The loss of EU funds due to rule of law concerns will strike a significant blow to Hungary’s economy, says CGTN reporter Pablo Gutierrez.
President Viktor Orban’s political opponents have blamed him for the situation.
President Viktor Orban’s political opponents have blamed him for the situation.
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NewsTranscript
00:00And one thing is certain right now and that is that the loss of this EU funds due to rule of
00:05law concerns by the European Union will strike a heavy blow to Hungary's economy which is already
00:12in recession. The 1.1 billion dollars that will be lost after midnight tonight adds to a 17 billion
00:20in withheld grants and post-COVID recovery aid which the EU has frozen in part to pressure
00:27Prime Minister Viktor Orban to address what it says are anti-democratic policies. To unlock
00:33those funds Hungary needed to complete 17 required reforms including tightening anti-corruption laws
00:40and resolving conflicts of interest but the European Commission said that progress had
00:47fallen short calling the government's efforts insufficient. Now Hungary's economic struggles
00:53make this situation even harder to manage. Its economic growth is below the EU average and its
01:015.4 percent budget deficit is among the highest in the bloc. On top of this Hungary is losing
01:091.1 million dollars a day in penalties for its treatment of asylum seekers totaling about 215
01:19million dollars this year and this was all by a fine that was imposed by the European
01:28Court of Justice earlier this year. So what's been the reaction to this from Hungary?
01:39Well Robin Hungary's government says the EU's actions are politically motivated and discriminatory
01:46meanwhile opposition leader Peter Magyar has criticized Orban's handling of the crisis accusing
01:53him of mismanagement with these funds likely blocked until at least 2026. Hungary is facing
02:01mounting economic and political challenges this year. Hungary's options are very limited and the
02:07government has already announced cuts to planned investments, social spending much of which relied
02:14on some of those EU funds for the 2025 budget. Next year billions have already been cut in
02:23infrastructure projects, public services have been cancelled and healthcare and the education
02:31are also going to suffer further cuts because of this. Now the EU has warned that those blocs
02:39will remain blocked unless Hungary addresses the concerns of judicial independence and
02:46anti-corruption measures and its treatment of minorities and asylum seekers. Now without those
02:52funds or any other major economic turnaround Hungary's risk for long stagnation which could
02:59have political implications. Let's remember that the government will enter in 2026 elections for
03:08parliament so for now it's a tricky situation and 2025 will be very challenging for Hungary's
03:15government.