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The European UnionThe executive is expected on Sunday to recommend the suspension of billions in funds to Hungary for corruption. It’s the first such case under a new “cashfor democracy” sanction that aims to protect the rule-of-law.
Two years ago, the EU instituted a new financial sanction in response to what it called the undermining democracy in Poland and Hungary. Prime Minister Viktor Orban subdued courts and media outlets, academia and NGOs, and also restricted the rights of women, gays, and migrants during his more than ten-year tenure in power.
The bloc has long decried Hungary’s public tender laws for not providing adequate anti-graft protections that result in an excessive rate of single bidding. Corruption is a problem.
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The European Commission, based in Brussels, met Sunday at 0630 and was expected to approve a proposal for suspending as much as 10% of Hungary’s economy from funds from the bloc’s shared budget for 2021-2027. This amount is a total $1.1 trillion.
The proposal would be sent to EU member states and they would have three months to vote on it in a majority vote. This means that no country could block the punishment, as was the case with the previous ineffective democratic policing.
Orban, who describes himself as a “freedom fighter” against liberal West’s world view, denied that Hungary, an ex-communist country with some 10 million inhabitants, is more corrupt than other EU countries.
Johannes Hahn, EU Budget Commissioner, announces that the EU will withhold funds from Hungary until the country can prove that corruption has been under control. This was in a speech made in Brussels, Belgium on September 18, 2022.
(REUTERS/Hedy Beloucif)
Although he has always refused to amend his laws, he was forced to make a deal with Brussels in order to get money for his failing economy and forint (the worst performing currency in the EU’s eastern region).
CORRUPTION
The Commission has already blocked $6 billion of funds that were intended for Hungary as part of a separate COVID economic stimulus. They claim the money could be misused.
Reuters reported in 2018 that Orban channeled EU development funds to his family and friends. This practice, human rights organizations claim has greatly enriched Orban’s inner circle and allowed him to consolidate his power.
According to OLAF, Hungary’s irregularities in spending EU funds in 2015-2019 was nearly 4%. This is the worst of the 27 EU countries. OLAF stated in 2016 that Budapest must repay $280 million it spent on Budapest Metro due to fraud and possible corruption.
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However, complex procedures and political maneuvering allowed Hungary to avoid severe financial penalties since it joined the bloc in 2004. This may not be possible as the EU is testing its new preemptive sanctions.
Orban also has rubbed many in the bloc wrong by continuing to cultivate close ties President Vladimir Putinand threaten to withdraw EU unity.
