EU Proposes Suspending Billions in Hungary Funding

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Facts

  • The European Commission on Sun. recommended the suspension of about €7.5 B ($7.5B) in funding to Hungary over corruption and rule of law concerns, according to the EU Budget Commissioner Johannes Hahn.
  • The Commission's proposal reportedly calls for the suspension of 65% of the funds allocated to Budapest under the EU's cohesion policy. The suspension would be in addition to the €5.8B [$5.8B] (allocated, but not approved, by the Commission to Hungary under the COVID recovery fund).
  • The proposal is reportedly the first such case under a new sanction mechanism designed to improve the EU's protection of the rule of law. The measure was introduced two years ago in response to the alleged erosion of democracy in Poland and Hungary.
  • Meanwhile, on Sun., Hahn welcomed the reform measures Hungary says it has committed to but called on Viktor Orbán's government to bring the plans into legal reality. Meanwhile, Poland said it would oppose the "illegal" withholding of EU funds from Hungary.
  • This comes as Hungary on Sat. announced a set of new anti-corruption laws, which will likely include new measures to better monitor the use of EU funds and steps to increase transparency in public procurement.
  • Last week, the European Parliament voted in favor of a resolution declaring that Hungary is no longer a democracy but has become a "hybrid regime of electoral autocracy" under the current government amid years of growing friction between Brussels and Budapest.

Sources: DW, EU Observer, Reuters, Politico, and Washington Post.

Narratives

  • Establishment-critical narrative, as provided by Lew Rockwell. The European Commission's proposal to potentially freeze billions of euros in cohesion funding for Budapest is not primarily about democracy and the rule of law. This is about punishing the government of Orbán for sovereign actions that do not submit to the dictates of the Brussels apparatus.
  • Pro-establishment narrative, as provided by The Washington Post. It's high time that the EU proves its ability to act in defense of its values by actually implementing punitive measures. Otherwise, it risks further erosion of its credibility, and countries like Hungary and Poland could feel emboldened in their populist, anti-democratic policies. If Orbán does not implement the announced anti-corruption measures, consequences must follow.