Return of the Solange Ghost: the Supremacy of EU Law and the Democracy Paradox

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Return of the Solange Ghost: the Supremacy of EU Law and the Democracy Paradox


1. Introduction: the Solange story, West and East


One of the most important themes in the grand narrative of the ascendance of EU law as the supreme law of the Union, prevailing over national legal systems, is (what may be called generically) a ‘Solange story’, that is, a story about national constitutional courts resisting a straightforward surrender of national legal sovereignties, and insisting on their own role as guardians of any further transfer of powers from the national to the European level. This resistance is based on their distrust both of the democratic legitimacy at the supranational level and the EU’s ability to provide a degree of protection for the principles of the rule of law and human rights, at least equivalent to that of the most elevated standards of the relevant national communities.


The story, as presented in this chapter, borrows its name from two famous judgments of the German Federal Constitutional Court. Solange I, in 1974,1 established that since European law had not yet reached a level of protection of fundamental rights equivalent to that provided by national constitutional law, as well as a similar level of democratic legitimacy for its law-making powers, the Court would keep reviewing secondary Community law according to the standards of the national Constitution. As long as the European Community system lacks an effective bill of rights and a truly democratic legislative process, the Federal Constitutional Court must exercise its right to review the consistency of Community law with the national Constitution. Solange II, in 1986,2 in turn, expressed satisfaction that such a level had been reached by EC law, and ‘as long as’ (Solange) the European Community, primarily through the case law of the ECJ, kept ensuring an effective protection of fundamental rights, the Federal Constitutional Court would no longer carry out a review of secondary Community legislation according to national constitutional standards, though it would retain the power to review the general regime of fundamental rights protection afforded by the European Community. This was described as a ‘reverse Solange formula’: in order to trigger a constitutional court’s active review of Community laws, a complainant (or a submitting court, in the ‘concrete review’ process) would have to show that there has been a general decline of the standard of fundamental rights at the EU level.3


These developments have been replicated in several other countries where constitutional courts have adopted a stance not unlike that of the German Court. For instance, on several occasions, the French Conseil constitutionnel reviewed the EC Treaties under the French Constitution, thus forcing France to amend its Constitution in 1992 and 1999.4 (Though the analogy with Germany is weak, as the decisions of the French Conseil constitutionnel were more like calls for constitutional amendments than strong objections to European legal supremacy. On the other hand, they were analogous in that they reasserted the role of the Conseil as a guardian of constitutionality vis-à-vis the EU.) In Italy, the Corte costituzionale established in Frontini, in 1973,5 that fundamental rights are the limit to the transfer of sovereignty to the European Community. This was reasserted in the Fragd ruling of 19896 where the Court claimed that it could review specific rules of EC law under the fundamental standards of the Italian Constitution, and in particular its provisions on rights (though it has not exercised this power of scrutiny so far). There is no need to consider patterns in several other West European countries here; in a summary description by Bruno de Witte, ‘In most other countries too, the Constitution is still the uncontroverted summit of the pyramid of the sources of law, and Community law is reluctantly given a para-constitutional status at most’.7


After eight post-Communist, newly democratized states of Central and Eastern Europe formally acceded to the EU in 2004, with two other countries joining in 2007, one might have expected that the constitutional courts in these states would be tempted to follow the path of their German and other Western European counterparts. In fact, it would have been strange had they not done so: the Solange story, initiated in Germany, France, Italy, etc some years earlier, was almost ideally suited to be taken up in CEE states after accession, for two important reasons. First, in nearly all post-communist European states, constitutional courts established themselves as powerful, influential, activist players, dictating the rules of the political game for other political actors; they were certainly not burdened with any self-doubt as to their legitimacy in striking down laws under very vague constitutional terms.8 While the powers of the constitutional courts in Central and Eastern Europe largely resemble (and often exceed) those of their Western European counterparts, the other branches of CEE states are weaker, more chaotic, disorganized, and inefficient compared to those in Western Europe. The relative positions of constitutional courts vis-à-vis other branches of government are therefore weightier than is the case in the ‘old Europe’. Accession to the EU provided these courts with yet another opportunity to reinforce their own powers—an opportunity not to be missed: they could easily assert a right to establish and enforce criteria of democracy, rule of law, and human rights protection, which would inform the relationship between the European and national constitutional orders. Such a power would further increase their position vis-à-vis the political branches in their countries, by delineating those aspects of the supremacy of European law which they deemed unacceptable, or by dictating the need to carry out constitutional amendments if certain dimensions of supremacy were to be accepted.


