Erasmus+ funds in jeopardy: European Commission slams Hungary’s public interest trust regulations

The European Commission has set out its objections to Hungary’s regulation of public interest trusts in a detailed explanatory memorandum. The laws in question are crucial as they determine whether the model universities can access funds from the Erasmus+ and Horizon Europe programmes, which were previously blocked due to conflict of interest issues.

Entry into force and full application of the legislation

According to the European Commission, one of the fundamental problems is that the Hungarian legislation would only enter into force if Member States revoked their earlier decision, which is contrary to EU requirements. Such legislation should come into effect as soon as it is presented in order to address the substantive issues. 

According to HVG, another serious concern is that the legislation does not apply to all the institutions involved, as not all the model-changing organisations are listed in the annex to the legislation. The EU believes the rules should encompass all relevant institutions and be enforced both prior to and during the application process for EU funding.  

Weaknesses in the management of conflicts of interest

The European Commission identified significant shortcomings in how conflicts of interest are managed for members of the Board of Trustees and the Supervisory Board. While Hungarian legislation mentions the importance of integrity, it does not provide adequate safeguards to ensure effective oversight and enforcement. 

The Commission expects all relevant individuals to submit declarations of conflicts of interest and assets prior to their appointment and periodically during their tenure. These declarations should be transparent and verifiable. Furthermore, this requirement extends to include relatives living in the same household to minimise the risk of potential abuse.