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Hungary strives to reach an agreement on EU recovery funds by the end of the year

By on June 3, 2022 0
  • Money blocked by a dispute over democratic standards
  • The EU this week approved the Polish recovery plan
  • Divergence puts pressure on Hungarian financial markets

BUDAPEST, June 3 (Reuters) – Hungary is pushing to reach an agreement with the European Union by the end of the year on access to billions of euros in pandemic funding , reported the official MTI news agency, quoting the country’s new European affairs minister as saying.

The EU Executive Commission has frozen access to funds for Hungary and Poland because of their nationalist governments’ track records of undermining liberal democratic rules by restricting the rights of migrants, gays and women, as well than by increasing state control over the media and the courts.

Hungarian Minister Tibor Navracsics told MTI on Thursday evening that Budapest would do everything possible to be able to sign an agreement on Hungary’s recovery plan “in the second half of the year or towards the end of the year”.

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Navracsics added, however, that the process leading to the signing of the agreement was “complicated”, striking a less optimistic note than on Tuesday, when Hungary indicated that negotiations were in their final stages.

Asked for comment, the Brussels-based Commission, however, reiterated its long-held position that Budapest needs to step up its efforts to tackle corruption in order to unlock the money.

“The Commission takes its role in safeguarding respect for…the rule of law…very seriously,” a spokeswoman said.

Poland won a political victory this week when the Commission granted it access to nearly 36 billion euros ($39 billion) that had been blocked during the Warsaw judicial overhaul that the highest court in the EU quashed for failing to shield courts from political interference.

Warsaw offered only a few concessions, rather than addressing the entire issue, but the political calculus shifted in its favor as Poland was hailed for taking in some 3 million refugees from neighboring Ukraine since the end of the war. invasion of Russia.

Conversely, tensions between Brussels and Hungarian Prime Minister Viktor Orban have increased in recent months, particularly over Budapest blocking more sanctions against Russia.

Hungary initially requested 7.2 billion euros in grants under the EU’s pandemic recovery plan, but after the Russian invasion in February, Orban signaled that he also planned to tap into the good loans. market offered under the program.

The lack of agreement on access to funds for Budapest and the recently announced windfall taxes on banks and energy companies have put pressure on Hungarian financial markets, sending the forint to historic lows against to the Polish zloty this week.

The EU has long criticized Hungary’s public procurement laws as failing to respect anti-corruption safeguards. Rights groups accuse Orban of funneling EU funds to his relatives, enriching them and ensuring their loyalty.

Only two of the 27 EU countries have not yet had their stimulus spending approved by the Commission.

($1 = 0.9309 euros)

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Reporting by Gergely Szakacs and Gabriela Baczynska; Editing by John Stonestreet and David Holmes

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