EU Defends Decision to Unfreeze Hungary Funds as Parliament Plans Lawsuit

Zoltan Simon and Jorge Valero
·2 min read
4

(Bloomberg) -- The European Union’s executive is sticking by its decision to unlock about a third of Hungary’s suspended funding late last year, saying it’s ready to fight a threatened lawsuit on the issue.

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The European Parliament’s legal committee voted Monday to take the European Commission to court for a December decision that unblocked €10.2 billion ($11.1 billion) for Hungary. The EU’s executive arm said at the time that Prime Minister Viktor Orban’s government met the conditions set on shoring up judicial independence.

“The commission considers that it acted in full compliance with EU law and will defend its decision before the EU courts,” said Stefan de Keersmaecker, a spokesman for the executive.

The forint dropped as much as 0.4% against the euro on Tuesday, nearing the weakest level in a year. The years-long dispute over Hungary’s access to more than €30 billion in suspended funding coincided with a budget crunch, making the forint one of the most volatile emerging-market currencies.

Read more: Why Funding Freeze Didn’t Fix EU’s Orban Problem: QuickTake

After the commission’s decision to unfreeze part of the locked funds, the European Parliament passed a non-binding resolution on Jan. 18, calling on the EU executive to stop releasing money in tranches until Orban’s cabinet is deemed to have met all criteria, ranging from a crackdown on graft to ensuring academic freedom and restoring LGBTQ rights.

The final decision to file the lawsuit rests with European Parliament President Roberta Metsola, who is scheduled to consult with political groups Thursday, according to Adrian Vazquez Lazara, the head of the assembly’s legal committee. As a general rule, the assembly’s president follows the legal committee’s recommendations, her spokesperson said.

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