The law of the european union in hungary by ORAC Kiadó

THE LAW OF THE EUROPEAN UNION IN HUNGARY EDITED BY MÁRTON VARJU AND ERNŐ VÁRNAY

THE LAW OF THE EUROPEAN UNION IN HUNGARY: INSTITUTIONS, PROCESSES AND THE LAW EDITED BY MÁRTON VARJU AND ERNŐ VÁRNAY

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CONTENTS

Contributors.................................................................................................................. 7 Table of cases and legislation..................................................................................... 9 1 MÁRTON VARJU AND ERNŐ VÁRNAY: The law of the European Union in Hungary: institutions, processes and the law.............................. 21 2 FLÓRA FAZEKAS: EU law and the Hungarian Constitutional Court..... 32 3 ANGÉLA JUHÁSZ-TÓTH: European Union law and the Hungarian Parliament: wasted opportunities?................................................................ 77 4 RÉKA SOMSSICH: The process and methodology of coordinating the transposition of EU law in Hungary....................................................... 112 5 ERNŐ VÁRNAY: The Hungarian government before the courts of the European Union: rationales and results................................................. 151 6 MÁRTON VARJU: The judicial reception of EU law.................................. 183 7 ANDRÁS OSZTOVITS AND KATALIN GOMBOS: Preliminary references and Hungarian courts: procedural context, trends and quality................................................................................................................. 223 8 TIHAMÉR TÓTH: The reception and application of EU competition rules in Hungary: an organic evolution........................................................ 241 9 MÓNIKA PAPP: The application of EU state aid rules in Hungary: an overview of individual Commission decisions (2004–2012)................. 279 10 ILDIKÓ BARTHA: Hungary’s international agreements in the light of its EU membership....................................................................................... 320 Bibliography................................................................................................................. 361

CONTRIBUTORS

ILDIKÓ BARTHA, Lecturer in Law at the Faculty of Law of the University of Debrecen, Department of European and International Law, and Research Associate at the MTA-DE Regulation of Local Public Services Research Group of the Hungarian Academy of Sciences and the Faculty of Law of the University of Debrecen FLÓRA FAZEKAS, Lecturer in Law at the Faculty of Law of the University of Debrecen, Department of Constitutional Law KATALIN GOMBOS, Judge at the Szeged Regional Appeal Court and Senior Lecturer at the Faculty of Law of the University of Szeged, Department of International and European Law ANGÉLA JUHÁSZ-TÓTH, Lawyer-Linguist at the European Court of Justice, Luxembourg, and former Civil Servant at the Committee on European Affairs of the Hungarian Parliament ANDRÁS OSZTOVITS, Judge at the Curia, Budapest, Senior Lecturer at the Faculty of Law of the Károli Gáspár University of the Reformed Church in Hungary, Budapest, Head of the Department of European and International Law, and Senior Research Fellow at the Hungarian Academy of Sciences, Institute of Legal Studies MÓNIKA PAPP, Lecturer in Law at the Faculty of Law of the Eötvös Lóránd University (ELTE), Budapest, Department of International Private Law and European Economic Law, and Research Fellow at the Hungarian Academy of Sciences RÉKA SOMSSICH, Lecturer in Law at the Faculty of Law of the Eötvös Lóránd University (ELTE), Budapest, Department of International Private Law and European Economic Law, and former Head of the European Union Law Department at the Ministry of Justice TIHAMÉR TÓTH, Senior Lecturer at the Faculty of Law of the Pázmány Péter Catholic University, Budapest, and of Counsel, White & Case, Budapest MÁRTON VARJU, Senior Research Fellow at the Hungarian Academy of Sciences and Senior Lecturer at the Faculty of Law of the University of Debrecen ERNŐ VÁRNAY, Professor of European Union Law and Head of the Department of European and International Law at the Faculty of Law of the University of Debrecen

TABLE OF CASES AND LEGISLATION

The EU Court of Justice Case 26/62, van Gend en Loos [1963] ECR 1. Joined Cases 28-30/62, Da Costa [1963] ECR 31. Case 6/64, Costa v ENEL [1964] ECR 585. Joined Cases 56 and 58/64, Consten and Grundig v Commission [1966] ECR 299. Case 44/65, Hessische Knappschaft English special edition 965. Case 29/68, Deutsche Milchkontor [1969] ECR 165. Case 9/70, Grad [1970] ECR 825. Case 11/70, Internationale Handelsgesellschaft [1970] ECR 1125. Case 22/70, Commission v Council [1971] ECR 0263. Case 4/73, Nold [1974] ECR 491. Case 146/73, Rheinmühlen [1974] ECR 139. Case 166/73, Rheinmühlen [1974] ECR 33. Case 41/74, Van Duyn [1974] ECR 1337. Case 36/75, Rutili [1975] ECR 1219. Case 107/76, Hoffmann-La Roche [1977] ECR 957. Case 27/76, United Brands v Commission [1978] ECR 0207. Case 33/76, Rewe-Zentralfinanz [1979] ECR 1989. Case 106/77, Simmenthal [1978] ECR 629. Case 9/78, Simmenthal [1979] ECR 777. Case 22/78, Hugin v Commission [1979] ECR 1869. Case 120/78, Rewe-Zentral AG [1979] ECR 649. Case 141/78, France v United Kingdom [1979] ECR 2923. Case 148/78, Ratti [1979] ECR 1629. Case 155/79, AM & S Europe v Commission [1982] ECR 1575. Case 44/79, Hauer [1979] ECR 3727. Case 244/80, Foglia II [1981] ECR 3045. Case 8/81, Becker [1982] ECR 53. Case 258/81, Metalurgki Halyps A.E. v Commission [1982] ECR 4261. Case 283/81, CILFIT [1982] ECR 3415. Case 99/82, Administrazione delle Finanze dello Stato v SpA San Giorgio [1983] ECR 3595. Case 199/82, San Giorgo [1983] ECR 3595. Case C-14/83, Von Colson [1984] ECR 1891. Joined Cases 89, 104, 114, 116, 117 and 125 to 129/85, Ahlström v Commission [1988] ECR 5193. Case 12/86, Demirel [1987] ECR 3719. Case 286/86, Gérard Deserbais [1988] ECR 4907. Case 103/88, Costanzo [1989] ECR 1839.

