The European Commission has taken the first formal legal step against the Hungarian government that could lead to “financial measures” for failing to respect the rule of law.
In a letter, the EU’s day-to-day management asks for clarification on European money in public tenders.
The commission has said “serious concerns” that this European tax money may end up in the wrong hands through fraud and corruption without the supervision of an independent body. This would be a structural problem going on for at least ten years.
Budapest has two months to reply before the commission may take further steps. These could eventually lead to a freeze on EU subsidies for Hungary if the country does not take action. But according to senior officials, Brussels wants to find a solution with the government of the newly re-elected Viktor Orbán. They also point out that it is not about fines or other sanctions or the recall of spending subsidies but about taking preventive measures “that protect the European budget”.
It is the first time that the committee has deployed a new mechanism that links EU money to the rule of law. The so-called conditionality regime is intended to prevent EU money from falling into the wrong hands through corruption or favouritism.
At the beginning of this year, the European Court of Justice rejected protests by Hungary and Poland against introducing the rule of law test.