Representatives of the European Union announce for the first time that they will cut grants of 7.5 billion euros to Hungary. Corruption and other deficiencies in the country are given as justification. At least Hungary is giving in a bit. But is that enough to thwart the cuts?
Because of corruption and other violations of the rule of law in Hungary, the European Commission has proposed cutting payments of around 7.5 billion euros from the EU budget to the country. The money in Hungary is not sufficiently protected against misuse, said EU Budget Commissioner Johannes Hahn. It is the first time that the Brussels authorities have taken such a step because of deficiencies in the rule of law in an EU country. At the same time, however, Hahn acknowledged that Hungary had recently made 17 commitments to eliminate the deficits. These are steps in the right direction, but they also need to be implemented.
It is now up to the EU states to follow the EU Commission’s proposal. In order to actually freeze the 7.5 billion euros, at least 15 countries with at least 65 percent of the EU population must agree. However, the Hungarian government is convinced that things will not go that far. For years, the EU Commission has been accusing Hungary under Prime Minister Viktor Orban of undermining EU standards and fundamental values. The authority launched a number of infringement procedures and sued Hungary several times before the European Court of Justice – without achieving a rethink in Budapest.
The report on the state of the rule of law in the EU states from July reads accordingly devastating: There are shortcomings “in relation to lobbying, revolving door effects as well as party and election campaign financing”. Independent mechanisms to uncover corruption were not enough. There is talk of an environment “in which the risks of clientelism, favoritism and nepotism in high-level public administration are not addressed”. And that’s not all. From Brussels’ point of view, the situation is getting worse and worse.
The European Parliament initiated proceedings under Article 7 of the EU treaties against Hungary in 2018 because it saw threats to democracy, the rule of law and fundamental rights in the country. On Thursday, in a symbolic move, MPs agreed that Hungary would be a full-fledged democracy. The EU rule of law mechanism is intended to stop this development. The instrument is intended to ensure that violations of the principles of the rule of law no longer go unpunished. It is crucial that this threatens to misuse EU funds. In April, the EU Commission initiated such proceedings against Hungary for the first time ever. Specifically, according to Sunday’s proposal, 65 percent of three programs to promote disadvantaged regions are to be retained: around 7.5 billion euros.
The Hungarian government did not allow itself to be diverted from its course for a long time. Until June, she did not even address the concerns of the EU Commission. But then the agency sent a letter to Hungary outlining how much money the country could lose. What followed was an unprecedented willingness to talk on the part of the government. “Financial pressure is obviously having an effect,” said Hahn. Specifically, in recent weeks Budapest has announced, among other things, that it will set up a new authority to fight corruption. The handling of EU funds is also to be made more transparent and monitored more closely. The proportion of public tenders with only one bidder is to be reduced and cooperation with the EU anti-fraud authority Olaf is to be strengthened. These measures are a paradigm shift, said Hahn. At the same time, he pointed out that so far these have only been promises and that important details have yet to be determined. Hungary intends to inform the EU Commission about the implementation of the measures by November 19. Budapest wants to bring the first laws into parliament this week.
However, Hungarian anti-corruption activists warn that the Orban government could dupe Brussels. And warning voices are also coming from the European Parliament. “It is fatal that Viktor Orban can still avert these sanctions before the end of the year with a few sham reforms,” ??said Green MP Daniel Freund. Moritz Körner from the FDP spoke of the fact that the federal states should not allow themselves to be fobbed off “with quickly decided paper tigers”. “Orban has lost the right to a leap of faith.” However, if Hungary implements all of its commitments, the EU Commission should recommend not cutting the funds after all. Hahn said the implementation of Hungary’s commitments will take a while. Therefore, the Council will be asked to extend the deadline for a decision from one month to the maximum of three months.
Hungary’s chief negotiator Tibor Navracsics said at a press conference in Budapest that the threatened funding cuts would not come about. “We didn’t make commitments to fog up the European Commission.” The Hungarian government would not dream of failing to fulfill the commitments it had made. Should Hungary actually implement the reforms, they could solve another problem for Orban. Because the EU Commission is currently blocking several billion euros in corona aid. It is the only country that has not yet been able to agree on a plan for how the money will be used with the EU Commission. There could be movement here too.
