Harvard Law School

Jean Monnet Chair

Seminar and Workshop on Advanced Issues in Law and Policy
of the European Union, NAFTA and the WTO

Professor J.H.H. Weiler

Harvard Jean Monnet Working Paper 8/99

János Volkai

The Application of the Europe Agreement
and European Law in Hungary:
The Judgment of an Activist 
Constitutional Court on Activist Notions

Harvard Law School    Cambridge, MA 02138

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No part of this paper may be reproduced in any form
Without permission of the author.

ISSN 1087-2221
© János Volkai
Printed in the United States of America in 2000
Harvard Law School
Cambridge, MA 02138
USA

THE APPLICATION OF THE EUROPE AGREEMENT AND EUROPEAN LAW IN HUNGARY: THE Judgment of an Activist Constitutional COURT on Activist NOTIONs

János Volkai
PhD Candidate, European University Institute, Florence

I.  INTRODUCTION

In response to the turbulent changes in the Eastern part of Europe starting at the end of the 1980’s, the European Communities had to show great flexibility in its policy towards the region. Nevertheless, following the adoption of trade agreements and the long-awaited establishment of diplomatic relations between the European Communities and the countries in the region, the European Communities decided to treat these countries in a uniform way by dividing them into two categories. Accordingly, on the legal level the European Communities developed its relationship with these countries by concluding two types of agreements. Most of the countries emerging on the territory of the former Soviet Union were offered Partnership and Co-operation Agreements, whereas other former soviet bloc countries, known as Central and Eastern European Countries (‘CEECs’) concluded Europe Agreements with the European Communities and its Member States leading to membership of the European Union on the long term.
Hungary is one of the CEECs and, indeed, since the fall of the communist regime she has pursued a policy aiming at ‘euro-atlantic integration’, including the intention of joining the European Communities (‘EC’)/European Union (‘EU’). Recent developments of the EU-Hungary relationship show that such an intention might gradually be realised. Nevertheless, notwithstanding the various documents issued on the way to Hungary’s EU accession, the primary legal basis of the relationship between the European Union and Hungary remains the Europe Agreement (‘EA’).
The Europe Agreement with Hungary, which entered into force on 1 February 1994, is mixed and complex. It is mixed in that it was concluded by Hungary, on one part, and by the European Communities and its Member States, on the other part, because its extensive scope covers fields which the European Communities did not have the (exclusive) competence to negotiate and contract. Furthermore, it is a complex agreement including various political, economic and social aims. Even economically, the Europe Agreement is not only a simple free trade agreement, but it also intends to create a so-called ‘wider market’ including the market of the European Communities and the Hungarian market.
This ‘wider market’ is based on the model of the Single Market of the European Communities. Accordingly, similar to the EC Treaty, a two-way approach was adopted by the Europe Agreement for the establishment of that market. On the one hand, the Europe Agreement reproduces the four basic freedoms of the Single Market in a limited way in order to combat public barriers to free trade. On the other hand, in order to combat private barriers to free trade, a special competition co-operation regime is established. According to Article 62 EA and its Implementing Rules (‘IR’), in the case of anti-competitive practices that may affect trade between the parties, the parties’ competition authorities (i.e., the Hungarian Office of Economic Competition (‘OEC’) and the European Commission) are bound to co-operate in the enforcement of the competition regime based on the principles of the application of Articles 85 and 86 EC.
Moreover, in addition to the two-way approach of trade liberalisation, Articles 67 and 68 EA set out that Hungary shall approximate its competition laws to Community law. 
Competition law is a significant issue under the Europe Agreement and it is decisive for the parties’ relationship, in particular from the viewpoint of Hungary’s preparation for her future EU accession. Hungary’s extensive and complex competition law obligations not only raise the issue of how the Europe Agreement can work effectively and efficiently; they might not only serve as a tool for the implementation of the ‘wider market.’ Competition law has a special future relevance, inasmuch as it is the field of law where, under the Europe Agreement, the emerging Hungarian democratic legal system has its first historic encounter with Community law. In particular, the Hungarian legal system is expected to elaborate its approach towards supranational Community law in the course of meeting its complex competition law obligations under the Europe Agreement. Consequently, the approach of Hungarian law towards Community competition law might serve as a model for other fields of Hungarian law, for the entire Hungarian legal system and possibly for other CEECs, too.
The latter statements are not mere assumptions or predictions. The above process has already started and the first encounter of the Hungarian and the Community legal systems has already taken place. The fulfilment of competition law obligations under the Europe Agreement has already triggered serious implications for one of the most important fields of the domestic legal system: Hungarian constitutional law.
In 1996 Professor Berke of ELTE University (Budapest) filed a submission with the Hungarian Constitutional Court (‘Court’) contesting the constitutionality of certain provisions of the competition co-operation regime established by Article 62 EA and its Implementing Rules. Berke argued, that “[i]n the context of Article 62 (2) EA, as implemented, the fundamental problem is that a Hungarian legislative act is not a precondition for the application of EC law (the criteria of application of articles 85, 86 EC) by national authorities, according to the state of the art at any time in the future. ‘Criteria’ of a foreign law (EC law) must be given effect in the normal practice of the [OEC].” In particular, Berke claimed that by accepting to directly apply the law of a foreign sovereign the future formation of which cannot even be influenced by Hungary, the Hungarian Republic unconstitutionally transferred part of her legislative powers to that foreign sovereign.
The submission raised a number of important preliminary issues, including whether the Court is authorised to control the constitutionality of a Hungarian law proclaiming an international treaty in the domestic legal system in accordance with the traditionally dualist nature of Hungarian law. More significantly, it involved whether the constitutionality of an international treaty, like the Europe Agreement, which has already been proclaimed in the Hungarian legal system, may be controlled by the Constitutional Court.
Owing to the special significance of the preliminary issues and the eventual unconstitutionality of the co-operation regime, the Court decided to deal with those two questions separately. Accordingly, Judgment 4 of 22 January 1997 addresses the Court’s competence to control the constitutionality of international treaties and their proclaiming laws (‘Preliminary Issues Judgment’/‘PIJ’), whereas Judgment 30 of 25 June 1998 deals with the merits of the submission, i.e., with the constitutionality of the competition co-operation regime (‘Europe Agreement Judgment’/ ‘EAJ’).
Due to the different status of the parties to the Europe Agreement and the mixed nature of the latter, the Europe Agreement and its competition co-operation regime can be analysed and interpreted according to four distinct benchmarks: (i) the law of international treaties between states and between states and international organisations; (ii) the law on the external relations and competences of the European Communities; (iii) the Constitutions and the laws on international law adopted by the Member States; and (iv) the Hungarian Constitution and Hungarian laws concerning international law. The present paper elaborates on the Hungarian constitutional issues arising in connection with the competition law duties of Hungary under the co-operation regime of the Europe Agreement, in particular on the way Community competition law is allowed to become effective in the Hungarian legal system by the Europe Agreement Judgment.
The analysis of the Europe Agreement Judgment will focus on two points which make that judgment exceptionally significant. Firstly, it is the first occasion on which the principles and competence established by the Preliminary Issues Judgment are applied in practice by the Court with the result of declaring the competition co-operation regime partly unconstitutional. Secondly, the Europe Agreement Judgment is the first judgment in which the Court deals with the law of the European Communities. Further, although Hungary is not a Member State of the European Union, the arguments of the Court might be instructive concerning its future approach towards Community law and the relation between Hungarian domestic law, in particular the Hungarian Constitution, and Community law following Hungary’s EU accession. The constitutional issues analysed by this paper might also have great relevance for those CEECs that are not in a position to join the European Union in the short term and whose relationship with the EU will be determined by similarly worded Europe Agreements for a longer period. Finally, the concerns raised by the Court might also be instructive for the future shaping of the external relations of the European Communities.

