The EC formulates serious shortcomings for Hungary in the rule of law report. Hungary has made some progress on the European Commission’s recommendations made in last year's rule of law report, but there are still serious shortcomings. Therefore it has ruled that Budapest cannot access the remaining frozen EU funds, financial website Portfolio.hu writes.

Last year, the EC made a string of recommendations, from enhancing the transparency of the judicial system to prosecuting corruption and reforming lobbying practices and campaign financing. The report acknowledges the ongoing judicial reforms, which were one of the preconditions for releasing a tranche of the frozen funds.

The National Judicial Council, which consists of judges elected by their peers, is able to exercise its powers in the interest of effectively checking the authority of the president of the National Judicial Office, and the transparency of assigning cases improved further at the level of the Kuria, Hungary’s supreme court.

However, this has not improved at lower-level courts. Political pressure on prosecution remains a concern, posing risks of undue interference in individual cases. Judges face ongoing pressures on their freedom of expression, and smear campaigns against them continue in the media.

On Hungary’s anti-corruption efforts, the EC notes that Hungary adopted a new anti-corruption strategy for 2024-2025 and legislation is planned to address lobbying and the revolving-door phenomenon, which entails the changes of positions between the public and private sectors.

The new Integrity Authority reports facing obstacles in effectively carrying out its supervisory tasks, and the Anti-Corruption Working Group has yet to produce tangible results, the report notes.

Shortcomings in the financing of political parties and campaigns remain unresolved, and the government adopted new rules to restrict foreign funding for political activity.

While some high-level corruption cases have reached the prosecution stage, the lack of substantive outcomes in investigations involving high-ranking officials and their associates remains a significant concern, it added.

Increasing state interference and arbitrary decisions by public authorities continue to pose problems for the functioning of businesses in the Single Market. The "state of emergency," first introduced at the start of the pandemic, has been extended until November 2024. The quality of legislation and frequent changes to legislation remain a major concern.

Threats to media pluralism highlighted in previous rule of law reports remain unaddressed. The government failed to adopt measures to level the playing field in public advertising to media outlets and guarantee the functional independence of the media authority and guaranteeing editorial independence in public broadcasters

Independent media continue to face a number of challenges, including coordinated smear campaigns and selective access to government events. Further legislative changes have introduced restrictions on freedom of information, according to the report.

The Orban government’s attacks on media freedom were one of the catalysts for the passing of the European Media Freedom Act, which is set to enter into force in August 2025, establishing EU-wide legal safeguards for editorial independence and the protection of journalistic sources.

The EU blocked €6.3bn from Cohesion Funds to Budapest in late 2022 because of concerns over rule of law issues, corruption and the lack of judiciary reforms. The withholding of the funds is part of the EU's Conditionality Regulation, which aims to protect the Union's budget from risks related to breaches of the principles of the rule of law. Additionally, some €2.5bn of cohesion funds are blocked due to the treatment of refugees, discrimination against the LGBT community, and violations of academic freedom.

Hungary is slated to receive a combined €10.4bn from the RRF, including €6.5bn in grants and €3.9bn in loans. These funds could be available only if Budapest meets all the 27 super milestones. Ecofin in December 2023 approved the country’s amended RRF plan, clearing the way for the transfer of €0.9bn REPowerEU pre-financing, which is not conditional.