by William Nattrass
Wednesday, 7
December 2022
Analysis
07:00

The EU may blink first in its Orbán standoff

Hungary has shown the bloc that it also has cards to play
by William Nattrass
Who’s blackmailing who? Credit: Getty

A meeting of EU finance ministers broke down on Tuesday amid the bloc’s ongoing “rule of law” standoff with Hungary, with the European Commission proposing to withhold billions of euros in funds for Budapest despite concessions made by Viktor Orbán’s government. Finance ministers had been expected to discuss the proposed funding block, with a final decision from member states due by December 19.  

Given the distaste for Orbán among many EU governments, this decision might have been assumed a foregone conclusion — but yesterday’s meeting showed that the bloc is belatedly realising the full ramifications of its rule-of-law crusade. A group of countries including France, Italy and Germany expressed frustration with the Commission’s unbending stance and sought a new evaluation which would reduce the amount of money to be withheld from Hungary, making it easier for EU member states to approve the plan. 


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Given the political capital that Brussels has invested in the rule-of-law proceedings, failure to get the Hungarian funding block over the line would be a “complete disaster”, according to EU diplomats. But last-minute concerns about the scale of the punishment also indicate a glimmer of pragmatic thinking from EU leaders who have realised that a new system of blackmail based on financial penalties is not a one-way street. 

Withholding funding from individual member states breaks the EU structure which ensures that countries with varying political objectives sacrifice a portion of their national sovereignty in exchange for greater prosperity based on cooperation and compromise. If Hungary is denied EU money, it has little incentive to make the sacrifices and compromises which EU membership entails.

As such, Orbán is deploying his own methods of political blackmail to bring the EU’s agenda to a standstill. Budapest reaffirmed its veto on new EU loans for Ukraine on Tuesday, and is also blocking approval of a 15% minimum corporation tax. 

Hungary does not, of course, admit any link between these vetoes and the funding controversy, but the message is clear: if the EU continues to weaponise funds, it will be stuck with an uncooperative and potentially destructive member state for as long as Orbán remains in power. Panic resulting from this too-late realisation is feeding calls from France, Germany and others for the sanctions on Hungary to be diluted. It has also given rise to a drive from Brussels for national vetoes to be abolished entirely. 

The EU can still save the situation, but only if it can see past the blinkered view of some of its rule-of-law hawks. Lithuania’s finance minister described Hungary’s block on EU loans for Ukraine as “immoral” ahead of the ministerial summit, saying that funding issues and help for Kyiv should not be put “on the same level.” But this argument works both ways: if unity on Ukraine can override other considerations, then it is irresponsible for Brussels to persist in politically alienating a member state through financial penalties. 

Withholding funds has already brought about reforms in Hungary which Budapest would not have implemented, left to its own devices. But now, with Brussels appearing to move the goalposts, the EU risks straying into a minefield of recriminations and mutual blackmail which could paralyse the bloc for good.

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Lennon Ó Náraigh
Lennon Ó Náraigh
1 month ago

EU law is mobilized to punish Hungary for restricting LGBT content on national TV. EU law is not mobilized to punish Denmark for pursuing hardline anti-foreigner policies – including restrictions on where foreigners in Denmark can live. “Rule of Law” is very selective, and the Commission turns a blind eye when it suits.

Last edited 1 month ago by Lennon Ó Náraigh
Daniel P
Daniel P
1 month ago

Still think the EU is just a really bad idea.
Europe is just too diverse for it to work.
You want to see where it can lead? Look at the US. More and more it looks like less federalism is going to be the answer to the country not tearing itself apart altogether.
Cooperation, confederation, around common needs is one thing. Handing over so much control of what goes on within a countries borders, that is another.
The EU was a grandiose vision that is fundamentally impractical and likely to create new tensions while exacerbating old ones.

Kerie Receveur
Kerie Receveur
1 month ago

More power to Budapest’s elbow.

Jeremy Bray
Jeremy Bray
1 month ago

It will be interesting to see how this plays out given that the EU’s interference in the internal affairs of member states could in future be turned on other member states. War by other means as it were. December 19 seems to be the crunch date to see if the commission has the necessary majority of countries on side to push through its full sanctions against Hungary despite the disruption an uncooperative Hungary could cause in its functioning.

Andrew Wise
Andrew Wise
1 month ago

> The EU can still save the situation
Lol … Captain Scarlet to the rescue 🙂 …. good luck with that

Peter Johnson
Peter Johnson
1 month ago

Whenever I read about the EU from across the Atlantic I can’t believe anyone would want to be part of it. Being governed by a bunch of pompous foreigners sounds like an exercise in endless frustration.

Walter Marvell
Walter Marvell
1 month ago
Reply to  Peter Johnson

Its a total nightmare. But our pro EU political/admin elite here and the Remainiac State broadcaster BBC never ever shines a true light on the multiple horrors of the EU; it’s rampant Zolverein protectionism, bullying and intimidation (inflaming Ulster) within and zero diplomatic impact without (appeasing two totalitarian powers); its chronic bureaucratic risk aversion and its forever broken backed dysfunctional currency regime. Too many Remainers profitted from uncontrolled mass migration and the rigged no new housing property market to even bother about ACTUAL EU behaviour. There is gold is bricks & mortar.

Marshall Auerback
Marshall Auerback
1 month ago

About a month ago, Hungary stopped receiving heavily subsidised gas from Russia. They are now paying world prices which, even though they have fallen from the highs, are still higher than the subsidised prices Budapest was getting before. Perhaps the real quid pro quo is Putin using Orban as his agent to disrupt increased sanctions/punishment on Russia in exchange for continued cheap gas?

j watson
j watson
1 month ago

The counter-factual is perhaps – how much the EU has already influenced Hungarian politics for some years, and for the positive? Who knows where Orban Hungary would be without the bond and occasional brake of the EU? Belarus?

The EU may not win all it’s arguments, and it has to bend and compromise on many occasions or it cannot last. But it’s general spirit remains at work almost to the extent it’s so normalised and accepted we no longer see it.

Last edited 1 month ago by j watson