Case C-350/88, Société française des Biscuits Delacre [1990] ECR I-395. Case C-192/89, Sevince [1990] ECR I-3461. Case C-213/89, Factortame [1990] ECR I-2433. Case C-368/89, Crispoltoni [1991] ECR I-3695. Joined Cases C-6/90 and C-9/90, Frankovich [1991] ECR I-5357. Case C-200/90, Denkavit [1992] ECR I-2217. Case C-286/90, Poulsen and Diva Navigation Corp. [1992] ECR I-6019. Joined Cases C-241/91 P and C-242/91 P, RTE and ITP v Commission [1995] ECR I-0743. Joined Cases C-267/91 and C-268/91, Keck and Mithouard [1993] ECR 1-6097. Case C-279/93, Schumacker [1995] ECR I-0225. Case C-384/93, Alpine Investments [1995] ECR I-1141. Joined Cases C-430/93 and C-431/93, Van Schijndel [1995] ECR I-4705. Case C-55/94, Gebhard [1995] ECR I-4165. Case C-194/94, CIA Security [1996] ECR I-2201. Case C-388/95, Belgium v Spain [2000] ECR I-3123. Case C-197/96, Commission v France [1997] ECR I-1489. Case C-102/97, Commission v Germany [1999] ECR I-5051. Case C-62/98, Commission v Portugal [2000] ECR I-5171. Joined Cases C-110/98-147/98, Gabalfrisa [2000] ECR I-1577. Joined Cases C-240/98 to 244/98, Océano Grupo Editorial SA [2000] ECR I-4941. Case C-443/98, Unilever [2000] ECR I-7535. Case C-466/98, Commission v UK [2002] ECR I-9427. Case C-467/98, Commission v Denmark [2002] ECR I-9519. Case C-468/98, Commission v Sweden [2002] ECR I-9575. Case C-469/98, Commission v Finland [2002] ECR I-9627. Case C-471/98, Commission v Belgium [2002] ECR I-9681. Case C-472/98, Commission v Luxemburg [2002] ECR I-9741. Case C-475/98, Commission v Austria [2002] ECR I-9797. Case C-476/98, Commission v Germany [2002] ECR I-9855. Joined Cases C-238/99 P, C-244/99 P, C-245/99 P, C-247/99 P, C-250/99 P to C-252/99 P and C-254/99 P, Limburgse Vinyl Maatschappij and Others v Commission [2002] ECR I-8375. Case C-309/99, Wouters [2002] ECR I-1577. Case C-417/99, Commission v Spain [2001] ECR I-6015. Case C-475/99, Ambulanz Glöckner [2001] ECR I-8089. Case C-482/99, French Republic v Commission [2002] ECR I-4397. Case C-99/00, Lyckeskog [2002] ECR I-4839. Case C-118/00, Larsy [2001] ECR I-5063. Joined Cases C-204/00 P, C-205/00 P, C-211/00 P, C-213/00 P, C-217/00 P and C-219/00 P, Aalborg Portland and Others v Commission [2004] ECR I-0123. Case C-453/00, Kühne&Heitz [2004] ECR I-0837 Case C-473/00, Cofidis [2002] ECR I-10875

Case C-147/01, Weber’s Wine World Handels-GmbH [2003] ECR I-11365. Case C-198/01 Consorzio Industrie Fiammiferi (CIF) v Autorità Garante della Concorrenza e del Mercato [2003] ECR I-8055. Case C-224/01, Köbler [2003] ECR I-10239. Case C-387/01, Weigel [2004] ECR I-4981. Case C-405/01, Colegio de Oficiales v Administración del Estado [2003] ECR I-10391. Case C-148/02, Carlos Garcia Avello v Belgian State [2003] ECR I-11613. Case C-302/02, Commission v France [2005] ECR I-6263. Case C-304/02, Commission v France [2005] ECR I-6263. Case C-365/02, Lindfors [2004] ECR I-7183. Case C-376/02, Stichting “Goed Wonen” [2005] I-3445. Case C-204/03, Commission v Spain [2005] ECR I-8389. Case C-243/03, Commission v France [2005] ECR I-8411. Case C-347/03, Regione Autonoma Friuli Venezia [2005] ECR I-3785. Case C-376/03, D [2005] ECR I-5821. Case C-403/03 Schempp [2005] ECR I-6421. Case C-475/03, Banca Popolare di Cremona [2006] ECR I-9373. Case C-512/03 Blanckaert [2005] ECR I-7685. Joined Cases C-23/04 to 25/04, Sfakianakis [2006] ECR I-1265. Case C-144/04, Mangold [2005] ECR I-9981. Case C-154/04, Spain v United Kingdom [2006] ECR I-7917. Case C-273/04, Poland v Council [2007] ECR I-8925. Case C-292/04, Meilicke [2007] ECR I-1835. Case C-302/04, Ynos [2006] ECR I-0371. Case C-328/04, Vajnai [2005] ECR I-8577. Joined Cases C-338/04, C-359/04 and C-360/04, Placanica [2007] ECR I-1891. Case C-436/04, Van Esbroeck [2006] ECR I-2351. Case C-437/04, Commission v Belgium [2007] ECR I-2513. Case C-168/05, Mostaza Claro [2006] ECR I-10421. Joined Cases C-222/05 to 225/05, Van der Weerd [2007] ECR I-4233. Case C-261/05, Lakép [2006] ECR I-0020. Joined Cases C-290/05, Ákos Nádasdi v Vám- és Pénzügyőrség Észak-Alföldi Regionális Parancsnoksága and C-333/05, Ilona Németh v VPOP Dél-Alföldi Regionális Parancsnoksága [2006] ECR I-10115. Case C-303/05, Advocaten voor Wereld [2007] ECR I-3633. Case C-305/05, Ordre des barreaux francophones [2007] ECR I-5305. Case C-341/05, Laval [2007] ECR I-1167. Case C-345/05, Commission v Portugal [2006] ECR I-10633. Case C-432/05, Unibet [2007] ECR I-2271. Case C-437/05, Vorel [2007] ECR I-0331. Case C-440/05, Commission v Council [2007] ECR I-9097. Case C-2/06, Willy Kempter KG [2008] ECR I-0411.

Joined Cases C-11/06 and C-12/06, Rhiannon Morgan and Iris Bucher [2007] ECR I-9161. Case C-183/06, Ruma [2007] ECR I-1559. Case C-205/06, Commission v Austria [2009] ECR I-1301. Case C-210/06, Cartesio [2008] ECR I-9641. Case C-249/06, Commission v Sweden [2009] ECR I-1335. Case C-283/06, KÖGÁZ [2007] ECR I-8463. Case C-312/06, OTP Garancia Biztosító [2007] ECR I-8463. Case C-345/06, Heinrich [2009] ECR I-1659. Case C-455/06, Heemskerk and Schaap [2008] ECR I-8763. Case C-525/06, De Nationale Loterij NV [2009] ECR I-2197. Joined Cases C-23/07 and C-24/07, Confcooperative Friuli Venezia Giulia and Others [2008] ECR I-4277. Case C-42/07, Santa Casa [2009] ECR I-7633. Case C-118/07, Commission v Finland [2009] ECR I-10889. Case C-297/07, Bourquain [2008] ECR I-9425 Case C-396/07, Juuri [2008] ECR I-8883 Case C-404/07, Katz [2008] ECR I-7607. Case C-509/07, Scarpelli [2009] ECR I-3311. Case C-14/08, Roda Golf [2009] ECR I-11677. Case C-16/08, Schenker [2009] ECR I-5015. Case C-19/08, Petrosian [2009] ECR I-0495. Case C-28/08 P, Bavarian Lager [2010] ECR I-6055. Case C-40/08, Asturcom [2009] ECR I-9579. 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 Luxembourg [2011] ECR I-4231. Case C-53/08, Commission v Austria [2011] ECR I-4309. Case C-54/08, Commission v Germany [2011] ECR I-4355. Case C-61/08, Commission v Greece [2011] ECR I-4399. Case C-73/08, Nicolas Bressol and Others [2010] ECR I-2735. Case C-74/08, Parat Automotive [2009] ECR I-3459. Case C-96/08, CIBA [2010] I-2911. Case C-132/08, Lidl Magyarország [2009] ECR I-3841. Case C-137/08, Pénzügyi Lízing [2010] ECR I-10847. Case C-138/08, Hochtief AG [2009] ECR I-9889. Case C-168/08, Hadadi [2009] ECR I-6871. Case C-243/08, Pannon GSM [2009] ECR I-4713. Case C-250/08, Commission v Belgium, not yet reported. Case C-258/08, Ladbrokes Betting [2010] ECR I-4757. Case C301/08, Bogiatzi [2009] ECR I-10185. Case C-323/08, Rodríguez Mayor [2009] ECR I-11621.

