- Cash is held up in spades above democratic standards
- The EU approved Poland’s recovery plan this week
- Divergence puts pressure on Hungarian financial markets
BUDAPEST, June 3 (Reuters) – Hungary is working to reach an agreement with the European Union on access to finance for recovering from the pandemic worth billions of euros by the end of the year, the state-run MTI news agency quoted the new minister as saying European affairs of the country proverb.
The EU’s executive board has frozen access to the funds for Hungary and Poland because their nationalist governments have undermined liberal democratic rules by restricting migrant, gay and women’s rights and increasing state control over the media and courts.
Hungarian Minister Tibor Navracsics told MTI late Thursday that Budapest would do everything possible to sign an agreement on Hungary’s reconstruction plan “in the second half of the year or towards the end of the year”.
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However, Navracsics added that the process leading to the signing of the agreement was “complicated”, striking a less optimistic tone than on Tuesday when Hungary indicated that negotiations were in the final stages.
Asked for comment, however, the Brussels-based commission reiterated its long-standing position that Budapest must step up its efforts to fight corruption to free the money.
“The Commission takes its role in upholding the rule of law… very seriously,” a spokeswoman said.
Poland scored a political victory this week when the commission gave it access to almost 36 billion euros ($39 billion) blocked over the Warsaw judiciary review that struck down the EU’s top court for not allowing the courts protected from political interference.
Warsaw has only offered some concessions rather than fully solving the problem, but the political calculus turned in its favor as Poland was praised for having taken in some 3 million refugees from neighboring Ukraine since the Russian invasion.
Conversely, tensions between Brussels and Hungarian Prime Minister Viktor Orban have increased in recent months, including over Budapest delaying further sanctions against Russia.
Hungary initially applied for €7.2 billion in grants under the EU’s pandemic stimulus package, but following Russia’s invasion in February, Orban signaled he also plans to take advantage of the cheap loans offered under the scheme.
The lack of an agreement on how to access the funds for Budapest and the recently announced unexpected taxes on banks and energy companies have squeezed Hungarian financial markets, sending the forint to all-time lows against the Polish zloty this week.
The EU has long criticized Hungarian public procurement laws for failing to meet anti-corruption provisions. Rights groups accuse Orban of funneling EU funds to his close associates, enriching them and securing their loyalty.
Only two of the 27 EU countries have not yet had their stimulus spending approved by the Commission.
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Reporting by Gergely Szakacs and Gabriela Baczynska; Edited by John Stonestreet and David Holmes
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