The European Commission intends to withhold 7.5 billion euros from the large corona recovery fund from Hungary because the country does not comply with European rules and regulations. This is the first time the European Commission actually applies the penalty system of the rule of law framework.
Last Friday, the European Parliament stated in a resolution that Hungary 'can no longer be called a democracy.' MEP Tineke Strik (GreenLeft) wants other EU funds to be withheld as well, such as agricultural funds, to put pressure on Hungary. Strik emphasizes that Hungarian abuse and fraud with agricultural funds have already been proven over recent years.
The anti-EU stance of the nationalist Hungarian government led by Prime Minister Viktor Orban has been a point of contention in EU circles for years, but until now European heads of government refrained from imposing fines.
However, now that Hungary rejects the pro-Ukraine and anti-Russia position of the EU countries, Brussels has had enough. Earlier this month, Hungary decided to buy more Russian oil.
The currently withheld 7.5 billion euros is about half of Hungary's share in the EU-wide recovery fund. In an attempt to allay Brussels' concerns, Budapest announced on Saturday – at the very last moment – that it intends to curb corruption.
Next week, EU heads of government must still approve the imposed penalty, and Hungary has six weeks to backtrack.
The conflict between Hungary, one of the largest net beneficiaries of the bloc, and the EU has grown steadily since Orban's ruling Fidesz party came to power in 2010.
The largest governing party is accused of undermining the country's democratic institutions, curtailing media freedoms, committing fraud with EU subsidies, and violating the rights of minorities – accusations that Budapest denies.