After months of tug-of-war with the Viktor Orban’s governmentthe European Comission has decided to take the plunge and activate the mechanism that conditions the disbursement of European funds regarding the rule of law. Although there are no estimates on the amount of European aid that Budapest could lose if it does not resolve the deficiencies identified by the Community Executive, Brussels considers that it has “sufficient evidence”, according to the vice president Vera Jourovathat there has been a violation of the rules in the management of the funds, for which Hungary has to give explanations and present corrective measures.
Today, we send a notification letter to Hungary formally activating the budget conditionality procedure.
We identified issues that might be breaching #RuleOfLaw in HU and affect the EU budget.
Hungary will have to reply to our concerns and propose remedial measures.
— Věra Jourová (@VeraJourova) April 27, 2022
“The Commission has decided to act because it has serious concerns about a number of institutions in el use of the EU budget in Hungary. They refer to public contracting, the functioning of the authorities responsible for the funds, financial controls and the audit process, transparency, the prevention of fraud, corruption and other violations, “explain sources from the community executive.
To this, they add the same sources, the “constant” refusal of the Hungarian authorities to comply with the recommendations and requests of Brussels for more than a decade, as demonstrated by the “exceptionally high level of financial corrections in recent years”. The European Commission has other concerns that have further aggravated the situation due to “limits to effective investigation and independent prosecution” in the country. In addition, Hungary does not have a comprehensive anti-corruption strategy which further complicates the situation in terms of the rule of law.
This is the first time that the Commission has activated the mechanism, which entered into force on January 1, 2021 and which Brussels had kept frozen until the ruling of the EU Court of Justice on the appeal filed by Hungary and Poland. The courts endorsed the instrument on February 16 and Brussels got down to work which has led to the sending of a formal letter of summons in which he identifies the problems. “This is only the beginning of the dialogue, there is no sanction, no fine or anything,” explain sources from the Community Executive.
The hungarian authorities They now have a period of two months to respond to the concerns identified by Brussels, provide explanations and propose appropriate corrective measures. “The objective is to achieve, if an agreement can be reached, so that the procedure can be stopped, but if this is not the case, it will continue”, add sources from the Commission on a procedure that could last between 5 and 9 months. “Nobody wants the process to last forever. The Commission has an obligation to activate it and adopt measures at the end of the process to correct the situation. So nine months is the maximum it could last,” they say.
Eddie is an Australian news reporter with over 9 years in the industry and has published on Forbes and tech crunch.