Lázár speaks out on EC decision to suspend development funds to Hungary

April 17, 2015

Giró-Szász András; Lázár János

At a press conference held on Thursday, Office of the Prime Minister head, Minister János Lázár shed light on the European Committee’s decision to suspend further payment of development funds to Hungary for the 2007-2014 funding period announced the previous day by deputy undersecretary for communications, Nándor Csepreghy.

Csepreghy first made a name for himself in the spring of 2014 by accusing Norwegian Civil Fund administrator Ökotárs of various wrongdoing after Lázár accused the NGO of channeling funds to Politics Can Be Different (LMP), a charge Ökotárs categorically denied.   During a 30 minute press conference held on Wednesday, Csepreghy stated that the EC had objected to the system of evaluating applications for EU funds developed and introduced during the Socialist governments of Ferency Gyurcsány and Gordon Bajnai.  This subsequently proved to be false, as the EC based its 2014 audit on projects funded in 2013, that is, during the third year of the second Orbán government.

He said that of the HUF 700 billion earmarked for the Economic Operative Program, HUF 550 had already been received, and that the suspension only involved HUF 150 billion.  In response to a question, the minister stated that out of 42,000 projects, the committee had only objected to six, and had raised objections to the method by which applications were evaluated in the case of three or four of the projects.  Lázár further stated that the method for evaluating projects had changed in 2014 because the government realized that the previous method for evaluating applications was not suitable to ensure that those decisions were taken “that were objective and served the country’s interests”.

In 2014 Lazar himself was put in charge of all EU funding in Hungary.  Prior to that, he served as the head of the National Development Agency for six months during the second half of 2013 before announcing the agency’s winding up at the end of 2013.

He said that the government was weighing the committee’s opinion, and was prepared to derive the necessary conclusions, but that at the same time the country was not threatened with financial loss, because if the financial correction takes place, then projects on the waiting list could be funded yet this year.

(Good luck with that as projects must be completed and paid for by the end of 2015 in order to qualify for EU funding from the previous funding period.-ed.)

With signature bravura, Lázár stressed that in comparison to the HUF 8,200 billion worth of developent funds Hungary was to receive during the 2007-2014 funding period, the disputed amount was “within a 2 percent margin of error”, and that with this Hungary was one of the leading eastern European countries with regard to respect for legality and regulations.

He said the government was considering the EC’s recommendations.

He also said that the government was asking the committee’s help to determine whether the anti-corruption office had really investigated the M4 affair.

Referring to a letter he claimed to be in his possession, the minister stated that OLAF might investigate or have investigated the M4 affair as to whether the price per kilometer was high.

(This is a bizarre statement considering only last week Csepreghy claimed that the EC had formally withheld funding of the construction of the M4 motorway on the grounds that it suspected collusion was involved-ed.)

Lázár stated that the government had stopped construction of the M4 and that the National Infrastructure Development Zrt. (NIF) had already held discussions with representatives of the affected companies.  He said that every subcontractor had been paid and that “naturally” the general contract would also be paid in proportion for the work completed.

With regard to future infrastructure development plans, the head of the Office of the Prime Minister stated that these included building connecting roads between Szolnok and the M0 and/or M5.

He said that it was necessary to examine whether or not to extend the M4 in the direction of Fegyvernek.