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On 30 November, the European Commission recommended that a pay-out of €7,5 billion from the Cohesion Fund initially allocated to Hungary, be freezed due to concerns about the deteriorating rule of law and possible grand-scale corruption within the country.
For several months now, Brussels has threatened Hungary with financial sanctions. Hungary accordingly submitted a list of 17 measures that would have been implemented before 19 November, which measures served as a sine qua non for Budapest to gain access to the funding in question. However, Hungary only managed to enact some of them timely, which left Brussels unconvinced of its commitment.
As part of the necessary reforms, the Hungarian government launched an anti-corruption task force, but the European Commission deemed this gesture to be insufficient. It therefore recommended Member States to validate Hungary’s recovery and resilience plan (€5,8 billion in subsidies), but to make the payment conditional to Hungary’s implementation of another 27 key-measures in line with fighting corruption and ensuring the independence of the judiciary.
As expected, the Hungarian prime minister, Viktor Orbán, criticised the decision of the European Commission and accused the “bureaucrats in Brussels” of freezing funds for “political reasons”. It is now time for heads of state and of government to make a decision. Against the backdrop of the war in Ukraine and the rising inflation hitting the country, these two decisions, due before the end of the year, could cause a major political crisis.
