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March 4, 2024

EU Threatens Legal Action Against Commission Over Release of Funds to Hungary

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Jan 19, 2024

The European Parliament has escalated its criticism of Hungary’s record on rule of law and threats to EU values, while threatening to take legal action against the European Commission for releasing frozen funds to the country.

Background

The conflict between the EU and Hungary has been simmering for years, centering on accusations that Prime Minister Viktor Orban has eroded democracy and the rule of law through measures seen as targeting marginalized groups and consolidating power.

The EU has frozen billions in recovery funds and tied access to improvements in areas like judicial independence, tackling corruption, and protections for LGBTQ people. However, under pressure to show unity in supporting Ukraine, the Commission released €5.8 billion in funds to Hungary in December.

Parliament Condemns Erosion of Values

On January 19, Members of the European Parliament strongly condemned the deterioration of values and rule of law in Hungary, stating Orban’s government has created an “hybrid regime of electoral autocracy” that violates EU principles.

A resolution passed accusing Hungary of corruption, lack of action on watchdog recommendations, weakening constitutional and electoral frameworks, limiting media and academic freedoms and minority rights, and failure to join the European Public Prosecutor’s Office.

MEP Guy Verhofstadt slammed Commission President Ursula von der Leyen for “dragging her feet” on using conditionality regulations to ensure proper use of EU funds:

“It is unacceptable that EU funds continue to flow into Orban’s coffers with no strings attached. The Commission President is dragging her feet on using the conditionality regulation while the rule of law situation in Hungary continues to deteriorate.”

Legal Threat Over Funds Release

Parliament President Roberta Metsola announced preparations for legal action against the Commission over the release of recovery funds to Hungary in December, seen by many MEPs as premature given lack of fulfilled reform commitments.

The Greens/EFA group called the funds release “painfully obvious breach of the rule of law”:

“In the absence of the Hungarian authorities implementing any of the reforms requested, the Commission’s decision to give its green light regardless seems difficult challenge legally. We are therefore preparing to bring this painfully obvious breach of the rule of law to the EU Court of Justice.”

Impact on Hungary’s Influence and Funding

The resolutions and threats of legal action represent a serious challenge to Hungary’s standing in the EU. Some consequences Hungary may face:

  • Loss of voting rights in EU Council
    • A resolution calling for launching mechanism to strip Hungary’s voting rights passed with 416 votes in favor, the first time such a measure has moved forward. Though highly symbolic, this would limit Hungary’s influence on EU policy.
  • Blocking of additional recovery funds
    • Without demonstrated progress on rule of law issues, approval of Hungary’s full National Recovery Plan and further access billions in pandemic funds will likely be halted.
  • Bypass mechanisms to prevent misuse of funds
    • Parliament is pushing for EU funds to Hungary to be managed by independent agencies, bypassing Orban’s government entirely to prevent corruption.
Potential Funding Impact Amount (billions EUR)
Frozen recovery funds 5.8
Bypassed shared management funds 2021-2027 budget 21
Cohesion funds subject to conditionality 22
Total 48.8

Orban Remains Defiant

Orban has remained defiant in the face of EU criticism, stating Hungary will not back down on policies regarding migration and LGBTQ rights that are seen as violating EU values.

His party has rejected resolutions as “Leftist witch hunts” and Orban characterized them as blackmail:

“We have bad news for our opponents: no matter what they do, Hungary will not yield to blackmail and will reject every attempt to coerce it when it comes to migration, LGBTQ propaganda in schools and other sensitive issues.”

However, loss of so much EU funding would significantly impact Hungary’s economy, likely forcing some concessions.

Next Steps

The coming months will determine whether the EU follows through on threats to isolate Hungary through legal and financial actions. However, unity on supporting Ukraine is paramount, meaning Orban likely faces more deadlines to show progress before harshest measures are implemented.

With Hungarian elections in April, continuation of Orban’s defiance could risk further erosion of Hungary’s relationships with EU institutions. However, domestic popularity from clashes with Brussels may strengthen his position for re-election.

Either way, tensions between liberal democratic values and national populist policies will continue to pose an existential challenge for the future of the European Union.

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AiBot scans breaking news and distills multiple news articles into a concise, easy-to-understand summary which reads just like a news story, saving users time while keeping them well-informed.

To err is human, but AI does it too. Whilst factual data is used in the production of these articles, the content is written entirely by AI. Double check any facts you intend to rely on with another source.

By AiBot

AiBot scans breaking news and distills multiple news articles into a concise, easy-to-understand summary which reads just like a news story, saving users time while keeping them well-informed.

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