II.  THE EUROPE AGREEMENT JUDGMENT

A.  The Core Issues of The Europe Agreement Judgment

As it was pointed out above, the Europe Agreement Judgment represents the first occasion on which the Hungarian Constitutional Court carried out the a posteriori constitutional control of an international treaty proclaimed in the Hungarian legal system. Due to the exceptional importance of the issues involved and for the sake of thoroughness, the Court requested the Ministry of Justice and the Ministry of Foreign Affairs to submit their opinions on Berke’s first submission. The opinion of the Ministry of Justice was duly communicated by the Court to Berke, who in turn submitted written reflections to the ministerial opinion and – following the delivery of the Preliminary Issues Judgment – a supplementary submission to the Court. Subsequently, the Court requested a fresh opinion from the Ministries. As a result of the exceptional transparency of the submissions, the Court’s procedure in the Europe Agreement Judgment evolved into a procedure resembling a classical court proceeding with Berke submitting the more legalistic, theoretic arguments opposing the two Ministries, which promoted a more pragmatic approach.
In order to understand the complexity of the arguments and counter-arguments submitted by the “parties” as well as the elaborate argumentation of the Europe Agreement Judgment itself, it is necessary to identify four significant issues:

(i) What do the ‘criteria arising from the application of the rules of Articles 85 [and] 86… EC’ referred to by Article 62 (2) EA cover exactly?

(ii) What does the obligation of applying these ‘criteria’ involve and how do these ‘criteria’ become effective in Hungarian law?

(iii) Is the sovereignty of the Hungarian Republic affected in any way by the competition co-operation regime? Was the co-operation regime adopted in a proper way?

(iv) Can the unconstitutionality of the Europe Agreement and the Implementing Rules be separated and what are the consequences of unconstitutionality?

The presentation of the Europe Agreement Judgment will follow the original structure of the judgment by simultaneously considering what position the “parties” and the Court took with regard to the above questions. Finally, this paper will try to identify the conclusions to be drawn from the ongoing Hungarian constitutional “saga” of the Europe Agreement, in particular its effects on the future approach of Hungarian constitutional law towards the legal system of the European Communities.

B.  The Judgment of The Constitutional Court

At the beginning of the Europe Agreement Judgment, the Court stated the main conclusions of its judgment. It declared that “in the context of the implementation of Article 62 (1) and (2) in Section 2 of Act I of 1994, it is a constitutional requirement that Hungarian law enforcement authorities cannot apply directly the application criteria referred to by Article 62 (2) EA.” Moreover, in contrast to Article 62 (2) EA, which was not found to be unconstitutional by the Court, the Court declared “the first and second paragraphs of Article 1 as well as Article 6 of the Annex to Government Decree 230/1996 unconstitutional.” Finally, “[t]he… Court suspended taking a decision on the annulment of the [above] unconstitutional provisions until 31 December 1999.”
Following the presentation of the arguments of Berke, the Ministry of Justice and the Ministry of Foreign Affairs, the Court cited the legal provisions relevant for the decision of the case. Instructively, the list starts with the relevant constitutional provisions, although this might merely be the result of the fact that the Court strictly follows the hierarchy of the relevant laws in their presentation:
“According to Article 2 (1) of the Constitution, the Hungarian Republic is an independent and democratic law-based state [Rechtsstaat]. According to Article 2 (2) [of the Constitution], in the Hungarian Republic all power belongs to the people, which shall exercise the people’s sovereignty either through its elected representatives or directly.”
Subsequently, the Court identified the core issues of the case:
“[I]n [the Europe Agreement Judgment the Court] had to assess how – in the field of the prohibition of anti-competitive restraints – the legal criteria and principles of Community law may become effective in the Hungarian legal system on the basis of Article 62 EA and the Implementing Rules. […] Accordingly, the constitutional issue is whether the norms of the domestic law of another subject of international law, another independent system of public power and autonomous legal order […] can be applied directly by the Hungarian competition authority without these foreign norms of public law having [first] become part of Hungarian law.” 

Having identified the basic issues of the case, the Court chose a very interesting approach to assess them:
“In the context of [Berke’s] submission, the direct effect of Article 62 (1) and (2) EA and the direct applicability of the Community law criteria referred to by Article 62 (2) in the Hungarian legal system needs to be assessed.”
Thus, at first sight paradoxically, the Court decided to assess the constitutionality of the Hungarian application of certain foreign (Community) law provisions by having recourse to principles of the same foreign (Community) law. Nevertheless, no matter how paradoxical that approach might seem at first sight, it is not unprecedented. In its First Opinion the Ministry of Justice also assessed whether Article 62 (2) EA could have direct effect. Moreover, the approach of the Court is probably more easily understandable in the light of the foreseeable underlying argument of such an approach adopted by a non-Member State Constitutional Court.
For instance, the Court highlighted that:
“[d]irect applicability distinguishes the appearance of Community law in the Member States from the way in which international treaties may become part of domestic law in general.”
In other words, the Court is determined to assess whether the competition co-operation regime has any of the distinguishing characteristics of the application of Community law in the Member States (direct effect, direct applicability) in the context of its effectiveness in the Hungarian legal system, and should the Court find such characteristics, it is also determined to declare the provisions in question unconstitutional based on the simple argument that Hungary is not yet a Member State of the European Union.
Indeed, that is primarily what the Court did.

