Brussels The EU Commission has surprisingly decided to freeze the billions in payments to Hungary that have been withheld for a longer period of time. Commission President Ursula von der Leyen and six of her commissioners made a preliminary decision on Wednesday that still has to be approved by the entire Commission next week.
The Brussels authorities had frozen 7.5 billion euros for Hungary in the summer because Prime Minister Viktor Orban, in their view, promotes corruption and patronizes the judiciary. For the same reason, the Commission had not previously approved Hungary’s Corona recovery plan. Budapest is entitled to 5.8 billion euros from the European Corona Recovery Fund, but it is subject to strict rule of law conditions.
On Wednesday, the Commission’s management circle signaled that the construction plan would be approved in principle so that the funds would not expire at the end of the year. However, they are not to be paid out until Hungary implements the required reforms. In addition, the Commission confirmed that the 7.5 billion euros in cohesion funds, money for the economic harmonization of the EU states, should also be withheld until reform progress is visible.
Commission sees “serious deficiencies” in reforms
In addition to von der Leyen, the three Vice Presidents Margrete Vestager, Valdis Dombrovskis and Frans Timmermans as well as Budget Commissioner Johannes Hahn, Justice Commissioner Didier Reynders and Economic Commissioner Paolo Gentiloni were involved in the decision. They form the Commission’s steering committee, which decides on the national development plans.
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The commission had given Orban until November 19 to implement 17 measures against widespread corruption in the country. As a result, the Hungarian parliament passed numerous laws in a hurry over the past few weeks, which were commented on favorably in Brussels. As Commission officials repeatedly praised the progress made in Budapest, the impression was created that the agency would release the funds.
However, in their assessment on Wednesday, von der Leyen and Co. came to the conclusion that the reforms were not enough. There are still “serious deficiencies”, it said in commission circles. Some measures are incomplete, while others lack information.
The rethinking in the Commission was welcomed in the European Parliament. “It’s nice to see that the pressure from Parliament is working,” said Green MEP Daniel Freund. Last week he and other parliamentarians presented a damning analysis of Hungarian reforms.
Freund said the Commission has now recognized that Orban’s promises are “more appearances than reality”. However, the authority contradicts itself when it withholds billions due to corruption in Hungary, but at the same time approves the construction plan in principle.
The Vice President of the European Parliament, Katharina Barley (SPD), also welcomed the decision. “The Hungarian government has gone too far,” she told Handelsblatt. “Even if the decision should have come much earlier, I am satisfied with the clear signal: anyone who systematically undermines the rule of law will have their funds cut.”
Majority in the EU Council not certain
Next, the Council of 27 Member States must approve the Commission’s decision. Finance ministers originally wanted to deal with it on December 6th. But a special session is likely to be called later in December because capitals need more time to evaluate the commission’s decision.
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In order to freeze the funds to Budapest, at least 15 countries with 65 percent of the total EU population would have to agree. The majority is considered uncertain, not least because Italy has a new Orban-friendly prime minister in Giorgia Meloni.
Orban has already created a threat: not only is his veto preventing agreement on a global minimum tax. He also threatens to block European Ukraine aid of 18 billion euros for the coming year. On top of that, he wants to delay Finland’s and Sweden’s accession to NATO as long as the money doesn’t flow. He has scheduled the ratification of NATO accession in the Hungarian parliament for December 7 – one day after the meeting of EU finance ministers.
The Commission expects the other governments not to be impressed by Orban’s maneuvers and to follow the recommendation from Brussels. But the European Parliament does not rule out the possibility of political horse-trading in the Council.
“I see the danger that Orban will now try even harder to blackmail the EU,” said Barley. “We have to be prepared for that too. It must be clear that the EU will not cave in.”
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