European Commission likely to approve Hungarian pandemic recovery plan

  • November 24, 2022
European Commission likely to approve Hungarian pandemic recovery plan

The European Commission is likely to approve a post-pandemic recovery plan for Hungary next week to leave open the possibility of EU payments later, but suspend any payments until Budapest meets all agreed conditions, Reuters reported, citing sources.

Under the EU recovery scheme, Hungary could receive €5.8 billion (in grants that could be spent on making the economy greener and more digital.

Separately, the Commission is also likely to recommend next week that EU governments suspend 65 percent of EU budget transfers to Hungary, or about 7.5 billion euros, until its conditions are met.

The Commission's decision to withhold 13.3 billion euros from funds for Hungary comes after months of negotiations with Prime Minister Viktor Orban's government over EU concerns about corruption and protecting the independence of courts, non-governmental institutions and media, as well as minority rights.

Under an agreement with the EC, Hungary was supposed to act on some of these key concerns by Nov. 19, but officials said a preliminary assessment showed that these steps were insufficient.

EU approval of the Budapest reconstruction plan is a way to keep open the possibility of payments and, therefore, put pressure on the Orban government to comply with numerous conditions.

Without approval in 2022, 70% of the reconstruction fund grants would be irretrievably lost.

The same logic applies to the recommendation to freeze more than half of the EU fund money for Budapest that EU countries receive to equalize living standards.

Once Hungary meets EU conditions, mostly related to corruption and judicial independence, so that EU funds are not at risk of misuse, the payments could be unblocked, sources said.

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