The Hungarian government is hoping to reach a deal with the European Commission to unblock billions of euros in EU funds by the end of August. The Cabinet of Prime Minister Viktor Orbán is seeking to diffuse a long-standing conflict between Budapest and Brussels over democratic standards, rule of law and corruption.
Following years of deteriorating relations between Hungary and the European Union, the European Commission withheld its approval for disbursing billions of euros in recovery funds to Budapest. The standoff is fueled by Prime Minister Viktor Orbán’s repeated confrontations with Brussels over a range of issues, including democratic standards, the state of rule of law and the level of corruption in Hungary.
According to the European Commission, Hungary fails to meet the bloc’s standards with respect to media pluralism, court independence, and corruption and there is a risk that even regular EU funds from the bloc's 2021-2027 budget sent to the country could be misspent.
The Commission has delayed signing what is called a partnership agreement with Hungary, which details how EU cash under joint EU-Hungarian management in the 2021-2027 budget would be spent, putting EUR 21 billion euros on hold.
Seeking an agreement
Despite fiery comments about double standards applied by Brussels, the signs that Orbán wants to reach a deal with the EU has been multiplying over recent weeks.
In June, senior Hungarian officials declared they were ready to seek a deal with the Commission and Budapest says talks have made progress since then.
The minister for regional development and the utilization of EU funds Tibor Navracsics struck an optimistic note earlier this summer, saying that the government would conclude a partnership agreement with the European Union in the second half of 2022, which will enable Hungary to access EU funds.
A potential agreement would grant Hungary access to HUF 10,000 billion (EUR 24 billion) for operative programs and an additional HUF 4,000 billion in rural agriculture development, Navracsics said.
Navracsics’s comments regarding a possible agreement between Brussels and Budapest come on the heels of the European Commission’s earlier decision to freeze access to Hungary’s plan for the EU’s coronavirus recovery fund, under which the country was initially set to receive EUR7.2 billion in grants. Brussels cites concerns over the state of rule of law and the level of corruption in Hungary, while the Orbán government claims Brussels is simply blocking the funds over the country’s LGBT policies and a host of other ideologically motivated concerns. As the commission recently gave the green light to Poland’s request, Hungary remains the only EU member state without an approved recovery plan.
Hungarian State Secretary for EU Affairs János Bóka said earlier this week that an agreement between Budapest and Brussels would be concluded by the end of August.
"Negotiations with the Commission have entered into a new phase," Bóka told reporters. "Hungary's objective is to close all outstanding issues in the budgetary conditionality by the end of August."
A key Commission concern was that when spending EU money, the Hungarian government often organizes tenders with only one bidder, usually linked to the ruling party. Bóka said the Hungarian government was ready to reduce the number of such single-bidder tenders to 15% of all tenders. "It is very difficult to reduce single-bid public procurement processes to zero, because there are certain areas where you have only one serious bidder," Bóka said. "We have to identify areas where this reduction is actually feasible."
The politician added that Hungary was also prepared to meet another of the Commission's demands, namely Hungarian courts would be allowed to order prosecutors to pursue a case, even if the prosecutor had earlier decided not to. Budapest was also ready to discuss detailed Commission suggestions on the transparency and inclusiveness of lawmaking in Hungary. "I do not see any area where we cannot come to an agreement. I cannot label anything as contentious," Bóka said.
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