Hungary has failed to pass promised rule of law reforms, the European Commission ruled on Wednesday, putting billions of EU money at risk for the country.
The decision comes as Brussels is at loggerheads with Viktor Orbán’s government over the release of both €7.5 billion in regular EU payments and €5.8 billion in pandemic recovery grants – money the EU has temporarily frozen over concerns of a democratic retreat in Hungary. .
While the Commission on Wednesday recommended approving Hungary’s plan to spend the recovery funds, it was clear the country would not receive the money until it implemented 27 special rule-of-law reforms.
Meanwhile, the Commission also found that Hungary has failed to fulfill an earlier promise to pass 17 rule-of-law reforms needed to access the €7.5 billion in EU funds held under the EU’s enabling mechanism. freeze funds at risk of bribery.
EU countries will decide whether to accept, change or reject the Commission’s decision by December 19.
The move comes as something of a surprise. As recently as last week, Brussels and Budapest were expected to reach an agreement on the release of the money. But Wednesday’s decision appears to be a little more nuanced — green-lighting the spending plan, not the money, slamming Hungary for failing to keep previous promises and asking EU countries to make the final call.
Commission President Ursula von der Leyen met with key commissioners on Wednesday to take this path forward. Their recommendation should be formalized by the entire College of Commissioners next week.
On Wednesday, the Commission was particularly critical of Hungary’s new “integrity power”, questioning Hungary’s strength and independence, as well as Budapest’s progress on commitments to asset declaration rules and its ability to review a prosecutor’s decision on whether to proceed with a case.
Brussels has also drawn up a new timetable of 27 reforms, or “super milestones”, that Hungary must adopt in order to receive the €5.8bn pandemic recovery fund. The 27 reforms include the previous 17 commitments the two sides agreed to in negotiations to retain 7.5 billion euros. Other conditions include the implementation of Hungary’s promised judicial reforms, as well as the adoption of rules on auditing and reporting of EU funds.
After the Commission formally adopts its decisions next week, it will be up to the EU Council to support or reject them by a qualified majority of 55 percent of countries and 65 percent of the EU population, which must happen in finance ministers. meeting
The exact date of that meeting is still unclear, as the meeting originally planned for December 6 may be too soon for countries to go through national parliamentary procedures. Thus, the Czech Presidency of the Council can schedule the next meeting of ministers at the end of December.
Approval of Hungary’s plan and the associated cash flow is crucial to a number of key EU priorities, including an 18 billion euro aid package for Ukraine and a global agreement on a minimum corporate tax rate.