Judgment of the General Court (Intermediate Chamber) of 30 September 2026.#Debreceni Egyetem v Council of the European Union.#Implementation of the Union budget – Regulation (EU, Euratom) 2020/2092 – General regime of conditionality for the protection of the Union budget – Implementing Decision (EU) 2022/2506 – Measures for the protection of the Union budget against breaches of the principles of the rule of law in Hungary – Article 2(2) of Implementing Decision 2022/2506 – Prohibition preventing the Commission from entering into legal commitments with any public interest trust or any entity maintained by such a trust – Competence of the Council – Right to be heard – Legal certainty – Equal treatment – Manifest error of assessment – Article 2 TEU – Proportionality – Article 13 of the Charter of Fundamental Rights – Academic freedom – Articles 165 and 179 TFEU – Freedom to provide services – Article 56 TFEU.#Case T-115/23.

Provisional text

JUDGMENT OF THE GENERAL COURT (Intermediate Chamber)

30 September 2026 (*)

( Implementation of the Union budget – Regulation (EU, Euratom) 2020/2092 – General regime of conditionality for the protection of the Union budget – Implementing Decision (EU) 2022/2506 – Measures for the protection of the Union budget against breaches of the principles of the rule of law in Hungary – Article 2(2) of Implementing Decision 2022/2506 – Prohibition preventing the Commission from entering into legal commitments with any public interest trust or any entity maintained by such a trust – Competence of the Council – Right to be heard – Legal certainty – Equal treatment – Manifest error of assessment – Article 2 TEU – Proportionality – Article 13 of the Charter of Fundamental Rights – Academic freedom – Articles 165 and 179 TFEU – Freedom to provide services – Article 56 TFEU )

In Case T‑115/23,

Debreceni Egyetem, established in Debrecen (Hungary), represented by J. Rausch, Á. Papp and V. Utassy, lawyers,

applicant,

supported by

Hungary, represented by M. Fehér and D. Csoknyai, acting as Agents,

intervener,

v

Council of the European Union, represented by E. Rebasti, L. Vétillard, B. Tószegi, M. Bencze and G. Rugge, acting as Agents,

defendant,

supported by

European Parliament, represented by U. Rösslein, T. Lukácsi and R. Crowe, acting as Agents,

and by

European Commission, represented by J. Baquero Cruz, A. Tokár and D. Drambozova, acting as Agents,

interveners,

THE GENERAL COURT (Intermediate Chamber),

composed of S. Papasavvas, President, M.J. Costeira, L. Truchot J. Schwarcz, M. Kancheva, U. Öberg (Rapporteur), P. Zilgalvis, E. Tichy-Fisslberger and S. Verschuur, Judges,

Registrar: A. Juhász-Tóth, Head of Unit,

having regard to the order of 1 June 2023, Debreceni Egyetem v Council (T‑115/23 R, not published, EU:T:2023:297),

having regard to the written part of the procedure, in particular the order of 4 April 2024, Debreceni Egyetem v Council (T‑115/23, not published, EU:T:2024:209),

further to the hearing on 9 September 2025,

gives the following

Judgment

1        By its action under Article 263 TFEU, the applicant, Debreceni Egyetem, seeks the annulment of Article 2(2) of Council Implementing Decision (EU) 2022/2506 of 15 December 2022 on measures for the protection of the Union budget against breaches of the principles of the rule of law in Hungary (OJ 2022 L 325, p. 94; ‘the contested provision’), by which the Council of the European Union prohibited the European Commission, where it implements the budget of the European Union under direct or indirect management, from entering into legal commitments with any public interest trust established on the basis of the közfeladatot ellátó közérdekű vagyonkezelő alapítványokról szóló 2021. évi IX. törvény (Law IX of 2021 on public interest trusts with a public service function (Magyar Közlöny 2021/75.); ‘Hungarian Law IX’) or with any entity maintained by such a public interest trust.

 Background to the dispute

2        The applicant is a higher education institution based in Debrecen (Hungary). Until 2021, the applicant was owned, controlled and in part financed by the Hungarian State as a public university.

3        The provisions of Hungarian Law IX removed the applicant from the pool of institutions directly managed and financed by the State, with effect from 1 August 2021. Its founding and management rights were transferred to a public interest trust. It was incorporated into the Gróf Tisza István Debreceni Egyetemért Alapítvány public interest trust (Count István Tisza Foundation for the University of Debrecen).

4        On 24 November 2021, the Commission sent a request for information to Hungary pursuant to Article 6(4) of Regulation (EU, Euratom) 2020/2092 of the European Parliament and of the Council of 16 December 2020 on a general regime of conditionality for the protection of the Union budget (OJ 2020 L 433 I, p. 1).

5        On 15 December 2022, following exchanges between Hungary and the Commission, the Council adopted Implementing Decision 2022/2506 on the basis of Commission proposal COM(2022) 485 final of 18 September 2022 for a Council Implementing Decision on measures for the protection of the Union budget against breaches of the principles of the rule of law in Hungary (‘the Commission proposal’) and Communication COM(2022) 687 final from the Commission to the Council of 30 November 2022 on the remedial measures notified by Hungary under Regulation 2020/2092 for the protection of the Union budget (‘the Commission communication’).

6        By Implementing Decision 2022/2506, the Council found, inter alia, that the conditions laid down in Article 4(1) of Regulation 2020/2092 were met and therefore adopted measures for the protection of the Union budget against breaches of the principles of the rule of law in Hungary. Those breaches related to public procurement, prosecutions, conflicts of interest, the fight against corruption and public interest trusts.

7        The Council adopted two measures: (i) a suspension of 55% of the budgetary commitments for three cohesion policy programmes for the period between 2021 and 2027, imposed by Article 2(1) of Implementing Decision 2022/2506; and (ii) a prohibition preventing the Commission from entering into any new legal commitments with public interest trusts or with entities maintained by them in relation to EU funding implemented under direct or indirect management, imposed by the contested provision.

8        Thus, Implementing Decision 2022/2506 provides, in the contested provision, that ‘where the Commission implements the Union budget in direct or indirect management pursuant to … Article 62(1) points (a) and (c), of Regulation (EU, Euratom) 2018/1046, no legal commitments shall be entered into with any public interest trust established on the basis of [Hungarian Law] IX … or any entity maintained by such a public interest trust’. Implementing Decision 2022/2506 took effect on 16 December 2022.

 Forms of order sought

9        The applicant claims that the Court should:

–        annul the contested provision;

–        order the Council to pay the costs.

10      The Council, supported by the European Parliament and the Commission, contends that the Court should:

–        dismiss the action;

–        order the applicant to pay the costs.

11      Hungary claims that the Court should uphold the applicant’s action.

 Law

12      In support of its action, the applicant raises 17 pleas in law, alleging, respectively, infringement of Article 2 TEU as regards the rule of law and the principles of legal certainty and equal treatment; infringement of Article 4 TEU as regards the Council’s competence to adopt the contested provision; infringement of Article 5 TEU concerning the principles of subsidiarity and proportionality; infringement of Article 7 TEU as regards the Council’s competence to establish breaches of the principles of the rule of law; infringement of Article 9 TEU concerning the principle of equal treatment; infringement of Article 11 TEU due to the failure to consult Hungarian higher education institutions maintained by a public interest trust or their students, teachers, researchers and partners; infringement of Article 2 TFEU as regards the Council’s competence to adopt the contested provision; infringement of Article 9 TFEU as regards the requirement to promote a high level of education and training; infringement of Article 56 TFEU as regards the freedom to provide services; infringement of Article 67 TFEU as regards respect for the area of freedom, security and justice; breach of the principle of a market economy based on free competition laid down in Article 120 TFEU; infringement of Article 124 TFEU as regards privileged access to financial institutions; infringement of Article 165 TFEU as regards the contribution to the development of quality education; infringement of Article 179 TFEU concerning the objective of strengthening the European Union’s scientific and technological bases; infringement of Article 13 of the Charter of Fundamental Rights of the European Union (‘the Charter’); and infringement of Article 2 TEU and Articles 48 and 52 of the Charter and infringement of Regulation 2020/2092.

13      According to the case-law, the Court must interpret an applicant’s pleas in law by reference to their substance rather than their characterisation and must thus characterise the pleas in law and the arguments in the application (judgment of 17 January 2024, Troy Chemical Company and Troy v Commission, T‑297/21, not published, EU:T:2024:13, paragraph 48).

14      In those circumstances, the Court will examine in turn the pleas alleging:

–        that the Council lacked competence to adopt the contested provision;

–        breach of the right to be heard and the right to be consulted;

–        breach of the principles of legal certainty, equal treatment and non-discrimination and infringement of Articles 120 and 124 TFEU;

–        infringement of Regulation 2020/2092 and infringement of Article 2 TEU and Articles 48 and 52 of the Charter;

–        breach of the principle of proportionality;

–        infringement of Article 13 of the Charter concerning academic freedom;

–        infringement of Article 56 TFEU concerning the freedom to provide services and of Articles 9, 165 and 179 TFEU.

15      As a preliminary point, it is necessary to examine the admissibility of the plea and the arguments submitted after the close of the written part of the procedure.

 Admissibility of the plea and the arguments submitted after the close of the written part of the procedure

16      On 4 March 2025, the applicant lodged, in the course of the proceedings, a document pursuant to Article 84 of the Rules of Procedure of the General Court. In that document, it put forward a plea alleging infringement of Article 21 TFEU and amplified its pleas concerning the infringement of Article 2 TEU, Articles 165 and 179 TFEU and Article 48 of the Charter.

17      The applicant, supported by Hungary, claims that the judgments of 16 January 2025, Ministarstvo financija (Erasmus+ grant) (C‑277/23, EU:C:2025:18), and of 18 December 2024, TP v Commission (T‑776/22, under appeal, EU:T:2024:908), which were delivered after the close of the written part of the procedure, constitute matters of law or of fact which came to light in the course of the procedure.

18      First, the applicant submits that the judgment of 16 January 2025, Ministarstvo financija (Erasmus+ grant) (C‑277/23, EU:C:2025:18), is a new matter of law in that it demonstrates that there is a direct link between the Erasmus+ programme and students’ right to move and reside freely and frames participation in the Erasmus+ programme as a fundamental right stemming from the freedoms of movement. According to the applicant, it was held in that judgment that the contested provision infringes Article 21 TFEU, since the fact that it is impossible for students to participate in the Erasmus+ programme interferes with their right to move and reside freely, as guaranteed by that article.

19      Secondly, as regards the amplification of its pleas alleging infringement of Articles 165 and 179 TFEU, the applicant argues that the judgment of 16 January 2025, Ministarstvo financija (Erasmus+ grant) (C‑277/23, EU:C:2025:18), also demonstrates that there is a link between the Erasmus+ programme and the objective of promoting student mobility and the free movement of scientific knowledge and researchers, referred to in Articles 165 and 179 TFEU. Thus, it maintains that the contested provision does not encourage the mobility of students, teachers and researchers and is unjustified and disproportionate, since it makes the exercise of such mobility impossible.

20      Thirdly, as regards the amplification of its pleas alleging infringement of Article 2 TEU and Article 48 of the Charter, the applicant relies on the judgment of 18 December 2024, TP v Commission (T‑776/22, under appeal, EU:T:2024:908, paragraphs 73 and 83), inasmuch as that judgment supports its line of argument, set out in the application, that the Council was required to conduct a prior individual examination of its actual situation before adopting the measure at issue.

21      Hungary states that if the pleas and arguments advanced by the applicant were found to be inadmissible under Article 84 of the Rules of Procedure, the Court should regard them as an amplification of the pleas concerning the infringement of Article 5 TEU and, more specifically, breach of the principle of proportionality and infringement of Article 165 TFEU.

22      The Council, supported by the Commission, contends that the pleas and arguments advanced by the applicant must be declared inadmissible or, in the alternative, unfounded.

23      Under Article 84(1) of the Rules of Procedure, no new plea in law may be introduced in the course of proceedings unless it is based on matters of law or of fact which have come to light in the course of the procedure or it amplifies a plea put forward previously, whether directly or by implication, in the application initiating proceedings and is closely connected therewith (judgment of 19 May 1983, Verros v Parliament, 306/81, EU:C:1983:143, paragraph 9; see also judgment of 7 November 2019, Intas Pharmaceuticals v EUIPO – Laboratorios Indas (INTAS), T‑380/18, EU:T:2019:782, paragraph 26 (not published) and the case-law cited). Moreover, arguments which in substance have a close connection with a plea raised in the application initiating the proceedings cannot be considered new pleas and they may be raised at the stage of the reply or the hearing (see judgment of 8 November 2018, “Pro NGO!” v Commission, T‑454/17, EU:T:2018:755, paragraph 70 and the case-law cited).

