The European Union on Monday moved to cut 7.5 billion euros in funding from Hungary over corruption, the first ever case in the 27-nation bloc’s history through a new sanction intended to protect the rule of law.
The EU introduced the financial sanction in 2020 in response to what it claims amounts to the undermining of democracy in Poland and Hungary due to its refusal to accept economic migrants as demanded by the EU.
Reuters reported that the EU claims Hungarian Prime Minister Viktor Orban “subdued courts, media, NGOs and academia, as well as restricting the rights of migrants, gays and women during more than a decade in power.”
"It's about breaches of the rule of law compromising the use and management of EU funds,” said EU Budget Commissioner Johannes Hahn. “We cannot conclude that the EU budget is sufficiently protected.”
He highlighted systemic irregularities in Hungary's public procurement laws, insufficient safeguards against conflicts of interest, weaknesses in effective prosecution and shortcomings in other anti-graft measures.
Hahn said the Commission was recommending the suspension of about a third of cohesion funds envisaged for Hungary from the bloc's shared budget for 2021-27 worth a total of 1.1 trillion euros.
Hahn stated that Hungary’s promise to address the bloc’s criticisms of its governance was the right step but it needs to be translated into law before the EU feels reassured.
The 7.5 billion euro figure represents around 5% of Hungary’s GDP. EU countries are given three months to vote on the proposal.