The Commission finds that, notwithstanding steps taken, there is still a continued risk to the EU budget given that the remedial measures that still need to be fulfilled are of a structural and horizontal nature.
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While a number of reforms have been undertaken or are underway, Hungary failed to adequately implement central aspects of the necessary 17 remedial measures agreed under the general conditionality mechanism by the deadline of 19 November, as it had committed to.
These relate, in particular, to the effectiveness of the newly established Integrity Authority and the procedure for the judicial review of prosecutorial decisions.
The Commission has concluded that the conditions for the application of the regulation remain and that further essential steps will be needed to eliminate remaining risks for the EU budget in Hungary.
As a result, 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. The Commission equally maintains its proposal that no legal commitments may be entered into with any public interest trust.
The Council will now have until 19 December to vote on the matter, requiring a qualified majority for the suspension of funds to enter into force.
The Commission, after ensuring essential milestones on judicial independence and protecting the EU budget were included, has also decided to endorse Hungary's Recovery and Resilience Plan (RRP), conditioned on the full and effective implementation of the required milestones.
In fact, in the recovery and resilience plan, and with a view to resolve the breaches putting the EU budget at risk, Hungary has committed to the 17 remedial measures, together with other rule of law reforms related to judicial independence, as a clearly defined set of 27 ”super milestones”.
This means that no payment under the RRF is possible until Hungary has fully and correctly implemented these 27 “super milestones”.
The Commission finds that Hungary's plan devotes 29.8% of the total allocation to support the digital transition.
This includes measures to digitalise and improve education and public administration. The digitalisation of transport, energy and healthcare is expected to foster long-term economic development.
The Commission concluded that the plan fulfils all relevant criteria and that none of the measures therein included is expected to significantly harm the environment, in line with the requirements laid out in the RRF Regulation.
The plan also includes a comprehensive set of key institutional reforms to strengthen the rule of law. These reforms effectively address the country-specific recommendations addressed to Hungary in relation to the rule of law and also serve to protect the financial interests of the Union.
They are also expected to improve the efficiency and resilience of the economy by reinforcing the fight against corruption, promoting competitive public procurements and strengthening the independence of the judiciary.
These reforms have been translated into a total of 27 “super milestones”, which must be fully and correctly implemented before any payment under the RRF can be made to Hungary. ■
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