€10.2 Billion Dispute: European Parliament Sues Commission Over Release of Funds to Hungary

Written by Camilla Jessen

Mar.14 - 2024 12:37 PM CET

News
Photo: Fabrizio Maffei / Shutterstock.com
Photo: Fabrizio Maffei / Shutterstock.com
European Parliament sues Commission over the release of €10.2 billion in frozen funds to Hungary

Trending Now

The European Parliament is following through with its warning and plans to sue the European Commission for releasing €10.2 billion in previously frozen funds to Hungary, as reported by Euronews.

This decision, expected on Monday evening, received official approval on Thursday morning from Parliament's President, Roberta Metsola, during a meeting with political group leaders. Metsola holds the authority to initiate legal actions against other entities at the European Court of Justice.

The submission deadline is set for March 25.

This lawsuit increases pressure on Ursula von der Leyen as she aims for a second term as Commission President and vows to stand firm on the rule of law, a sensitive issue that has absorbed considerable energy of her first mandate.

Dispute Over Rule of Law

The Commission's decision in December to unlock €10.2 billion in cohesion funds for Hungary—funds previously inaccessible due to ongoing rule of law issues—has sparked controversy among lawmakers.

The Commission justified this action, stating that Hungary had implemented reforms in May last year to enhance judicial independence and reduce political influence in the courts, aligning with Brussels' four "super milestones."

However, lawmakers and civil society voices have disputed this justification, arguing that the reforms were insufficient. They also criticized the timing of the funds' release, which occurred just before an important EU leaders' summit, where Hungarian Prime Minister Viktor Orbán had hinted at vetoing crucial Ukraine-related agreements.

Resolution and Reaction

In a strongly supported resolution in January, Members of the European Parliament (MEPs) considered legal action and declared that "in no way can the EU give in to blackmail and trade the strategic interests of the EU and its allies by renouncing its values."

They stated, "Hungary does not meet the standard of judicial independence set out in the (EU treaties) as the measures adopted do not ensure sufficient safeguards against political influence and can be either circumvented or inadequately applied,"

Following this, MEPs questioned Commissioners Didier Reynders (Justice), Nicolas Schmit (Jobs), and Johannes Hahn (Budget) about an alleged behind-the-scenes agreement with Orbán, which supposedly traded the lifting of his veto for the €10.2 billion. They expressed concerns that the assessment of Hungary's judicial reforms was rushed, suggesting that the Commission should have awaited tangible outcomes before releasing the funds.

The Commissioners defended their decision, arguing that Hungary had met the required milestones, including actions to empower the National Judicial Council and prevent political intrusion in the Supreme Court.

Reynders stated, "the Commission was under legal obligation to take a decision."

Ongoing Financial Withholdings

Currently, Brussels continues to withhold nearly €12 billion of Hungary's cohesion funds and the majority of its €10.4-billion recovery plan, a situation Orbán has labeled "financial blackmail."

These funds are tied to various conditions, including changes in legislation concerning LGBTQ+ rights, asylum policies, public procurement, and anti-corruption efforts, where little progress has been noted.

MEPs have insisted that all remaining blocked funds "must be treated as a single, integral package, and that no payments should be made even if progress is made in one or more areas but deficiencies still persist in another."

This legal challenge isn't the Parliament's first attempt to compel the Commission to act. In October 2021, it sued the Commission for not enforcing a new mechanism that linked EU fund payments to adherence to fundamental rights.

Most Read