Brussels One name dominates the last days before the Christmas holidays in Brussels: Viktor Orban. The Hungarian Prime Minister is currently slowing down all projects that must be taken forward in the European Union. He wants to force the EU to release frozen billions to Hungary. The EU Commission wants to withhold the funds until Orban fully implements his promises to uphold the rule of law.
At the meeting of 27 EU finance ministers this week, Hungary blocked EU aid worth €18 billion from being approved for Ukraine. The global minimum tax could not be decided again because Orban threatened to veto it.
The situation got even worse on Wednesday: at a meeting of EU ambassadors, the Hungarian representative spoke out against the planned ninth package of sanctions against Russia. Orban also just wants to pass Sweden and Finland’s accession to NATO in the new year – if he gets what he wants by then.
EU partners have long gotten used to the fact that Orban will not shy away from any means. The Budapest autocrat, who has been in power since 2010, regularly uses his veto to gain leverage elsewhere.
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But the current total lockdown has surprised even seasoned diplomats. Anger is growing in the Council of Member States. In particular, the rejection of aid to Ukraine means that the tone is becoming increasingly aggressive. Even other eastern Europeans are now distancing themselves from Orban.
The dispute revolves around a total of 13.3 billion euros. The EU Commission froze €7.5 billion in funding in the summer because, in their view, Orban is patronizing the judiciary and promoting corruption in the country. Under the so-called rule of law mechanism, authorities in Brussels can cut a country’s funds if it violates the Union’s values.
Furthermore, the EU is still withholding €5.8 billion in corona aid to Hungary. These can only flow once the Council of Member States has approved Hungary’s national development plan. The Commission recently recommended acceptance of the plan, but linked the payment of money to meeting 27 reform targets.
Orban is now stepping up the pressure as he is running out of time. The development plan must be approved by the EU by the end of the year, otherwise the 5.8 billion euros will be lost. The head of government cannot afford this in view of the severe economic crisis in the country. Inflation is around 20%.
Orban set to lift petrol price cap
Orban suffered another setback this week when he had to raise the gas price cap. After the EU oil embargo against Russia took effect earlier in the week, Hungarian state oil company MOL announced that it would no longer be able to serve customers if the price cap remained.
Since Wednesday, gasoline has returned to market prices. Hungarians probably saw the end of the price cap coming and filled again last week. As a result, a quarter of the nation’s gas stations have gone dry.
Orban promptly blamed EU sanctions for rising prices. Russian pipeline gas flowing to Hungary is exempt from the embargo. The reason for the scarcity is different. According to government information, the price cap has led to excessive demand for gasoline. This year MOL sold 2.2 billion liters of fuel compared to just 1.5 billion last year.
In view of the dismal economic situation, Orban can hardly afford to compromise on EU corona aid. From this, European partners are hopeful that, ahead of next week’s EU summit, he will rise up and give up his destructive course. In Brussels, the Hungarian is seen as someone who knows exactly how far he can push his hand – and when the time comes to give in.
Reassessment of reforms should bring solution
Despite his controversial criticisms of EU sanctions, which he blamed for months for the domestic economic crisis, Orban always backed the measures in the end. That will also happen this time, according to Brussels. The Commission wants to present the ninth package next week. It is said to include further sanctions against Russian banks and export bans on certain technology products.
EU ambassadors will spend the next few days trying to reach an agreement with Orban. At the insistence of Germany and other states, the commission was tasked with once again assessing the progress made in Hungary’s reforms. At the end of November, it came to the conclusion that the anti-corruption measures were still not enough and that resources would continue to be blocked.
The most recent laws must now also be taken into account in the reassessment. After all, this could lead to the council deciding to give the green light to Hungary’s Corona recovery plan. Orban would still have the prospect of the EU’s billions in the new year, as long as he meets the reform requirements. And he could end his block.
Most: The first assessment of the Hungarian reforms is negative.