Euronews: European Parliament to sue Commission over partial release of Hungary's frozen funds

The European Parliament is launching a lawsuit against the European Commission over its decision from last December declaring the Hungarian judicial reform complete, Euronews reports. This condition was previously blocking Hungary’s access to almost all of the €22 billion (more than 8,600 billion forints at current exchange rates) in cohesion funding.

The decision was made by EP President Roberta Metsola on Thursday following consultations with the leaders of the EP’s political groups.

In January, following the EC's decision to accept Hungary's judicial reform as complete, the European Parliament requested a resolution from its own Legal Affairs Committee on a potential lawsuit. The reform was the reason why almost all EU catch-up funding from the 2021-2027 budget had been withheld from Hungary. Although a portion of the catch-up funding is still inaccessible to Hungary due to other conditions, as of early March, almost half of the €22 billion, namely €12.2 billion, or more than 4,800 billion forints, have already become available. These funds are typically used by the EU to reimburse pre-financed developments in exchange for invoices. According to Mihály Varga's announcement last Friday, more than HUF 550 billion of the previously blocked funds have so far been received.

The judicial reform included four of the 27 conditions which have prevented Hungary from receiving payments from the €10.4 billion of the off-budget recovery fund. According to a partial assessment carried out last December, these "super-milestones" had not been fully met by the Hungarian government. The funding is available until August 2026, which makes drawing down the money from it all the more urgent.

On Monday, members of the European Parliament's Legal Affairs Committee almost unanimously approved suing the European Commission. The body's recommendation was then forwarded to EP President Roberta Metsola, who had until 25 March to decide on how to proceed. If she had opposed the proposal, she would have either had to take the matter before the leaders of the political groups or the full plenary. In the end, according to Euronews, she approached the group leaders, who met on Thursday.

What is the EP objecting to?

The decision to release part of the catch-up funding which had been withheld from Hungary was made just a day before the year's last meeting of heads of state and government in December 2024. The launching of negotiations about Ukraine's EU membership and further support for the country, as well as the increasing of the long-term EU budget, were among the topics which were to be discussed at the summit. In its January resolution, the EP said that Hungarian Prime Minister Viktor Orbán acted “in total disregard and violation of the EU’s strategic interests” when he blocked the decision on the vital review of the multiannual financial framework, which included the aid package for Ukraine. According to the body, "such conduct violates" the principle of loyal cooperation enshrined in the EU's quasi-constitution, the founding treaties. According to the EP

"the EU must not give in to blackmail in any way, and must never haggle over the strategic interests of the EU and its allies by giving up its values in exchange".

Last summer, Viktor Orbán said that

a budget increase "requires unanimity. So you just have to hold out the bag, and that's it. That's how it's done, that's the plan."

Later, however, even the Prime Minister acknowledged that, due to the principle of loyal cooperation, tying the review of the EU budget to the unfreezing of Hungarian funds would be "bordering on the edge of lawfulness". Ahead of the December summit, the Prime Minister's political director, Balázs Orbán, said that if the common budget was affected by the money for Ukraine (which it eventually was), then in his view the two issues were linked, and he subsequently accused the EU institutions of blackmail.

What are the governing parties and the European Commission saying?

During the January debate on the EP proposal, many MEPs argued that the European Commission had approved the Hungarian reform in exchange for Hungary conceding to the opening of EU accession talks with Ukraine. The Hungarian governing parties spoke of ideological blackmail and of a political circus staged in the run-up to the June EP elections.

Commenting on the committee's decision, Ernő Schaller-Baross, Fidesz MEP told Magyar Nemzet that what the EP was doing was

"legally nonsensical".

"What we are talking about here is nothing more than the body turning to the EU court to legally enforce its own political needs – while disregarding legal limitations". He believes that the EP is seeking to have the decision on EU funds for Hungary annulled because its political arguments have not been taken into account. He said the European Parliament was going through a "midlife crisis", because "there are less than a hundred days to go until the European elections, when European voters will express their views on the functioning of the EU institutions in the spirit of demanding a better democracy". For the Hungarian 'dollar-funded left' financed by George Soros, and the leftist liberal majority abroad, there is nothing sacred any more, and they would even turn the EU institutions against each other.

When announcing the decision in December, the European Commission argued that it would have been irregular if it had not decided to adopt the reform.

The body's justice commissioner, Didier Reynders, said that without the decision, the Hungarian government would have been able to sue. He said it was due to the Hungarian side that they were able to tick off the reform a day before the December meeting of EU heads of state and government, because the last piece of legislation, the publication of which the European Commission was waiting for as a final condition, was adopted faster than usual. (The text was published in the Hungarian Gazette the day before the summit.)

On Thursday, the body was asked about the European Parliament's decision to proceed with legal action. Spokesman Christian Wigand said they had taken note of the EP's decision. He stressed that with such procedures they are bound by strict conditions and deadlines (indeed, they only had days to make a decision), and added that

the Hungarian government had sent all the evidence the European Commission had requested to demonstrate the independence of its judicial system, so they were legally obligated to adopt the resolution.

The spokesman said the body was in full compliance with EU law and would defend its decision before the EU court.