EU braces for revolt as Poland vows veto on cuts to Hungary in latest attack on VDL

The European Union is facing a revolt from within as Poland slams planned cuts to Hungary’s funding. Last week, the EU Commission proposed to suspend €7.2billion of funds allocated to Hungary over corruption fears. The Commission also set out requirements for Hungary to keep access to the funding, including new legislation, which Budapest said it would meet. Express: EU braces for revolt as Poland vows veto on cuts to Hungary in latest attack on VDL

As Poland criticises proposed cutbacks to Hungary’s budget, the European Union is dealing with an internal uprising. The EU Commission suggested last week that Hungary’s funding of €7.2 billion be suspended due to concerns about corruption. Budapest said it will comply with the Commission’s demands, which include new laws, for Hungary to continue receiving cash.

Mateusz Morawiecki, the leader of Poland, spoke out on Sunday in support of Viktor Orban’s administration, declaring: “Poland will oppose in the strongest terms any action by the European institutions that intends to unlawfully deprive any member state of funds, in this case, Hungary in particular.”

The two nations have been at odds over Mr Orban’s ties to Russian President Vladimir Putin and Budapest’s hesitation to help Ukraine militarily.

But Mr Morawiecki declared his determination to resume regular collaboration with Hungary inside the Visegrad Group of countries at the beginning of this month.  To avoid losing billions of euros from the EU, Hungary’s government on Monday sent the first of many anti-corruption laws to parliament.

The first measure has been presented to parliament, according to Justice Minister Judit Varga, who also announced on Facebook that the government would “focus on drafting and implementing the commitments (to the EU) in the coming weeks and months.”

The veteran prime minister seems prepared to comply with EU requests to finally establish structures that would reduce corruption risks in EU-funded projects, despite significant hurdles related to growing energy prices and double-digit inflation, a weak forint, and a sluggish economy.

According to Mujtaba Rahman, Managing Director Europe at Eurasia Group, “The latest developments in Brussels certainly come at a bad time for Orban, who is struggling with a swath of political and economic problems brought about by both global issues, most notably rising energy prices, so he is likely to go further to satisfy Brussels’ demands.”

Budapest would probably close the deal, he said, but other disputes over other EU funding would still need to be settled.

“The bigger problem for Orban is the money tied up in the Recovery Fund, because the Commission has more discretion over whether it gives that the green light or not,” Mr Rahman said.

Similar to the majority of EU nations, Hungary last year presented its plan for using EU funding to transform its economy into one that is high-tech and ecologically friendly in the wake of the COVID-19 epidemic. On that front, too, it is still awaiting clearance.

If Budapest does not receive EU funding, the forint, which has lost 8% of its value this year, will almost certainly fall much lower, making it more difficult to control inflation and leaving Hungarian assets vulnerable to any downturn in global sentiment.

Hungary’s minister of development, who oversees discussions with the EU, said on Sunday that Hungary will adhere to all 17 of its pledges to the commission in order to avoid losing any cash.

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