Hungary cannot easily replace lost EU funding
Wednesday, December 7, 2022
Significance
EU finance ministers in response postponed decisions on paying Hungary EUR5.8bn under the post-COVID-19 recovery plan, and whether to freeze EUR7.5bn from the ‘cohesion’ funds due Hungary from the 2021-27 EU budget. Due to EU concerns about Hungary’s democratic backsliding, Budapest may lose funds just when it is in its tightest-ever fiscal position.
Impacts
- Orban will turn towards Russia and China, creating increased security risk for the EU.
- Western discussion of ‘what to do about Hungary’ will amplify.
- The EU may have to consider for the first time how to expel a member state.
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