EU moves step closer to freezing Hungary’s slice of the budget

Brussels, Sep 18 (EFE).- The European Union took a step closer to drastically reducing Hungary’s access to EU funds in response to the nation’s continual disregard for the principles of the rule of law and accusations of systemic corruption. 

The proposal from the European Commission, the EU’s executive arm, would withhold an estimated 7.5 billion euros from the Central European nation should the measure be adopted. 

“Today’s decision is a clear demonstration of the Commission’s resolve to protect the EU budget, and to use all tools at our disposal to ensure this important objective,” said Johannes Hahn, the commissioner in charge of Budget and Administration, on Sunday.

More specifically, the proposal would suspend 65% of commitments for three programs under the EU’s cohesion policy.

It would also block Hungary from striking deals with public commitment trusts “for programmes implemented in direct and indirect management.”

The EU Council has a month to decide whether to adopt the proposal, from which moment Hungary will also have a month to respond.

Meanwhile, the bloc will monitor whether the government of Hungarian prime minister Viktor Orbán implements measures to pull his country in line with EU principles. 

European Commissioner for Budget and Administration Johannes Hahn gives a press conference on the protection of the EU budget in Hungary (Rule of Law Conditionality Mechanism) at the European Commission in Brussels, Belgium, 18 September 2022.  EFE/EPA/STEPHANIE LECOCQ

The EU in July outlined 17 remedial measures for Budapest that would address deficiencies in public procurement, irregularities in the conflict of interest from government officials, and shortcomings in the judicial oversight of cases relating to EU funds. 

The proposal does not need unanimous approval to come into effect.

Rather, it needs a qualified majority, meaning Poland, a traditional ally of Hungary within the bloc, cannot lend Orbán a veto. 

The process is open to extensions, which means Budapest will have until December 21 to make the changes required by the EU. 

Hungary is one of the biggest net beneficiaries of the EU’s budget.

Budapest has more than 22.5 billion euros lined up until 2027 under the cohesion policy. 

In April, the European Commission activated the conditionality regulation mechanism, which conditions the disbursement of EU funds in respect of the rule of law. 

The mechanism was negotiated ahead of the EU’s budget for the 2021-27 period. 

Hungary and Poland were unsuccessful in attempting to derail the mechanism during the negotiation period. EFE

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