26th Jan 2023

EU Commission still probing Hungary's Covid recovery plan

  • Hungarian former commissioner Tibor Navracsics is leading Budapest's talks with the EU Commission (Photo: European Parliament)
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The EU Commission said on Tuesday (30 August) it wanted to conclude its assessment of Hungary for EU pandemic recovery funds "as fast as possible" — which have so far been held up by rule-of-law concerns.

The EU executive, however, did not comment in detail on Hungarian media reports that the government of Viktor Orbán has been already making the funds available — pre-financed from the national budget, to be covered later by the EU.

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The reports suggested the Orbán government is confident it will secure the EU funds that will cover the pre-prefinancing.

The reports "no way influence the way we are discussing issues with Hungary", the commission's spokesman Eric Mamer said on Tuesday.

"While we made progress on a number of issues over the last months, there are still a number of points that remain open, including anti-corruption, and also very importantly, adequate audit and control arrangements and well as education measures," another commission spokesperson added.

"We are working to conclude our assessment as fast as possible," the spokesperson said, adding that the executive is still in discussion with Budapest.

Hungary had been allocated €5.8bn from the EU Covid-19 recovery fund, but has been unable to access it as the commission made it dependent on several conditions to better keep track of the funds and fight corruption.

In a parallel procedure, Hungary also faces potential financial penalties over rule-of-law issues, including public tender procedures that fall short on anti-corruption safeguards.

Last week Hungary said it will amend several laws by the end of October, which had been criticised by the commission, if an agreement on the funds is reached.

"We have already submitted part of these [package of legal changes] and made promises for several more law amendments if the deal with the commission is signed," Orban's chief of staff, Gergely Gulyás, was quoted as saying by Reuters last Tuesday (23 August).

Hungary's economy has been under pressure due to rising energy prices and inflation, worsened by a weakening forint currency, putting the onus on the government to find an agreement with the EU over the funds.

In July, Hungary's chief negotiator, former EU commissioner Tibor Navracsics, told Bloomberg that Budapest still needs to "build confidence" over the next months to address corruption and rule-of-law concerns.

Orbán has been accused of syphoning EU funds to his cronies to solidify his grip on power.

A draft report on the state of Hungary's democracy by the European Parliament described Hungary as a "hybrid regime of electoral autocracy".

The report will be voted on by MEPs in mid-September.

Polish move

At the same time, the commission said it stands by its decision to approve Poland's recovery plan — after four associations of European judges asked the EU court to annul it.

On Sunday, the judges asked the EU General Court to scrap the commission decision, and the subsequent decision by the council of ministers to approve the Polish plan.

The judges argue that the commission disregarded a decision by the EU's top court in July 2021 that Polish judges, suspended as a result of unlawful changes in the Polish judiciary by the country's nationalist government, should be reinstated immediately.

The commission, however, had accepted in talks with Warsaw that the suspended judges be subject to a review procedure of more than a year, with an uncertain outcome.

EU approved Poland's recovery fund despite criticism

EU Commission president Ursula von der Leyen is expected to travel to Warsaw on Thursday to announce the move — which comes after a year-long debate over the release of Covid-19 recovery financing.

EU Commission tightlipped on Hungary recovery-plan decision

Among the criteria needed for EU pandemic recovery funds is for member states to propose arrangements "expected to prevent, detect and correct corruption, fraud, and conflicts of interests when using the funds provided."

Hungary tries to unblock EU funds with new anti-graft body

Budapest's move is aimed at unblocking EU funds — as Hungary's government is under increasing pressure, from rising inflation and energy prices, coupled with a sinking forint, to come to an agreement with the commission.

EU Commission issues winter Covid warning

Although cases are dropping, the European Commission has warned that Covid spikes may occur during the autumn and winter months. "The Covid-19 pandemic is still very much with us" EU health commissioner Stella Kyriakides said, killing 2,300 Europeans daily.


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Poland's legal fixes to collect EU funds come under fire

Unlocking the €35.4bn in grants and loans allocated for Poland as part of the EU's Covid-19 fund is key for the Law & Justice (PiS) government to boost its chances ahead of the upcoming elections in the autumn.

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