Brussels holds back EU money for Poland and Hungary

From Poland, Brussels is asking for better control over the use of funds. For Poland, this means almost €75 billion in EU aid is at stake, for Hungary it is more than €20 billion. The Commission may suspend the disbursement of these funds as EU subsidy legislation has recently been tightened.

In principle, Hungary received the green light from Brussels on Thursday for projects involving 22 billion euros in European subsidies. This paved the way for pre-financing of a few hundred million euros at the last minute. Reimbursement of actual costs incurred in future years – most of the grants – is however subject to strict conditions for the Commission.

Controversial LGBTI laws

For example, Hungary must guarantee the independence of the judiciary. Additionally, EU grants for schools will not be granted as long as Prime Minister Viktor Orbán’s government sticks to its controversial LGBTI laws. These laws prohibit schools from providing information about any sexual orientation other than heterosexual. The Commission is also asking Hungary to guarantee the freedoms of universities and to adapt its asylum legislation to European rules.

If that doesn’t happen, Hungary will soon face a “no” from Brussels when it submits payment requests. The costs incurred for the support programs submitted will then not be reimbursed.

The Commission is asking Poland to clarify how it monitors aid plans and checks the correct use of EU funds. Poland is entitled to 75 billion euros of EU funds for the poorest regions until 2027. The stricter conditions for spending these funds were agreed in 2020 by European heads of government when drawing up the budget of the EU for 2021-2027. Prime Minister Mark Rutte was one of the strong supporters of stricter criteria.

Spoils

The Commission, the European Parliament and most EU countries have been at odds with Hungary and (to a lesser extent) Poland for years. Budapest was recently the first to be subject to the new rule of law test, which requires EU grants to be frozen if proper spending is not guaranteed. As a result, 6.3 billion euros for Hungary are already pending. In addition, the 5.8 billion euros for Hungary from the European Recovery Fund will only be released once the rule of law is improved. Reparations for Poland (35 billion euros) are also still blocked, pending legal reforms by Warsaw.

The rule of law test, the conditions for receiving reparations money and the stricter general requirements for the use of EU grants put recipient countries under pressure to comply with European rules and values . Heads of government and parliamentarians have complained for years that it is a travesty that Hungary and Poland are taking full advantage of the EU budget, while flouting the rules in the meantime. In June last year, the irritation erupted to such an extent that Prime Minister Rutte challenged his Hungarian colleague Orbán to leave the EU with his country at an EU summit.

In an earlier version of this article, the intro said Warsaw, where it should be Budapest. It has been adjusted.