EU COM Recommends Suspension Of Cohesion Funds, Approves RRF w/Conditions

EU Commissioners confirm that it is recommending the suspension of a large portion of Hungary's EU cohesion funding due to failures to enact reforms to support rule of law in the country. Statement reads, "the Commission has decided to maintain its initial proposal of 18 September to suspend 65% of the commitments for three operational programmes under cohesion policy, amounting to €7.5 billion."

• Full Commission statement: https://ec.europa.eu/commission/presscorner/detail...
• The Commission confirms that the Council will have until 19 December to approve the suspension of funds, requiring a qualified majority, not a unanimous vote.
• Also, as expected, the Commission has approved the Hungarian gov'ts plan for its use of EUR5.8bn in COVID-19 recovery and resilience funding, but conditional on 27 'super milestones' being reached regarding judicial independence, corruption and rule of law. The statement confirms that, "no payment under the RRF is possible until Hungary has fully and correctly implemented these 27 “super milestones”."
• Justice Commissioner Didier Reynders confirms that there will 'be no partial payment for partial fulfillment', meaning all 'supermilestones' must be implemented before the funds will be disbursed.
• Given the major reliance of the Hungarian gov't on the EU for structural funding, there could be significant efforts within the Orban gov't to enact the reforms to gain access to EU cash. However, given that Orban has made opposing Brussels a key plank of his 'illiberal democracy' governing stance the Commission's recommendations could easily lead to the PM doubling down.