BUDAPEST (Reuters) -Hungary’s parliament passed the first of a series of anti-corruption bills on Monday as Budapest seeks to avoid a loss of European Union funds at a time when its economy is headed into recession and the forint has plunged to record lows.
Prime Minister Viktor Orban’s ruling Fidesz party passed an amendment to the criminal code to set up a procedure concerning criminal offences related to the management of public property, allowing a judicial review in case an investigation is closed without indictment or a crime report is dismissed.
Parliament passed the bill with 136 members voting yes, while seven voted against it and 14 abstained.
The legislation is one of 17 commitments Orban’s government had made to the European Commission in order to stave off a suspension of billions of euros of EU money. For the measures please see:
Facing surging energy costs and inflation, a record weak forint and a slowing economy, Orban, long at odds with the EU over some of his policies, now looks willing to fulfil EU demands to create institutions that would cut corruption risks in EU-funded projects.
A favourable decision on the funds later this year could ease pressure on the forint and Hungarian assets, which have sold off in past weeks as emerging markets were hammered due to the U.S. dollar’s surge, with Hungary’s vulnerabilities making its assets especially exposed to risk aversion.
“We expect that by mid- to end-November Hungary will make progress towards resolving the EU’s conditionality mechanism, which should also unlock a deal for the recovery funds,” Bank of America said in a note on Monday.
“From Hungary’s side, the cash-strapped administration has no choice but to compromise with the EU in our view.”
(Reporting by Krisztina Than. Editing by Jane Merriman and Susan Fenton)
