European Union finance ministers will debate on Tuesday the European Commission’s recent recommendation to suspend 7.5 billion euros in cohesion funds to Hungary, but the final decision should not be made until next week.
Less than a week after the unprecedented decision of the community executive to formally propose to the Council the suspension of the payment of 65% of the commitments of three operational programs in the field of cohesion policy, for an amount of 7,500 million euros, Inside Within the framework of the conditionality mechanism, for alleged breaches of the rule of law, this issue will dominate the Ecofin Council meeting this Tuesday.
However, several European sources indicate that the adoption of a decision this Tuesday is unlikely, arguing some Member States that the Commission should update the assessment of the measures adopted in the meantime by Budapest, despite the fact that the opinion of the community executive dates from last November 30, based on the information provided by the Hungarian authorities up to November 19, and this Tuesday even the Commission has reiterated that the EU countries have “all the elements they need” to pronounce themselves.
The Member States have, however, until December 19 to adopt a final decision -by qualified majority-, with a new meeting likely next week, before a European Council that will bring together the Heads of State and Government of the European Union on December 15 and 16 in Brussels.
On Monday, at the start of a Eurogroup meeting prior to the Ecofin Council, Finance Minister Fernando Medina said that Portugal would defend the importance of an understanding regarding the files relating to Hungary, also for Europe to “move forward”, referring to the issue of cohesion funds, but also to the approval of the Hungarian Recovery and Resilience Plan (PRR) and other files that Budapest has blocked due to not having access to funds.
Medina added that what he expects, “and that Portugal will seek to contribute to the discussion, is a message of the importance of an understanding, of reaching an understanding”, important not only for Budapest but for the entire bloc.
The minister pleads for “an understanding that allows, on the one hand, to unblock and clarify the situation of support for Hungary, but also allows, from that point of view, to overcome the vetoes that exist in relation to two files, which is EU support for Ukraine and minimum taxes on companies”, referring to the macro-financial aid package of 18,000 million euros to Kiev by 2023 and the minimum tax of 15% on the profits of the largest companies, which Hungary has blocked in light of its already old ‘iron arm’ with Brussels.
“We are going to appeal, and we are going to work these two days, to make it easier for there to be an understanding that can unlock the files, so that these important issues can move forward,” he reinforced.
Fernando Medina wanted “the ability to be open and understanding, to assess not only the progress that Hungary has made, its commitment to comply with the agenda that was set”, but “that this also allows progress in the solution regarding the financing of European funds and also unblock what have been the obstacles that Hungary has put in relation to a set of files”.
According to the minister, it is extremely “important that the Union can make progress on these fronts.”
At the end of November, the European Commission gave the ‘green light’ to Hungary’s PRR, worth 5.8 billion euros, but proposed to suspend 7.5 billion euros in cohesion policy funds, since, according to Brussels, “despite the measures taken, there remains a permanent risk for the EU budget, given that the corrective measures that have not yet been met are of a structural nature”.
This was the first time that the conditionality regulation was applied, the measure is linked to irregularities in Hungary, in matters such as public procurement, omission of investigations and legal actions in cases related to European funds and also deficiencies in the fight against corruption
Adopted in 2021, the conditionality mechanism provides for sanctions in case of violation of the rule of law in a given Member State and in situations affecting the financial interests of the EU.
At the same time, the institution gave the ‘green light’ to the Hungarian PRR, whose approval has been delayed for months, after “ensuring the inclusion of essential milestones on judicial independence and the protection of the EU budget.”
However, to access PRR funds, Budapest depends 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 judicial independence, in a total of 27 Important Frameworks .
Brussels maintains a long dispute with the Hungarian government of Viktor Órban, accused of violating the rule of law, that is, the independence of the judicial system and the media and of violating the rights of minorities and of not fighting corruption . In ‘response’, Budapest has blocked several files that require unanimity, such as aid to Ukraine and the taxation of multinationals.
Source: TSF
