First indication on the possible loss of EU funds

HUNGARY - In Brief 11 Sep 2022 by Istvan Racz

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It is the EU's ongoing rule-of-law procedure against Hungary again. Brief recap: On July 22, the EU Commission (the commissioner for budget affairs) wrote a letter to the government, summarising its standing problems with Hungary's way to use EU funds, and opening up the last round of the procedure, asking for a satisfactory response, with measures to remove the problems, within a month's time. On August 22, the government responded, offering some measures in response to criticism from the EU. The Commission has now another month, expiring on September 22, to make a recommendation to the Council whether to impose a financial penalty on Hungary, because of remaining rule-of-law problems, or to close down the procedure without a sanction, if all previous issues having been sorted out. However, the Commission has made clear that it is prepared to continue talks with the government on possible ways out during this remaining one-month period. At present, there are intense talks of this kind going on, without any of their specific content or results being known to the public. What happened in the past few days, though, was the leak of a memorandum by Johannes Hahn, the EU's commissioner for budget affairs, written to the Commission on July 20, just two days before the latest letter was sent by the Commission (signed by Mr. Hahn himself) to the government on the subject. In this, Mr. Hahn described Hungary's public procurement practice as seriously flawed and rich with corruption, its public prosecution, judicial independence and anti-corruption framework as inadequate, and the remedial measures offered by the government by that time as fundamentally insufficient. In this lat...