EU freezes funds for Hungary

However, the sum should not be as high as proposed by the EU Commission.

A large majority of EU countries have agreed to freeze billions in payments from the European Community budget intended for Hungary.

Due to concerns that EU funds are being misappropriated in the country due to insufficient fight against corruption, 6.3 billion euros are to be blocked for the time being. The current Czech EU Council Presidency provided information on the agreement, which is unprecedented in the history of the EU, on the night after a meeting of the permanent representatives of the member states in Brussels.

Reforms to improve the rule of law called for

The sum of 6.3 billion euros is around 1.2 billion euros lower than proposed by the EU Commission and desired by countries like Germany. However, the agreement is still considered a great success as Hungary is now under pressure to undertake further reforms to improve the rule of law.

The sum was reduced because several EU countries wanted to acknowledge that the right-wing government of Prime Minister Viktor Orban had already made efforts in this direction in recent weeks.

The federal government supports the step

A qualified majority is required for the final approval of the proposal – that means at least 15 of the 27 EU states must agree and together make up at least 65 percent of the total population of the EU. This requirement has been met following the agreement reached in the Permanent Representatives Committee and is now to be formalized in a written procedure before the EU summit on Thursday.

In the past few days, the federal government had already signaled its approval of the tough action against Hungary and spoke out in favor of freezing around 7.5 billion euros. “This is about our values, about our rule of law as a European Union as a whole,” said Foreign Minister Annalena Baerbock on the sidelines of a meeting with colleagues from the other EU member states in Brussels. The Federal Republic supports “the very good proposals of the EU Commission”.

How does Hungary react?

The meeting of the permanent representatives of the member states also approved the Commission’s proposal to formally confirm Hungary’s plan to use EU corona aid. However, it also stipulates that the payments of up to 5.8 billion euros should only be made if a total of 27 requirements are met. This includes those formulated in the rule of law process.

The further developments are eagerly awaited, above all because Hungary has considerable means at its disposal to exert pressure on the EU. For example, the government in Budapest could block decisions that require unanimity in the EU. On the other hand, according to diplomats, Hungary even made concessions on Monday evening and gave up its blockade against new Ukraine aid and an EU law on international minimum taxes.

The reason is the threat from EU countries such as Germany to block approval of the Hungarian plan to use EU corona aid. This would have meant that by the end of the year 70 percent of the available funds of EUR 5.8 billion would have expired.

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