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Suspended EU funds: Hungary could lose €2 billion

With the European Union suspending funds for 13 of the 15 National Development Agency (NFÜ) programs slated for EU support, Prime Minister’s Office State Secretary János Lázár was forced to admit today that the government could lose as much as HUF 600 billion (€2.02 billion) of said funds in 2013 “if the government does not take urgent action in the coming weeks.”

Lázár went on to tell those assembled at a press conference that some officials were currently negotiating in Brussels in hopes of regaining funding earmarked for projects including roadwork and social development programs and that a sanction of HUF 50 billion to HUF 100 billion (approximately €168.3 million to €336.6 million) would be acceptable to get the NFÜ projects restarted by mid-September.

A Reuters report noted similarities between this EU action and its suspension of funds to the Czech Republic in 2012 and quoted Lázár as stating “…our legal stance is unchanged: We believe the reasons [cited by Brussels] are unjust and unlawful.”

Lázár has urged the prime minister to call a meeting of government officials on Wednesday and has reportedly also requested Sándor Csányi’s presence to discuss the matter – on that same day Hungarian media ran his line dubbing the OTP CEO “Hungary’s biggest usurer.” Lázár pledged to “urge the Prime Minister to make a decision that, if a ministry can be held accountable for losing EU funds due to its clumsiness, laziness or impotence, its 2014 budget will be curtailed by the same amount of money.”

According to government statistics, HUF 8.2 trillion in EU funds has been available to Hungary for the 2007-2013 period, with 95% of this already dispensed through the NFÜ. Another HUF 500 billion is yet to be dispersed, but the overall funds awarded this year will be lower than planned. The goverment should pay businesses HUF 1.5 billion in subsidies this year, said Lázár, calling a figure of HUF 1.2 billion to HUF 1.3 billion “realistic.”

“You have my word on that,” Lázár promised.