Council Implementing Decision (EU) 2022/2506 on measures for the protection of the Union budget against breaches of the principles of the rule of law in Hungary

Author (Corporate)
Series Title
Series Details L 325, Pages 94-109
Publication Date 20/12/2022
Content Type , , ,


Implementing Decision (EU) 2022/2506 - adopted by the Council of the European Union on 15 December 2022 - introducing measures aimed at protecting the budget of the European Union (EU) against breaches of the principles of the rule of law in Hungary.

Further information:

Regulation (EU, Euratom) 2020/2092 established a general regime of conditionality for the protection of the EU budget. It provides that appropriate measures shall be taken where it is established in accordance with Article 6 that breaches of the principles of the rule of law in a Member State affect or seriously risk affecting the sound financial management of the Union budget or the protection of the financial interests of the Union in a sufficiently direct way.

This Decision suspends some budgetary commitments under certain operational programmes in Cohesion Policy, based on the understanding that remedial measures proposed by Hungary in the framework of Regulation (EU, Euratom) 2020/2092 are not fully adequate to address the findings set in a notification sent by the European Commission in April 2022 as regards breaches of the principles of the rule of law in the country.

In November 2021, the European Commission sent a request for information to Hungary pursuant of Article 6(4) of the Conditionality Regulation to which the Hungarian authorities replies in January 2022. In April 2022, the Commission sent a written notification to Hungary which presented the findings regarding a number of issues concerning the public procurement system in the country; a high rate of single bidding procedures and low intensity of competition in procurement procedures; issues related to the use of framework agreements; issues in the detection, prevention and correction of conflicts of interest; concerns related to the use of EU funding by public interest trusts. The notification also presented findings regarding investigation and prosecution, and the anti-corruption framework.

In June 2022, Hungary replied to the notification. Further information was later also provided by the Hungarian authorities. However, the Commission considered that the first reply and the additional letters did not contain adequate remedial measures appropriately committed in the context of the Conditionality Regulation. On 20 July, the Commissions sent a letter to Hungary to inform of its assessment and of the measures it envisaged to propose for adoption by the Council of the European Union in the absence of adequate remedial measures. Hungary replied to that letter on 22 August criticising the procedure and contesting the proportionality of the measures.

Even so, a number of remedial measures were presented and technical discussions have taken place. Further commitment were established by the Hungarian authorities in a letter sent to the Commission on 13 September. The Commission's conclusion was that the proposed measures could in principle address the issues if correctly detailed in relevant laws and rules, and implemented accordingly. Pending the fulfilment of key implementation steps, the Commission considered that a risk for the EU budget remained. This explains the draft Decision tabled by the Commission on 18 September 2022, which was eventually adopted by the Council of the European Union on 15 December 2022. It was published in the Official Journal on 20 December 2022.

Source Link
Related Links
Commentary and Analysis
Carnegie Europe: Strategic Europe, 15/09/2022: Judy Asks: Is the EU Too Soft on Hungary?
Politico, 20/09/2022: EU gives Hungary an off-ramp on democratic norms
Centre for Eastern Studies (OSW): Analyses, 20/09/2022: Conditionality mechanism: Hungary facing the threat of withheld EU funds
Euro|topics, September 2022: Rule of law in Hungary: EU threatens to cut billions
European Council on Foreign Affairs (ECFR): Commentary, 05/10/2022: Mind the gaps: The pending suspension of Hungary’s EU funds
Verfassungsblog, 14/11/2022: Are Hungary’s EU Funds Being Cut (or Not)?
The Economist, 24/11/2022: No reforms, no money. The EU is withholding aid to press Hungary to reform
Euro|topics, November 2022: Should the EU freeze funding for Hungary?
Euro|topics, December 2022: Brussels seeks to block funds for Budapest
The Spectator: Coffee House, 02/12/2022: The EU’s bid to control Hungary may backfire
German Council on Foreign Relations (DGAP): Memo, 07/12/2022: The EU System Is Adjusting to Permanent Tension with Orbán’s Hungary
Verfassungsblog, 08/12/2022: The Hungary Files. Untangling the political and economic knots
Foreign Policy: Dispatch, 13/12/2022: Brussels Brings Orban to Heel—for Now
The Conversation, 21/12/2022: Hungary and the EU are in an endless dispute that challenges the very foundations of the union
Peterson Institute for International Economics (PIIE): Blog, 22/12/2022: The EU’s latest bargain with Hungary's Orban unlocks aid to Ukraine
Euro|topics, January 2023: EU suspends Erasmus funding for Hungary
Project Syndicate: Commentary, 20/01/2023: The EU Must Spare Young Hungarians
Politico: beyond the Bubble, 06/02/2023: Brussels hits Orbán where it really hurts — education
Centre for European Reform (CER): Insights, 08/02/2023: Hungary, Poland and the EU: it's the money, stupid?
Open Access Government, 24/03/2023: The EU’s Horizon Europe funding freeze is causing disputes
The Brussels Times, 24/05/2023: Frozen EU funds threaten Erasmus student scheme in Hungary