1. Direct Effect

In its analysis of the eventual direct effect of Article 62 (1) and (2) EA in Hungary, the Court first pointed to the OEC’s direct obligation to apply the ‘criteria’:
“In the context of the application of Article 62 EA, the procedural position of undertakings is delineated by the fact that, according to the Implementing Rules, they are subject to the jurisdiction and procedure of the parties’ competition authorities. In contrast to the opinion of the Ministries, the joint interpretation of the first and second paragraphs of Article 1 IR does not only lead to the identification of the parties’ competition authorities but they also result in the obligation that the OEC has to effectively apply the criteria laid down by Article 62 EA.”
This important preliminary remark of the Court was fully in accordance with the submission of Berke, who assessed the possibility of the legislative implementation of the co-operation regime but rejected this on the basis of the continuously-evolving nature of competition law and concluded that the executive branch of the Hungarian state was bound to implement the competition co-operation regime.
Subsequently, the Court adhered to the “parties’” shared conviction on the exclusively public nature of the obligations set out in Article 62 (2) EA. On this basis, in contrast to the Ministry of Justice, which carried out a more classic assessment along the lines of ECJ jurisprudence on the direct effect of international treaty provisions, the Court also rejected the direct effect of Article 62 (1) and (2) EA:
“Although the requirement and content of the rules in Article 62 (1) EA was clarified by paragraph (2) [of Article 62 EA] and the Implementing Rules, Article 62 EA itself does not create direct prohibitions and legal consequences for private law subjects. Thus, it is not directly enforceable against undertakings, but only indirectly, pursuant to the interpretation of the contested provisions of the Implementing Rules. Accordingly, Article 62 (1) and (2) EA cannot be held to be directly effective.”
Nevertheless, distinguishing between the effectiveness of Article 62 EA and of the ‘criteria’ referenced thereby, the Court also stated that:
“it does not flow from the lack of direct effect of Article 62 (1) and (2) EA that the legal criteria […] referenced by Article 62 (2) EA should not be taken into account by the Hungarian law enforcement authorities in another context.”
On the one hand, the Court was of the opinion that “Article 62 (2) EA is still relevant with regard to the existence of an eventual violation of the EA: that paragraph determines the content criteria the violation of which means the breach of the competition rules laid down by Article 62 (1) EA.” On the other hand, the Court considered the obligation of the OEC under Article 1 IR to settle cases within the scope of the competition co-operation regime both under the ‘criteria’ of Article 62 (1) and (2) EA and in accordance with its own substantive competition law. Presenting a mixed approach, which is rather based on interpretation than on direct application argued by the executive approach of Berke, the Court stated that:
“[s]ince the obligation defined by Article 62 (2) EA has been assigned to the Hungarian competition authority by the first two paragraphs of Article 1 IR, the provision of the IR on the application of own substantive law – in contrast with the governmental opinions – does not entitle the OEC to settle the cases in its own competence solely on the basis of… the Hungarian Competition Act. In other words, besides the rules of Hungarian competition law, the relevant Community law ‘criteria’ are also relevant for the OEC.” “Although the OEC does not apply Article 62 (1) and (2) EA because of the lack of direct effect of those provisions, but the substantive provisions of the Hungarian Competition Act (which also include prohibitions and sanctions), it has to determine the applicable content of those provisions in a way that the relevant Community law criteria become properly effective in Hungarian jurisprudence. Thus, the... criteria indirectly determine the content of competition authority decisions against undertakings (private law subjects) involved in the procedure of the OEC.” “[T]he obligation to take into account the legal criteria of the EC Treaty referred to by Article 62 (2) EA… means that the criteria flowing from the application of Articles 85 and 86… EC… have to be taken into account by the OEC as interpretative aspects of the application of substantive law provisions of the Hungarian Competition Act in the cases under the scope of applicability of the EA. Thus, if the assessment of cases according to the relevant Community law criteria cannot be guaranteed by the interpretative action of the OEC in the application of the substantive rules of Hungarian law, Article 62 EA has been breached. As a consequence, recourse can only be had to consultations on the diplomatic level or finally to the application of commercial policy sanctions.”

2. Direct Applicability

Turning to the analysis of the direct applicability of Community norms referred to by Article 62 (2) EA through the ‘criteria’, the Court first assessed the scope of Community norms relevant for the ‘criteria.’ Adopting Berke’s global approach of relevant legal sources and the continuously evolving nature of competition law, the Court stressed that:
“the application criteria evolved and continuously evolving in the jurisprudence under Articles 85 and 86 EC constitute the actual Community competition law. The relevant criteria of application include the content totality of Community competition law, including the developments of jurisprudence and the rules of the block exemption regulations under Article 85 EC as well as the experience gained in their application. Thus, «the criteria flowing from the application» of Articles 85 and 86 EC refer to the content totality of Community law, essentially they can be equalled with the totality of Community competition law norms.”
Subsequently, the Court followed Berke’s submission further, and by emphasising the obligation of the OEC in the implementation of the ‘criteria’, it stated that:
“[t]he problem of direct applicability arises because […] Article 62 (2) EA does not include [the] ‘criteria’ but only refers to them, as they exist and evolve in the law of the Community. At the same time, according to the IR… the OEC has the duty to apply these ‘criteria.’ Thus, according to Article 62 (2) EA and Article 1 IR, the relevant Community law criteria, as soon as they appear in the decisions of the competition authority or the court of the Community or in the Community regulations, have to be taken into consideration and applied by the Hungarian competition law enforcement authority, too.”
Finally, the Court made its acceptance of Berke’s essential arguments complete by assessing whether the Hungarian direct applicability of the ‘criteria’ could fit into the approach put forward by Berke. Under the approach which I shall call the ‘window approach’, Berke advocated that foreign law, i.e., norms not originating in Hungarian law, can only enter the Hungarian legal system through constitutionally opened windows, in other words, in the ways expressly authorised by Constitutional law or by the jurisprudence of the Constitutional Court. According to Berke, the constitutional problem with the penetration of the Hungarian legal system by Community competition law lay in the fact that it did not fit into any of the accepted ways in which foreign law could enter into the Hungarian dualist legal system. In order to demonstrate this, he examined all of the possible categories in this regard, i.e., (i) international treaty law; (ii) generally accepted rules of international law; and (iii) private international law.
As foreseen earlier, a key argument of the Court for the rejection of the possibility that the direct applicability of the ‘criteria’ fit into the ‘window approach’ was the fact that Hungary was not a Member State of the European Union:
“[T]he mechanism of direct applicability is a typical characteristic of the relationship between the Community legal system and EU Member States. However, the situation flowing from the ensemble of Article 62 (2) EA and Article 1 IR has to be assessed in the course of constitutional control with regard to the fact that presently the Hungarian Republic is not a Member State of the European Union. The appearance of the Community law criteria referred to by Article 62 (2) EA in Hungarian law enforcement does not fit into the order of effectiveness of international treaties. Fundamentally, because the… ‘criteria’ appear as a reference. Such reference is made to the domestic laws and the jurisprudence of the domestic fora of an international law subject (EC Commission, EC Court of First Instance, EC Court). Thus, the referenced Community law criteria require application in the procedure of the OEC without confirmation, incorporation, transformation or proclamation by a domestic law, which are necessary for the domestic effectiveness of international treaties under Hungarian law.”
In accordance with the requirements of the ‘window approach’, the Court also excluded the possibility of applying the ‘criteria’ referred to by Article 62 (2) EA as private international law on the basis of the public nature of competition law:
“[P]rivate international law relations, even if they are governed by cogent norms, have to be distinguished from public law relations affecting sovereignty because subjugation to this latter necessitates constitutional authorisation.”
Finally, the Court rejected the possibility that the ‘criteria’ enter the Hungarian legal system as generally accepted rules of international law on the basis that “the relevant criteria of Community law cannot be equalled in any respect with the generally accepted rules of international law or the norms of international ius cogens.”

3. Sovereignty

The Court also accepted Berke’s arguments with regard to the eventual violation of the sovereignty of the Hungarian Republic. First, the Court upheld Berke’s argument on the lack of temporal limitation of the legal norms applicable under the ‘criteria’:
“[N]ot only the specific «application criteria» already applicable in Community law appear in Hungarian jurisprudence but also the legal norms, principles and criteria which evolve in Community law after the adoption of the [Europe] Agreement, namely in the decisions of the European Commission as competition authority, in the judgments of the Community courts and in the Community regulations.”
As a next step, based on the earlier declared public nature of competition law, the Court stressed the inseparable attachment of competition law to state sovereignty:
“[B]y its meaning and implementation, [competition law] is under the exclusive jurisdiction of state sovereignty. The extension of the rules of this legal field over the principle of objective territoriality is not accepted by international law, either. […] The exclusivity of state sovereignty attached to territoriality also means that the state may dispose of its sovereign rights in its international relations.”
Indeed, competition law and policy involves a great deal of State sovereignty but, as it was argued rightly by Vereshchetin, it is exactly “the most important aspects of State sovereignty and the domestic competence of States” which are more and more impinged upon by “the intrusion of international law.”
Nevertheless, although accepting the argument of the Ministry of Foreign Affairs concerning the inevitable limitation of state sovereignty as a result of the conclusion of any international treaty, the Court stressed that:
“[i]t also applies to the formation of international relations, that the power of the Parliament – and also of other state institutions – is not unlimited power. […] Therefore, conversely to the governmental opinions, in a legal field under the exclusive jurisdiction of state sovereignty, the Parliament is not entitled to extend constitutionally over the principle of territoriality in an international treaty without an express constitutional authorisation. In this regard, from the viewpoint of constitutionality, it is not relevant that such an extension applies to a relatively narrow, strictly delineated field, namely the law of anti-competitive restraints. The requirement of constitutionality means that the totality of the legal system and each part of it has to be in conformity with the Constitution.”
Thus, the Court expressly rejected the approach of the Ministries, and accepted Berke’s argument that such a limitation of sovereignty necessitates an express constitutional authorisation, even in the absence of any kind of written rule, let alone prohibition in that regard.

