January 28, 2023

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

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

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  • EU executive proposes taking 7.5 billion euros from Hungary
  • He says the treatments proposed by Hungary can work if they are done well
  • 27 EU countries have three months to decide, no veto
  • EU tests new democratic sanctions for the first time

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

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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.

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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.


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.

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.

Orban has also mischaracterized many in the bloc by establishing enduring close relations with President Vladimir Putin and threatening to deprive the European Union of the unity needed to impose and maintain sanctions on Russia to wage war against Ukraine.


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(Gabriela Bachinska reports); Editing by David Evans

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