The 27-nation EU bloc has three months to decide on suspending funding for Hungary on charges of damaging democracy.
The European Union executive recommended suspending some 7.5 billion euros ($751 billion) in funds to Hungary for corruption, the first such case in the 27-nation bloc under a new sanction aimed at better protecting the rule of law. .
Relations between the EU and Hungary have been in a delicate state for months, as Brussels suspects that the nationalist government of Prime Minister Viktor Orban is undermining the rule of law and using EU money to enrich his cronies.
Two years ago, the EU introduced new financial sanctions in response to what it says undermines democracy in Poland and Hungary.
For more than a decade in power, Orban subdued the courts, the media, NGOs, and academia, as well as restricting the rights of migrants, the LGBTQ+ community, and women.
“These are breaches of the rule of law that compromise the use and management of EU funds,” EU Budget Commissioner Johannes Hahn said. “We cannot conclude that the EU budget is sufficiently protected.”
He highlighted systemic irregularities in Hungary’s public procurement laws, insufficient safeguards against conflicts of interest, weaknesses in effective prosecution, and shortcomings in other anti-corruption measures.
Hahn said the Commission was recommending the suspension of around a third of the planned cohesion funds for Hungary from the bloc’s shared budget for 2021-27 worth a total of 1.1 trillion euros ($1.1 trillion). .
The 7.5 billion euros ($7.5 billion). in question amounts to 5 percent of the country’s estimated 2022 gross domestic product (GDP). EU countries now have up to three months to decide on the proposal.
Hahn said Hungary’s latest promise to address EU criticism was a significant step in the right direction, but it still needs to be translated into new laws and practical action before the bloc settles down.
On Saturday, Hungary’s government said parliamentarians would vote next week on a series of laws aimed at easing the conflict. The measures are expected to include the creation of 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 will indeed be game-changers.”
He said Hungary has committed to “fully reporting” to the commission on the implementation of measures to address its concerns by November 19.
Hungarian Development Minister Tibor Navracsics, in charge of negotiations with the EU, said Hungary would honor the 17 commitments made to the European Commission to avoid losing any EU funding.
“Hungary did not undertake to confuse the Commission,” Navracsics told a news conference. “We have made commitments that we know can be implemented…so we will not face a loss of funding.”
Prime Minister Orban, who calls himself a “freedom fighter” against the worldview of the liberal West, denies that Hungary, a former communist country of about 10 million people, is more corrupt than others in the EU.
On Thursday, the European Parliament declared that Hungary is no longer a “full democracy” and that the EU must act after a vote of 433 for and 123 against the resolution. Hungary reacted angrily to the vote, calling it an “insult against a Hungarian person.”