The second reason why the Solange story almost begged for a recurrence in Central and Eastern Europe stemmed from the sovereignty concerns which were felt and expressed in CEE states prior to accession and persisted after joining the EU. In Chapter 2, the situation surrounding this concern was described as a ‘sovereignty conundrum’:9 the often perceived irony that almost immediately after the shaking off of brutal dominance by the Soviet Union (with its doctrine of ‘limited sovereignty’ of Warsaw Pact member states) and the recovery of their independence, these countries should accede to a supranational community in which traditional notions of sovereignty are found to be outdated and in which they are asked to surrender their power of self-government to supranational institutions. Chapter 2 also included a description of the various ways in which lawyers and politicians in these countries tried to reconcile the aspiration of traditional sovereignty with membership of the EU, that is, by creating a dichotomy between sovereignty and the exercise of sovereign powers. While these devices were often clever rather than compelling, the fact remained that concerns about the preservation of sovereignty reverberated strongly in political discourses in CEE states around the time of accession to the EU. CEE constitutional courts thus found themselves tempted to rephrase sovereignty-based objections against the supremacy of EU law in terms of their role as guardians of constitutional values. This was much stronger than in the case of their West European counterparts, who felt much more relaxed about sovereignty in the EU. Indeed, the founding states of the EU (where the original Solange phenomenon prefigured what is now going on in some of the new Member States) were not the sites of any particularly strong concerns about preserving sovereignty within a supranational polity, which they themselves had created. While the Solange process could have occurred there, it subsequently found much more fertile ground in the sovereignty-starved countries of Central and Eastern Europe, affected by the additional (possibly humiliating) factor of having to join the EU on a ‘take it or leave it’ basis, where the impossibility of meaningfully altering the existing rules of the game exacerbated their sovereignty concerns.


As is clear from the above introductory remarks, the reasons for the willingness of the constitutional courts of a number of the CEE states to replay the Solange story after accession to the EU are related to their domestic, political, and legal context rather than the EU itself. However, here is a striking paradox. As will be argued in more detail in Chapter 4, one of the main rationales for CEE states joining the EU was to consolidate democratic reforms and protect human rights. With uncertain and vulnerable pre-Communist credentials, and after several decades of authoritarian rule, CEE countries had to undergo a process of rebuilding of democratic, constitutional regimes through trial and error, against a background of economic collapse, disaffected citizenry, and an incompetent and corruption-prone bureaucracy, judiciary, and politicians. Joining first the CoE (as described in Chapter 1) and subsequently the EU was seen as, among other things, the best way of making democracy irreversible and robust, with political conditionality viewed as the best democracy-learning process, and full membership as the guarantee of the resilience of democratic achievements.


This was both an external and an internal perception. Externally, EU enlargement was perceived, inter alia, as the best promotion of democratic values within a region where a collapse into authoritarian, nationalistic rule was an imminent threat and could upset the peaceful balance within the entire continent. Internally, EU membership has always been viewed by liberal–democratic forces within the candidate (and then, new Member) states as the strongest backup for democratic processes and the protection of human rights. It would be truly ironic if the constitutional courts were to erect, following accession, democracy-based arguments against the supremacy of EU law in new Member States. It would be perhaps even perverse if the courts of the very countries which entered the EU in order, among other things, to consolidate their democracy and human rights protection were to erect barriers against a smooth integration within the EU legal framework on the basis of their uncertainty as to the outcome, in terms of the protection of both democracy and rights, of such an integration (that is, of the supremacy of EU law over national constitutional laws). The EU is thus perceived both as a source of the promotion of democracy and as a threat to democracy (through a transfer of powers to European institutions, whose democratic legitimacy is doubted). Here is the paradox which underlies the discussion in this chapter.


