European Commission continues to block €7.5 billion in subsidies for Hungary | Abroad

The commission gave Hungary until November 19 to implement 17 measures to address anti-corruption concerns in the country, but concluded in its weekly lecture on Wednesday that Budapest had not done enough. That was why it stuck to its proposal to Member States To suspend 7.5 billion euros in subsidies from the European budget.

“Hungary has undoubtedly taken steps in the right direction, so we can confirm that the conditionality mechanism is an effective catalyst for fiscal protection. But there is still a risk for the European budget because important parts of the reforms still have gaps,” said Johannes Hahn, EU Budget Commissioner. .

The ball is now in the court of the Member States. In order to trigger the suspension of funds, the proposal must have the support of a qualified majority of 55% of member states (15 out of 27 member states) representing at least 65% of Europe’s population. Finance ministers will discuss the matter next Tuesday. The decision must be made by December 19th at the latest.

Hungary is The first EU member state to be affected by the new conditionality mechanism. This makes it possible to suspend subsidies from the regular European budget when the work of the rule of law in a member state is such that adequate expenditure of money is no longer guaranteed. The commission launched action against Budapest this spring, in part over concerns about systemic irregularities in public procurement.

In September, the Commission then proposed suspending €7.5 billion in subsidies for Hungary. This is about 20 percent of all funds allocated to the country in the multi-year budget from 2021 to 2027. The implementation of the 17 corrective measures could have changed the Commission’s mind, but this is not the case. For example, she questions the effectiveness of a new integrity authority in Budapest that should monitor the spending of European money.

The Commission has opened the door for Hungary’s access to the €723.8 billion Special Recovery Fund that was set up to help Member States overcome the COVID-19 crisis. €5.8 billion is expected to be awarded to Hungary, but due to the same concerns about a lack of anti-corruption, conflicts of interest and faltering public procurement, the commission has yet to approve the Hungarian plan a year and a half after it was submitted.

Hungary was the latest member state to finally receive the go-ahead for the plan on Wednesday, but the commission immediately attached strict conditions to the disbursement of funds. Orban’s government must reach at least 27 “milestones” before any money can actually be transferred. “The situation in Hungary is systemic and requires a very large number of measures to resolve,” said EU Justice Commissioner Didier Reynders. In addition to the 17 measures under the conditionality mechanism, Budapest is required, among others, to take four measures by the end of March to strengthen the independence of the judiciary.

Hungary is struggling with accelerating inflation and a currency in free fall and could put European money to good use. The state is accused of holding other important files in European institutions hostage in order to free up funds. For example, Orbán’s government opposes introducing a minimum tax on profits of multinational corporations and approving an 18 billion euro loan to Ukraine, but Budapest denies any connection to the frozen funds.

In any case, the Commission has not yet opened the file on Hungary. This pleases the European Parliament, which has put intense pressure on the Commission to stand firm. For Tom Vandenkdelaere (CD&V), it is clear that the mechanism of European conditionality “passes the test”. This is an important victory for the European Parliament. Hungary will not get a penny as long as the European budget is in danger,” it seems. “There is no respect for European values ​​and democracy, and therefore there is no European money. It’s that simple,” concludes Sarah Mathieu (Green).