MNI POLICY: EC To Approve Hungary NGEU Plan, Keep Funds Frozen

The European Commission is expected to approve Hungary’s EUR5.8 billion NextGenerationEU plan Wednesday but also maintain its proposal to European leaders to freeze EUR7.5 billion of the country’s cohesion funds, MNI understands.

The plan contains 27 milestones, the highest in any NGEU plan, all of which Hungary will need to meet before it can request funding under the plan.

The Sept 18 proposal to the European Council to freeze part of Hungary’s Cohesion Funds will be maintained due to the Commission`s finding that the Orban administration is yet to deliver fully on some of the 17 remedial measures it had agreed to put in place by Nov 19, MNI understands.

A potential Council decision in favour of freezing funds could however complicate the approval of EUR18 billion under the Macro-Financial Assistance+ programme to Ukraine, for which Commission borrowing should start next year, as it requires unanimity of the 27 Member States.

EU finance ministers could vote on the Hungary plan and the Commission`s proposal to freeze funds on Dec 6, along with the Ukraine MFA+ and a proposed minimum tax rate of 15% in line with OECD recommendations, both of which have been blocked by Hungary so far.