Leaked document: chance high that Hungary will lose EUR 8.8 bn EU fund
Benedek Jávor, the Head of Delegation of the City of Budapest in Brussels leaked Johannes Hahn’s letter, sent during the summer. Népszava says HUF 3,500 billion (EUR 8.8 billion) is at stake. Furthermore, it is unlikely that Hungary will get that money before the end of 2022. That may result in the further weakening of the forint and a deepening economic crisis.
According to some calculations, the European Commission would like to freeze EUR 8.8 billion of EU funds from the 2021-2027 budget. At least, that is what they wrote in an official letter sent in July to the Hungarian government. Benedek Jávor, a former MEP of Párbeszéd (Dialogue for Hungary) between 2014 and 2019, leaked the document. Now he heads Budapest’s delegation in Brussels.
EUR 8.8 billion is 70% of Hungary’s EU funds aim to cover environment protection, transport and settlement development projects. The European Commission’s explanation says they chose such harsh measures because the breach of law is systematic in the public procurement procedures in Hungary. Therefore, they feel that the EU’s financial management is in danger.
The Hungarian government sent its official answer to the EC’s critics on 22 August. However, nobody knows a thing about the content of that letter. As reported yesterday, Justice Minister Judit Varga conducts intensive negotiations concerning the EU funds. However, she was only successful in issuing some positive-tone statements.
The Orbán government regularly expresses its commitment to baulk corruption and monitor public procurements more effectively. The European Commission praised those statements but highlighted that they want more than just promises. They would like to see implementation. The EC has until 22 September to decide whether they will continue the infringement procedure against Hungary. Those may result in losing all EU funds. A better option would be for the Orbán cabinet if the EC terminated the process.
However, Népszava’s sources agreed the European Commission would not decide in favour of Orbán. At least for now. In September, the Committee will probably suggest freezing the EU funds for Hungary. Provided the government met its commitments regarding corruption, public procurements, etc., Hungary might get the money.
The infringement procedure started in April because the European Commission believed the Hungarian judicial authorities did not punish irregularities, fraud and corruption. As a result, they cause significant damage in the EU budget. Hungary is the first member state against which an infringement procedure ever started.
Source: Népszava