We have the final decision: in the summer, the Hungarian government will receive gigantic money from Brussels.

This is a € 700 billion decision

On Tuesday, the morning of the EP’s decision, we have already outlined the objectives, resources and conditions of the Instrument to Promote Recovery and Resilience (FRR), which is the main element of the next-generation EU Recovery Plan ( 750,000 million euros) in 2018. and 800,000 million euros in 2020. regulation. Subsequently, MEPs approved it during the day by 582 votes to 40 and 69 abstentions.

The FRR budget is 672.5 billion euros in 2018 and approx. € 700 billion, so a very important decision was made. Following the EP’s decision, the regulation was also approved by the ambassadors of the Member States in the Council on Thursday afternoon, so it will appear in the Official Gazette of the EU on 18 February and will enter into force thereafter. .

Objectives and funding framework of the RRF

Member States can spend a total of € 672.5 billion in grants and loans on measures to mitigate the economic and social consequences of the pandemic. For this Each Member State should develop national plans for recovery and strengthening of resilience. Projects launched for this purpose as of February 1, 2020 can also benefit from the Mechanism.

National recovery and resilience plans that receive changes in the policy areas identified as EU priorities are eligible for funding:

• green transition, including biodiversity,
• in digitization,
• increase economic cohesion and competitiveness,
• strengthen social and territorial cohesion.
• that make the institutional background of the country in question more crisis-ready and resilient, and
• they help children and young people, for example, in learning or developing skills.

National recovery plans are expected to:

spend at least 37% of your budget on climate protection and at least 20% on digitization.

It is also important that reforms and investments financed in this way have a lasting social and economic impact. They must be comprehensive and detailed and must not significantly jeopardize the achievement of environmental objectives.

The regulation of the instrument also establishes that: only Member States that respect the rule of law and the fundamental values ​​of the EU can claim resources, therefore, the rule of law adopted in December last year, which came into effect in January of this year, must be met in order to withdraw the money.

How the schedule is?

The funding option for the RRF is for three years (i.e. the money for the target areas must be allocated before 2024) and there are an additional 3 years to implement it (so the RRF will run until 2026 and the EU budget for 2021-2027 it will run in parallel.

To make it sustainable, this year Each Member State has until the end of April to present its final national reform program. (RRF Plan) to the European Commission, which has up to 2 months to examine them, and then to the Council to adopt them within a maximum period of 1 month. Therefore, the disbursement of money, in the form of a 13% down payment detailed below, is expected to start in July.

The rest of the money can be disbursed depending on the achievement of the objectives set out in the national reform programs (milestones) and it is important that the whole process is not only closely monitored by the European Commission, but also by the monthly bi-committee. . The Commission should also provide Member States with an integrated information and monitoring system that provides comparable data on the use of resources.

On the other side of financing, it is also important when, after the RRF regulation that has just been approved, a new EU fund can be created to issue bonds in the capital market from the EU budget, from the which money can be transferred. to the Member States. That requires that the regulation on increasing the EU’s own budgetary resources necessary for the operation of the recovery fund will be ratified by the Member States, transpose it into your legal system. This is also due to the fact that the own resources regulation restricts the right of all governments to collect taxes at home or imposes an additional payment obligation on the EU budget (this will be in part to cover loan repayments) .

The most recent situation regarding the ratification of the own resources regulation is that five Member States have already done so (Croatia, Cyprus, Portugal, Slovenia, France) is a recent Commission status report Prime Minister Antonio Costa, who holds the Portuguese presidency, said yesterday Your post on Twitter Based on.

National ratification dilemmas

At the moment, there is a lot of silence in Hungary about the Hungarian parliamentary ratification of the decree on own resources, as

A step must be taken that goes against last summer’s five-point Hungarian parliamentary resolution before the EU summit.

