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Gov’t Reportedly Concedes to HUF 500 Billion Penalty for Mismanaging EU Funds

Fanni Kaszás 2019.11.13.

Hungary has imposed and accepted a penalty of more than 500 billion HUF ($1.65 billion) in funding corrections, much more than in the previously expected worst-case scenarios, due to mismanaging EU funds in the 2014-2020 EU budget.

Details of the penalty were set out in a document prepared by the European commissioner for the neighborhood policy’s team for a meeting on Monday. The document was posted on the European Parliament’s Budget Control Committee’s website after its Monday meeting and showed that Hungary had agreed to a 10% reduction in the EU funds deemed by the committee to have been mismanaged in the current 2014-2020 EU budget period.

The penalties, which would amount to more than 500 billion HUF, were undertaken by the government in order to resume EU payments suspended for the duration of the investigation. However, even after the EU detected the abuse of EU funds, the state did not withdraw the aid from the beneficiaries, but covered billions from the state budget. According to reuters.com, the EU found that eight of the 30 EU funding programs need to be “corrected” due to mismanagement. The government could have opted to challenge the findings one by one, but rather chose the financial correction.

According to Benedek Jávor, an opposition politician who investigated abuse of EU funding as an MEP in the previous term, collected the financial corrections in a document prepared as part of the European Commission’s 2018 final budget clearance process, and the penalty is twice as much as the previously estimated amount. As he put it: “this is the cost to Hungary of the corruption of Lőrinc Mészáros, István Tiborcz, and other pro-Fidesz oligarchs. But this is not paid by them, but by Hungarian taxpayers.”

Prime Minister Viktor Orbán rejects allegations that the government has eroded democratic checks and balances, and scoffed at a proposal to tie funding to upholding democratic principles and the rule of law. Meanwhile, the government has yet to comment on this specific case.

featured photo: Pixabay