Hungary hit by proposed rule of law conditions in next EU budget

New rule of law conditions for payments in the next budget cycle proposed on Wednesday by European Commission President Ursula von der Leyen could impact Hungary and threaten to cut off more funding channels from Brussels, according to draft rules seen by Euronews.

“The rule of law must be respected unconditionally, and this is binding on all the bases of the EU budget. But with the next multiannual financial framework we will go further,” said von der Leyen.

“In the National Regional Partnership Plans, we are making the rule of law and fundamental rights a condition for investment and a focus for reform. This will be about smart conditionality,” she added.

Von der Leyen also said that EU money will be spent responsibly, with very strong safeguards, clear conditionality and appropriate incentives, “because this is in the interest of citizens”.

The National and Regional Partnership Plans (NRPs) package, which von der Leyen mentioned, is the biggest item in the seven-year budget plan, accounting for almost half of total spending, €865 billion, if the budget figures are adopted per the proposal.

The Commission President did not give details on the specific form of the rule of law checks that would be carried out on the programmes under the NRPs.

New strict rule of law conditions are coming, according to a document obtained by Euronews

However, the draft regulations obtained by Euronews show that a member state will have to comply with EU core values in order to be awarded projects.

Here, the EU Charter of Fundamental Rights, Article 2 of the EU Treaty on fundamental rights, is mentioned in the regulations, but it also states that member states must not violate the principle of gender equality.

Another new feature of the legislation is that payments will be linked to the annual rule of law report.

If these rule of law conditions are not met, the Commission will notify the member state concerned and if there is no change, the Council may suspend payments.

The rules spell out the need to promote open, rights-based, democratic and inclusive societies and to strengthen the judiciary, the fight against corruption and media diversity.

Transparency would also be improved by publishing a list of final beneficiaries of EU funds in a central database. Also included in the budget proposal is the strong AgoraEU line, which together with ERasmus+ will receive €49 billion. This is intended to support common EU values, democracy, the rule of law, freedom of the press and civil society organisations.

Hungary could face a difficult situation in the next budget cycle

Hungary is currently the country most criticised in the European Union for issues related to the rule of law.

Hungary is also the only country to be subject to Article 7 proceedings in the Council, which could in principle end with the withdrawal of voting rights. Hungary is also the only country to be subject to the Rule of Law Procedure, which has been used to suspend EU funds because of the risk of systemic corruption.

The Hungarian government has described these procedures and accusations as acts of political revenge.

Of the current running EU budget, Hungary can now essentially only use cohesion and agricultural funds. However, these are due to be merged into a programme called National and Regional Partnership Plans, so that in future these funds could be suspended by Brussels if it deems the rule of law to be inadequate.

However, the budget proposal presented now is far from final, as it will have to be agreed with the European Parliament and member states. Moreover, each member state, including Hungary, has a veto on the seven-year budget.