24      In this instance, it should be noted that the plea alleging infringement of Article 21 TFEU was not raised in the application. It therefore constitutes a new plea in law within the meaning of Article 84 of the Rules of Procedure.

25      As regards the existence of a new matter of law within the meaning of Article 84(1) of the Rules of Procedure, it must be borne in mind that a judgment given in the course of proceedings cannot be relied on as a new matter since, in principle, that judgment gives only an interpretation ex tunc of EU law (see, to that effect and by analogy, judgment of 27 February 1997, FFSA and Others v Commission, T‑106/95, EU:T:1997:23, paragraph 57 and the case-law cited).

26      In the present case, as is apparent from paragraphs 38 to 40 of the judgment of 16 January 2025, Ministarstvo financija (Erasmus+ grant) (C‑277/23, EU:C:2025:18), that judgment simply confirms settled case-law relating to the importance of the principle of freedom of movement of persons in the field of education, having regard to the objectives pursued by Article 6(e) and the second indent of Article 165(2) TFEU, namely, in particular, to encourage the mobility of students and teachers. That is particularly so given that, in its judgment, the Court refers to its earlier case-law, thus demonstrating that that case-law is of a settled nature.

27      In those circumstances, the judgment of 16 January 2025, Ministarstvo financija (Erasmus+ grant) (C‑277/23, EU:C:2025:18), cannot be regarded as a matter of law that came to light in the course of the procedure, within the meaning of Article 84(1) of the Rules of Procedure.

28      The same is true of the judgment of 18 December 2024, TP v Commission (T‑776/22, under appeal, EU:T:2024:908).

29      By contrast, the applicant’s reliance on the judgment of 16 January 2025, Ministarstvo financija (Erasmus+ grant) (C‑277/23, EU:C:2025:18), constitutes an amplification of arguments previously and directly put forward by it in the application initiating proceedings, in the context of the pleas alleging infringement of Articles 165 and 179 TFEU, and such reliance presents, in the present case, a sufficiently close link with those pleas to be regarded as resulting from the normal development of the debate in contentious proceedings.

30      The same applies to the judgment of 18 December 2024, TP v Commission (T‑776/22, under appeal, EU:T:2024:908), which constitutes an argument that is an amplification of the plea alleging infringement of Article 48 of the Charter.

31      Accordingly, the plea and the arguments submitted after the close of the written part of the procedure, in the document of 4 March 2025, must be rejected as inadmissible.

32      However, in so far as the applicant and Hungary also relied, at the hearing, on the judgments of 16 January 2025, Ministarstvo financija (Erasmus+ grant) (C‑277/23, EU:C:2025:18), and of 18 December 2024, TP v Commission (T‑776/22, under appeal, EU:T:2024:908), and since those judgments constitute arguments that are amplifications of the pleas alleging infringement of Articles 165 and 179 TFEU and Article 48 of the Charter, they must be regarded as admissible.

 The plea in law alleging that the Council lacked competence to adopt the contested provision

33      First of all, the applicant submits, in essence, that since education is an exclusive competence of the Member States, the Council adopted the contested provision without having the relevant powers and competences to do so, in breach of Article 4 TEU.

34      The applicant also claims that, in breach of the principle of subsidiarity enshrined in Article 5 TEU, the Council adopted the contested provision, which applies to Hungarian higher education institutions, without first examining whether the objective of protecting the financial interests of the Union could, in relation to those institutions, be sufficiently achieved by Hungary at central, regional or local level.

35      In the reply, the applicant states that it is Implementing Decision 2022/2506, and not Regulation 2020/2092, which breaches the principle of subsidiarity, since it produces effects in fields which do not fall within the exclusive competence of the European Union.

36      The applicant also argues that the contested provision infringes Article 2 TFEU, since the FEU Treaty did not confer on the European Union competences in the field of education policy and university research, which would provide a legal framework for the adoption of the contested provision.

37      In its reply, the applicant adds that the fact that the Court examined the procedure which led to the adoption of Regulation 2020/2092 and found it to be lawful is irrelevant. In the present case, it is clear that the contested provision produces adverse effects in the fields of education and scientific research, which are not among the competences conferred on the European Union.

38      Lastly, the applicant submits that the contested provision infringes Article 67(1) TFEU because it does not respect the legal system of Hungary as a Member State, since, by its effects, it directly prevents the functioning of all Hungarian higher education institutions maintained by a public interest trust.

39      The Council, supported by the Commission, disputes the applicant’s arguments.

40      As a preliminary point, the Court recalls that it is apparent from the citations of Regulation 2020/2092 that that regulation was adopted under the FEU Treaty and, in particular, under Article 322(1)(a) thereof.

41      Article 1 of Regulation 2020/2092 states that the purpose of that regulation is to establish ‘the rules necessary for the protection of the Union budget in the case of breaches of the principles of the rule of law in the Member States’.

42      Article 322(1)(a) TFEU provides that the Parliament and the Council, acting in accordance with the ordinary legislative procedure, and after consulting the European Court of Auditors, are to adopt by means of regulations ‘the financial rules which determine in particular the procedure to be adopted for establishing and implementing the budget and for presenting and auditing accounts’.

43      The Court has confirmed that, in accordance with the principle of conferral of powers enshrined in Article 5(2) TEU and the principle of consistency of the European Union’s policies laid down in Article 7 TFEU, the rule of law is capable of constituting the basis of a conditionality mechanism covered by the concept of ‘financial rules’ within the meaning of Article 322(1)(a) TFEU (judgments of 16 February 2022, Hungary v Parliament and Council, C‑156/21, EU:C:2022:97, paragraph 128, and of 16 February 2022, Poland v Parliament and Council, C‑157/21, EU:C:2022:98, paragraph 146).

44      Thus, a conditionality mechanism may fall within the scope of the concept of ‘financial rules’ referred to in Article 322(1)(a) TFEU where it makes the receipt of financing from the Union budget subject to horizontal conditionality which is linked to respect by a Member State for the value of the rule of law, contained in Article 2 TEU, and which relates to the implementation of the Union budget (judgments of 16 February 2022, Hungary v Parliament and Council, C‑156/21, EU:C:2022:97, paragraph 133, and of 16 February 2022, Poland v Parliament and Council, C‑157/21, EU:C:2022:98, paragraph 151).

45      Such a mechanism is justified by the fact that there is a clear relationship between respect for the rule of law and the efficient implementation of the Union budget, as is apparent from recital 13 of Regulation 2020/2092.

46      The Union budget is one of the main instruments for giving practical effect, in the Union’s policies and activities, to the principle of solidarity, set out in Article 2 TEU, which is itself one of the fundamental principles of EU law. The implementation of that principle, through the Union budget, is based on mutual trust between Member States in the responsible use of the common resources included in that budget. That mutual trust is itself based on the commitment of each Member State to comply with its obligations under EU law and to continue to comply, as is moreover stated in recital 5 of the Regulation 2020/2092, with the values contained in Article 2 TEU, which include the value of the rule of law (judgments of 16 February 2022, Hungary v Parliament and Council, C‑156/21, EU:C:2022:97, paragraph 129, and of 16 February 2022, Poland v Parliament and Council, C‑157/21, EU:C:2022:98, paragraph 147).

47      Thus, the obligation relating to respect for the rule of law, the breach of which may fall within the scope of the horizontal conditionality mechanism established in Article 4(1) of Regulation 2020/2092, read in the light of the principles set out in Article 2(a) thereof, is a specific expression of the requirements resulting, for the Member States, from their membership of the European Union, pursuant to Article 2 TEU (judgment of 16 February 2022, Hungary v Parliament and Council, C‑156/21, EU:C:2022:97, paragraph 231; see also, to that effect, judgment of 16 February 2022, Poland v Parliament and Council, C‑157/21, EU:C:2022:98, paragraph 201).

48      In that regard, according to the case-law of the Court, appropriate measures are to be taken under Regulation 2020/2092 only where it is established that a breach of one of the principles referred to in Article 2(a) of that regulation has been committed or may occur and concerns a situation attributable to an authority of a Member State or the conduct of such an authority, in so far as that situation or conduct is relevant to the sound financial management of the Union budget or to the protection of the financial interests of the Union and that that breach affects or seriously risks affecting, in a sufficiently direct way, that sound financial management or those financial interests (judgments of 16 February 2022, Hungary v Parliament and Council, C‑156/21, EU:C:2022:97, paragraph 253, and of 16 February 2022, Poland v Parliament and Council, C‑157/21, EU:C:2022:98, paragraph 174).

49      As regards, in particular, Implementing Decision 2022/2506, it is apparent from the citations thereof that it was adopted by the Council under Article 6(10) of Regulation 2020/2092, following a proposal from the Commission on the appropriate measures to be adopted, in accordance with Article 6(9) of that regulation, and that it is thus intended to protect the Union budget and to ensure observance of the principles of the rule of law.

50      More specifically, the contested provision results from the application of one of the measures provided for in Article 5(1) of Regulation 2020/2092, given that the Commission took the view that the conditions laid down in Article 4 of Regulation 2020/2092 were met and that the remedial measures proposed by Hungary were not adequate to address the findings set out in the Commission’s written notification submitted pursuant to Article 6 of that regulation.

51      In that connection, Article 5(1)(a)(ii) of Regulation 2020/2092 provides that, where the Commission implements the Union budget under direct or indirect management, pursuant to Article 62(1)(a) and (c) of Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial rules applicable to the general budget of the Union, amending Regulations (EU) No 1296/2013, (EU) No 1301/2013, (EU) No 1303/2013, (EU) No 1304/2013, (EU) No 1309/2013, (EU) No 1316/2013, (EU) No 223/2014, (EU) No 283/2014, and Decision No 541/2014/EU and repealing Regulation (EU, Euratom) No 966/2012 (OJ 2018 L 193, p. 1; ‘the financial regulation’), and where a government entity is the recipient of the funds from that budget, the Council may prohibit the Commission from entering into new legal commitments with that entity.

52      Consequently, in the context of the adoption of Implementing Decision 2022/2506 and, in particular, of the contested provision, although it is apparent from Article 6(e) and Article 4(3) TFEU that the European Union has only a supporting competence in the field of education and a shared competence in the field of research, the Council did not exercise a competence in those fields, as the applicant claims. It merely exercised a competence relating to the establishment and implementation of the Union budget, within the meaning of Article 322(1)(a) TFEU, which falls within the exclusive competence of the European Union (see, to that effect, judgment of 16 February 2022, Poland v Parliament and Council, C‑157/21, EU:C:2022:98, paragraph 241).

53      Moreover, without encroaching upon the competence of the Member States in the fields of education and research, while the European Union clearly has competence to carry out actions to support, coordinate or supplement the actions of the Member States, including in the field of education, as follows from Regulation (EU) 2021/695 of the European Parliament and of the Council of 28 April 2021 establishing Horizon Europe – the Framework Programme for Research and Innovation, laying down its rules for participation and dissemination, and repealing Regulations (EU) No 1290/2013 and (EU) No 1291/2013 (OJ 2021 L 170, p. 1), and from Regulation (EU) 2021/817 of the European Parliament and of the Council of 20 May 2021 establishing Erasmus+: the Union Programme for education and training, youth and sport and repealing Regulation (EU) No 1288/2013 (OJ 2021 L 189, p. 1), it also necessarily has the competence to suspend temporarily the implementation of its budget for those programmes vis-à-vis certain Member States, under conditions laid down by law and, in particular, pursuant to Regulation 2020/2092 in the event of breach of the principles of the rule of law.

54      As regards the principle of subsidiarity, it should be pointed out that it follows from Article 5(3) TEU that the provisions of Protocol No 2 on the principles of subsidiarity and proportionality apply only in the ‘areas which do not fall within [the] exclusive competence’ of the European Union.

55      In that connection, first of all, with respect to Regulation 2020/2092, the legal basis for that regulation – as recalled in paragraph 40 above – is Article 322(1)(a) TFEU, since it is intended to protect the Union budget against breaches of the principles of the rule of law.

