Hungary’s prime minister on Friday touted what he called his victory at the European Union summit, where the bloc’s leaders decided on a massive seven-year budget and coronavirus recovery plan, but acknowledged he did not achieve his goal of de-linking EU funds from rule of law considerations.
Hungary and Poland, two nations led by right-wing populist governments, are both in the midst of EU proceedings over concerns that they are violating EU standards with laws and practices that threaten the independence of judges and press freedoms, and could face sanctions. At the marathon EU summit that ended Tuesday, leaders had debated tying receiving EU funds to demands that member nations follow EU democratic standards but did not explicitly do so.
“Polish and Hungarians … thwarted the attempt of others deciding about the money due to us,” Prime Minister Viktor Orban said Friday on state radio about the EU deal worth just over 1.8 trillion euros ($2 trillion) in which Hungary and Poland were considered to be among the greatest beneficiaries.
At the end of the summit, Orban said “any attempt to make a connection between the rule of law and the budget was … successfully rejected,” but on Friday he acknowledged the issue is far from settled.
“We didn’t win the war but simply only a very important battle,” Orban said.
According to news site portfolio.hu, Hungary may get as much as 52.8 billion euros ($61.3 billion) from the EU in the seven-year budget period starting in 2021, about 35% more than in the last budget.
Orban arrived at the EU summit with a resolution from the Hungarian parliament demanding, among other things, an end to an EU sanctioning process launched against Hungary in 2018 due to rule of law concerns.
But German Chancellor Angela Merkel, whose country holds the rotating EU presidency, said the initiative to close the proceeding “must come from Hungary.”  
“Hungary would like — this is what Prime Minister Orban has told me — for this not to be such an impasse,” Merkel at the end of the summit. “We will support Hungary in this. But the decisive paths must, of course, be specified by Hungary.”
While Orban had mentioned even vetoing a deal at the summit if funds were tied to rule of law standards, it would have been highly risky to go directly against the wishes of Germany, which is Hungary’s largest trading partner and was strongly behind the coronavirus recovery package.
“Viktor Orban understood that he could not fundamentally oppose German aspirations and interests, which were for there to be an agreement by all means,” said Attila Tibor Nagy of the Center for Fair Political Analysis.
He said with Germany worried about a collapse of key export markets like Italy and Spain, “the Hungarian government realized that the rule of law clause was not worth vetoing over.”
After the EU summit, however, EU officials reiterated that nations still must adhere to democratic standards. There are also concerns that Hungary and Poland have refused to join the EU public prosecutor’s office, which will be investigating fraud connected to EU funds.  
Hungary has built a rash of large soccer stadiums in small towns under Orban’s rule. Some officials in Hungary and other EU nations have also been accused of obtuse land deals that gave them access to EU farm subsidies while impoverishing farmers.  
“Protecting our budget and the respect for the rule of law go hand in hand,” EU Commission President Ursula von der Leyen said Thursday in the EU Parliament. “We must also do everything we can to protect European money by stepping up the fight against fraud.”
“This means having the right controls in place, including a database that puts us in the position to know who the final beneficiaries of EU funding are,” she added.
Von der Leyen said the Commission would seek to again advance its proposal for funding cuts to member states that had a lack of judicial independence or other democratic failings. And EU Parliament President David Sassoli said this week that tying rule of law demands to disbursements was “a topic the Parliament cares a lot about.”  
The EU legislature on Thursday adopted a resolution by a wide majority which, while criticizing cuts to the 2021-2027 EU budget in research and health, also expressed lawmakers’ desire to make sure that governments violating the bloc’s “fundamental values” will have their access to EU funds blocked or limited.
The European Parliament has the final say in approving the budget.
Given that atmosphere, the Orban government is preparing supporters for new confrontations with the EU over its perceived democratic deficits.
Hungarian Justice Minister Judit Varga, who has faced strong criticism in the European Parliament while defending Hungarian policies, told the pro-government Magyar Nemzet newspaper that “the gist of the fight is yet to come.”
“I expect a new series of tougher, more unscrupulous attacks than ever before to begin in the fall,” Varga said.
Analysts said the trend in the EU was to reinforce rule of law principles.
“It’s evident that Viktor Orban sees, as do others, that the EU is increasingly going moving toward the implementation of these kinds of conditions and the retention of funds,” said Andrea Virag, strategic director at Republikon Institute, a Budapest-based liberal think-tank. “So while they may be talking about a victory, they are readying themselves and voters that a debate about this is still to come.”
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