Hungary, a former Eastern Bloc country that joined the European Union (EU) in 2004, has started to benefit from EU funds since that year. Viktor Orban, who previously served as Prime Minister in Hungary from 1998-2002, came to power in 2010, marking a turning point in EU-Hungary relations. Orban, serving as a Prime Minister since 2010, drew the reaction of Brussels for the policies he followed in his country. Especially between the EU and the Hungarian Government, there are significant differences in democratic principles, human rights, immigration to Europe and finally the sanctions against Russia.
In April, the EU took punitive action against Budapest, warning Hungary that financial aid could be cut.[1] This initiative of the EU has been considered a milestone, as no such criminal action has been taken by EU official institutions against any member state before. It should not be considered as a coincidence that the decision in question came after Viktor Orban won the elections again on April 3, 2022.
From the perspective of the EU, Hungary appears to be a grumpy ally. The fact that the funding cut to Hungary has come to the fore is a clear indication that the patience towards Orban in the union is now exhausted. Given the serious loss of value of[2] Hungary’s national currency Forint,it is clear that the possible funding cut that the EU will impose on Hungary will have a significant impact on Budapest.
Viktor Orban came under increasing pressure to strike a deal with Brussels amid rising inflation in the country. Since June, negotiations have been held between the EU and Hungary to resolve the funding problem, but the Brussels administration has said that it has not updated Hungary on providing access to 15.5 billion euros for the Covid-19 recovery fund.[3] In July, Hungarian Minister of Justice Judit Varga said that negotiations with the European Commission became more constructive as Budapest made concessions on judicial reform, legislative and energy system issues, EU officials emphasized that several problems remained unresolved.[4] In particular, the EU’s grand expectations from Hungary on issues such as “fighting corruption” caused the talks to stall at one point.
In the process of continuing the funding problem between the EU and Hungary, Orban also puts the functioning of the EU decision-making mechanism in a tricky situation. In July 2022German Chancellor Olaf Scholz said: “We can no longer afford national vetoes in foreign policy for example, if we want to continue to have our voices heard in a world where great powers compete.” [5] Although Scholz did not mention the name of a country, it would not be wrong to say that this country is Hungary. Because Hungary has been the only EU member to raise its voice against the sanctions against Russia and has followed a policy that prevents the bloc from complying with its foreign policy decisions. Due to the structure of the EU, all member states have the right of veto. However, the fact that the veto right is not used by Orban in the interests of the bloc, according to the EU, creates unrest in Brussels. In this way, Orban can directly influence the decisions taken by the EU. This unrest will have reached such a point that the “veto issue” has been brought to the agenda even by Germany, which is described as the strongest state of the EU. In this respect, it can be expected that the EU will go through a revision within the veto framework in the future. All of this shows [1]the problems Orban has created for the EU and in a way points out why the bloc has a funding problem with Hungary.
As can be seen, the EU is clearly trying to play the economy card in resolving the disputes with Hungary. The EU is trying to take advantage of Hungary’s bad economic situation to get Orban to accept its demands. In Hungary, whose economy is getting worse, Prime Minister Viktor Orban wants to benefit from EU funds to find a solution to this problem. For this reason, Orban has recently sent a senior official to Brussels to take advantage of the funds frozen during the EU’s disciplinary process against Hungary.Hungary will lose4.64 billion euros [6]in Covid recovery funds if no agreement is reached on blocked EU funds by the end of the year.Tibor, Hungary’s chief negotiator While Navracsics told The Guardian that it is optimistic about a deal on a potential €15 billion Covid recovery fund by the end of the year [7], the trend does not look very encouraging for Hungary.
The unrest that Orban created within the bloc caused the EU to condition aid funds for Budapest. Some circles within the EU even came to the agenda to stop the funds to Hungary completely.[8] Unless concrete steps are taken in the direction desired by the EU, it seems unlikely that Hungary will benefit from EU funds. Because the EU’s approval of the aid fund would mean the approval of the Orban administration in a way. This is the point that makes the EU think. From this point of view, the EU will wait for the right time and the fulfillment of its demands.
As a result, the EU has put on the agenda the cutting of financial aid as a last resort to get the Hungarian Government to accept its demands and has imposed some conditions on Hungary for the granting of these aids. The initiation of criminal proceedings against a member state for the first time in EU history is remarkable in that it shows the point where the tension in EU-Hungary relations has arisen. It would not be wrong to say that the EU will implement the carrot-and-stick strategy in its relations with Hungary in the future. Hungary’s ability to receive financial aid from the EU; it will only happen if the EU accepts its terms.
[1] “Brussels triggers rule of law mechanism for very first time against Hungary,” Euronews, https://www.euronews.com/2022/04/27/brussels-triggers-rule-of-law-mechanism-for-very-first-time-against-hungary, (Date of Accession: 12.08.2022).
[2] “Hungarian forint: one of the world’s weakest currencies,” Daily News Hungary, https://dailynewshungary.com/hungarian-forint-not-only-the-regions-but-the-worlds-weakest-currency/, (Date of Accession: 12.08.2022).
[3]“No updates on unlocking billions for Hungary, says EU Commission”, Reuters, https://www.reuters.com/article/hungary-economy-eu-idUSKBN2OA1EK , (Date of Accession: 12.08.2022).
[4] “Hungary optimistic on €15bn EU funds after pledges on energy and corruption “, Financial Times , https://www.ft.com/content/c8b56137-f769-451d-8408-928767652897 , (Date of Accession: 12.08.2022).
[5] “Germany’s Scholz Says EU Can No Longer Afford National Vetoes,” Radio Free Europe/ Radio Liberty, https://www.rferl.org/a/eu-scholz-no-veto/31947439.html, (Date of Accession: 12.08.2022).
[6] “Hungary tries to unlock funds frozen amid EU disciplinary process “, The Guardian , https://www.theguardian.com/world/2022/aug/08/hungary-tries-to-unlock-funds-frozen-amid-eu-disciplinary-process , (Date of Accession: 13.08. 2022).
[7] Ibid.
[8] “MEPs, rule of law experts calls on the commission to cut all EU funds to Hungary,” Euractiv, https://www.euractiv.com/section/economy-jobs/news/meps-rule-of-law-experts-call-on-the-commission-to-cut-all-eu-funds -to-hungary/, (Date of Accession: 13.08.2022).
