European Union cuts Hungary’s funding for endangering democracy

• The EU says Hungary should lose about 7.5 billion euros in funding because of corruption.
• This is the first time this has happened in the 27-nation bloc under new rule meant to protect rule of law.
• EU nations have up to three months to decide what to do about the proposal.

The executive of the European Union said that Hungary should lose about 7.5 billion euros in funding because of corruption. This is the first time this has happened in the 27-nation bloc under a new rule meant to protect the rule of law.

The EU came up with the new financial penalty two years ago in response to what it sees as an attack on democracy in Poland and Hungary. During his more than a decade in power, Prime Minister Viktor Orban shut down courts, media, NGOs, and universities and limited the rights of migrants, gays, and women.

“It’s about breaches of the rule of law compromising the use and management of EU funds,” said EU Budget Commissioner Johannes Hahn. “We cannot conclude that the EU budget is sufficiently protected.”

He brought up problems with the way Hungary’s public procurement laws are set up, how there aren’t enough safeguards against conflicts of interest, how effective prosecution is, and how other anti-corruption measures aren’t good enough.

Hahn said that the Commission was recommending that about a third of Hungary’s cohesion funds, worth a total of 1.1 trillion euros, be taken out of the bloc’s shared budget for 2021–2027.

The amount in question, 7.5 billion euros, is equal to 5% of the country’s estimated GDP for 2022. Now, EU nations have up to three months to decide what to do about the proposal.

Hahn said Hungary’s recent promise to do something about the EU’s criticisms was a big step in the right direction, but it still needed to be followed up with new laws and actions for the EU to feel better.

In the past few weeks, Orban’s government has talked about making a new anti-corruption agency. This is because Budapest is under pressure to get money for its weak economy and forint, which is the worst-performing currency in the east of the EU.

Orban, who calls himself a “freedom fighter” against the worldview of the liberal West, denies that Hungary, an ex-communist country with about 10 million people, is more corrupt than other countries in the EU.

Because of the same worries about corruption, the Commission has already stopped about 6 billion euros in funds that were supposed to go to Hungary as part of a separate COVID economic stimulus plan.

In 2018, Reuters showed how Orban gives EU development funds to his friends and family. Human rights groups say that this has made his inner circle very wealthy and helped the 59-year-old stay in power.

From 2015 to 2019, almost 4% of EU funds spent in Hungary were spent in a way that wasn’t right, according to OLAF, the EU’s anti-fraud body. This was by far the worst result of the 27 EU countries.

Orban has also upset a lot of people in the bloc by maintaining close ties with President Vladimir Putin and threatening to break up the EU, which is needed to put and keep sanctions on Russia for going to war with Ukraine.

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