Hungarian government reaches technical agreement on most valuable EU reform

The Hungarian government and the European Commission have reached a technical agreement on the judicial package, Hungarian Justice Minister Judit Varga announced on Monday.

The package itself is blocking almost all of the €22 billion in catch-up funding as a horizontal conditionality, and while the budget may not receive part of the amount for other reasons, the agreement would free up €13 billion (roughly 4,900 billion forints), according to Népszava.

Népszava: No guarantee of political approval

Sources of the paper's Brussels correspondent have stressed that the deal still needs to be approved by the Commission President and members of the panel (or college) but it would not be the first time for a preliminary agreement to be blocked at this level. In her post, Ms Varga also wrote that "We are waiting for the decision of the College of Commissioners." It is enough for the European Commission to conclude that the horizontal conditionality has been met.

European Commission spokesman Christian Wigand confirmed only that the technical talks were "progressing well", that Judit Varga and Didier Reynders had had a "constructive discussion" and that the Commission would analyse the progress, but would not comment on the ongoing procedure.

According to the Commission's calendar, the next meeting of the College of Commissioners will be this Wednesday, but Christian Wigand did not give any information when asked when they might move forward with the procedure.

What is the debate about?

The EU conditions are:

• the strengthening of the role and competencies (independent judicial oversight powers on behalf of the judiciary) of the National Judicial Council (Országos Bírói Tanács-OBT)
• the strengthening of the independence of Curia judges – formerly the Supreme Court – in order to protect them from political interference.
• the possibility for the authorities to challenge final judgments in the Constitutional Court to be removed;
• the obstacles – which are contrary to EU law – for Hungarian judges to appeal to the Court of Justice of the European Union, should they perceive a conflict between Hungarian and EU law, to be removed.

The Hungarian government submitted its reform proposal for public consultation in January, but the National Judicial Council was not satisfied with this, and, according to leaks, neither was the European Commission.

The judicial conditions are also part of the 27 "milestones" which are blocking the payment of a non-refundable €5.8 billion (around 2,200 billion forints) of the recovery funds over and above the EU budget. This is decided by a qualified majority of member states on a proposal of the Commission.

As previously reported, EU funds are currently being withheld from Hungary due to an intertwined and partly overlapping set of conditions:

• almost all of the roughly €22 billion (more than 8 300 billion forints at the current exchange rate) of catch-up funding allocated through the government without any co-financing;
• the non-reimbursable part of the recovery fund over and above the 'normal' EU budget (the Hungarian government has only recently decided to apply for the loan);
• and public foundations and universities with such a foundation background have (since mid-December, as decided by the Member States) been banned from entering into any grant contracts (commitments).