**This article has been updated with comments from officials of the Hungarian government
The European Commission announced on Tuesday (5 April) that it will trigger a conditionality mechanism linking EU funds to the rule of law, just days after Hungary’s general election saw Prime Minister Viktor Orban secure a fourth consecutive term.
European Commission President Ursula von der Leyen told MEPs on Tuesday that EU Budget Commissioner Johannes Hahn had informed the Hungarian authorities that the European executive will trigger the so-called conditionality mechanism.
The mechanism, if implemented, could see countries with systemic rule of law problems lose out on EU funds – however, the process will likely take months to complete.
The decision comes just days after Hungary’s general election saw Prime Minister Viktor Orbán’s party Fidesz preserve the two-thirds majority they have held in the Hungarian legislative since 2010, despite polling and analyst predictions.
The mechanism had posed a significant hurdle in negotiating the bloc’s €1.8 trillion seven-year budget at the end of 2020.
The hard-fought compromise, under which Hungary and Poland agreed to unblock the budget, included a provision that the bloc’s highest court, must first rule on whether the mechanism falls foul of EU treaties.
In a live broadcast in February 2022, the European Court of Justice dismissed the legal challenge in February.
Earlier, in November 2021, the EU executive sent a letter under the conditionality regulation, seen by EURACTIV, in which it asked Budapest to explain ineffective prosecutions and problems in public procurement.
Despite receiving a response from the Hungarian government in January, von der Leyen said in Strasbourg on Tuesday: “We’ve carefully assessed the result of these questions and our conclusion is, we have to move on to the next step.”
However, the process that could see Hungary lose billions in EU funding support is likely to still take months, potentially more than half a year.
After the official letter triggering the mechanism, Budapest will have between one and three months to “make observations”.
Once comments are received, the EU executive will decide within the “indicative time limit of one month” whether it will move to ask other EU countries to give their blessing for action.
If the Commission moves forward, it will again have to give Hungary a month to “submit its observations, in particular on the proportionality of the envisaged measures”.
Once the EU executive receives the second round of comments on the measures, it will have another month to submit its proposal to other EU countries.
Member states will then have up to three months to adopt or amend the Commission’s proposal with a qualified majority in the Council.
No progress on COVID-19 recovery cash
Hungary recently asked for its €9.6 billion allocation in loans from the EU’s COVID-19 recovery fund, backtracking from its prior position of not requesting the repayable support. This comes on top of the €7.2 billion in grants requested in May 2021.
However, its recovery plan, a key document for the disbursal of the cash, has been under examination by the Commission since the same month.