The EU Commission is tightening its grip on Hungary in the long-running dispute over the rule of law: on Wednesday, Brussels authorities officially triggered a new sanctions mechanism against Budapest, as announced by EU Commissioner Margaritis Schinas in Brussels. This threatens Hungary with billions in EU funding cuts. Commission President Ursula von der Leyen announced the move shortly after the re-election of Hungarian Prime Minister Viktor Orban in early April.
As early as February, the European Court of Justice (CJ) rejected Hungary and Poland’s complaints against the rule of law mechanism. But they did not want to provide Viktor Orbán with new ammunition against the “enemy” in Brussels during the election campaign.
blocked funds
This is the first time that the EU has used this tool: both Hungary and Poland are already receiving less money from the international community than expected. Corona reconstruction fund funds are blocked – also due to doubts about the use of the rule of law. Currently, Poland is losing €23 billion in non-refundable donations, Hungary seven. If the rule of law mechanism were used, around €140 billion would be at stake for Poland and €40 billion for Hungary in the coming years.
However, it will still be some time before Hungary actually has money cut from the EU budget. Ultimately, this would also require approval from at least 15 EU countries with at least 65% of the EU population.
The so-called EU rule of law mechanism has been in place since the beginning of 2021. Its aim is to ensure that violations of the rule of law, such as the separation of powers, no longer go unpunished. Crucially, however, the breaches threaten the misuse of EU funds. Poland and Hungary consider themselves the focus of the instrument and have appealed to the European Court of Justice. However, he rejected the lawsuits in February. Both states receive billions from the common budget every year.
First, Budapest can now comment on the allegations and, if necessary, propose corrective measures. The EU Commission takes this into account when deciding whether to actually propose that EU states reduce EU funds to Hungary.