4. Legitimisation

In addition to the aspect of international relations, the Court analysed sovereignty from the point of view of legitimisation. It seems that a significant underlying argument between the “parties” to the Europe Agreement Judgment, and also for the Court itself, was the issue of whether the Hungarian Parliament has unlimited powers to exercise its role as a legitimised depositary of the sovereignty of the Hungarian people or whether such powers are subject to constitutional control. The Court adopted a strict and far-fetched interpretation of Article 2 of the Constitution in that context:
“[I]n accordance with the principle of the sovereignty of the people declared by Article 2 (2) of the Constitution, it is one of the requirements of the democratic law-based state founded on the sovereignty of the people that public power may only be exercised on the basis of democratic legitimisation. […] According to the Constitution, the principle of democratic legitimisation… establishes the requirement… that all public norms applicable in Hungarian law enforcement against Hungarian legal subjects be based on democratic legitimisation, that can be traced back to the sovereignty of the people.”
Following the logic of the above requirement of absolute legitimisation, the Court concluded that:
“[a]ccording to Article 2 (1) and (2) of the Constitution, the norms of public power that form the domestic law of another system of public power – in this case the Community – and on the creation of which the Hungarian Republic does not have any influence because Hungary is not a Member State of the European Union, cannot appear with an obligation of applicability in the jurisprudence of Hungarian law enforcement institutions. In fact, this would require an express constitutional authorisation.”
Thus, the Court fully accepted the ‘window approach’ put forward by Berke. At the same time, it expressly rejected the relevant arguments of the Ministries:
“A concrete and exact state undertaking in an international treaty is absolutely different from the subjugation of a specific legal field to another system of public power, even if that refers to a narrow and strictly delineated field. Consequently, Article 2 (1) and (2) of the Constitution is violated by the fact that, as a result of the ensemble of Article 62 (2) EA and Article 1 IR, the Hungarian competition authority is bound to assess certain cases by means of the direct application of the criteria only referenced by Article 62 (2) EA, simultaneously to the application of Hungarian substantive rules.” 
Finally, analysing the Parliament’s powers to exercise the sovereignty of the people and to adopt and amend the Constitution, the Constitutional Court confirmed the status of the Constitution and thereby implicitly confirmed itself as the most legitimised institution of the Hungarian Republic:
“According to Article 2 (2) of the Constitution, the Parliament is the depositary of the sovereignty of the people; the generally applicable form of the exercise of power is the exercise of power by the Parliament. [However,]… the Parliament may not breach Article 2 (1) and (2) of the Constitution even by the conclusion and proclamation of international treaties. According to Article 19 (3) (a) of the Constitution, the Parliament has the competence to adopt and amend the Constitution. [Nevertheless,] also in this regard, the Parliament may only proceed constitutionally, in compliance with the procedural and decision-making requirements governing the amendment of the Constitution and on the basis of the provision on the direct and express power to amend the Constitution…The Parliament is not entitled to carry out the covert amendment of the Constitution by means of the conclusion and proclamation of an international treaty.”
Again, this argument of the Court follows the submission of Berke, who expressly argued against the ‘creeping-sneaky’ circumvention of the Constitution and the procedure leading to the adoption and amendment thereof.

5. Article 1 IR

Assessing the constitutionality of Article 1 IR, the Court first accepted the common position of the “parties” with regard to the indivisibility of the co-operation regime:
“[T]he Constitutional Court assessed Article 62 (1) and (2) EA and… Article 1 IR as a tightly intertwined regulatory unit.”
As a next step, the Court adopted the argument of the Ministries on the constitutionality of Article 62 (2) EA, however, this seemingly paved the way for the conclusion urged by Berke that both Article 62 (2) EA and the relevant provisions of the Implementing Rules would be unconstitutional:
“In the absence of the Implementing Rules, the unconstitutionality of the regulation does not follow from the provision in Article 62 (2) EA itself. In fact, Article 62 (2) EA in itself does not attach the obligation of assessment according to Community law criteria to the Hungarian law enforcement authority. At the same time,… Article 1 IR in itself would not be problematic from the constitutional viewpoint for naming the Hungarian law enforcement authority (OEC) as the institution applying the conventional competition rules, either, unless the Hungarian law enforcement authority has to assess cases on the basis of Community law criteria under Article 62 (2) EA by directly applying the Community norms in this field.”
If the Court regards the co-operation regime as a ‘tightly intertwined regulatory unit’, the elements of which are not unconstitutional individually but violate the Constitution in their totality, the Court should have declared both Article 62 (2) EA and the relevant provisions of the Implementing Rules unconstitutional. Although the Court rejected declaring Article 62 (2) EA unconstitutional, its initial statement that “it is a constitutional requirement that Hungarian law enforcement authorities cannot apply directly the application criteria referred to by Article 62 (2) EA” reflects the implicit acceptance of the possibility that Article 62 (2) EA has an unconstitutional interpretation, namely the one pointed out by Berke.
However, the Court decided to save Article 62 (2) EA and thereby it seemingly exercised self-restraint. The reasons for such self-restraint are manifold. First, in the light of the importance of the legal and political issues involved, the Court obviously wanted to adopt the outcome with the least interference with the status quo. Second, 
“[a]ccording to the [Court], the first and second paragraphs of Article 1 IR result in the obligation that the criteria referred to by Article 62 (2) EA have to be taken into consideration in the cases assessed by the competition authorities, thus by the OEC on the Hungarian part. The EA itself does not determine the order of implementing the obligation set out by Article 62 (2) EA.”
Thus, the Court accepted the argument for only declaring the relevant paragraphs of Article 1 IR unconstitutional put forward by Berke himself, namely that Article 1 IR on its own reproduces the whole constitutional problem and it contains the smallest regulatory unit causing the constitutional problem. 

6. Article 6 IR

The same underlying argument must have been the basis of the Court’s declaring Article 6 IR unconstitutional. Indeed, the approach, the arguments and even their sequence is absolutely identical to those applied with regard to the constitutional control of Article 62 (2) EA. Still, Article 6 IR was declared unconstitutional and Article 62 (2) EA was saved by the Court. The fact that the Court adopted an identical approach also means that it refused to assess the constitutionality of Article 6 IR differently because it did not pay attention to the detailed concomitant IR provisions concerning the Hungarian application of Community block exemption regulations.

