EU lawmakers raise pressure to cut funds for Hungary over graft woes

© Reuters. FILE PHOTO: European Union flags flutter outside the EU Commission headquarters in Brussels, Belgium, June 17, 2022. REUTERS/Yves Herman/File Photo

By Gabriela Baczynska

BRUSSELS (Reuters) - A large majority of European lawmakers voted on Thursday to condemn damage to democracy in Hungary under veteran Prime Minister Viktor Orban, stepping up pressure to cut European Union funding for the ex-communist country.

Citing corruption risks, the EU executive is expected to recommend later this week suspending billions earmarked for Budapest from the bloc's shared budget for 2021-27, which is worth 1.1 trillion euros ($1.1 trillion) in total.

That would be the first such EU move under its new financial sanction dubbed "cash for democracy" and agreed two years ago precisely in response to Orban, as well as his allies in Poland, rowing back on liberal democratic tenets inside the bloc.

On Thursday, the European Parliament voted 433 in favour versus 123 against to adopt a report declaring the "existence of a clear risk of a serious breach by Hungary of the values on which the (European) Union is founded".

"The situation has deteriorated such that Hungary has become an 'electoral autocracy'" rather than a democracy, the chamber said in a statement.

Orban has been locked for years in acrimonious feuds with the EU, which Hungary joined in 2004, over the rights of migrants, gays and women, as well as the freedoms of the judiciary, media and academia.

The self-styled illiberal crusader denies, however, that Hungary is any more corrupt than others in the 27-nation bloc.

The executive European Commission has already blocked some 6 billion euros earmarked for Budapest from the bloc's separate COVID economic stimulus package, citing insufficient anti-graft safeguards in Hungary's public procurement.

Much more is at stake should the other EU countries approve the expected recommendation by the Commission, a prospect that has weighed on the Hungarian forint.

Budapest has come under pressure in recent weeks to strike a deal with Brussels and unlock funding for Hungary's ailing economy.

Orban's government promised a new anti-graft agency and member countries could curb the punishment should Budapest make convincing moves to actually set it up over the three months the 27 would have to decide on the Commission's recommendation.

($1 = 1.0021 euros)