Friday’s assessment by the European Union executive will help 26 member countries decide whether or not to give Budapest billions in funds.
Viktor Orban, Hungary’s Nationalist Prime Minister, is trying to get access to the money. With domestic inflation at 26%, Orban has to face one of the biggest challenges in his 12 year rule. The cost of debt is rising and the economy will slow down sharply next.
The stakes are 13.3 billion Euros ($14.1 Billion), which had been allocated from EU-Hungary joint funds but were blocked by concerns about corruption and low judicial independence.
Two officials confirmed that the European Commission will communicate its position to Czech Republic in a letter to be sent to it later Friday.
Judit Varga, the Hungarian Justice Minister, stated this week that more laws have been passed by parliament to deal with graft issues since November’s last assessment of the Commission.
Sources claim that EU countries may use Hungary’s recent legal amendments to approve Budapest’s National Recovery Spending Plan worth 5.8 Billion Euros and less than 7.5 Billion for other frozen funds.
One source in the Czech government said that “if there’s a clear assessment of Hungarians taking more important steps over the past 20 days… it would likely lead to a moderater evaluation at the point where the frozen funds are concerned,”
Sources said that the discussion could only take place on Monday. They also stated that it would depend on whether Budapest decides to move on Orban’s blocking of two decisions – a joint EU loan for Ukraine worth 18 billion euro and a proposal for global corporate minimum tax.
According to international watchdogs, Orban funnelled EU money to his associates in order to secure power. Orban claims that Hungary is not more corrupt than other countries.
Self-described “illiberal” crusader, he has been in many bitter disputes with the EU about media freedoms and academic freedoms. He also opposes the treatment of immigrants and LGBT rights. Moscow has maintained close ties and repeatedly blocked EU sanctions on Russia for the war in Ukraine.
Orban tried to reach a compromise with the Commission to create an anti-graft agency in order to unlock desperately needed EU funds.
In an earlier recommendation, the Commission recommended that 7.5 billion euro (or 65%) of the EU’s development funds be frozen until 2027. This was due to corruption risk.
The Commission also withheld approval for Hungary of approximately 5.8 billion Euros from an EU Fund to aid countries recovering from the COVID pandemic.
As both parties try to make concessions, the end-of year deadline adds pressure.
Consulting Eurasia Group was optimistic about a deal, but warned of growing risks. “Brisbourg and EU capitals tend to show… Orban will not be blackmailed.”