Joined Cases C-447/08 and 448/08, Sjoberg and Gerdin [2010] ECR I-6921. Case C-499/08, Ingeniørforeningen i Danmark [2010] ECR I-9343. Case C-25/09, Sió-Eckes [2010] ECR I-1409. Case C-31/09, Bolbol [2010] ECR I-5539. Case C-66/09, Kirim Amgen [2010] ECR I-7943. Case C-108/09, Ker-Optika [2012] ECR I-12213. Case C-133/09, Uzonyi [2010] ECR I-8747. Case C-137/09, Josemans [2010] ECR I-13019. Case C-225/09, Jakubowska [2010] ECR I-12329. Case C-232/09, Danosa [2010] ECR I-11405. Case C-253/09, Commission v Hungary, not yet reported. Case C-256/09, Purrucker [2010] ECR I-7353. Case C-298/09, Rani [2010] ECR I-0081. Case C-312/09, Michalias [2010] ECR I-0082. Case C-359/09, Ebert [2011] ECR I-0269. Case C-368/09, Pannon Gép Centrum [2010] ECR I-7467. Case C-392/09, Uszodaépítő [2010] ECR I-8791. Case C-399/09, Landtová [2011] ECR I-5573. Case C-504/09 P, Commission v Poland, not yet reported. Case C-17/10, Toshiba Corporation and Others v Úřad pro ochranu hospodářské soutěže, not yet reported. Case C-34/10, Brüstle [2011] ECR I-9821. Case C-81/10 P, France Télécom v Commission, not yet reported. Case C-115/10, Bábolna [2011] ECR I-5017. Case C-118/10, Commission v Council, not yet reported. Case C-121/10, Commission v Council, not yet reported. Case C-125/10, Merck Sharp & Dohme, not yet reported. Case C-210/10, Márton Urbán v VPOP Észak-Alföldi Regionális Parancsnoksága, not yet reported. Case C-274/10, Commission v Hungary [2011] ECR I-7289. Case C-292/10, G, not yet reported. Case C-327/10, Hypotecni Banka [2011] ECR I-11543, Case C-364/10, Hungary v Slovakia, not yet reported. Case C-378/10, Vale, not yet reported. Case C-385/10, Elenca, not yet reported. Joined Cases C-411/10 and 493/10, N.S., not yet reported. Case C-472/10, Invitel, not yet reported. Case C-473/10, Commission v Hungary, not yet reported. Joined Cases C-584/10 P, C-593/10 P and C-595/10 P Commission v Kadi, not yet reported. Joined Cases C-611/10 and C-612/10, Hudzinski and Wawrzyniak, not yet reported. Case C-32/11, Allianz Hungaria Biztosító, not yet reported.

Joined Cases C-80/11 and C-142/11, Mahagében and Dávid, not yet reported. Case C-180/11, Bericap, not yet reported. Case C-245/11, K., not yet reported. Case C-254/11, Shomodi, not yet reported. Case C-273/11, Mecsek Gabona, not yet reported. Case C-274/11, Spain v Council, not yet reported. Case C-295/11, Italy v Council, not yet reported. Case C-277/11, M.M., not yet reported. Case C-324/11, Tóth, not yet reported. Case C-364/11, Abed el Karem, not yet reported. Case C-397/11, Jőrös, not yet reported. Case C-435/11, CSH Tour Services, not yet reported. Case C-472/11, Banif Plus, not yet reported. Case C-488/11, Asbeek Brusse, not yet reported. Case C-490/11, IBIS (Removal Order of 19 April 2012). Case C-648/11, M.A., not yet reported. Case C-667/11, Paltrade, not yet reported. Case C-16/12, Hermes, not yet reported. Case C-32/12, Duarte Hueros, not yet reported. Joined Cases C-33/12 and C-38/12, Körös-vidéki Környezetvédelmi és Vízügyi Igazgatóság, not yet reported. Case C-43/12, Commission v Council and European Parliament (case in progress). Case C-48/12 Commission v Poland (case in progress). Case C-71/12, Vodafone Malta, not yet reported. Case C-91/12, PCF Clinic, not yet reported. Case C-112/12, Franklin Templeton Investment (Removal Order of 5 December 2012). Case C-125/12, Promociones y Construcciones (not yet reported) Case C-182/12, Fekete, not yet reported. Joined Cases C-187-189/12, SFIR, not yet reported. Case C-191/12, Alakor Gabonatermelő és Forgalmazó Kft., not yet reported. Case C-286/12, Commission v Hungary, not yet reported. Case C-288/12, Commission v Hungary (case in progress). Case C-310/12, Commission v Hungary (Removal Order of 20 August 2013). Case C-342/12, Worten, not yet reported. Case C-349/12 Peró Gáz (Removal Order of 14 February 2013). Case C-382/12 P, MasterCard and Others v Commission, OJ C319/4. Case C-385/12, Hervis Sport- és Divatkereskedelmi, not yet reported. Case C-394/12, Abdullahi, not yet reported. Case C-399/12, Germany v Council (case in progress). Case C-444/12, Hardimpex, not yet reported. Case C-462/12, Commission v Hungary (case in progress). Case C-475/12, UPC, not yet reported.

Case C-488/12, Nagy and Others, not yet reported. Case C-519/12, OTP Bank, not yet reported. Case C-563/12, BDV Hungary (case in progress). Case C-31/13 P, Hungary v Commission (case in progress). Case C-115/13, Commission v Hungary (case in progress). Order of the Court of Justice in Case C-430/13, Baradics, not yet reported Opinion 1/03 Competence of the Community to conclude the new Lugano Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, [2006] ECR I-1145. Opinon of Advocate General Poiares Maduro in Case C-210/06, Cartesio [2008] ECR I-9641. Opinion of Advocate General Bot in Case C-364/10, Hungary v Slovakia, not yet reported. Opinion of Advocate General Crúz Villalón in Case C-32/11, Allianz Hungária, not yet reported. The General Court Case T-2/89, Petrofina SA v Commission [1992] ECR II-1091. Case T-12/89, Solvay v Commission [1992] ECR II-0907. Joined Cases T-466/93, T-469/93, T-473/93, T-474/93 and T-477/93, O’Dwyer [1995] ECR II-2071. Case T-115/94, Opel Austria [1997] ECR II-0039. Joined Cases T-228/99 and T-233/99, Westdeutsche Landesbank Girozentrale (West LB) v Commission [2003] ECR II-0435. Case T-417/04, Regione autonoma Friuli-Venezia Giulia v Commission [2007] ECR II0641. 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 T-80/06 and T-182/09, Budapesti Erőmű Zrt. v European Commission, not yet reported. Case T-310/06, Hungary v Commission [2007] ECR II-0015. Case T-32/07, Slovakia v Commission (Removal Order of 14 May 2008). Case T-194/07, Czech Republic v Commission (Removal Order of 26 April 2013). Case T-221/07, Hungary v Commission (Removal Order of 23 April 2013). Case T-111/08, MasterCard, not yet reported. Case T-370/08, Alpiq Csepel v Commission, not yet reported. Case T-89/10, Hungary v Commission, not yet reported. Case T-194/10, Hungary v Commission, not yet reported. Case T-240/10, Hungary v Commission, not yet reported. Case T-407/10, Hungary v Commission, not yet reported.

