EU | The EU Commission triggered a mechanism that could take billions of EU funds away from Hungary

Brussels

EU Commission on Sunday did what was expected in advance and announced that he would freeze part of the funding that Hungary receives from the EU budget.

This will be done if Hungary does not take corrective measures. Worried about the loss of money, the country has promised to make a total of 17 reforms, which would, among other things, tighten anti-corruption measures.

However, mere promises are not trusted in Brussels, but according to the Commission, the reforms must be passed into law and put into effect. The Commission will assess the situation again in November.

The decision on the suspension belongs to the EU member states. They basically have a month to make a decision, but the deadline can be extended by two months to December.

Read more: The Commission is coming with a strict proposal for Hungary: the money given by the EU will be frozen if violations of the rule of law are not corrected

Commission threatens to freeze 65 percent of the funding it has granted through the EU Cohesion Fund to three ongoing funding programs in Hungary.

of the commissioner responsible for the EU budget by Johannes Hahn according to this means 7.5 billion euros. It is a third of Hungary’s cohesion funding in the current budget period 2021-2027.

The Cohesion Fund directs EU funds to poorer member states whose gross national income per inhabitant is less than 90 percent of the EU average.

Commission is now using the rule of law mechanism for the first time, which entered into force at the beginning of 2021. Thanks to it, the EU can freeze EU aid money from countries that violate the rule of law and endanger the effective use of EU budget funds in their country.

Hungary and Poland managed to thwart the use of the mechanism by arguing that it was against EU law. In February, the EU Court decided that there is no obstacle to the use of the mechanism, and in April the Commission started actions against Hungary.

Read more: The EU is officially putting Hungary under scrutiny – the country’s government must respond to suspicions about misuse of aid money

It has clearly been easier for the Commission to find evidence of budget-threatening rule of law violations in Hungary. The mechanism has not been triggered in Poland, although there has been great concern about the independence of the judiciary. At least so far, the Commission has not been able to demonstrate that this is a threat to the EU budget, Hahn stated on Sunday.

Commission points out, among other things, shortcomings in Hungarian public procurement, i.e. tenders, when the state and local government procure goods and services.

According to Hahn, there has been only one bidder in more than half of such tenders in Hungary. This raises suspicions that the final outcome of the tender has been pre-arranged.

According to Hahn, the Commission chose the three programs of the Cohesion Fund precisely because almost all of the EUR 7.5 billion funds flowing through them are distributed through public procurement procedures.

Hungarian of the prime minister Viktor Orbán Secretary of State Gergely Gulyas said on Sunday that the country’s government will already submit bills to the parliament next week, with which Hungary will implement the corrections required by the commission.

Freezing cohesion funds would make a noticeable dent in Hungary’s budget. The country’s economy has suffered as the value of the currency weakened and inflation accelerated.

Hungary has also applied for money from the EU’s stimulus package, but even the funds are stuck – almost all other EU countries have already received funding from it. Hungary’s share of the stimulus instrument would be around seven billion euros.

In speeches and reports, the Commission has been trying for years to get Hungary to correct the most glaring flaws in the distribution of EU funds, but nothing has happened.

“Economic pressure is showing its strength. That was the intention when the parliament and the member states approved a mechanism that can respond to some of the shortcomings in the rule of law,” Hahn said on Sunday.

The commission had an exceptional meeting on Sunday, because the chairman Ursula von der Leyen will be attended next week by the queen Elizabeth’s funerals and the UN General Assembly.