Monday

3rd Oct 2022

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

  • Hungary's government is expected to submit the bill creating the new body to parliament by the end of September (Photo: John6536)
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The EU Commission said the assessment of Hungary's replies to its rule-of-law concerns is ongoing — after the government of prime minister Viktor Orbán published plans to create a new anti-corruption authority.

The Hungarian government plans to create an anti-corruption authority to oversee the spending of EU funds, according to a decree published late on Monday.

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The 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.

The EU executive, which has withheld the authorisation of €5.8bn from the Covid-19 recovery fund, said it was studying the decree.

The commission in April launched an unprecedented procedure against Hungary, which links EU funds to the respect of rule of law and could lead to financial penalties.

Hungary sent its latest legal arguments on 22 August to the commission, while the EU executive has one month to respond.

"The analysis is ongoing," said a commission spokesman on Tuesday (6 September).

In both cases, anti-corruption safeguards have been a key issue for the commission. Orbán's government has been accused of syphoning EU funds to prop up his cronies.

The commission's most recent rule-of-law report in July said that "independent control mechanisms remain insufficient to detect corruption".

"The lack of a robust track record of investigations of corruption allegations concerning high-level officials and their immediate circle remains a serious concern," the reports said, adding that some high-level cases have been opened.

"The lack of judicial review of decisions not to investigate and prosecute corruption remains a cause of concern, in particular in an environment where risks of clientelism, favouritism and nepotism in high-level public administration remain unaddressed," the report, released in July, added.

According to Monday's decree the Budapest government will introduce a bill on creating an anti-corruption authority by 30 September, and expects it to set it up by 21 November.

The new body will step in if Hungarian authorities do not take sufficient steps to "prevent, investigate and fix cases of fraud, conflict of interest, corruption or other illegalities and irregularities" as EU funds are spent, the decree said.

The government also pledged to create an anti-corruption working group to advise the authority by 1 December, where half the members of the group will be government delegates and the others will be representatives of non-governmental organisations.

However, the exact setup remains to be seen, as Orbán has been criticised before for stuffing independent institutions with his allies.

According to Transparency International's Corruption Perceptions Index, Hungary now ranks lowest in the EU after Bulgaria, with its ranking continuously dropping under Orbán's rule.

Meanwhile, the Hungarian Helsinki Committee, a Budapest-based rights group said that András Zs. Varga (president of the Kúria, the supreme court, and described as an ally of Orbán's party), unlawfully appointed several judges to the bench in 2021, according to the self-governing body of judges.

The commission on Tuesday said that it had repeatedly raised the issue of judicial appointments with the Hungarian authorities and recommended to strengthen the control of judiciary bodies over the Kúria president.

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Researchers from EU-funded environmental organisations warn the portion of the €723.8bn recovery fund money to be spent on climate is being misused and hurts biodiversity and the environment — and the EU lacks monitoring tools to prevent it.

EU Commission proposes freezing 65% of funds to Hungary

The freezing, the first time in the EU's history using the conditionality mechanism linking EU subsidies to the respect of the rule of law, would suspend money from the bloc's cohesion funds under the 2021-27 long-term budget.

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