Conflict between Hungary and the EU: threat of cuts in EU funds

The EU Parliament denies Hungary’s democratic status and calls Budapest an “electoral autocracy”. Hungary can still turn things around.

Hungarian Parliament illuminated in national colors

The Hungarian Parliament in Budapest on the National Day in August Photo: Peter Lakatos/ap

BRUSSELS dpa | Hungary is threatened with cuts in EU funds due to corruption and other violations of the rule of law. The EU Commission could decide on a corresponding proposal to the member states on Sunday, as the German Press Agency learned from EU circles. It would be the first time that the authority has proposed cutting EU funds because of violations of the rule of law.

With a large majority, the members of the European Parliament voted in favor of a report on Thursday the Hungarian is no longer a full democracy. Conditions had deteriorated so much that it had become an “elective autocracy”. There was talk of “a disintegration of democracy, the rule of law and fundamental rights in Hungary”.

There is still room for a compromise. In the European Parliament there is a fear that the money will ultimately flow. The head of the commission stressed Ursula von der Leyen on Wednesday decided to take action against corruption. She also mentioned the rule of law mechanism, which is intended to prevent the misuse of money from the EU budget. So far, Hungary is the only country against which a procedure based on this mechanism is running.

The EU Commission has long criticized widespread corruption in the country, which has been ruled by Prime Minister Viktor Orbán for twelve years. A July report spoke of “an environment in which the risks of clientelism, favoritism and nepotism in senior public administration are not addressed”. Because the EU Commission sees the risk of EU money being misused, it resolved the rule of law mechanism out. Cutting money would be the next step.

It is up to the states to decide whether to freeze EU funds

The document from the EU Commission shows that the authority could propose that the EU states retain up to 70 percent of several Structural Fund programs to promote disadvantaged regions. According to calculations by the Green MEP Daniel Freund, that could be around seven billion euros. In addition, the authority will decide on Sunday recommendations on how to remedy the grievances in Hungary, it said. Should Hungary implement these, it could be that the money will not be frozen in the first place.

Budapest had recently shown movement in the dispute with Brussels. In recent weeks, she has promised several measures, including a new anti-corruption agency. Hungarian anti-corruption activists warn that the Orbán government could dupe Brussels.

The decision to freeze funds is ultimately made by the EU member states. According to the recommendation of the EU Commission, you have up to three months. At least 15 countries with at least 65 percent of the EU population must agree.

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