János Lázár, who is currently in Brussels, said the fact that Hungary needs to draw down 2100 billion forints (EUR 6.5bn) in European Union funding this year is a significant challenge.

The Minister in Charge of the Prime Minister’s Office told the press that Hungary had paid out a total of HUF 6880 billion (EUR 21.4bn) prior to December 2014, with HUF 1863bn (EUR 5.8bn) paid out last year alone. This means that Hungary has distributed 80 percent of the available budget for the 2007-2013 period, 75 percent of which has already been transferred by Brussels.

DownloadPhoto: Minister János Lázár and EU Commissioner for Regional Policy Corina Cretu, from Romania. Source: MTI/European Commission/Jennifer Jacquemart

According to Minister Lázár, Hungary has also performed particularly well in this field over the past two years and Brussels has expressed its acknowledgement of the Hungarian team working to facilitate the distribution of funding.

Mr. Lázár explained that the administration had succeeded in developing an excellent working relationship with the previous Commissioner for Regional Policy, Johannes Hahn, and he would like to maintain a similar relationship with the new Commissioner, Corina Cretu, in addition to which the Ministry is working to ensure that there is continuous dialogue between the Government, development policy experts and the European Commission in the interests of successfully bringing the 2007-2013 financing period to a close.

The Minister also mentioned that EU funding had contributed tangibly to the growth of the Hungarian economy again last year, and both the schedule according to which Brussels transfers monies this year and the speed with which the Government succeeds in distributing funding to beneficiaries will have a similarly important influence on the economy this year.

New Operational Programme tenders to be launched in April

During his meeting with Commissioner Cretu, Minister Lázár also discussed the approval of Operational Programmes (OPs) for the 2014-2020 financing period, with relation to which he told the press that the Commission had already “de facto” approved six of the OPs submitted by the Government, and the launching of related tenders could begin as early as April.

Mr. Lázár said that the Operational Programmes for rural development, fisheries and the modernisation of public administration were still under review, in addition to which he also mentioned that the Brussels body had asked the Government to provide a new public procurement plan, which it had duly submitted in December, and which the Commission has found to be suitable for discussion and realisation. In accordance with the changes, a new Act on Public Procurement and a new system of implementation regulations will be introduced in Hungary.

The new public procurement practices are important to help reduce bureaucracy, make the distribution system for EU funding fully transparent and thus ensure that to all intents and purposes there cannot be even a suspicion of corruption, Minister Lázár underlined.

DownloadPhoto: MTI/European Commission/Jennifer Jacquemart

The Prime Minister’s Office would like to bring the “asphalt issue” to a close this year

The Minister also mentioned that he would like to bring the so-called “asphalt issue”, which could potentially determine the fate of over 100 billion forints (EUR 311 million), to a close by the end of the year.

He reminded the press that the European Commission had determined with relation to previously authorised road construction projects that Hungarian tenders had infringed on competition regulations and had recommended that if Hungary accepts the findings then it should pay a 25 percent so-called correction totalling 100-150 billion forints.

This recommendation was not accepted by the Government, because it does not view re-opening of previously authorised projects as fair, in addition to which the administration claims that in certain cases the presence of an asphalt plant in the vicinity of the road works led to the construction of a higher quality road. Brussels found fault with the fact that in certain cases only companies which had an asphalt production site in the area of the road works in question could take part in the related tender.

According to the Minister, the national budget would find it difficult to handle the unscheduled payment of a 300-500 million euro fine, but Mr. Lázár also said that it would seem the Commission is to a certain extent acknowledging the Hungarian standpoint. The Government has asked the Commission for a hearing on the issue, but the meeting it not expected to take place before March.

(Prime Minister's Office, MTI)