
EU threatens Hungary funds with rule of law action
The EU’s executive on Wednesday hit Hungary with a no means-before-used legal manner that might see Budapest stripped of funding for flouting democratic requirements.
The move comes simply over three weeks after Hungarian Prime Minister Viktor Orban gained re-election with an awesome majority.
The nationalist is often accused in Brussels of backsliding on democratic norms.
EU budget commissioner Johannes Hahn has sent a “written notification” to Hungary’s government triggering the start of the rule of law mechanism, European Commission vice president Margaritis Schinas said.
Germany’s minister for European affairs, Anna Luehrmann, welcomed the move.
“Rule of law is the foundation of our European home. Hungary must resolutely and swiftly eliminate the existing shortcomings,” she tweeted.
In a message posted to Facebook, Orban’s chief of staff Gergely Gulyas, confirmed that Budapest had received the letter and would respond at a weekly press briefing on Thursday.
This response will outline “what can and can’t be up for debate, be part of a compromise or not.”
But Gulyas warned Hungary would not backtrack on a law to ban the promotion of LGBT “ideology”, which Orban defends as a child protection measure but Brussels sees as an attack on equal rights for sexual minorities.
The issue has raised frustrations in Brussels, and Orban’s government has used it to mobilise anti-EU opinion but is not central to the rule of law case launched on Wednesday.
Brussels has repeatedly clashed with Hungary over its public procurement system, conflict of interests and corruption, but now for the first time has formally moved towards a funding halt.
A senior EU official said the move represented the “very first formal step” in the lengthy procedure and that Hungary would have two months to respond once it received the letter.
Overall the back-and-forth with Budapest could take nine months and any potential cuts to Hungary’s EU funding would need to be endorsed by a super-majority of the bloc’s 27 member states.
Analyst Patrik Szicherle of Budapest thinks tank Political Capital said he doesn’t think the case will end in a funding cut.
“This will start a sort of a six-to-nine month negotiation process,” he told AFP. “It does not mean that Hungary’s EU subsidy allocation will be cut in the near future.
“On the EU level, Hungary might be more open to or likely to reach a compromise on some issues, at least temporarily, with the commission,” he said.
Once the immediate economic crisis has passed, Szicherle predicted, Budapest will start more fights with Brussels, “but right now Hungary really does need the EU money.”
The conditionality mechanism was created in 2020, after a summit at the height of the coronavirus pandemic that agreed on common borrowing to build an 800-billion-euro ($900 billion) pile of grants and loans to help EU economies recover.
Budget hawks, including Austria and the Netherlands, demanded the conditionality mechanism to put guard rails around the spending of taxpayers’ money.
Hungary and Poland challenged the new procedure in the EU’s top court. But, in February, the European Court of Justice gave the go-ahead for its use, saying the European Union “must be able to defend those values”.
The commission was under pressure from the European Parliament to apply the conditionality mechanism against Poland and Hungary. The legislature launched legal action to make the commission act.
“EU Commission has triggered the rule of law mechanism against Hungary,” tweeted Green MEP Daniel Freund.
“Soon the funding for Orban’s corrupt autocracy will run dry. FINALLY!!”
The use of the mechanism provides an extended listing of other methods the commission has taken over issues against Hungary and Poland.
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