Hungary and the European Commission: a bargain with the rule of law — and the Court’s patience

By Matthew Parish, Associate Editor

Thursday 12 February 2026

On 12 February 2026, Advocate General Tamara Ćapeta of the Court of Justice of the European Union, the EU’s highest court, delivered an Opinion that goes to the heart of a problem the European Union has been trying to manage for more than a decade — how to defend the rule of law in a Member State without turning the Union’s budget into a political bargaining chip. In Case C-225/24, Parliament v Commission, she proposed that the Court of Justice annul the European Commission’s December 2023 decision to lift the suspension on the disbursement of roughly €10 billion in cohesion-policy funds to Hungary. 

The Opinion matters legally because it tests how far the Commission’s discretion runs when it declares a Member State “back in compliance” with rule-of-law conditions. It matters politically because it lands eight weeks before Hungary’s parliamentary elections on 12 April 2026, with polling commentary across Europe describing a serious risk that Prime Minister Viktor Orbán could lose office to his pro-European challenger, Péter Magyar of the Tisza Party. 

What follows is the background, the procedure, the legal reasoning signalled by the Advocate General and the likely political consequences for Hungary and her government.

The background — why money and courts became entwined

The story begins with the EU’s long-running concern that Hungary’s constitutional and institutional changes have weakened judicial independence and checks on executive power. In response the Union has increasingly linked access to funds to compliance with legal standards — a shift that became unavoidable once rule-of-law backsliding started to look, from Brussels, like a financial risk to the EU budget as well as a constitutional risk to the Union itself.

Two legal tracks sit behind this case.

First, there is the general “rule-of-law conditionality” framework — the idea that the EU can protect its budget where rule-of-law deficiencies jeopardise sound financial management. The Court upheld the core conditionality regulation against challenges brought by Hungary (and Poland) in 2022, confirming that budget protection can be linked to rule-of-law breaches without “circumventing” the political process enshrined in EU law for reduction of budgets. 

Secondly, there is the cohesion-policy architecture — the machinery through which structural funds are allocated. Under the 2021 “Common Provisions Regulation” (the CPR), Member States must satisfy “enabling conditions” to receive funds, including a horizontal condition linked to the Charter of Fundamental Rights. In December 2023 the Commission announced two decisions concerning Hungary and the rule-of-law situation — including a decision that, in the Commission’s view, allowed the release of funds after judicial reforms were assessed as meeting the relevant condition. 

That December 2023 move was controversial from the outset — not only because of the substance of Hungary’s reforms, but because of the context. At the time EU institutions were under pressure to secure unanimity on urgent EU decisions, and critics argued that the release of funds looked like a concession offered in return for political co-operation. Civil-society organisations warned that “unfreezing” could create a misconception that Hungary was on a genuine reform trajectory. 

The European Parliament then decided to litigate.

The case — Parliament sues the Commission

This is not a classic “Commission v Hungary” infringement action. It is a constitutional dispute between EU institutions.

The applicant is the European Parliament. The defendant is the European Commission. The act being challenged is Commission Implementing Decision C(2023)9014 of 13 December 2023 — the decision lifting the suspension on disbursement of funds to Hungary. 

Procedurally this is an action for annulment under Article 263 of the Treaty on the Functioning of the European Union — the EU’s main judicial route for striking down unlawful EU acts. Parliament’s argument, in essence, is that the Commission misapplied the CPR’s legal requirements and made a manifest error of assessment when it concluded that Hungary satisfied the relevant enabling condition, and that it failed properly to state reasons. 

The case is being heard by the Court of Justice (rather than the General Court) and listed as sitting in the Grand Chamber — a signal that the institutional and constitutional stakes are considered high. 

On 12 February 2026, the Advocate General delivered her Opinion.

An Advocate General’s Opinion is not a judgment. It is an independent, reasoned legal view intended to assist the Court. The Court often follows an Opinion, but it is not obliged to do so. There is no opportunity for the parties to make submissions between the rendering of an opinion and the issuance of a judgment. This is a procedural peculiarity of the Court of Justice.

What Advocate General Ćapeta said — legality cannot be “promised”, it must exist

The Court’s press release summarising Ćapeta’s Opinion is unusually blunt in its core proposition: the Commission may not disburse EU funds to a Member State until required legislative reforms are in force and are effectively being applied. 

Three features stand out from the Advocate General’s approach as presented publicly.

1. Reforms must be in force, not merely announced

Ćapeta’s central criticism is temporal and practical, not rhetorical. A Commission decision that unlocks funds cannot be justified by reforms that have not yet entered into force or are not yet being applied in reality. The test is not “direction of travel”; it is legal and operational fact. 

This strikes at a familiar Brussels habit — treating legislative commitments as political currency, then hoping implementation follows. The Opinion suggests that, at least for the CPR enabling-condition logic, hope is not a legal standard.

