EU recommends withholding funds to Hungary over corruption concerns

The European Union administration has proposed suspending €7.5 billion ($7.5 billion) from Hungary’s allocated budget following accusations of corruption and fraud.

The European Commission has proposed suspending funding as part of new mandates under the so-called Conditionality Mechanism, according to a statement on Sunday. Penalties must be approved by the member states of the bloc.

“The European Commission today proposed a budget protection measure to the Council under a conditional regulation,” according to a statement on Sunday. “This is to ensure that the EU budget and EU financial interests are protected from violations of the rule of law principles in Hungary.”

Hungarian Prime Minister Viktor Orban has challenged the democratic foundations of the EU following an unprecedented consolidation of powers that rewrites the constitution, reviews electoral rules and expands influence over courts, media, culture and education. Under his leadership since 2010, Hungary plummeted in Transparency International’s Corruption Perceptions Index and now ranks last in the EU after Bulgaria.

financial gain

Fed up with moves to erode judicial independence, erode minority rights and erode the primacy of EU law, the bloc introduces new mechanisms to protect its economic interests from member states blaming democratic setbacks. Hungary is the first country to be targeted, but Poland, whose leadership mimics Orban’s policies, may also risk similar scrutiny in the future.

The EU confrontation has hit Hungarian assets, with the forint losing almost 10% against the euro this year. Investors say the uncertain outlook for EU funds contributed to the disproportionate sell-off.

Last month, he proposed setting up an anti-corruption agency and amending laws, including public procurement, to allay the concerns of EU officials.

The EU government has one month to make a final decision on whether to cut Hungary’s funding, which could extend the deadline by up to two months. A qualified majority of member states is required for the Commission’s proposals to become effective.

Orban quickly sent officials to convince his counterparts to vote against the cuts.

After meeting in Paris with Garance Pinault, French President Emmanuel Macron’s adviser on EU affairs, Justice Minister Judith Varga wrote on Facebook on Thursday: .

EU lawmakers said this week that European Union officials had been dragging out the Hungarian issue too long and that their lack of decisive action “contributed to the collapse of democracy”.

In a resolution, the European Parliament said, “Neglecting violations of the rule of law undermines democratic institutions and ultimately reduces human rights and human rights for all in countries where these violations occur.” It affects lives,” he said.

Dear Reader,

Business Standard has always strived to provide up-to-date information and commentary on developments that are of interest to you and that have wide-ranging political and economic impact on the nation and the world. Your encouragement and constant feedback on how to improve our products only makes our determination and commitment to these ideals stronger.In such a difficult time caused by Covid-19, also remains committed to providing authoritative news, authoritative views, and insightful commentary on relevant topical issues to keep you informed.
However, I have a request.

We need your help even more so that we can continue to deliver quality content as we battle the economic impact of the pandemic. We have seen encouraging responses from many users who have subscribed to Increasing subscriptions to online content helps us achieve our goal of providing more relevant and relevant content. We believe in free, fair and responsible journalism. Your support through more subscriptions will help us live the journalism we are committed to.

Supporting high-quality journalism, Subscribe to Business Standard.

digital editor