Hungarian prime minister’s office issues misleading statement regarding EU fiscal transfers

May 19, 2014

Chepreghy

Csepreghy claimed on Friday all issues relating to future EU fiscal transfers were resolved last Wednesday.

On Friday, 16 May 2014, the Office of the Prime Minister announced that Hungary had received HUF 150 billion (USD 590 million) worth of European Union development grants, and that it expected to receive additional EU fiscal transfers from Brussels in the coming week.  It also stated that Hungary “can start sending in receipts for the period after April 15”.

In April the European Commission asked Hungary not to send invoices to Brussels until Hungary explained to the satisfaction of the Commission how EU development grants are distributed and monitored in Hungary after responsibility for verifying work performance and authorizing payment of invoices was transferred to state-owned enterprises on April 15.

Friday’s statement quotes Deputy State Secretary Nandor Csepreghy (pictured above) as saying “the timely transfer of funds thus far this year shows that we have exceeded the expectations of plans approved earlier by the European Commission. Of the HUF 8.2 trillion (USD 36 billion) made available for the fund’s 2007-2013 budgetary cycle, Hungary has been able to call down HUF 5.5 trillion (USD 24 billion). The deadline to call down all the remaining funds is December 2015. If Hungary keeps with this pace it is very likely that we’ll be able to call the remaining funds down well before the deadline”.   Csepreghy attributes this development to a successful meeting that reportedly took place between the Office of the Prime Minister and the European Commission on Wednesday of last week.

Misleading statement by the Office of the Prime Minister

444.hu reports that last week’s fiscal transfer is, in fact,  unrelated to the funds that had been “frozen” by the European Commission in April 2014, but rather stems directly from invoices submitted to the Commission in 2013.

At the end of 2013 the government divided the responsibilities and personnel of the National Development Agency (NFÜ) among various ministries. Previously, the NFÜ had been responsible for overseeing the use and distribution of EU funds.  The new system devised by Janos Lazar, the Secretary of State for the Office of the Prime Minister, effectively does away with the centralized government administration of said funds by divvying up the task among a number of ministires and state-owned enterprises.

Hungary continues to receive fund disbursements under the previous system. However, because the government neglected to provide Brussels with details of how EU grants were to be administered after April 15, the EC informed Hungary in April that future EU fiscal transfers would only take place after the new system is evaluated.

At the end of April EC Funds and Norway Grants announced that they had officially suspended the transfer of development funds to Hungary citing the same reason.

Referenced in this article:

Brüsszel utalt és várja az újabb számlákat, kormany.hu; 16 May 2014.

Újranyitották a brüsszeli pénzcsapot, BruxInfo.hu; 16 May 2014.

Nem is a befagyasztott milliárdokat utalja Brüsszel, 444.hu; 18 May 2014.