Hungary - December 2022

The European Commission will withhold EUR 22 billion of Hungary’s 2021-27 cohesion funds, intended to promote sustainable development for poorer member states. The move comes following Hungary’s failure to conform with the Charter of Fundamental Rights, particularly related to academic freedoms, LGBTQIA+ rights and the asylum system.  An additional EUR 6.3 billion were frozen until a set of conditions related to dealing with corruption are fulfilled. The EU also suspended EUR 5.8 billion in funds from Hungary’s Covid-19 recovery fund, pending required changes in the country’s judicial independence. The Commission’s decision underpins the dispute between the EU’s promotion of democratic values and Hungary’s democratic backsliding. The EU’s plan is a major setback for Hungary, and it aims to pressure the country to implement the required reforms. International IDEA’s Global State of Democracy Indices classifies Hungary as a democratic backslider as of 2019 and as a severe backslider as of 2021.

Sources: Reuters, Bloomberg, The Washington Post