EU also pours money into Ukraine from Hungarian sources

While Brussels is withholding huge amounts from Hungary and Poland, the EU is extending its support to Ukraine using contributions paid by the two member states, a Hungarian daily writes.

ECONOMY POLITICS OCTOBER 26. 2022 12:51

The Hungarian government will fulfill the European Commission’s requests, but it must assume that it will continue to receive more and more requests, the daily Magyar Nemzet quotes Hungarian PM Viktor Orban, who recently gave an interview to the German-language Budapester Zeitung newspaper. With this, Hungary’s prime minister was referring to EU funds Hungary is entitled to, noting that Poland also delivered on every EC request, yet it faced new, additional demands. Forcing a change of government in Poland is clearly the aim, and this could ultimately be the goal also in the case of Hungary, he said, stressing however, that Hungary could not be cornered financially.

The European Union is withholding huge sums, billions of euros from Hungary, although it would have been unable to set up the Recovery Fund without Hungary’s consent, Magyar Nemzet recalls. In addition, Hungary pays its contribution to the EU’s common coffers each year.

A few days after the parliamentary elections in April, Brussels announced that it would initiate proceedings against Hungary for the “protection” of EU funds. Ever since, a tug of war has been going on, with the European Commission suggesting additional conditions. In this context, it appears rather contentious that the EU, hand in hand with the United States, is pouring money almost unconditionally into Ukraine, which is not an EU member. According to EC President Ursula von der Leyen, Ukraine needs €4bn a month.

This will be funded by the European Union, the United States and financial organisations. The support, in part, will be provided in the form of discounted loans, with the rest being non-repayable grants. Those member states that have received nothing from the EU’s common funds must also contribute to this,

the paper points out, adding that the International Monetary Fund (IMF), known for linking the provision of its resources to severe austerity measures, is also involved in supporting Ukraine. In response, Ukraine’s leadership said they were not sure whether IMF’s standard instruments were, in fact, designed for such situations, so they would likely have to be creative.

Western institutions have always been aware of the fact that corruption is a permanent problem in Ukraine. This was also highlighted in the 2021 report of the European Court of Auditors, which wrote that tens of billions are lost annually in Ukraine due to graft. They said the biggest obstacle to foreign investment was corruption. The report also mentions the situation of the judiciary, and the rise of oligarchs,

political analyst Balint Rotyis told the paper. The EU has launched numerous projects to crack down on corruption, but these have not achieved their intended goal. “Now there is war in a country that’s not exactly known for its transparent operations. The current situation has made matters even worse, and corruption is presumably still rampant. Now huge sums are paid to Ukraine, with quick decisions being made about the installments. There is no time to even monitor the transparency of the actions of Ukraine’s government, the expert noted, adding that

the case of Hungary and Poland shows how the EU is treating its own member states differently.

Data supplied by the institutions suggest that the biggest problems in terms of corruption and public procurement procedures are not in Hungary and Poland. Still, Brussels has singled out these two countries, clearly for political reasons, the expert said, arguing that Brussels’ attack is motivated by the fact that both countries had assumed a sovereignistic position.

Geopolitics and the war have rewritten all, hence the leniency towards Ukraine. Nobody asks whether the funding to the country at war is spent on the intended purposes, or whether Kyiv will ever pay back any of it, the expert said. Balint Rotyis recalled that Ukraine was the poorest country in Europe before the war, and its economic potential has been obliterated due to the conflict.

He said it is important to know that the EU budget consists of contributions from member states. If Brussels says that it gives Ukraine 1.5 billion euros per month, this also includes amounts paid by Hungary and Poland. Yet, the European Commission does not fulfil its payment obligations in relation to Hungary and Poland.

ECONOMY POLITICS

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European Union, Hungary, money, ukraine