The European Commission said on Wednesday that Hungary could start claiming reimbursements on projects worth up to €10.2 billion ($11 billion) after finding it had fulfilled conditions on the independence of its judiciary.

The European Union had frozen the money over concerns that Prime Minister Viktor Orban's government was doing too little to uphold the rule of law and combat corruption in the eastern European country.

EU Justice Commissioner Didier Reynders said on Wednesday, however, that recent judicial reforms are in "full compliance ... with the requirements we had agreed on," adding: "We have received sufficient guarantees to say that independence of the judiciary will be strengthened in Hungary."

Additional EU funds totaling almost €12 billion and further billions in COVID-19 recovery aid remain blocked because breaches "in the areas of public procurement, prosecutorial action, conflict of interest, the fight against corruption and public interest trusts" were not addressed, according to a Commission press release.

"Overall," the commission said, "the funding that remains locked for Hungary amounts to around €21bn."

Furthermore, the bloc underlined that funds could be refrozen should it detect any issues.

"The commission will closely and continuously monitor, notably through audits, active engagement with stakeholders and in monitoring committees, the application of the measures put in place by Hungary," it said in a statement.

How could the move affect Ukraine?

The announcement comes on the eve of an EU summit on continued support for Ukraine, including the commencement of accession talks, which Orban, a conservative nationalist who is Russian President Vladimir Putin's closest ally in the 27-member EU, has threatened to disrupt.

Whether the release of at least some of the locked funds will lead the Hungarian prime minister to reconsider his threat to veto any decisions on Ukraine, remains to be seen.

"I am willing to make financial deals on financial issues, but I am not willing to make strategic or policy deals on financial issues," said Orban on Wednesday.

He did not specify whether he was referring to aid for Ukraine but did say separately that opening EU membership talks with Kyiv would be a "terrible mistake."

Starting accession talks does not guarantee membership, but it is considered a highly symbolic step that is generally followed by detailed and potentially open-ended negotiations that can last decades.

"Our stance is clear. We do not support Ukraine's quick EU entry," Orban said in a post on Facebook.

Hungary insists it has principled objections to Kyiv's move for membership, arguing that President Volodymyr Zelenskyy's wartime administration has not done enough to fight corruption.

What have other EU leaders said?

Arriving in Brussels for the summit, new Polish Prime Minister Donald Tusk appeared to attempt to soothe relations by calling Orban a "very pragmatic politician" and said he would seek to find a way to win him over.

"Apathy on Ukraine is unacceptable," he said, adding that he will try to convince "some member states" of the need to help the country.
In an apparent rebuke to Hungary, German Chancellor Olaf Scholz called earlier for more decision-making by a qualified majority in the EU to prevent single nations from having a veto on issues such as accession.

"National parliaments would still have the final say, but a single country would no longer be able to block every single step," he said in the German Bundestag.

'The biggest bribe in EU history'

The move from EU has not been universally welcomed. Ahead of the announcement, the chiefs of the parliament's four groups wrote a letter to commission head Ursula von der Leyen to oppose the funds' release, claiming that the conditions had "not been fulfilled."

"Von der Leyen is paying the biggest bribe in EU history to the autocrat and Putin-friend Viktor Orban, German MEP Daniel Freund said on social media. "The signal is disastrous: Orban's blackmail pays off."

Criticism was not just limited to the parliament, with Vitor Teixeira of Transparency International saying: 

"The European Commission cannot claim to uphold democracy in the EU if it is not serious about sanctioning those that breach its values. Today's decision sends the opposite signal: that destruction to democratic society can go unpunished if mere cosmetic reforms are undertaken."

mf/sms (Reuters, AFP, AP)