Hungary’s blocked EU funds: MEPs concerned over ongoing rule of law issues

Hungary needs to fulfil all conditions required to unblock EU funds as soon as possible to ensure they reach citizens and businesses, EU lawmakers from the budgetary control committee said, as rule of law problems persist.

“We call on the Hungarian government to implement all 27 supermilestones […] without any further delay to finally unblock almost €28 billion,” the head of the delegation Monika Hohlmeier (EPP) told reporters at the end of the fact-finding mission in Hungary on Wednesday (17 May).

The European Commission decided to freeze almost €22 billion of funds earmarked for Hungary under the 2021-2027 EU budget last December until the 27 conditions – supermilestones – to restore the rule of law and fundamental rights are met. A further €5.8 billion in grants from the EU recovery programme remain frozen due to concerns linked to judiciary independence.

“We want the funds to reach citizens and companies in Hungary in a transparent manner,” Hohlmeier said, adding that the Parliament will continue to monitor the situation in the country.

Persisting concerns

According to the delegation, concerns remain regarding the state audit office and the manipulation of tenders, the reliability of budget accounts and the reporting of fraud cases to the prosecution.

“We asked specific questions and no specific answers were provided and that is concerning,” Hohlmeier said.

MEPs also voiced concerns over public procurement, the lack of involvement of local and regional authorities and flaws in the decision-making process of the national assembly.

Regarding the business environment, EU lawmakers reported the use of distorting price caps in some sectors and arbitrary change of laws as well as intimidating actions which risk compromising the free single market.

Steps forward

At the same time, the MEPs said there have been improvements.

The appointment of a new integrity authority is “very positive”, the delegation said, welcoming other “positive developments” such as the cooperation between the national tax and customs administration and the EU anti-fraud agency OLAF and the recent amendments passed to strengthen the judiciary.

Hungary must go further to access EU funds, says Commission

The impasse between the EU and Hungary over access to the bloc’s post-pandemic recovery funds remains, despite moves by Hungarian lawmakers this week to adopt new laws to address EU rule of law concerns. 

At the beginning of May, the European Commission also welcomed Hungary’s progress on judicial independence, but said the government needed to do more to fulfil the milestones’ requirements of public transparency and consultations before the funds could be released.

Coming up

The ongoing negotiations for the release of the funds will be the subject of a resolution in the European Parliament soon, MEP Daniel Freund (Greens) told the reporters on Wednesday.

EU lawmakers will also debate the suspension of EU funds due to rule of law breaches with European Commissioner for the budget Johannes Hahn in a committee meeting next week.

In the meantime, the facts gathered by the MEPs in Hungary will be checked and investigated by the European Commission, the delegation said.

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[Edited by Nathalie Weatherald]

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