This paradox lies at the heart of what I will call the Solange story, ‘chapter 3’. The first two ‘chapters’ of this chain novel were written within old Member States, with constitutional courts first questioning the supremacy of European law out of fundamental-rights concerns, and then affording a conditional imprimatur to supremacy, justified by the fact that the protection of rights at the EU level had reached standards equivalent to those required at the national level.10 The third chapter is now being written in the Eastern parts of the EU. But here is an additional irony: the initial concerns put forward by the German or the Italian courts back in the 1970s (‘chapter 1 of Solange’) were eventually dispelled, based on the fact that the protection of rights by the EU had reached a satisfactory level (‘chapter 2 of Solange’ story). Thus, the CEE constitutional courts entering the scene as the subsequent authors of the same serial novel, with a claim that they now have to protect their citizens from the erosion of their rights protection (an erosion resulting, as the argument goes, from the supremacy of EU law over national constitutional orders), appear like a return to chapter 1 of the Solange novel, while we have already been through chapter 2.


And yet, despite the apparent improbability—due to the irony just noted—of ‘chapter 3 of Solange’, it is now being written, and among its co-authors are the three by far most activist and powerful constitutional courts in Central and Eastern Europe: those in the Czech Republic, Hungary, and Poland. These are respectable, talented authors, with strong audiences, and sympathetic reviewers. Their contribution to the majestic narrative of Solange is rather complex and somewhat confusing. As I will show, they speak with different voices and their concerns are not exactly the same (as is usually the case with co-authors), but the cumulative effect of their respective discourses leads to the conclusion that the Solange story, begun over thirty years ago, is alive and well, and that the last chapter has not yet been written in full.


Below, I will present and discuss at some length three constitutional court decisions which exemplify the Solange approach in Central and Eastern Europe. Part 2 of this chapter describes the way in which the courts of that region employ the doctrinal resources available to them to limit the supremacy of EU law, especially vis-à-vis the constitutional law of their states. Part 3 then balances the argument somewhat by showing the positive inspiration of the EU law in affecting rights-affirming approaches in Central and Eastern Europe. Finally, in part 4, taking the ‘democracy paradox’ as the normative framework organizing the discussion, an explanation is offered which may dissolve the paradox, pointing at the domestic (horizontal) rather than the European (vertical) context of chapter 3 of Solange.


2. Solange in Central Europe: three decisions, three strategies


The three constitutional court decisions that I will describe in some detail in this part of the chapter are not the only decisions of CEE constitutional courts which may be seen as aligning themselves with a Solange narrative, nevertheless they are perhaps the most significant. Additionally, one may cite the judgment of the Lithuanian Constitutional Court of 14 March 2006 in which the Court discussed and affirmed the supremacy of EU law over national legal regulations with the exception of the Constitution, which retains unconditional primacy.11 The decision concerned provisions of the Lithuanian law on ‘protected territories’ (nature parks), which regulated rights to ownership and land and water use, as well as nationalization of the land denominated as national parks. The relevance of these laws to our discussion is that at a certain point the Court encountered the issue of the rights of ‘foreign entities’ to acquire the land, implicating the operation of EU law. Interestingly, the Court simply quoted the constitutional formula (from the Constitutional Act on the Membership of the Republic of Lithuania in the EU, of 13 July 2004) and then added words (absent from the Constitutional Act) to the effect that the primacy of EU law does not apply to the Lithuanian Constitution. As some commentators noted, this statement was made obiter dicta and, therefore, it may be seen as an attempt by the Court to ‘re-assess the constitutional reality after Lithuania’s accession to the EU’ and to make a pre-emptive point—just in case—that the ultimate source of authority rests with the Constitution.12


