Citing ‘systemic’ fraud, Commission pushes Hungary to change procurement

Hungarian Prime Minister Viktor Orban leaves a face-to-face EU summit, in Brussels, Belgium, 11 December 2020. [EPA-EFE/FRANCISCO SECO / POOL]

The European Union’s executive has told Hungary to reform its public procurement laws to curb “systemic fraud” before billions of euros from the EU pandemic recovery fund become available, according to an internal document seen by Reuters.

The European Commission is mandated with managing the 750-billion-euro scheme and has already told several EU states that their proposals for spending their part of the funds must be improved.

There was no immediate response from the Hungarian government to an emailed request for comment on the document.

The bloc wants outright changes to Hungary’s public procurement laws, according to the 26 January Commission document laying out specific legal changes required of Prime Minister Viktor Orbán’s government.

“Competition in public procurement is insufficient in practice,” said the document, adding that this was linked to “systemic irregularities” that “led to the highest financial correction in the history of (EU) structural funds in 2019”.

The document called specifically for improved data transparency and accessibility, arguing that that would lead to a fairer and more open procurement process.

Budapest, which has had a series of battles with EU authorities over rule of law issues, is due to get nearly €6.3 billion in free grants from the recovery scheme if its spending plan is proposed by an end-of-April deadline, and then accepted by Brussels and other EU countries.

Deteriorating corruption situations

For a third year in a row, Hungary, alongside Bulgaria and Romania, shares the last place in the EU as the bloc’s most corrupt country, according to Transparency International’s corruption perceptions index published last month.

Ranking 69th globally, Hungary scored 44 of 100 on the 2020 index (100 being the least corrupt), meaning it dropped 11 points since 2012.

In a Eurobarometer survey published in June 2020, 87% of the surveyed Hungarians described corruption in the country as widespread, well above the EU average of 71%.

A further 32% “totally agree” with the statement that they are “personally affected by corruption in their daily life” up from 26% in 2017.

Hungary's fight against corruption 'globally unsatisfactory'

Hungary has made no progress on implementing recommendations on corruption concerning members of parliament, judges and prosecutors, the Council of Europe’s anti-graft body said in a report released on Tuesday (17 November).

Hungary has also made no progress on implementing recommendations on corruption concerning members of parliament, judges and prosecutors according to the Council of Europe’s anti-graft body report released late last year.

The Group of States against Corruption [a Council of Europe anti-corruption body] concluded that Hungary has made no progress since 2019 and had so far implemented satisfactorily only five of 18 recommendations from 2015.

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