56      Furthermore, the Court has confirmed that the proposal for a regulation which led to the adoption of Regulation 2020/2092 was right to state, under the heading ‘Subsidiarity (for non-exclusive competence)’, that the ‘financial rules governing the Union budget under Article 322 [TFEU] could not be adopted at the level of the Member States’ (judgment of 16 February 2022, Poland v Parliament and Council, C‑157/21, EU:C:2022:98, paragraph 240).

57      It follows that Regulation 2020/2092, which contains financial rules determining the procedure to be adopted for establishing and implementing the Union budget, within the meaning of Article 322(1)(a) TFEU, falls within the exercise of an exclusive competence of the European Union relating to its functioning, which, by its nature, can be exercised only by the European Union itself (see, to that effect, judgment of 16 February 2022, Poland v Parliament and Council, C‑157/21, EU:C:2022:98, paragraph 241).

58      Therefore, since Implementing Decision 2022/2506 was adopted on the basis of Regulation 2020/2092, which falls within the exclusive competence of the European Union, the principle of subsidiarity does not apply.

59      As regards the applicant’s argument alleging infringement of Article 67(1) TFEU, inasmuch as the contested provision does not respect the legal system of Hungary and prevents the functioning of higher education institutions maintained by a public interest trust, it should be recalled that that article, which forms part of Title V of Part Three of the FEU Treaty, provides that the European Union is to constitute an area of freedom, security and justice with respect for fundamental rights and the different legal systems and traditions of the Member States. That argument is ineffective in the present case, since the contested provision does not relate to matters falling within the area of freedom, security and justice provided for in Article 67(1) TFEU.

60      Accordingly, the applicant’s pleas and complaints alleging that the Council lacked competence to adopt the contested provision must be rejected.

 The pleas in law and complaints alleging breach of the right to be heard and the right to be consulted

61      The applicant submits that neither Hungarian higher education institutions maintained by a public interest trust, including itself, nor the students and researchers of those institutions participated in the procedure leading up to the adoption of Implementing Decision 2022/2506 and that their views could not be taken into account when that implementing decision was adopted, even though the contested provision affects them.

62      The applicant submits that, because of the failure to consult Hungarian higher education institutions maintained by a public interest trust and the failure to consult their students, teachers, researchers and partners, the contested provision infringes Article 11 TEU.

63      The Council, supported by the Commission, disputes the applicant’s arguments. It also raises a plea of inadmissibility in respect of the plea in law alleging breach of the right to be consulted.

64      In that connection, in the first place, as regards the Council’s plea of inadmissibility, the Council argues that the plea in law alleging breach of the right to be consulted was not set out in a sufficiently clear and precise manner in the application.

65      However, it is apparent from the application that the applicant submits that the failure to consult Hungarian higher education institutions maintained by a public interest trust and the failure to consult their students, teachers, researchers and partners before the adoption of the contested provision infringes Article 11 TEU.

66      Accordingly, the applicant has, albeit briefly, stated coherently and intelligibly, in the application, the essential points of fact and of law on which it relies.

67      Consequently, the plea of inadmissibility raised by the Council alleging infringement of Article 76(d) of the Rules of Procedure must be rejected.

68      In the second place, concerning the breach of the right to be heard alleged by the applicant, it should be borne in mind that that right is enshrined in Article 41(2)(a) of the Charter and includes, inter alia, the right of every person to be heard before any individual measure which would affect him, her or it adversely is taken.

69      The right to be heard is one of the rights of the defence and is a general principle of EU law which is applicable even in the absence of any specific rules in that regard. That principle requires that the addressees of decisions which significantly affect their interests should be placed in a position in which they may effectively make known their views with regard to the evidence on which those decisions are based (see judgment of 28 October 2021, Vialto Consulting v Commission, C‑650/19 P, EU:C:2021:879, paragraph 122 and the case-law cited).

70      However, the right to be heard in an administrative procedure taken against a specific person, which must be observed, even in the absence of any rules governing the procedure, cannot be transposed to a procedure leading to the adoption of a measure of general application (see, to that effect, judgments of 22 June 2023, Arysta LifeScience Great Britain v Commission, C‑259/22 P, not published, EU:C:2023:513, paragraph 50, and of 11 September 2002, Alpharma v Council, T‑70/99, EU:T:2002:210, paragraph 388 and the case-law cited), such as Implementing Decision 2022/2506 (see, to that effect, order of 4 April 2024, Debreceni Egyetem v Council, T‑115/23, not published, EU:T:2024:209, paragraph 36).

71      In particular, in the case of acts of general application, neither the process of drafting them nor those acts themselves require, in accordance with the general principles of EU law, such as the right to be heard, consulted or informed, the participation of the persons affected. The position is different if an express provision of the legal framework governing the adoption of that act confers such a procedural right on an affected person (judgment of 22 June 2023, Arysta LifeScience Great Britain v Commission, C‑259/22 P, not published, EU:C:2023:513, paragraph 51; see also judgment of 19 December 2019, Probelte v Commission, T‑67/18, EU:T:2019:873, paragraph 87 and the case-law cited).

72      The procedure provided for in Article 6(1) to (9) of Regulation 2020/2092 for the adoption of appropriate measures to protect the Union budget merely lays down the obligation to consult the Member State concerned and provides for the various exchanges that are to take place between the Commission and that Member State. The applicant does not, moreover, dispute that that procedure was properly conducted. In addition, in the present case, it follows from recitals 1, 2, 6 and 8 to 10 of Implementing Decision 2022/2506 that the Commission engaged in discussions with the Hungarian authorities before submitting its proposal to the Council.

73      It should be added that the Commission and the Council did not make allegations of individual breaches of the principles of the rule of law, of systemic fraud or of particular conflicts of interest involving the applicant, justifying the adoption of specific measures under Regulation 2020/2092, which would have required its right to be heard to be observed. The fact that the contested provision affects the applicant in the same way as other beneficiaries due to serious systemic breaches of the principles of the rule of law, as alleged by the Commission and the Council, does not, on its own, confer such a special procedural right on the applicant.

74      In those circumstances, it must be held that the applicant cannot validly claim breach of its right to be heard.

75      In the third place, concerning the breach of the right to be consulted, the applicant relies in particular on Article 11(3) TEU, which provides that ‘the European Commission shall carry out broad consultations with parties concerned in order to ensure that the Union’s actions are coherent and transparent’.

76      However, as is apparent from paragraph 72 above, Article 6 of Regulation 2020/2092 merely lays down the obligation to consult the Member State concerned, which was done and is not, in any event, disputed by the applicant.

77      Furthermore, it must be stated that the applicant’s arguments in that regard are indistinguishable from those relating to breach of the right to be heard.

78      In those circumstances, the applicant’s plea alleging breach of its right to be consulted must be rejected on the same grounds as those which led to the rejection of its arguments relating to the right to be heard, set out in paragraphs 72 and 73 above.

79      Accordingly, the pleas and complaints alleging breach of the right to be heard and the right to be consulted must be rejected.

 The pleas alleging breach of the principles of legal certainty, equal treatment and non-discrimination and infringement of Articles 120 and 124 TFEU

80      First, the applicant submits that, according to Implementing Decision 2022/2506, it is the fact that senior political executives are able to sit on the boards of public interest asset management foundations which raises concerns about political conflicts of interest. However, the expression ‘senior political executives’ in recital 43 of that decision does not meet the requirements of legislative clarity. That expression does not, it is claimed, refer to any precise concept, which creates scope for the contested provision to be interpreted arbitrarily and misapplied and which breaches the principle of legal certainty.

81      In addition, the applicant states that the board members of the trust which maintains it do not include any ‘senior political executives’.

82      Secondly, the applicant submits that the contested provision discriminates against Hungarian higher education institutions maintained by a public interest trust, including itself, as compared with other Hungarian higher education institutions operating under a different legal form and with higher education institutions in other Member States (namely Finland and the Netherlands), with similar structures.

83      In support of that argument, the applicant refers to two annexes to the reply (namely Annexes A.17 and A.18) intended to assess the autonomy of higher education institutions. Those annexes are, respectively, a study conducted by an audit firm concerning the applicant’s governance structure and an international comparison drawn up by that firm.

84      Thirdly, the applicant claims that the contested provision breaches the principle of equal treatment laid down in Article 9 TEU. It argues that the contested provision discriminates against the students, teachers, researchers and partners of Hungarian higher education institutions maintained by a public interest trust as compared with the students, teachers, researchers and partners of other higher education institutions not maintained by a public interest trust.

85      Fourthly, the applicant submits that the contested provision breaches the principle of a market economy based on free competition, laid down in Article 120 TFEU, since it places Hungarian higher education institutions maintained by a public interest trust and their students, teachers, researchers and partners at a disadvantage as compared with higher education institutions operating under different structures and their students, teachers, researchers and partners.

86      Fifthly, the applicant states that the contested provision places Hungarian higher education institutions maintained by a trust, which will no longer be eligible for funds from EU programmes, at a disadvantage as compared with other institutions, which have ‘privileged access’ to EU financial resources solely because they operate under a different legal form, thereby breaching Article 124 TFEU.

87      The Council, supported by the Commission and the Parliament, disputes the applicant’s arguments and contends, in its rejoinder, that Annexes A.17 and A.18 to the reply are inadmissible because they were not submitted in accordance with Article 85(2) of the Rules of Procedure.

88      Concerning the admissibility of Annexes A.17 and A.18 submitted for the first time in the reply, it should be borne in mind that, under Article 85(2) of the Rules of Procedure, in the reply or the rejoinder the main parties may produce or offer further evidence in support of their arguments, provided that the delay in the submission of such evidence is justified. However, it follows from the case-law that evidence in rebuttal and the amplification of offers of evidence submitted in response to evidence in rebuttal from the opposite party, in the defence, are not covered by the time-bar laid down in Article 85(1) and (2) of the Rules of Procedure. That provision concerns fresh offers of evidence and must be read in the light of Article 92(7) of those rules, which expressly provides that evidence may be submitted in rebuttal and previous evidence may be amplified (judgments of 17 December 1998, Baustahlgewebe v Commission, C‑185/95 P, EU:C:1998:608, paragraph 72, and of 13 December 2018, Monolith Frost v EUIPO – Dovgan (PLOMBIR), T‑830/16, EU:T:2018:941, paragraphs 21 to 23).

89      In the present case, the applicant stated, in the reply, that those offers of evidence were intended, first, to respond to arguments and evidence put forward by the Council in its defence, according to which the governance structure of Hungarian higher education institutions managed by a public interest trust did not provide sufficient safeguards against conflicts of interest, and, secondly, to expand on its arguments concerning the comparison between the Hungarian model and foreign systems.

90      It should be noted that, in its defence, the Council relied on the fact that its assessment was supported by other authoritative organisations, such as the Hungarian Helsinki Committee and the European University Association (EUA), and by a recent study, according to which ‘of the 106 seats on the boards of the 21 foundations (as of January 2022), 31 were occupied by active politicians … and 4 ex-politicians of the governing party, but many other seats were distributed to business people and intellectuals openly sympathetic to the governing party’.

91      As regards the comparison with other Member States’ legal systems, the Council also relied in its defence on the study referred to in paragraph 90 above to argue that ‘while the introduction of boards with significant decision-making power aligns with international governance trends, the Hungarian reform has some distinctive features …: the exclusion of institutions from member selection, the high number of pro-government politicians among board members and the lifetime employment of board members’.

92      The submission of Annexes A.17 and A.18 to the reply must therefore be accepted as an offer of evidence in rebuttal.

93      In the first place, as regards the merits of the plea alleging breach of the principle of legal certainty, it is settled case-law that that principle requires, on the one hand, that the rules of law be clear and precise and, on the other, that their application be foreseeable for those subject to the law, in particular where they may have adverse consequences. That principle requires, inter alia, that legislation must enable those concerned to know precisely the extent of the obligations imposed on them and that those persons must be able to ascertain unequivocally their rights and obligations and take steps accordingly (see judgment of 16 February 2022, Poland v Parliament and Council, C‑157/21, EU:C:2022:98, paragraph 319 and the case-law cited).

94      However, those requirements cannot be interpreted as precluding an EU institution from having recourse, in a provision of an act that it adopts, to an abstract legal notion, or as requiring that such an abstract rule refer to the various specific hypotheses in which it applies, given that all those hypotheses cannot be determined in advance by that institution (see, to that effect, judgment of 16 February 2022, Poland v Parliament and Council, C‑157/21, EU:C:2022:98, paragraph 320 and the case-law cited).

