Hungary to lose significant EU funding?

Now it is almost certain that Hungary is going to lose a part of its EU funding. When and how much? That still remains a question.

No funding

As 168.hu put it, Viktor Orbán needs to come up with new fundraising tactics. Hungary has not received EU funding recently and is not likely to receive it for some time either. 24.hu has analysed the situation.

The first issue is that the parties have not yet signed the Partnership Agreement for the 2021-2027 budget. On top of that, Brussels has not approved the Hungarian government’s spending plans for the Recovery Fund, so

Hungary has not received any EU funds recently and will not receive any in the near future.

The problem seems to be so significant that Viktor Orbán has even mentioned that the Hungarian government might be compelled to raise money through bond issues.

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Which areas?

According to 24.hu, it is not clear even to EU experts which funds can be withdrawn and from which sectors. The areas affected by public procurement are the ones where corruption is most evident: these are in direct conflict with the financial interests of the EU budget.

In theory, the procedure could apply to all EU funds, since all the money is coming from the EU taxpayers and the European Commission has to ensure that the Hungarian government uses it properly. The Brussels experts 24.hu consulted do not expect comprehensive sanctions, nor do they foretell punishments of a magnitude that would bankrupt the Hungarian economy.

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How much money?

Experts say that sanctions of a few hundred million euros can be expected. They do not expect the EU to withdraw billions of euros at the end of the months-long procedure. In addition, the sanction must not be excessive. It must be proportionate to the infringement found, and it is understood that the Commission is targeting funds whose beneficiaries are public bodies, not, for example, municipalities or hospitals.

“The sanction, if there is going to be a cut in the amount of aid, say, a 10% cut in one of the budgets, that means that it’s going to be cut by that much, so the amount of money cannot be transferred to another area. But the penalty could also be a suspension of the payment of funds; for example, Hungary will not receive any aid in 2024,”

writes 24.hu.

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Source: 24.hu, 168.hu