April 18. 2024. 12:59

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EU cautious on summer payments of blocked funds to Hungary


Hungary has made progress on bolstering guarantees of judicial independence but is “not quite there yet”, and needs to improve democratic credentials in other areas before getting billions worth of blocked European Union funds, officials said on Thursday (30 March).

Four officials cautioned about expecting aid for Hungary from the bloc’s long-term budget, or up to €15.4 billion from the EU’s COVID recovery stimulus to start flowing this summer.

“We are progressing well. We are reaching the end of the discussions on the judicial milestone,” said one of the officials, all of whom spoke under condition of anonymity.

“But we don’t only have the judicial reforms. There also is a whole list of corruption reforms” needed, including on improving public procurement, to get the money, they said.

In more than a decade in power, Hungarian Prime Minister Viktor Orbán has had many bitter run-ins with the EU and its executive arm, the European Commission, over Budapest restricting the rights of gays and migrants, as well as tightening state controls over non-governmental organizations, academics, media and courts.

No official comment from Budapest or the Commission was available on Thursday.

Last month, Hungary’s negotiator said ironing out remaining issues with Brussels over democratic reforms prescribed to win the recovery funds could last until the summer.

“We are almost there, not quite there yet, but we are getting there” with the judicial reforms, said the second EU official, who is involved in negotiations between the Brussels-based Commission and Budapest.

Hungary passes anti-graft law to avoid loss of EU funds

Hungary’s parliament passed the first of a series of anti-corruption bills on Monday as Budapest seeks to avoid a loss of European Union funds when its economy is headed into recession, and the forint has plunged to record lows.

Prime Minister …

The person said that meeting those requirements would open Budapest’s access to up to €20 billion in development funds, but it was unlikely that any would be sent straight away.

The lag is due to how these funds are spent, with member countries first financing projects on their own and only later asking the Commission for reimbursement. The officials said Budapest would unlikely have the bills ready to send in even if it unlocks access to the money mid-year.

The sources said some recovery payments could be possible this summer but that mostly the money would come later in the year if Hungary meets the necessary conditions.

Hungary and Poland are the only EU members lagging behind in getting the recovery funds, which the Commission has blocked over accusations that the countries’ nationalist, populist governments damage democracy and the rule of law.

The Commission is withholding Hungary’s access to the development funds over the same concerns around corruption and freedom of courts.

Under pressure from high inflation at home, Orbán has sought to strike a deal with Brussels on the money, while also wrangling with the EU on issues including support for Ukraine and punishing Russia for invading its neighbour.

On 30 November, the European Commission recommended freezing the disbursement of EU recovery funds until Hungary complies with 27 “essential milestones” linked to the rule of law and the independence of the judiciary.

Commission recommends EU funds for Hungary remain frozen

While recommending the freezing of EU funds under the rule of law conditionality mechanism, the European Commission gave a formal green light to Hungary’s recovery plan. However, the disbursement of the recovery money would be linked to 27 ‘supermilestones’.