Case T-499/10, MOL v Commission, not yet reported. Case T-37/11, Hungary v Commission, not yet reported. Case T-320/11, Hungary v Commission, not yet reported. Case T-387/11, Nitrogénművek Vegyipari Rt v Commission, not yet reported. Other jurisdictions ICSID Case No. ARB/07/22. German Federal Constitutional Court Case 2 BvR 2134, 2159/92, Judgment of 12 Oct. 1993. German Federal Constitutional Court 2 BvR 2236/04, Judgment of 18 July 2005 . German Federal Constitutional Court BVerfG, 2 BvE 2/08, Judgment of 30 June 2009. French Constitutional Tribunal Case 92-308 DC, Judgment of 9 Apr. 1992. French Constitutional Tribunal Avis 368.282 of 26 Sept. 2002. French Constitutional Tribunal Case 2007-560 DC, Judgment of 20 Dec. 2007. Czech Constitutional Court Case Pl. ÚS 50/04, Judgment of 8 Mar. 2006. Czech Constitutional Court Case Pl. ÚS 19/08, Judgment of 26 Nov. 2008. Czech Constitutional Court Case Pl. ÚS 29/09, Judgment of 3 Nov. 2009. Czech Constitutional Court Case Pl. ÚS 5/12, Judgment of 31 Jan. 2012. Italian Constitutional Court Case 183/1973, Judgment of 18 Dec. 1973. Polish Constitutional Tribunal Case III. ÚS 31/97. Polish Constitutional Tribunal Case K 18/04, Judgment of 11 May 2005. Polish Constitutional Tribunal Case P 1/05, Judgment of 25 Apr. 2005. Cyprus Supreme Court Case Ap. 294/2005, Judgment of 7 Nov. 2005. Slovenian Constitutional Court Case U-I-14/06, Judgment of 22 June 2006. Belgian Constitutional Court Case 128/2007, Judgment of 10 Oct. 2007. EU legislation Decision 69/494/EEC on the progressive standardisation of agreements concerning commercial relations between Member States and third countries and on the negotiation of Community agreements, OJ L326/39. Directive 85/374/EEC on liability for defective products, OJ L210/29. Directive 89/106/EEC on the approximation of laws, regulations and administrative provisions of the Member States relating to construction products, OJ L40/12. Directive 91/447/EEC on the control of the acquisition and possession of weapons, OJ L 256/51. Regulation 2407/92/EEC EEC on licensing of air carriers, OJ L240/1. Regulation 2408/92/EEC on access for Community air carriers to intra-Community air routes, OJ L240/8. Regulation 2409/92/EEC on fares and rates for air services, OJ L240/15. Directive 93/13/EEC on unfair terms in consumer contracts, OJ L95/29. Directive 94/62/EC on packaging and packaging of waste, OJ L365/10.

Directive 98/34/EC laying down a procedure for the provision on information in the field of technical standards and regulations, OJ L204/37. Council Decision 98/415/EC on the consultation of the European Central Bank by national authorities regarding draft legislative provisions, OJ L189/42. Directive 1999/44/EC on certain aspects of the sale of consumer goods and associated guarantees, OJ L171/12. Council Regulation 659/1999/EC laying down detailed rules for the application of Article 93 of the EC Treaty, OJ L83/1. Regulation 44/2001/EC on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters OJ L12/1. Regulation 45/2001/EC on the protection of individuals with regard to the processing of personal data by the Community institutions and bodies and on the free movement of such data, OJ L8/1. Regulation 68/2001/EC on the application of Articles 87 and 88 of the EC Treaty to training aid, OJ L10/20. Regulation 69/2001/EC on the application of Articles 87 and 88 of the EC Treaty to de minimis aid, OJ L10/30. Regulation 70/2001/EC on the application of Articles 87 and 88 of the EC Treaty to small and medium-sized enterprises, OJ L10/33. Framework Decision 2002/584/JHA on the European arrest warrant and the surrender procedures between Member States, OJ L190/1. Regulation 2195/2002/EC on the Common Procurement Vocabulary (CPV), OJ L340/1. Regulation 2204/2002/EC on the application of Articles 87 and 88 of the EC Treaty to State aid for employment, OJ L337/3. Council Regulation 1/2003/EC on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty, OJ L1/1. Directive 2003/4/EC on public access to environmental information, OJ L41/26. Directive 2003/35/EC providing for public participation in respect of the drawing up of certain plans and programmes relating to the environment, OJ L143/56. Directive 2003/109/EC concerning the status of third-country nationals who are long-term residents, OJ L16/44. Commission Decision 2003/503/EC establishing a model passport for intraCommunity movement of dogs, cats and ferrets, OJ L209/49. Commission Decision 2003/755/EC on the aid scheme implemented by Belgium for coordination centres established in Belgium, OJ L282/25. Directive 2004/17/EC and Directive 2004/18/EC on public procurement procedures, OJ L74/1. Directive 2004/35/EC on environmental liability, OJ L143/56. 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 Member States, OJ L158/77.

Regulation 773/2004/EC relating to the conduct of proceedings by the Commission pursuant to Articles 81 and 82 of the EC Treaty, OJ L123/18. Directive 2005/29/EC concerning unfair business-to-consumer commercial practices in the internal market, OJ L149/22. Decision 2005/842/EC on the application of Article 86(2) of the Treaty to state aid in the form of public service compensation granted to certain undertakings, OJ L312/67. Directive 2006/7/EC on the quality of bathing water, OJ L64/37. Directive 2006/112/EC on the common system of value added tax, OJ L 347/1. Directive 2006/123/EC on services in the internal market, OJ L376/36. Decision 2006/697/EC on the signing of the Agreement between the European Union and the Republic of Iceland and the Kingdom of Norway on the surrender procedure between the Member States of the European Union and Iceland and Norway, OJ L292/1. Regulation 1931/2006/EC laying down rules on local border traffic at the external land borders of the Member States, OJ L29/3. Decision 2007/339/EC on the signature and provisional application of the Air Transport Agreement between the European Community and its Member States, on the one hand, and the United States of America, on the other hand, OJ L134/1. Regulation 1234/2007/EC establishing a common organisation of agricultural markets and on specific provisions for certain agricultural products, OJ L299/1. Directive 2008/57/EC on the interoperability of the rail system within the Community OJ L191/1. Directive 2008/98/EC on waste, OJ L312/3. Commission Decision 2009/174/EC on measure C 35/04 implemented by Hungary for Postabank and Takarékpénztár Rt./Erste Bank Hungary Nyrt., OJ L62/14. Commission Decision 2009/609/EC on the State aid C 41/05 awarded by Hungary through Power Purchase Agreements, OJ L225/53. Regulation 662/2009/EC establishing a procedure for the negotiation and conclusion of agreements between Member States and third countries on particular matters concerning the law applicable to contractual and non-contractual obligations, OJ L200/25. Regulation 664/2009/EC establishing a procedure for the negotiation and conclusion of agreements between Member States and third countries concerning jurisdiction, recognition and enforcement of judgments and decisions in matrimonial matters, matters of parental responsibility and matters relating to maintenance obligations, and the law applicable to matters relating to maintenance obligations, OJ L200/46. Regulation 1120/2009/EC laying down detailed rules for the implementation of the single payment scheme , OJ L316/1. Directive 2010/41/EU on the application of the principle of equal treatment between men and women engaged in an activity in a self-employed capacity, OJ L180/1.

