Hungary has to face the EU, which could cost it billions

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BUDAPEST, Hungary (AP) — Following his headlining performance at Hungary’s Sziget Festival last month, pop star Justin Bieber threw a grand party for his staff in a luxurious country setting — a 19th-century castle owned to the son-in-law of the country. Prime Minister.

The castle, in the eyes of critics of Prime Minister Viktor Orban, is emblematic of the corruption, nepotism and largesse of which the populist leader and his government have been accused for years – behavior which now threatens to cost Hungary billions in price. funding from the European Union. .

Standing next to the iron gates of Schossberger Castle this week, an independent Hungarian lawmaker who has made a name for himself as an anti-corruption crusader snapped photos of the structure and its sprawling, manicured grounds.

A former member of Orban’s ruling Fidesz party, Akos Hadhazy quit the nationalist-populist party in 2013 after becoming aware of what he describes as a patronage system of unchecked corruption taking shape in the central European nation.

“When Fidesz came to power, I saw more and more that a very serious organization was beginning to grow throughout the country, whose main task was to steal as much money as possible from the European Union “, Hadhazy told The Associated Press.

Now Orban faces a settling of scores with the EU, which appears ready to impose financial sanctions on his government over corruption concerns and alleged rule of law violations that could cost Budapest billions and cripple its already struggling economy.

The EU’s executive arm, the European Commission, has for nearly a decade accused Orban of dismantling democratic institutions, taking control of the media and undermining minority rights. Orban, in office since 2010, denies the charges.

The long-running dispute could culminate on Sunday when the commission is expected to announce cuts in funding for Hungary, one of the EU27’s biggest net recipients, if the country does not change course.

Peter Kreko, director of the Budapest-based think tank Political Capital, said the EU appeared to be toughening its stance against Orban after previous disciplinary measures failed to bring Europe’s longest-serving leader in line with his values. .

“EU institutions are learning slowly, but they are learning. More and more people in the Commission and in the European Union are aware of Hungary’s deceptive negotiation tactics, as well as the nature of the Hungarian political regime,” Kreko said.

While it’s unclear how much money Hungary stands to lose, funds cut from its 22 billion euro (dollar) share of the EU’s 2021-2027 budget could affect around 70% of funding for certain programs, according to a July internal document from Budget Commissioner Johannes Hahn.

Many of the potential reductions are related to public procurement – state purchases of goods and services or for the execution of projects using EU funds.

According to Hadhazy, improper processes for awarding such contracts allowed Orban’s government to funnel large sums of EU money into the businesses of politically connected insiders.

“Such things have made huge fortunes, and they are basically the cause of this amazing luxury mansion behind us,” Hadhazy said of the castle in the city of Tura. “The system is all about having its tentacles…in the highest levels of government.”

EU Commissioner Hahn’s note also pointed to irregularities in public procurement in Hungary and “an increased chance of winning from politically connected companies”.

Hadhazy, who has investigated and documented hundreds of cases of alleged corruption, borrowed a car from his mother to visit several locations this week where he suspects EU funds have been misappropriated.

One was the site of a planned server farm near Budapest where the government said it would store the state’s most important data. Benefiting from funding of more than $50 million from the EU, the construction of the facility – attributed to a company owned by a childhood friend of Orban who is the richest man in Hungary – has started in 2016 and was scheduled for completion the following year.

But when Hadhazy visited the site on Wednesday, only a concrete skeleton stood where the server farm was planned — a sign, he said, that the funds may have been misused.

“The whole process is a charade,” Hadhazy said of Hungary’s public procurement process, which would normally involve competition between multiple bidding companies. “It’s decided at the very beginning who can win, and it’s decided who will do the job at the end.”

He mentioned a case involving Istvan Tiborcz, the owner of Tura Castle who is married to Orban’s daughter. The European Anti-Fraud Office has found serious irregularities in the granting of funds to a company he owned.

As a result of the bureau’s investigation, the EU demanded the return of more than 40 million euros (dollars). The sum was ultimately borne by Hungarian taxpayers, not Tiborcz’s company, and an investigation into the case by Hungarian authorities was dropped due to lack of evidence of a crime.

Tiborcz was the 36th richest person in Hungary this year, according to an analysis by Forbes Hungary.

Orban’s government recently made conciliatory efforts to release nearly 6 billion euros (dollars) of pandemic recovery funds that the EU has withheld due to corruption concerns, and to avoid further cuts in Hungary’s share of the EU budget.

Earlier this month, the Hungarian government pledged to create its own anti-corruption agency. It is said to have drawn up additional legislation aimed at increasing transparency in public procurement.

But the European Commission is facing pressure from EU lawmakers to fully enforce corruption rules and rule of law requirements. In a resolution passed by an overwhelming majority on Thursday, the European Parliament said the Hungarian government had become “a hybrid regime of electoral autocracy” that could no longer be considered a democracy.

The Hungarian Justice Ministry did not respond to a request for comment. Speaking in Serbia on Friday, Orban dismissed the resolution as a “joke” and argued his government’s conservative credentials were the reason for the EU’s tough stance.

Kreko, the analyst, said it was doubtful Orban’s government would seriously consider changing its ways.

“I would say the engine of the Orban regime is nepotistic corruption,” he said. “So I think we can be rather skeptical about the real will of the government to fight corruption, which is part of the nature of the regime.”

In 2021, the Hungarian government opted out of joining the European Public Prosecutor’s Office, an independent EU body tasked with fighting crimes against the bloc’s financial interests. He argued that joining would amount to a loss of national sovereignty.

But Hadhazy said that unless Orban’s government agrees to join office, there will be no real guarantee that corruption reforms can yield meaningful results.

“I say that if the EU gives a penny to Hungary without us having joined the EU prosecutor’s office, then the EU is really as stupid as Orban says,” he said. he declares.

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Yahoo

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