Another form of mild resistance to the supremacy of EU law (only indirectly resembling the Solange pattern) was displayed by the Estonian Supreme Court, which refused to declare certain provisions of the Political Parties Act unconstitutional and inconsistent with the EC Treaty.13 The challenge based on these alleged inconsistencies was lodged by the Chancellor of Justice (whose role is equivalent to Ombudsman, though with significantly enhanced powers compared to Ombudsman offices elsewhere), on the basis that the Estonian Act restricting the right to belong to political parties only to Estonian citizens constituted an infringement of other EU citizens’ right to stand as candidates in local elections. The Court based its refusal to find this a violation of the EC Treaty on a technicality: it asserted that the challenger does not have ‘the competence to request that the Supreme Court declare an Act unconstitutional on the ground that it is in conflict with the European Union law’.14 It also hinted at the possibility of a legislative solution to this justiciability issue: ‘The legislator is competent to decide whether it wants to regulate the procedure for declaring invalid Estonian legislation which is in conflict with EU law’.15 However, it was a highly questionable way of avoiding the need to align the domestic law with the EU legal rules, and a powerful dissenting opinion by Justice Julia Laffranque argued that the Supreme Court ‘should have asked the European Court of Justice for a preliminary ruling for the interpretation of EC Treaty provisions establishing the right of EU citizens to stand for local elections in all member states’, in order to be able to interpret the Estonian Constitution’s equality provisions in the light of EC law.16 In addition, according to the dissenting judges, the Court could have scrutinized the conformity of the Act with the Estonian Constitution, and more specifically with the Act Supplementing the Estonian Constitution which had authorized Estonia’s EU membership.17 But even in this very ‘Euro-friendly’ dissent Justice Laffranque drops some hints about the ultimate supremacy of Estonian constitutional principles over EU law, reminding the Supreme Court that it has an obligation ‘to take into account the principles of law generally recognised in the European Union law, if these are not in conflict with the basic principles of the Estonian Constitution’.18 (Incidentally, a mantra on the overriding character of national ‘constitutional principles’ has been used by another Euro-friendly Baltic constitutional court: in the decision of the Latvian Court, which emphasized the duty to interpret the national laws in the light of EU law, it was stated that Latvian law must nevertheless be interpreted in such a way as to avoid any conflicts with the obligations towards the EU ‘unless the fundamental principles incorporated in the [Latvian Constitution] are affected’.19)


I have characterized the approach displayed by the Estonian Court as a ‘mild’ version of the Solange pattern because the Court has not gone too far in resisting the application of EU law in Estonia based on the local understandings of the national constitutional principles: it simply declined to conduct the constitutional scrutiny at all. But the decisions of the Czech, Hungarian, and Polish constitutional courts are more emblematic of ‘chapter 3 of Solange’, and that is why I will provide an account of these three decisions in this part of the chapter. Because so much of the Solange message relies upon the rhetoric, language, and style of the arguments used, the account will be quite detailed, focusing not only on the reasoning but also on the rhetoric of the judgments. A reader finding a textual exegesis of judicial decisions tedious is well advised to go straight to part 3 of this chapter.


2.1 The Court as a guardian of EU powers (Czech Republic)


In its decision of 8 March 2006, the Czech Constitutional Court (CCC) dealt with Community law for the first time: the CCC took the opportunity to express its position on the supremacy and direct applicability of Community law in the Czech Republic.20 These principles were accepted to a large extent, but not unconditionally. The CCC reserved its authority to have a say in cases where Community norms might conflict with the requisites and foundations of the democratic state.


