The European Commission has proposed suspending a part of the EU funds allocated to Hungary over concerns about their mismanagement. Johannes Hahn, the Commissioner for Budget and Administration, told a press conference on Sunday that the EC was proposing to the European Council a suspension of 65% of cohesion funds due to Hungary, amounting to an estimated 7.5 billion euros. The council will now have one month to approve the commission’s proposals with a qualified majority, which can be extended by a further two months under special circumstances. According to the EC’s press release, Hungary has committed to fully inform the commission about the implementation of its remedial measures by Nov. 19. Hahn said the EC had taken a unanimous decision on the next step in the procedure regarding the conditionality mechanism which links EU funding to the rule of law. “This is the first case … which … aims at protecting the financial interests of the Union,” the commissioner said.
Hahn said the EC’s decision had been based on the intensive dialogue conducted between Hungary and the commission over the last several months, which had led to Hungary committing to several remedial measures to address the commission’s concerns. The commission assessed the measures put forward by Hungary to determine whether they will put an end to the breaches of the rule of law and/or the EU’s financial interests as well as the identified risks to the EU budget, he said. It concluded that the proposed remedial measures “could in principle be capable of addressing the issues described in the notification, if they are correctly specified in relevant laws and rules, and implemented accordingly”, Hahn said. However, until the key steps are implemented, “the Commission’s assessment is that a risk for the budget at this stage remains”, he said, adding that the EC’s decision takes into consideration the remedial measures proposed by Hungary.