The European Parliament passed a report on the state of the rule of law in Hungary on September 15 saying that European Union values are under threat and that the country can no longer be considered a full democracy. The report was approved with 433 votes in favour, 123 against and 28 abstentions.

The report puts pressure on the European Commission not to compromise with Viktor Orban's radical rightwing regime by releasing currently frozen Recovery and Resilience (RRF) and Cohesion Funds until Budapest "fully complied" with all recommendations and implemented judgments by the Court of Justice of the EU and the European Court of Human Rights

In the report, MEPs termed Hungary a "hybrid regime of electoral autocracy". The report says democracy and fundamental rights in Hungary had further deteriorated through the "deliberate and systematic efforts of the Hungarian government" since the EP launched the Article 7 procedure against the country in 2018.

The protection of EU values enshrined in the bloc's founding treaties has deteriorated since 2018, the report said, adding that the situation had been "exacerbated by EU inaction". The lack of decisive EU action, it said, had contributed to the emergence of a "hybrid regime of electoral autocracy".

The report, submitted by French MEP Gwendoline Delbos-Corfield (Greens/EFA) noted that Hungary's justice system, corruption, conflicts of interest and human rights remained key concerns, as did the functioning of the country's constitutional and electoral system and freedom of expression, including media pluralism. It also lists academic and religious freedom, freedom of association, the right to equal treatment, including LGBTQ rights, minority rights, and the rights of migrants, asylum seekers and refugees as "problematic" areas.

The report calls on the European Commission to make full use of all tools at its disposal, especially the mechanism in the EU budget linking funding to the rule of law, to remedy the situation.

The MEPs who backed the report also urged the EC not to approve Hungary's post-pandemic recovery plan (RRF) until the country has fully complied with all recommendations and implemented judgements by the Court of Justice of the EU and the European Court of Human Rights.

MEPs also pressed the executive body to exclude Hungary from funding cohesion programmes where there is suspicion of the misuse of EU funds or rule-of-law violations. Also, EU funds should be distributed through local governments rather than government organisations, they said.

The EU’s executive body is expected to formalise its assessment of Hungary by the September 22 deadline, or some days earlier. The European Commission could give the green light for the release of €22bn funding available for Hungary from the 2021-2027 budget if it finds the government’s commitment to fixing rule of law and corruption issues.

According to EC senior officials, Brussels could recommend the suspension of 70% of the funds, but Hungary could also be given extra time before the financial penalties are executed.

The government will submit relevant legislation to remedy the concerns of the European Commission to Parliament, Hungary’s chief negotiator, Minister for Regional Development Tibor Navracsics said in a television interview.