European Commission Launching Conditionality Mechanism Against Hungary

The European Commission has decided to send an official letter informing the Hungarian authorities that it will trigger the conditionality mechanism of the EU’s rule of law procedure, announced Ursula von der Leyen, President of the European Commission, at the European Parliament’s plenary session in Strasbourg on Tuesday (pictured at the session).

Ursula von der Leyen recalled that a letter had previously been sent to Hungary with questions over the matter. The Hungarian government’s answers had been “thoroughly analyzed,” she said, and a decision was taken to launch the mechanism in light of this.

Budget Commissioner Johannes Hahn spoke with representatives of the Orbán government yesterday about sending an official letter from the Commission to them about this.

The announcement was made by the President of the European Commission at 3:48pm, according to a live broadcast of the session.

Although the “Regulation on a general regime of conditionality for the protection of the Union budget” has been in force since January 1, 2021, it has not been used yet because the two affected EU Member States, Hungary and Poland, took the matter to the European Court of Justice.

The Luxembourg body dismissed the Hungarian and Polish lawsuits on February 16, but the European Commission indicated that it did not want to launch the procedure until after the Hungarian parliamentary elections on April 3.

However, the Commission did not even wait 48 hours after Fidesz’s latest electoral victory before it made the announcement. There is now not much talk of launching the mechanism against Poland, which may have to do with the fact that, unlike Hungary’s leaders, the government in Warsaw is fully committed to the European Union’s policy of tough action against Russia over the war in Ukraine.

Hungary stands to lose €32 billion (US $34.9 billion) in aid over the next five years due to the possible sanctions levied by Brussels.

On his visit to Budapest last December, French President Emmanuel Macron promised Hungary’s political opposition that the conditionality mechanism would be launched this year. Since the beginning of the year, France has held the rotating presidency of the EU.

How does the conditionality mechanism work?

The conditionality mechanism on the rule of law is a means by which the European Union can force EU Member States to comply with the rules of a democratic state by depriving them of money if breaking these norms has a direct and sufficient effect on the EU budget, meaning if authorities in the Member State do not take steps against such abuses.

A failure to take action would include cases in which the public prosecutor in an EU member state declines to investigate and sanction the misuse of EU funds.

An example of this would be the Elios case, connected with Viktor Orbán’s son-in-law István Tiborcz. Hungary’s National Investigative Bureau closed their investigation into the matter despite the fact that, according to the European Anti-Fraud Office (OLAF), the company, Elios Innovatív Zrt., had used fradulent means to win public tenders.

If such violations do not have a direct impact on how EU money is spent, they do not fall within the scope of the regulation. With this in mind, a breach in democratic principles can be one of the following:

• The independence of the judiciary in the country is threatened.

• The authorities that allocate the EU budget do not function properly.

• Investigators and prosecutors are not doing everything they can to tackle corruption and associated violations of EU law.

• Independent judicial review of the actions or omissions of these authorities is not provided.

• Fraud or corruption associated with EU funds is not prevented or sanctioned.

• Illegally-paid sums are not paid back.

• There is no attempt to avoid conflicts of interests.

[Népszava]