Brussels expected to maintain freeze on Hungary funds

The European Commission does not yet accept that Hungary has made sufficient anti-corruption reforms to justify lifting its embargo on 7.5 billion euros ($7.8 billion) in EU funds, officials said Thursday.

The EU executive’s official position on unfreezing the cash will be announced after a meeting of commissioners, “perhaps next week”, in the words of commission spokeswoman Dana Spinant.

The next such meeting is on November 30, but European sources, speaking on condition of anonymity ahead of the formal decision, said Hungary had failed to make enough progress.

Brussels is constantly at loggerheads with Hungary’s right-wing populist premier Viktor Orban and his government over what it sees as their contempt for democracy and the rule of law.

Budapest in turn has tried to stifle EU decision-making in several areas to pressure Brussels into releasing European funds, including putting EU support for Ukraine in its war with Hungary’s ally Russia under threat.

In September, citing “systematic irregularities” in Hungarian government contracts, the commission recommended that EU member states agree to block 7.5 billion euros in EU funds earmarked for Budapest.

They set out 17 benchmarks for anticorruption measures for Hungary to meet and, although these are still being examined, the sources said Orban’s government has come up short.

That opinion is shared by many in the European Parliament, where on Thursday MEPs voted by 416 to 124 to oppose any release of the funds while Budapest maintains its blocking tactics.

They citied Hungary’s refusal to back an 18-billion-euro aid package designed to keep the Ukrainian government running as an “abuse on the rule of voting by unanimity” and urged member states not to “give in to pressure”.

Hungary is also awaiting EU approval of its 5.8-billion-euro post-Covid recovery plan, which is also frozen over Brussels’ concerns that rule of law is being flouted.

If this plan does not get the green light before the New Year, 70 percent of those funds would be lost. 

According to European sources, the commission is leaning towards approving the Hungarian spending plan itself — with no disbursement until conditions are met — but making future payments contingent on judicial reforms and anti-corruption measures.