The mandate of the head of government “fixed” before the EU summit last summer Viktor Orbán was able to achieve only two of his five points and a part of a third point, Although the parliamentary resolution was not binding on him, it was only intended to be a tactical weapon. TOz five points item by item:

• The first two conditions it succeeded in ensuring that “Member States in the same situation should be treated equally” and “citizens of richer Member States should not receive more support than citizens of poorer countries”.
• The third condition (The ongoing so-called “seven article procedures” need to be completed before the adoption of the EU Next Generation Instrument and MFF ”), as they were finally adopted by the Hungarian government in December, but article 7 was not completed . rule of law procedure. The background to this is that although a verbal promise was made in principle to German Chancellor Angela Merkel at the EU summer summit that steps would be taken during the German Presidency to close the rule of law process with Hungary for years , finally it was not. done. Germans. The reason for this was largely because the debate on the rule of law dragged on until the end of the year and, according to the German presidency, there was no improvement in the rule of law situation in Hungary, so there was no reason to make it happen . Another hearing for the Portuguese presidency is now scheduled for May, but they are also expected to pass the ball to the Croatian presidency, which has a chance to pass the ball to the French presidency in early 2022. By then, the rule of law will have a ruling of the European Court of Justice, as well as a possible Hungarian “adjustment” to the situation, whereby the question of the Hungarian rule of law can be put to a vote in the Council. (The vote is key because if there is not a four-fifths majority among the members to continue the process, to impose sanctions, the whole process will end immediately, so the country would have a document that there are no comprehensive questions of state of right that can proudly flag, for what they throw – they postpone the decision on the vote of each of the Presidencies in office)
• In the fourth condition the head of government was unsuccessful: here the parliament’s condition was that “political parties and organizations involved in political activities disguised as civilians are not eligible for EU funding”. These organizations can continue to receive funding, as was the case in the 2014-2020 cycle.
• In the fifth condition (According to the parliamentary resolution, “Linking resources to political and ideological conditions, under the heading of” Rule of law, is unacceptable “), has also been only partial since then, as 25 member states and Parliament finally adopted the Rule of law regulation unchanged (sufficient qualified majority) This was softened by the Hungarian and Polish governments in exchange for a budget veto by fighting a 4-page Council decision that excluded 2014-2020 money from the scope of the regulation , postponing the applicability of the rule of law mechanism until the European Court of Sentencing of Justice and in its interpretation, it limits it a bit, clarifying what is understood by the rule of law. At the same time, the regulation has been in force since 1 January, and the relevant EU commissioner has already issued several warnings in recent weeks that all cases are being monitored and that they may bl ook a lot of money from the EU to Hungary if you don’t. change.

Therefore, Viktor Orbán could only fulfill two and a half of the five points above, but the Hungarian Parliament must give its approval to the EU own resources decree. It is important to add, of course, that the decision of the Summer Parliament, together with the above conditions, has already been taken in advance to have a common debt issuance in the EU and therefore in general

It is almost certain that during the spring session, the Hungarian parliament will also give its blessing to the own resources decree, despite the partial fulfillment of last summer’s resolution.

What is known of the Hungarian plan so far?

An upfront payment of up to 13% can be requested for RRF plans adopted this year, and it is deducted from the above schedule and the RRF plan of HUF 5.76 billion described in advance that: Around HUF 748 billion is expected to come from Brussels in June-July.

Last week, the government approved a new (not final) version of the Hungarian RRF program, which includes loans of up to € 10 billion and additional grants of up to € 7 billion. This means that the 9 priorities published in the Bulletin have been marked, along which the definitive plan will be set, but for the moment it seems that only in the field of higher education definitive decisions have been made on the financial allocation. .

In recent days, the government has repeatedly communicated that the approx. Of the $ 5.8 billion budget, about $ 1.509 billion will be spent on university development (one of the priorities foreseen above is the development of education and training). “We want to spend 955 billion of the money on infrastructure and mainly the development of university equipment, 382 billion on financing innovation issues at the university, the concept of science park, 172 billion on the university development of the system professional deformation”. including the development of content and tools, “said László Palkovics, Minister of Innovation and Technology.

It has not yet been communicated in addition to the above. Large sums are being spent on green economy development and digitization. The latter is not accidental, as the RRF Regulation requires that at least 37% of the framework for reform plans be spent in line with green goals and at least another 20% for digitization projects. For this reason, it is also understandable why Prime Minister Viktor Orván has been communicating in such a way that We will be great allies of Brussels in these areas.