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Hungary Gets Conditional Nod to Access EU Funds

Mariann Őry 2022.11.30.
european commission

On Wednesday, the European Commission recommended that 7.5 billion euros of EU funds should continue to be withheld from Hungary over “rule of law concerns.” Meanwhile, the Brussels body endorsed Hungary’s 5.8 billion euros post-COVID recovery plan, but demands Budapest to attain 27 so-called “super milestones” in order to secure the funds.

The European Commission decided to endorse Hungary’s Recovery and Resilience Plan (RRP), conditioned on the full and effective implementation of the required milestones connected to judicial independence and protecting the EU budget, the Brussels body announced on Wednesday. 

In its statement, the Commission added that

no payment is possible until Hungary has fully and correctly implemented the so-called 27 “super milestones”

recently prescribed by them. 

Executive Vice-President Valdis Dombrovskis told a press conference on Wednesday that “no funds will flow until the ‘essential milestones’ are properly implemented.” The 27 milestones cover “all the first key implementation steps of relevant remedial measures under the conditionality mechanism, all the milestones related to judicial independence and all those related to audit and control, such as the establishment of a functioning IT repository to collect data.”

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However, the Commission finds that “notwithstanding steps taken, there is still a continued risk to the EU budget given that the remedial measures that still need to be fulfilled are of a structural and horizontal nature.”

According to the Commission, while a number of reforms have been undertaken or are underway,

Hungary failed to adequately implement central aspects of the necessary 17 remedial measures

agreed under the general conditionality mechanism by the deadline of November 19, as it had committed to. These relate, in particular, to the effectiveness of the newly established Integrity Authority and the procedure for the judicial review of prosecutorial decisions, the statement adds.

Commissioners Valdis Dombrovskis, Johannes Hahn, and Didier Reynders at the Brussels press conference (Photo via the European Commission).

The Commission has concluded that the conditions for the application of the regulation remain, and that further essential steps will be needed to eliminate remaining risks for the EU budget in Hungary. 

Next steps

The announcement did not come as a surprise. Minister for Regional Development Tibor Navracsics, one of the government members who led most of the negotiations with the Commission, told Reuters on Tuesday that the government expects its recovery fund plan to be approved by EU finance ministers at an Ecofin meeting on December 12, and that he expected that the Commission would most probably recommend that EU governments suspend 65 percent of transfers from the EU budget to Hungary, equating to about 7.5 billion euros.

Navracsics reiterated that Hungary would meet commitments made to Brussels and expects to receive all suspended European Union funds next year.

For the Conditionality Regulation, the Commission will now transmit to the Council its analysis of the implementation of the 17 remedial measures by Hungary, according to its statement. The Council will have until December 19 to make a decision on the Commission proposal.

For the Recovery and Resilience Plan, the Council will now have, as a rule, four weeks to adopt its implementing decision. The Commission will authorize disbursements of 5.8 billion euros in grants based on the satisfactory fulfillment of all the milestones and targets outlined in the recovery and resilience plan, reflecting progress on the implementation of the investments and reforms. 

According to Radio Free Europe‘s Hungarian edition, contrary to the customs, Commission President Ursula von der Leyen will not travel to Hungary to announce that the country’s recovery plan has been endorsed. The news site pointed out that last year the Commission was so close to endorsing the plan that Von der Leyen’s flight ticket to Budapest was already booked, but they canceled last minute after Hungary adopted the so-called child protection act, which – among other things – prevents LGBTQ organizations from entering schools and kindergartens. Officially this law, which is within the scope of national competences,  does not relate to recovery funds.

Featured photo via Pixabay

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