2nd Dec 2022

'Cosmetic changes' not enough on EU funds, Hungary warned

  • Hungary’s minister in change of negotiations, Tibor Navracsics, insisted the Budapest government 'has no intention of failing to fulfil the commitments it made' to the EU Commission (Photo: European Parliament)
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The Hungarian government will submit the first of its new anti-corruption bills to parliament later on Monday night (19 September), as prime minister Viktor Orbán's cabinet tries to avoid the freezing of billions of euros in EU subsidies.

The EU Commission on Sunday proposed to suspend 65 percent of EU funds (worth €7.5bn) under cohesion programmes to Hungary because of its concerns over corruption and rule of law.

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That decision will have to be made by the council of member states, which has initially one month to decide, and which can be expanded by a further two months.

The commission said Hungary would have to implement the 17 measures promised to the EU executive by 19 November.

Hungary's minister in change of the negotiations with Brussels, Tibor Navracsics said his government "has no intention of failing to fulfil the commitments it made" to the commission, and therefore the council will not ultimately have to make a decision on the proposed suspension.

Navracsics, himself a former Hungarian EU commissioner, was quoted by MTI news agency on Sunday, saying that the commission's weekend decision concluded months of negotiations with Brussels, and "no further expectations can be placed on Hungary".

Navracsics also said he will hold a new round of talks on the implementation with EU budget commissioner Johannes Hahn on Wednesday.

Sunday's announcement was the first example of where the EU used a new sanctions procedure aimed at better safeguarding the EU budget and the rule of law.

Some of the 17 measures include the establishment of a so-called "integrity authority" with the aim of "reinforcing prevention, detection and correction of illegalities" in the use of EU funds, and an Anti-Corruption Task Force.


However, some critics have seen a smokescreen of compromises, aimed at cosmetic changes that save the EU from a political showdown with its biggest internal challenge, and offer Orbán a way out despite currently being under heavy economic pressure.

Orbán has clashed with the EU for over a decade for dismantling domestic checks and balances and independent institutions. Hungary has been under EU scrutiny since 2018, and was last week declared by the European Parliament of not to be a fully-fledged democracy.

Hungary has already seen more than €5.8bn of EU Covid-19 recovery money tied up, as the commission refuses to approve its release because of rule-of-law concerns.

Critics meanwhile point out that Hungary will continue to receive substantial inflows of EU funds, as the proposed suspension applies only to around 22 percent of total EU subsidies earmarked for Hungary in the EU's current long-term budget for 2021-2027.

András Léderer, a lawyer with the Budapest-based Hungarian Helsinki Committee, a human rights organisation, said none of the bills planned to be submitted by the government have been put to public consultation.

"The last 12 years makes us cautious with regards to the government's commitment to independent institutions and the rule of law," Léderer said, referring to Orbán time as PM.

"The state audit office, the ombudsman's office, and many more institutions have been either abolished or filled with political loyalists. They could create a new institution which aims to be independent, but the experience of the last 12 years does not underpin that," he added.

Léderer argued that the commission's position — that the prosecution does not pursue corruption cases — would suggests that the real issue is with the prosecution, and will not be solved with a new institution, which will hastily be set up by 19 November.

An EU diplomat also said that while it is a good sign that the commission is using the new rule-of-law sanctions tool, judicial independence is missing from the measures the EU executive is demanding from Hungary.

The diplomat, talking to EUobserver on the condition of anonymity because of the sensitivity of the issue, said that claiming that there is an issue with anti-corruption but not asking for measures on judicial independence, is strange —not least since the commission itself had said that the two are interlinked.

"We have seen 10-plus years of backsliding. To think that an entire culture of corruption can be reversed in three months time is wishful thinking," the diplomat said, referring to budget commissioner Hahn's Sunday comment that he was "fairly optimistic" that Hungary will deliver.

Member states governments will want to see strong assurances that "these reforms are not just cosmetic but mean real change", the diplomat added.

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.

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.

MEPs condemn EU Commission 'leniency' on Hungary

MEPs criticised the EU Commission for what they see as the executive not being tough enough on the government of Viktor Orbán, as Hungary's parliament passed new legislation as part of a deal with the EU executive.

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Over the last 10 years, Portugal has given 1,470 golden visas to people originating from countries whose tax-transparency practices the EU finds problematic. But unlike common practice in other EU states with similar programmes, Portugal has not implemented "due diligence".

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