Half-hearted Promises, Disappointing Delivery – Assessment of the Government’s measures to protect the EU budget

As a result of the negotiations between the European Commission and the Hungarian Government following the triggering of the Conditionality Mechanism, 17 specific and one general commitment have been included in the Commission’s proposal for a Council Implementation Decision (‘Commission Proposal’). Without any public consultation or published impact assessments, the Hungarian Government rushed through Parliament five bills by 4 October to deliver on its commitments. A sixth bill is pending with the Parliament, the final vote is expected during the week of 10 October 2022. This analysis, jointly prepared by the Hungarian Helsinki Committee, K-Monitor, and Transparency International Hungary, reviews 8 key elements of the adopted laws and the proposed bill in light of the commitments made by the Government and included in the Commission’s Proposal:

1. Public consultation in law-making
2. Independent judiciary respecting the primacy of EU law
3. Conflicts of interest in public interest asset management foundations
4. A new Integrity Authority and a new Anti-Corruption Task Force
5. New rules on asset declarations
6. Transparency of public spending and access to information
7. Extraordinary legal remedy to bring corruption cases to justice by private prosecution
8. Changes to public procurement

▶️ The full assessment and its annex are available here.

The absolute lack of transparency, public consultations and published impact assessments in the process that preceded the adoption of what was supposed to be the largest anti-corruption legislative package in Hungary in over a decade foreshadowed the contents of the changes. While in some of the above areas it is possible to identify steps in the direction suggested by the European Union, the Government, when formulating remedial measures, was careful not to introduce changes that would shake the institutional and procedural fundaments of the captured, illiberal state. This is best exemplified by the new Integrity Authority, the establishment of which equates to a self-incriminating confession on the Government’s behalf that other, currently existing state agencies tasked with the protection of European Union funds constantly fail to carry out their duties.

Although this new authority will be empowered to suspend ongoing public procurement processes, its powers, in general, are limited to requesting information, carrying out analyses, making recommendations and inviting other agencies to take action in their respective field of competence, while it will be strictly banned from taking over cases from existing authorities. Should these fail to do so, as it has been the case for over a decade now, the Integrity Authority would be able to bring lawsuits against them. The ongoing legislative process leaves Hungary’s captured authorities under the direction of political appointees. Even the limited role of the Authority to flag corruption could be watered down if political loyalists were selected as its leaders.

In another legislative amendment, adopted rapidly and without any prior consultations, the Government expanded the circle of those entitled to take cases of perceived corruption or mismanagement before a criminal court if the prosecution service fails to indict. If the Constitutional Court approves these changes, besides private individuals, civil society organisations will also be empowered to step up as litigants, but not the Integrity Authority. However, due to numerous shortcomings, this new extraordinary remedy process will hardly prove effective in the fight against corruption.

Moreover, despite the Government’s general commitment to respect and strengthen judicial independence, no legal changes are introduced to ensure that cases brought before justice will be dealt with by judges appointed in a lawful manner. That the current legal framework cannot guarantee the right to a tribunal established by law is evident from the fact that the President of the Kúria, Hungary’s highest court, appointed five judges to the Kúria unlawfully in 2021. Four of these judges are hearing administrative law cases, the type of cases that can involve public procurements or other proceedings that affect the spending of EU funds.

Overall, the already half-hearted promises of the Government were delivered in a disappointing manner, resulting in changes that remain insufficient to protect the Union budget. In order to advance durable and substantive changes, our analysis includes recommendations at the end of each section that could still be implemented prior to a final vote on the Commission’s proposal.

An Annex at the end of the document summarises the main deficiencies of the proposed remedial measures.

▶️ The full assessment and its annex are available here.

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An updated analysis of 17 November, along with a comprehensive table assessing the compliance with all the key implementation steps of the remedial measures as committed to by Hungary, is available here.