Brussels triggers rule of law mechanism that could lead to Hungary losing EU funds

The European Commission has formally triggered its new mechanism that could lead to Hungary losing EU funds over rule-of-law violations — the first time the bloc has use the conditionality mechanism.

EU commissioners met Wednesday and gave the official go-ahead to the process, after court action against it by Hungary and Poland.

The move marks the beginning of a months-long process that could end with Hungary losing a significant amount of EU funds, with the decision ultimately up to the Council of the EU, composed of representatives from each country. 

A Commission official told reporters that Hungary is being targeted due to “serious concerns” about its use of EU funding.

EU Court throws out Hungary, Poland challenge to rule of law regulation

The official pointed to misgivings over how Hungary doles out public contracts and how it controls and audits EU funds. The EC said these concerns had been ignored by Hungary for over a decade.     

Any funding reduction will need a “qualified majority” from the European Council to pass, meaning support from at least 55% of EU countries representing at least 65% of the bloc’s population.

Under the regulation governing the mechanism, the EU may cut funding when rule-of-law violations affect, or could risk affecting, the EU budget in a “sufficiently direct way.”

Orbán recently won a fourth consecutive term, after which the Commission announced it would soon trigger the rule-of-law mechanism.