95      Consequently, a provision of an EU act breaches the principle of legal certainty on the ground of lack of clarity only if it displays such ambiguity as to prevent individuals from resolving with sufficient certainty any doubts as to the scope or meaning of that provision (see, to that effect, judgments of 14 April 2005, Belgium v Commission, C‑110/03, EU:C:2005:223, paragraph 31, and of 22 May 2007, Mebrom v Commission, T‑216/05, EU:T:2007:148, paragraph 108).

96      In the present case, the contested provision provides that ‘where the Commission implements the Union budget …, no legal commitments shall be entered into with any public interest trust established on the basis of [Hungarian Law] IX … or any entity maintained by such a public interest trust’.

97      Thus, it is apparent from the contested provision that the fact that the applicant is an entity maintained by a public interest trust established on the basis of Hungarian Law IX prevents the Commission from entering into legal commitments with it, in the context of the implementation of the Union budget under direct or indirect management.

98      Consequently, the contested provision is sufficiently clear and precise and thus meets the requirements of the principle of legal certainty.

99      That conclusion is not called into question by the applicant’s argument that the concept of ‘senior political executives’, referred to in recital 43 of Implementing Decision 2022/2506, does not meet the requirements of legislative clarity.

100    It follows from the wording of recital 43 of Implementing Decision 2022/2506 that the term ‘senior political executives’ or ‘top-level officials’ refers to high-level politicians of the Hungarian National Assembly and Hungarian autonomous bodies.

101    Therefore, the applicant cannot maintain that the term ‘senior political executives’, referred to in recital 43 of Implementing Decision 2022/2506, prevented it from ascertaining with sufficient certainty the scope or meaning of the contested provision.

102    In any event, recital 43 of Implementing Decision 2022/2506 does not seek to define the term ‘senior political executives’ or ‘top-level officials’, but merely explains why Hungarian higher education institutions maintained by a public interest trust are excluded from EU funding.

103    Moreover, and as the Commission rightly pointed out, identical or very similar terms appear in Hungarian legislation. Thus, Paragraph 182 of the kormányzati igazgatásról szóló 2018. évi CXXV. törvény (Law CXXV of 2018 on government administration (Magyar Közlöny 2018/208.)) also uses the term ‘senior political executive’, which is thus unambiguous.

104    In the second place, as regards the principles of equal treatment and non-discrimination, it follows from settled case-law that the principle of equal treatment, as a general principle of EU law, requires that comparable situations must not be treated differently and that different situations must not be treated in the same way, unless such treatment is objectively justified. A difference in treatment is justified if it is based on an objective and reasonable criterion, that is, if the difference relates to a legally permitted aim pursued by the legislation in question and is proportionate to the aim pursued by the treatment concerned (see judgment of 3 February 2021, Fussl Modestraße Mayr, C‑555/19, EU:C:2021:89, paragraph 95 and the case-law cited).

105    The comparable nature of different situations is assessed in the light of all the elements that characterise them. Those elements must, in particular, be determined and assessed in the light of the subject matter and purpose of the act making the distinction in question. In addition, the principles and objectives of the field to which the act relates must be taken into consideration (see judgment of 3 February 2021, Fussl Modestraße Mayr, C‑555/19, EU:C:2021:89, paragraph 99 and the case-law cited).

106    Since the applicant has pleaded breach of the principle of equal treatment, it falls to the applicant to identify precisely the comparable situations which it considers to have been treated differently or the different situations which it considers to have been treated in the same way (see, to that effect, judgment of 12 April 2013, Du Pont de Nemours (France) and Others v Commission, T‑31/07, not published, EU:T:2013:167, paragraph 311).

107    In the present case, first, the applicant submits that it is at a disadvantage as compared with Hungarian public higher education institutions which are not maintained by a public interest trust, because they are not covered by the contested provision.

108    In that regard, it is apparent from recitals 11, 13, 29 and 43 of Implementing Decision 2022/2506 that the Hungarian regulatory framework does not prevent top-level officials and senior political executives from sitting on boards of public interest asset management foundations.

109    It is, inter alia, that particularity, specific to the legislation applicable to public interest trusts and the entities maintained by them, which served as the basis for the adoption of the contested provision.

110    However, the applicant has not demonstrated that Hungarian higher education institutions maintained by a public interest trust are in a comparable situation to that of Hungarian higher education institutions maintained by the State or operating under a different legal form.

111    The applicant submits that, under Hungarian law, there is no difference between institutions as regards the powers available to the maintaining entity in order to ‘steer’ the maintained entity.

112    However, at the same time, the applicant states that, so far as concerns the autonomy of those institutions, in the case of institutions maintained by the State, it is a minister – that is to say, a political figure – who, alone, ‘steers’ the higher education institutions, whereas, in the case of higher education institutions maintained by trusts, such ‘steering’ is done by the board of the trust. In other words, higher education institutions maintained by a public interest trust operate within a framework that is more flexible than higher education institutions maintained by the State. The applicant also submits that there are differences between the operational decision-making mechanisms and the sources of financing of those different types of institution.

113    It follows that higher education institutions maintained by the State and those maintained by a public interest trust are in different situations.

114    Secondly, as regards the applicant’s argument that Hungarian higher education institutions maintained by a public interest trust, including itself, are discriminated against as compared with higher education institutions in other Member States (namely Finland and the Netherlands), with similar structures, it must be stated that the applicant itself acknowledges that the situation of Hungarian institutions maintained by a public interest trust is different from that of institutions in other Member States.

115    Consequently, the applicant has also not demonstrated that Hungarian higher education institutions maintained by a public interest trust, including itself, are in a comparable situation to that of higher education institutions in other Member States.

116    In the third place, concerning the alleged infringement of Article 9 TEU, it should be recalled that that article provides, inter alia, that, in all its activities, the European Union is to observe the principle of the equality of its citizens, who are to receive equal attention from its institutions, bodies, offices and agencies.

117    In the present case, on the question of whether the contested provision breaches the principle of equal treatment, given that the students, teachers, researchers and partners of Hungarian higher education institutions maintained by a public interest trust are at a disadvantage as compared with the students, teachers, researchers and partners of other higher education institutions not maintained by a public interest trust, it should be noted that the applicant has not demonstrated that all of those students, teachers, researchers and partners are in a comparable situation.

118    In the fourth place, as regards the infringement of Articles 120 and 124 TFEU, the applicant’s arguments are based on the premiss that the contested provision is discriminatory and unjustified, in that it places the applicant at a competitive disadvantage and discriminates against it as compared with other universities, thereby breaching the principle of a market economy based on free competition. Those arguments are thus indistinguishable from the arguments alleging breach of the principle of equal treatment.

119    Accordingly, the pleas alleging breach of the principles of legal certainty, equal treatment and non-discrimination and infringement of Articles 120 and 124 TFEU must be rejected as unfounded.

 The pleas in law and complaints alleging infringement of Regulation 2020/2092 and infringement of Article 2 TEU and Articles 48 and 52 of the Charter

120    The applicant alleges, in essence, first, infringement of Regulation 2020/2092 and, secondly, infringement of Article 2 TEU and Articles 48 and 52 of the Charter. The Court shall examine those complaints in turn.

121    In that regard, it should be recalled that Article 4 of Regulation 2020/2092 lays down the conditions for the adoption of appropriate measures under that regulation.

122    Article 4(1) of Regulation 2020/2092 states that such measures are to be taken where it is established, in accordance with Article 6 thereof, that breaches of the principles of the rule of law in a Member State affect or seriously risk affecting the sound financial management of the Union budget or the protection of the financial interests of the Union in a sufficiently direct way.

123    Under Article 6 of Regulation 2020/2092, it is for the Commission to set out, in a written notification to the Member State concerned, the factual elements and specific grounds on which it based its findings that there are reasonable grounds for considering that the conditions set out in Article 4(1) of that regulation are fulfilled (judgment of 16 February 2022, Poland v Parliament and Council, C‑157/21, EU:C:2022:98, paragraph 338) and, in particular, that the breaches affect or seriously risk affecting the sound financial management of the Union budget or the protection of the financial interests of the Union in a sufficiently direct way, that latter condition requiring a genuine link between those breaches and that effect or serious risk of an effect (see, to that effect, judgment of 16 February 2022, Hungary v Parliament and Council, C‑156/21, EU:C:2022:97, paragraphs 111 and 147).

124    In addition, the Court has held that the prevention of effects such as those referred to in Article 4(1) of Regulation 2020/2092 requires that the breaches of the principles of the rule of law which have been established must ‘seriously’ risk affecting the sound financial management of the Union budget or the financial interests of the Union and requires, therefore, the Commission and the Council to demonstrate that that risk has a high probability of occurring, in relation to the situations or to the conduct of authorities referred to in Article 4(2) of Regulation 2020/2092 (judgment of 16 February 2022, Poland v Parliament and Council, C‑157/21, EU:C:2022:98, paragraph 299).

125    Therefore, it follows from a combined reading of Article 4 and Article 6(1) of Regulation 2020/2092 that, in order to justify the adoption of appropriate measures under that regulation, the Council and the Commission must establish in a specific manner, first, that there are reasonable grounds for considering that at least one of the principles of the rule of law referred to in Article 2(a) of that regulation has been breached in a Member State; secondly, that that breach concerns at least one of the situations attributable to an authority of a Member State or at least one instance of conduct of such an authority referred to in Article 4(2) of that regulation, in so far as those situations or that conduct is relevant to the sound financial management of the Union budget or to the protection of the financial interests of the Union; and, thirdly, that that breach affects or seriously risks affecting that sound management or the protection of those financial interests, in a sufficiently direct way, by a genuine link between those breaches and that effect or serious risk of effect (judgment of 16 February 2022, Poland v Parliament and Council, C‑157/21, EU:C:2022:98, paragraph 288).

126    It is in the light of those considerations that the Court must examine the parties’ arguments.

 The complaints alleging breach of the principles of the rule of law

127    In the context of its pleas and complaints alleging breach of the rule of law, first of all, the applicant claims, inter alia, that the contested provision infringes Regulation 2020/2092 in so far as its scope is overly broad, since it is addressed to all Hungarian higher education institutions that are maintained by a public interest trust, rather than to Hungary alone. According to the applicant, the contested provision could only target payments resulting from legal commitments entered into directly in favour of Hungary.

128    Furthermore, the applicant submits that the contested provision is vitiated by a manifest error of assessment, in that the Council gave an inaccurate account of the facts. First, the conflict of interest relied on to justify the measure under the contested provision, namely the fact that ‘top-level officials, including senior political executives from the National Assembly and Hungary’s autonomous bodies, [may sit] on boards of public interest asset management foundations’, does not exist in the case of the applicant and the trust that maintains it. Secondly, all public funding and subsidies are received directly by the applicant and the trust that maintains it has no influence over how the applicant’s resources are used. The applicant also states that, since the conflict of interest on which the contested provision is based does not exist in its case, the Council adopted that provision without first assessing whether the problem of political conflicts of interest actually arose vis-à-vis the applicant.

129    Lastly, the applicant submits, inter alia, that the Council was wrong to consider, in recital 11 of Implementing Decision 2022/2506, that the rules on public procurement did not apply to higher education institutions maintained by a public interest trust, since the applicant is indeed subject to Hungarian public procurement procedures.

130    The Council, supported by the Commission, disputes the applicant’s arguments.

131    At the outset, the Court must reject the applicant’s arguments alleging, first, that the contested provision infringes Regulation 2020/2092, inasmuch as its scope covers all Hungarian higher education institutions maintained by a public interest trust and not only Hungary, and, secondly, that the Council was wrong to consider that entities maintained by a public interest trust, including the applicant, were not subject to the rules on public procurement.

132    First, as regards the scope of Implementing Decision 2022/2506, Article 5 of that decision expressly states that ‘this Decision is addressed to Hungary’, as the applicant observed in paragraph 41 of the application.

133    Nevertheless, contrary to what the applicant claims, the fact that Implementing Decision 2022/2506 is addressed to Hungary does not mean that it can only relate to legal commitments of which Hungary is the direct beneficiary.

134    Article 5(1)(a)(ii) of Regulation 2020/2092 provides that, where the Commission implements the Union budget under direct or indirect management pursuant to Article 62(1)(a) and (c) of the financial regulation, and where a government entity is the recipient of funds from that budget, the Council may prohibit the Commission from entering into new legal commitments with that entity.

