Budapest Faces Major Financial Hit as European Commission Takes Action
Brussels, September 18 – The European Commission is set to deduct a €200 million fine from Hungary’s EU funds after the country failed to comply with a ruling by the European Court of Justice (ECJ) regarding its restrictive asylum laws. The fine stems from Hungary’s refusal to adhere to EU asylum regulations, which the ECJ deemed an “unprecedented and exceptionally serious breach of EU law.”
The Commission has activated a special “offsetting procedure” to recover the funds, following Hungary’s failure to pay the fine by the September 17 deadline. This procedure allows Brussels to subtract the fine from Hungary’s allocated share of the EU budget. The Commission is now reviewing upcoming payments to Hungary to determine which financial envelopes can absorb the penalty. The deduction process may take time, but the Commission has made it clear that all payments to Hungary are now under scrutiny.
Ongoing Financial and Legal Battles
Hungary, under Prime Minister Viktor Orbán, has been at odds with Brussels for years over rule-of-law issues, which has led to the freezing of approximately €21 billion in cohesion and recovery funds. Despite this, Hungary has refused to pay the fine or comply with the ECJ ruling, arguing that the country’s border policies should be rewarded, not punished. Orbán has even demanded €2 billion from the EU to cover Hungary’s border defense since 2015, a claim that the Commission rejects.
In addition to the €200 million fine, Hungary is facing a daily penalty of €1 million for every day it fails to lift its asylum restrictions. The first payment request from the Commission covers €93 million and has a 45-day deadline. Budapest has yet to respond adequately to questions about how it plans to comply with the ECJ ruling.
Orbán’s Anti-EU Rhetoric and Retaliatory Threats
As the dispute escalates, Prime Minister Orbán has intensified his anti-EU rhetoric, labeling the fine as “outrageous” and accusing Brussels of unfairly penalizing Hungary for defending its borders. In a provocative move, Orbán’s government has threatened to bus migrants to Belgium “voluntarily” and “free of charge,” a plan that has drawn sharp criticism from both Belgian and EU authorities.
No migrants have yet been transferred, but the threat marks a new escalation in the long-standing feud between Brussels and Budapest.
Concerns Over Hungary’s National Card Scheme
The tension is further heightened by Hungary’s decision to extend its National Card scheme to Russian and Belarusian citizens, raising fears of potential sanctions circumvention and risks to the Schengen Area’s internal security. Brussels has warned that the scheme could undermine EU sanctions, while Hungary insists that it is necessary to address labor shortages.
Despite the ongoing disputes, there have been recent signs of dialogue. Hungary’s Minister for European Affairs, János Bóka, met with Ylva Johansson, the European Commissioner for Home Affairs, to discuss both the ECJ ruling and the controversial National Card scheme. The Commission has yet to provide details from the meeting, but it may signal an opening for further negotiations.
As the standoff between Hungary and the European Commission continues, the financial and political consequences are becoming increasingly severe.
