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EU money pouring into Ukraine includes Hungarian funds as well

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2022.10.26. 19:24 2022.10.26. 19:24
EU money pouring into Ukraine includes Hungarian funds as well

While Brussels’ leadership withholds enormous sums from both Hungary and Poland, the EU is supporting Ukraine from the both countries’ funds as well. According to an expert we spoke with, there are clear political reasons behind this.

“The Hungarian government is complying with the Commission’s requests, but the starting point should be that ever further requests will be forthcoming,” said Prime Minister Viktor Orbán in his interview with the German-language weekly, Budapester Zeitung. The Prime Minister was referring to the EU funds due to Hungary. He noted that the Poles fulfilled everything, but then new demands were put on the table. He added that, “it is clear that it’s about forcing a change of government in Poland… and eventually, this could be the goal in the case of Hungary as well.” However, he declared that “Hungary cannot be cornered financially.”

The European Union is withholding enormous amounts from Hungary. Calculated at the current exchange rate, the recovery fund amount due to our country will be 7,000 billion forints (~17 million euros), and the framework budget for seven years will amount to 12,000 billion forints (~29 million euros). All while the recovery fund could not have been created without our contribution. Moreover, Hungary contributes to the Brussels common funds – next year for instance with over 600 billion forints (~1.5 million euros).

A few days after the Hungarian parliamentary elections in April, Brussels announced that it would initiate proceedings against Hungary for the “protection” of EU funds. Since then, a tug-of-war has been persisting as the European Commission creates more and more demands from Hungary to get access to the funds. In light of this, it is quite paradoxical that the EU, hand in hand with the United States, is pouring money into the non-EU member state, Ukraine, with barely any conditions. According to the President of the Commission, Ursula von der Leyen, Ukraine needs four billion euros monthly to maintain functionality. This will be funded by the European Union, the United States, and various financial institutions. Part of the support is made up of favorable loans while the rest are direct grants. Member States that have thus far received nothing from the common funds must contribute to this as well.

The International Monetary Fund (IMF) is also supporting Ukraine; the institution is known to tie support to tight restrictions. In response to this, the Ukrainian leadership said that they are not sure the IMF’s standard instruments were designed for situations such as their own so they will probably have to get creative.

“Western institutions have always been aware of the fact that corruption is a permanent problem in Ukraine. This was highlighted in the European Court of Auditors’ 2021 report which showed that tens of billions are lost in Ukraine due to corruption. They stated that the biggest obstacle to foreign investments is corruption. The state of justice and the rise of oligarchs were also listed,”

– Bálint Rotyis, analyst at the Nézőpont Institute, told Magyar Nemzet. The EU launched several projects to reduce corruption, but none were able to reach their goals.

“Now, a country that was not known for its transparent operations has entered a war. With the current situation, these conditions have worsened and it can be assumed that corruption has not disappeared either. Enormous sums are arriving to Ukraine now and very quick decisions are made about the transfers. There is not even enough time to investigate the transparency of the Ukrainian government’s measures,” explained the expert.

Bálint Rotyis went on to point out that, 

on the other hand, the treatment of Hungary and Poland show that the EU acts very differently with its own member states.

“It is clear from the institution's data that, within the EU, the biggest problems with corruption and public procurement are not in our country nor in Poland. However, Brussels chose us and there are clear political reasons behind this,” emphasized the analyst. He believes the Hungarians and Poles are being attacked because both governments represent sovereign perspectives.

“Geopolitics and the war have changed everything, demonstrated by the obvious leniency towards Ukraine. Nobody is talking about whether the funds sent to a warring country will actually be used for what they were intended for. Just as nobody is talking about how Kiev will actually pay back any of this in the future,” said the expert. Bálint Rotyis reminded that Ukraine was Europe’s poorest country before the war as well and any economic potential they had is now gone.

“It is important to know that the EU’s budget is made up of the member states’ contributions. If Brussels says it's going to give 1.5 billion euros per month to Ukraine, that includes money from both the Hungarian and Polish state. In the meantime however, the European Commission is not fulfilling its financial obligations towards Hungary and Poland,” added the expert.

 

Photo: Ursula von der Leyen and Volodimir Zelenskij (Photo CRedit: Europress/AFP)

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