135    Article 2(b) of Regulation 2020/2092 defines ‘government entity’ as ‘a public authority at any level of government, … as well as Member State organisations within the meaning of point (42) of Article 2 of Regulation (EU, Euratom) 2018/1046’. When Implementing Decision 2022/2506 was adopted, point (42) of Article 2 of the financial regulation defined ‘Member State organisation’ as ‘an entity established in a Member State as a public law body, or as a body governed by private law entrusted with a public service mission and provided with adequate financial guarantees from the Member State’. It follows from the very wording of those provisions that Hungarian public interest trusts are ‘Member State organisations’ and thus ‘government entities’ capable of being ‘recipients’ within the meaning of Article 5(1)(a)(ii) of Regulation 2020/2092.

136    Thus, there is no requirement that Implementing Decision 2022/2506 relate solely to legal commitments of which Hungary is the direct beneficiary.

137    Secondly, as regards the application of the rules on public procurement to public interest trusts and to the entities maintained by them, such as the applicant, it should be recalled that, in recitals 3 and 11 of Implementing Decision 2022/2506, the Council stated that the Commission initially had concerns about the non-application of the rules on public procurement and conflicts of interest to public interest trusts and to the entities managed by them.

138    Recital 29 of Implementing Decision 2022/2506 stated that, taken together, the remedial measures proposed by Hungary were in principle capable of addressing the issues regarding systemic irregularities, deficiencies and weaknesses in public procurement, risks of conflicts of interest and concerns regarding public interest trusts.

139    Consequently, the Court concludes from this that the serious systemic weaknesses in public procurement procedures, on account of the non-application of the rules on conflicts of interest and public procurement to public interest trusts and to the entities managed by them, were resolved by Hungary’s remedial measures. They are therefore no longer, in themselves and in so far as they relate to public interest trusts alone, the subject of the breaches of the principles of the rule of law alleged by the Council, meaning that, contrary to what the applicant claims, the Council did not adopt the contested provision because it considered that the rules on public procurement were not applicable to public interest trusts and to the entities maintained by them.

140    Indeed, the Commission confirmed at the hearing that that issue had been resolved.

141    Next, it should be observed that, in the present case, the applicant submits – in the context of its argument that it is not affected by any conflict of interest – that none of the members of the public interest trust that maintains it can be classified as a ‘senior political executive’. According to the applicant, in the absence of any examination by the Council, the infringement alleged by the latter in order to adopt the contested provision is thus not made out in respect of the applicant. Consequently, it was wrongly included on the list of entities covered by the contested provision.

142    That argument is based on a misconception of the nature of the breaches of the principles of the rule of law alleged by the Council in Implementing Decision 2022/2506.

143    In that regard, the Court finds that the situations or conduct of the authorities listed in Article 4(2)(a) to (h) of Regulation 2020/2092, as breaches of the principles of the rule of law within the meaning of that regulation, include situations or conduct of both an individual and a systemic nature. Moreover, recital 15 of Regulation 2020/2092 states that not only individual breaches of the principles of the rule of law, but also breaches that are widespread or due to recurrent practices or omissions by public authorities, or due to general measures adopted by such authorities, may seriously harm the financial interests of the Union.

144    In that regard, the Court has held that, where breaches of the principles of the rule of law liable to be systematic in nature are also liable to affect or seriously risk affecting the sound financial management of the Union budget or the protection of the financial interests of the Union, the European Union cannot be criticised for implementing the means necessary to protect that sound management and those financial interests (see, to that effect, judgment of 16 February 2022, Poland v Parliament and Council, C‑157/21, EU:C:2022:98, paragraph 362).

145    In the present case, it should be noted that recital 11 of Implementing Decision 2022/2506 states:

‘… there are concerns regarding the non-application of … conflict of interest rules to “public interest trusts” and the entities managed by them, and the lack of transparency with regard to the management of funds by those trusts. Those issues and their recurrence over time demonstrate a systemic inability, failure or unwillingness, on the part of the Hungarian authorities, to prevent decisions that are in breach of the applicable law, as regards … conflicts of interest, and thus to adequately tackle risks of corruption. They constitute breaches of the principles of the rule of law, in particular the principles of legal certainty and prohibition of arbitrariness of the executive powers and raise concerns as regards the separation of powers.’

146    In addition, recital 43 of Implementing Decision 2022/2506 states:

‘[Despite some legislative amendments,] the regulatory framework [in Hungary] still does not prevent top-level officials, including senior political executives from the National Assembly and Hungary’s autonomous bodies, from sitting on boards of public interest asset management foundations … Moreover, Hungary has reintroduced as of 1 November 2022 the possibility (by means of an exception from the general prohibition) for senior political executives to have other remunerated employment, including on boards of public interest asset management foundations. The Council considers that for these reasons as further set out in the Commission’s communication, the weaknesses of the regulatory framework combined with the new legislative developments aggravate the possible conflict of interest that the remedial measure was meant to address and therefore renders it inadequate to address the concerns originally raised by the Commission.’

147    Lastly, recital 62 of Implementing Decision 2022/2506 states:

‘Concerning the identified breaches in relation to public interest trusts, the regulatory framework in Hungary has weaknesses, as set out above, which have not remedied the risk of conflict of interest that the remedial measure was meant to address. In light of the inadequacy of the remedial measure, a serious risk for the Union budget remains and can best be addressed by a prohibition on entering into new legal commitments with any public interest trust and any entity maintained by them under any programme under direct or indirect management. …’

148    It follows from recitals 11, 43 and 62 of Implementing Decision 2022/2506 that the alleged breach of the principles of the rule of law which affects or seriously risks affecting the sound financial management of the Union budget or the financial interests of the Union stems from a factual situation and from the regulatory framework in Hungary, which does not prevent top-level officials, including senior political executives, from sitting on boards of public interest asset management foundations established by Hungarian Law IX. That breach of the principles of the rule of law is exacerbated by the fact that, with effect from 1 November 2022, Hungary reintroduced the possibility for senior political executives to hold other remunerated positions, including on boards of public interest asset management foundations established by that law.

149    Moreover, recital 58 of Implementing Decision 2022/2506 expressly states that ‘the identified cases of non-compliance refer to breaches of a systemic character’.

150    In that connection, paragraph 128 of the Commission proposal states that, ‘as regards the nature of the breaches, the Commission considers that the assessment of the breaches … relevant to conflicts of interest for public interest trusts has led to the conclusion that these issues are indicative of breaches of the rule of law, in particular of those of Article 3(b) of Regulation … 2020/2092, as they fail to prevent, correct or sanction arbitrary or unlawful decisions by public authorities and fail to ensure the absence of conflicts of interest’.

151    In paragraph 57 of its proposal, the Commission also took the view that the breaches of the principles of the rule of law concerned, inter alia, the situation referred to in Article 4(2)(h) of Regulation 2020/2092, that is to say, ‘other situations … that are relevant to the sound financial management of the Union budget or the protection of the financial interests of the Union’, manifested in this case by the increased risk of conflicts of interest due to the fact that senior political executives sat on the boards of public interest trusts.

152    In addition, paragraph 130 of the Commission proposal states:

‘… the identified breaches of the principles of the rule of law concern important parts of the public sector in Hungary, i.e. all public entities implementing Union funds that may be or become contracting authorities, as well as all public interest trusts, which despite being private entities, have a public interest objective, such as education, research, environment and climate protection and heritage protection. Thus, the identified breaches of the principles of the rule of law are systemic and widespread, and thus serious.’

153    Lastly, in paragraph 142 of its proposal, the Commission observed that it was practically impossible to consider that the prohibition on entering into new legal commitments, in connection with programmes under direct and indirect management, with public interest trusts and entities maintained by them should apply only to certain public interest trusts and certain entities maintained by them, or that partial legal commitments could be entered into with such entities.

154    As is apparent from paragraph 70 of the Commission communication, the fact that top-level officials and senior political executives are able to sit on the boards of public interest trusts ‘creates a situation in which [those] senior political executives may participate in decision-making relating to the disbursement of public funds to entities, in which they themselves are employed and have key decision-making powers’. As the Council has stated, public interest trusts exercise, by legislative design, decisive influence and control over the entities maintained by them, such that, in practice, the two are inextricably linked as a unit. As a result, any decision regarding the use of EU funds by an entity managed by a public interest trust is affected by the risk of conflicts of interests relating to public interest trusts.

155    Therefore, it follows from Implementing Decision 2022/2506, read in the light of the Commission proposal and the Commission communication, that the concerns regarding breaches of the principles of the rule of law related to the legal framework applicable to public interest trusts, in particular the organisation, functioning and systemic lack of transparency in connection with the management of funds by those trusts and the entities maintained by them, and not breaches committed, on an individual basis, by them or by the entities maintained by them, such as the applicant.

156    Consequently, since the breaches of the principles of the rule of law alleged by the Council are systemic in the present case, the Commission and the Council were not required to establish the existence of individual conflicts of interest within each entity concerned in order to adopt the contested provision. Such an interpretation would make it impossible to adopt measures aimed at remedying systemic breaches of the principles of the rule of law.

157    It follows that the complaints alleging breach of the principles of the rule of law must be rejected.

 The complaints alleging infringement of Article 2 TEU and Articles 48 and 52 of the Charter

158    The applicant submits that, as a result of the manifest error of assessment relating to the existence of conflicts of interest affecting it, the contested provision breaches the principle of the rule of law guaranteed by Article 2 TEU, the presumption of innocence enshrined in Article 48 of the Charter and the principle of proportionality laid down in Article 52 of the Charter.

159    As regards the breach of the principle of the rule of law guaranteed by Article 2 TEU, the applicant states that the Council adopted the contested provision without first assessing whether the problem of political conflicts of interest actually arose vis-à-vis the applicant.

160    As regards the breach of Article 48 of the Charter, the applicant claims that the Council, when adopting the contested provision, presumed that it was guilty, even though there was no conflict of interest in its case, and therefore imposed a collective penalty on it.

161    In paragraph 44 of the application, the applicant also asserts that it is subject to a penalty in the form of a deprivation of resources as a result of legislative acts adopted not by it, but by the Hungarian National Assembly.

162    As regards Article 52 of the Charter, the applicant argues that the contested provision breaches the principle of proportionality referred to in that article, since that provision imposes a collective penalty on it even though it is not affected by any conflict of interest. Thus, the contested provision constitutes an unauthorised restriction of the rights and freedoms referred to in Articles 13 and 48 of the Charter.

163    The Council, supported by the Commission, disputes the applicant’s arguments.

164    As a preliminary point, the applicant’s argument alleging breach of the principle of the presumption of innocence enshrined in Article 48(1) of the Charter must be rejected as ineffective. The applicability of that principle depends on whether the proceedings at issue are criminal in nature (see, to that effect, ECtHR, 8 June 1976, Engel and Others v. the Netherlands, CE:ECHR:1976:0608JUD000510071, § 82, and ECtHR, 12 May 2017, Simeonovi v. Bulgaria, CE:ECHR:2017:0512JUD002198004, § 110). That is not the case with regard to the procedure which led to the adoption of Implementing Decision 2022/2506.

165    The applicant’s argument that Implementing Decision 2022/2506 imposes penalties on Hungarian higher education institutions maintained by a public interest trust must also be rejected. According to the case-law, the purpose of Regulation 2020/2092 and therefore of Implementing Decision 2022/2506 is to protect the Union budget against effects resulting from breaches of the principles of the rule of law in a Member State in a sufficiently direct way, and not to penalise those breaches as such (judgments of 16 February 2022, Hungary v Parliament and Council, C‑156/21, EU:C:2022:97, paragraph 119, and of 16 February 2022, Poland v Parliament and Council, C‑157/21, EU:C:2022:98, paragraph 137). Thus, Implementing Decision 2022/2506 does not impose any penalty on the applicant or Hungary.

166    Next, it must be stated that all the applicant’s arguments rest on the premiss that, since top-level officials or senior political executives do not sit either on its board or on the board of the public interest trust which maintains it, the contested provision should not apply to it.

167    In that regard, suffice it to recall that the contested provision imposes a prohibition on entering into new legal commitments not because of the specific situation of certain public interest trusts or entities maintained by such trusts, but rather, as is apparent from paragraphs 149 to 155 above, because of the legal framework applicable to those trusts and thus because of the systemic nature of the breaches of the principles of the rule of law alleged by the Council.

