The EU is the first to cut funding to Hungary for undermining democracy

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  • EU executive proposes to withdraw 7.5 billion euros from Hungary
  • Hungary says the proposed remedy could work if implemented well
  • The 27 EU countries have three months to decide and have no veto
  • The EU tested the new democratic sanction for the first time
  • Hungary commits to fulfill all commitments to unlock EU funds

BRUSSELS/BUDAPEST, Sept 18 (Reuters) – An EU executive on Sunday recommended suspending about 7.5 billion euros in funding to Hungary over corruption. Law.

The European Union introduced new financial sanctions two years ago, undermining democracy in Poland and Hungary, with Prime Minister Viktor Orbán restricting the courts, the media, NGOs and academics, and the rights of migrants. , more than a decade of gay men and women in power.

“This is about breaching legal provisions that compromise the use and management of EU funds,” EU budget commissioner Johannes Hahn said. “We cannot conclude that the EU budget is adequately protected.”

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He highlighted systemic irregularities in Hungary’s public procurement laws, insufficient safeguards against conflicts of interest, weaknesses in effective prosecutions, and deficiencies in other anti-corruption measures.

Hahn said the commission would recommend suspending a third of the cohesion funds planned for Hungary from the coalition’s shared budget for 2021-27, worth a total of 1.1 trillion euros.

The €7.5 billion in question is 5% of the country’s estimated 2022 GDP. EU countries now have up to three months to decide on the proposal.

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Hungary’s recent promise to address EU criticism is a significant step in the right direction, but still needs to be translated into new laws and practical measures, Hahn said.

Development Minister Tibor Navrasiks, who is in charge of negotiations with the EU, said Hungary would meet all 17 commitments it made to the European Commission to prevent the loss of EU funds.

“Hungary is not committed to confusing the commission,” Navracsics told a news conference. “We have implemented the commitments that we know about … so, we will not face financial loss.”


Orban’s government has proposed the creation of a new anti-corruption agency in recent weeks as Budapest comes under pressure to cash in on the forint, the weakest economy and the worst-performing currency in the EU’s east.

Orbán, who calls himself a “freedom fighter” against the worldview of the liberal West, denies that Hungary, a former communist country of 10 million people, is more corrupt than any other in the European Union.

Orban’s government will submit legislation to parliament on Friday to establish a new independent anti-corruption commission to oversee public procurement of EU funds, Navracsics said, with the body set to launch in the second half of November.

Hungary has pledged to implement more anti-corruption safeguards, including tighter rules on conflicts of interest, expanding the scope of financial statements and expanding the powers of judges to prosecute suspected corruption.

Navrasics expressed hope that the commission would be committed to implementing the reforms and withdraw its proposed sanctions against Hungary by November 19.

The commission has already blocked around 6 billion euros in funds planned for Hungary in a separate COVID economic recovery stimulus over the same corruption concerns.

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Reuters documented in 2018 how Orbán funneled EU development funds to his friends and family, a practice that human rights groups say greatly enriched his inner circle and allowed the 59-year-old to entrench himself in power.

OLAF, the group’s anti-fraud body, said Hungary accounted for nearly 4% of EU financial spending in 2015-2019, the worst result among the 27 EU countries.

Orbán has rubbed many in the group the wrong way by continuing to cultivate close ties to President Vladimir Putin and by threatening to renege on the EU solidarity needed to protect Russia by imposing sanctions on it for waging war against Ukraine.

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Report by Gabriela Pacinska; Editing by David Evans

Our Standards: Thomson Reuters Trust Principles.

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