Approval of Hungary's CAP plan by the EU Commission is an important step forward but no game changer

HUNGARY - In Brief 07 Nov 2022 by Istvan Racz

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The news came today that the EU Commission had approved Hungary's plan to use its €8.4bn grant quota under the Common Agricultural Policy (CAP) section of the new 7-year EU budget. This is an important step forward, as previously no parts of Hungary's utilisation plan for the new budget and the Recovery Fund (RRF), amounting in total to €37.7bn in grants over 7 years, had been approved. However, this action has nothing to do with the ongoing rule-of-law procedure against Hungary, especially as blocking this part of the EU budget for Hungary has never come up as an issue. This is mainly because most part of agricultural funds are not allocated by the Hungarian government: some €6.6bn of the total CAP quota is to go to landowners as so called direct payments. On rule-of-law issues, Hungary has a deadline of November 19 to deliver proper action on its 17-point to-do list of anti-corruption measures. Lately, good progress has been apparently achieved by the government in implementing these measures, and their main point, the new Integrity Authority (similar to what exists already in Italy and Slovenia) is expected to start operations in a few days. Should all points on the to-do list be appropriately addressed by the government, the approval of Hungary's RRF utilisation plan, which has been blocked in the EU for almost one-and-a half years now, could make progress at the next EU Commission meeting on November 22. The latter would not mean immediate access to RRF funds, but at least these funds would not get lost for Hungary (which would happen, up to 70% of the quota, if the RRF plan is not approved by end-2022). On the results of the rule-of-law procedure, the European Co...