Initially, the EU saw a move to cut money for Hungary due to damage to democracy

Initially, the EU saw a move to cut money for Hungary due to damage to democracy

By Gabriela Bacchinska

BRUSSELS (Reuters) – The European Union’s chief executive is expected on Sunday to recommend suspending billions of euros in funds for Hungary over corruption, the first such case in the European Union under a new “Cash for Democracy” penalty aimed at better protecting the rule of law. .

The European Union introduced the new financial penalty two years ago precisely in response to what it says amounts to undermining democracy in Poland and Hungary, where Prime Minister Viktor Orban has subjugated courts, the media, NGOs and academia, as well as restricted the rights of migrants. Gays and women during more than a decade in power.

The conglomerate has long decried Hungary’s public procurement laws for inadequate anti-graft safeguards that return an excessive rate to individual bidders and fuel corruption.

The Brussels-based European Commission meets from 0630 on Sunday and is expected to approve a proposal to suspend up to a tenth of the Hungarian economy’s money from the bloc’s joint budget for 2021-27 with a total value of 1.1 trillion euros.

The proposal would go to EU member states and they would have up to three months to decide on it in a majority vote, meaning no country alone could prevent punishment as was the case under the bloc’s previous ineffective democratic policing system.

Orbรกn, who calls himself a “freedom fighter” against the worldview of the liberal West, denies that Hungary – a former communist country of about 10 million people – is more corrupt than others in the EU.

He has long refused to amend his laws, but has now come under pressure to strike a deal with Brussels to secure money for his faltering economy and the forint, the worst performing currency in the eastern European Union.


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The Commission is already blocking about 6 billion euros of funds envisaged for Hungary in a separate COVID economic recovery stimulus, saying the money would otherwise be vulnerable to misuse.

Reuters documented in 2018 how Orbรกn funnels European development money to his friends and family, a practice that human rights organizations say has greatly enriched his inner circle and allowed the 59-year-old to establish himself in power.

Hungary had irregularities in nearly 4% of EU money spending in 2015-2019, according to the bloc’s anti-fraud body, OLAF, the worst result among the EU’s 27 nations. Olaf said in 2016 that Budapest had to repay more than 280 million euros spent on the Budapest metro due to “potential fraud and corruption”.

But complicated procedures and political wrangling have allowed Hungary to avoid significant financial punishment since it joined the bloc in 2004, something that may no longer be granted while the EU tests its new safeguard sanctions.

Orban has also mischaracterized many in the bloc by establishing enduring close relations with President Vladimir Putin and threatening to deprive the European Union of the unity needed to impose and maintain sanctions on Russia to wage war against Ukraine.

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