The European Union suspends all Cohesion Fund resources for Hungary

The European Commission said it will withhold all 22 billion euros of EU cohesion funds for Hungary until the government meets conditions related to the independence of the judiciary, academic freedoms, LGBTQ rights and the asylum system.

On December 12, EU institutions decided to freeze €6.3 billion of the funds until Viktor Orban's right-wing, eurosceptic government meets an even tougher set of 17 conditions, also related to the judiciary and tackling high-level corruption.

€22 billion is the amount of EU cohesion funds that Hungary should receive from the long-term EU budget between 2021 and 2027. These are transfers from the EU designed to equalize living standards between the richest and poorest members to the 27 member states of the EU, paid out mainly as a refund of money spent on achieving agreed targets by individual governments. The €22 billion for Hungary is earmarked for programs including education for disadvantaged children, rail modernization, broadband access and aid for regions affected by the closure of coal plants.

The decision to withhold the entire amount for Hungary was made, and on Thursday the Commission and Budapest signed the so-called a partnership agreement detailing how money from the EU budget will be spent, as well as the 11 operational programs under cohesion policy.

"The European Commission considers that the horizontal enabling condition in relation to the Charter of Fundamental Rights has not yet been met. This means that the European Commission cannot reimburse costs. We will continue to work with the Hungarian authorities to overcome this situation " said Elisa Ferreira, EU Commissioner for Cohesion and Reforms.

Hungary's controversial anti-LGBTQ+ law, which restricts the teaching of subjects related to homosexuality and transgenderism in schools, and "serious risks to academic freedom and the right to asylum" mean Hungary is not complying with the EU's Charter of Fundamental Rights, the Commission has said and added that the cash cannot be paid out until Hungary is back in compliance.

Hungary's government said the law restricting gender and sexual identity education was meant to protect children.

What Hungary will be able to receive without any prior action is 1.5% of the funds in the form of pre-financing, as well as a certain amount of cash in the form of technical assistance for the preparation of the projects.

Hungary and the EU have long been at odds over the rule of law, corruption, treatment of sexual minorities, education and migration policies.

In addition to cohesion funds, the EU has also withheld Hungary's €5.8 billion in grants from the EU Recovery Fund until the government addresses concerns about the independence of the courts.

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