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European Commission Suspends €2,4 billion EU Funds For Hungary

By Tamás Székely // 2015.04.16.

The European Commission (EC) has suspended 700 billion forints (€2.4 billion) in Hungary’s European Union funding after it found fault with the selection process during the 2007-2013 budget cycle, a government official said. Deputy state secretary Nándor Csepreghy told a press conference that Hungary’s dispute with the Commission on the matter is of a “technical” nature. He added that the government is weighing possible solutions.

The correction the EC prescribes for such cases is usually below 10% of total funding, which could mean around 20 billion forints, Csepreghy said. This amount may not be used for the original programme but may be used for other development goals, he explained. No developments can be halted due to the EC decision, Csepreghy said. Csepreghy noted that the former Socialist government’s selection process had been used during the period in question.

The ruling Fidesz party said in response that it will ask the government to do its utmost to ensure that no economic development programmes should be halted because of the “technical debate” that has developed with Brussels as a result “of the Socialists’ misappropriate selection process.”

Opposition parties LMP, Együtt (Together) and the Hungarian Liberal Party (MLP) demanded that the government should release the EC’s related report to the public without delay. Erzsébet Schmuck, a lawmaker for LMP, said the party had repeatedly stated concern of suspected corruption surrounding the public procurement system and the selection process of projects. László Heltai, an economic policy spokesman for the party, said that the Prime Minister’s Office had received from the EC the auditors’ report stating concrete concerns already in February which must be released.

Együtt party said that ruling Fidesz must stop pointing the finger at the previous government since it has had five years in government to correct the “alleged discrepancies” in the use of funds. Zoltán Bodnár, an economic expert of the Liberal party, said the EC’s measure could be expected since Brussels and Budapest had been engaged in a debate for months over the transformation of the selection process Hungary had carried out without consultations with the European Commission.

Radical nationalist Jobbik called for an overall change in the Hungarian public procurement regime and for installing “a new, transparent” system. Deputy group leader Dániel Z Kárpát said that the EC’s decision is “no accident,” making reference to press reports saying that Brussels had looked into thousands of contracts “in connection with which the suspicion of corruption emerged.”

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