EU court strikes down Hungary’s law that forced CEU exit

The Court of Justice of the European Union has ruled that the conditions introduced by the Hungarian government to enable foreign higher education institutions to carry out their activities in its territory are incompatible with EU law.

The judgment relates to the Hungarian law amending the 2017 Law on Higher Education, which was used by the Hungarian government to curb the activities of the Central European University.

The law amendment, ‘Lex CEU’, had the effect of forbidding the university from accepting new students from 1 January 2019, forcing it to launch all new US-accredited degree programmes across the border in Vienna, Austria.

Hungary is required to comply without delay to the judgment in the case for the European Commission v Hungary (Higher education) delivered on 6 October or it may face financial penalties.

Rector and President of CEU Michael Ignatieff said the ruling was “a complete vindication of the position we took at CEU since the beginning of the ‘Lex CEU’ crisis in March 2017.”

‘Moral and legal’ victory

CEU said in a public statement that the decision means that Lex CEU is no longer applicable. “CEU is free to operate its US degree programmes in Budapest. It is also an important moral and legal victory as well as a historic victory for academic freedom in Europe.”

The university sent a message to its supporters, “the hundreds of thousands of you in Hungary and across the world – who fought with us, marched with us, lobbied on behalf of us: thank you”.

Ignatieff added that he hoped the landmark judgment will strengthen the legal protections for academic freedom across Europe.

“Each one of us should take pride in what we have achieved, not just for ourselves, but for the cause of academic freedom and institutional autonomy in Europe,” he said.

Robert Quinn, founding executive director of the New York-based Scholars at Risk (SAR) Network welcomed the court’s decision.

“Forcing the Central European University to shutter its doors and leave Hungary violated the fundamental values of the EU and raised serious concerns about the ability of all Hungarian higher education institutions to operate freely and to engage with the global academic community,” he said.

“The Hungarian government must take immediate steps to comply with the judgment and rectify their laws.”

SAR’s European Director Sinead O’Gorman said: “This is an important legal victory for academic freedom in Europe. Together with colleagues across Europe, we must now push for its implementation.”

Hungary has ‘failed to comply’

The court held, first, that, by making the exercise, in Hungary, of teaching activities leading to a qualification by higher education institutions situated outside the European Economic Area (EEA) subject to the existence of an international treaty between Hungary and the third country in which the institution concerned has its seat, Hungary has failed to comply with the commitments in relation to national treatment given under the General Agreement on Trade in Services (GATS), concluded within the framework of the World Trade Organization (WTO).

It said that requirement is also contrary to the provisions of the Charter of Fundamental Rights of the European Union (‘the Charter’) relating to academic freedom, the freedom to found higher education institutions and the freedom to conduct a business.

Article 13 of the Charter specifically states: “The arts and scientific research shall be free of constraint. Academic freedom shall be respected.”

Second, the court held that, by making the exercise, in Hungary, of the activities of foreign higher education institutions, including institutions having their seat in another member state of the EEA, subject to the condition that they offer higher education in the country in which they have their seat, Hungary has failed to comply with its national treatment commitments under the GATS and with its obligations in respect of the freedom of establishment, the free movement of services and the provisions of the Charter.

Hungary, on 4 April 2017, had adopted as a matter of urgency a law amending the law on higher education, which was presented as being intended to safeguard the quality of higher education teaching activities, and the main object of which was to reform the licensing regime applicable to foreign higher education institutions.

A statement published by the court said that, regardless of whether or not they were previously approved, such institutions are now subject to new requirements, including those examined by the court.

The commission brought an action for failure to fulfil obligations before the court against Hungary, claiming that the 2017 law on higher education was incompatible with both the commitments undertaken by Hungary within the framework of the GATS and with the freedom of establishment, the free movement of services and the provisions of the Charter relating to academic freedom, the freedom to found higher education institutions and the freedom to conduct a business.
The court held that the measures at issue were capable of endangering the academic activities of the foreign higher education institutions concerned within the territory of Hungary and, therefore, of depriving the universities concerned of the autonomous infrastructure necessary for conducting their scientific research and for carrying out their educational activities.

Such measures, therefore, limit academic freedom, which is protected in Article 13 of the Charter, the court found. They also constitute interference with the rights to establish higher education institutions as established in Articles 14 and 16 of the Charter.

‘Flagrant violation’

In December 2018, CEU said the effect of ‘Lex CEU’ was an arbitrary eviction of a reputable university which represented a flagrant violation of academic freedom, a dark day for Europe and a dark day for Hungary.

“The government has done an injustice towards its own citizens, the hundreds of Hungarians who work and study at CEU, and thousands of Hungarian alumni and their families,” Ignatieff said.

CEU was founded in 1991 by Hungarian-American philanthropist and financier George Soros, a strong critic of Hungary’s Orbán government.