The EC acknowledged in the report that Hungary is implementing an anti-corruption strategy but said that "its scope remains limited".
"Shortcomings persist as regards political party financing, lobbying, and 'revolving doors'. Risks of clientelism, favoritism and nepotism in high-level public administration, as well as risks arising from the link between businesses and political actors, remain unaddressed," according to the report.
The EC said media pluralism in Hungary "remains at risk", adding that "concerns persist with regard to the independence and effectiveness of the Media Authority".
"While no media support schemes were established to counter the impact of the COVID-19 pandemic on news media outlets, significant amounts of state advertising have continued to permit the government to exert indirect political influence over the media," according to the report.
The EC noted that Hungarian lawmakers had repealed a law on the transparency of foreign-funded NGOs after the Court of Justice of the European Union (CJEU) ruled it violated EU rules on free movement of capital and the rights to protection of personal data and freedom of association but said "pressure remains" on NGOs "critical towards the government".
"The transparency and quality of the legislative process remain a source of concern," the EC said.
The EC said a recommendation to Hungary to strengthen judicial independence "remains unaddressed", noting that new rules allowing the appointment of members of the Constitutional Court to the Supreme Court outside of the normal procedure is among developments "adding to existing concerns".
According to a report by news wire Reuters, the EC won't approve Hungary's recovery plan until it carries out judicial reform and guarantees that corruption cases are investigated, justice commissioner Didier Reynders said in an interview published yesterday.
In a post on Facebook after the release of the report, Justice Minister Judit Varga said the EC is "blackmailing" Hungary over recently approved legislation on child protection.
Hungary has come under fire for the legislation that codifies the right of parents to take charge of their children's sexual education. The EC launched an infringement procedure against Hungary over the law days earlier, arguing that provisions in the legislation "violate human dignity, freedom of expression and information, the right to respect of private life as well as the right to non-discrimination".
Varga said the EC's "latest report puts the children's protection act in the crosshairs".
"Their problem is we don't allow LGBTQ activists and any sexual propaganda into Hungarian schools and kindergartens," she claimed.
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