Hungary committed to the values on which the EU is founded

Hungary committed to the values on which the EU is founded |

The conditionality procedure was conceived as a preventive tool to protect the financial interests of the EU but if it is turned into a political sanctioning mechanism, the whole exercise will become a collective failure, writes Judit Varga.

Judit Varga is the justice minister of Hungary.

In the past few months, the Hungarian government has been engaged in an intensive dialogue with the European Commission in the framework of the conditionality procedure. It has not been easy, to say the least, as there’s a great deal of mistrust on both sides, but we have made huge progress.

As a result, the Hungarian government proposed a comprehensive package of significant remedial measures to protect the Union’s financial interests further. The measures aim to make public procurement more transparent and competitive, reinforcing the legal and institutional framework for fighting fraud and corruption and strengthening audit and control processes and conflict of interest rules.

On September 18, 2022, the conditionality procedure entered a new phase. In its decision, the Commission recognised that the proposed remedial measures, taken together, would, in principle, be capable of addressing the issues that prompted the launch of the conditionality procedure, provided that all the measures are correctly and effectively implemented. 

Since then, our objective has been to implement those remedial measures in consultation with the Commission. 

An Integrity Authority has been established to intervene in all cases where competent authorities have not taken the necessary steps to prevent, detect and correct fraud, conflicts of interest, corruption and other irregularities that have or may have an effect on the implementation of EU financial support. The Board of the Authority has been elected, and its provisional infrastructure is already in place. 

An Anti-Corruption Task Force has also been convened. The Task Force is chaired by the chair of the Integrity Authority and operates with the participation of an equal number of governmental and non-governmental actors.

We amended the Code of Criminal Procedure and established a procedure concerning special criminal offences related to the exercise of public authority and the management of the public property. Judicial review is now available for decisions of the prosecution or the investigating authority to dismiss a criminal report or terminate criminal proceedings. Based on the review, an investigating judge will have the authority to order the commencement or the continuation of criminal proceedings. Ultimately, the procedure opens the right to file an indictment in a court of justice. 

We clarified that asset management foundations that operate in the public interest fall under the scope of public procurement obligations and adopted legislation to ensure full compliance with the EU Financial Regulation regarding conflict of interest rules. 

We enhanced our comprehensive asset declaration system concerning publicity, content and verification. We strengthened both external and internal audit and control mechanisms. From now on, a finance guard will enable OLAF to carry out its on-the-spot checks and inspections on request. 

By the end of the year, we will reduce the share of public procurement tender procedures financed wholly or partially from EU funds with single bids to below 15%. Regarding public procurement tender procedures financed from the national budget, we will gradually reach this objective by the end of 2024. We have implemented a number of measures towards this end: We provide training free of charge for 2,200 micro, small and medium-sized enterprises, designed and hosted by public procurement experts; we also set up a support scheme providing a partial lump sum compensation for at least 1,800 eligible micro, small and medium-sized enterprises to cover their costs associated with participation in public procurement procedures.

We established a central register to publish a wide range of information related to public spending. We are now applying all the functionalities of the ARACHNE risk-scoring tool in implementing all EU support. We significantly improved our Electronic Public Procurement System with a regularly updated database containing information on all contract award notices of public procurement procedures in a structured form, capable of being processed by a machine. 

To underscore our long-term commitment to implement and maintain these measures, we translated them into milestones in our Recovery and Resilience Plan, which the Commission is evaluating. This will allow structured monitoring until the end of 2026. In addition, we agreed to regularly report to the Commission on the status of our remedial measures regardless of the continuation of the conditionality procedure.

Hungary is committed to the values founded by the European Union – values we all share. Hungary is also committed to protecting the financial interests of the Union as it is in our common interest to ensure transparent and efficient use of European taxpayers’ contributions, including those of Hungarian citizens and companies.

To borrow the words of a Hungarian poet, “the surface chatters while the deep is silent.” There is already very close scrutiny of the full and effective implementation of the remedial measures and an ongoing debate on how these measures could be further improved or complemented. This scrutiny and debate are welcome. But it is only the chattering surface. There is a deeper political significance that is often lost in the chatter.

The procedure launched against Hungary in the conditionality procedure is a test case. It could become an example of constructive dialogue, a symbol of unity in diversity and a confirmation of genuine solidarity. But it may well become a hostage of particular political agendas and further undermine the unity of the Union at a time when it faces unprecedented challenges we can only meet together. The conditionality procedure was conceived as a preventive tool to protect the financial interests of the EU. If it is turned into a political sanctioning mechanism instead, the whole exercise will become a collective failure.

We regard this process, first and foremost, as an exercise in building mutual trust. Hungary has shown responsibility and political ownership. We have invested resources and political capital to find a negotiated solution. We have done so despite our serious reservations about the fact that we are denied access to funds that the EU was able to borrow thanks to the financial guarantee of member states, including Hungary. Not to mention the absurdity that, in our case, the conditionality procedure is supposed to apply to the inappropriate use of financial resources under the new MFF, funds we have not yet even received.

However, effort and political investment are needed from all sides. If this is not the case, what we are now doing is simply another chapter in the same old book. The time has come to close that book and start writing a new one.


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