Not a good day for Hungarian Prime Minister Viktor Orban!
EU countries have decided to freeze billions of payments from the social budget allocated to Hungary.
The written procedure was completed on Thursday with the required majority. This was announced by the Czech EU Council Presidency.
6.3 billion euros are to be blocked – a step never seen before. The background is the fear that EU funds have been misused in Hungary due to an inadequate fight against corruption.
The decision is part of a set of four resolutions that should actually be finalized on Wednesday. These include a resolution on comprehensive aid to Ukraine and an important directive to implement the international minimum tax for large corporations. However, at the last minute, Poland registered the need to review the minimum tax.
The objective of minimum tax is to prevent shifting of corporate profits to tax havens. International companies with annual sales of at least 750 million euros must pay at least 15 percent tax, regardless of their location. Aid to Ukraine means up to 18 billion euros in loans through the European Union to the country, which will be attacked by Russia next year.
Since both decisions must be unanimous, Hungary was able to block them for several weeks. That impasse was resolved earlier this week, according to EU diplomats, when countries such as Germany threatened to approve Hungary’s plan to use EU coronavirus aid.
This would have irrevocably seized 70 percent of the €5.8 billion of EU funding available at the end of the year. Confirmation of the Corona program is the fourth part of the package decided on Thursday. However, the payment should be made only if the 27 requirements for fighting corruption are met.
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