EU Tensions over Hungarian Cohesion Funds
The ongoing struggle between the European Parliament and the Hungarian government, led by Prime Minister Viktor Orbán, has gained renewed attention due to the recent Midterm Review of the EU’s Cohesion Funds. This review aims to reallocate unused funds to enhance defense capabilities and expedite spending as the EU approaches the latter half of its seven-year budget cycle. Members of the European Parliament (MEPs) are particularly concerned that Hungary may exploit this reshuffling process to access previously frozen funds without addressing crucial conditions regarding academic freedom and the rights of LGBTI individuals. The Hungarian government is reportedly seeking to reallocate approximately €600 million in addition to funds they had already managed to reclaim.
German Green MEP Daniel Freund expressed strong skepticism regarding Orbán’s maneuvers, noting that Hungary has already accessed €160 million in funds previously blocked by the European Commission and hinted that they could unfreeze up to €1.68 billion more. Freund criticized the tactics employed by Orbán and insisted that until Hungary demonstrates a commitment to upholding the rule of law, no additional funds should be released. The Commission has refrained from confirming the specifics of the funds released and highlighted that any financial adjustments must receive prior approval. The situation remains complicated, as Hungary’s request for additional funds remains under discussion.
In response to MEPs’ concerns, the European Commission has attempted to reassure them regarding the importance of maintaining oversight related to the rule of law. A Commission spokesperson emphasized that funds already frozen cannot be impacted by the new flexibilities introduced through the cohesion policy adaptations. This assurance comes amid rising tensions, with Vice President Raffaele Fitto clarifying that the Commission would not approve any payment requests while previously frozen funds remain unaddressed. The commitment to uphold the rule of law throughout the review process was reiterated, although skepticism persists among some MEPs regarding the real enforceability of these assurances.
Dutch MEP Tinneke Strik cautioned that the assurances provided by the Commission do not constitute legally binding guarantees, thereby allowing Hungary potential loopholes to withdraw funds. The threats of strategic fund reallocation were also underscored by Freund’s commentary, illustrating that Hungary could possibly leverage specific regulatory exemptions to access funds without triggering complete scrutiny. Earlier attempts by the Parliament’s Regional Development (REGI) Committee to amend the CPR Regulation to introduce stronger safeguards encountered legal barriers, further complicating the matter. Critics, including Hungarian MEP Klára Dobrev, argue that these revisions fall short of ensuring adequate protections and hold the Commission accountable for its commitments.
The political stakes surrounding the allocation of Cohesion Funds to Hungary have significant implications, given that a substantial portion—approximately €18 billion of the €28 billion total—is currently frozen due to concerns tied to corruption and rule of law issues. This funding restraint has arisen amid ongoing concerns about Hungary’s adherence to the Charter of EU Fundamental Rights, including safeguarding academic freedom and the protection of LGBTI rights. Most notably, the significant financial challenges Hungary faces in securing these funds could bolster Orbán’s political position, allowing him to claim a victory in his negotiation strategies against the EU.
Controversy has already emerged surrounding the European Commission’s earlier decision to release €10.2 billion in frozen funds to Hungary, coinciding with Orbán’s lifting of his veto on an aid package for Ukraine. Many MEPs expressed apprehension that this illustrated a secretive agreement benefiting Hungary at the expense of principle, threatening legal action against the Commission for perceived favoritism. With a population of EU lawmakers keeping a close watch, issues surrounding the Midterm Review will undoubtedly draw scrutiny as the Parliament seeks to ensure both accountability and transparency in future dealings with Hungary.
