News of the week
In order to get the RRF money and to end the legal conditionality procedure the Hungarian government announced setting up a new anti-corruption authority in addition to reviving the anti-corruption task force which had existed before.
The EU Budget Commissioner is encouraged by the state of play, but he is still waiting for concrete written results and the necessary decisions before presenting his proposal to the College of Commissioners for a final decision by 22 September at the latest. Now that the government has made the announcement, the Commission wants to see the final draft law before taking a decision. The Commission has a very clear idea of what should be included in the legislation. (Szabad Európa)
Director of Corruption Research Center Budapest pointed out in an interview for telex that it may look like everything is in place in Hungary for fighting corruption: the legal framework is EU-compliant, the Public Procurement Authority, the Economic Competition Authority, the prosecution and the police are all functioning. But these cannot be considered autonomous institutions in Hungary, so they cannot be expected to be effective in countering the corruption that pervades all levels of public spending. Transparancy International (TI) is similarly sceptical ’The state was gradually taken captive by the government elite and the informal business group around it, and by 2015 at the latest, the independence of all institutions except the courts had been lost. In this system, the establishment of a truly autonomous anti-corruption authority would represent a paradigm shift, which the executive director of TI does not expect.
The agreement is encouraged by the leaked Commission letter of 20 July on the legal conditionality. If no agreement can be reached with the Hungarian government, the European Commission would propose to the Council to block cohesion policy programmes for Hungary where, in the previous funding period, money was typically allocated to beneficiaries through public procurement. In this case the COM would propose to suspend 3,500 billion forints of EU payments out of the total 8,000 billion for cohesion.
What is it all about? A procedure on legal conditionality is taking place at the same time as negotiations on the RRF and cohesion (and on agricultural funds, the political link between the latter and the rule of law conditionality is not yet clear). If the procedure cannot be concluded amicably, the Commission would suspend almost half of the cohesion funds. In practice, Hungary would only be able to count on the remaining cohesion money until the legal conditionality procedure is closed.
Risk is increasing that the EU will not finance those operational programmes where only one company attend at the bidding with special regard to municipal development, large construction projects. This would hurt the politicaly like-minded companies.
Another consequence of the failure is that the agreement on RRF funds will be delayed (they have to be agreed by the end of the year at the latest).
In our weekly summary you may find assessment on:
- How politics intervenes in the HU&Croation business relations (MOL, Indotek)
- After Vodafone the next must have is a state owned cement factory
- Polish elections has consequences its neighbourhood policy (DE, CZ)
- CZP Presidency sees as HU has to take a decision on staying in the EU or exit
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