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The EU still bogged down in its showdown with Hungary

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(Brussels) The European Union (EU) and Hungary failed on Tuesday to resolve their conflict over the rule of law. Threatened to lose 13 billion euros of European funds, Budapest is still blocking several crucial files.

Meeting in Brussels, the Ministers of Finance of the Twenty-Seven failed to convince Budapest to lift its vetoes which paralyze the institutions.

The file could rise in the coming days at the level of heads of state and government, the EU seeking a solution while remaining firm on its principles in the face of nationalist leader Viktor Orban.

At the end of November, the Commission recommended that Member States suspend 7.5 billion in cohesion funds that were to be paid to Hungary under the 2021-2027 budget. And if it validated the Hungarian post-COVID-19 recovery plan, endowed with 5.8 billion euros, it made its payment conditional on the implementation of reforms to improve the fight against corruption and the independence of the justice.

But, at the same time, Budapest is using its right of veto to block the 18 billion euro aid plan for Ukraine, scheduled for 2023, and the draft minimum tax on the profits of multinationals concluded within the OECD.

Accused of blackmail, Hungary denies any link between these blockages and the question of European funds.

But it also opposes new sanctions against Russia, with which it maintains ties, and remains the only NATO country with Turkey not to have ratified the accession of Sweden and Finland to the EU. Atlantic Alliance.

Several votes, which were supposed to take place on Tuesday at the meeting of finance ministers, were withdrawn. They concerned the Hungarian recovery plan, the suspension of cohesion funds, the release of macro-financial aid to Ukraine and the plan to tax multinationals.

New assessment

If Budapest has agreed to undertake the reforms demanded, the account is not there yet.

Member states on Tuesday asked the Commission “to provide a new assessment on Hungary” as the Hungarian parliament meets on Wednesday to adopt new measures to meet EU expectations, EU diplomats said. This new evaluation will have to take place very quickly to unblock the files at a next meeting in December.

“We will take a position in the coming days,” French Minister Bruno Le Maire said on Monday. Regarding Hungary’s commitments, “there are things that are going in the right direction, others that still need to be looked at closely”, according to him.

In the absence of a decision on Tuesday, “we will decide at a next meeting, perhaps in a week”, also explained the Commissioner for the Economy, Paolo Gentiloni.

Solution at the top?

Several diplomats believe that the resolution of the Hungarian problem could go back to the highest level, that is to say the summit of heads of state and government scheduled for December 15 and 16.

The so-called “conditionality” procedure intended to protect the European budget from attacks on the rule of law, a first for the EU, was launched against Hungary in April because of “systematic irregularities in the award of public contracts as well as “failures” in terms of legal proceedings and the fight against corruption.

Under pressure, Budapest has already adopted 17 measures to respond to Brussels’ concerns, including the establishment of an “independent authority” intended to better control the use of EU funds, suspected of enriching relatives of Viktor Orban.

Member States have until December 19 to decide on the suspension of the 7.5 billion euros of cohesion funds. This sum could be revised downwards depending on Hungary’s progress, diplomats said.

The payment of the 5.8 billion from the recovery plan will also be conditional on the implementation of the promised reforms. And on this issue too, time is running out. If the plan did not get the green light before the end of the year, 70% of the funds would be lost.



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