Hungary pledges legal changes to secure EU recovery funding – govt

By Krisztina Than and Gabriela Baczynska

BUDAPEST (Reuters) – Hungary will amend by the end of October several laws criticised by the European Commission if an agreement on financial aid is reached with the EU executive, Prime Minister Viktor Orban’s chief of staff said on Tuesday.

The Commission has been withholding its approval for Hungary to draw on money meant to help lift economies from the COVID-19 pandemic, accusing Orban’s government of undermining the rule of law.

Hungary also faces financial penalties from the European Union over the same rule of law issues – including public tender procedures that fall short on anti-corruption safeguards – and had until the end of Monday to address Brussels’ concerns.

Nationalist Orban – locked in many battles with the EU over migration, LGBTQ rights and democratic standards – has come under increased pressure to strike a deal with Brussels as the forint currency hit new lows and inflation keeps surging.

“We have already submitted part of these (legal changes) and made promises for several more law amendments if the deal with the Commission is signed,” Gergely Gulyas told a briefing.

Gulyas said the reply Hungary sent had provided a consensus on all the recommendations of the Commission, and would create a “stricter than ever” and most transparent system for overseeing the use of EU funds and procurement contracts.

“We hope the conditionality procedure can be closed and then the agreement on the recovery funds and then also the seven-year budget can be signed,” Gulyas said.

The Commission confirmed it received Hungary’s response in the so-called conditionality mechanism and now had a month to analyse it.

It declined to offer an early assessment but, should it deem Budapest’s assurances insufficient, it could propose that the other 26 EU member states approve financial penalties against Orban’s government.

This, however, is a separate procedure to approving the disbursement of billions of euros earmarked for Hungary under the COVID-19 economic stimulus, said a Commission spokesman.

While looking at similar matters related to spending controls – including for EU funds that would go to Hungary – there is no automatic link between one decision and another, the spokesman added.

(Reporting by Krisztina Than, Anita Komuves, Gabriela Baczynska; Editing by Jon Boyle, Tomasz Janowski and Mike Harrison)