news letterOur mobile application

Weekly newsletter

Gov’t Reacts to EU Penalty: No Funding Loss

Hungary Today 2019.11.15.

After the news began circulating that Hungary had received and accepted a more than 500 billion HUF penalty in funding corrections, the government also responded. The Ministry for Information and Technology called the information an unfounded accusation, while the head of the PM’s Office implicitly admitted it, but at the same time called the numbers extremely exaggerated, emphasizing that Hungary is not losing a single cent of European Union funding.

As we have previously written, Hungary has been reportedly accepted a penalty allegedly more than 500 billion HUF (EUR 1.49bn) in funding corrections, due to mismanagement of EU funds in the 2014-2020 EU budget.

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

Later, the Ministry for Innovation and Technology labeled the information fake news in their statement, calling the accusations of opposition MPs  “the usual political scare-mongering.” The main argument of the press release is that the financial correction (penalty) does not mean that the country will suffer a net loss of funds,  Portfolio writes. According to the economic news portal, what is happening in reality, is that some of the EU development accounts that have already been carried out in the country are not accepted by the European Commission budget, and have to be managed from the budget.

In the meantime, further improvements in Hungary must be made properly so that the country can actually mobilize the development funds originally promised from Brussels.

Gergely Gulyás, the head of the Prime Minister’s Office also talked about the matter in a regular government press briefing on Thursday. Regarding the financial penalty rumored to be between 500-700 billion HUF, he said: “even 500 billion is brutally exaggerated.”

Eu Funds: How Much Money Will Hungary Receive and What Can It Do with It?

The Minister, therefore, implied that the Hungarian press had drawn exaggerated conclusions from the recent responses of the European Commission to the European Parliament Committee.

Hungary is not losing a single cent of European Union funding and transfers are ongoing, he emphasized.

Those pieces of information appearing in the press that apply the correction to the entire program affected by the audit make the biggest mistake, Gulyás said.

He pointed out that the individual agreements and the flat-rate adjustments do not concern the whole of the Operational Program but only a part of it, and that is why significant differences exist between the numbers circulating in the press and actual penalties.

Gulyás said EU funding totalled 7.500 billion forints (EUR 22.5bn), and thanks to a favorable exchange rate, this amount was now worth up to 8 billion forints. Operational programs, however, are receiving a total of 9.1 billion HUF, as the Hungarian state is providing more than matching funds.

He said disputes with Brussels over funding only accounted for a small percentage of programs, and a resolution was highly likely in these cases.

Gulyás said so far 41% of EU funds had been drawn down, “an especially very good ratio.” Hungary is ranked ninth in this respect and is top of the list of Visegrad countries, he added.

Featured photo by Lajos Soós/MTI