Hungary might see Cohesion Funds frozen over budget deficit

The European Commission has threatened Hungary with the withdrawal of a €500 million Cohesion Fund commitment, unless the country undergoes drastic budget reforms.

The funding, which is supposed to be paid out next year, represents 30 per cent of the country’s 2013 Cohesion Fund allocation. The Commission proposed on 22 February to tie the money to Hungarian efforts to reduce its budget deficit, which is at present above the EU limit of 3 per cent of GDP.