The Government of Viktor Orbán holds the pulse after the proposal of the European Commission to freeze 13,300 million in European funds to his country
It also continues to veto the approval of the minimum rate of 15% of corporate tax, agreed by the EU in the OECD
The Government of Viktor Orbán He is not willing to give up. He wants the 13,300 million in European funds allocated to Hungary -7,500 million from cohesion funds and 5,800 million in Next Generation funds- that the European Commission proposed to block last week due to the drift in state of state and for this it has decided to exercise its power of veto and block during the meeting of EU economy and finance ministers (Ecofin) two of the files pending decision that require unanimity: the disbursement of 18,000 million euros to help Ukraine stay afloat next year and the 15% corporate tax on large multinationals.
“Hungary is not in favor of amending the financial regulation”, the Hungarian representative announced during the Ecofin meeting about the decision to block the new aid plan for Ukraine. “Unfortunately we are not in a position to adopt the package. However, “Our ambition remains to disburse aid to Ukraine at the beginning of January. We will seek solutions with the support of 26 Member States”, said the resigned Czech Minister of Economy and acting President of Ecofin, Zbyněk Stanjura, that has made it clear that “the money is going to be disbursed, whether 27 or 26 Member States participate”.
The goal now is for the economic and financial committee to seek alternative solutions qThey allow to disburse the money, which Ukraine needs to pay salaries, pensions and the functioning of the administration, without touching the multiannual financial framework, which requires unanimity. “There are two options that the budget can support and if not with national guarantees. In any case, the Member States have promised to work and do everything necessary so that the financing reaches Ukraine in January. Ukraine is at war, it needs our aid and there is a Member State that is delaying everything. It cannot be”, recalled the vice-president of the Commission, Valdis Dombrovskis.
It is not the only file that has been blown up by Budapest’s refusal. The Czech EU presidency has also been forced to remove from the agenda the rule setting a minimum rate of 15% in corporate tax to large multinationals agreed within the framework of the OECD and which will be applied to those companies with revenues of more than 750 million euros. The decision also requires the unanimity of the Twenty-seven and the Hungarian delegation has once again prevented it from going ahead. Although the Hungarians insist that both issues are not linked to the disbursement of European funds to Hungary, the Ecofin result confirms that “it is a package.”
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In fact, the Twenty-seven has also ended up postponing the decision on the freezing of 7,500 million in cohesion funds to Hungary. Some countries, such as Germany, understand that the proposal requires a new evaluation of the measures implemented by the Orbán government since last November 19, which could lead to a reduction in the frozen amount. Time, in any case, is pressing. The deadline for making a decision expires on December 19. If by then there is no decision of the Twenty-seven, the file would end up in the trash, without sanction to Budapest. There is also no decision on the hungary recovery planthe only one of the Twenty-seven that remains to be approved, and that will give it access to 5,800 million euros.
Brussels proposed a week ago to approve the plan but conditioning the disbursement to the Hungarian Government meeting the milestones and objectives in terms of reforms to fight corruption and strengthen judicial independence. A decision is also urgent given that if Ecofin does not approve the Hungarian plan before the end of the year, Budapest will lose 70% of the funds. This outcome will force the Czech presidency to convene a new extraordinary council of ministers, which could be held next week, or to take the matter to the summit of EU leaders scheduled for December 15.