(Bloomberg) -- The European Union’s executive arm is likely to withhold approval of Hungary’s economic stimulus plan past a July 12 deadline due to concerns that the proposal doesn’t go far enough in preventing corruption, according to people familiar with the issue.
The European Commission must assess by Monday the plan submitted by Prime Minister Viktor Orban’s government, which may miss out on early backing for as much as 7.2 billion euros of EU grants from the recovery package, said the people who asked not to be named discussing confidential talks. At stake for Hungary is its share of the EU’s post-pandemic recovery funding.
The commission is expected to cite concerns about insufficient safeguards against corruption in the Hungarian plan, the people said, although one of the people said that a final decision on approval hasn’t been made.
The decision comes amid a separate fight over a law Hungary passed last month outlawing content for minors that can be deemed to “promote homosexuality.” The EU has warned Hungary it could start a process later this year to begin withholding funding to the government from the bloc’s budget.
“It’s certainly true that in the past two to three weeks the commission has come forward with downright absurd demands in areas that we had already agreed on previously,” Hungarian Cabinet Minister Gergely Gulyas said at a briefing in Budapest on Wednesday. “But to say that the plan has been rejected or that talks aren’t ongoing is false.”
European lawmakers earlier Wednesday urged the commission and EU leaders to block funding for a government they said failed to respect EU values, with many denouncing the law.
A commission spokesperson said it “is pursuing its in-depth assessment of the Hungarian recovery and resilience plan” with criteria including country-specific recommendations and “whether the plans provide an adequate control and audit mechanism.” German newswire DPA reported earlier that the commission was withholding approval.
©2021 Bloomberg L.P.