According to the opinion of the European Commission published on Wednesday afternoon, Hungary's judicial reform has addressed the deficiencies in judicial independence, which were the reason for blocking the release of most of the cohesion funds earmarked for Hungary. However, the body's interim assessment also said the conditions for paying out some of the withheld funding still had not been met under the so-called rule of law (conditionality) procedure.
Even so, this is the first time the Hungarian government has had any of the roughly thirty conditions blocking the majority of the funding available as of 2021 ticked off.
This will unlock a nearly €10 billion (around 3,800 billion forints) portion of the blocked funds.
The European Commission justified the decision on the judicial conditionality by saying that "After a thorough assessment, and several exchanges with the Hungarian government, the Commission considers that Hungary has taken the measures it committed to take,” allowing the EU’s executive to free up the funds.
“This means part of the cohesion policy funding would no longer be blocked, and therefore Hungary may start claiming reimbursements of up to around €10.2 billion,” the statement said.
They added that it is not enough for member states to comply once, they must ensure that the conditions are met throughout the entire period of cohesion policy. For this reason, “the commission will closely and continuously monitor, notably through audits, active engagement with stakeholders and in monitoring committees, the application of the measures put in place by Hungary,”
“If, at any point in time, the Commission considers that this horizontal enabling condition is no longer fulfilled, it may again decide to block funding.”
However, in a second decision also announced on Wednesday, 55 percent of three cohesion programmes (€6.3 billion) will continue to be withheld because "Despite regular exchanges with Hungary, the Commission considers that Hungary has not addressed the breaches of the principles of the rule of law" that triggered the activation of the mechanism, the Commission said.
MEPs' letter to Von der Leyen
There has recently been a surge in messaging between the European Parliament and the Hungarian government on the issue of funding. On Monday, Tibor Navracsics, Hungary's Minister for Regional Development said that while they had no authority in the matter, the European Commission was under political pressure from MEPs and was fearful for its own existential interests.
On Wednesday afternoon, before the Commission's expected decision was announced, the leaders of the European Parliament's major groupings wrote to EC President Ursula von der Leyen to express their objections to the release of EU funds to Hungary. The leaders of the EU political groups wrote: “We would like to express our deep concern as regards the imminent positive assessment of the Hungarian judicial reforms and their fulfillment of the four judicial milestones set out in the horizontal enabling condition under the Common Provisions Regulation.”
They also expressed their concern about Hungary’s new “sovereignty protection” law.
The letter was signed by Iratxe García Pérez for the Socialists and Democrats group, Manfred Weber for the centre-right European People’s party, Stéphane Séjourné for Renew Europe, and Philippe Lamberts and Terry Reintke for the Greens.
According to the Guardian, critics of the Commission's decision suggest that the decision could be an attempt to persuade Orbán not to go against continued support for Ukraine and the opening of EU accession talks at the upcoming summit.
MEP Daniel Freund visited Hungary in May as a member of the EP's Budgetary Control Committee. In a statement after the decision was announced, the German Green Party politician wrote that by releasing €10 billion, "Von der Leyen is making the biggest mistake of her tenure".
He argued that the necessary reforms cannot yet be considered complete, while the timing of the release of the funds suggests that it is not about judicial reform at all, but about having Orbán's veto on continued support for Ukraine and starting accession talks with the country lifted. Freund claims that there was no need for announcing the decision before the EU summit, and he had earlier warned that unblocking the funds "could present a problem" if the European Commission President were to seek re-election next year.
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