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Hungary faces EU anti-corruption deadline


Hungary faces EU anti-corruption deadline

Hungary faces the suspension of European Commission developmental funding due to the lack of anti-corruption reforms.
Photo: Valeria Mongelli/Bloomberg

Hungary faces an EU-imposed deadline today to implement anti-corruption reforms. 

Brussels has threatened to withhold some or all of Hungary’s $21.3 billion in cohesion funds—a special allocation for poorer member states to develop infrastructure. The EC has already frozen $5.8 billion in post-pandemic relief. In addition to corruption in the public sector, Brussels has expressed concerns on the independence of the country’s judiciary, media and non-governmental organizations.

In the short term, expect the EC to recommend suspension of some but not all of Hungary’s cohesion funds. Hungary is likely to comply with one pivotal EC concern—government-linked bidders tendering alone for EU-funded projects—and EU leadership is likely to cautiously withdraw funding to avoid alienating the country. The withholding of COVID-19 relief funds has prevented the government from addressing Hungary’s acute economic crisis, which includes double-digit inflation and a weakened currency. 

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In the medium to long-term, expect the failure of EU efforts to slowly coerce Hungary into internal reform absent the ouster of Prime Minister Viktor Orban’s government. Such efforts are only likely to further move Hungary toward Russia, particularly by heightening Budapest’s calls for a Russia-favored peace in Ukraine and an end to the European sanctions regime. 

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