7 Dec

Hungary considers it a dangerous precedent to link the disbursement of EU funds to completely unrelated issues, but several EU member states would link the approval of the Hungarian recovery plan to the Hungarian government changing its position on various other issues, Finance Minister Mihály Varga told MTI on Tuesday in Brussels.


Speaking at a press conference following the meeting of EU finance and economic affairs ministers (Ecofin), the minister stressed: this is not a fair attitude since the global minimum tax and the €18 billion EU loan to support Ukraine are not linked to the disbursement of EU funds.

Regarding the Hungarian recovery plan, Mihály Varga said that it was a significant step forward that the European Commission not only gave it a positive assessment after a year and a half, but also gave it in fact an excellent grade. Furthermore, there are categories in which Hungarian programs are among the top five. He said that the content of the plan was supported by all member states, so that it could be officially approved by the end of the year.

However, he said, it was regrettable that the commission maintained its September recommendation to suspend payments for three operational programs, despite the fact that the government had fully met its commitments until November on the 17 issues requested by the EC. He added that several EU member states are of the opinion that this is the first time that a procedure is being carried out under the rule of law mechanism and that the commission must therefore "remain fair, proportionate and objective, and base its position on facts".

"Several member states have indicated the need for an objective assessment, taking into account the steps taken by the Hungarian government after 19 November. France and Germany, for instance, believe that there is a certain disproportionality in the commission’s assessment," Mihály Varga said, expressing hope that the EU executive body will conclude the process with a more objective rating.

On the joint €18 billion EU loan to support Ukraine, the minister said that Hungary was not willing to contribute to it. "We have had bad experiences with joint borrowing, for example, this type of EU decision during the coronavirus pandemic did not help Hungary to access the funds," he added.

He stressed that Hungary is ready to further help Ukraine, but it will only provide loans within the framework of a bilateral agreement, from its own resources, for specific purposes to be defined together with Ukraine. The necessary funds are available in the Hungarian budget, the Finance Minister said.

Mihály Varga recalled that Hungary has already taken in more than one million refugees from Ukraine and has spent HUF 31 billion to support the war-torn country.

Speaking about the global minimum tax, the Finance Minister stressed that Hungary has one of the lowest corporate tax rates, at 9 percent, which would have to be raised to 15 percent in line with international efforts to introduce a global minimum tax. The tax increase would also lead to job losses in Hungary and a deterioration of competitiveness, which is why Hungary does not support the increase of the global minimum tax, he said.

Hungary rejects the idea of linking these two issues to the EU funds we are entitled to, Mihály Varga said.

Source: MTI - Hungarian News Agency