United States: COVID-19 Key EU Developments, Policy & Regulatory Update No. 93 - Jones Day

United States: COVID-19 Key EU Developments, Policy & Regulatory Update No. 93 - Jones Day

On 30 November 2022, the Commission endorsed Hungary's recovery plan under the Recovery and Resilience Facility (RRF)*, to be financed by ?5.8 billion in grants. With this approval, the Commission has now endorsed all 27 Member State recovery plans.


However, the Commission's endorsement of Hungary's recovery plan is conditioned on Hungary's full and effective implementation of 27 milestones on the rule of law, judicial independence, anti-corruption, and protecting the EU's budget. These reforms must be fulfilled before any payment to Hungary is possible. Later reversals or watering-down of these milestones would block any subsequent payments under the RRF.


Of the 27 milestones, 17 of these respond to the Commission's launch against Hungary of a "conditionality mechanism of the rule of law procedure" in April 2022. This procedure against Hungary is the first one under the Conditionality Regulation, adopted in December 2020 to protect the EU budget (see here and Jones Day COVID-19 Update No. 87 of 23 September 2022).


The remaining milestones in Hungary's recovery plan concern other rule of law reforms related to judicial independence and audit and control measures.


Despite certain reforms underway by Hungary, the Commission considered that Hungary had failed to timely and adequately implement central aspects of the necessary 17 remedial measures agreed under the conditionality mechanism. The Commission thereby also announced on 30 November 2022 that it maintained its proposal to the Council (see here) for budget protection measures under the Conditionality Regulation against Hungary's breaches of the rule of law, including:


  • a suspension of 65% of the ..

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