EU official says EU-Hungary agreement over EUR billions close

An EU official, speaking under the condition of anonymity, said that Hungary made a “significant step” towards securing the billions of euros the European Commission rejected to give due to rule-of-law and corruption concerns. That means Válasz Online, a Hungarian news website, will be right: finally, PM Orbán will be victorious over the European Commission by getting euro billions and stablising the Hungarian economy. Anyway, the European Union and Hungary have only weeks to reach a final agreement. After the signing process, the financial help can start to flow into the country from next spring.

And that money will mean a difference considering Hungary’s financial and economic problems. Since the country has to pay in euros for the import gas and oil, it creates a significant monetary deficit and weakens the currency exchange rate of the forint. However, if the EU money arrives, Budapest can use it to pay for the energy. Meanwhile, the government will pay the EU allowances for the Hungarian applicants in forint, a win-win situation for both the budget and the economy.

The Hungarian government has always been hopeful about the EU-Hungary agreement, but from Brussels, nobody spoke until yesterday. Reuters managed to talk with an EU official who confirmed that “the Hungarians have accepted the Commission’s conditions on the milestone for the independence of the judiciary. That is not the end of the negotiations but it is a significant step. I cannot confirm that we have finished all the negotiations on the recovery funds, but we are finalising them. The sticking points were very much around the independence of the judiciary”, he cleared.

The Hungarian government did not comment on the developments. However, Gergely Gulyás, the prime minister’s chief of staff, said on a regular press briefing that “Hungary was making some changes in the judiciary system to meet the EU executive’s conditions”, Reuters noted. According to Gulyás, judiciary issues were the “last hurdle” in the way of the long-desired agreement on the RRF (recovery and resilience) funds.

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The European Commission has time until 19 December to decide whether Hungary can or cannot access the 5.8 billion euros of the RRF funds. However, the European Commission started another process concerning 7.5 billion euros, which is 5 percent of Hungary’s estimated 2022 GDP. That is because Brussels believes, without serious counter-measures, that money would be spent through corruption circles and enrich Orbán’s closest allies to ensure their loyalty towards the regime.

To dispel all doubts, the government pledged to meet 17 commitments strengthening its anti-corruption framework. The parliament passed several bills to address EU concerns.

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Even so, the lower house of the German parliament commanded chancellor Olaf Scholz on Thursday evening to reject the payment of the 7.5 billion euros in the European Council provided Hungary does not carry out the needed reforms. Coalition parties SPD, the Greens and the liberal FDP supported the resolution together with the opposition Left. The CDU/CSU alliance remained neutral, while the right-radical AfD voted ‘Nay’, infostart.hu wrote.

Of course, it is still a big question whether the EU will consider the Hungarian reforms enough to allow Hungary access to the funds. But there is light at the end of the tunnel. Surely, we will see clear by 19 December.

Source: Reuters, infostart.hu