2. The Commission must actually assess the reforms — and their surrounding context

Reuters’ reporting of the Opinion highlights a second criticism: that the Commission failed to assess Hungary’s judicial reforms properly and did not address developments that could undermine or offset the reforms. 

That is a pointed rebuke because it implies that the Commission cannot evaluate reforms in a vacuum. If parallel measures, political pressure, institutional design, or subsequent steps erode the practical independence of the judiciary, the Commission must grapple with that reality before releasing funds.

3. The remedy proposed is annulment — not a mild warning

The Advocate General proposed annulment of the Commission decision. 

Annulment is a hard remedy. It would mean that, in legal terms, the Commission’s decision is void. The downstream consequences can be managed through the Court’s handling of temporal effects, but the constitutional message would be stark — the Commission’s discretion has limits, and those limits are judicially enforceable even when the Commission argues it is balancing legal and political imperatives.

What happens next — the procedural road from Opinion to judgment

The procedural rhythm is predictable even if the outcome is not.

• The Advocate General delivers her Opinion (done — 12 February 2026). 

• The judges deliberate in private.

• The Court delivers judgment at a later date — sometimes weeks, sometimes months — and may follow the Opinion in full, in part, or not at all.

If the Court annuls the decision, the Commission will face an immediate institutional problem: it must decide how to treat funds already disbursed under the annulled act, and how to structure any future disbursements. Commentators have noted the practical possibility that the Commission might need to “recoup” amounts indirectly by reducing future payments, even if clawback is politically difficult. 

Even if the Court ultimately does not annul, the Opinion alone raises the legal and political cost of treating funds as leverage.

The political implications — Hungary, her elections and her European narrative

1. Orbán’s campaign problem: “we unlocked the money” may become “we unlocked it unlawfully”

Orbán’s governing story has long been that he can defy Brussels and still extract resources — portraying conflicts with EU institutions as sovereignty theatre while quietly relying upon EU money to stabilise the economy and fund development. A Court judgment annulling the Commission’s unfreezing decision would puncture that narrative.

Even the Opinion, arriving on the same day it was reported widely, gives his opponents a sharp line: the money was not “won” by negotiation, it was released prematurely and potentially unlawfully. 

2. Magyar’s campaign opportunity: credibility with Brussels becomes an electoral asset

Péter Magyar has built momentum by claiming he can restore relations with the EU, reduce corruption risks and unlock withheld funds through genuine reforms rather than permanent confrontation. Reuters’ election reporting frames the 12 April contest as Orbán’s toughest in years, with Tisza leading in most polls cited. 

The Advocate General’s Opinion does not endorse Magyar — courts do not play that game — but it strengthens the general argument that institutional credibility, especially judicial credibility, has direct financial consequences for Hungary. That is exactly the causal chain the opposition wants voters to internalise.

3. Brussels’ institutional politics: Parliament asserts itself against the Commission

A less-discussed implication is internal to the EU. Parliament is effectively telling the Court that the Commission cannot present itself as the guardian of the Treaties while also cutting pragmatic political deals that dilute legal conditionality. That institutional clash will outlast the election.

If the Court follows the Advocate General, Parliament’s willingness to litigate will look vindicated — and the Commission’s room for manoeuvre with other backsliding governments will shrink.

4. Hungary’s deeper dilemma: money can be suspended quickly, but trust takes longer to rebuild

Even a change of government will not instantly restore confidence. If Hungary’s institutions have been re-shaped over many years, then new laws alone will not satisfy a sceptical Commission or a cautious Court — implementation, appointments, administrative practice and the independence culture of the judiciary will be scrutinised.

The Advocate General’s insistence on reforms being “in force” and “effectively being applied” is a warning to everyone — Orbán if he stays, Magyar if he wins. 

What the Opinion signals about Europe’s future posture

The Opinion can be read as a constitutional thesis in miniature: the rule of law is not a political promise to be traded, but an operational condition that must exist before money moves. If the Court adopts that approach, the EU’s budget becomes less usable as a negotiating instrument in high politics — and more tightly bound to verifiable institutional reality.

For Hungary the timing is unforgiving. Her election campaign is now taking place under the shadow of a legal argument that the Commission’s accommodation was itself unlawful. For Orbán, that is not merely a legal headache — it is a threat to the central claim that he can outplay Brussels without cost. For Magyar it is an opportunity to argue that what Hungary needs is not louder defiance but the slow, unglamorous work of rebuilding judicial credibility so that the funds flowing to Hungarian towns, firms and families are not hostage to a permanent constitutional quarrel.

And for the Union as a whole, the case forces an uncomfortable question into the open — whether Europe wants to be a community of law that sometimes withholds money, or a community of money that sometimes tolerates the erosion of law.

In Luxembourg, Advocate General Ćapeta has suggested the Court should choose the first.

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The author was a sometime clerk to Advocate General Sir Francis Jacobs KC at the Court of Justice of the European Union.