The European Commission has adopted the Hungarian recovery program, paving the way for a transfer of €5.8 billion, but will propose to the European Council to suspend €7.5 billion from the cohesion funds, the Commission Vice President Valdis Dombrovskis announced on Wednesday.
“While a number of reforms have been undertaken or are underway, Hungary failed to adequately implement central aspects of the necessary 17 remedial measures agreed under the general conditionality mechanism by the deadline of Nov. 19, as it had committed to,” the Commission said in a press release.
“The Commission has decided to maintain its initial proposal of Sept. 18 to suspend 65 percent of the commitments for three operational programmes under the cohesion policy, amounting to €7.5 billion,” it added.
EU leaders will vote on the matter at the Dec. 19 EU Council summit, where a qualified majority is required.
The Commission has also added 10 new points on which Hungary must make progress before the cohesion funds are released, amounting now to a total of 27 points.
Justice Commissioner Didier Reynders also confirmed earlier information that four of the 27 milestones will eventually relate to the strengthening of the Hungarian judiciary. He indicated that Hungary will only be able to access recovery funds once these four milestones, among others, have been met.
Reynders confirmed that the National Council of the Judiciary should be prevented from challenging the freedom of judges to refer to the European Court of Justice for the interpretation of law and opinions, and that Hungarian public authorities should be prevented from challenging final Hungarian court judgments in the Constitutional Court.
At the briefing, Budget Commissioner Johannes Hahn said that it was not enough to meet the 17 conditions agreed to by the parties, which is why the decision to withhold funds was maintained. Public interest trusts cannot receive EU funds until the EU’s conflict of interest concerns are clarified, he said.
It is important to note that these funds will not be lost and could be called up next year. However, the amount of EU recovery fund money that Hungary is entitled to would be reduced if no agreement is reached this year.