Unfulfilled Requirements

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The European Union moved to punish Hungary for breaking bloc rules, a push that would allow the bloc to withhold millions in EU funds to the country, the Wall Street Journal reported.

The European Commission’s move marks the latest escalation between Hungary and the bloc, amid years-long disputes over rule-of-law violations, inadequate anti-corruption measures, restrictions on press freedoms and violations of LGBTQ+ rights.

The mechanism used to punish Hungary was established in 2020 alongside the approval of a nearly $791 billion coronavirus recovery fund. It would empower the EU to bar nations from receiving funds if Brussels can demonstrate that their lack of an independent judiciary or inadequate anti-corruption institutions mean the bloc’s funds could be misused.

Hungary and Poland – which have also drawn the ire of the EU – rejected the tool and challenged it at the European Court of Justice. The court, however, rejected that case in February.

Meanwhile, Hungary has accused the EU of using the instrument to blackmail countries and force them to bend to the bloc on certain issues involving immigration and social values.

Commission officials said that they had enough proof of violations of financial management standards to win any Hungarian appeal. But any decision to block funds will take months and will depend on the support of a supermajority of EU states – meaning backing from at least 55 percent of EU countries representing more than 65 percent of the bloc’s population.

Currently, EU officials have already halted more than $7 billion in coronavirus recovery funds for Hungary but it had not attempted to block regular annual budget funds from being paid out.

The decision comes as recent divisions have opened up in the EU over imposing further sanctions against Russia over its invasion of Ukraine.

Hungary has voiced opposition against imposing levies on Russian energy.

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