Name of the act/s*

Opinion of AG Kokott of 5 March 2020 in the Case C-66/18, European Commission v Hungary [ECLI:EU:C:2020:172]

Subject area

the freedom to found and to operate educational establishments, academic freedom

Brief description of the contents of the act

In her opinion, AG Kokott concluded that the amendment to the Act of Higher Education concerning the requirements of the operation of foreign universities in Hungary is contrary to the law of the European Union.  She expressed the view that the requirement of an international agreement with the State of origin is incompatible with the national treatment rule (the rule that foreign and domestic service providers must be treated equally) under the General Agreement on Trade in Services (GATS) and it also constitutes a violation the EU Charter of Fundamental Rights (freedom to found and to operate educational establishments and academic freedom). In addition, the requirement of genuine teaching activity in the State of origin is an infringement of freedom of establishment, the Services Directive, the Charter (the freedom to found and to operate educational establishments and academic freedom) and the national treatment rule of the GATS.

Comment

In March 2017, the Hungarian government initiated the amendment of the Act on Higher Education. Although the amendment of the law applies to all foreign-accredited universities in Hungary, the rules appear to target one specific institution, namely Central European University (CEU). CEU is a private university founded under the law of New York State (United States) by the Hungarian-born American businessman and philanthrope George Soros who is often attacked by the incumbent Fidesz party.

The newly introduced requirements make the continuous operation of CEU in Hungary impossible. The following two provisions are the most problematic. First, every foreign university must perform genuine teaching activity in its State of origin. Second, the operation of any foreign university functioning in Hungary must be based on an agreement between the State of origin and Hungary. Even though the university made serious efforts to comply with the law, only the Hungarian government has influence over the conclusion of an international agreement with the State of origin. The Hungarian government, however, made it clear it has no intention of signing the agreement that it negotiated with the State of New York, which would ensure CEU’s operation in Budapest.

Since the introduction of the legislation, almost all European constitutional actors (with the exception of the CJEU and the ECtHR) have expressed an interest in the matter. Most important, the Venice Commission concluded that “introducing more stringent rules without very strong reasons, coupled with strict deadlines and severe legal consequences, to foreign universities which are already established in Hungary and have been lawfully operating there for many years, appears highly problematic from the standpoint of rule of law and fundamental rights principles and guarantees. These universities and their students are protected by domestic and international rules on academic freedom, the freedom of expression and assembly and the right to and freedom of education.”

In April 2017, the European Commission launched an infringement proceedings against Hungary and the case was eventually referred to the Court of Justice of the European Union (CJEU) in December of the same year. In the meantime, the Hungarian Constitutional Court suspended the constitutional complaint procedures concerning the same legislation until the delivery of the judgment by the CJEU.

In the absence of a signed agreement between the State of New York and Hungary, the CEU’s operation in Hungary is no guaranteed, so the university has decided to relocate to Vienna. The Austrian accreditation procedure has been started and part of the academic activities of CEU is already carried out in Vienna.

On 5 March 2020, more than two years after the Commission’s referral of the case to the CJEU, AG Kokott delivered her opinion. The Advocate General expresses the view that the requirement of an international agreement with the State of origin is incompatible with the national treatment rule (the rule that foreign and domestic service providers must be treated equally) under the General Agreement on Trade in Services (GATS). In addition, such a requirement constitutes a disproportionate restriction on the freedom to found and to operate educational establishments and on academic freedom protected by the Charter of Fundamental Rights of the EU (Charter). Finally, the requirement of genuine teaching activity in the State of origin, which applies to all foreign higher education institutions, including those of other EU Member States and of EEA States, is an infringement of freedom of establishment, the Services Directive, the Charter (the freedom to found and to operate educational establishments and academic freedom) and the national treatment rule of the GATS because of the fact that it is discriminatory and disproportionate.

In her opinion, AG Kokott concluded that the amendment to the Act of Higher Education concerning the requirements of the operation of foreign universities in Hungary is contrary to the law of the European Union.  She expressed the view that the requirement of an international agreement with the State of origin is incompatible with the national treatment rule (the rule that foreign and domestic service providers must be treated equally) under the General Agreement on Trade in Services (GATS) and it also constitutes a violation the EU Charter of Fundamental Rights (freedom to found and to operate educational establishments and academic freedom). In addition, the requirement of genuine teaching activity in the State of origin is an infringement of freedom of establishment, the Services Directive, the Charter (the freedom to found and to operate educational establishments and academic freedom) and the national treatment rule of the GATS.

Secondary sources/ doctrinal works (if any)

Petra Bárd: The rule of law and academic freedom or the lack of it in Hungary, European Political Science, Vol. 19, Issue 1 (2020)

Zsolt Enyedi: Democratic Backsliding and Academic Freedom in Hungary, Perspectives on Politics, Vol. 16, Issue 4 (2018)

Tamás Dezső Ziegler: Academic Freedom in the European Union - Why the Single European Market is a Bad Reference Point,Max Planck Institute for Comparative Public Law & International Law (MPIL) Research Paper No. 2019-03, available at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3317406

Renáta Uitz : Academic Freedom in an Illiberal Democracy: From Rule of Law through Rule by Law to Rule by Men in Hungary, Verfassungsblog, 13 October 2017, available at: https://verfassungsblog.de/academic-freedom-in-an-illiberal-democracy-from-rule-of-law-through-rule-by-law-to-rule-by-men-in-hungary/

Renáta Uitz: What Being Left Behind by the Rule of Law Feels Like, Part I, Verfassungsblog, 29 October 2018, available at https://verfassungsblog.de/what-being-left-behind-by-the-rule-of-law-feels-like-part-i/

Renáta Uitz: What Being Left Behind by the Rule of Law Feels Like, Part II, Verfassungsblog, 31 October 2018, available at : https://verfassungsblog.de/what-being-left-behind-by-the-rule-of-law-feels-like-part-ii/

*Act citation /year and number

Opinion of AG Kokott of 5 March 2020 in the Case C-66/18, European Commission v Hungary [ECLI:EU:C:2020:172]

Enacted by

Advocate General of the Court of Justice of the European Union

Official link to the text of the act

http://curia.europa.eu/juris/document/document.jsf;jsessionid=AE4ECB9A2CDA7928127AD8CD7589464C?text=&docid=224125&pageIndex=0&doclang=EN&mode=req&dir=&occ=first&part=1&cid=1414043