The EU’s magic solution –


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The European Commission’s recent decision to suspend €7.5 billion in EU cohesion funds for Hungary is intended to urge Orbán’s government to address at least some of the country’s rule of law gaps. But will it be enough to get Hungary back on a democratic path?

“If the question is whether it is enough to force Mr Orban to turn Hungary back into a democracy, the answer is clearly no,” former Labor and Social Rights Commissioner and Hungarian economist László Andor told EURACTIV in Budapest last week .

In mid-September, the Commission proposed to trigger the conditionality mechanism and suspend a third of cohesion funds for Hungary amid long-standing concerns about corruption and mismanagement of EU funds.

To reverse this decision, the country has two months to take remedial action, including the establishment of an anti-corruption task force with civil society participation.

However, Andor doubts that the mechanism even if they are adopted by Member States later this yearwill fix the rule of law problems in the country.

“I think a lot of people in Brussels just fell too much in love with this approach of sanctions and conditionality,” he said, adding that the instrument was introduced as a “replacement” for Article 7, the procedure that can suspend voting rights of a country in the Council in the event of a serious and persistent breach of EU values.

In fact, the conditionality mechanism is primarily a tool to protect the EU’s financial interests against breaches of the rule of law.

“Now we see that this is far from a perfect replacement,” Andor said, adding that it could only “cut off some excesses”.

In his view, in order to appease the commission, Hungary could intervene in the conflict of interest in running universities or other matters that are “not the essence of the system”.

“Cutting off these excesses will not affect the essential elements of this hybrid autocracy,” he said, echoing that of the European Parliament decision Brand Hungary as a “hybrid regime of electoral autocracy”.

Benedek Jávor, head of the Budapest representation in Brussels, agreed that while the tool could help reduce corruption in the country, it is unlikely to do more than that.

“This constitutional conditionality says nothing about media freedom […]academic freedom, freedom of education, a distorted electoral system, regulation of party funding and so on,” he said, adding that some of these issues “are even more problematic than corruption itself.”

As long as the conditionality mechanism is seen as a “magic solution” to solving the problem, Andor believes the EU will not consider other options, such as channeling funds directly to pro-democracy organizations and media.

Budapest and other opposition-led municipalities have long advocated direct access to EU funds to prevent them from being mismanaged at the national level, but so far their calls have gone unanswered.

Such a measure would require a reform of the shared management rules, according to which the Commission entrusts Member States with the allocation of funds to local beneficiaries.

Although political will can achieve anything, that decision could require “years of discussion,” Andor warned.

Still, rethinking how EU funds are managed might be the right decision, at least for the Hungarian population.

The highest with inflation of 15.6% in August bread price iraise recorded in the block that Forint near an all-time low against the euro, and the EU reconstruction funds that have not yet been released mean that the population is faced with a very difficult economic situation.

“If [funds] withdrawn from the country blocks development, so a good next step would be to say that the sum should not be lost to the country but managed differently,” suggested Andor.

Meanwhile, Andor told those calling for even tougher measures to suspend 100% of funding for Hungary that it still would not be enough to bring Hungary back to full democracy.

“So much has happened in this country in the last 10 or 12 years that you’re not going to make an omelet into an egg, at least not in a few months.”

As the Commission strives to tackle poverty through adequate minimum income schemes across the bloc, Eurostat noted this Self-employed people in the EU are more at risk of poverty or social exclusion than European workers.

In 2021, almost a quarter of self-employed people aged 18 and over in the EU were at risk of poverty or social exclusion, while only 9.1% of workers faced the same risk.

According to the data, the situation of the self-employed is also deteriorating compared to previous years, increasing from 22.6% in 2020 to 23.6% in 2021, while the risk of poverty among workers has decreased.

Graphic by Esther Snippe

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János Allenbach-Ammann contributed to the reporting.

[Edited by Alice Taylor]


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