EU to Cut Funding to Hungary, Russia's Close Ally

[Asia Economy Reporter Yujin Cho] The European Union (EU) has decided to suspend financial support to the Hungarian government, which is reportedly internally supporting Russia's invasion of Ukraine.

According to major foreign media including Euronews on the 18th (local time), the EU Commission announced that it will suspend funding of 7.5 billion euros (approximately 10.4145 trillion KRW) to Hungary, a member state, citing violations of the rule of law and corruption in the public procurement process. This decision will take effect if approved by a majority of EU member states excluding Hungary.

Johannes Hahn, EU Commissioner for Budget and Administration, explained, "This measure stems from the judgment that Hungary lacks transparency in securing public contracts and has insufficient efforts to combat corruption."

He added, "Our ultimate goal is to prevent jeopardizing the management of the EU budget's use," and expressed hope that "(Hungary) will undertake appropriate reforms to address corruption and strengthen the rule of law."

The EU Commission had planned to provide Hungary with 22 billion euros through the Cohesion Funds by 2027. The Cohesion Funds are allocated to low-growth countries whose gross domestic product (GDP) falls below the overall average, aiming to resolve economic imbalances among EU member states and establish a single market.

This is the first time the EU has taken such a strong sanction as suspending financial support due to issues like violations of the rule of law. Foreign media reported that the EU Commission is concerned that the Hungarian government, which is controversially seen as effectively supporting Russia, may not properly use such funds.

Viktor Orban, Hungary’s longest-serving prime minister, has continued an authoritarian course, including shutting down a daily newspaper with an 80-year history, manipulating pro-government media to suppress press freedom, and attempting to forcibly dissolve parliament under the pretext of the "COVID-19 Prevention Act."

Orban, who is close to Russian President Vladimir Putin, has voiced opposition to the EU’s sanctions against Russia, calling them "unproductive."

This is the first time the EU, which has strongly criticized Orban’s authoritarian actions, has taken practical sanctions against him.