III.  The Consequences of The Europe Agreement Judgment

A.  The Short-term Consequences of Unconstitutionality

As a result of the a posteriori constitutional control of the competition co-operation regime in the Europe Agreement Judgment the Court declared the first and second paragraphs of Article 1 IR as well as Article 6 IR unconstitutional. In accordance with the Preliminary Issues Judgment the unconstitutionality of the above provisions results in the annulment of only the relevant provisions of the Hungarian laws proclaiming those unconstitutional international treaty provisions. 
Moreover, the Court suspended taking a decision on the annulment of the relevant provisions until 31 December 1999 on the basis of the possibility of delayed annulment established in the Preliminary Issues Judgment. By opting for delayed annulment, the Court rejected Berke’s request of immediate annulment, and probably in order to soften the finding of unconstitutionality, it adopted the arguments of the Ministries on the prevalence of public interest over private ones. In its judgment the Court analysed the consequences of unconstitutionality both with regard to the unconstitutional provisions and the saved Article 62 (2) EA. Undoubtedly, the Court had a moral justification to do so at least in the context of the provisions to be annulled. The Europe Agreement Judgment constitutes the first occasion of the delayed annulment of provisions proclaiming international treaties that have been declared unconstitutional. Nevertheless, the Constitutional Court has no legislatively established competence to issue detailed guidance on the effects of such a situation.
The Court seized the opportunity of providing guidance on the consequences of the unconstitutionality of the relevant provisions of the Implementing Rules to define the short-term consequences of its judgment and also to re-confirm the dualism of the Hungarian legal system. Accordingly, it strictly distinguished the consequences of the unconstitutionality of an international treaty provision on the level of international and domestic law:
“[T]he fact that the Constitutional Court declared the partial unconstitutionality of the Implementing Rules does not affect Decision 2/96 of the EC-Hungary Association Council as the source of the internationally undertaken obligation. However, the Implementing Rules adopted by means of the decision of the Association Council are unconstitutional in Hungarian domestic law in their parts affected by the judgment of the Constitutional Court.” 
Furthermore, the Court determined the consequences of unconstitutionality in domestic law in a way that does not only push Hungarian dualism even over the limits of the version argued by Berke, but it might even contradict Article 27 VCLT referred to by the Ministry of Foreign Affairs:
“As a result of the unconstitutionality of the proclaiming Hungarian law, the unconstitutional internationally undertaken obligation cannot become effective and cannot be applied in [Hungarian] domestic law. The undertaken obligation remains unaffected as regards its effectiveness under international law, namely the decision of the Association Council is binding upon the Hungarian Republic as an international law subject after the declaration of the unconstitutionality of the provisions of the proclaiming laws. Pursuant to Article 7 (1) of the Constitution, it is the task of the legislator to establish the harmony of domestic law and the obligation undertaken on the international level.”
It seems forced to limit the implementation of international treaty provisions that have been declared unconstitutional to the legislative way referenced by the Ministries. It is an unsuccessful venture for a sovereign non-Member State to comply with the obligation to implement Community law solely by legislative means. Indeed, the Court rejected the approach of exclusive legislative implementation put forward by the Ministries. Such an approach will be even more outdated after Hungary becomes a Member State of the European Union.
Moreover, non-application as an automatic consequence of unconstitutionality results in practice in the non-existence of the proclaiming Hungarian equivalents of the unconstitutional treaty provisions. Consequently, although the Constitutional Court managed to confirm its powers by preventing unconstitutional treaty provisions from becoming effective in Hungary, and thereby it accepted Berke’s arguments that Hungarian private law subjects should be protected from the negative effects of unconstitutional treaty provisions with immediate effect, the Court effectively deprived delayed annulment, not to mention its gesture to the Ministries, of its meaning. Indeed, if the only effect of annulment is that the annulled norm loses its applicability, what is the point in delaying the annulment of a legal norm that cannot be effective anyway?

The above approach was not the last word of the Court on the short-term effects of the unconstitutionality of the relevant provisions. In addition to providing guidance on the effects of unconstitutionality with regard to the unconstitutional provisions, the Court analysed the consequences with regard to the application of the saved Article 62 (2) EA:

“The mere fact that, in the absence of appropriate transformation (incorporation), an international treaty does not become part of domestic law, does not necessarily mean in each case that the specific treaty does not have to be taken into account in the application of Hungarian law. Article 7 (1) of the Constitution requires the harmony of undertaken international law obligations and domestic law, and in that framework the interpretation of the domestic law proclaiming the international treaty, which complies with the living meaning of the treaty accepted in international law… [T]he harmony of undertaken international obligations has to be guaranteed with regard to the entire domestic law, including the Constitution, as well. At the same time, according to Article 7 (1) of the Constitution, the Hungarian legal system accepts the generally accepted rules of international law and a similar constitutional requirement applies to the norms of international ius cogens. Nevertheless, international treaty obligations undertaken outside the scope of... international ius cogens cannot become effective in their content contrary to the Constitution. The principle of favor conventionis applies to the extent until the Constitution is violated as a result of the interpretation of Hungarian law in conformity with the international treaty. If the appropriate interpretation of the undertaken international obligation leads to the violation of Article 2 of the Constitution, the harmony required by Article 7 (1) of the Constitution has not been established. As the first and second paragraphs of Article 1 IR are unconstitutional… and thus they cannot be taken into account in the Hungarian legal system, they cannot be relevant in the interpretation and application of Article 62 (2) EA, either. Thus, the Hungarian law enforcement authorities cannot directly apply the criteria of application referred to by Article 62 (2) EA.”

 Although the Court’s decision not to annul Article 62 (2) EA might at first glance show genuine self-restraint, by giving guidelines on how that implicitly unconstitutional article could be applied in a constitutional way, the Court acted in an activist manner. Undoubtedly, the Court lacks any kind of legislative power to do so, since it may only decide on a provision’s constitutionality or unconstitutionality. In other words, it may declare Article 62 (2) EA unconstitutional or may save it, but it cannot save it and at the same time limit its applicability. Nevertheless, the Court’s guidance is restrictive as it limits the indirect interpretative effect of Article 62 (2) EA.

