January 1, 2025 - 7:00am
Hungary is set to lose more than €1 billion in European Union cohesion funds, the result of an ongoing conflict with Brussels over the country’s alleged violations of the rule of law. The deadline for Hungary to meet the requirements and implement corrective measures passed yesterday, marking a pivotal moment in its relationship with the Union.
This would be the first time a member state permanently and irrevocably loses funding under the Rule of Law Conditionality Regulation, a mechanism introduced in 2020 and purportedly aimed at strengthening countries’ compliance with “EU values”. This is done by allowing the European Commission to withhold funds to governments found in breach of the rule of law — as defined by Brussels, of course.
Following the introduction of the new regulation, the EU proceeded to freeze €6.3 billion in cohesion funds to Hungary, as well as approximately €6 billion in grants from the Covid-19 Next Generation EU (NGEU) recovery fund, citing concerns over irregularities in public procurement, inefficiencies in prosecution, and corruption. Meanwhile, raising similar concerns, the Commission also froze almost €140 billion in EU funds to Poland — then governed by the conservative Law and Justice (PiS) party.
Anna-Kaisa Itkonen, a spokesperson for the European Commission, confirmed that the €1 billion at stake for Hungary represents the initial tranche of suspended cohesion funds. “This loss is irrevocable, and Budapest has no right to appeal,” she said in a statement to the Polish news agency PAP. The funds relate to commitments made in 2022, meaning Hungary will not be reimbursed for projects it carried out under the cohesion policy that year. Failure to address EU recommendations could result in Budapest losing an additional €1.1 billion by the end of 2025, with further penalties possible unless substantial reforms are implemented.
The decision marks a substantial escalation in the EU’s war against Viktor Orbán — and against principles of national sovereignty and democratic self-determination in general. It’s important to understand that the conditionality mechanism is more than just a way for the EU to impose its “values” on member states by resorting to financial blackmail, which would be concerning enough, especially where such “values” are misaligned with nationally approved policies on issues such as immigration.
The reality is that the rule of law is, more than anything, a convenient pretext for targeting dissenting governments that resist aligning with the EU’s expanding supranational authority and broader political agenda — including on matters largely unrelated to the rule of law, such as economic and foreign policy. This is why the EU is happy to ignore rule-of-law violations when pro-Brussels governments are involved, so long as they comply with Union policy on the issues that really matter, such as Ukraine.
Poland is a textbook example: within a year of the Left-liberal, pro-EU coalition led by Donald Tusk taking power, the country has experienced an unparalleled attack on the rule of law. The new government has launched an authoritarian power grab against the media, the judiciary and its political opponents. Yet all this has been met with silence in Brussels — and even cheered on. Indeed, the European Commission’s reaction has been to unblock up to €137 billion in frozen funds, highlighting the hypocrisy of the whole rule-of-law debate.
As far as Hungary’s finances are concerned, the €1 billion at stake doesn’t pose a huge problem, amounting to around 0.5% of GDP. However, this latest move signals the EU’s increasingly aggressive approach towards governments which refuse to toe the line. Its willingness to trample over basic democratic principles was on full display in Romania recently, where the EU supported the constitutional court’s decision to annul the results of the presidential election, in which independent populist candidate Călin Georgescu came top, on grounds of alleged — but unproven — “foreign interference”.
This presents Hungary with a dilemma. So far, it has managed to maintain a high degree of policy autonomy even in the context of the EU straitjacket. But as Brussels continues to tighten the screws on recalcitrant governments, leaders like Orbán may find themselves with no real option but to choose between national autonomy and EU membership.
Thomas Fazi is an UnHerd columnist and translator. His latest book is The Covid Consensus, co-authored with Toby Green.
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SubscribeAnd Starmer appears keen to cosy up to this Empire.
If one joins a club, one has to abide by its rules. Orban is welcome to lead Hungary out of the EU. Given his sycophancy toward Putin, the EU would be well rid of it.
Generally a club has equitable rules, acceptable to all members. That isn’t the case here. They have been changed since the member joined with no chance of objection.
And of course Hungary won’t be allowed to leave. The relevant “lubricant” will be applied to ensure it doesn’t.
Problem: Orban doesn’t like the rules of the club. Solution: Leave, and find another club to join.
Hungary won’t be allowed to leave.
It’s a voluntary union, they can leave if they wish
If the EU had any sense, they would kick Hungary out (or at the very least stop giving it money).
Just suppose the rules of the club were changed not to your liking or if the EU regime changed and a different application was found for the Rule of Law Conditionality Regulation.
Of course under Blair the rule of law was thoroughly subverted in the UK and leftist governments have done much the same in Italy and France
Good reasons for the fact that I live in Australia.
You fail to realise that the EU will change the rules as and when it suits them to apply to different member states. This hypocrisy is one of the reasons I voted Leave.
Why wouldnt the EU allow Hungary to leave?
