In the beginning, the European Union moves to cut money to Hungary because of damage to democracy

BRUSSELS/BUDAPEST (Reuters) – The European Union’s chief executive on Sunday recommended suspending some 7.5 billion euros of funding for Hungary over corruption, the first such case in the 27-nation bloc under a new penalty aimed at better protecting Hungary’s rule. Law.

The European Union introduced the new financial penalty two years ago precisely in response to what it says amounts to undermining democracy in Poland and Hungary, where Prime Minister Viktor Orban has subjugated courts, the media, NGOs and academia, as well as restricted the rights of migrants. Gays and women during more than a decade in power.

“This is about violations of the rule of law that endanger the use and management of EU funds,” said EU Budget Commissioner Johannes Hahn. “We cannot conclude that the EU budget is adequately protected.”

He highlighted the systematic irregularities in Hungary’s public procurement laws, inadequate safeguards against conflicts of interest, weaknesses in effective litigation and the shortcomings of other anti-graft measures.

Hahn said the commission had recommended suspending about a third of Hungary’s envisaged cohesion funds from the bloc’s joint budget for 2021-27 with a total value of 1.1 trillion euros.

The €7.5 billion involved amounts to 5% of the country’s estimated GDP for 2022. EU countries now have up to three months to decide on the proposal.

Hahn said Hungary’s recent pledge to address EU criticism was an important step in the right direction but that it still had to be translated into new laws and practical measures before the bloc was reassured.

Development Minister Tibor Navraxis, who is in charge of negotiations with the EU, said Hungary would honor all 17 commitments it made to the European Commission to avoid losing any EU funding.

“Hungary has not undertaken to confuse the commission,” Navraxx told a news conference. “We’ve made pledges that we know can be carried out…so, we won’t face a loss of money.”

corruption

Orbán’s government has proposed creating a new anti-graft agency in recent weeks as Budapest has come under pressure to secure funds for the faltering economy and the forint, the worst performing currency in the eastern European Union.

Orbán, who calls himself a “freedom fighter” against the worldview of the liberal West, denies that Hungary – a former communist country of about 10 million people – is more corrupt than others in the European Union.

Navraxx said Orban’s government will present laws to parliament on Friday to create a new independent anti-graft body to monitor public procurement of EU funds, with the body to be launched by the second half of November.

Hungary has also pledged to implement several other anti-corruption safeguards, including stricter rules on conflicts of interest, broadening the scope of financial statements and expanding the power of judges to prosecute suspected corruption.

Navraxx expressed hope that the Commission will be assured of implementing the reforms and withdraw its proposed sanctions against Hungary by November 19.

The Commission is already blocking around €6 billion in funds envisaged for Hungary in stimulating a separate COVID economic recovery due to the same corruption concerns.

Reuters documented in 2018 how Orbán funnels European development money to his friends and family, a practice that human rights organizations say has greatly enriched his inner circle and allowed the 59-year-old to establish himself in power.

Hungary had irregularities in nearly 4% of EU money spending in 2015-2019, according to the bloc’s anti-fraud body, OLAF, the worst result among the EU’s 27 nations.

Orbán also rubbed many in the bloc the wrong way by establishing enduring close relations with President Vladimir Putin and threatening to deny the European Union the unity needed to impose and maintain sanctions on Russia to wage war against Ukraine.

https://www.reuters.com/investigates/special-report/hungary-orban-balaton/

(Gabriela Bachinska reports); Editing by David Evans

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