B.  The Medium-term Consequences: How to Re-negotiate?

The Court’s guidance on the effects of unconstitutionality with regard to the saved Article 62 (2) EA means that the co-operation regime remains effective even in Hungarian law except for the direct applicability of Community competition law in the Hungarian legal system. This, however, also means that the Europe Agreement Judgment invalidates what is probably the most important element of the competition co-operation regime, without which the regime remains unimplemented.
The Court did not solve this problem, it only provided for the possible ways to solve it. According to its Preliminary Issues Judgment, the choice between the alternatives lies in the hands of the legislator. It is for the legislator to decide whether to guarantee the harmony of domestic law and undertaken international obligations by amending the Constitution or by terminating or re-negotiating an international treaty as regards its unconstitutional provisions.
Nevertheless, since in practice the Hungarian Government is the most important institution proposing legislation and is also involved in the (re-)negotiation of international treaties, the decision between those alternatives can be strongly influenced by the Government. Interestingly, the same Ministries that had the possibility to influence the procedure leading to the Europe Agreement Judgment happen to be responsible also for finding a detailed solution to the situation created by the Court’s judgment.
In September 1998 the Ministry of Justice and Ministry of Foreign Affairs presented a joint ‘Proposal to the Government on the Assessment of Judgment 30 of 25 June 1998 of the Constitutional Court and on the Steps Taken and Necessary on the Basis of That Judgment.’ In duly analysing the relevance of the two alternatives of unconstitutionality laid down by the Preliminary Issues Judgment, the Ministries accepted that:
“[i]n principle, the violation of sovereignty could be eliminated by means of the amendment of the Constitution, in other words by including an authorisation into the Constitution according to which the Hungarian Republic may temporarily cede the exercise of partial rights flowing from her sovereignty to international organisations and it authorises the limitation of her sovereignty in order to fulfil her international duties.”
However, the Ministries rejected the amendment of the Constitution as “not opportune for a number of reasons.” Despite their earlier argument that in a later phase of the integration process – but still before accession to the European Union – Hungary should renounce the exercise of parts of her sovereign rights to the European Union, they adopted an approach based on the requirement of mutuality and rejected that Hungary transfer her sovereign legislative rights to the European Union before it becomes Member State. As a practical argument they also pointed out that the co-operation regime has not yet been invoked or applied before the OEC and therefore it would be odd to promote the amendment of the Constitution “for the sustainability of a law the practical importance of which is not significant.” Accordingly, at the end of their proposal the Ministries published a draft Government Resolution “authorising the Minister of Justice and the Minister of Foreign Affairs to initiate negotiations by nominated experts and involving the Minister of Finance and the President of the OEC on the necessary amendment and joint interpretation of the [Implementing Rules] as a result of the [Europe Agreement Judgment].”
As regards the actual position of the Hungarian party in such negotiations, the Ministries analysed three solutions “which have been earlier applied by the EC [in its external relations] or the application of which is otherwise possible.”
The first solution considered by the Ministries was a regime similar to that of the European Economic Area. Under such a regime:
“the experts of the EEA Member States participate in the preparation of draft EC laws having an EEA relevance… Subsequently, the new law is incorporated «in a Community way» into the legal systems of the EEA Member States following the amendment of the EEA Agreement.”
Nevertheless, the Ministries rejected this regime for a number of reasons. First, the EEA Agreement does not aim at preparing its parties for EU membership. Moreover, the Ministries doubted the usefulness of introducing significant changes in EC-Hungary relations for the remaining hopefully short period before accession and in a very limited part of the coherent system established by the Europe Agreement. They also feared that the full reception of Community competition law might have negative effects on the less developed Hungarian market, furthermore no real compensating benefits similar to the case of the EEA Agreement would be offered for Hungary in exchange for the full reception of Community competition law. Finally, the Ministries considered the limited support by the European Union for such a solution, since it would grant a special treatment to Hungary and therefore “it would be a step of great political weight.”
As a second possibility, the Ministries considered the incorporation of substantive EC competition law into the Implementing Rules. Thus, “the Implementing Rules would practically «reproduce» the Community competition law ‘criteria’; in other words, the Implementing Rules would practically reflect substantive Community competition rules.” In the opinion of the Ministries, such an amendment would be justified by the fact that “during the negotiations leading to the EA the parties basically conceived the adoption of the Implementing Rules in that construction. Therefore, this version would be close to the original intention of the signatories.” Nevertheless, the Ministries discarded this possibility because of its probable rejection by the European Commission, since “thus the interpretation and application of the substantive law provisions of the Implementing Rules would be separated and could therefore differ from that of Community competition law.”
The third possibility considered by the Ministries was the “«reception» of Community competition law by legislation.” According to the Ministries, this “seems to offer an advantageous solution to the issue at hand from a practical point of view.” This solution would be based on the appropriate rectification of the unconstitutional provisions of the Implementing Rules and on the parties’ simultaneous declaration in the Association Council that “Article 62 (2) EA obliges Hungary to only approximate her laws to the Community law criteria referenced by that paragraph (at least with regard to anti-competitive practices affecting Hungary-EC trade).” In other words,
“the parties would make it clear that they do not attach to Article 62 (2) EA an interpretation, according to which Hungarian authorities and courts should directly apply Community competition law ‘criteria’ even as interpretative criteria. […] Consequently, Hungary should only comply with her obligations flowing from the EA by way of legislation. This would also mean that the parties interpret Article 62 (2) EA in a way that it is sufficiently complied with by way of the proper rectification of Hungarian domestic laws.”
Promoting this third solution, the Ministries only listed its advantages. They reiterated their earlier argument that it would not be expedient to introduce a radically different procedural order for a rather limited period, in particular, in contrast to the EEA, no special institutions should be established for guaranteeing legal uniformity. Moreover, they argued that this solution would not result in Hungary’s special treatment among the CEECs and it would establish a less tight requirement of uniformity limited to the main principles and requirements of Community competition law. Finally, this solution is the one closest to the opinion of the European Commission and the OEC. In other words, the third version would comply with the understanding of its addressees and also with the Europe Agreement Judgment, without at the same time showing any of the disadvantages of the earlier two possible solutions.
Nevertheless, if this third solution is adopted, that would also mean the triumph of the legislative approach represented by the Ministries in the procedure of the Europe Agreement Judgment (notwithstanding the arguments against such an approach even from Ambassador Juhász), and it would necessarily involve the rejection of Berke’s understanding on the implementation of the co-operation regime.
However, although such an outcome could be regarded as a partial defeat of Berke’s arguments, the Europe Agreement Judgment facilitated the general recognition of the validity of his arguments. In the postscript of his original submission to the Court Berke stressed that:
“[he] elaborated [his] submission and tried to draw attention […] to a rather significant issue in the hope that the Constitutional Court recognises that a major future direction of its activities will be the analysis of and guidance on, the process, conditions and consequences of accession to the European Union.”
In the course of the Europe Agreement Judgment superior Hungarian executive and judicial fora had to seriously consider the issue of Community law and its connection with the Hungarian legal system for the first time. Interestingly, they identified their positions on those issues in compliance with Berke’s approach. Not only did the Constitutional Court defend the sovereignty of the Hungarian Republic and re-confirm most of Berke’s arguments, but also the Ministry of Justice adopted a similar approach. Despite its earlier arguments, in its second submission the Ministry of Justice analysed the criteria of the limitation of Hungarian sovereignty. The following instructive passage could be regarded as the future conviction of the Hungarian executive branch in that regard:
“It is known from scholarly works and from the jurisprudence of EU Member States that the rules on the limitation of sovereignty or the joint exercise thereof with other states, either if such rules are explicit as in the case of a number of Member States or if they are implicitly applicable as in the case of the current Hungarian Constitution, are not independent of the other constitutional provisions and they cannot be used to circumvent other constitutional provisions or to deprive them of their content. It is on this basis that the process of concluding treaties involving the limitation of sovereignty and the authorisation of institutions concluding such treaties are subject to constitutional control. Moreover, such an agreement may not affect the essential elements of sovereignty, either, and it cannot directly contradict constitutional principles. The principle of democracy based on the representation of the people cannot be violated and the level of protection of fundamental rights cannot diminish. Even where the latter criteria are fulfilled, the limitation of sovereignty can only take place in specific limited fields and such limitation cannot be irrevocable or irreversible.”

