E.U. accused the Prime Minister of Hungary for reducing the power of Courts, media, NGOs and academia, restricting the rights of migrants and the LGBTQ+ community and women
The European Union (E.U.) has plans to suspend the € 7.5 billion (U.S. $ 751 billion) in funding for Hungary for rule of law violations involving corruption in the awarding of public contracts.
This is the first such case in the bloc under a new sanction meant to better protect the rule of law. Two years ago, the E.U. introduced new financial sanctions in response to acts that amount to the undermining of democracy in Poland and Hungary. The E.U. accuses the Prime Minister of Hungary – Viktor Orban for the reducing the power of Courts, media, NGOs and academia, restricting the rights of migrants and the LGBTQ+ community and women.
Hungary is due to receive € 22 billion in cohesion funds during the current round of E.U. budget spending, which lasts until 2027. It is also separately seeking to unlock an extra € 7 billion of grants and billions more in loans under the E.U.’s COVID-19 Recovery & Resilience Facility (RRF), which could also be affected if Hungary did not address rule of law issues.
The European Commission has asked the Member States to vote to suspend about a third of Hungary’s cohesion funding, which is provided to less economically developed parts of the E.U. The decision to withhold the funds must be approved by a majority of the E.U.’s member states, excluding Hungary, within a month but the deadline could be extended by a further 2 months
Taking it to twitter, the European Commission tweeted,
Today we proposed budget protection measures to the @EUCouncil under the conditionality regulation.
— European Commission 🇪🇺 (@EU_Commission) September 18, 2022
This is to ensure the protection of the #EUbudget and the financial interests of the EU against breaches of the principles of the #RuleOfLaw in Hungary.
Read more ↓
Speaking on the occasion, the E.U. Budget Commissioner – Johannes Hahn said, “It’s about breaches of the rule of law compromising the use and management of EU funds. We cannot conclude that the EU budget is sufficiently protected.”
Hahn said there are systemic irregularities in Hungary’s public procurement laws, insufficient safeguards against conflicts of interest, weaknesses in effective prosecution and shortcomings in other anti-graft measures. Hahn said the European Commission was recommending the suspension of about 1/3rd of cohesion funds envisaged for Hungary from the bloc’s shared budget for 2021-27 worth a total of € 1.1 trillion (U.S. $ 1.1 trillion).
The € 7.5 billion (U.S. $ 7.5 billion) amounts to 5% of the country’s estimated 2022 Gross Domestic Product (GDP). The Member States now have upto 3 months to decide on the proposal.
Prior to this, 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 E.U. funds as well as steps to make the legislative process more transparent. Hahn said Hungary’s latest promise to address E.U. concern is a significant step in the right direction but must still be translated into new laws and practical actions before the bloc would be reassured.
Hungary is expected to inform the European Commission about implementing measures to address their concerns by November 19, 2022. Hungary’s Development Minister – Tibor Navracsics, in charge of negotiations with the E.U., said Hungary would meet all 17 of its commitments made to the European Commission to prevent any loss of E.U. funding.
