In a long series of developments between the EU and Hungary, the disagreements may be heading to a loggerheads. Viktor Orbán, Hungary’s Prime Minister, has come under widespread scrutiny previously regarding his policies on migration quotas, treatment of asylum seekers and there has been concerns over a draft bill requiring NGOs to declare foreign funding from foreign sources.

More recently, Hungary passed a Higher Education Law on 4 April 2017, which could effectively force the Central European University (CEU) to close. The law requires foreign accredited universities in Hungary to have a base in their home country and not to teach any foreign accredited courses. In CEU’s case, the university is based in the US, thus it would have to open a campus in the US and not teach any US accredited courses.

The legislation will enter into effect on 11 October 2017 and CEU would have to open a campus in the USA by February 2018 to remain open. University officials have called this onerous and far too expensive, to the point the University will be forced to close.

Legal proceedings and EU Competence

The CEU and the Commission entered into discussions on 12 April and 26 April to enable the Commission to assess the issues surrounding the Higher Education Law.

On 26 April 2017, the EU Commission confirmed it sent Budapest a letter of formal notification on its legal case against Hungary and has given Hungary a month to respond including a formal demand of an explanation and a remedy to go forward on the legal concerns. This is the first step in EU infringement procedures. The Commission can refer the case to the Court of Justice of the European Union who could impose financial penalties on the failure of a Member State to comply with EU law.

The attacks on academic freedom are seen as attacks on democratic values and even the rule of law. Yet, it must be noted that these cases are difficult for the Commission to bring. The EU has no general competence over the rule of law – apart from the ability to bring Article 7 TEU proceedings, which is a political process and requires that 4/5 of the Member States agree that there is a serious breach of these fundamental values – or education, because Article 165 TFEU gives a MS sovereignty on its education system.

The Commission stated that its reason for bringing proceedings against Hungary is that the Higher Education Law is “not compatible with the fundamental internal market freedoms, notably the freedom to provide services and the freedom of establishment but also with the right of academic freedom, the right to education and the freedom to conduct a business as provided by the Charter of Fundamental Rights of the European Union, as well as with the Union’s legal obligations under international trade law.” The investigation looks at whether Hungary has infringed the spirit of Article 2 TEU and whether the Higher Education Law would be incompatible with the free movement of capital, the EU Charter of Fundamental Rights and the freedom of assembly. One can see that the EU does indeed have competence in such areas.

However, Orbán believes that the European Commission is “going beyond its competencies” and that “the regulation of higher education is a member-state competency, not the EU’s”. The Hungarian government however, states that the Higher Education Law “adopted by the Hungarian parliament is a minor amendment that applies to 28 foreign universities in Hungary and all it does is introduce uniform rules applying to them, closes loopholes, introduces transparency and ends privileges that these foreign universities enjoyed over European ones.”

Parliamentary session on Hungary

The European Parliament session on 26 April 2017, opened the floor to discussion, whilst giving Frans Timmermans the opportunity to clarify the EU’s position on Hungary’s recent activities. Orbán was also present during the session to defend his actions and to enable the two parties to enter into a dialogue. Orbán attacked CEU founder George Soros for “destroying the lives of millions of European, he is the enemy of the euro, yet he is still welcomed in Brussels at the highest level.” The Higher Education Law and pending NGO register have been seen as an attack on Soros’s influence in Hungary. Timmermans discussed the Commission’s criticism over Hungary’s Higher Education Act and the Hungarian government’s consultation called “Let’s Stop Brussels!” to which the Commission has published a reply. The Commission noted it would decide later whether action against the protection of pregnant working women in Hungary is needed to ensure full compliance with maternity rules in the EU.

The discussion from 26 April 2017, continued on 17 May 2017, where the EU Parliament voted in favour to trigger Article 7 TEU. The resolution was adopted by 393 votes to 221 with 64 abstentions. MEPs believe that the controversial laws on asylum seekers, NGOs and CEU need to be withdrawn and Hungary’s fundamental rights situation justifies launching the formal procedure to determine whether there is a “clear risk of a serious breach” of EU values by a Member State.


It seems the Commission expects Hungary to strike a compromise so that further legal action may not be necessary. Timmermans’s hope is on dialogue as he stated during the Parliamentary session: “dialogue is the European way. Dialogue to solve misunderstandings. Dialogue when we disagree. That is the European way.” The Commission also confirmed it has opened dialogues with the Hungarian authorities on matters arising on migration and asylum, including keeping an eye on any developments concerning NGO registration laws.