EU cuts €1 billion in funds to Hungary over rule of law violations

The European Union (EU) has suspended €1 billion in funding allocated to Hungary under the bloc’s cohesion policy, citing concerns over rule of law violations. The decision underscores the ongoing rift between Brussels and Budapest over democratic standards and governance.

EU Commission spokesperson Anna-Kaisa Itkonen confirmed the development to Anadolu Agency, stating, “The first tranche of commitments suspended for 2022 amounts to €1.04 billion, which expired at the end of 2024.”

Longstanding tensions between Budapest and Brussels

Hungary’s strained relationship with the EU began to take shape after Viktor Orban assumed office as prime minister in 2010. Orban, known for his nationalist and conservative policies, has frequently clashed with EU institutions over issues such as judicial independence, media freedom, and the supremacy of EU law over national legislation.

In 2018, the EU initiated proceedings under Article 7, referred to as the “nuclear option,” which could strip Hungary of its voting rights in the Council of the EU. This marked a significant escalation in tensions, as the EU accused Budapest of undermining core democratic values.

The European Parliament went further in 2022, declaring Hungary an “electoral autocracy” and stating that the country no longer adheres to democratic principles. The statement cited concerns over corruption, press freedom, gender equality, refugee rights, and the misuse of EU funds.

Conditional funding and Budapest’s resistance

As part of the EU’s response to rule of law concerns, the bloc introduced a conditionality mechanism linking access to EU funds to compliance with democratic standards. Hungary’s access to EU cohesion funds was made contingent upon implementing reforms by the end of 2024.

In response, the Orban government has frequently wielded its veto power on key EU decisions, including the bloc’s budget and a COVID-19 recovery package. Budapest has also faced multiple lawsuits at the European Court of Justice over alleged violations of press freedoms, gender rights, and asylum laws.

The EU’s decision to withhold funds comes amid mounting criticism of Hungary’s use of EU financial resources. The bloc has repeatedly urged Budapest to enact meaningful reforms to address corruption and uphold the rule of law.