The European Commission has proposed suspending 65% of Hungary’s cohesion funds, the Brussels-based body announced on Saturday. This amounts to €7.5 billion (US $7.5 billion), but the Hungarian government has a two-month window to implement the necessary reforms.
The announcement was made by Budget Commissioner Johannes Hahn, who said that in April the Commission had initiated the so-called conditionality mechanism against Hungary for rule of law violations that threatened EU funds. Hahn listed three reasons for this unprecedented step: problems with public procurement procedures, conflicts of interest, and the weakness of Hungary’s anti-corruption measures.
The Hungarian government began to turn its behavior around this past summer, when it initiated 17 important measures in the right direction. “We welcome constructive engagement, even if it came late,” Hahn said.
Among the commitments made by Hungary were the establishment of an independent anti-corruption authority, amendments to the criminal code, amendments to the public procurement law, restructuring regulation for public interest foundations, and transparency in the asset declarations of high-ranking politicians.
Yet the European Commission believes that there are still budgetary risks, which is why it decided to suspend the payment of €7.5 billion, or about 3 trillion forints, in cohesion funds due to Hungary. The Commission also proposed that this money not be provided to public-interest foundations either.
However, the Hungarian government will still have until November 19 to rectify its problems and inform the Commission about the measures it has taken.
The government’s proposal will be sent to the Council of EU member states, where a decision must be made within one month, but this can be extended by two months at most. The entire procedure must be completed by the end of December. [Magyar Hang]