C.  The Long-term Consequences: Implications for A Future Member State

The Europe Agreement Judgment is an important milestone in the development of Hungarian constitutional jurisprudence. Whereas in its earlier judgments the Court only developed its approach towards two categories of international law, namely international treaty rules and generally accepted rules and principles of international law, for the first time in the Europe Agreement Judgment it enunciated its position on Community law. And, although it adopted its judgment by interpreting Hungarian laws concerning international law, it expressly took into account the fact that Community law has special characteristics. For instance, the Court adopted Berke’s formulation and, instead of using the expression ‘international law’, “[it] stresse[d] that the referenced ‘criteria’ of the Community’s domestic law qualify as foreign law from the point of view of Hungarian law enforcement, since Hungary is not a Member State of the European Union.”
As for the long-term consequences of the Europe Agreement Judgment, namely what kind of approach will the Hungarian Constitutional Court adopt once Hungary becomes a Member State of the European Union, one could conclude that it will imitate the German Constitutional Court (‘Bundesverfassungsgericht’). Indeed, when paving the way for the Europe Agreement Judgment, in its Preliminary Issues Judgment, it expressly referred to the historic judgments of the Bundesverfassungsgericht on the relationship between German law and Community law. In the light of the Preliminary Issues Judgment and the Europe Agreement Judgment, such a development of Hungarian constitutional jurisprudence cannot be excluded.
Even though there is no explicit constitutional prohibition or detailed provision on the transfer of Hungarian sovereignty, the constitutional limitations established by the Hungarian Constitutional Court seem to sound very much like the following paragraph in the Brunner Judgment of the Bundesverfassungsgericht:
“Art. 38 GG wird demnach verletzt, wenn ein Gesetz, das die deutsche Rechtsordnung für die unmittelbare Geltung und Anwendung von Recht der – supranationalen – Europäischen Gemeinschaften öffnet, die zur Wahrnehmung übertragenen Rechte und das beabsichtigte Integrationsprogramm nicht hinreichend bestimmbar festlegt. Steht nicht fest, in welchem Umfang und Ausmaß der deutsche Gesetzgeber der Verlagerung der Ausübung von Hoheitsrechten zugestimmt hat, so wird die Inanspruchnahme nicht benannter Aufgaben und Befugnisse durch die Europäischen Gemeinschaften ermöglicht. Dies käme einer Generalermächtigung gleich und wäre damit eine Entäußerung, gegen die Art. 38 GG schützt.”
As we have seen, other elements of the concept laid down by the Bundesverfassungsgericht, like for example that of the ‘Herren der Verträge’ also surface in the arguments of the Ministry of Justice; the ‘window approach’ of the Europe Agreement Judgment implies a similar constitutional approach following accession.
Indeed, not only Member States but also future Member States might determine their approach to EC law on the basis of the model provided by the Bundesverfassungsgericht, and might thereby develop a conflictual relationship with the Community legal system after accession.
Nevertheless, following the German model is not the only possibility for the Hungarian Constitutional Court. As it was argued by Tatham, the guidance of the Court in the Europe Agreement Judgment on how Community law should be applied by the OEC on the basis of the Europe Agreement bears great resemblance to the constitutional ‘construction approach’ followed by another dualist Member State, the United Kingdom between 1972 and the end of the 1980’s. In its mixed approach the Court interpreted the obligation of the OEC to be an obligation of interpreting Hungarian law according to its EC counterparts.
Not only does Hungary and the UK adopt a dualist approach to international law, Hungary had also had the tradition of an unwritten Constitution for centuries. The first written Hungarian Constitution, the one amended in 1989, had been adopted only in 1949. Recently there has been a historic nostalgia of returning to an unwritten Constitution, which is also reinforced by the fact that, although the 1989 amendment has practically resulted in a new Constitution both in its content and its quality, it is only a temporary document. In an activist urge to hasten democratic reforms and the adoption of the new Constitution, the Constitutional Court applied the notion of the ‘invisible Constitution’ in adjudicating such important issues as the abolition of death penalty and the powers of the Parliament, the President of the Republic and the Government over armed forces. Another example was the constitutional “saga” concerning the compensation of property confiscated for political reasons, in which “[t]he first... [problem] was whether the Constitutional Court should take an active part in the transition of the entire legal system or limit itself to the role of a final watchdog of constitutionality. The Court, led by its President… Sólyom, took up an activist stand, not only curtailing and invalidating the unconstitutional acts of the legislation but also developing a concept of constitutional compensation as a guideline for the legislation.”
The Hungarian Constitutional Court adopted the general approach of the Member States to Community law in that it recognised its special nature “not by virtue of the inherent nature of Community law… but under the authority of [its] own national legal order.” This might lead to conflicts between Hungarian constitutional law and EC law in the future. As De Witte pointed out, “[i]f the courts (and other national authorities) think that Community law ultimately derives its validity in the domestic order from the authority of the Constitution, then they are unlikely to recognise that Community law might prevail over the very foundation from which its legal force derives.”
Nevertheless, the post-accession development of Hungarian constitutional jurisprudence may also turn out to be more sophisticated than just imitating the jurisprudence of another Member State. There are only a few textual starting points in the Europe Agreement Judgment that may hint at, or predict, the future Hungarian approach towards Community law. For instance, in the above passage on the foreign law nature of Community law, the Court explicitly argued that Community law qualified as foreign law from a Hungarian point of view because Hungary is not yet a Member State of the European Union. Turning this argument backwards, Community law would qualify as non-foreign law from the viewpoint of Hungarian law enforcement following accession to the European Union. Moreover, it seems from the fact that the real constitutional problem was the vagueness of the relevant provisions that Hungarian Constitutional Court could accept and indeed would prescribe the indirect application of foreign laws specifically referenced by an international treaty. However, it can only be hoped that all this shows a willingness on the part of the Constitutional Court to accept the specific characteristics of Community law such as direct applicability or direct effect in Hungary following accession. A sufficient degree of certainty in that regard could only flow from future Constitutional jurisprudence expressly accepting that possibility.
Further guidance as to the approach of Hungarian constitutional law towards Community law can be drawn from the Court’s analysis on the applicability of the saved Article 62 (2) EA. Limiting the Hungarian application of foreign law to the context that was not declared unconstitutional by the Constitutional Court might raise the concern that should a Community norm be regarded as unconstitutional or declared unconstitutional in Hungary, such a norm could not be taken into account – even following accession. Indeed, by confirming the right to determine how international norms should be applied by Hungarian law enforcement organs the Constitutional Court retained exclusive leverage on the legitimisation of international rules in the Hungarian legal system. Hilf’s arguments concerning national courts apply to domestic law enforcement institutions in general:
“[t]he more national courts become involved in the implementation of international rules, the more the relevant international institutions will gain domestic political support and thus, legitimacy.”
Moreover, although the constitutional conflict identified in the Europe Agreement Judgment will be solved by the re-negotiation of the co-operation regime, on the longer term accession will definitely necessitate certain amendments to the Hungarian Constitution. In the light of the deep-rooted traditional dualism of the Hungarian legal system and the upholding of the ‘window approach’ by the Court, an express constitutional provision on the limitation or transfer of Hungarian sovereignty as of the date of accession seems inevitable. For instance, Hungarian law enforcement institutions should be expressly entitled by the Constitution to disregard Hungarian norms in cases where they conflict with Community law. Moreover, in order to avoid an unnecessary debate between Hungarian and Community law, Article 8 (1) of the Constitution, which was expressly argued by Berke concerning the preliminary issues, also needs to be amended in the sense that not only Hungarian parliamentary acts should be entitled to lay down and limit fundamental rights and duties. Otherwise any kind of Community norm directly applicable in Hungary and laying down or limiting fundamental rights would be contested before the Constitutional Court for formal reasons. A similar situation arose concerning pre-1989 legislation in the context of which Article 8 “led to countless challenges to governmental and cabinet ordinances of the old legal order that affected some fundamental right.” As a result, “[t]he Constitutional Court was obliged to introduce the practice that without a substantive violation of the Constitution, no old norm would be invalidated due... to a purely formal reason.” And, although the Court may adopt the same approach on the formal issues of Community law, as well, it is highly probable that the Court would exercise in full its well-established substantive control rights over limitations which may affect the essence of a fundamental right and whether such a limitation is proportional. Indeed, it was argued in the context of the Solange II judgment of the Bundesverfassungsgericht that “[i]t is clear that the Federal Constitutional Court did not give up its jurisdiction or come to the conclusion that no such jurisdiction exists. It only states that it will not exercise the jurisdiction as long as the present conditions as to the protection of fundamental rights by the European Court of Justice prevail.” Thus, by giving up concerns on formal or even substantive issues, the Hungarian Constitutional Court would still retain leverage over Community law.
Furthermore, simultaneous to the amendment of the relevant constitutional provisions, the outdated Law Decree No. 27 of 1982 on the Procedure Relating to International Treaties might also have to be made more “flexible and more expedient.”
Finally, although the Court managed to address the issue of the relation between Hungarian and supranational law by regarding Community law as foreign law and hiding behind the “sterile” ‘window approach’, it cannot be excluded that later, in particular after accession to the European Union, the Court might adopt a more flexible approach concerning Community law by breaking the sometimes inflexible boundaries of thinking in the monist-dualist dichotomy. In a more general context, the Court is and will be exposed to a growing extent to “the objective necessity” of “the application of international law within the domestic legal order and the gradual affirmation of its supremacy over national law.” Nevertheless, although the coherent legislative amendment of the Hungarian Constitution and other domestic rules governing the relation between Hungarian and non-Hungarian law might be preferable, in the absence thereof the Court may also choose to adapt to the circumstances of accession by developing and enforcing its approach as part of the ‘invisible Constitution.’

