EU may suspend €7.5bn in funding from Hungary amid corruption fears

EU may suspend €7.5bn in funding from Hungary amid corruption fears

18 Sep 2022 (The Guardian)

European Commission proposes withholding funds as it awaits ‘gamechanger’ reforms from Orbán government

The EU’s executive arm has proposed suspending €7.5bn in financing for Hungary, as it awaited potential “gamechanger” anti-corruption reforms from Budapest.

The EU and Hungary have been at loggerheads for months, with Brussels suspecting the government led by nationalist prime minister Viktor Orbán of undercutting the rule of law and using EU money to enrich its cronies.

The European Commission’s budget commissioner, Johannes Hahn, told a press conference on Sunday that the EU’s executive proposed suspending “the commitments for cohesion programmes and cohesion policy amounting to [an] estimated amount of €7.5bn”.

On Saturday, Hungary’s government said that MPs would vote next week on a series of laws aimed at easing the conflict.

The measures are expected to include setting up independent anti-corruption watchdogs to monitor the use of EU funds, as well as steps to make the legislative process more transparent.

Hahn said he was “very confident that … we will see significant reforms in Hungary, which indeed will be a gamechanger”.

He said Hungary had committed to “fully inform” the commission about implementing measures to address their concerns by 19 November.

Orban’s administration has struck a more emollient tone than usual on the issue and the justice minister, Judit Varga, reacted to the commission’s proposal by acknowledging that “we still have work to do” to end the row, while insisting that “we are moving in the right direction”.

“We are working to ensure that the Hungarian people receive the resources they are entitled to!” Varga commented on her Facebook page on Sunday.

Tibor Navracsics, the Hungarian minister in charge of negotiations with the EU, told reporters on Sunday that he was confident that “we can conclude these negotiations before the end of the year and sign the related agreements” to enable the release of the funds.

But the German MEP Daniel Freund told AFP that, although the freezing of funds to Hungary was welcome, he feared the proposed measures from Hungary were not enough to “stop Orban and his cronies from stealing EU funds”.

“Those are good measures and they should be adopted but they are not sufficient to stop corruption, let alone to make Hungary a functioning democracy,” he said.

Valérie Hayer, a French MEP, tweeted that this was the “last chance” for Orbán. “The time for discussions is over,” she said.

The final decision on the proposal will be taken by the Council of the European Union.

Gergely Gulyás, Orbán’s chief of staff, told reporters on Saturday that MPs would vote within days on measures designed to allay concerns about graft and a lack of transparency in public procurement.

The conciliatory move from Budapest comes as the Hungarian economy faces increasing pressure from a weakening local currency and fast-rising inflation. Both have hit new records this year.

On Thursday, the European parliament declared that Hungary was no longer a “full democracy” in a symbolic vote that infuriated Budapest.