Photo: Hungarian Prime Minister, Victor Orban, with European Commission President, Ursula Von Der Leyen.

Money Power: How The EU Is Shaking Up The Orban System

The European Union has made Hungary’s access to billions in EU funds contingent upon wide-ranging reforms that threaten to put the Orban system into existential crisis.

Hungarian Prime Minister Viktor Orban is the new darling of Christian conservative politics. To his European and North-American admirers, he is the rare voice of sanity in a world gone mad. Meanwhile in Hungary, it is another story. Orban is a system of corruption and patronage.

Orban has been able to maintain power since 2010 thanks to patronage politics. In Hungary, political connection is everything, whether it’s about getting a job or a licence. It’s how the ruling Fidesz party wins votes and loyalty. But the Orban system is expensive to run, and depends on the generous supply of EU funds. Indirectly, the EU has helped sustain the Orban system for years.

But now, the EU is wielding its money power to shake up the Orban system.

Brussels won’t allow Hungary to access the €5.8 billion in grants from the coronavirus recovery funds approved last December until Budapest implements a list of 27 reforms, including, among others anti-corruption measures and strengthening judicial independence.

The Orban government is under pressure, because the deadline to access the funds is before the end of 2023.

The EU has also suspended Hungary’s access to €6.3 billion in regular funds over rule-of-law breaches, again on the condition that that Hungary could receive the money if it can show the reforms were successfully implemented.

The Hungarian government has started implementing changes in order to access money from the EU’s coronavirus recovery fund, but their effectiveness is doubtful.

“Corruption is part of the methodology of the government,” Miklós Ligeti, legal director at Transparency International Hungary told Politico, adding that the EU’s new list of reforms “would definitely go against the logic of this kind of corruptly orchestrated system that Hungary is being governed under.”

The new Integrity Authority created as a part of the Anti-corruption reforms “will have to rely” on the ineffective institutions that led to the establishment of this new authority in the first place, said András Léderer, head of advocacy at the Hungarian Helsinki Committee, a rights group.

Human Rights in Hungary: EU Freezes Nearly €22 Billion in Funds

But Orban is facing his biggest challenge yet in the battle for EU funds, and this time, the funds are worth a staggering 10 percent of Hungary’s annual GDP.

Regarding an agreement on nearly €22 billion in regional development funds for Hungary under the bloc’s 2021 to 2027 budget, the EU has set the condition that the money will not be released until Hungary complies with the EU’s Charter of Fundamental Rights.

“The Commission considers that the provisions of Hungary’s so- called child-protection law, and serious risks to academic freedom and the right to asylum have a concrete and direct impact on the compliance with the Charter,” the Commission wrote last December.

Implementing the reforms to comply with the EU’s Charter of Fundamental Rights would mean a radical change of direction for the Orban regime which has built its recipe for electoral victory on anti- immigrant and anti-LGBTQ+ issues.

“The EU demands meaningful involvement of civil society, and rightfully so,” said Hungarian opposition MEP Katalin Cseh. “The problem is that implementing this demand would contradict the entire logic of the Orbán regime,” she said.

“So far, the European Commission has been lenient enough to let them get away with workarounds and superficial changes,” Cseh added. “This time may be different.”

The Commission’s decision to withhold funds to Hungary is viewed as fair game within Brussels.

“Hungary currently is in a particularly difficult economic condition and is also dependent on this money,” European Budget Commissioner Johannes Hahn told the Der Standard newspaper. “It seems that financial pressure is the most effective. If that helps to improve the conditions for the rule of law, that’s good.”

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