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The EU executive proposes to take €7.5 billion from Hungary He says the remedies proposed by Hungary could work if implemented correctly Hungary pledges to honor all commitments to unlock EU funds
BUDAPEST, Sept 19 (Reuters) – Hungary’s government submitted the first of several anti-corruption bills to parliament on Monday as Budapest tries to avoid losing billions of euros in European Union funding. The European Union executive on Sunday recommended freezing 7.5 billion euros ($7.48 billion) in funds over what it sees as Hungary’s failure to fight corruption and uphold the rule of law. read more The European Commission also set demands for Hungary to maintain access to funding, including under new legislation, which Hungary said it would meet. Sign up now for FREE unlimited access to Reuters.comSign up Justice Minister Judit Varga said on her Facebook page that she submitted the first bill to parliament as the government “will focus on drafting and implementing commitments (to the EU) in the coming weeks and months.” “Hungary could enter the year 2023 without losing EU funds,” Varga said. The bill amends legislation on Hungary’s cooperation with the EU’s anti-fraud office OLAF, ensuring that OLAF receives support from Hungarian tax officials in its investigations of EU-funded projects and has access to data and documents on the spot. In addition, it changes the rules governing public asset management institutions, explicitly requiring them to issue tenders for public contracts for projects and stricter conflict of interest rules in their management. Hungary’s case is the first in the EU under a new sanction aimed at better protecting the rule of law and fighting corruption in the 27-nation bloc. Nationalist Prime Minister Viktor Orbán, in power since 2010, has repeatedly clashed with Brussels over policies seen as eroding democracy in Hungary. But with major challenges of rising energy costs and double-digit inflation, a weak forint and a slowing economy, the veteran prime minister appears willing to meet EU demands to finally create institutions that would reduce the risks of corruption in funded projects from the EU. “The latest developments in Brussels certainly come at a bad time for Orbán, who is struggling with a range of political and economic problems caused by both global issues, notably rising energy prices, so he is likely to go further to satisfy Brussels”. requires,” said Mujtaba Rahman, Europe CEO of Eurasia Group. He said Budapest would likely secure the pending deal, but that would not resolve all outstanding disputes over other pieces of EU funds. “The biggest problem for Orbán is the money tied up in the Recovery Fund, because the Commission has more discretion on whether to give it the green light or not,” Rahman said. Like most EU countries, Hungary submitted its plan last year on how it would use EU grants to make its economy greener and more hi-tech after the COVID-19 pandemic. It has yet to receive approval for that as well. If Budapest does not receive the EU funds, the forint – which has lost 8% this year – is almost certain to fall further, complicating efforts to contain inflation and exposing Hungarian assets to any negative change in the global climate. read more Development Minister Tibor Navracsics, in charge of negotiations with the EU, said on Sunday that Hungary would meet all 17 of its commitments to the Commission to avoid losing any funding. ($1 = 1.0025 euros) Sign up now for FREE unlimited access to Reuters.comSign up Reporting by Krisztina Than, additional reporting by Gabriela Baczynska. edited by Raissa Kasolowsky and Grant McCool Our Standards: The Thomson Reuters Trust Principles.
