the seats in Parliament, constituting a 2/3 majority which is required for passing a new constitution or constitutional amendments.

That next happened,  Fidesz quickly wrote and passed the new constitution in 2011.  At the same time, a law to amend the electoral system was passed in parliament introducing changes that would translate the 53% of the 2010 vote for Fidesz in an even bigger parliamentary majority, namely 75% of the seats.  The concentration and constitutional entrenchment of power in the dominant party inHungary is at odds with the democratic values of pluralism and tolerance, and of respect for the rule of law as enshrined in Article 2 of the Treaty on European Union to whichHungary acceded.

The question is what the EU can do when one or more of its members fail to uphold the democratic standards on which the EU is based?   The accession criteria for entry into the EU are well established in theCopenhagencriteria, but how about when EU members start to deviate from the democratic path?

There are no clear criteria established for what constitutes the EU democratic threshold and hence no traffic lights when countries pass through orange or red lights.  However, the Treaty on European Union (The Lisbon Treaty) introduced for the first time a procedure, Article 7, for EU Member States in breach of the EU values enshrined in Article 2 of the Treaty.

Three steps are provided for.  At the initiative of 1/3 of the Member States, or by the European Parliament or by the European Commission, and on the bases of a ‘reasoned proposal’, the Council acting by a majority of 4/5 of its Member States and with the consent of the European Parliament and after hearing the Member State in question may determine that there is a clear risk of a serious breach by a Member States of the values referred to in Article 2.  A second step is, following the same decision-making process, to determine the existence of a serious and persistent breach by theMemberStatein question.  When the second step has been taken, the third step can be decided by qualified majority and involves the possibility to suspend certain rights deriving from the application of the Treaties to theMemberStatein question, including the voting rights in the Council.  The obligations of theMemberStatein question under the Treaties shall continue to bind that State.

Victor Oban is also vice-president of the European People’s Party since 2002, the largest political family in the European Parliament.   The EPP chairperson, former Belgian Prima Minister Wilfried Martens nor the EPP has so far had no success in stopping Prime Minister Orban’s descent into authoritarianism.  For the EPP, having had to cope with the shenanigans of the former Italian Prime Minister Silvio Berlusconi, the high office within EPP of Victor Orban has become another headache.

But following the laws past over the Christmas period in Hungary, Commission President Joao Barosso, was quick to respond to the open letter of the Hungarian former dissidents.   Today he took on behalf of the Commission a firm position, stating “We do not want the shadow of doubt on respect for democratic principles and values to remain over Hungary any longer.”

He announced that the European Commission has started an accelerated (!) infringement procedure, the first step in the Art 7 procedure. Hungarywill be discussed in the European Parliament tomorrow and their appears little doubt that the EP will endorse the initiative taken by the European Commission.  In the announcement President Barosso specifically referred to the legislation affecting the independence of the Hungarian Central Bank, the retirement age of judges and the independence of the data protection authority, while questions were raised about the independence of the judiciary  The Hungarian government has one month to respond to the concerns raised by the Commission.   What is lacking in the statement is an expression of concern about infringements on media freedom and concerns about the new electoral system.  The assessment underlying the Commissions’ action againstHungaryis not available, hence it is not known yet why these important dimensions of a pluralist democracy are not tabled.

Meanwhile, the Hungarian economy is in decline as well.  The government needs financial assistance at the tune of Euro 20 bn.  It is needed now to stem the economy from collapsing. Hungarycan no longer borrow at the private markets because of the junk status of its government bonds, hence the need to borrow from the IMF, ECB  and EU.  But the loan negotiations were suspended about the infringement of the independence of the Hungarian Central Bank.  Hence, in addition to the legal and political tools of the EU to keep Member States at the path of democracy, the threat to withhold much needed financial support may prove as effective a tool to make the Orban government restore the independent integrity of key institutions of the democratic architecture.

Democracy is the raison d’être of the European Union.  The action taken by the European Commission to try to stopHungary becoming a mirror of Putin’sRussia is much needed and welcome in order not to allow the EU’s core identity to erode.

As the Democracy Index 2011 shows, democracy is not as solidly rooted as often assumed.  Hence, there is more at stake inEuropethan only rescuing the Euro.  Hopefully, the infringement procedure initiated by the European Commission will make the Hungarian government fall in line again with EU democratic standards.  But even when this will be the result of the infringement procedure started and the wielding of the financial stick, the Hungarian example shows that a thorough reflection is required about the state of democracy within EU Member States and how the performance can be improved to reverse the backsliding.

In memory of Vaclav Havel and with reference to the need for a deeper reflection on the state of democracy, I like to quote what he had to say about democracy:  “If we understand democracy as merely a set of systemic measures, formal rules of the game or mere organizational tricks, we shall never build a state that is truly democratic.  We shall only build it if we bear in mind at all times that democracy is only an outer expression of something very internal, which cannot be modeled by any generation of computers or constructs of political science.  Democacy is the work of human beings who have understood their inalienable human rights and their responsibility as human beings, and who respect human rights and believe in the human responsibility of their neighbours’’