Economy
Hungary would rather pay HUF 100 bn penalty than face more probes
European Commission auditors uncovered discrepancies in 24 out of 29 procurements examined. More than half of these were infrastructural development projects, e.g. road, railway and water sector investments. Total value of the projects amounted to HUF 972 billion and ruled that a penalty of over HUF 100 bn was due.
This is already more than 10% of the total value of the scrutinised projects. Note that in the 2014-2020 fiscal cycle, the European Commission pays only 90% of the invoices on due date (within 60 days) and retains 10% until the necessary probes are done and everything is found in order.
The above case does not mean a 10% general correction but that the EC will never pay this 10% it had withheld. In light of what the source said it appears that the cabinet rather suffers this loss than to face additional investigations of more projects and pay an even greater penalty as a consequence.
The source also suggested that this was the case, noting that the 10% retained annually (“lump sum correction") should be viewed as a discount offer and whenever possible the member states rather opt for this than the burdensome scrutiny of the EU co-financed projects one by one, for these probes may eventually lead to higher penalties.
This option helps keep a veil on one of the consequences of Hungary’s ultra-fast absorption of EU funds, namely the numerous errors and irregularities made during the procurements, simply because without more detailed investigations discriminatory manoeuvres and abuses can remain hidden.
Most of the cases listed by 24.hu are about such irregularities that - via the restriction of competition - could have violated the principal of the efficient use of public assets.
Front page photo by MTI/EPA Olivier Hoslet
This is already more than 10% of the total value of the scrutinised projects. Note that in the 2014-2020 fiscal cycle, the European Commission pays only 90% of the invoices on due date (within 60 days) and retains 10% until the necessary probes are done and everything is found in order.
The above case does not mean a 10% general correction but that the EC will never pay this 10% it had withheld. In light of what the source said it appears that the cabinet rather suffers this loss than to face additional investigations of more projects and pay an even greater penalty as a consequence.
The source also suggested that this was the case, noting that the 10% retained annually (“lump sum correction") should be viewed as a discount offer and whenever possible the member states rather opt for this than the burdensome scrutiny of the EU co-financed projects one by one, for these probes may eventually lead to higher penalties.
This option helps keep a veil on one of the consequences of Hungary’s ultra-fast absorption of EU funds, namely the numerous errors and irregularities made during the procurements, simply because without more detailed investigations discriminatory manoeuvres and abuses can remain hidden.
Most of the cases listed by 24.hu are about such irregularities that - via the restriction of competition - could have violated the principal of the efficient use of public assets.
Front page photo by MTI/EPA Olivier Hoslet