And when the club changes the rules to no longer resemble what you joined??
Leave the club. It’s not rocket science. Britain did it. Hungary can do it.
Dribbling, babbling madness!
Starmer will be seen by history as a very well dressed but transitional figure. While we’re on this subject, whatever happened in the investigation into the missing party funds in Scotland and the luxury RV in the driveway of the mother of the party leader? Are they down the media memory hole for good?
Yes of course they are
That’s absurd! Starmer isn’t “well dressed”! I saw him on the box today, and he wasn’t even wearing a tie!
I find it hard to have any sympathy for Orban, and that’s despite me really disliking the EU and voting to Leave.
He’s always there with his hand out, Hungary receiving billions of euros from the EU yet at the same time he seems to believe the rules of membership shouldn’t apply him. Either play by the rules or leave and forgo the EU money, stop whining and playing the victim every time you don’t get your own way.
As the article explains, the “rules” are arbitarily defined, applied, and enforced. Even the scope of the rules is not limited by law, allowing the Commission to simply grab power from member states by decree. The ECJ is so politicised it would make a Soviet judge blush. And that comparison is quite apt given the man who dismantled Soviet communism – Gorbachev – described the EU as Sovietism dressed in Western clothes.
The parallels with the Soviet Union are many but perhaps the most fundamental is Europeans have been voting with their feet and leaving. Denied opportunities by a deadening anti-democratic bureaucracy, native born Europeans from even its wealthiest states have been emigrating to outside the EU in very large numbers for over a decade and a half, masked by a focus on net migration figures and earlier waves of Eastern expansion of the EU. Like the Soviet Union did, the EU has lost millions of its most talented people fleeing to find better opportunities and greater economic freedoms outside the EU.
Orban’s crime is that he enacts policies that his population as a whole wants and takes a more realistic stance on Hungary’s needs for energy than the EU. In other words he deviates from the policies of the Soviet style nomenclature that are essentially anti-democratic. The whole bogus values policy is simply a cover for the nomenclature to attempt to impose its will. Unfortunately in the UK we have through a popular vote escaped the clutches of formal alignment with the EU but still suffer the rule by our own essentially anti-democratic nomenclature.
No problem with that. Orban can take Hungary out of the EU, and lead it into Putin’s “co-prosperity sphere”.
That might be fine if the rules were uniformly applied. But the EU rules by coercion and politicised lawfare against those it dislikes, as the article makes clear.
The EU is first and foremost an economic bloc and has (or at least should have) some kind of responsibility to work towards the interest of its member states and people.
As far as I can tell, it has been failing to do so since Mutti Ursula was installed as queen of the commission. The EU, as an economic & regulatory project, should stick to it’s brief, because whenever it wanders out into geopolitics, it screws things up – for example it destroyed it’s (absolutely crucial) trade relations with China and Russia over American foreign adventurism and insignificant post Soviet states (Ukraine, Georgia, Moldova), with nothing to show for it (except for massive inflation, deindustrialization and undemocratic politicking to keep “the far right” at bay).
Another, unfortunately quite large, aspect of “rule of law” is the use of economic warfare (the EU is incapable of any other kind for the time being) to punish countries for not aligning with the values pushed by the rainbow brigade, which Poland (previously) and Hungary refused to do, which was one of the main reasons they were punished (although the currently stated reason is Ukraine).
Now, in fairness, I do generally agree that Hungary (or anyone else) should be sticking to “the rules”, but there doesn’t appear to be a way to debate what is and isn’t part of the EU package and in this particular case I consider Orbans obstructionism/”rogue diplomacy” to be a godsend, seeing as the will of the silent majority is being trampled upon by the European elites.
The EU is a political project for union of European states, sold as an economic project, which is how it was sold to the British people.
It is basically a partnership of big business with state institutions, for the benefit of a small ruling elite, not the “common people”. There is a name for this, not to be mentioned, but more and more evident, as in the approach to Hungary.
Regrettably this was foreseen by some, but they were ignored.
DeGaulle’s “Europe des patries” co-operating when appropriate was the right route to take.
”…a partnership of big business with state institutions…”
Wouldn’t il Duce would be envious.
The EU resembles Swift’s fleas, the greater having smaller ad infinitum. A Hungarian when casting his vote would never have imagined choosing to lose a billion Euros to a public servant in Brussels. He or she went in to a Bingo game and ended up playing dice with a loaded die. It will not last.
If the EU powers that be seriously wanted member states to respect the rule of law, there would be sanctions on states like Germany which connive in and facilitate the genocide in Gaza. Unsurprisingly, there is no sign of that happening.
“Genocide” has a specific meaning. And you’re obviously oblivious to that. Your first name seems appropriate.
It’s a novel idea that some nations might prefer not to be bossed around by unelected EU bureaucrats. Someone should try it. Hmmm…
Then leave the EU
Not allowed, of course.
