EU backs further delays to Hungary funding

Bloomberg

The European Commission recommended delaying the disbursement of crucial funding to Hungary, saying Prime Minister Viktor Orban’s government has failed to allay its concerns over graft and the erosion of the rule of law.
The EU’s executive arm said member states should conditionally approve Hungary’s Covid-era recovery plan, but
Budapest would first have to comply with a set of reforms
before it could receive the
€5.8 billion ($6 billion) in grants from the bloc. The interim step, which takes account of Hungary’s recent efforts to pass more than a dozen pieces of
anti-corruption legislation, will
prevent Budapest from losing access permanently to €4.1 billion of that pot.
Separately, the commission suggested freezing €7.5 billion
of funds allocated to Hungary out of the bloc’s budget until
it enacts a set of milestones aimed at rooting out graft in the government.
“In short, no funds will flow until the essential milestones are properly implemented,” Commission Vice President Valdis Dombrovskis said in a news conference, adding that a later reversal of any milestones would block subsequent payments.
The bloc’s justice commissioner, Didier Reynders, added that the 27 milestones are binding and time-bound.
“Let me be clear from the outset: We will be very vigilant in our scrutiny of Hungary implementing these milestones,” he said. “‘There’s no partial payment for partial fulfillment here.”
The EU’s 27 member states had been expected to make a final decision on December 6 on the two recommendations, but that timetable could slip. EU member states have until December 19 to act on the suspension. The forint pared losses after news of the EU decision. Earlier in the day, it fell as much as 0.9% against the euro, leading losses in emerging markets. The currency has plunged almost 10% year-to-date as uncertainty over EU funds weighed over Hungarian assets.
The EU measures are an effort to bolster the rule of law in Hungary after Orban appointed loyalists to the courts, the chief prosecutors office and the media authority and, according to the EU, chipped away at democratic standards in the country.
The decisions signal that the EU is no longer taking Orban’s promises for granted after more than a decade during which
the renegade Hungarian leader skirted the bloc’s scrutiny while taking its money.
Poland, where the ruling party has mimicked many of Orban’s policies, is also currently unable to access fresh EU funding due to concerns about the independence of judges.

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