168    In the light of the foregoing, the applicant’s arguments based on the premiss that, when the contested provision was adopted, top-level officials or senior political executives did not sit either on its board or on the board of the public interest trust which maintains it, with the result that the contested provision should not apply to it, cannot succeed.

169    Accordingly, the complaints alleging infringement of Article 2 TFEU and Articles 48 and 52 of the Charter must be rejected.

 The pleas in law and complaints alleging breach of the principle of proportionality

170    First of all, the applicant, supported by Hungary, claims that the contested provision breaches the principle of proportionality laid down in Article 5 TEU. In that regard, it puts forward four arguments.

171    First, as regards whether the contested provision is appropriate, the applicant maintains that the suspension of payments under all project proposals submitted within the framework of the Erasmus+ and Horizon Europe programmes is justified only in the event of a manifest and immediate breach specifically linked to the use of funds made available in connection with those programmes. According to the applicant, that is not the case here.

172    Secondly, as regards whether the contested provision is necessary, the applicant states that the disbursement of payments under project proposals is a secure and transparent process, managed and controlled by the EU institutions, so that it is possible to intervene effectively in a selective and targeted manner without having to block all payments under both programmes. Thus, the withdrawal of resources as a result of the contested provision has long-term effects for the Erasmus+ and Horizon Europe programmes and for scientific publications, since the withdrawn grants and scholarships will not become available again once the conflicts of interest justifying the contested provision, if any, are resolved. Furthermore, according to the applicant, the effects of the contested provision are irreversible for the final beneficiaries, that is to say for students, teachers and researchers, who are no longer able to participate in the Erasmus+ and Horizon Europe programmes or in other research programmes.

173    The applicant also submits that the existence of a theoretical possibility of the measure being lifted is not sufficient to make it temporary in nature. The temporary nature of a measure must be an inherent feature of the measure itself and must not depend on an entirely discretionary decision of the Commission and the Council. In addition, the applicant maintains that it can already be ruled out that the contested provision is temporary in nature because it has been in force for approximately one and a half years and there is no realistic prospect of it being withdrawn in the near future.

174    Thirdly, concerning the matter of proportionality stricto sensu, the applicant submits that the immediate suspension of payments has long-term adverse consequences at a financial, professional and reputational level for the higher education institutions concerned. The Council also failed to explain why the contested provision was the least restrictive.

175    Fourthly, the applicant argues that the Council did not carry out any prior assessment of the impact of the contested provision, even though it is clear from recital 19 of Regulation 2020/2092 that, ‘when considering the adoption of measures, the Commission should take into account their potential impact on final recipients and beneficiaries’.

176    In that regard, the applicant submits that the contested provision infringes Article 7 TEU due to the Council’s failure to take into account the possible consequences of such a provision for the rights and obligations of natural and legal persons.

177    According to the applicant, the requirement laid down in Article 7 TEU is set out in recital 19 of Regulation 2020/2092, which states that ‘when considering the adoption of measures, the Commission should take into account their potential impact on final recipients and beneficiaries’. In other words, even if Article 7 TEU were not applicable, its content would still be directly relevant in relation to Implementing Decision 2022/2506.

178    In particular, the applicant, supported by Hungary, submits that the Council failed to take account of the situation of the final recipients and beneficiaries. It claims that a measure adopted on the basis of Regulation 2020/2092 is lawful only if it observes the principles referred to in recitals 18, 19 and 26 of that regulation, which entails an individual and selective examination of the situation of the final recipients and beneficiaries. However, no such examination was carried out by the Council as regards the applicant.

179    The Council, supported by the Commission, disputes the applicant’s arguments.

180    In recital 62 of Implementing Decision 2022/2506, the Council stated that the best way to address the serious risk posed to the budget, caused by potential conflicts of interest in public interest trusts, was the contested provision, namely the prohibition preventing the Commission, when implementing the Union budget under direct or indirect management, from entering into new legal commitments with those trusts or the entities maintained by them. According to the Council, such a measure is proportionate to what is strictly necessary in order to achieve the objective of protecting the Union budget against the effects or risks of effects stemming from breaches of the principles of the rule of law in a Member State.

181    The Court recalls that Article 5(3) of Regulation 2020/2092 provides that measures taken pursuant to that regulation are to be proportionate. They are to be determined in the light of the actual or potential impact of the breaches of the principles of the rule of law on the sound financial management of the Union budget or the financial interests of the Union. The nature, duration, gravity and scope of the breaches of the principles of the rule of law are to be duly taken into account. In so far as possible, the measures are to target the Union actions affected by the breaches. It follows that the measures taken must be strictly proportionate to the impact of the breaches of the principles of the rule of law found on the Union budget or on the protection of the financial interests of the Union (judgment of 16 February 2022, Poland v Parliament and Council, C‑157/21, EU:C:2022:98, paragraph 302).

182    The principle of proportionality, which is one of the general principles of EU law and is enshrined in Article 5(4) TEU and Article 52(1) of the Charter, requires that acts of the EU institutions be appropriate for attaining the legitimate objectives pursued by the legislation at issue and not go beyond what is necessary in order to achieve those objectives; when there is a choice between several appropriate measures, recourse must be had to the least onerous, and the disadvantages caused must not be disproportionate to the aims pursued (judgment of 16 February 2022, Hungary v Parliament and Council, C‑156/21, EU:C:2022:97, paragraph 340; see, also, judgment of 16 February 2022, Poland v Parliament and Council, C‑157/21, EU:C:2022:98, paragraph 353 and the case-law cited).

183    In the first place, it is necessary to examine whether the contested provision is appropriate.

184    In that regard, the applicant has not submitted any specific evidence to the Court which casts doubt on the ability of the contested provision to achieve the objective of protecting the Union budget against breaches of the principles of the rule of law.

185    More specifically, the applicant simply maintains that the suspension of payments under all project proposals submitted within the framework of the Erasmus+ and Horizon Europe programmes is justified only in the event of a manifest and immediate breach specifically linked to the use of funds made available in connection with those programmes.

186    As stated in paragraphs 155 and 156 above, the breaches of the principles of the rule of law alleged by the Council are systemic in nature, in so far as they stem from the Hungarian regulatory framework, which does not prevent senior political executives from sitting on boards of public interest trusts established by Hungarian Law IX, thereby entailing a potential risk of conflicts of interest. Therefore, the adoption of the measure provided for in the contested provision did not require the Council to establish the existence of such individual conflicts of interest affecting EU funds within entities such as the applicant.

187    In those circumstances, the applicant’s arguments are not sufficient to demonstrate that the contested provision is inappropriate and they must be rejected.

188    In the second place, as regards whether the contested provision is necessary, the applicant submits that it would have been possible to intervene effectively, in a selective and targeted manner, in relation to certain public interest trusts or entities maintained by such trusts, without it being necessary to impose the same measure on all institutions covered by that provision, thus producing long-term and irreversible effects.

189    In that regard, it should be noted that the contested provision imposes a prohibition on entering into new legal commitments not because of the specific situation of certain public interest trusts or entities maintained by such trusts, but rather because of the Hungarian legal framework, which does not prevent top-level officials and senior political executives from sitting on boards of public interest asset management foundations, thereby creating a situation in which those high-level political figures are able to participate in decision-making relating to the disbursement of public funds to entities in which they themselves are employed and hold key decision-making powers. Thus, due to the systemic nature of the breach at issue, the alternative proposed by the applicant was not chosen by the Council.

190    In any event, even if the alternative proposed by the applicant was less onerous, it has not been shown that it would make it possible to achieve the objective set out in paragraph 184 above – namely to protect the Union budget against effects liable to result from breaches of the principles of the rule of law in a Member State – as effectively as the contested provision. It has thus not been established that the contested provision manifestly goes beyond what is necessary to achieve that objective.

191    In the third place, as regards the proportionality of the contested provision, the applicant submits that the immediate suspension of payments has long-term adverse consequences at a financial, professional and reputational level for the higher education institutions concerned.

192    The Court observes that the least onerous of the five measures listed in Article 5(1)(a) of Regulation 2020/2092, in the light of the objectives pursued, is the prohibition on entering into new legal commitments. The other measures listed in that provision – namely the suspension of payments or of the implementation of the legal commitment or the termination of that commitment pursuant to Article 131(3) of the financial regulation; the suspension of the disbursement of instalments in full or in part or the early repayment of loans guaranteed by the Union budget; the suspension or reduction of the economic advantage under an instrument guaranteed by the Union budget; and the prohibition on entering into new agreements on loans or other instruments guaranteed by the Union budget – would have disruptive effects on the programmes in progress, also entailing difficulties for third parties.

193    Thus, the applicant has not demonstrated that the contested provision was disproportionate in the light of the objectives pursued.

194    In the fourth place, it should be observed that the applicant’s arguments that the Council did not carry out any prior assessment of the impact of the contested provision on the situation of the final recipients and beneficiaries, which also encompass the plea alleging infringement of Article 7 TEU, is indistinguishable from the arguments put forward in support of the breach of the principle of proportionality.

195    Thus, and in so far as the applicant refers to Regulation 2020/2092, it should be recalled that recital 19 of that regulation is worded as follows:

‘It is essential that the legitimate interests of final recipients and beneficiaries are properly safeguarded when measures are adopted in the event of breaches of the principles of the rule of law. When considering the adoption of measures, the Commission should take into account their potential impact on final recipients and beneficiaries.’

196    In addition, Article 5(2) of Regulation 2020/2092 provides that the imposition of appropriate measures is not to affect the obligations of government entities or Member States to implement the programme or fund, and in particular the obligations they have towards final recipients or beneficiaries, unless the decision adopting the measures provides otherwise.

197    In the present case, first, it must be held, as is apparent from paragraph 192 above, that the contested provision was the least disruptive to the programmes already in progress on the date on which Implementing Decision 2022/2506 took effect, since it allowed the final recipients of the Erasmus+ and Horizon Europe programmes to continue to receive, even after the adoption of the contested provision, grants awarded before its adoption, until the end of the agreements signed under those programmes.

198    Secondly, recital 63 of Implementing Decision 2022/2506, which states that that decision does not affect Hungary’s obligations, in particular, towards final recipients or beneficiaries, including the obligation to make payments, demonstrates that the Council took into account the effects of that decision on the final recipients and beneficiaries.

199    It follows that the applicant has not demonstrated that the contested provision was disproportionate.

200    Accordingly, the complaints alleging breach of the principle of proportionality must be rejected.

 The plea in law alleging infringement of Article 13 of the Charter concerning academic freedom

201    The applicant argues that the contested provision constitutes an interference with academic freedom, provided for in Article 13 of the Charter.

202    In that regard, the applicant submits that, as a result of the contested provision, its teachers and researchers no longer have access to the resources available to other Hungarian institutions. The affected teachers, researchers and students of the applicant are thus at a disadvantage, since scientific and research work requires substantial funding, the most significant source of which is the Horizon Europe programme. Without such resources, scientific and research work becomes impossible for the applicant’s teachers and researchers, placing it at a disadvantage since those teachers and researchers will no longer choose the applicant or will leave it.

203    Thus, the applicant claims that the effect and objective of the contested provision is to restrict funding and to alter the functioning of Hungarian higher education institutions whose legal form has changed, which constitutes an interference with Hungary’s powers to decide on the content and organisation of higher education and therefore an interference with academic freedom and, in particular, the freedom of scientific research.

204    The Council, supported by the Commission, disputes the applicant’s arguments.

205    The Court recalls that academic freedom is enshrined in general terms in Article 13 of the Charter, which provides that ‘the arts and scientific research shall be free of constraint’ and that ‘academic freedom shall be respected’.

206    Article 14 of the Charter, entitled ‘right to education’, states in paragraph 1 that ‘everyone has the right to education and to have access to vocational and continuing training’.

207    Under Article 14(3) of the Charter, ‘the freedom to found educational establishments with due respect for democratic principles … shall be respected, in accordance with the national laws governing the exercise of such freedom …’.

208    At the outset, it should be noted that the Court has previously found that academic freedom in research and in teaching should guarantee freedom of expression and of action, freedom to disseminate information and freedom to conduct research and to distribute knowledge and truth without restriction, although it should be made clear that that freedom is not restricted to academic or scientific research, but that it also extends to academics’ freedom to express freely their views and opinions (see judgment of 6 October 2020, Commission v Hungary (Higher education), C‑66/18, EU:C:2020:792, paragraphs 224 and 225 and the case-law cited).

