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The European Commission stated that it is examining Hungary’s application for €17.4 billion through the European Union’s Security Action For Europe (SAFE) initiative, citing the nation’s weak performance in public procurement openness and issues with conflicts of interest, as Members of the European Parliament cautioned that the funds might be misused for the political advantage of Prime Minister Viktor Orbán.

Hungary is the sole EU member state where EU funding has been put on hold because of a significant corruption risk. Of the €27 billion allocated for Hungary during this financial period, €17 billion remains frozen, with disbursements dependent on reforms within the public sector.

Established due to concerns over Russian threats, SAFE offers affordable loans from the EU to member nations to strengthen their defense sectors. In the most recent funding cycle, Hungary requested €17.4 billion, making it the third-highest amount sought by any nation.

“It’s hard for me to envision a scenario where we could sign the loan agreement and begin disbursements if it’s evident that the conditions outlined in the same regulation are not fulfilled,” stated Commissioner for Budget, Anti-Fraud and Public Administration Piotr Serafin during a session at the European Parliament on Monday night.

The European Union initiated the so-called conditionality mechanism concerning Hungary in 2022. This instrument allows for the interruption of financial support when significant corruption threats are detected.

Serafin mentioned that the guidelines also apply to SAFE funds, and that after Hungary’s national defense program is approved, the EU will examine how the funds will be utilized.

There will be an opportunity to examine how the Hungarian government intends to safeguard the financial interests of the budget, as well as their approach to enforcing specific regulations regarding public procurement, conflicts of interest, and public interest trusts,” Serafin stated. “All those vulnerabilities that have already been recognized. Yes, the conditionality regulation mechanism is applicable to all EU funds, including SAFE.

On Monday, the Commission gave approval to seven national defense plans. The Hungarian proposal was not included.

Last week, the European Parliament discussed Hungary’s SAFE proposal, with numerous MEPs calling for protections concerning the expenditure. Some expressed concerns that the funds might be misused to enhance Orbán’s prospects for re-election in April.

This is a significant gift for Orbán, as he will receive a substantial portion of it prior to the elections in Hungary,” said Dutch Green MEP Tineke Strik, “and due to the absence of conditions, he can utilize it for his campaign and present it as an indicator of the legitimacy of his government.

However, MEP Tamás Deutsch, representing Orbán’s ruling party Fidesz, stated that the EU’s examination of SAFE is part of a political effort targeting Hungary.

“Regardless of how hard they try to oppose Hungary in Brussels, we will defend the interests of the Hungarian nation, and we will secure every single euro that belongs to Hungary, its people, and Hungarian families,” Deutsch stated.

The European Union is scheduled to make a decision regarding the SAFE payments during the first quarter of this year.