By Gabriela Baczynska
BRUSSELS (Reuters) -Hungary must bolster the independence of its judiciary "very soon" to stand a realistic chance of getting any of the 15.4 billion euros envisaged for Budapest from the European Union's COVID recovery stimulus, a senior EU official said.
Hungary can receive some 5.8 billion euros ($6.20 billion) in free grants and a further 9.6 billion euros in cheap loans from the EU, but the bloc has suspended any payments until Budapest implements reforms to improve judicial independence and tackle corruption.
"They will have to adopt laws, which will strengthen the position of the judges, which will strengthen the anti-corruption actions," Vera Jourova, a deputy head of the European Commission, said after a Hungarian delegation held talks at the Brussels-based EU executive this week.
Jourova, who is responsible for upholding democratic standards in the 27-nation union, added that improving public procurement in Hungary was another requirement.
"These are very concrete things, which the Hungarian government has promised to correct or install very soon... time works against them," she said in comments cleared for publication late on Friday.
Hungary and Poland are the EU'S only member states lagging behind in getting the funds, amid long-standing criticism from the Commission that their nationalist, populist governments are damaging democracy and the rule of law.
Last year, Brussels suspended the recovery funds for Budapest and proposed freezing another 7.5 billion euros that Hungary would normally receive from the EU budget as part of funds transferred to poorer member states in the bloc.
European taxpayers "don't want their money to go to places where there is no respect for rule of law, where life is very difficult for the LGBT people or other minorities", Jourova said.
During his 12 years in power, Hungarian Prime Minister Viktor Orban has had many bitter run-ins with Brussels over the rights of gays and migrants, as well as his tightening of state controls over NGOs, academics, the courts and media.
But under pressure from a double-digit inflation at home, he has sought to strike a deal with Brussels on the money, while also wrangling with the EU on subjects including support for Ukraine and punishing Russia for invading its neighbour.
In his state of the nation speech on Saturday, Orban said EU sanctions against Russia were an example of wrong policies pushed by the Commission.
"Instead of help, we only get new and new sanctions from Brussels. The Brussels bureaucracy, with a deliberate ill will, did not give Hungary and Poland the share from the European recovery programme that we are entitled to," he said.
"We did not get the money in 2022, in the most difficult year, that member states took out as a joint loan, and we Hungarians will have to repay our due share of that. They are nitpicking about the state of rule of law in Hungary."
The EU Commission has put an end-year deadline on accessing the COVID funds, though several countries have already said they need more time to spend the large emergency aid package.
Hungary, however, has yet to win the Commission's approval before it can access the money, and first has to fulfil more than 20 conditions - or "milestones" - related to the judiciary, public procurement and corruption.
"Those supermilestones for the judiciary have to be done soon" for that to be realistic, said Jourova.
The bloc has also long frowned at what international watchdogs say is Orban channelling EU funds to associates to entrench himself in power. Orban says Hungary is no more corrupt than others.
"Unfortunately, at this stage Hungarian government has a deficit of trust," said Jourova of tense relations with Budapest. ($1 = 0.9351 euros)
(Additional reporting by Krisztina Than, Writing by Gabriela Baczynska, Editing by Clelia Oziel)