These Are the European Conditions Imposed on Hungary to Punish the Rebellion of Orban’s Government

The European Union found an opportunity, in light of the current conditions that Hungary is going through, to break the rebellion of the right-wingers, especially in light of Orban’s position opposing Western sanctions on Russia and supporting Ukraine and his repeated objections to the Union’s policies, especially financial ones.

In their agreement on Monday, EU governments decided to suspend financing to Hungary by 55%, equivalent to 6.3 billion euros. This is a huge sum for Hungary, accounting for more than 3% of the country’s annual economic output.

Hungary, headed by the head of the ultra-nationalist right-wing government, Viktor Orban, is experiencing an economic situation that is the most difficult in the European Union, as the inflation rate has reached 22% at a time when the ruling Fidesz coalition in the country is being accused of pursuing economic policies that are destructive to the internal economy, as well as the country’s relations with other European countries.

 

European Conditions

For the first time, the Europeans used their financial weapon to besiege the rebellion of the conservative nationalist Hungarian government in order to push it to back down from the veto it raised in the face of the European Union’s financial support to Ukraine by about 18 billion euros (before the end of this year) to overcome its difficult economic situation during 2023.

Hungary was waiting for the transfer of about 6.5 billion euros from the recovery package, which was approved after the Corona pandemic.

What was reached late in the evening of December 12, under the name of the settlement, requires Hungary to meet 27 conditions for the release of the seized funds.

As for Budapest, the amount of 6.5 billion euros constitutes only about 18% of what it receives annually from the European Union, but the harsh economic conditions that the country is experiencing, with an insane rise in inflation of up to 22%, in addition to the increase in gasoline and energy prices in the middle of the beginning of winter makes those billions an urgent and necessary need.

The conditions that Budapest must meet until next March, to release the amount of European economic recovery, were considered by the Hungarian political scientist in the German Marshall Fund, Daniel Hegedus, a severe economic blow to Hungary.

Hegedus noted in statements to Danish newspapers recently that the current inflation rate in Hungary is the highest rate in Europe, in addition to a continuous decline in the price of the forint (the Hungarian currency).

 

Corruption & Populism

The Europeans accuse the prime minister of the conservative right-wing Fidesz coalition, Orban, of pursuing economic and financial policies that deepen corruption and misuse of European budget funds.

It is noticeable in this direction that the countries of the Visegrad alliance, which were once considered supporters of Orban, in Poland, the Czech Republic, and Slovakia, are today his opponents.

The conflict that has been taking place for years between the capital of the European Union headquarters, Brussels, and the European Parliament in Strasbourg made many, through specialized studies, conclude that Hungary in the era of Orban has become among the most corrupt countries in Europe.

It is simply a matter of pursuing economic policies that exploit the distribution of European funds in a way that includes a lot of favoritism and nepotism, according to the Financial Times.

The newspaper also criticized Orban’s friend and the wealthiest man in Hungary, Lorinc Meszaros, who started his life as a plumber and now owns a business empire that is growing faster than Facebook.

European reports indicate that corruption has become linked to the ruling class, which exploits money to consolidate its power and re-elect it on several occasions by providing funds and projects, raising the retirement rate, and so on, in order to keep Orban’s popularity high.

Transparency International stated that since Fidesz seized power in 2010, the oligarchs close to it have continued to distort the entire institutional system of the state, according to the organization’s Hungarian director, Joseph Peter Martin, in 2017.

Orban was repeatedly accused of undermining the rules and principles of the European Union, not only on the economic and financial level but also in terms of abolishing the separation of powers and his control over them, judicial, media, electoral, and others, in the interest of the party’s influence.

Since 2021, the EU institutions, under their budget ceiling for the period extending to 2027, have tightened their tools to target corruption and misuse of EU funds. One such mechanism is what was precisely implemented earlier this month, withholding funds until Brussels’ conditions were shown to be met.

The Hungarian economic situation forced Orban to comply with European decisions, and remove from his hand all means of extortion in a vital political issue related to Finland and Sweden’s accession to NATO, as well as in cases of sanctions against Russia.

 

Financial Sanctions

It seems that Orban, who pinned his hopes on the narrative promoted by most of the far-right and conservative nationalists in Europe since the last European Parliament elections in 2019, considers their countries to be “a victim of the bureaucracy and domination of Brussels.”

The European tactic of exerting financial pressure on Budapest, under the title of “settlement,” came to discourage it from “vetoing” EU political and economic decisions, such as imposing the global corporate minimum tax of 15%.

The Hungarian retreat from both matters was imposed by the joint European agreement to “punish” Orban, in a precedent that paves the way for another way to overcome the rebellion of some European governments against the policies and decisions of Brussels.

As part of the financial sanctions portal, the Europeans imposed a precedent for freezing funds allocated to member states if they did not comply with the conditions.

According to polls by the Institute of Political Capital in Budapest, more than half of the Hungarian population believes that EU citizens suffer more from sanctions than Russians.

Despite this, that narrative was finally dealt a severe blow when the head of the Hungarian Central Bank, Gyorgy Matolcsy, who is loyal to the ruling Fidesz, earlier this month, criticized the financial policy in the past years in the era of Orban in front of the Hungarian parliament.