Viktor Orbán’s Hungary is partially making its way here by exploiting the need for unanimity in major EU decisions. Orban at a press conference at the end of November in Slovakia.
Photo: Leszek Szymanski/EPA/LETA
Viesturs Sprude, “Latvijas Avīze”, JSC “Latvijas Mediji”
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Hungary yesterday lifted its veto on an 18 billion euro loan from the European Union (EU) to Ukraine. This came after a majority agreed to reduce the amount of EU money earmarked for Budapest, but so far blocked, at a meeting of EU countries’ permanent representatives in Brussels on Monday to Tuesday night.
Initially, the European Commission (EC) recommended freezing €7.5 billion earmarked for Hungary until the government of Hungarian Prime Minister Viktor Orbán delivers on its promises to implement reforms related to the prevention of corruption and the independence of the judiciary, but now the frozen amount has been reduced to 6.3 billion. At the same time, under certain conditions, the funds intended for the recovery of the Hungarian economy after the Covid-19 crisis were also released. Thus a compromise was reached between the EU and Hungary, but in reality it turns out that Orbán’s diplomatic blackmail from Brussels has yielded results.
Hungary versus Ukraine
The EC decided already in November to grant Ukraine 18 billion euros to cover the short-term financing needs of 2023, guarantee the basic functions of the state, carry out urgent repairs and restore the energy infrastructure destroyed by Russia. The European Parliament (EP) has approved the loan for Kyiv on very favorable terms.
Each month Ukraine will receive 1.5 billion euros. A unanimous decision of all 27 member states was needed to grant the loan, but Hungary blocked it on 6 December. Among other things, the alleged discriminatory policy of the Kiev authorities towards the Hungarian minority in the Transcarpathian region of Ukraine was alleged as a pretext. At the same time, it was no secret that the real motivation was the desire to use blackmail to get the EU to freeze the allocation of money intended for Hungary.
The diplomatic battle in this regard had been going on for months. In total, the EC had frozen more than €13bn earmarked for Hungary, including €5.8bn earmarked for the economic recovery plan after the Covid-19 crisis was delayed by a year. The rest of the suspended amount, the aforementioned 7.5 billion, was money intended for the equalization of living standards in EU countries.
After Hungary’s veto of EU aid to Ukraine, Brussels has evaluated the possibility of circumventing the obstacles imposed by Budapest. It could have been regulated in such a way that the loan to Ukraine would have been guaranteed not by the EU budget, but by 26 individual member states, excluding Hungary. However, as Politico points out, in this case the image of the EU as a single bloc would suffer.
Brussels did not want to allow it and preferred a compromise with Orbán’s government. To accept it, it was necessary to reach a qualified majority of the representatives of the member states at the meeting on Monday evening – the consensus of at least 15 countries – which apparently has been achieved. The bureaucratic process for freezing the funds should end today and the final decision will be made on Thursday at the meeting of EU leaders.
Image preservation
The EU has now unblocked €5.8 billion from the Covid-19 aid basket and reduced the sum initially blocked by doubts about its fair use due to corruption risks. At the same time, the requirement remains that before receiving the Covid-19 money, Hungary must prepare 27 pieces of legislation so that it complies with EU anti-corruption standards and judicial independence norms. It remains to be seen whether Hungary will do this and how Brussels will act if not. Budapest is expected to receive this funding gradually until 2026.
“Politico” notes that Orbán’s tactics succeeded due to two circumstances: first, the EU system requires unanimity in such important matters; secondly, the EU wanted to maintain an image of unity in light of the war situation in Ukraine. At the same time, the compromise with Hungary raises the question of how rigorously the EU is prepared to uphold its principles.
On the other hand, the retention of 6.3 billion is also painful for Hungary, which also has to foresee that in the future such a policy of blackmail can backfire in an unpleasant way in relations with the EC and the other Member States. For example, ahead of Monday’s decision, German Foreign Minister Analena Burbock spoke out against reducing the frozen amount, chiding: “It’s about our values, about maintaining our principles as the rule of law in the European Union in general”.
However, events are taking place against a very unpleasant background for the EU, at a time when the European Parliament was shaken by the corruption scandal, which has already been called “Catargate”. “Latvijas Avīze” already wrote yesterday that the vice president of the European Parliament, Eva Kaili, is accused of having accepted bribes from Qatar, which she paid to influence the decision-making process.
Several other people were arrested with her, but the Greek MEP is the most prominent. Belgian police seized at least €750,000 in cash during the search and €150,000 was confiscated from Kaili’s residence. EU country officials warn the scandal could undermine the credibility of European institutions as a whole. “Catargate” mocked Hungarian Prime Minister Orbán, who wrote on his Twitter site: “And they said the EP is seriously concerned about corruption in Hungary.”
Themes
