Further news on EU transfers

HUNGARY - In Brief 14 Sep 2022 by Istvan Racz

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The local press (Népszava) reported this morning, referring to unofficial sources in Brussels, that the EU Commission is preparing to decide this Sunday (September 18) if it proposes sanctions against Hungary, and on what conditions, because of rule-of-law concerns. This would be just a few days before the Commission's deadline for making a proposal, which is September 22. It is more than likely, in our view, that the Commission will propose a significant financial penalty, especially after Mrs. von der Leyen's speech on the state of the EU in the European Parliament earlier today. In this, she referred to this issue specifically, confirming that the Commission is set to protect judicial independence and the EU's financial resources, both being at threat currently. However, the amount and the modalities, currently unknown, are important. On the potential maximum amount, we published a note here a few days ago. On the modalities, it is very well possible that the EU will set a 'probation period', in a Polish-style conditional arrangement, saying that Hungary can eventually get the money after a certain period if it implements its promises regarding rule-of-law issues in a meaningful way. What is meant here is the fact that the Hungarian government, which has been in intense talks with the Commission lately, has made a number of proposals, some of which were essentially insignificant, but one, a proposal that Hungary would set up a new anti-corruption authority with a broad mandate and serious guarantees of its independence, is generally considered potentially worth the effort. It was most probably this latter proposal, referring to which Mr. Hahn, the EU's budget commis...