Britain left
Well some of it did…almost.
It should worry other EU Member States but it doesn’t because of the absence of political leadership throughout most of the EU.
I wonder if the EU would similarly penalize Romania for the existing ruling party’s recent annulment of a legitimate election won by a supposed “hard-right” candidate as described in the Spectator piece below. I expect not.
https://thespectator.com/topic/democracy-rotting-europe-georgia-romania/?utm_source=Spectator%20World%20Signup&utm_campaign=3216464c48-EMAIL_CAMPAIGN_2024_12_24_10_39&utm_medium=email&utm_term=0_-3216464c48-157653472
No-one who has studied the history of the European Union since its inception would be at all surprised by any of this. The mission has always been to rescue Europe’s elites from the humiliation of ‘anglo-saxon democracy’ and restore the ‘government of the experts’ – even if it means pauperising the entire continent.
It’s our bad luck that we have a government of economic illiterates who seem determined that we should go down with the Brussels Titanic just as the Americans embark – thanks to AI, de-regulation and cheap energy – on the fastest and longest expansion of their wealth in history.
Still, Orban will probably have the last laugh. How long is VdL’s tinpot empire going to last once the populists have taken power in all the states?
“… citing concerns over irregularities in public procurement, inefficiencies in prosecution, and corruption.”
If those are the grounds for the EU withholding funds, they could do the same to the UK. Oh, hang on…we’ve already left.
If they are worried about corruption they have no need to look at the member states as they have more than their fair share in Brussels.
Orban should call their bluff and state that under the circumstances they have no alternative to start the process of secession.The EU are terrified of another Brexit .
I think they’d be happy to see the back of Orban.
Yes…but not Hungary. The EU is the Hotel California.
Really? I have a vague recollection that Britain left the EU.
Not all of it…
I don’t see Orbán and his people ever bowing to the EU’s bureaucratic imperium. Good for them.
He will, he’s all bluster. He receives billions from the EU, and it’s a handy bogeyman for him in regards to domestic politics but he’ll never offer the Hungarians a vote on leaving it
He will not. Hungary currently pays €1,000,000, per day because they refuse to change their asylum process to accommodate what the EU sees as appropriate as determined by them. Of course, let’s not forget that immigration and the decision as to who you let into your country is a nation-state competence.
Oh, the great ‘democratic’ kleptocracy in Brussels…
Except for those governments which seem unable to control their own borders. You would think the Channel a significant border, but it seems as porous as any in the Schengen bloc.
I’m surprised the EU still allows any nation-state competences. Surely they have been whittling them down ever since inception as they were only a smokescreen to fool people into thinking they were just a friendly trading block and had no designs on “one rule for all” direct from Brussels.
Sanctions by another name!
Sanctions maybe, but on a nation that richly deserves them. If Orban is such a great leader, maybe he could arrange for his nation to actually achieve something beyond holding out a begging bowl to the EU.
So…nineteen comments but not all shown, despite some having been made many hours ago…
at strengthening countries’ compliance with “EU values”. This is done by allowing the European Commission to withhold funds….. and of course all transnational /corporates have their coercive, repressive “value statements” and equally pious virtue signalling “mission”, “vision” and false religious commandments to force conformity and validation of trans/homo/bigender identity nonsense. All under pinned by Marxist, anti family, white hating state enforced school propaganda. Freedom of speech, any freedoms, personal agency all but permanently cancelled in pursuit of robotised, atomised drones. The EU and its anti democratic adherents like Bliar, Brown and Noideaikea are its loyal acolytes.
At the end of the day, if you want the money it’s no surprise that you need to fall in line. The EU would be mugs to do otherwise. If they don’t like it, Hungary can always leave.
“Leaders like Orbán may find themselves with no real option but to choose between national autonomy and EU membership.”
It’s not up to leaders, or Orbán, to decide on these matters, it’s for the people or the party they have elected. This is precisely the issue.
If you’re in the EU they punish you, if you leave they punish you more.
The US uses the expression “rules based international order”; it allows the POTUS to determine what rules to apply to any particular situation, depending on what side of the bed he gets up from. The same is true of the EU and the President of the Commission.
The EU used to be an economic bloc, but has morphed into a political bloc as a result of Major’s subscription to Maastricht and subsequent agreements. Like many Britons, I was in favour of the advantages brought by the EEC; but much less certain of the political advantages of the EU. It seems that Orban is undergoing a similar process.
Hopefully he will come to the same decision as Britain did – to take Hungary out of the EU. Of course, he will need to find someone else to give it money (the obvious source of such money being Russia).
I voted No in 1975 not to remain in the Common Market (as it was called then) as I could see which way the wind was blowing. Once the likes of Fond-of-Lying get a taste of a little bit of power there is no stopping them.
Orban should get the hell out of failing Western Europe—Central Europe and the East is where center of gravity is. Orban knows it, so does Brussels.