AP

Hungary expects to sign EU funding agreement within days

Dec 13, 2022, 3:58 AM | Updated: 4:00 am

BUDAPEST, Hungary (AP) — Hungary’s government expects to sign an agreement within days that will bring it closer to accessing billions in European Union funding suspended over concerns of corruption and democratic erosion in the Central European country.

Tibor Navracsics, Hungary’s principal negotiator with the EU, told a news conference Tuesday that a new package of reforms would be submitted to the parliament by the end of March aimed at fulfilling the bloc’s conditions for accessing more than 12 billion euros (dollars) in suspended funding.

He said he expected to sign a formal agreement with the EU “within days” on accessing the funds, and that Hungary’s new round of reforms could result in Budapest receiving the much-needed money by spring.

“The last stage of this is the end of March, when the legislature will have to pass a package of laws which we hope will be the last,” Navracsics said, adding that the European Commission — the EU’s executive — has indicated that if the end of March deadline is met, the suspension of the funds could be lifted “as early as April or May.”

The 27 envoys of the EU nations reached a tentative agreement late Monday in a deal that brought Budapest closer to accessing the promised funds that have long been in jeopardy over complaints by the other member states that nationalist Prime Minister Viktor Orban had overseen systemic corruption and a dismantling of democratic institutions.

Under the agreement Budapest will gain access to 5.8 billion euros worth of EU pandemic recovery funds if it implements 27 “super milestones” on democratic reforms to unlock the money.

Hungary and the EU reached the agreement after Hungary had held up an EU aid package to Ukraine and the passage of a global minimum corporate tax.

A deal was also reached to decrease the proposed suspension in regular aid funds by about 1.2 billion euros to approximately 6.3 billion euros, which Hungary can still unlock by carrying out further reforms.

The historic decision is the first time that the EU has used a new “conditionality mechanism” which allows member countries to be financially penalized for violating rule-of-law and democracy standards, something the nationalist Orban has been accused of for years.

Only hours after the deal was reached, Orban announced on Facebook that he had signed a government decree raising pensions in Hungary by 15% from Jan. 1, a sign that Budapest was breathing a sigh of relief after the approval of its economic recovery plan.

“We must not forget that Hungary has great goals that go beyond the difficult times,” Orban said in a video on Facebook Tuesday. “One of those big goals is to ensure that pensioners can live in dignity and that the value of their pensions is preserved.”

Hungary’s forint currency gained more than 1% against the euro early Tuesday on news of the agreement, but was still down more than 11% since the beginning of the year. Hungary is also struggling with a 22.5% annual inflation rate, among the highest in the 27-member EU.

Orban’s chief of staff, Gergely Gulyas, said at the news conference that Hungary’s parliament would begin debating the NATO accession bids of Finland and Sweden on Feb. 20 at the start of the next legislative session. Hungary is the only NATO nation other than Turkey not to have approved the two countries’ accession bids.

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Hungary expects to sign EU funding agreement within days