The European Commission on Thursday pledged to enforce judicial independence standards in Hungary through the EU’s pandemic recovery funds, bowing to building pressure from inside its own ranks.

The move came after a group of EU commissioners — echoing numerous MEPs and diplomats — pushed the Berlaymont to go harder on Hungary over rule-of-law issues, according to officials with knowledge of the proceedings.

The precipitating incident was the Commission’s decision on Sunday to essentially offer Hungary a deal: If it could enact a list of corruption-combating reforms, Brussels wouldn’t slash €7.5 billion of the country’s regular EU funds, as it was threatening to do.

Left off the list of reforms, however, was judicial independence — a key concern for civil society groups that have warned Hungary is dangerously backsliding on democratic norms.

In a meeting on Sunday, the commissioners argued that if that was the case, the Commission must use a parallel process — negotiations over Hungary’s access to money from a separate post-pandemic recovery fund — to ensure Hungary also makes more wide-ranging judicial changes.

Commissioners pushing for the two-track process included climate chief Frans Timmermans, Competition Commissioner Margrethe Vestager, Justice Commissioner Didier Reynders, rule-of-law chief Věra Jourová and Home Affairs Commissioner Ylva Johansson.

Adding to the commissioners’ voices were diplomats and MEPs who also fretted about the need for better safeguards for the judiciary.

“It seems quite obvious,” said a western European diplomat, “that this is essential to assure anti-corruption but is glaringly left out here.”

A long-running fight

Brussels and Budapest have been locked in a yearslong dispute over rule of law standards.

Earlier this year, the Commission took the unprecedented step of triggering a new power that allows the bloc to slash regular EU funds over rule-of-law violations. That process resulted in the Commission on Sunday taking the seemingly major step of recommending a €7.5 billion cut to Hungary’s EU funds.

But the move was almost instantly undercut by the Commission’s move to simultaneously outline a way out for Budapest to keep the funds, listing 17 reforms it must enact this fall to combat corruption.

The issue now goes to the Council of the EU, which can make the final decision to slash funds within a three-month period.

Hungarian MEP Klára Dobrev, a member of the opposition Democratic Coalition party, called the 17 reforms “very limited.”

“Protecting the EU budget cannot be done without the independence of the judiciary system,” she said, while also raising concerns about media freedom and a range of alleged corrupt practices involving government-friendly companies.

EU Budget Commissioner Johannes Hahn, however, defended the Berlaymont’s approach.

“Not each instrument is suited equally to each rule-of-law issue,” he said in an interview on Wednesday.

The rule-of-law mechanism triggered against Hungary “is clearly aiming at protecting the European budget,” he added, noting that “the issue of public procurement, corruption, conflict of interest was the prevailing element in our assessment.”

For Hahn, Hungary’s willingness to introduce reforms is already a positive sign.

“We want to improve living conditions of Hungarian citizens,” the commissioner said, arguing that the quick timeline for a Council decision helped bring Budapest to the table.

"Our priority,” he said, “is not to punish the Hungarian government" but to create an environment where Brussels can be assured European taxpayers' money "is properly spent.”

Asked why Budapest offered reforms following months of stalled negotiation, the commissioner quipped: “Money makes the world go round.”

And, he said, while the negotiations over Hungary’s regular EU funds can help address financial corruption, other negotiations could help tackle related concerns in the longer term. That’s where the recovery funds come in.

Hahn also stressed that the Commission can always restart the rule-of-law process on Hungary’s regular EU funds.

Hungary’s view

The Hungarian parliament building, Budapest

The Hungarian government, meanwhile, has argued that the planned anti-corruption reforms will be sufficient for it to access both its regular EU budget funds and recovery money.

Judicial independence issues “were explicitly excluded by the president of the Commission in an informal meeting with the prime minister last year,” said one senior Hungarian official.

Commission President Ursula von der Leyen, the official said, “made a definite promise that the independence of judiciary would not be part” of the pandemic fund talks.

Asked whether von der Leyen made such a promise, Commission spokesperson Eric Mamer declined to comment on the president’s personal conversations.

Nevertheless, the spokesperson said, “Hungary will need to include measures to strengthen judicial independence in the design of its recovery and resilience plan.”

And, Mamer noted, the Commission does have ongoing concerns about issues like how judges are being appointed to the country’s supreme court.

Meanwhile, the clock is ticking. The Commission has said Hungary needs its recovery plan to be formally endorsed by the end of the year — a lengthy process that could take up to three months — or risk losing 70 percent of its envelope.

Commission officials expect Budapest will submit its plan by the end of September, after which the Commission could take up to two months to assess it and pass it to the Council, where EU countries have up to a month to endorse it. The final step would be for the Commission and Hungary to sign a financing agreement.

In parallel, the Commission is also expected to assess Hungary’s promised 17 reforms later this fall.

The timeline is tight, but Brussels officials say they believe the prospect of losing billions is pressuring Budapest to move. And if the Commission’s current plans pan out, they could also impact the broader rule-of-law debate.

The pandemic recovery plan, Mamer said, “is one vehicle to address issues related to judicial independence and where close monitoring by the Commission can be ensured.”