The Hungarian government has not satisfactorily implemented its 17 reform promises. This is the conclusion reached by the EU Commission today (Wednesday), recommending to the Council of Member States to freeze EU funds amounting to 7.5 billion euros. The upcoming vote in the Council is the final step in the rule of law procedure, which has been ongoing since April 2022.

At the same time, the Commission today greenlit Hungary’s recovery plan. The until now withheld Corona payments of 5.8 billion euros from Brussels could thus soon flow to Hungary in several instalments if corresponding milestones are met. In the case of Hungary, however, the Commission first requires the complete fulfilment of 27 so-called “super-milestones” before any payments from the reconstruction fund can be released. As part of these “super-milestones”, Orbans government must not only implement the 17 reform proposals from the rule of law procedure, but also additional reforms in the justice sector.

Daniel Freund, Green negotiator for the Rule of Law Conditionality Mechanism in the European Parliament’s Committee on Budgetary Control, comments:

“The EU Commission is finally cracking down and making it clear: anyone who destroys democracy will have EU funds cut off. In recent months, Viktor Orban has made no move to abandon his autocratic course. Now he is receiving the 7.5 billion euro bill from Brussels for the systematic dismantling of democracy over the past twelve years. EU money may now only flow after real reforms have been implemented – no empty promises. The freezing of 7.5 billion euros is unfortunately still too little in view of the enormous corruption in Hungary. The European Parliament has been fighting for years that no EU money should be paid to autocrats. Today’s decision by the EU Commission is a partial success for European democracy.”

What funds could now be cut from Orban?

Under the rule of law procedure, Orban faces the freezing of 65% of funds from three operational programmes of the EU’s cohesion policy. In addition, no more EU funds may be paid to the so-called “Public Interest Foundations”, which are de facto under the control of Prime Minister Viktor Orban and his allies. In total, this would amount to a freezing of about 7.5 billion euros.

Under the EU recovery and resilience fund, Hungary is entitled to another 5.8 billion euros on top of the regular budget. But the Hungarian government can only get hold of these funds if corresponding milestones are met.

In addition to the 17 measures, what reforms does Hungary still need to fulfil in the area of justice?

1. increasing the powers of the independent National Judicial Council, to limit undue influence and discretionary decisions, and ensure a more objective and transparent administration of courts;
2. reforming the functioning of the Supreme Court to limit risks of political influence;
3. removing the role of the Constitutional Court in reviewing final decisions by judges on request of public authorities; and
4. removing the possibility for the Supreme Court to review questions that judges intend to refer to the European Court of Justice.  

The EU Commission’s detailed assessment of the 17 reform measures is available here: https://ec.europa.eu/info/sites/default/files/about_the_european_commission/eu_budget/com_2022_687_1_en_act_part1_v5.pdf 

The concrete milestones for Hungary to meet for the disbursement of the recovery funds are available here (starting on page 50): https://ec.europa.eu/info/sites/default/files/com_2022_686_1_annex_en.pdf