EU proposes suspending billions of funds from Hungary

By LORNE COOK, Associated Press

BRUSSELS (AP) — The executive branch of the European Union recommended on Sunday that the bloc suspend about 7.5 billion euros (dollars) in funding to Hungary due to concerns about democratic backsliding and the possible mismanagement of EU money.

The European Commission, which proposes the bloc’s laws and enforces them, said it was acting “to ensure the protection of the EU budget and the financial interests of the EU against violations of the principles of the state of law in Hungary”.

EU Budget Commissioner Johannes Hahn said that despite Hungary’s proposed measures to address shortcomings, the committee recommends the suspension of funds “estimated at €7.5 billion”.

The money would come from the “cohesion funds” granted to Hungary. This envelope of money, one of the largest tranches of the bloc’s budget, helps countries bring their economies and infrastructure up to EU standards.

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EU countries contribute around 1% of their gross national income to the budget. Hungary should receive at least 50 billion euros in total from the 2021-27 budget, according to the commission’s estimates.

Any action to suspend funds must be approved by EU member countries, which requires a “qualified majority”, which amounts to 55% of the 27 members representing at least 65% of the total population of the EU. EU.

They have one month to decide whether or not to freeze Hungary’s funds, but can, in exceptional circumstances, extend this deadline to two months. The commission recommends that member countries take until November 19 to give Hungary more time to respond to concerns.

The commission has for nearly a decade accused Hungarian Prime Minister Viktor Orban of dismantling democratic institutions, seizing control of the media and undermining minority rights. Orban, in office since 2010, denies the charges.

Speaking after a meeting of EU commissioners in Brussels, which unanimously endorsed the move, Hahn welcomed Hungary’s offer to fix the problem, saying the proposed remedies go “in the right direction”.

He said the measures could address some of the committee’s concerns if followed through and properly implemented. But he said ‘a risk to the budget at this stage remains, so we cannot conclude that the EU budget is sufficiently protected’.

The committee’s concerns focus on public procurement — state purchases of goods and services or for the execution of projects using EU funds. Critics say awarding such contracts allowed Orban’s government to funnel large sums of EU money into the businesses of politically connected insiders.

A senior EU official pointed to “systematic and systemic irregularities, loopholes and weaknesses in public procurement linked to very high single tender rates”. Officials estimate that about half of public tenders in Hungary are awarded after single-bidder processes.

The commission also has “serious concerns about the detection, prevention and correction of conflicts of interest”, as well as a number of public interest trusts which manage large funds, particularly in the field of education. .

Hungarian media reported that Orban’s nationalist government was set to announce new legislation as early as Monday. European lawmakers expressed concern last week that this was just a ploy to buy time.

In a resolution Thursday, lawmakers said Hungary’s nationalist government was deliberately trying to undermine the bloc’s democratic values.

They said the government in Budapest – which Orban describes as “illiberal democracy” – has become “a hybrid regime of electoral autocracy”. They partly blame EU member countries for turning a blind eye to possible abuses.

The French Greens parliamentarian who chaperoned the resolution to the assembly, Gwendoline Delbos-Corfield, said that “for the first time, an EU institution is telling the sad truth, that Hungary is no longer a democracy”. .

The case, launched by the commission against Hungary in April, is a further step in using a new mechanism for the EU to act to protect its budget. It does not target member countries for general violations of EU law.

The mechanism is seen as the EU’s most powerful weapon to prevent further anti-democratic drift in some countries. Commission officials said Hungary has still not implemented EU recommendations for more than 10 years.

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