On 27 April 2022, the European Commission officially triggered the so-called conditionality mechanism against Hungary. Based on Regulation 2020/2092, the mechanism allows the EU to cut off an EU Member State from receiving EU money if it breaches principles of the rule of law (→ eucrim 3/2020, 174-176).

The step was already announced by Commission President Ursula von der Leyen shortly after the Hungarian parliamentary elections at the beginning of April 2022 (→ eucrim 1/2022, 23-24).

Pursuant to Art. 6 of that Regulation, the Commission sent a written notification to Hungary setting out the factual elements and specific grounds on why the Commission believes that the conditions for adopting measures to protect the EU’s financial interests due to rule-of-law infringements are met. Allegations include shortcomings in the control of the use of EU money, in audit and transparency obligations, and in public tender procedures. Furthermore, the Commission criticised widespread corruption and the lack of independence of the judiciary.

At the end of July 2022, following the observations of Hungary, the Commission sent a letter to inform the Member State of the measures that the Commission intends to propose to the Council. However, Hungary has now one month to react to the Commission’s letter and provide for statements in particular on the proportionality of the envisaged measures.

Hungary is one of the largest net recipients of EU funds, almost €5 billion in 2020 alone. This is more than three and a half percent of Hungary's economic output. A suspension or interruption of funds could hit Orbán’s government hard.