Commission Decision 2010/95/EC on State aid C 10/07 (ex NN 13/07) implemented by Hungary for tax deductions for intra-group interest, OJ L42/3. Commission Decision 2011/88/EU of 9 June 2010 on state aid C 1/09 (ex NN 69/08) granted by Hungary to MOL Nyrt., OJ L34/55. Commission Decision 2011/507/EU authorising methods for grading pig carcasses in Hungary, OJ L209/49. Commission Decision of n. SA 30584 (C 38/2010, ex NN 69/2010) on the state aid implemented by Hungary in favour of Malév Hungarian Airlines Zrt., C(2011)9316 final. Commission Decision 2011/269/EU on State aid C 14/09 (ex NN 17/09) granted by Hungary to Péti Nitrogénművek, OJ L118/9. Regulation 1175/2011/EU amending Council Regulation (EC) No 1466/97 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies, OJ L306/12. Council Implementing Decision 2012/156/EU suspending commitments from the Cohesion Fund for Hungary with effect from 1 January 2013, OJ L78/19. Regulation 1219/2012/EU establishing transitional arrangements for bilateral investment agreements between Member States and third countries, OJ L351/40. Council Decision 2013/315/EU abrogating Decision 2004/918/EC on the existence of an excessive deficit in Hungary, OJ L173/43. Legal and policy documents Act concerning the conditions of accession of the Kingdom of Norway, the Republic of Austria, the Republic of Finland and the Kingdom of Sweden and the adjustments to the Treaties on which the European Union is founded, OJ C241/9. Act concerning the conditions of accession of the Czech Republic, the Republic of Estonia, the Republic of Cyprus, the Republic of Latvia, the Republic of Lithuania, the Republic of Hungary, the Republic of Malta, the Republic of Poland, the Republic of Slovenia and the Slovak Republic and the adjustments to the Treaties on which the European Union is founded, OJ L236/1. Communication from the Commission: Temporary Framework for state aid measures to support access to finance in the current financial and economic crisis, OJ C16/1, as amended by the Communication from the Commission amending the Temporary Community Framework for state aid measures to support access to finance in the current financial and economic crises, OJ C303/6. Commission Notice on cooperation within the Network of Competition Authorities, OJ 2004/C 101/03 Commission Guidelines on the effect on trade concept – contained in Articles 81 and 82 of the Treaty, OJ 2004/C 101/07. Commission Recommendation 2001/93/EC on pre-contractual information, OJ L69/25. Commission Recommendation 2003/361/EC concerning the definition of micro, small and medium-sized enterprises, OJ L124/36.

Commission Recommendation 2006/585/EC on the digitisation and online accessibility of cultural material and digital preservation, OJ L236/28. Commission Recommendation 2009/329/EC on data protection guidelines for the Internal Market Information System (IMI), OJ L100/12. Communication of the Commission: Temporary Union Framework for State aid measures to support access to finance in the current financial and economic crisis, OJ C6/5. Community Guidelines on State aid for rescuing and restructuring firms in difficulty, OJ 1999/C 288/2. Community Guidelines on State aid for rescuing and restructuring firms in difficulty, 2004/C 244/2. Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, OJ L339/3. Council Act establishing in accordance with Article 34 of the Treaty on European Union the Convention on Mutual Assistance in Criminal Matters between the Member States of the European Union, OJ C197/1. Europe Agreement establishing an association between the European Communities and their Member States, of the one part, and Hungary, of the other part, OJ L347/2. Europe Agreement establishing an association between the European Economic Communities and their Member States, of the one part, and Romania, of the other part, OJ L357/2. Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) of the ECSC Treaty, OJ 98/C 9/03. Guidelines on the method of setting fines imposed pursuant to Article 23(2)(a) of Regulation No 1/2003, OJ 06/C 210/1. Guidelines on national regional aid for 2007-2013, OJ C54/13. Guidelines on regional State aid for 2014-2020, OJ/C 209/1. Multi-sectoral framework on regional aid for large investment projects, OJ C70/8. Rules of Procedure of the Court of Justice adopted on 25 September 2012, OJ L265/1. Stabilization and Association Agreement between the European Communities and their Member States, of the one part, and the Republic of Croatia, of the other part, OJ L26/3. Statute of the Court of Justice of the European Union, OJ C83/210.

1 THE LAW OF THE EUROPEAN UNION IN HUNGARY: INSTITUTIONS, PROCESSES AND THE LAW Márton Varju and Ernő Várnay

This book examines the impact of European Union law on the state and the law in Hungary. It focuses predominantly on the legal and institutional changes and the institutional adaptation processes induced by EU law, which started long before Hungary’s accession to the European Union in 2004. Our aim was to provide a comprehensive account of changes as introduced and documented in primary and secondary legislation, policy documents, and administrative and judicial practice at the national and the EU level. The book looks at institutional responses in government to the direct adaptational pressures following from various areas of EU law and governance, in particular, the mechanisms and practices adopted for the harmonization of national law with EU law, including the external acquis, the application and enforcement of EU law in Hungary, and the protection by the Hungarian government of rights and Hungarian interests before EU courts. It also covers substantive legal changes in domestic law based on provisions of EU primary and secondary law and the general principles of the EU legal order. It examines the primary avenues of legal adaptation on for the Member States under the EU framework including, in particular, the modifications in domestic constitutional law required by EU membership, the interpretation and application of EU law by domestic courts and the application of EU (competition and state aid) law by Hungarian authorities. The legal and institutional changes introduced in Hungary since the beginning of the accession process in the mid-90s represented a fundamental test for the new Central and Eastern European democracy. The successful fulfilment of the formal criteria of EU membership and the competent operation of law and administration as a Member State of the EU required Hungary to implement effectively in the workings of the state the newly discovered requirements of the rule of law, good governance and good regulation. Informed decision-making based on expert knowledge, observing the legal boundaries of legislative and administrative action, and designing state conduct with reference to a broader legal and policy framework have, in principle, become the norm in EU affairs demanding adaptation in government, in Parliament and in the courts both on an institutional and a personal level. It would be a mistake to assume that legal and institutional change came easy for Hungary. Although passing new laws and setting up new institutions and

