The EU Council could formally adopt, on Thursday 15 December, the hard-fought compromise decision to suspend €6.3 billion of EU cohesion policy funds for Hungary due to the breach of the Rule of law in the country.
A written procedure due to expire on Wednesday evening has been extended until Thursday noon at the request of Poland.
The conditions laid down in Regulation 2020/2092 on a general system of conditionality for the protection of the Union budget are therefore met “with a view to adopting appropriate measures for the protection of the Union budget against breaches of the principles of the rule of law in Hungary”, the decision reads.
Once the following cohesion policy operational programmes are approved, 55% of the budgetary commitments under these programmes - amounting to €6.3 billion - will be suspended: - Environment and Energy Efficiency Operational Programme Plus; - Integrated Transport Operational Programme Plus; - Territorial and Settlement Development Operational Programme Plus.
The decision makes it clear that the suspension of budgetary commitments is of a temporary nature. “The measure can therefore be lifted under the procedure provided for in that article without loss of Union funding, if the situation is fully remedied within two years”, the EU Council decision says.
This decision shall not affect the obligations of Hungary to carry out the programmes and funds concerned, and in particular its obligations towards the final beneficiaries or recipients, including the obligation to make payments in accordance with the relevant sectoral or financial regulations.
Hungary will have to report to the Commission every three months from the adoption of the decision on its compliance with these obligations.
The agreement on the protection of the EU’s financial interests in Hungary has logically unblocked three other politically related files (see EUROPE 13083/27): - the Hungarian recovery plan; - EU macrofinancial assistance of €18 billion to Ukraine for 2023; - the minimum taxation of multinationals (Pillar II of the OECD agreement).
The finalisation of the written procedure will allow the formal adoption of the directive integrating in the EU the pillar II of the OECD agreement establishing a minimum taxation of multinationals.
Link to the decision on Hungary on rule of law conditionality: https://aeur.eu/f/4no (Original version in French by Lionel Changeur)