The European Commission launched action against Hungary on Wednesday under the new rule of law mechanism. This mechanism should protect the EU budget from violations of the rule of law by EU countries. This is the commission’s first use of this tool. The measure could lead to a partial suspension of European subsidies to Budapest.
The Commission has sent an official letter to the Hungarian authorities expressing concerns about the performance of the public procurement market. According to the Commission, European subsidies are not being used properly, current controls are inadequate and there is no guarantee that an independent investigation and prosecution of fraud related to EU funds will be conducted.
Budapest has two months to respond to the letter. If the identified problems are not resolved, the Commission can propose to the Council (EU member states) to partially suspend the payment of European subsidies to Budapest. Only a qualified majority is required to adopt such a measure, so member states do not have to agree unanimously.
In the commission, the use of the words fines and penalties was carefully avoided. “Ultimately, these are administrative measures, such as suspension of payments. The European Court of Justice has insisted that the remedial measures proposed are proportionate.
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