EU to deduct €200m fines from Hungary aid funds over country's refusal to pay

The European Commission has launched a special procedure to deduct a 200 million euro fine imposed by the European Court of Justice (ECJ) on Hungary for long-standing restrictions on the right to asylum. This was reported by UNN with reference to EuroNews.

The fine is to be paid to the European Commission in a lump sum.

Budapest missed the first deadline in late August, prompting the EU executive to send a second request for payment with a deadline of September 17.

Since this request was also ignored, the European Commission said on Wednesday it would activate a so-called "netting procedure" to deduct the 200 million euro fine from Hungary's allocated share of EU funds.

The procedure will review the financial packages expected to be disbursed to Hungary in the coming weeks. Some 21 billion euros of cohesion and reconstruction funds earmarked for Hungary remain frozen due to the decline in law and order.

"From today we are moving to the 'netting out' phase," a European Commission spokesman said Wednesday.

"In theory you can look at any payment, nothing is excluded, but obviously it's going to take some time, we need to define exactly what it is and identify the payments that can absorb the appropriate penalty.

In parallel, Hungary faces a fine of 1 million euros for each day it continues to ignore the European Court's ruling and maintains restrictions that prevent migrants from enjoying full access to the right to asylum. The total amount of the fine is approaching 100 million euros.

Budapest must reply to the European Commission explaining what measures, if any, it has introduced to comply with the court's decision. As no response has been received, the executive branch has sent the first payment request to collect the fine, which has 45 days to do so.

The European Court of Justice ruling, in which the judge called Hungary's actions "an unprecedented and exceptionally serious violation of EU law," drew a furious reaction from Prime Minister Viktor Orban, who called the multi-million dollar fine "outrageous and unacceptable.

In retaliation, his government threatened to send migrants to Belgium "voluntarily" and "for free," which would be an unprecedented case of instrumentalization of migration by one EU member state against another.

The transport of migrants has not yet taken place, but the scheme has already been fiercely criticized by Belgian and EU authorities.

The dispute, which has become a new chapter in the decade-long standoff between Brussels and Budapest, has been exacerbated by growing concerns over Hungary's decision to extend its National Card scheme to citizens of Russia and Belarus, which the Commission warned could circumvent sanctions and threaten the "entire" Schengen area.

Budapest has categorically denied any internal security risks, arguing that extending the system to Russian and Belarusian citizens is necessary to alleviate domestic labor shortages and provide employers with a "simpler procedure" for hiring foreign workers.