The CCC was asked by a group of deputies of the Czech Parliament to review the constitutionality of a number of provisions of the 2004 governmental Regulation ‘Laying Down Certain Conditions for the Implementation of Measures of the Common Organization of the Markets in the Sugar Sector’. The contested provisions dealt with the way in which the production quotas for sugar producers had been established. The CCC annulled the challenged provision of the regulation on the basis that the government had exercised a power which had already been transferred to the European Community. According to the CCC, EC law was directly applicable and there was no legal basis for a national law transposing the Commission’s regulation into the Czech national legal order. The importance of this decision for this chapter lies in the fact that the Court engaged in an open, explicit discussion of the role of democratic principles in the context of accession to the EU. There were two types of reference to democracy, or more specifically, to the constitutional principle of the ‘democratic law-based State’ which are of a direct relevance to the Solange theme. First, democracy was invoked when the CCC discussed possible limitations to the acceptance of EC law principles: direct effect and supremacy. Secondly, the CCC invoked the principle whilst explaining the limitations of the powers of national institutions in areas in which competences have been delegated to the European Communities.


Regarding the interpretation of the supremacy and direct effect of Community legal norms, the Court emphasized, in a distinctly Euro-friendly manner, that ‘Community law norms enjoy application precedence over the legal order of Member States of the EC’.21 The Court found itself not competent to assess the validity of such norms: it referred to the case law of the ECJ, which clearly establishes that, when a matter is regulated solely by EU law, it takes precedence over national law, including over national constitutional law. The CCC did not contest this precedent. It acknowledged the fact that after accession to the EU, ‘a fundamental change occurred within the Czech legal order’—that is, that Community law ‘will have an impact on formation, application, and interpretation’ of national law. The Court went on to stress the fact that European law exerts a gravitational pull on the entire legal system, including its own constitutional law, especially ‘in a field of law where the creation, operation, and aim of its provisions is immediately bound up with Community law.… [I]n this field the Constitutional Court interprets constitutional law taking into account the principles arising from Community law’.22 On the other hand, the Court added that Community legal norms cannot be ‘in conflict with the principle of the democratic law-based State’.23


This is where the Solange theme begins. To be sure, the Court accepted the supremacy doctrine and the fact that it lacked competence to assess the validity of Community law norms. At the same time, however, referring approvingly to the Solange practice of several West European high courts (and here the relevant passage reads almost like a textbook entry on the Solange approach),24 it pointed out that Community norms have been refused precedence on certain occasions and that these other courts have ‘retained a certain reserve to interpret principles such as the democratic law-based State and the protection of fundamental rights’.25 And the Court concludes this theme with a stern warning that the present judgment ‘in no way signifies that the Constitutional Court would abdicate its powers of constitutional review of national legal enactments which are complementary to Community law, as has been done by several courts of EC Member States’.26


The second type of appeal to the principle of democracy is in the section of the decision, explaining the ways in which the government actually exceeded the limitations placed on its powers. By adopting the contested provisions, which merely paraphrased provisions of the European Commission regulation, the government failed to observe that upon the accession of the Czech Republic to the EU, some of the powers of national organs had been transferred to the supranational organs of the EU. This transfer, the Court emphasized, ‘has taken place on the basis of Art. 10a of the Constitution’, that is, the provision authorizing the transfer of powers to the EU. This statement is followed by a lengthy explanation of the nature of the delegation of powers. According to the CCC, the delegation of powers is conditional upon the powers being exercised in a manner that is not only compatible with the preservation of state sovereignty, but also does not pose a threat to the very essence of the law-based State:27


Should one of these conditions for the transfer of powers cease to be fulfilled, that is, should developments in the EC, or the EU, threaten the very essence of State sovereignty of the Czech Republic or the essential attributes of a democratic State governed by the rule of law, it will be necessary to insist that these powers be once again taken up by the Czech Republic’s State bodies.


