Hungary’s fine by Court of Justice of the European Union is swelling by the day

european court of justice hungary fined Court of Justice of the European Union
The Court of Justice of the European Union in Luxembourg. Source: Wikimedia Commons/Luxofluxo

Recently, the Court of Justice of the European Union (CJEU) imposed a substantial EUR 200 million fine on Hungary. There is a daily additional EUR 1 million fine for failure to comply with the judgement of the CJEU. However, it is still not clear if the Hungarian government is willing to pay the lump sum and the additional delay costs. In addition, further fines are on the horizon. 

Hungary fined by the Court of Justice of the European Union

Economx reports that on 13 June, the Court of Justice of the European Union (CJEU) imposed a substantial EUR 200 million fine on Hungary for failing to amend its border policy concerning migrants and asylum seekers, as required by EU law. This penalty significantly exceeds the European Commission’s initial request of EUR 7 million and includes a daily fine of EUR 1 million until Hungary complies with the judgment.

european court of justice hungary fined Court of Justice of the European Union
The Court of Justice of the European Union in Luxembourg. Source: Wikimedia Commons/Luxofluxo

Hungarian officials, including PM Viktor Orbán, have condemned the verdict as “outrageous” and “unjust,” with the government indicating that while compliance is inevitable, negotiations with Brussels are ongoing. However, the government has warned that if a resolution is not reached, Hungary will continue its border protection efforts. Moreover, the situation has raised concerns about how the fines will be managed and their effects on Hungary’s relations with the EU.

A growing fine

Hungary faces a daily penalty of EUR 1 million until it complies with a recent ruling by the Court of Justice of the European Union. As the EUR 200 million lump sum is due, Hungary received a letter and a notice with a 45-day payment deadline issued by the Court of Justice of the European Union in mid-July. If unpaid, the European Commission may deduct the fine from Hungary’s EU funds. Despite the finality of the judgment, no clear decision has been made on when or how the fines will be paid. Similar actions were taken against Poland in 2021, where fines were deducted from its EU funds.

Hungary vs Brussels

For years, Hungary has urged Brussels to contribute more to the EU‘s border protection costs, having spent around HUF 700 billion (EUR 1.8 billion)  since 2015, while the European Commission has contributed only HUF 45 billion (EUR 113 million). Zoltán Lomnici, an expert on Hungarian and EU law, noted that Hungary could potentially sue the Commission for compensation for these expenses, a sum far greater than the fines imposed in the recent ruling by the Court of Justice of the European Union. Additionally, Hungary could leverage its veto power on key issues, such as taxation, social security, and foreign policy, to exert pressure on Brussels.

Further fines?

In June, the European Commission identified Hungary among seven EU member states with budget deficits, leading the Council of the European Union to formally initiate procedures against them on 26 July. While this could eventually result in fines, Hungary’s government is aiming to reduce its budget deficit gradually. Gergely Gulyás suggested a potential 2% reduction as a significant step forward. The Ministry of Finance projects a budget deficit of 4.5% this year, and 3.7% next year. The ultimate goal is to bring the deficit below the EU reference value (3% of GDP) by 2026.

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