EU Seeks to Freeze €13bn in Funding to Hungary Over Corruption Fears – The European Commission desires to freeze more than €13 billion (£11 billion) of EU funds for Hungary due to concerns over democratic weaknesses and failures to combat corruption. The measures, which must yet be accepted by EU member states, represent a turning point in the commission’s legal battle with Hungarian Prime Minister Viktor Orbán.
In September, the EU executive proposed suspending €7.5 billion in economic development funding for Hungary because of concern that Orbán’s government could not guarantee the funds’ proper use and control. Budapest was given until November 19 to undertake seventeen remedial actions, including establishing an anti-corruption task force and tightening laws against conflicts of interest in the awarding of public funds.
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The European commissioner responsible for the EU budget, Johannes Hahn, told reporters on Wednesday that Budapest had “unfortunately not implemented the remedial measures, so we could not say that the risks have gone away”, although he added that Hungary was “moving in the right direction”.
Separately, while the commission approved Hungary’s long-delayed €5.8bn Covid recovery plan on Wednesday, it stated that no money should be released until Budapest reaches 27 “super milestones” that include securing the independence of the supreme court and expanding the powers of the National Judicial Council, whose members have been recently attacked by pro-government media. Included in the 27 “super milestones” are the 17 measures against corruption.
Hungary is at risk of losing billions if the recovery plan is not approved before the end of the year. EU officials believe they have a unique opportunity to press Orbán for reform as the Hungarian economy deteriorates and the country’s need for money increases. But authorities are also cautious, recalling that Orbán, who has been in office since 2010, has repeatedly pledged changes while continuing to extend government control over the courts, restrict independent media, and soften controls against cronyism and corruption.
Hungary has been one of the largest recipients of EU funds, with over 80% of public investment coming from “cohesion funds” that are designed to help Europe’s poorer countries and regions catch up to the wealthiest. Petri Sarvamaa, a Finnish centre-right MEP, referred to the judgment as a “historic moment for the protection of the rule of law in Europe” and urged the 27 EU member states to confirm the decision. “If EU citizens’ money cannot be protected against irregularities, then it cannot be disbursed.”
The €7.5 billion funds can only be withheld if two-thirds of the 27 member states representing 65 percent of the EU’s population vote in favor of the plan, which is an uncertain conclusion. With its harsh criticism of EU sanctions against Russia and threatening to veto €18 billion in fund for Ukraine, the Hungarian government has upset neighbors and alienated allies.
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Prior to deciding whether to release Budapest’s EU funding, EU finance ministers are anticipated to press Hungary for its approval of the €18 billion in aid for Ukraine. Diplomats from the European Union have accused Hungary of using other concerns as leverage, such as obstructing an international accord on minimum corporate tax rates. The Hungarian government has not commented on the most recent announcements, but it has previously denied using vetoes to secure the delivery of EU funding.
In an interview with the Hungarian Nation newspaper published on Monday, Orbán’s chief spokesperson, Zoltán Kovács, stated that “the left” had taken the EU institutions hostage and was “using their monopoly to exert political pressure, to blackmail, to continually apply double standards, and to make relentless attempts to slaughter governments and political forces that don’t think the way Brussels tells them to think.”
