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Orbán Asks European Commission for Loan That He Rejected Last Year

picture of Viktor Orbán

Viktor Orbán (pictured) urged the President of the European Commission to give Hungary access to the EU’s reconstruction fund as soon as possible. The Hungarian Prime Minister also asked from Ursula von der Leyen that the Commission make a credit line available that the Prime Minister personally refused in Brussels last April.

The letter was sent to Brussels by Viktor Orbán on Friday, and was first reported by 444 early yesterday afternoon. Later in the day, the government published the full letter in English and an abbreviated form in Hungarian on its website.

The original amount was for 5.8 trillion HUF (US $17.1 billion), but under the current EU rules, it has shrunk to around 5.1 trillion HUF ($15.0 billion) this year because of the favorable Hungarian GDP data in 2021.

In addition to the urgent transfer of funds, Orbán also indicated that it was unacceptable that his government would not be granted the original amount. That is, not only did he urgently demand the money, but he wanted even more than Hungary is entitled to under current EU rules.

In order for the Hungarian government to access to the money, the European Commission first needs to accept Hungary’s plan on how it would spend it. But for a year now, the Hungarian government has been unable to submit a plan that the Commission determines meets the criteria set by EU Member States. In his letter, Orbán also calls for a relaxing of this criteria.

More than half of the total amount due to Hungary would be a loan on favorable terms, which Orbán now wants to spend on measures to deal with the crisis caused by the war, including the military, border protection, refugees, and other areas.

But 444 has learned that the European Commission is trying to convince the Hungarian government to spend its funds instead on reducing its energy dependence with Russia.

Thus far, 22 EU Member States have already accessed at least some of the enormous €750 billion ($823 billion) making up the Recovery and Resilience Facility.

The Netherlands has not yet submitted a plan, as their government says they have no need for the money. The Swedish government was also reluctant to apply for EU recovery funds for similar reasons. It didn’t submit a plan until the end of last year, though it should be approved within the next few days.

Bulgaria had to deal with an ongoing government crisis in 2021, and was only able to submit a plan in the fall that has not been approved yet.

Of the plans submitted by Member States last spring, only Poland and Hungary faced problems, primarily due to EU concerns over democratic backsliding in those countries.

The Polish government says they are close to an agreement on their plans. The Commission has a problem with some of Poland’s laws on courts, and the country is expected to rewrite some of these to meet EU expectations.

Beyond demanding payment, some sort of gesture may be needed on the part of the Hungarian government for it to access the funds. State Secretary Szabolcs Ágostházy began discussing this with relevant personnel in the Commission last week, but the news site reports that there has not been any agreement yet.

[444]

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Posted in European Union

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