209    The concept of ‘academic freedom’ must, however, be viewed more broadly than from the perspective of freedom of expression or freedom of opinion. In that regard, the Court has held that account should be taken of the content of Recommendation 1762 (2006), adopted by the Parliamentary Assembly of the Council of Europe on 30 June 2006 and entitled ‘Academic freedom and university autonomy’, from which it is apparent that academic freedom also incorporates an institutional and organisational dimension, a link to an organisational structure being an essential prerequisite for teaching and research activities. Also relevant is point 18 of the Recommendation concerning the Status of Higher-education Teaching Personnel, adopted on 11 November 1997 by the General Conference of the United Nations Educational, Scientific and Cultural Organisation (Unesco), meeting in Paris (France) from 21 October to 12 November 1997, at its 29th session, according to which ‘autonomy is the institutional form of academic freedom and a necessary precondition to guarantee the proper fulfilment of the functions entrusted to higher-education teaching personnel and institutions’. Point 19 of that recommendation makes clear that ‘Member States are under an obligation to protect higher education institutions from threats to their autonomy coming from any source’ (judgment of 6 October 2020, Commission v Hungary (Higher education), C‑66/18, EU:C:2020:792, paragraph 227).

210    Therefore, it must be held that academic freedom, enshrined in the second sentence of Article 13 of the Charter, incorporates a requirement for higher education institutions to be autonomous in their institutional and organisational framework vis-à-vis public authorities and, in particular, the executive.

211    The Court observes in that regard that the European Commission for Democracy through Law (‘the Venice Commission’), in its opinion of 2 July 2021, also drew attention to the significant role played by universities in a democratic society as privileged places for the education of each new generation, the discovery of new knowledge and innovation, the development of rational and critical thinking, and freedom of inquiry and argumentation. In particular, the Venice Commission highlighted the importance of guaranteeing the political, cultural and intellectual independence of universities and their institutional autonomy.

212    The Venice Commission also recalled that the United Nations Committee on Economic, Social and Cultural Rights had described the concept of the ‘autonomy of institutions of higher education’ in the General Comment on Article 13 of the International Covenant on Economic, Social and Cultural Rights, signed in New York on 16 December 1966, concerning the right to education, in the following terms:

‘Autonomy is that degree of self-governance necessary for effective decision-making by institutions of higher education in relation to their academic work, standards, management and related activities. Self-governance, however, must be consistent with systems of public accountability, especially in respect of funding provided by the State. Given the substantial public investments made in higher education, an appropriate balance has to be struck between institutional autonomy and accountability.’

213    In its opinion of 2 July 2021, the Venice Commission found that the submission of public universities in Hungary to the management of a board of a public interest trust, initially appointed by the government and subsequently released from democratic supervision, risked threatening their academic freedom and weakening their autonomy.

214    Those claims were subsequently reproduced by the Commission in its 2022 Rule of Law Report, which, in the chapter concerning Hungary, states that, after the transfer to the board of the public interest trust of the rights which the minister holds as founder – the board being the sole body with the power to remove and appoint its members – that founding minister relinquishes all control over the board, thus rendering its members autonomous and irremovable.

215    Those concerns were, in particular, repeated in paragraph 33 of the Commission proposal, which states:

‘… the establishment of private law entities to which the state donated significant public assets may imply lack of public control over the functioning and governance of these entities. In particular, following the transfer of the founder’s rights from the competent Minister to the board of trustees, the state seems to lose any form of control over these trusts. Furthermore, the Commission also notes, in the 2022 Rule of [L]aw Report, that conflicts of interest rules are not applicable to members of Parliament, state secretaries and other public officials of the government who serve, at the same time, as board members of public interest trusts, despite the fact that these entities receive significant public funding, entailing increased risks of corruption.’

216    In that regard, the General Court recalls that the Court of Justice has previously held that national measures capable of endangering the academic activities of higher education institutions and, therefore, of depriving the academics concerned of the autonomous infrastructure necessary for conducting their scientific research and for carrying out their educational activities, were such as to limit the academic freedom protected in Article 13 of the Charter (see, to that effect, judgment of 6 October 2020, Commission v Hungary (Higher education), C‑66/18, EU:C:2020:792, paragraph 228).

217    It should also be noted that, in accordance with Article 51(1) of the Charter, the European Union is required to respect academic freedom in the exercise of its powers.

218    First of all, as regards the applicant’s argument that the effect and objective of the contested provision is to alter the functioning of higher education institutions in Hungary, it should be borne in mind, as the Council points out, that Implementing Decision 2022/2506 is of a financial nature, in so far as it seeks to protect the Union budget by prohibiting the Commission from entering into legal commitments with certain entities governed by Hungarian law, and does not contain any prohibition or requirement relating to the academic or scientific activities of higher education institutions, something which is not disputed in the present case.

219    The fact that Member States may, in the event of serious breaches of the principles of the rule of law, including in the exercise of their powers in relation to the organisation of higher education, vocational training and research and development, be subject to remedial measures, taken pursuant to Regulation 2020/2092, does not, in itself, interfere with the academic freedom provided for in Article 13 of the Charter.

220    Next, concerning the applicant’s argument that the contested provision entails a reduction in the resources allocated to scientific research, it must be stated that the temporary reduction in funding from the Union budget in the event of systemic breaches of the principles of the rule of law cannot be regarded as a breach or restriction of the fundamental right of academic freedom (see, to that effect, judgment of 27 September 1979, Eridania-Zuccherifici nazionali and Società italiana per l’industria degli zuccheri, 230/78, EU:C:1979:216, paragraph 22).

221    A refusal to allocate financial resources to a research and knowledge-dissemination organisation, such as a university or a research institute, or to researchers or research groups does not, in itself, constitute an interference with or a restriction of academic freedom, provided that any decision refusing to grant financial resources is based on scientific considerations or on policy guidelines in the fields of education and research and development drawn up by the legislature, or stems from objectives of general interest clearly laid down by law.

222    In addition, Article 5(2) of Regulation 2020/2092 provides that the imposition of appropriate measures is not to affect the obligations of government entities or Member States to implement the programme or fund, and in particular the obligations they have towards final recipients or beneficiaries, unless the decision adopting the measures provides otherwise.

223    In any event, the Court finds that the applicant has not adduced, in support of its assertions, sufficiently persuasive evidence capable of demonstrating the impact that the prohibition on entering into new legal commitments, under the Horizon Europe programme, has had on its higher education or scientific research activities.

224    Lastly, even if the contested provision had to be regarded as an interference with academic freedom, it is, as already stated above, provided for by law, justified and proportionate from the perspective of the public interest objective of protecting the Union budget against breaches of the principles of the rule of law in accordance with Regulation 2020/2092.

225    Moreover, the contested provision, whilst protecting the Union budget against the misuse of EU funds arising from, in particular, the systemic risk of conflicts of interest, also contributes to preserving the applicant’s organisational autonomy, minimises the scope for arbitrary interference by the executive in its organisation and is thus conducive to ensuring respect for academic freedom and the principles of the rule of law.

226    Consequently, the contested provision is not such as to interfere with the academic freedom protected by Article 13 of the Charter.

227    The plea alleging infringement of Article 13 of the Charter relating to academic freedom must therefore be rejected.

 The pleas in law alleging infringement of Article 56 TFEU concerning the freedom to provide services and infringement of Articles 9, 165 and 179 TFEU

228    The applicant claims that the contested provision infringes the freedom to provide services laid down in Article 56 TFEU.

229    In that regard, the applicant submits that the contested provision imposes a restriction on non-Hungarian students, teachers and researchers working in Hungarian higher education institutions maintained by a public interest trust, because they are not eligible to receive payments under project proposals submitted within the framework of the Erasmus+ and Horizon Europe programmes, thus restricting their access to research and university education services.

230    First, the applicant states that it provides teaching to students in return, in part, for tuition fees. That is particularly true for non-Hungarian EU citizens, with the result that the interests of a large number of foreign students are affected by the contested provision, since there is no tuition at the University of Debrecen that is free of charge for foreign students. Furthermore, with specific regard to the Erasmus+ programme, the applicant maintains that the contested provision restricts student mobility.

231    Secondly, the applicant submits that researchers and academics participating in the Horizon Europe programme carry out scientific and research activities for consideration and in a market context, often commissioned and partly financed by market operators. It also states that it operates specific laboratories and research institutes, for example for drug trials, laboratory tests, healthcare and the submission of joint bids with market stakeholders, where knowledge and innovation are – or are supposed to be – provided to private stakeholders by universities. According to the applicant, Implementing Decision 2022/2506 also deprives those operators of the knowledge of Hungarian universities.

232    In addition, the applicant claims that, since the contested provision does not contribute in any way to a high level of education and training, it infringes Article 9 TFEU. It also argues that the contested provision hampers the objectives set out in Articles 165 and 179 TFEU.

233    More specifically, as regards the infringement of Article 165 TFEU, the applicant submits that the contested provision does not contribute to the development of quality education and constitutes a serious interference with Hungary’s powers to decide on the content and organisation of higher education. Furthermore, it states that that provision hinders the mobility of students and teachers as well as the development of the European dimension in education and training.

234    As regards the infringement of Article 179 TFEU, the applicant maintains that the withdrawal of resources under the Erasmus+ and Horizon Europe programmes hinders the free movement of researchers, scientific knowledge and technology.

235    The Council, supported by the Commission, disputes the applicant’s arguments.

236    It should be recalled that Article 56 TFEU provides that restrictions on the freedom to provide services within the European Union are to be prohibited in respect of nationals of Member States who are established in a Member State other than that of the person for whom the services are intended. Furthermore, Article 57 TFEU provides, inter alia, that services are to be considered to be ‘services’ where they are normally provided for remuneration.

237    According to the case-law, the prohibition on restrictions on freedom to provide services applies not only to national measures, but also to measures adopted by the EU institutions (see judgment of 8 December 2020, Hungary v Parliament and Council, C‑620/18, EU:C:2020:1001, paragraph 104 and the case-law cited).

238    It is necessary to determine whether the applicant’s teaching and research activities are ‘services’ within the meaning of Article 57 TFEU.

239    In that connection, the Court has consistently held that services normally provided for remuneration constitute economic activities, since the essential characteristic of remuneration resides in the fact that it constitutes financial consideration for the service in question, without however having to be paid for by the recipient of that service (see judgment of 15 September 2016, Mc Fadden, C‑484/14, EU:C:2016:689, paragraph 41 and the case-law cited; see also, to that effect, judgment of 14 July 2022, ASADE, C‑436/20, EU:C:2022:559, paragraph 60 and the case-law cited).

240    The Court recalls that services provided for remuneration which, without falling within the exercise of public powers, are carried out in the public interest and without a profit motive and are in competition with those offered by operators pursuing a profit motive, may be regarded as economic activities (see judgment of 14 July 2022, ASADE, C‑436/20, EU:C:2022:559, paragraph 63 and the case-law cited).

241    It is true that the case-law has excluded from the concept of ‘services’, within the meaning of Article 57 TFEU, courses provided by certain institutions which formed part of a system of public education and which were financed, wholly or mainly, by public funds, given that, by establishing and maintaining such a system of public education, financed as a general rule by the public budget and not by pupils or their parents, the State did not intend to involve itself in remunerated activities, but was carrying out its task in the social, cultural and educational fields towards its population (see judgment of 11 September 2007, Schwarz and Gootjes-Schwarz, C‑76/05, EU:C:2007:492, paragraph 39 and the case-law cited).

242    However, the Court has also held that courses given by education institutions essentially financed by private funds constitute services, since the aim of those institutions is to offer such services for remuneration (see judgment of 2 February 2023, Freikirche der Siebenten-Tags-Adventisten in Deutschland, C‑372/21, EU:C:2023:59, paragraph 20 and the case-law cited).

