EU ministers mull whether to punish Hungary over rule of law

European Union finance ministers were assessing on Tuesday whether to immediately punish Hungary by withholding billions of euros for failures to implement solid rule-of-law reforms or whether to grant Budapest more time to improve its democratic credentials. The Commission also wants to put conditions on Hungarys pandemic recovery plan worth 5.8 billion euros and insists Budapest implement 27 super milestones on democratic reforms to unlock the funding.

European Union finance ministers were assessing on Tuesday whether to immediately punish Hungary by withholding billions of euros for failures to implement solid rule-of-law reforms or whether to grant Budapest more time to improve its democratic credentials. On top of that, the 27 ministers were also hoping to make progress on approving 18 billion euros in financial aid for Ukraine and a global minimum tax for multinational corporations. But because of Hungary's ability to wield veto powers on such issues, everything has become linked in a massive package of political brinkmanship. “I see all these topics as one package,” said Czech Finance Minister Zbynek Stanjura, who was leading the daylong talks. Many nations see Hungary's holding back on other decisions as a thinly veiled threat by Hungarian Prime Minister Viktor Orban to blackmail the rest of the bloc into releasing the billions in regular EU funds and pandemic recovery cash that has been held up.

The EU's 27 nations have until Dec. 19 to take a decision, and EU leaders meet for a two-day summit next week, increasing chances that the issues could be pushed forward on their plate.

EU nations have been mulling for years now whether to punish Orban for what he calls his brand of “illiberal democracy” but what is seen by many others as unfit for the EU's traditional sense of Western democratic liberalism. On top of that, Orban has also angered the bloc's officials with his repeated criticism of the EU sanctions targeting Russia for its war in Ukraine.

The EU's executive branch proposed that the bloc suspend around 7.5 billion euros (USD 7.5 billion) in regular funding to Hungary over concerns about democratic backsliding and the possible mismanagement of EU money. The Commission also wants to put conditions on Hungary's pandemic recovery plan worth 5.8 billion euros and insists Budapest implement 27 “super milestones” on democratic reforms to unlock the funding. Hungary already agreed on 17 anti-corruption measures, including the creation of an anti-corruption task force and changes to its public procurement rules, but the Commission wants to see more action. The money can be frozen under a recently introduced conditionality mechanism that allows the EU to take measures to protect its budget. Any action to suspend the funds must be approved by the EU member countries, and this requires a “qualified majority'' — at least 15 countries representing at least 65% of the total EU population.

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