European Commission Budget Commissioner Johannes Hahn has sent a formal note to the Hungarian government on the launch of a rule of law mechanism to protect EU funds against Hungary, Commission Vice-President Margaritis Schinas announced at a press conference in Brussels on Wednesday.
The rule of law mechanism is a procedure whereby the Commission can take financial measures if it finds that EU funds are not being used for their intended purpose, because the rule of law, or European values, are being violated, Magyar Hang reports. This could include recovering funds, withholding future funds, and reducing costs or payments. The legislation has been in effect since January 1st of last year, which means that any payments made after that date will fall under this regulation. So it also applies, for example, to the previous seven-year budget cycle if the specific payment was made after January of last year.
FactThe Court of Justice of the European Union rejected Hungary’s and Poland’s complaint in February that the EU may cut funds to the Member States that violate the rule of law. According to the ruling, the so-called rule of law mechanism is legal. The Luxembourg-based panel announced in the ruling that the two countries would also bear the costs of the proceedings.
The European Commission has concerns about public procurement, the implementation of European budgets, audits, monitoring, clearance of accounts, transparency, fraud prevention, and corruption, but other breaches have also been identified, which aggravate the situation. The latter relates to investigations, i.e. the detection of irregularities.
The official added that these problems have existed in Hungary for more than ten years and no solution has been found during this period. If funds are withdrawn from Hungary, the end-users cannot be harmed in this case either, which means that the Hungarian government has to stand up and pay these funds from its own budget. This will be monitored by the European Commission, and the people concerned can report it if they feel they are being cut off from funding.
Vera Jourova, the Vice-President for Values and Transparency, wrote on Twitter that the conditionality mechanism will be activated by the letter.
We identified issues that might be breaching [the rule of law] in Hungary and affect the EU budget,”
Yesterday, we reported that Prime Minister Viktor Orbán will have three months to respond to the letter from Hahn. The process can last from six to nine months. At the end of it, a council of national government representatives may decide to suspend or block part of EU funding if it is proven that the EU’s financial interests are directly affected by a breach of certain rule of law standards. Although there were earlier rumors that Poland would also be affected, the Brussels body said this was not justified.
According to the Orbán government, the procedure is politically motivated, a “witch hunt,” and has no legal ground.
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