This point was deemed significant enough to be repeated by the Court: should the delegated powers be exercised in a way that is ‘regressive in relation to the existing conception of the essential attributes of a democratic law-based State’,28 they will be again assumed by the national organs of the Czech Republic. As this had not occurred in the present case, the Court was comfortable invalidating the governmental regulation, clearly expressing its trust in the EU not exercising its powers in a manner ‘regressive’ to the democracy and ‘law-based State’ (or the rule of law). The Court assessed that the current standard for the protection of fundamental rights and basic freedoms within the Community was perfectly satisfactory and not ‘of a lower quality’ than in the Czech Republic. (The same assessment was reasserted, later, in a May 2006 decision of the Czech Constitutional Court which upheld the validity of a European Arrest Warrant in the Czech Republic.29)


The following general observations on this decision are relevant to our discussion in this chapter:


(1) Both the reasoning and the outcome of the decision are reasonably Euro-friendly; in the outcome of its decision, the Court castigates the government for intruding on the powers of the European Community, and in its reasoning, the Court is clearly comfortable acknowledging the supremacy and direct applicability of EU law within the Czech Republic legal system. It is significant that, in the context of interpreting the supremacy of EU law, the Court does not put an emphasis on national sovereignty and the supremacy of the Czech Constitution over EU law.


(2) The Court sends a clear signal that the transfer of powers to the EU according to the criteria of the ‘democratic, law-based State’ is to remain continuously open to its scrutiny; and, in this context, the Court gestures towards the German and Italian decisions for instance, in which the Courts challenged the absolute supremacy of EU law.


(3) It is at this stage, that is, at the point of linking its overseeing role to the principle of democracy and the rule of law, that the Court brings state sovereignty into the picture: sovereignty and democracy are indeed intrinsically linked in the Court’s reasoning. The limits to EU law supremacy are related to democratic principles, with state sovereignty as the ultimate guarantor of the latter. And, by condemning the government for intruding on EU functions while no threat to democratic principles (hence, no breach of the conditions for the transfer of powers) had been ascertained, it establishes itself gently but surely in the role of an umpire of national–European legal relationships on the basis of its own interpretation of democracy. So there is both a warning and a sweetener in this ‘Sugar Quota Decision’.


The sweetener is perhaps more obvious than the warning. As far as the central issue of the supremacy of European law is concerned, the ratio of the CCC decision (as opposed to the peripheral obiter pronouncements) did not make any inroads into the principle; if anything, it strengthened the status of European law vis-à-vis national laws (after all, the Court in effect reprimanded the government for illegitimately intruding on the province reserved to EU law). The Solange-like themes appeared only in the obiter ruminations. Thus, the Court’s decision aligned itself with the Solange story not by what it did but only by what it said (or, more precisely, by what it said that it might be forced to do in the future). This is the most important aspect of this judgment, for our purposes: the Court asserts that it will not abdicate its role as the guardian of the national Constitution against possible threats from EU law, but at the same time behaves as a good European citizen and orders its own government to respect the European rules of the game, as far as the repartition of powers between the Union and the national level is concerned.


Now cases subsequent to the Sugar Case judgment in the Czech Republic should be considered. In 2008 and 2009 the Constitutional Court was called to review the constitutionality of the Lisbon Treaty—and on two occasions it has largely reproduced its reasoning from the Sugar Case. Its 2008 decision30 was handed down in the process of an ex ante review of the constitutionality of international treaties. The Court found no constitutional incompatibility with the Lisbon Treaty because the EU after the Treaty would still be an international organization with attributed powers, and a transfer of competences to such an organization is constitutionally allowed insofar as it does not violate the essence of the Republic (as a democratic state governed by the rule of law and founded on respect for the rights and freedom of individuals). The 2009 Lisbon Treaty decision of the same Court31 was rendered in the process of an abstract review initiated by a group of senators who challenged the Treaty as a whole, including under the provisions which were not subject to an ex ante review in 2008, and the Court confined itself only to those aspects of the Treaty which it had not reviewed before. Here it mostly developed its reasoning from the Lisbon Treaty 2008 decision, and declined an opportunity to follow the German Constitutional Court’s stance, that is, it refused to specify (German-style) the substantive limits on the transfer of competences because such a ‘catalogue of non-transferable powers’ is essentially a political question and should be left within the political branch—of course, subject to an ex post review by the Constitutional Court.32 But it found no causes for concern about the loss of sovereignty: ‘the transfer of certain state competences, that arises from the free will of the sovereign … is not a conceptual weakening of sovereignty, but, on the contrary, can lead to strengthening it within the joint actions of an integrated whole’.33


