EU Pushes a Hard Line on Hungary

Hungary's ruling Fidesz party announced June 4 that parliament would delay a vote on reforms of Hungary's central bank, Magyar Nemzeti Bank (MNB), in order to comply with specific requests by the European Central Bank (ECB). The announcement follows an April decision by the European Commission to freeze Hungary's share of cohesion funds, which are aimed at reducing income disparities between the European Union's richer and poorer regions, for failing to sufficiently reduce the country's budget deficit.

The commission issued a preliminary recommendation May 30 to release the funds in light of recent moves by Hungary to meet its budgetary goals, but the final decision will be made at a June 22 meeting of EU finance ministers. Hungary's decision to accede to the European Union's demands reflects both Budapest's need for financial assistance and the commission's ability to take a harder stance against EU members that are not part of the eurozone when they fail to meet the European Union's economic and institutional requirements.