Brussels says the Hungarian gov't has still not addressed rule of law concerns
Last week, the Hungarian government held successful negotiations with the European Commission, and it was concluded that the independence of the Hungarian judiciary has been strengthened by the latest reform package. Brussels concluded that it now meets the horizontal eligibility criteria linked to the EU budget.
As a result, more than €10 billion of EU funds will be made available to Hungary from the end of 2023.
On paper, this opens up the possibility of invoicing all €22 billion of cohesion funding to the government, but because of the conditionality procedure - and other smaller horizontal items - we can only claim €10.5 billion, or around €3,800 billion. In what is known colloquially as the rule of law mechanism, member states decided in the European Council on 15 December last year to freeze €6.35 billion in EU aid. In practice, this means a 55% block on the budgets of three operational programmes.
A total of 17 items have been identified where action is expected from the government to make these funds available. The Viktor Orbán-led cabinet therefore had one year to adopt new corrective measures, and in the process they could notify the European Commission at any time to investigate the rule of law situation.
But Hungary has not submitted a written notification, even though a year has passed since the Council measures were adopted.
In contrast, Balázs Orbán, the Prime Minister's political director, claimed at the EU summit in mid-December that the Hungarian government had already met all the requirements of the rule of law procedure.
Balázs Orbán also said that there is a legal dispute with the European Commission on the expectations. He did not answer a question on why the Orbán-led cabinet has not yet asked the Brussels executive to assess whether Hungarian legislation meets the conditions.
Now, in the absence of an evaluation, the Commission has carried out a reassessment of Hungary's quality in the rule of law, as requested by last year's Council decision, which found that Hungary has met its commitments on a number of corrective measures. However, according to the annual reports of the Integrity Authority, significant weaknesses, risks and shortcomings remain, in particular in the areas of public procurement, the efficiency of the prosecution and the fight against corruption.
In the report, the Commission expressed reservations about the effective use of the Arachne instrument. Thus, in practice, they do not yet see sufficient progress in administrative and management controls in the area of the Structural Funds (European Social Fund and European Regional Development Fund).
They still see problems with the implementation of commitments related to the use of EU funding.
For four other corrective measures, there are no immediate key implementation steps as they require a longer implementation period. Thus, the Hungarian government's commitment to reduce the share of single-bid public procurement is still under review, but is indicated to have been successfully implemented in 2022.
According to the EC, action plans to increase competition in public procurement are being developed. They are also waiting for priority to be given to increasing prosecutorial capacity and improving efficient operating conditions, and for the effects of these measures to be visible in the work of the authorities.
On the basis of this summary, the European Commission continues to call on the Hungarian authorities to act urgently on key measures and to fully implement corrective measures to ensure the effective use of EU funds. This is also important as there is an overlap with the conditionality procedure requirements for payments under the Recovery Fund and the associated RePoweEU programmes.
Cover photo: Portfolio
