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European Commission Suspends €121M Development Funding To Hungary Over “Irregularities”

By Tamás Székely // 2016.03.30.

The European Union last week suspended the transfer of 121 million euros of development funds earmarked for Hungary because of various irregularities, an insider source who wished to remain unnamed told Hungarian news agency MTI. The European Commission suspended paying funds related to projects from the 2007-2013 financing period on March 23. The EC temporarily cut payments for the projects in September 2015 and has now officially suspended money transfers, the source said.

According to the source the EC will resume the payment of funds if Hungary corrects the irregularities the EC has issues with and possibly accepts paying a fine. The EC has already sent Hungary a letter in September 2015 notifying it of the cancelations of payments and setting out the necessary changes but as Hungary has not taken sufficient steps in the last six months the Commission now took additional measures, the source said. If Hungary fulfils the conditions set out by the EC, then the Commission is ready to resume money transfers immediately, although the projects in question will now be more closely examined, the source added. The EC has suspended or interrupted the payment of a total of 700 million euros of development funds to Hungary and the 121 million euros involved in the current EC decision is part of that larger figure.

The news about the suspension has triggered harsh reactions in Hungarian media, especially in anti-government newspapers. In left-wing Népszava journalist Miklós Bonta dismisses the government’s claims according to which Brussels is punishing Hungary for favouring Hungarian entrepreneurs in public tenders. Bonta thinks that Hungary is unlikely to be denied all the withheld subsidies, but at the end of the day, Hungarian taxpayers will still have to shell out billions of Forints to cover projects which the Commission decides not to reimburse from EU funds.

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