If there was a word in Euro-speak for ‘Move on, nothing to see here,’ the EU would undoubtedly have used it in its announcement yesterday about Hungary. Brussels has formally notified Budapest that it is invoking the so-called ‘conditionality mechanism’ against it, meaning a supermajority within the EU can vote to withhold funds from a member state where there is a threat to the rule of law coupled with direct effects on the sound financial management of the EU budget or other EU financial interests.
The notification itself has not been publicised; but everything, the EU says, is in order. A letter was sent last November outlining allegations of graft, corruption and nepotism among those distributing EU largesse; the European parliament demanded action when no adequate response was received. Now we have a formal claim to which Hungary has to respond within two months, otherwise it risks losing EU funds. The amounts, which include some Covid recovery funds, are worth having. EU payments worth over £34 billion, which by some accounts Hungary has already spent in anticipation, are potentially at stake.
However, as is usual in relations between the EU and Hungary, there is more to this than meets the eye. True, Hungary would win few prizes for the integrity of its officials, the transparency of its public procurement, or the financial detachment of its politicians, of whom PM Viktor Orbán is one of the richest. True also that control of EU funds in Hungary tend to be concentrated in a fairly narrow clique of insiders, and that even though the budget of the EU as a whole may not be seriously affected there is probably enough evidence of money going astray to convince the EU Court that the intervention is justified. Nevertheless, it is likely that the aim of the EU here is less about financial than social and political Europe.
Hungary, besides being irredeemably off-message when it comes to Ukraine – unsurprising, given its close economic ties with Russia and its long-running dispute with Ukraine over the Hungarian minority there – is also a serious maverick as a matter of social policy. (In this it joins Poland, something we will come to later.) Budapest is already in trouble with Brussels over multiple matters: its treatment of its gay minority; its pushbacks of migrants seeking asylum; its failure to take adequate steps against fraud and corruption; and the doubtful impartiality of some of its judges.
Unfortunately for the EU, not only is Hungary part of the awkward squad but the EU’s normal methods of showing who’s boss, consisting of obtaining judgments from the Court of Justice that are then obeyed to the letter by member states, does not really work in Budapest. Fidesz, the ruling party in the Hungarian government, is in no mood to submit to these tactics. It takes the view that matters like this are no business of Brussels; it has scandalised the EU central bodies by asking its courts to rule that the law of the EU does not prevail over that of a member State. And it has made it clear that in its own internal affairs it will by and large follow Hungarian public opinion rather than march to the orders of the EU.
Moreover, much to the disgust of the EU, it became clear this month that there was genuine public support for the Fidesz position. In the general election, Orbán trounced Péter Márki-Zay, the pro-European candidate who had stood against him with the overt support of both the EU nomenklatura and progressive opinion throughout the bloc. Even though some points were made about the imbalance of the media in the course of the election, the election process itself received a fairly clean bill of health, and there can be no serious doubt about the legitimacy of the outcome.
Indeed, this leads on to the other suggestive feature about this episode. The EU’s intention to issue yesterday’s proceedings had been predicted by Ursula von der Leyen almost immediately after the election was over. Although we obviously cannot know this for certain, it seems pretty likely that the poll result featured large in Brussels’s plans.
Berlaymont, one suspects, had prepared to proceed against Hungary in November last year, but had then quietly decided to put the scheme on ice pending the outcome of the election. It had doubtless pinned its hopes on being able to abandon it entirely once Márki-Zay had defeated Orbán and he could be welcomed into the Brussels fold. Having had its plans dashed by Orbán’s unexpectedly conclusive victory, the EU then had no choice than to follow its original plan.
In taking these proceedings, in other words, Brussels is seeking to do by the purse-strings what it has failed to do by lawfare: to bring Hungary to heel on matters of social policy. Its calculation in all probability is that in a few months’ time it will be able to strike a deal with the money, or a large proportion of it, released in exchange for an agreement by Orbán to carry out internal reforms to the EU’s satisfaction.
Will this scheme succeed? It may. The EU has cannily proceeded against Hungary at a time when it is estranged from its usual ally, Poland, which is pro-Ukraine and frankly disgusted by Orbán’s unconcealed cosying-up to Russia. On the other hand, success is not assured. Warsaw may well be prepared to forget its differences over Ukraine and make common cause with Budapest on what both see as the need to stop further EU encroachment. And for that matter large numbers of voters in Hungary may come to resent an EU whose attitude to democracy seems to be that it is quite all right to pay governments handsome sums of public money to disregard the wishes of their own electors.