Hungary has repeatedly threatened to block EU aid for Ukraine during the Russia-Ukraine war. Patrick Müller and Peter Slominski explain that this approach is indicative of a “hostage-taking” bargaining strategy in which the threat of a veto is used to gain concessions in other policy areas.
Populist radical right parties in power have gone to great lengths to dismantle the building blocks of the liberal state, as shown by Hungary under Viktor Orbán’s Fidesz and Poland under its previous Law and Justice government. This has raised important questions about the efficacy of EU safeguards against democratic backsliding in its member states.
The EU’s Article 7 procedure is intended to protect fundamental values such as democracy and the rule of law. However, it has proven to be ineffective. As a result, the EU has more recently opted for a new conditionality mechanism to fight Hungary’s backsliding on the rule of law, which has allowed it to freeze more than €20 billion of EU funds.
Hostage-taking as a new bargaining strategy
In a new study, we show that the Hungarian government responded to the EU’s new assertiveness through a strategy of what we call “hostage-taking”. Here, a government of a member state combines its veto-power on intergovernmental decisions with a strategy of tactical issue-linkage to extract substantive concessions in another, not functionally related, policy area. In particular, Hungary has used its veto power in relation to key EU foreign policy decisions in the context of the Russia-Ukraine war, which require unanimity among the member states, to gain leverage in its rule of law conflict with the EU.
While hostage-taking is also relevant to other international institutions, it is particularly important in the multi-sector EU governance system with its high number of repeated political interactions and ample veto opportunities. The institutional constraints in the EU system play an important role in this context. Hostage-taking is widely regarded as a violation of the informal cooperative EU norms that prevail in settings like the Common Foreign and Security Policy (CFSP).
EU member states are expected to contribute to consensus-building in CFSP negotiations, while the use of a veto should be limited to situations where vital national interests are at stake. Violating these norms can isolate a member state in the EU, which can be costly. To mitigate these costs, a “hostage-taker” may therefore opt for “soft hostage-taking”, which aims to hide links between unrelated policies.
Through rhetorical obfuscation, a hostage-taker may seek to maintain the outward appearance of acting legitimately while simultaneously using its veto-power as leverage in backstage negotiations. The demands articulated may not represent the “real” issues at stake but instead serve as a pretext for delaying or even blocking decisions.
Such manufactured arguments may be framed in terms of genuine national interests or even common EU concerns, thus making them appear legitimate and in line with informal EU norms. Interestingly, the rhetorical disguise of the hostage-taker’s real intentions also makes it easier for its targets (the EU) to grant substantive concessions without appearing to give in to political pressure.
Hungary’s success
We identify three main conditions for the effectiveness of soft hostage-taking. First, the veto-threat must be credible. The hostage-taker must convince the target about its capacity to exercise a veto and its readiness to lift a veto in return for the demanded concessions.
Second, the costs for the target of giving in to a hostage-taker’s real demands must be lower than the costs of upholding the veto. Third, the effectiveness of soft hostage-taking also depends on the extent to which the target can alter relative costs. For example, the EU may sidestep a veto by moving to a policy mode that falls under qualified majority voting or by coordinating outside the EU framework. Alternatively, the EU could articulate credible counter threats of its own.
The concept of soft hostage-taking helps us to understand Hungary’s bargaining behaviour in the (European) Council in relation to the Russia-Ukraine war. Equipped with multiple, credible veto options, Prime Minister Viktor Orbán denied any explicit link between his CFSP vetoes and the intensifying rule of law conflict with the EU. However, the timing of Hungarian veto-threats and crucial rule of law decisions was indicative of soft hostage-taking.
For instance, just one week after the European Commission had submitted its proposal to freeze €7.5 billion in EU funds under the conditionality mechanism in November 2022, Hungary was the only EU government that refused to approve an EU aid package to Ukraine, which included a loan of €18 billion to Kyiv.
Orbán justified this position by citing concerns about safeguarding Hungary and the EU’s vital interests within the Common Foreign and Security Policy. As it was of utmost importance for the EU to show unity and responsibility in its support for Ukraine, the Council decided to reduce the blockage of funds from €7.5 billion to €6.3 billion, which led Orbán to drop his veto.
For soft hostage-taking to be effective, it was critical that the EU institutions played along and also denied any link between the two issue areas. Arguing strictly within the thematic boundaries of the rule of law issue, the Council stated that its decision to reduce the amount of frozen EU funds was solely made “in light of the number and significance of remedial (rule of law) measures that have been satisfactorily implemented by Hungary”.
Close proximity between Hungary threatening to veto Common Foreign and Security Policy decisions and a partial unfreezing of EU money was again visible at the December 2023 European Council. On this occasion, Orbán eventually suspended his veto on opening EU accession negotiations with Ukraine around the same time that the Commission decided to unblock €10.2 billion in frozen EU funds.
The EU strikes back
Despite these successes, Hungary’s attempt in early 2024 to take an EU decision about a €50 billion financial aid package for Ukraine hostage provoked the EU to resort to mitigation measures. Officials from other member states began to publicly criticise Hungary for “misusing the unanimity principle” and stated they were planning to work around Hungary if Budapest continued to block aid for Ukraine. The EU also threatened to target Hungary’s economy.
This indicates the EU is now willing to increase the costs of Hungary’s soft hostage-taking strategy and pursue workarounds to circumvent Hungarian veto threats. Whether this approach will prove to be successful remains to be seen. However, what is certain is that hostage-taking will remain a serious challenge for EU decision-making in times of crisis and polarisation.
For more information, see the authors’ accompanying paper in the Journal of European Public Policy.
Note: This article gives the views of the authors, not the position of EUROPP – European Politics and Policy or the London School of Economics. Featured image credit: European Union
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