Thursday

21st Oct 2021

EU Commission tightlipped on Hungary recovery-plan decision

  • Prime minister Viktor Orbán and EU Commission president Ursula von der Leyen met in April to talk about the recovery plans. Then things escalated (Photo: European Commission)
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With the deadline ending for the EU Commission to complete assessing Hungary's Covid recovery plan, pressure is growing on the EU executive to decide whether to give the green light to the €7bn recovery money Viktor Orbán's government can claim.

On Thursday (30 September) the commission remained tightlipped over the decision, which was supposed to come at the end of this month.

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"There is no decision today," a commission spokeswoman said, adding: "The European Commission is continuing the assessment of the Hungarian recovery plan on the basis of the 11 criteria in recovery and resilience fund regulation."

She said the "engagement with Hungarian authorities continues", and that the commission working to conclude the assessment "as fast as possible".

Among the criteria is the need for member states to propose arrangements that "are expected to prevent, detect and correct corruption, fraud, and conflicts of interests when using the funds provided".

The commission wants to make sure "all our issues are addressed, and we have all information available make the assessment, and to be able to tick all of the legal requirements" in the regulation.

"This is an entirely normal and expected part of the assessment procedure," the spokeswoman added.

More than two months after it was already initially due, additional time was given to Hungary to table robust guarantees on how it will push back against corruption. That has now expired as well.

The commission has last year pointed out in an economic report that corruption-related "investigation and prosecution appears less effective in Hungary than in other member states", and that "determined systematic action to prosecute high-level corruption is lacking".

In July, economy commissioner Paolo Gentiloni stressed the need for milestones in Hungary's stimulus plan. Setting such targets could be a way out of the political conundrum for the commission.

On Wednesday, Transparency International and six other organisations urged the commission in a letter to push for "stronger safeguards and guarantees on the spending" before it approves the plan.

MEPs are pressurising the commission not to approve the plan without robust safeguards. The parliament has also been pushing the executive to make use of a new tool against Hungary, linking EU funds to the respect of the rule of law.

German Green MEP Daniel Freund tweeted that if the commission approves recovery money for Budapest, "we can kiss the rule of law goodbye".

"'Milestones and targets' have not been met by Orbán in the past, they won't be in the future. Because Orbán knows that Brussels will send the money no matter what," he added.

Once the commission approves the plan, the council of member states also needs to give the okay, which it will also have to do before unblocking tranches of the funding, as reform and investment milestones are reached in the next months - as is the case with all member states.

Some member states have also been keen to see the commission making sure Hungary sticks to the anti-corruption and anti-fraud commitments.

If a legal and technical solution is found on how to make sure Hungary sticks to those anti-fraud commitments, it is unlikely these countries would prevent releasing the funds.

'Blackmail'

The delay in an assessment was initially prompted by widespread corruption concerns, deteriorating relations between the commission and Orbán's government, which only escalated after Budapest introduced anti-LGBTIQ legislation over the summer.

The Orbán government has accused the commission of using the delay as "blackmail" to get it to change this legislation. The law has been challenged by the commission, which launched an infringement procedure against it.

The commission on Thursday said the two are separate procedures.

Spring blossom for Orban?

If the plan is approved, the funding - worth about five percent of Hungary's GDP - could flow just in time for the general election in Hungary in the spring.

On Tuesday, Hungary's foreign minister Péter Szijjártó told AFP that the commission's "blackmailing' does not work, because Hungary is very successful in the bond market.

"We have way enough money to start those projects, which would have been covered by EU bonds. Yes, we can do it without [EU funds]," he said.

Besides Hungary, the approval of the Polish plan is also on hold, as the commission awaits Warsaw scrapping its disciplinary chamber of the Supreme Court, whose functioning the European Court of Justice found to be against EU rules.

EU may delay approval of Hungary's recovery plan

The EU executive is analysing the latest replies it received from the Hungarian authorities which only arrived last Friday. MEPs have urged the commission not to approve Hungary's plan until an effective anti-fraud system is in place.

Hungary's recovery ratification on hold, amid anti-LGBTIQ row

The EU Commission and most MEPs have called on Hungary on Wednesday (7 July) to repeal discriminatory new laws against LGBTIQ people or face legal consequences. Meanwhile, the commission is assessing Budapest's Covid-19 pandemic recovery plan.

Orbán and von der Leyen to tussle on EU recovery funds

Viktor Orbán has one key card in his hands: Hungary has still not approved the legislation necessary for the EU Commission to raise money on the markets. However, it will be difficult to hold out on this.

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