Brussels calls for €7.5B of EU funds to be cut from Hungary over rule of law concerns

The European Commission on Sunday called for an estimated €7.5 billion in European funds to be withheld from Hungary over corruption concerns.

Commissioner Johannes Hahn, in charge of Budget and Administration, said the figure amounts to about a third of cohesion funds the country received from the EU budget. 

For Brussels, the recommendation to the Council to adopt this punitive measure is the next step in the rule of law mechanism process that it triggered against Hungary in April. 

The mechanism, which had been approved by the European Court of Justice just weeks earlier following a challenge from Budapest and Poland, allows Brussels to impose financial sanctions on member states “to protect the budget” if they are deemed to have breached core EU values. 

The decision to impose the financial penalty was taken unanimously by commissioners, Hahn said, during their College meeting exceptionally held earlier in the morning. 

Hahn emphasised that Budapest has outlined 17 remedial measures since Brussels triggered the conditionality mechanism and that these “should in principle be capable of addressing the issues described in the notification” including the “systematic irregularities” in the public procurement process, conflict of interest from government officials and weakness in the investigation and prosecution in cases regarding EU funds. 

But he also stressed that this is only if they are “implemented accordingly” and that the timeline remains “very tight” and that it concrete change in practice would also take time.

“A risk for the budget at this stage remains, therefore we cannot conclude that the EU budget is sufficiently protected,” he went on. 

Sunday’s announcement comes just three days after MEPs declared that Hungary is no longer a fully functioning democracy but a “hybrid regime of electoral autocracy” instead.

In their resolution, European lawmakers put the blame for the rule of law drift in the eastern European country squarely on Prime Minister Viktor Orbán.