Commission threatens to suspend Hungary’s Cohesion Fund

Thursday February 23rd, 2012

The European Commission proposes to suspend €495,184000 of Cohesion Fund commitments taking effect on 1 January 2013, representing 0.5 % of GDP and 29% of the country’s cohesion fund allocations for 2013.


This follows the Commission’s repeated warnings to Hungary urging the country to step up its efforts to end its excessive government deficit, and its subsequent failure to take appropriate action.

In January this year, the European Commission concluded, as part of the Excessive Deficit Procedure (EDP), that Hungary had not taken effective action to bring its deficit to below the target of 3% of GDP by 2011 in a sustainable and credible manner.

Commenting on the proposed suspension, Olli Rehn, the European Commission Vice-President for Economic and Monetary Affairs and the Euro, said: “It is now for the Hungarian government to act before the suspension takes effect”.

Johannes Hahn, Commissioner for Regional Policy, added: “It is now up to the Hungarian authorities to take the necessary measures without delay, in order to be able to reap the full benefit of the Cohesion Fund.”

The current Cohesion Fund Regulation explicitly provides for the suspension of the totality, or part of, the Fund in the case of an excessive government deficit and an absence of effective action to correct it. This is the first time such a measure is being applied.

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