The EU will withhold $ 7.5 billion in funding from Hungary for allegations of “fraud and possible corruption”.

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The EU executive should recommend on Sunday the suspension of billions of dollars in funds for Hungary for corruption, the first case of its kind in the bloc with a new “cash for democracy” sanction intended to better protect the rule of law. .

The EU introduced the new fine two years ago precisely in response to what she believes amounts to undermining democracy in Poland and Hungary, where Prime Minister Viktor Orban has subdued courts, media, NGOs and academia, as well as limiting the rights of migrants, gays and women during more than a decade in power.

The bloc has also long denounced Hungarian public procurement laws for insufficient anti-graft guarantees that return an excessive rate of individual bidders and fuel corruption.

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The Brussels-based European Commission met on Sunday at 06:30 and plans to approve a proposal to suspend up to one-tenth of the Hungarian economy’s funds from the block’s shared budget for 2021-27 for a total value of 1, 1 trillion dollars.

The proposal would go to the EU member states and they would have up to three months to decide by a majority, meaning that no single country can block the punishment as was the case with the bloc’s previous and ineffective democratic police.

Orban, who calls himself a “freedom fighter” against the worldview of the liberal West, denies that Hungary – a former Communist country of around 10 million people – is more corrupt than others in the EU.

EU Budget Commissioner Johannes Hahn announces plans for the EU to withhold funds from Hungary until the country can prove corruption is under control, in a speech in Brussels, Belgium , on September 18, 2022.

EU Budget Commissioner Johannes Hahn announces plans for the EU to withhold funds from Hungary until the country can prove corruption is under control, in a speech in Brussels, Belgium , on September 18, 2022.
(REUTERS / Hedy Beloucif)

He has long refused to change his laws, but has now been pressured to strike a deal with Brussels to secure money for its ailing economy and the forint, the worst-performing currency in the east of the EU.

CORRUPTION

The Commission is already blocking about $ 6 billion of planned funds for Hungary in a separate stimulus for COVID economic recovery, saying the money would otherwise be at risk of being misused.

Reuters documented in 2018 how Orban channeled EU development funds to his friends and family, a practice that human rights organizations say has immensely enriched his inner circle and allowed the 59-year-old to take root in power.

Hungary recorded irregularities in nearly 4% of EU funds spending in 2015-2019, according to OLAF, the bloc’s anti-fraud body, by far the worst result among the 27 EU countries. OLAF said in 2016 that Budapest should reimburse more than $ 280 million spent on the Budapest metro due to “fraud and possible corruption”.

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But complex procedures and political disputes have allowed Hungary to avoid heavy financial sanctions since it entered the bloc in 2004, something that may no longer be granted when the EU tests its new pre-emptive sanction.

Orban has also rubbed many into the bloc the wrong way by cultivating continued close ties with President Vladimir Putin and threatening to deny the EU unity needed to impose and preserve sanctions on Russia for waging war on Ukraine.