The European Commission on Wednesday gave the green light to Hungary’s recovery and resilience plan (PRR), worth €5.8 billion, but proposed suspending €7.5 billion in cohesion policy funds.
The two decisions were announced this Wednesday by the community’s executive, which said in a statement that “today it has submitted to Hungary an assessment under the conditionality procedure”, arguing that “despite the measures taken, there is still a continuing risk to the EU exists budget, as the corrective measures that still need to be implemented are of a structural nature”.
For this reason, Brussels is proposing to suspend 65% of commitments for three operational programs under cohesion policy, for an amount of €7.5 billion, a process that had already started in mid-September.
“The Commission has concluded that the conditions for the application of the regulation remain and that further essential measures will be needed to remove the remaining risks to the EU budget in Hungary,” justifies Brussels.
At the same time, the institution gave the “green light” to the Hungarian PRR, whose approval has been delayed for months, after “the essential milestones in the areas of judicial independence and the protection of the EU budget were included”.
However, to access PRR funds, Budapest is dependent on the “full and effective implementation of the necessary milestones”, with 17 corrective measures at stake, along with other rule of law reforms related to the independence of the judiciary, a total of 27 major milestones.
“This means that no payments under the PRR will be possible until Hungary has fully and correctly implemented these 27 key milestones,” added Brussels.
The RRP Regulation stipulates that 70% of the grants to be awarded to Member States must be approved before December 31, 2022, the deadline that Budapest will have to take into account.
Among the 17 corrective actions imposed by the institution under the conditionality mechanism are initiatives to combat corruption, improve competition and transparency in public procurement, strengthen conflict of interest rules, strengthen audit and control requirements and even strengthen the independence of the judiciary.
Brussels maintains a long dispute with the Hungarian government of Viktor Órban, accused of violating the rule of law, namely the independence of the judiciary and the media, and violating minority rights and failing to fight corruption.
In mid-September, the Community administration proposed suspending Community funds to Hungary under the cohesion policy for violations of the rule of law.
It is now up to the Council to vote on the suspension of such Community funds until 19 December, in a decision to be taken by qualified majority.
The Commission’s decision also prevents Hungary from entering into legal commitments with funds of general interest for programs implemented under direct and indirect management.
This was the first time that the cross-compliance regulation was applied, as the measure related to irregularities in Hungary such as public procurement, lack of investigations and legal action in cases related to European funds, as well as deficiencies in the fight against against corruption.
“The Commission will remain in close and constructive contact with the Hungarian authorities to continue working towards a prompt and substantial resolution of the concerns identified in both proceedings,” the community’s executive told the press.
The conditionality mechanism, adopted in 2021, provides for sanctions in case of rule of law violations in a particular Member State and in situations affecting the EU’s financial interests.
Source: DN
