EU Holds Firm: €18 Billion Funds Frozen as Hungary Shows ‘No Progress’ on Rule of Law
EU Holds Firm: €18 Billion Funds Frozen as Hungary Shows ‘No Progress’ on Rule of Law
The European Commission has revealed in its latest Rule of Law Report that Hungary has made ‘no progress’ on critical reforms, leading to the continued freezing of €18 billion in EU cohesion and recovery funds. Released on Tuesday, the report highlights persistent concerns over democratic backsliding in Hungary.
Michael McGrath, the European Commissioner for Justice, expressed deep disappointment, stating, ‘It is deeply disappointing we’re not in a position to report further progress on the recommendations that were made last year.’ He emphasized that despite the Hungarian people being largely pro-EU, the release of funds hinges on compliance with the rule of law.
The report specifically noted Hungary’s failure to advance on seven out of eight recommendations from the previous year, including reforms concerning lobbying rules, the fight against high-level corruption, and ensuring the editorial independence of public media. McGrath also raised alarms about a ‘deteriorating environment’ for civil society organizations, citing issues like the ban on the Pride parade and a controversial draft law on foreign-funded NGOs.
The frozen funds comprise approximately €8.4 billion in cohesion funds and €9.5 billion in COVID-19 recovery funds. While Hungary previously secured the release of €10.2 billion after judicial independence reforms, the remaining €18 billion shows no signs of a breakthrough.
This financial deadlock exacerbates the long-standing tensions between Brussels and Budapest. Hungarian Prime Minister Viktor Orbán has accused the Commission of ‘financial blackmail.’ Concurrently, Hungary continues to incur daily fines from the European Court of Justice for its ‘unprecedented’ breach of migration law, with McGrath stressing that ‘Compliance with ECJ judgements is not optional or discretionary.’ The issue of fundamental rights and democracy is expected to be central to discussions on the EU’s next multiannual budget, further linking fund disbursements to rule of law adherence.
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