processes are fairly uncomplicated to achieve, the experience of Hungary, which reveals both hiatuses and achievements, shows that the results were hardly fought for and further improvement will require toil and slow adaptation. The preparation for EU membership and the post-accession adaptational pressures have affected law and government in Hungary in a significant degree. New institutions were created, existing institutions were modified, new processes for political and expert-level coordination were established, procedural and substantive law were amended, and new constitutional and legal principles were transplanted into the Hungarian legal order. The preparation for membership and membership itself required the systematic training of expert staff – civil servants and judges, and the creation of EU policy and EU law units and decision-making/ decision-support structures in the top tier of public administration and in the judiciary. The Hungarian Parliament set up an autonomous parliamentary committee for EU affairs. The new, essentially international obligations and responsibilities of domestic institutional actors – ministries, executive bodies and agencies, and courts, which appeared alongside and often in conflict with their national tasks and duties, required investment in new resources, the reconsideration of institutional attitudes and priorities, and the readjustment of operational habits. For all actors involved, the obligations and institutional pressures from EU law and governance presented an incentive for reform which manifested either through the implementation of direct legal obligations determined at the European level, or by means of gradual – or often radical – legal and institutional adjustment championed by domestic actors. Institutional and legal adaptational pressures from the European Union did not, however, demand a complete overhaul of law and administration in Hungary. Although in some areas, such as competition law or external treaty obligations, the influence of EU law over national law was extensive and some of the traditional doctrines of law and governance in Hungary were openly challenged by the principles and the law of the EU, the institutional and legal framework created in a gradual process in the period of post-communist transformation was found, in general, suitable to serve Hungary as a Member State of the European Union.1 The recent comprehensive overhaul of the Hungarian constitutional and legal system and the parallel reform of the administration, which commenced in 2010, were driven predominantly by home-grown ideas for change rather than adaptational pressures from the EU.2 The Europeanization of law and government, on the whole, was characterized by partial, sector- or policy-specific adjustment, and it has led to the separation of legal and governance areas depending on whether and with what 1 For an overview of post-communist legal transformation in Hungary, see A.F. Tatham, P. Takács and A. Jakab, The Transformation of the Hungarian Legal Order 1985-2005, The Hague: Kluwer, 2007. 2 For an overview, see P. Smuk, The Transformation of the Hungarian Legal System 2010-2013, Budapest: Complex, 2013. The fact that recent reforms are based on home-grown ideas does not mean that those ideas are not the product of vertical and horizontal learning and borrowing from the EU and from other Member States.

intensity EU requirements applied.3 In areas outside the scope of direct EU legal obligations where the generally applicable requirements of EU law, such as the non-discrimination principle, do nevertheless apply, implementing those requirements necessitated only limited adaptation. In other areas, for instance where national authorities are bound by directly applicable EU measures, change was more fundamental. Adjustment could also involve the integration of EU requirements into existing institutional, procedural and legal structures without fundamentally altering them. For instance, the application of EU law by national courts and the realization of their rights and obligations within the EU judicial system took place in the existing institutional and procedural system for justice in Hungary. Grafting European requirements onto national legal and institutional frameworks and achieving change by solutions specific to the local context were also the preferred choice in other central areas, such as the coordination of legal harmonization obligations. There are certain areas where the adaptation process, instead of studious preparation and systematic adjustment, necessitated prompt action or situational responsiveness from Hungary. For instance, the effective representation of the Hungarian position in EU decision-making requires different, more reactive competences than those necessitated in the systematic process of pre-accession harmonization. The same holds true for the making of an admissible and substantively well-constructed preliminary reference to the EU Court by national courts. The targets are more fluid, and successful participation and contribution assumes professionalism and the up-to-date knowledge of developments. In a similar vein, the judgments and reasoning of the Constitutional Court on the relationship between national law and EU law required, in principle, a different vision of the EU polity and EU law and a different understanding of the social and economic impact of their rulings in the pre- and post-accession period. In the former, the political, social and economic stakes were much lower than in the latter when, as a matter of EU doctrine, provisions of EU economic and social regulation may override constitutional principles and political and social values. Finally, different institutional attitudes and strategies are demanded when compliance is based on the Commission’s pre-accession conditionality strategy and now, when Hungary is subject to the full rigour (and flexibility) of infringement procedures and sanctions. We are not convinced that in these circumstances the responsible domestic actors are able to perform their best. If we accept the argument that preaccession conditionality has socialized expert elites in top-tier administration to remain sensitive to criticism formulated on the European level and to settle (compliance) problems fairly quickly,4 there is a long way ahead before more 3 There is an inevitable temporal dimension of these developments which follows the expansion of EU competences and EU legislative and policy activity in certain fields. 4 U. Sedelmeier, ‘After Conditionality: post-Accession Compliance with EU law in East Central Europe’, Journal of European Public Policy 15, 2008, pp. 806-825.

autonomous and responsive, and perhaps less conciliatory, institutional and personal attitudes and strategies develop. This book documents a transformation process which by and large was carried out on the basis of expert knowledge. It relied on the commitment and willingness of expert actors, civil servants, judges and academics at the domestic level. There is evidence of a conscious assessment of the possibilities available to the government and the courts in achieving a more effective incorporation of EU requirements into existing domestic legal and governance frameworks. It is also clear that many EU legal norms are now applied and given effect as part of the domestic legal order and that EU related activity in the central administration and in courts has become part of professional routine. Bottom-up developments, such as the creation of the legal and procedural framework for government participation in the EU decisionmaking process and for the coordination and the monitoring of the fulfilment of EU legal harmonization requirements, provide good examples of expertise-driven legal and administrative changes. Without ignoring the possibility of ‘experts’ conceiving legal and institutional transformation as a technical process governed by obligations laid down in law, it could be argued that this presence of expertise and professionalism ensured that the reception of EU law in Hungary amounted to a more substantial and innovative transformation process than a mere automatic and formulaic execution of requirements determined at the European level by national actors. It must not be overlooked, however, that the preparation for membership and post-2004 practices are not devoid of examples of incompetence, ignorance, ‘sitting on the fence’ and ‘foot dragging’ behaviour,5 complacency and institutional inertia, and to a certain extent disagreement and resistance. These essentially negative developments in the adaptation process, which may characterize any system of public administration and any judicial system in any other context, could, on the one hand, be recognized as inevitable in a gradual process of learning, or, with a more critical eye, as evidence of serious institutional and personal deficiencies. The lack of follow-up monitoring by the responsible bodies prevents making definitive conclusions concerning whether the extensive training programmes in EU law and policy for civil servants, judges and constitutional court judges provided a sufficient basis or the generation of expert knowledge, or they only succeeded communicating the bare legal essentials for managing EU membership. Bottom-up directed adjustments, which would attempt to reconcile European obligations with domestic considerations and interest, remain rare, and the relevant actors – courts, the Constitutional Court, Parliament – have been rather passive in shaping EU law and governance and their impact in Hungary. One of the few exceptions is the overall competent and successful representation of the Hungarian position before the EU Court of Justice by a small cohort of expert agents, although it is uncertain whether the incentive for them to 5 See T. Börzel, ’Pace-Setting, Foot-Dragging and Fence-Sitting: Member State Responses to Europeanization’, Journal of Common Market Studies 40, 2002, pp. 198-214.

