Hungary. EC to deduct EUR 200 million from EU funds for failure to pay fine on time

This includes making it harder for people from third countries to apply for international protection. The Court of Justice of the EU ruled in 2020 that Hungary violated EU law, including by detaining people seeking protection in transit zones and expelling those who were waiting for their appeals to be considered. The ruling also concerned the use of so-called pushbacks – the forced return of migrants to the country whose border they had crossed.

Immediately after the verdict, Hungary declared the abolition of transit zones. CJEU However, it found that Budapest had not implemented the ruling and in June it imposed a fine of 200 million euros. At the same time, in order to force Budapest to change its migration policy, the Court announced that if Hungary did not change its law in accordance with the ruling, it could be subject to a daily fine of 1 million euros.

“As regards the one-off fine of €200 million because Hungary did not make the payment by 17 September, the Commission – after having requested Budapest to make the payment and clearly informed it of the consequences of non-payment – is now moving on to the compensation procedure in accordance with the applicable rules. This means that the fine in question will have to be deducted from the upcoming transfers from the EU budget to Hungary,” EC spokesman Balazs Ujvari said in Brussels on Wednesday.

Ujvari informed that Hungary had 3 months from the date of the judgment (until 13 September 2024) to respond and explain to the Commission how it intends to comply with the judgment, but the Commission has not received any response.

“In this regard, on 16 September 2024, the Commission sent a letter requesting Hungary to pay the fines for the first three months following the Court's ruling on 13 June. For the period from 13 June to 13 September, the fine amounts to €93 million (€1 million per day, including the date of the judgment). The Commission will send letters every two months requesting payment of the daily fines, as long as the infringement persists. If Hungary does not pay the amounts imposed by the CJEU, the Commission will deduct them from Hungary's financial allocations under the various programmes, as it would for any other Member State in a similar situation,” he told a conference in Brussels.

The Hungarian government wanted the EC to include the funds the country spends on guarding the EU's external border, i.e. its border with Serbia. According to Budapest's calculations, the Commission owes it EUR 2 billion for the last 10 years. However, Balazs Ujvari has previously stressed that the procedure for paying or offsetting penalties is provided for in an EU regulation, with which Budapest's proposal is not consistent.