The European Commission launches a mechanism to reduce funding for Hungary


European Commission launches Hungarian funding reduction mechanism

Viktor Orban/Radio Liberty

The European Union is unhappy with Hungary's actions to undermine the rule of law. Now the country can be punished.

The European Commission has developed a special mechanism that is designed to cut millions of EU payments to countries where, according to its findings, violations of the law jeopardize the bloc's budget. And Hungary will be the first to suffer because of this. All because of the consolidation of power by Prime Minister Viktor Orban and his Fidesz party.

For several years, various EU institutions have tried in vain to take existing measures to appease Hungary. The Commission repeatedly brought Hungary to the EU Court of Justice because of its controversial actions, but Orban continued to consolidate power. In 2018, the country could even lose the right to vote – the corresponding procedure was initiated by the European Parliament. But then it was not possible to bring the matter to an end.

What are the claims against Hungary

International experts note that after Viktor Orban came to power in 2010, a gradual usurpation of power took place in Hungary. All this led to corruption and enrichment of family members and persons close to Orban at the expense of funds allocated by the European Union.

Orban introduced a new constitution and changed the electoral system. Thanks to this, in 2022, his Fidesz party, under unequal conditions, won the parliamentary elections. Therefore, Orban will be elected for the fourth time as prime minister. In addition, Fidesz expanded its influence into the judiciary, the state media and the education system during his reign. And even got to the chief prosecutor.

At the same time, high-level corruption flourished in Hungary, Orban's family members and close friends became one of the richest people in Hungary.

From the fall before authoritarianism, the country was saved by EU treaties.

A new punishment mechanism

Back in late 2020, many EU countries were complaining that governments that violated democratic norms were misusing EU taxpayer funds. Therefore, a new mechanism has been developed that will allow the bloc to reduce EU funding for member states where violations of the rule of law affect or could affect the EU budget in a “fairly direct way”.

But due to the political agreement reached between the leaders of the EU, the Commission agreed to postpone the deployment of the new power until Hungary and Poland challenge the legality of the new mechanism in the EU Court of Justice. In the end, in February 2022, the court gave this mechanism a legal green light, but the Commission decided to wait until the completion of the elections in Hungary.

When Hungary can be punished

European Commission President Ursula von der Leyen said her team communicated its decision to Hungary on Tuesday, April 5, after reviewing Budapest's responses to an informal letter the Commission sent last November asking for information about her concerns about the rule of law.

After the Commission officially starts the process, a lengthy communication with Budapest is expected. Then the EU Council, which includes representatives from each country, will finally decide whether to reduce payments for Hungary. Any reduction in funding requires a “qualified majority”, i.e. at least 55 percent of EU countries representing at least 65 percent of the bloc's population to pass.

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