perform well in representing the national position emerges from a bottom-up process or it is the consequence of the top-down reality of the procedure before the EU Court. Interestingly, the textualism which strongly characterized the transformation process in Hungary, and which would be targeted by the critical accounts on the legal reception of EU law in the new Member States,6 could attract opposing evaluations. On the one hand, the professional dependence of actors to the text of legal provisions could be seen as the cause of the less than dynamic and proficient incorporation of the EU legal order in Hungary. The fundamental principles and interpretative canons of EU law require a far more progressive reading of institutional tasks and responsibilities than what may follow from the textual reading of statutory provisions. On the other hand, textualism, in particular, the presence of EU obligations in the text of national legislation was indeed central to the acceptance by actors at the national level of their responsibilities and obligations under EU law. This book could not have undertaken the task of mapping and analysing the deeper, perhaps less visible impacts of Europeanization on law and administration in Hungary. We were unable to investigate institutional and individual attitudes, socialization and learning, unofficial coping strategies and mechanisms, or changes in institutional and legal culture. Our authors were all lawyers – academics and practitioners, and we followed a predominantly legal methodology. Although this book provides a mainly legalistic account of the reception of EU law in Hungary, it also endeavoured to discuss the motivation and interests of institutional actors and to project a dynamic image of the transformation process going beyond the explanations offered by formal legal logic. Evidence of the profound legal and institutional changes were found in the available primary and secondary legal sources, which in the different chapters of the book were used to indicate shifting institutional behaviour, improving performance in the understanding and application of EU law, and interest in the effective operation of law and administration in Hungary. It seems that the legal and policy transfer mechanisms operated under the EU framework, such as the procedure for a preliminary ruling between domestic courts and the EU Court, or the information exchange network between the EU Commission and national competition authorities, have had an impact on law and governance at the national level beyond formal legal compliance. The transformation process discussed in this book, as indicated by most of the Chapters, could, in principle, be explained in legalistic terms.7 Alignment and 6 For an overview of the literature and a critical account of the judicial reception of EU law in Latvia and Estonia, see T. Evas, Judicial Application of European Union Law in post-Communist Countries, Farnham: Ashgate Publishing, 2012. For a critical review of the book, see M. Varju, ‘Book review: Tatjana Evas, Judicial Application of European Union Law in post-Communist Countries. The Cases of Estonia and Latvia’, forthcoming in the Common Market Law Review (May 2014). 7 See the discussion concerning the acceptance of EU legal doctrine by national courts in K. Alter, ’Explaining National Court Acceptance of European Court Jurisprudence: a Critical Evaluation of Theories of Legal Integration’, in A-M. Slaughter, A.S. Sweet and J.H.H. Weiler (eds.), The European Court and National Courts – Doctrine and Jurisprudence, Oxford: Hart Publishing 1998, pp. 227-251.

adjustment to EU requirements followed from the acceptance by domestic actors that they are compelled to honour EU obligations. Their conduct was based on domestic legal provisions (the constitution, legislation) and on recognizing the authority of EU law. There is not much evidence that the rationale and the logic of EU legal doctrine (e.g. effet utile) convinced domestic actors to act in a particular way. The explanatory force of the legalist approach is, however, somewhat limited when the apparent variation in the conduct of different domestic actors in different phases of the transformation process is considered. This variance and fluctuation in the reception of EU law could be better explained by the inevitable influence of non-legal factors at the national level. These include positive factors, such as the formulation and representation of institutional interests in the administration and governance of certain policies, the incentives offered by EU law to civil servants and judges, or the competition between the upper and lower tiers of domestic institutional structures (the judiciary), and negative factors, such as professional incompetence, ignorance and professional complacency. The hard evidence collected in this book regarding the actual impact of these factors is not particularly strong. If we accept that the transformation process was indeed governed by legal compulsion, we must also ask whether legal compulsion serves as a sufficient basis for the unprecedented institutional and legal transformation which took place in Hungary before and after 2004. Legalism as a basis could be interpreted as a mere bureaucratic reflex of compliance, or as a technical measurement of legal obligations, as they follow from EU law, and of legal constraints of observing those obligations, as they follow from domestic law. It lacks an institutional vision of the EU polity and the place of Hungary and domestic actors within the EU polity, and it fails to interpret the social and economic relevance of the relationship between EU law and the domestic legal order. The Hungarian Constitutional Court’s legalistic jurisprudence reveals very little about the relationship between the EU and the Hungarian constitutional order and about the impact of EU accession on Hungarian constitutionalism. This technical legal approach is perhaps the most damaging when the constitutional jurisprudence forces individuals to select less accessible avenues of legal redress against the state violating their rights. The formal, and barely minimal, contribution of the Hungarian Parliament to European Union governance offers a depressing image of parliamentary culture in Hungary and of the domestic reactions to the EU level efforts to bridge the gap between the EU polity and its citizenry. Its consequences are especially disadvantageous when European politics in Hungary is reduced to the protection of the rather fungible idea of the ‘national interest’ (e.g. the protection of domestic legislation and administrative practice, domestic tax revenues, access to EU funds, or national ‘honour’). Despite the availability of ample legal information on the transformation process, its evaluation from a legal perspective remains far too uncertain. On the one hand,

the amount and often the quality of the legal changes implemented are impressive. As a matter of compliance with EU obligations on paper, Hungary has traditionally performed really well.8 The formal and substantive adjustments required in the pre- and post-accession period, even in retrospective, seem overwhelming, and the institutional, procedural and substantive legal responses given to them must have tied down much of the intellectual, personal and financial resources available in Hungary. Hungary came out of the transformation process as a Member State where compliance with EU obligations and the application and enforcement of EU law, as a matter of the techniques of government and the expert operation of administrative and judicial processes, is by and large unproblematic. On the other hand, the discussions in this book did not reveal compelling evidence that the legal and institutional transformation process has fundamentally improved how we are governed and how institutions, processes and the law operate in Hungary. The impetus of EU accession seems to have been wasted on carrying out technical adjustments and on meeting targets on paper, and sometimes in practice. The Chapters in this book discussed missed opportunities, unclear institutional strategies and half-baked legal responses. The assumed substantive prerequisites of a successful accession to the European Union from a legal and governance perspective, such as the value of expertise, professional independence, inquisitiveness, willingness to learn, and reflexiveness in the operation of key institutions, did not seem to have taken a sufficiently firm root in law and administration in Hungary. The transformative potential of external influences on law and governance at national level, even if they follow from binding legal obligations, depends on the openness and receptiveness of the broader domestic environment. There are areas where change can be achieved with relative ease (e.g. the modification of laws), where change requires smaller institutional adjustment and the use of some resources (e.g. the appointment of EU trainer judges), and where change necessitates the development of complex structures and the readjustment of institutional (and personal) attitudes and values (e.g. participation in EU policy-making). The operation of certain EU-related areas of administrative governance in Hungary, such as competition enforcement, state aid monitoring, the fulfilment of legal harmonization obligations, or the cooperation with the Commission in infringement procedures, indicates that the alteration of fundamental institutional attitudes and reflexes is indeed possible. On the basis of the legal borrowing literature in comparative law, which from the perspective of the success of legal borrowing distinguishes between ‘bolt-on’ solutions and ‘organic products’ generated by ‘internal adaptation by the receiving system’,9 it can be suggested that the successful administration of legal change requires active adjustment techniques and the 8 See G. Falkner and O. Treib, ‘Three Worlds of Compliance or Four? The EU-15 Compared to the New Member States’, Journal of Common Market Studies 46, 2008, pp. 293-313. 9 J. Bell, ‘Mechanisms for Cross-fertilisation of Administrative Law in Europe’, in J. Beatson and T. Tridimas (eds.), New Directions in European Public Law, Oxford: Hart Publishing, 1998, p. 147.