243    In that regard, the Court has made clear that a research and knowledge-dissemination organisation, within the meaning of Article 2(83) of Commission Regulation (EU) No 651/2014 of 17 June 2014 declaring certain categories of aid compatible with the internal market in application of Articles 107 and 108 of the Treaty (OJ 2014 L 187, p. 1), may pursue a number of goals and pursue different types of activity, provided that, among those different goals, the pursuit of independent research activities or the wide dissemination of the results of those activities is the primary objective which prevails over any other objectives pursued by that organisation. That concept of ‘primary goal’ does not preclude a university or a research and knowledge-dissemination organisation from also carrying out other activities, which may be of an economic nature, such as educational activities for consideration, provided that those activities retain a secondary, non-preponderant nature in relation to the primary activities, generally non-economic, of independent research or of dissemination of the results of that research (judgment of 13 October 2022, Baltijas Starptautiskā Akadēmija and Stockholm School of Economics in Riga, C‑164/21 and C‑318/21, EU:C:2022:785, paragraphs 47 and 48).

244    Thus, although a university or a higher education institution, like the applicant, may be financed, wholly or mainly, by public funds in order to conduct research or engage in knowledge dissemination, that does not preclude it from also carrying out, at the same time, other activities of an economic nature, such as research activities financed by private funds and supported by businesses, or teaching activities for consideration.

245    Nevertheless, in the present case, the applicant has not submitted any evidence enabling the Court to determine whether its teaching and research activities were essentially financed by private funds. As is apparent, in particular, from paragraph 230 above, following a question put by the Court at the hearing, the applicant stated that it provided teaching to students, including non-Hungarian students, in return for tuition fees. However, it was unable to specify the amount of those fees or the proportion they represented compared with public funding. Similarly, in the absence of data on the applicant’s resources, the Council and the Commission stated that the other Hungarian universities which had brought an action challenging the contested provision received most of their funding – 70% – from the Hungarian State and had own resources of approximately 20%. EU funding was said to account for between 1.5% to 1.9% of their budget, as a general rule. Thus, according to the Commission and the Council, Implementing Decision 2022/2506 has a marginal financial impact on the applicant, given that the Hungarian State is required under Hungarian Law IX to finance the activities of those universities.

246    In any event, even if the applicant’s activities could be regarded as activities of an economic nature and as services within the meaning of Article 57 TFEU, and even if there was a restriction on or obstacle to the freedom to provide services in the present case, the fact remains, as the Court has already pointed out above, that Implementing Decision 2022/2506 pursues an objective of public interest and is proportionate to that objective.

247    Serious and systemic breaches of the principles of the rule of law and, in particular, as is apparent from recital 11 of Implementing Decision 2022/2506, of the principles of legal certainty, the prohibition of arbitrariness of the executive and the separation of powers, manifested, inter alia, by the systemic risk of conflicts of interest within public interest trusts and the entities maintained by them, undermine the necessary trust in the proper functioning of the procedures and governance structures of the universities maintained by those entities, which are involved in the use of funds financed by the EU budget. That therefore jeopardises the sound financial management of the Union budget or the protection of the financial interests of the Union.

248    As regards Articles 9, 165 and 179 TFEU, the Court recalls that Article 9 TFEU, which forms part of Title II of Part One, headed ‘Provisions having general application’, states that ‘in defining and implementing its policies and activities, the Union shall take into account requirements linked to the promotion of a high level of employment, the guarantee of adequate social protection, the fight against social exclusion, and a high level of education, training and protection of human health’.

249    The Court also observes that Articles 165 and 179 TFEU form part, respectively, of Title XII, headed ‘Education, vocational training, youth and sport’, of Part Three and Title XIX, headed ‘Research and technological development and space’, of Part Three.

250    Under Article 165(1) TFEU, ‘the Union shall contribute to the development of quality education by encouraging cooperation between Member States and, if necessary, by supporting and supplementing their action, while fully respecting the responsibility of the Member States for the content of teaching and the organisation of education systems and their cultural and linguistic diversity’.

251    Article 179(1) TFEU provides that ‘the Union shall have the objective of strengthening its scientific and technological bases by achieving a European research area in which researchers, scientific knowledge and technology circulate freely, and encouraging it to become more competitive, including in its industry, while promoting all the research activities deemed necessary by virtue of other Chapters of the Treaties’.

252    Article 179(2) TFEU states in that regard that the Union ‘shall, throughout the Union, encourage undertakings, including small and medium-sized undertakings, research centres and universities in their research and technological development activities of high quality’ and that ‘it shall support their efforts to cooperate with one another, aiming, notably, at permitting researchers to cooperate freely across borders and at enabling undertakings to exploit the internal market potential to the full, in particular through the opening-up of national public contracts, the definition of common standards and the removal of legal and fiscal obstacles to that cooperation’.

253    First of all, concerning the applicant’s argument that the effect and objective of the contested provision is to alter the functioning of higher education institutions in Hungary, thereby infringing Article 165 TFEU, the Court recalls, as it has already stated in paragraphs 218 and 219 above, that the contested provision was adopted in order to protect the Union budget from a situation in which top-level officials and senior political executives are able to participate in decision-making relating to the disbursement of public funds to public interest trusts on which they themselves are board members and to entities maintained by such trusts over which they have significant decision-making powers.

254    Although EU law does not encroach upon the competence of the Member States in the field of education, as follows from Article 165(1) and Article 166(1) TFEU, the fact remains that, when exercising that competence, both the Member States and the EU institutions must observe EU law, in particular the principles of the rule of law and the fundamental rights provided for in the Charter (see, to that effect, judgments of 25 July 2018, A (Assistance for a disabled person), C‑679/16, EU:C:2018:601, paragraph 58 and the case-law cited, and of 7 September 2022, Cilevičs and Others, C‑391/20, EU:C:2022:638, paragraph 59 and the case-law cited).

255    Next, it should be noted that it follows from the wording of Article 9 TFEU that that article sets out general objectives and principles which are necessarily applied in conjunction with the respective chapters of the FEU Treaty intended to give effect to those principles and objectives. That article cannot therefore, on its own, have the effect of establishing clear and unconditional legal obligations (see, by analogy, judgment of 21 December 2022, Firearms United Network and Others v Commission, T‑187/21, not published, EU:T:2022:848, paragraph 203 and the case-law cited).

256    Similarly, it follows from both the wording of Article 165 TFEU and that of Article 179 TFEU that, by those provisions, the drafters of the Treaties intended to confer a supporting competence on the European Union, allowing it to pursue not a ‘policy’, as provided for in other provisions of the FEU Treaty, but ‘actions’ and ‘programmes’ in a number of specific areas, including education, research and technological development. Thus, those provisions constitute a legal basis authorising the European Union to exercise that supporting competence, under the conditions and within the limits fixed therein, including, for example, as provided for in the first indent of Article 165(4) TFEU, the exclusion of any harmonisation of the legislative and regulatory provisions adopted at national level. That supporting competence also allows the European Union to adopt legal acts solely with the aim of supporting, coordinating or supplementing Member State action (see, to that effect, judgment of 21 December 2023, European Superleague Company, C‑333/21, EU:C:2023:1011, paragraph 99).

257    By way of corollary, and as is also apparent from the context of which Articles 165 and 179 TFEU form a part, in particular from their insertion in Part Three of the FEU Treaty, dealing with ‘Union policies and internal actions’, and not in Part One of that treaty, which contains provisions of principle, including, under Title II, ‘provisions having general application’, those articles are not cross-cutting provisions having general application (see, to that effect, judgment of 21 December 2023, European Superleague Company, C‑333/21, EU:C:2023:1011, paragraph 100).

258    It follows that, according to the case-law of the Court, although the competent EU institutions must take account of the different elements and objectives listed in Articles 165 and 179 TFEU when they adopt, on the basis of those articles and under the conditions fixed therein, measures in the field of higher education and research, those different elements and objectives as well as those measures need not be integrated or taken into account in a binding manner in the application of the provisions of the FEU Treaty relating to the fundamental principle of freedom of movement. More broadly, nor must Articles 165 and 179 TFEU be regarded as being special rules exempting higher education or scientific research from all or some of the other provisions of primary or secondary EU law, such as Regulation 2020/2092 and Implementing Decision 2022/2506, liable to be applied to those activities or requiring special treatment for them in the context of that application (see, to that effect, judgment of 21 December 2023, European Superleague Company, C‑333/21, EU:C:2023:1011, paragraph 101).

259    It follows from the foregoing that the applicant cannot validly claim infringement of Articles 9, 165 and 179 TFEU, taken individually. Moreover, Implementing Decision 2022/2506 was adopted on the basis of the exclusive competence of the European Union to establish and implement the Union budget; it was not adopted in the field of education, vocational training, research and technological development.

260    It must also be stated that the fundamental principle of freedom of movement is particularly important in the field of education and scientific research, in view of the aims pursued by Article 6(e) and the second indent of Article 165(2) TFEU, namely, inter alia, to encourage the mobility of students and teachers (see judgment of 16 January 2025, Ministarstvo financija (Erasmus+ grant), C‑277/23, EU:C:2025:18, paragraph 40 and the case-law cited), and the aims pursued in the field of research and technological development in accordance with Article 179(1) TFEU, namely, inter alia, to achieve a European research area in which researchers, scientific knowledge and technology circulate freely.

261    In that regard, Article 179(2) TFEU states inter alia that, for that purpose, the European Union is to encourage research centres and universities and is to support their efforts to cooperate with one another, aiming, notably, at permitting researchers to cooperate freely across borders, in particular through the removal of legal and fiscal obstacles to that cooperation.

262    Given that the European Union established and financed the Erasmus+ and Horizon Europe programmes, it must therefore ensure not only that the allocation or withdrawal of grants and programmes designed to facilitate the mobility and freedom of movement of the beneficiaries of those programmes does not create an unjustified restriction on the right to cooperate freely across borders and to move and reside in the territory of the Member States (see, to that effect, judgment of 16 January 2025, Ministarstvo financija (Erasmus+ grant), C‑277/23, EU:C:2025:18, paragraph 44), but also, in order to guarantee scientific and academic excellence, that countries in receipt of funds under the Erasmus+ and Horizon Europe programmes respect academic freedom.

263    Even if the contested provision could be classified as an obstacle to or restriction on the mobility and freedom of movement of students, teachers, researchers, scientific knowledge and technology within the European Union, that provision is, as already stated above, provided for by law and is justified and proportionate from the perspective of the protection of the Union budget under Regulation 2020/2092.

264    Furthermore, as regards the possible or potential effect of the contested provision on, inter alia, the applicant’s international cooperation with other universities or consortia, within the framework of the Erasmus+ and Horizon Europe programmes, it must be stated that the contested provision, in so far as it prohibits only the Commission from entering into commitments with entities such as the applicant, does not, as such, restrict the applicant’s opportunities for international cooperation, in particular in the field of research. In the present case, the applicant has not demonstrated, to the requisite standard of proof, that, as a result of the contested provision, its partners or competitors might possibly or potentially exclude it from any agreement, collaboration, call for proposals or consortium.

265    Lastly, the temporary exclusion from EU funding and programmes of stakeholders who, due to the existence of a systemic risk of conflicts of interest, pose a genuine risk to the regular and lawful use of EU funds, actually strengthens the objectives pursued by the European Union under Articles 9, 165 and 179 TFEU, by making it possible to ensure that everyone adheres to the same rules, in particular the principles of the rule of law.

266    It follows that the pleas alleging infringement of Articles 9, 56, 165 and 179 TFEU, taken individually or, as the case may be, together, must be rejected.

267    Accordingly, the action must be dismissed in its entirety.

 Costs

268    Under Article 134(1) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the applicant has been unsuccessful, it must be ordered to bear its own costs and to pay those incurred by the Council, including those relating to the proceedings for interim measures, in accordance with the form of order sought by the Council, with the exception of the costs incurred in connection with the plea of inadmissibility rejected by order of 4 April 2024, Debreceni Egyetem v Council (T‑115/23, not published, EU:T:2024:209), which must be borne by the Council.

269    Under Article 138(1) of the Rules of Procedure, Hungary, the Parliament and the Commission must bear their own costs.

On those grounds,

THE GENERAL COURT (Intermediate Chamber)

hereby:

1.      Dismisses the action;

2.      Orders Debreceni Egyetem to bear its own costs and to pay those incurred by the Council of the European Union, including those relating to the proceedings for interim measures, with the exception of the costs incurred in connection with the plea of inadmissibility rejected by order of 4 April 2024, Debreceni Egyetem v Council (T‑115/23, not published, EU:T:2024:209), which shall be borne by the Council;

3.      Orders Hungary, the European Parliament and the European Commission to bear their own costs.

Delivered in open court in Luxembourg on 30 September 2026.

[Signatures]

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*      Language of the case: Hungarian.