It is unacceptable for EU funds to be used for corrupt practices 

Respect for the standards of rule of law is required for the proper spending of EU funds – this was the conclusion drawn by several speakers at an international conference organized by Transparency International Hungary (TI). Held on the occasion of International Anti-Corruption Day, participants of the “Átláccó” Festival also noted that a crisis of rule of law is starting to form in the European Union.

The rule of law and exposure to corruption risks go hand in hand. In recent years, Hungary has seen a deterioration of rule of law and democratic norms, which is in close connection to corruption becoming systemic in the country. “Hungary is one of the biggest beneficiaries of EU funds, with around EUR 25 billion coming to the country in the current budget cycle. These funds are often distributed in a partial manner, most projects are overpriced and the funds are frequently wasted on unjustified objectives,” said József Péter Martin, the executive director of TI Hungary, in his opening address.

The European Commission is watching

Corruption can have a negative influence on the business environment and the distribution of goods; it leads to significant social costs and thus eventually diminishes the well-being of citizens. “The European Commission is monitoring how member states combat corruption and the measures they take,” said Gábor Zupkó, the head of the Representation of the European Commission in Hungary, in his address to the conference. The Commission also treats corruption as a priority within the European Semester, which provides a framework for a coordination of economic policies, and it formulates proposals toward member states. “It is not only public procurements and public administration which are at-risk areas, but health care and economic life may be affected as well,” added the head of representation.

Addressing the conference, Éric Fournier, the French ambassador to Hungary, declared: “The embezzlement of part of the EU structural funds is irresponsible, if not criminal. The EU should put an end to those irregularities which are nothing less than the theft of the European taxpayers’ money.”

New EU crisis on the horizon: one of the rule of law

“There is a crisis of rule of law forming in the European Union,” declared Carl Dolan, the director of Transparency International’s EU office. According to Dolan, the stubborn member states are defying the EU, while the European Commission is showing signs of helplessness. It is time for the EU to defend its core principles. The executive director of TI EU believes this includes financial penalties, the suspension of EU funds, as well as resorting to civil control mechanisms such as the so-called Integrity Pact. “If the EU doesn’t do anything, a new generation of autocrats will take control, which will lead to increased corruption risks,” said Dolan.

György Surányi, a former head of the Hungarian central bank, held a comprehensive presentation demonstrating the political and rule of law aspects of introducing the euro. According to the economic expert, in the new European Union, if the less-developed countries that joined the EU later do not join the eurozone, they could easily find themselves on the periphery or even outside of the EU. “This would pose an unforeseeably negative perspective for Hungary as well,” Surányi added.

Lászó Csaba, lecturer at Central European University has emphasized the importance of transparency during the roundtable discussion on EU funds and rule of law in Hungary: „Transparency has to be accepted as a public interest, but unfortunately things have seriously declined in this area. Public information is now not only secret, but the reason for why they are secret is also classified.”

László Andor, former commissioner of the European Commission has stated during the roundtable discussion on the solutions for the risks of corruption and trends threatening the rule of law, and on the borders of sovereignty, that making the spenditure of EU funds dependent on meeting rule of law requirements is not a solution for many different reasons, in fact there is a solution already available: the European Commission should take Article 7 seriously.

The conference was concluded with a closing speech by David Kostelancik, the chargé d’affaires ad interim of the U.S Embassy in Hungary, where he stated, that “Democratic values have an essential place in our relationships with our allies, as strong a place as our military and economic partnerships, and the United States will always fight to preserve and protect these values.  We rely on organizations like Transparency International to help us in this fight.”

Poster competition – what does the EU mean to citizens?

TI Hungary launched a poster competition called “For me, the EU … Supermarket or community of common destiny?” that received no less than 85 submitted works. The six-member jury evaluating the submissions – which, in addition to well-known artists and advertising experts, included René van Hell, the Dutch ambassador to Budapest, and Péter Szigeti, editor-in-chief of 24.hu – awarded the HUF 300,000 first prize to Benkő Líviának and Hollós Csaba. The audience award went to Horváth Győző, totaling HUF 100,000 in prize money. Closing the event was TI’s traditional end-of-year reception, which was attended by numerous public figures both from Hungary and abroad. 

You can read about the details of the poster competition here. More information on the conference’s program can be found here, the presentations can be viewed on our Facebook page, and the speech given by TI Hungary’s executive director is available here.