careful consideration of options offered by national legal systems. In this light, the transformative impact of EU membership seems to depend on the ability to develop home grown solutions and the promotion of the expert (deep) integration of EU requirements into the domestic legal and governance context. The adequate and deep grafting of ‘foreign’ legal and governance solutions require bottom-up adjustment based on internal experiences, and possibly on horizontal learning from the experience of other Member States. It must not be overlooked, however, that in the rush of the pre-accession process and even today the ‘copy-paste’ transposition (transplantation) of EU law into domestic law appears as more practical and rapid, and it may avoid the distortions in the content and the boundaries of EU principles and the mellowing down of the transformative potential of implementing EU obligations, which may follow from their integration by means of developing home grown responses. Constitutions are primary locations for legal change associated with EU membership. They provide the fundamental legal authorization and the ultimate legal framework for the impact of EU law and governance in the Member States. In her Chapter, Flóra Fazekas discusses the responses given in Hungarian constitutional law to the challenges of EU integration before and after 2004, and also how EU membership (should) have changed the domestic constitutional environment. She focuses mainly on the jurisprudence of the Hungarian Constitutional Court addressing the jurisdiction available and the control exercised in EU-related matters. The Chapter criticizes, in particular, the indecisiveness of the Hungarian Court in establishing the constitutional controlimiti of EU membership and argues for a change of tack in the jurisprudence in order for the court to fulfil its broadly interpreted functions. The division of competences among national courts, the Constitutional Court and the EU Court, which forms the basis of the doctrinally effectively reasoned jurisprudence, may leave individuals without effective redress against the violation of EU law by the Hungarian state. As a result of gradual political and constitutional developments at the EU level, national parliaments have become central political actors in the European Union. At the national level, they have long served as a dominant forum of public debate on the European Union and EU membership, and also as the fundamental authority authorizing national governments to take decisions on EU matters. Their ability to influence European integration and EU decision-making directly or indirectly through their respective governments presumes that national parliaments maintain effective institutional solutions to address EU matters and that they take their European role seriously. Angéla Juhász-Tóth in her Chapter examines the changes introduced in the Hungarian Parliament to enable effective participation in European affairs, in particular the institutional and procedural framework adopted. In her account, the Hungarian Parliament, despite the available framework, is some way away from acting as an effective and responsible actor at the domestic and the European level in the EU political process.

Before 2004, as it follows from one of the fundamental purposes of the accession process the fulfilment of legal harmonization obligations represented the most pressing legal challenge for Hungary. The tasks of legislative screening and implementation required establishing an effective coordination mechanism in government capable of managing the domestic and the European aspects of harmonizing Hungarian law with the EU acquis. In her Chapter, Réka Somssich discusses the institutional and procedural solutions adopted in Hungary to secure the fulfilment of legal harmonization tasks before and after the accession. The Hungarian response follows the relevant Commission guidelines but its particularities indicate that its design was based on an expert consideration of the available solutions on the basis of their suitability in the domestic context. Another area where EU membership required the creation of new capacities is the representation of the Hungarian government in infringement procedures and in procedures before EU courts. Ernő Várnay in his Chapter sets out to find an adequate description of the performance of Hungary in these procedures as the protector of Hungarian interests and of the rights of Hungarian individuals. He looks at the overall trends in Hungarian participation focusing on the number, the types and the success of interventions, and tries to place Hungary in the existing categories used to denote Member State behaviour before EU courts. The Chapter also examines in detail the more telling cases of Hungary’s participation in EU infringement and court procedures including the controversial Hungary v Slovakia case. Várnay concludes that with some improvement Hungary could become a successful repeat player in EU litigation. In the next Chapter, Márton Varju investigates perhaps the most salient legal aspect of the adaptation process. The recognition and application of EU law by Member State judiciaries is crucial to the effective operation of the EU polity and requires, as an optimal solution, far-reaching changes in the judicial interpretation and application of the law from national courts. Varju discusses the emergence in the Hungarian jurisprudence of the relevant fundamental and more technical principles of EU law and also the coordinative task undertaken by the Curia (the former Supreme Court) in order to secure the appropriate interpretation and application of EU law by lower domestic courts. His Chapter indicates where sufficient progress has been achieved and where further adaptation and institutional learning is required to overcome some fundamental problems with the new judicial functions acquired within the framework of the EU judicial system. The Chapter on the Hungarian experience with references for a preliminary ruling to the EU Court reveals an overall successful process of institutional adaptation. András Osztovits and Katalin Gombos discuss the ups and downs of the integration of the preliminary ruling procedure into the Hungarian procedural environment, and they examine in detail the propensity of Hungarian courts, and its potential causes, to turn to the EU court with a preliminary reference. They evaluate the performance of Hungarian courts in making the most important

decisions concerning the initiation of the procedure, namely the relevance of the issues put forward to the EU Court and the treatment of the question of whether the preliminary ruling is necessary in the meaning of Article 267 TFEU. The mixed experience of the Hungarian judiciary with preliminary references indicates the potential pitfalls of larger processes of institutional adjustment. The development of Hungarian competition law and enforcement under European influence reinforces the image of adaptation and adjustment to EU requirements as a complex, multifaceted and rationally driven process. The Chapter by Tihamér Tóth gives an overview of the post-transformation and pre- and postaccession changes in Hungarian competition law and discusses how Hungarian law and the Hungarian competition authority managed to retain their autonomy in the decreasing area left unaffected by EU law. He examines the most relevant legislative changes introduced under EU influence and the relevant practice of the Hungarian competition authority where EU law was applied. His Chapter pays special attention to the hiatuses of the Hungarian practice and highlights the areas where further improvement could be achieved as a matter of both domestic and European requirements. The substantive and procedural constraints represented by EU state aid law on national policy making require significant legal and institutional adaptation from the Member States. Hungary, as discussed by Mónika Papp in her Chapter, created its own domestic arrangements for monitoring and ensuring compliance with EU state aid requirements. The Chapter examines the legal and institutional status of the office entrusted with these tasks and evaluates its performance within government and in discharging its obligations towards the Commission. In order to offer a more complete assessment of the domestic influence of the EU state aid regime, the Chapter looks at the Hungarian state aid cases investigated by the Commission. Papp’s overall evaluation of the Hungarian implementation of EU state aid policy is positive. However, she is also keen to emphasize the hiatuses in the legal and institutional grafting of EU state aid requirements onto the Hungarian policy-making process and the lack of sufficient care in developing domestic policy having regard to the constraints formulated in EU state aid law. In the final Chapter by Ildikó Bartha, the adjustment of Hungary’s international treaty obligations to the EU external acquis is examined. After an overview of the international and European legal foundations of the requirement for Member States to harmonize their international treaties with EU law, Bartha introduces the domestic framework for international treaty-making in Hungary and provides an overview of the process in which the international treaty obligations of Hungary were screened and amended in light of EU law obligations. The Chapter then evaluates the impact of recent legal developments at the EU level concerning Member State bilateral treaties with third countries on the similar international treaty commitments of Hungary. In its discussion and analysis, the Chapter offers an accurate image of the achievements and pitfalls of Hungary achieving the

arduous task of harmonizing its international treaties with EU law and integrating into the external acquis of the EU. This book was written for both a domestic and an international audience. Although its scope does not extend beyond changes experienced in Hungary and attempts to compare developments with those in other Member States were kept to a minimum, it reveals an adaptational process and it discusses legal and institutional changes which have relevance beyond the borders of a single Member State, and which form an integral part of the general debate on the Europeanization of law and administration in European states. It is hoped that this book gives an accurate and accessible account of this largely transparent process of legal and institutional transformation and offers an engaging evaluation – from a lawyer’s perspective – of the changes experienced. We felt that the Europeanization of law and administration in Hungary leading up to and following its 2004 accession to the European Union deserves similar attention to that of the transformation process of the post-1989 regime change. The editors and authors would like to thank the civil servants and judges who spared no effort to help with our queries. The help of George Seel at the University of Debrecen and our student assistant Henrietta Regina Farkas in the Department of European and International Law at the University of Debrecen were indispensable in the editing process. Finally, we are greatly indebted to Ádám Frank and Éva Harkai at HVG-ORAC who enabled us to produce this book.