In major first, EU unleashes power to cut Hungary’s funds over rule of law violations – POLITICO

The European Commission on Wednesday officially unleashed a powerful new mechanism that could see Hungary lose EU funds over rule of law breaches – the first time the bloc has used the authority.

The commission spent months preparing the ground to take the step, but has repeatedly delayed final approval. The commissioners met on Wednesday and gave the official starting signal.

The decision marks a significant moment for the EU. The bloc has never used this power before, allowing it to slash payouts to members when rule-of-law issues threaten the EU budget. The new mechanism was created in recent years after existing tools to monitor recalcitrant member states proved incapable of changing behaviour.

A Commission official told reporters that Hungary was being targeted due to “serious concerns” about the use of EU funds. The official highlighted concerns about how Hungary awards public contracts and how it controls and audits EU funds. The official also berated the country for a lack of transparency and obstructing effective investigations and prosecutions.

Those concerns, the official said, had been “ignored” for over a decade, pointing to “ongoing violations” without “any improvement.”

While the EU officially received its new powers in early 2021, a court case and political considerations prompted the Commission to wait over a year before officially triggering it.

Wednesday’s move heralds the start of a months-long process that could end with Hungary losing a significant amount of EU money, with the ultimate decision resting with the EU’s Council, made up of representatives from each country.

Any cut in funding will require a “qualified majority” – that is, the support of at least 55 percent of EU countries representing at least 65 percent of the bloc’s population.

Under the regulation governing the mechanism, the EU can cut funding if breaches of the rule of law affect or could affect the EU budget “sufficiently directly”.

Officials say the commission ultimately chose to trigger the mechanism against Budapest — rather than the rule of law’s other troublemaker, Poland — due to rampant high-level corruption and a lack of proper prosecution of bribes in Hungary committed to the Berlaymont gave a strong case.

Since Hungarian Prime Minister Viktor Orbán came to power more than a decade ago, Brussels and Budapest have grown increasingly apart. During Orbán’s tenure, civil rights groups say the Hungarian leader gradually took control of democratic institutions and funneled taxpayers’ money to friends and family.

Orbán recently won a fourth consecutive term, prompting the commission to announce that it would soon trigger the rule of law mechanism.

In a letter to the Hungarian authorities late last year that laid the basis for the decision, the Commission pointed to systemic problems and a lack of accountability for corruption in Hungary and asked 16 questions on issues such as conflicts of interest and who benefits from EU funds. In major first, EU unleashes power to cut Hungary's funds over rule of law violations - POLITICO

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