In addition to the great significance of the Preliminary Issues Judgment and the Europe Agreement Judgment as regards the approach of the Hungarian legal system towards Community law, those judgments have special importance from a domestic point of view as they constitute important steps in the Constitutional Court’s self-legitimisation.
Observing the development of constitutional jurisprudence in the field of the relationship between Hungarian and non-Hungarian law starting from Judgment 53 of 13 October 1993 (‘1956 Revolution Judgment’), one can see the emergence of the Constitution as the ultimate benchmark with regard to the harmony between Hungarian and non-Hungarian norms, and the emergence of the Constitutional Court as the ultimate forum to identify and decide the constitutional issues involved. Undoubtedly, major parts of that jurisprudence constitute judicial law-making, which had to have certain characteristics to be successfully accepted. It is noteworthy, that each step in the direction of extending the Constitutional Court’s competence by judicial law-making involved two elements, even if in a covert way: (i) it opened the way for actio popularis; and (ii) in most cases it decided in favour of a widely accepted political issue. In other words, the Court based the development and extension of its jurisprudence and competences in this field on the people’s legitimisation.
It is in this context that the Court’s following declaration in the Europe Agreement Judgment has to be observed: 
“The democratic legitimacy of the exercise of public power is a constitutional requirement with regard to both the internal and external acts of public power, thus including acts of public power that aim to determine international relations and result in international obligations.”
Undoubtedly, by such a declaration in an implicit way the Court effectively confirmed itself as the most legitimate institution in the Hungarian Republic, since it can even control the institution in which the sovereignty of the Hungarian people is traditionally vested, namely the Parliament. Interestingly, although during the transition negotiations “[t]he Communist government wanted to preserve the supremacy of Parliament and aimed at creating a Constitutional Court with only limited jurisdiction [by withholding] from the Court the right to annul Acts of Parliament”, the two basic and finally implemented proposals of the opposition concerning the Constitutional Court were actio popularis and the empowerment of the Court to review the constitutionality of legislative acts adopted by the Parliament. 
There is no reason to criticise the Court for fulfilling its constitutional duties and its special role in democratisation. Indeed, both international law and constitutions have played major roles in this regard and constitutional courts have been mostly established to promote that role in countries previously governed by totalitarian regimes, and which have thereby lost confidence in traditional legal and political institutions.
Hungary is no exception. The Hungarian Constitutional Court was the first democratic institution set up after the democratic changes at the end of the 1980’s as it even preceded the formation of the first democratically elected Parliament. Moreover, the Court has been an institution involving major political interests since its inception. As mentioned earlier, it has been set up according to the opposition’s maximalist requirements concerning its competence. As a result, “[t]he jurisdiction and power of the Court, even by international comparison, is very broad”, and in practice the Court has made full use of that. Following the start of its operation “in [the] highly volatile period [of the establishment of a democratic system], the existence of the Constitutional Court allowed political debate to be transposed into legal problems that, with the Court’s decision, would be closed in a final and binding manner.” However, it was practically impossible to discard the predominant political connotations by such legalisation. As Paczolay pointed out, “[t]he history of the Compensation Cases reveals that the Constitutional Court attempted to translate highly political questions into legal ones and give them correct legal answers. That history illustrates the limited possibility of such efforts.”
Indeed, since the political and economic systems are undergoing enormous transformation the Hungarian Constitutional Court has an even greater role and responsibility as a rule-maker than any of its counterparts in established democracies. As soon as the new constitutional regime was put into operation, the problems of the system which had not even been conceived by the “founding fathers” arose as prompt and practical political issues. Consequently, even a self-restricting Constitutional Court is involved in the formation of the constitutional system and in the adjudication of highly political issues affecting public interest to a level unimaginable in settled democracies.
In any event, it is striking to see how effectively the Hungarian Court’s self-legitimisation is accepted by the wider public and by the Hungarian political arena. The Parliament’s legislative dumping to replace legislation of the former regime went hand in hand with a “flood of requests” by private parties to the Constitutional Court. Even though “the Court rejected two thirds of the requests on the ground that they did not ask for an examination of the constitutionality of legal rules, but rather an appeal against final judgments” because citizens “took [the Court] – erroneously – to be the highest court of appeal”, this shows that citizens had a clear image of Hungarian democracy, and accorded a great deal of legitimacy to the Constitutional Court as the most available institution in facilitating the realisation of that image. Or to take another, more practical example: in contrast to other European countries like France and Italy, where people would probably be more likely to publicly protest against unpopular political decisions, the 1995 Stability Pact of the Hungarian Government induced relatively few demonstrations but much more submissions to the Constitutional Court.
The Constitutional Court has been and is being legitimised by the higher echelons of Hungarian political life, too. “[I]n parliamentary debate, political parties have tried to use to their advantage the preventive review of norms.” As during four years of socialist-liberal political rule between 1994 and 1998 when the Constitutional Court was the ultimate forum of conservative opposition to effectively block Government proposals and acts, in February 1999 the Court decided in favour of the submission by the socialist-liberals now in opposition declaring that acts to be adopted by two-thirds qualified majority cannot be annulled or amended by acts adopted by a simple majority.
It is probably justified to criticise the Hungarian Constitutional Court for its excessive judicial law-making and for stepping out into the Hungarian political arena to such an extent. Nevertheless, it should not be forgotten that simultaneous to the perceived disappointment of the people by traditional political institutions of the Hungarian Republic, the Constitutional Court has remained a relatively legitimised institution. Undoubtedly, by legitimising itself the Constitutional Court also legitimises the newly established Hungarian democracy. At times of turbulent changes in the social and economic environment, safeguarding the validity of the pre-transition legal system, which is phased out at a relatively slower pace than social and economic changes take place, in effect safeguards the most stabile factor in society. Nevertheless, both the legislation of the old regime and new legislation have one sine qua non for successful operation: legitimisation. In fact, it seems that in times of changing regimes and social and economic transition, when legal and political issues are more intertwined, the validity of the laws and their legitimisation can be strangely distinct and extremely important factors. It seems that whereas validity is a crucial issue at the very point of political change, the more transition proceeds the more significant is the role of legitimisation in establishing democracy.
Now only one question remains unanswered: is excessive judicial law-making by a quasi-political Constitutional Court too high a price for such legitimisation?