Will Brussels withhold further EU funds from Hungary?
Brussels has expressed dissatisfaction with a Hungarian law passed in November, citing concerns that a lack of transparency in public works investments violates EU regulations. As a result, Hungary now faces the serious risk of the EU freezing further EU funds, which could lead to the loss of billions of euros.
Brussels finds Hungarian law problematic
As Portfolio reports, the European Commission and the Hungarian government have been at odds since March over a public works investment law enacted in November. Brussels argues that the legislation may violate EU standards for transparency and competition in public procurement, as it allows the government to exempt certain projects from procurement procedures. These exemptions, seen as inadequately justified, raise concerns about transparency and could breach rules on the efficient use of EU funds. Despite repeated warnings, Hungary faces significant repercussions, including the potential freezing of billions in EU funds for operational programmes.
Violation of EU rules?
The European Commission has raised pecific concerns about a Hungarian law requiring property transfers, often free of charge, to the ministry responsible for overseeing certain investments. This arrangement, which particularly affects local authorities, could violate EU rules governing transparency in project implementation. Ongoing negotiations between Brussels and Hungary continue, with the Ministry of Construction and Transport confirming that it responded to the Commission’s concerns by the 24th April deadline.
Ongoing investigation
The Hungarian Ministry of Construction and Transport has confirmed that it provided detailed explanations to the European Commission within the required timeframe. The ministry argued that elevating investment regulations to the level of law would create a coherent framework and strengthen legal guarantees for all parties involved, thereby supporting the rule of law. While the ministry hopes these explanations will satisfy Brussels, the European Commission has stated that its investigation is still ongoing, as key amendments to the law were only introduced in August. Discussions remain active as the Commission evaluates the potential misuse of EU funds.
What will happen to the EU funds?
The future of the EU funds for Hungary remains uncertain, with public infrastructure investments worth up to EUR 2-6.5 billion at risk due to ongoing disputes with Brussels. Although a full suspension of these funds is considered unlikely, given the Hungarian government’s cooperation, negotiations continue. Additionally, sources from both the Orbán cabinet and Brussels indicate that the dispute is likely to be resolved by the end of 2024.
However, other significant disagreements remain unresolved. Talks over the release of EUR 10.4 billion from the recovery and resilience fund, as well as EUR 6.35 billion in cohesion funds, have been stalled for months, with no signs of progress. In a recent cabinet briefing, Gergely Gulyás acknowledged the gravity of the situation, warning that these frozen funds could be lost by the end of the year if an agreement is not reached.
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EUSSR will do their thing, however, Orbán has the power to leave the EU for the much better prognosis BRICS.
We’ll see how it turns out.
I wished the western world wasn’t so corrupt.
It’s the west that is the evil empire right now.
Exemptions are good – just like rule by decree! More flexibility for our Politicians…
It is nor like BRICS, members are free of corruption, right @svensson?
Brussels needs the money to extend and expand the Ukrainian war. Of course, Brussels will withhold the money.