EurActiv, 22/07/2022: EU gives Hungary a month to act before moving to suspend funds
Bloomberg, 05/09/2022: Orban Agrees to Set Up Anti-Graft Agency to Unlock EU Funds
Associated Press (AP News), 06/09/2022: Hungary to set up anti-corruption agency to unlock EU funds
EUObserver, 13/09/2022: EU Commission mulls 70% cut to Hungary's EU funds
Politico, 14/09/2022: European Commission to propose EU funding cut for Hungary
Euronews, 17/09/2022: Hungary faces EU judgement day that could hammer its economy
Reuters, 17/09/2022: Hungary to submit new laws to unlock EU funds next week
The Guardian, 18/09/2022: EU may suspend €7.5bn in funding from Hungary amid corruption fears
Reuters, 18/09/2022: In a first, European Union moves to cut Hungary funding over damaging democracy
Euronews, 18/09/2022: Brussels calls for €7.5 billion EU funding cut from Hungary over rule of law concerns
EurActiv, 18/09/2022: EU Commission proposes to cut €7.5 billion funding to Hungary
Deutsche Welle, 18/09/2022: EU proposes suspending billions in funds to Hungary
Politico, 18/09/2022: Commission proposes €7.5B funding cut for Hungary but opens compromise path
Bloomberg, 18/09/2022: EU Recommends Freezing Funds for Hungary Over Graft Concerns
Le Monde, 18/09/2022: EU recommends suspending €7.5 billion in funding to Hungary
Reuters, 19/09/2022: Hungary submits bills to meet commitments made to EU - justice minister
RFE/RL, 19/09/2022: Hungary Submits Proposals Aimed At Avoiding Loss Of EU Funds
RTÉ News, 19/09/2022: Hungarian govt submits bill to avoid losing EU fund
RFI News, 19/09/2022: EU Commission moves to ban Hungary's access to funds over corruption allegations
The Irish Times, 19/09/2022: Commission outlines plan to cut €7.5bn in EU funding to Hungary
EurActiv, 20/09/2022: Poland to oppose EU rule of law sanctions on Hungary
EUObserver, 24/11/2022: EU Commission to keep Hungary's EU funds in limbo
The Guardian, 30/11/2022: EU seeks to freeze €13bn in funding to Hungary over corruption fears
Euronews, 30/11/2022: Brussels recommends freezing €7.5 billion in EU funds to Hungary over rule of law concerns
BBC News, 30/11/2022: EU Commission calls for freeze on €13bn funding for Hungary
Politico, 06/12/2022: Hungary vetoes Ukraine aid, EU seeks alternative solution
Hungary Today, 07/12/2022: Hungary Has Powerful Allies in the Fight for EU Funds
Balkan Insight, 13/12/2022: Hungary's Govt sells suspension of EU funds as 'victory'
Reuters, 22/12/2022: EU holds back all of Hungary's cohesion funds over rights concerns
Euronews, 12/01/2023: Hungary ready to sue EU over cuts to Erasmus funding
Reuters, 12/01/2023: Hungary denounces EU decision to cut off funds to universities
Hungary Today, 07/03/2023: University Rectors Accuse Brussels of Damaging Erasmus Program
Politico, 13/03/2023: Viktor Orbán’s battle for EU funds reveals existential clash
Bloomberg, 27/04/2023: Hungary Poised to Unlock €13 Billion of Frozen EU Funding
EurActiv, 04/05/2023: Hungary must go further to access EU funds, says Commission
Politico, 17/05/2023: EU lawmakers say Hungary is not ready for frozen EU funds
EurActiv, 07/06/2023: Hungary looks for alternatives to frozen EU funding
Reuters, 27/06/2023: Hungary not getting EU recovery funds would hit credibility, Fitch says
Bloomberg, 31/07/2023: Hungary Risks Erasmus+ Scholarship Fund Ban as It Fails to Allay EU Concerns

EUR-LEX: COM(2022)485: Proposal for a Council Implementing Decision on measures for the protection of the Union budget against breaches of the principles of the rule of law in Hungary
European Commission: EU Budget: Rule of law conditionality regulation
European Commission: Press Release, 18/09/2022: EU budget: Commission proposes measures to the Council under the conditionality regulation
European Commission: Remarks by Commissioner Hahn at the College Read-out on the protection of the EU budget in Hungary (18 September 2022)
EPP EP Group: Newsroom, 18/09/2022: EPP demands substantial reforms from Hungary
Council of the European Union: Press Release, 12/12/2022: Rule of law conditionality mechanism: Council decides to suspend €6.3 billion given only partial remedial action by Hungary
EPP EP Group: Newsroom, 01/06/2023: No EU funds for Hungary until government completes reforms

Subject Categories , ,
Subject Tags ,
Countries / Regions
International Organisations