2.2 Scrutinizing only national law, not the EU’s law (Hungary)


Shortly after its accession to the EU, Hungary saw the first decision taken by the Hungarian Constitutional Court (HCC) concerning (albeit indirectly) the relationship between Hungarian and European law which gave the Court an occasion to reassert its views about the rule of law, namely the injunction against retroactivity.34 Under the Court’s scrutiny the law was enacted on 5 April 2004 by the Hungarian Parliament ‘On Measures Concerning Agricultural Surplus Stocks’, implementing two Commission Regulations on transitional measures.35 The measures were aimed at preventing speculative stock accumulation in view of Hungary’s accession to the EU. They provided for the stocktaking of certain agricultural reserves and stipulated that if speculative action were to be discovered, a fine would be imposed. These transitional measures, applying to all ten candidate countries, were not unlike similar transitional measures which had been prescribed by the Commission before the earlier enlargements, and in those earlier enlargements, they were usually approved by the ECJ, against charges of restraint of trade, discrimination, and lack of proper justification. In Hungary, the President of the Republic, before signing the Act, submitted it to the Constitutional Court requesting a constitutional review, on the basis of alleged retroactivity. The Court agreed and invalidated several provisions of the law.


It is striking that, in the judgment, the ‘European’ dimension of the case is somewhat hidden, since the HCC chose to treat the issues involved as concerning only the application of national Hungarian law. However, the fact remains that the rules which were eventually struck down by the Court were identical to the transitional measures adopted in the Commission regulations in anticipation of the accession of Hungary and the other candidate states. It is clear that, for the HCC, the principle of legal certainty is such a strong component of the democratic state that it prevails over Hungary’s obligations stemming from its participation in the EU. Therefore, the decision raises some fascinating issues concerning the Court’s bid for the role of monitoring European law (even though only as reflected in national legal instruments) according to its consistency with the Court-established criteria for the ‘democratic State under the rule of law’, as stipulated under article 2(1) of the Hungarian Constitution, operative for this judgment.


The President’s petition to the Court was based on the fact that, even if he were to sign the Surplus Act, the statute would not enter into force before 25 May 2004 (because of the vacatio legis of forty-five days, provided by the Act itself), and since the obligations introduced by the Act were to be assumed on 1 May 2004 (the date of entry into force of the Accession Treaty and thus of Hungary becoming a Member State of the EU) the Surplus Act would be retroactive. The Court stressed that the Act did not allow ‘due time’ for the recipients to learn about the legal duties involved and, further, that it imposed legal obligations in a retroactive manner. As a consequence, the principle of legal certainty stemming from the principle of the rule of law proclaimed by the Hungarian Constitution (article 2(1)), was violated. More specifically, in the President’s submission legal certainty was found to have been violated in two respects. First, the law provided for the possibility of taking an inventory of stocks as of 1 May 2004 despite the fact that the expected date of entry into force of the Act would not be earlier than the second half of May 2004. Secondly, it contained a presumption of intended speculation in the case of contracts signed after 1 January 2004, although there had been no rule in force at that time prohibiting the increase of stocks. These aspects of the law gave the Court an opportunity to comment about its earlier jurisprudence on the principle of ‘legal certainty’ as well as the principle of non-retroactivity (as an essential part of the legal certainty). They mean, among other things, that ‘statutes may not define obligations for a time period preceding their promulgation, and no lawful act may be declared illegal with retroactive effect, in order to allow the recipients to adapt their conduct to the legal provisions they have access to’.36 In addition, ‘the principle of the rule of law requires the determination of the date of entry into force of a statute in a way allowing the persons concerned to become familiar with the statute, to prepare for its application, and to adapt to the new regulations’.37