Hungary risks losing billions in EU funding for its policies

BUDAPEST, Hungary — After his headline performance at Hungary’s Sziget Festival last month, pop star Justin Bieber held a grandiose party for his staff in a luxurious countryside setting — a 19th-century castle owned by the son-inlaw of the country’s prime minister.

The castle, to the critics of Prime Minister Viktor Orban, is emblematic of the corruption, nepotism and largesse of which the populist leader and his government have been accused for years — the kinds of behavior which now threaten to cost Hungary billions in European Union funding.

Standing beside the iron gates of Schossberger Castle last week, an independent Hungarian lawmaker who has made a name for himself as an anti-corruption crusader snapped pictures of the structure and its manicured grounds.

A former member of Orban’s ruling Fidesz party, Akos Hadhazy left the nationalist-populist party in 2013 after becoming aware of what he describes as a clientelistic system of unchecked corruption.

“When Fidesz came to power, I saw more and more that a very serious organization was beginning to develop throughout the country, whose main task was to steal as much of the European Union’s money as possible,” Hadhazy said.

Now Orban is facing a reckoning with the EU, which appears set to impose financial penalties on his government over corruption concerns and alleged rule-of-law violations.

The EU’s executive arm, the European Commission, has for nearly a decade accused Orban of dismantling democratic institutions, taking control of the media and infringing on

minority rights. Orban, who has been in office since 2010, denies the accusations.

The long-standing conflict could culminate Sunday when the commission is expected to announce a funding cut for Hungary, one of the 27-nation bloc’s largest net beneficiaries.

Peter Kreko, director of the Budapest-based think tank Political Capital, said the EU appeared to be hardening its stance against Orban after previous disciplinary measures failed to bring Europe’s longest-serving leader into compliance with its values.

“EU institutions learn slowly, but they learn. More and more people in the Commission and in the European Union know about the negotiation deception tactics of Hungary, as well as about the nature of the Hungarian political regime,” Kreko said.

While it is not clear how much money Hungary stands to lose, funds cut from its $22 billion share of the EU’s 2021-27 budget could affect around 70% of funding from some programs, according to an internal July document

by Budget Commissioner Johannes Hahn.

Many of the potential cuts are related to public procurements — purchases by the state of goods and services or for the execution of projects using EU funds.

According to Hadhazy, improper processes for awarding of such contracts have allowed Orban’s government to channel large sums of EU money into the businesses of politically connected insiders.

“Huge fortunes were made from such things, and they are essentially the source of this astonishing luxury mansion behind us,” Hadhazy said of the castle in the town of Tura. “The system is about having its tentacles ... in the highest levels of government.”

The European Commission faces pressure from EU lawmakers to fully enforce rules on corruption and rule-of-law requirements. In a resolution passed Thursday with an overwhelming majority, the European Parliament said the Hungarian government had become “a hybrid regime of electoral autocracy” that could no longer be considered a democracy.

ANNA SZILAGYI/AP Hungarian independent lawmaker Akos Hadhazy stands outside an unfinished government server farm that he says is a clear sign of the misuse of EU funds.