The European Commission’s Proposal to Freeze Funding for Hungary

The European Commission has proposed freezing €7.5 billion in European Union payments to Hungary, after experts believe that the country is no longer a democracy, but an ‘electoral autocracy.’ In fact, 80 percent of European Parliament members voted and declared that Hungary is no longer a “full democracy.” Much of the commission’s concerns stemmed from Hungary’s Prime Minister, Viktor Orban, who has been in power since 2010. There have been increased concerns over academic and religious freedoms within the country, the functioning of their electoral system, and rights of vulnerable groups like minorities and refugees.  

In addition to his reputation as a leader, his relationship with the European Union has been anything but smooth. Since he has come into power, Orban has failed to implement European Union recommendations, and has been accused of dismantling democratic institutions in Hungary. Much recently, Orban has also openly been a critic of western support for Ukraine and has particularly been vocal about the economic sanctions being placed on Russia. Orban argues that has only hurt the economy of Europe, and that continuing energy shortages and inflation will only bring Europe to its knees. 

The European Commission tasked themselves with protecting the European Union’s budget, with much of that responsibility coming from ensuring that member nations are respecting principles set forth by the European Union when using its funds. Their concern in Hungary has been the mismanagement of such funds, particularly in the arena of public procurement. It is believed that European Union funds have been used by Hungary to contract with “politically connected insiders” to execute public projects. This belief stems from “systematic and systemic irregularities, deficiencies and weaknesses in public procurement related to very high rates of single bidding.” More generally, the European Union fears that continuing to give Hungary funds will only strengthen their anti-democratic practices. 

While freezing Hungarian funds is only a proposal at this point in time, funds can be suspended if a qualified majority (55% of the 27 members) vote in favor of doing so. The commission is recommending that member countries wait until November to come to a decision. Orban has said that this move by the European Commission is a “joke,” stating that Hungary is not any more corrupt than the other 27 nations in the European Union. At the very least, withholding member nation’s funds may be a powerful tool to ensure that member nations are following the European Union’s standards set forth to protect its democratic principles.  

Article Written by Andrew Castelletti.

Sources

WSJ – EU Squeezes Hungary Funding While Seeking Its Backing Against Russia – September 18, 2022, available at https://www.wsj.com/articles/eu-squeezes-hungary-funding-while-seeking-its-backing-against-russia-11663501887