Hungary is fighting for billions of euros. The European Commission's plan could disrupt this
Peter Magyar arrives in Brussels on Wednesday to discuss with Ursula von der Leyen how Hungary can unlock frozen EU funds. This amounts to EUR 17 billion, of which Budapest may lose EUR 10 billion permanently at the end of August if it does not carry out the necessary reforms. According to Financial Times sources, the talks in Brussels may be hampered by the legal step planned by the European Commission regarding the retail tax in Hungary, which the EC has been fighting for several years.
“The EU is stepping up its fight against the Hungarian retail tax just as new Prime Minister Peter Magyar visits Brussels, seeking warmer relations with the European Commission.” – we read in “FT”.
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The Financial Times announces the EC's move towards Hungary
During the meeting on Wednesday in Brussels, Peter Magyar has, among other things, discuss with Ursula Von der Leyen ways of redirecting part of the funds to the National Development Bank of Hungary as a temporary measure to get ahead of the deadline. The European Commission wants to check the readiness of the new Hungarian Prime Minister to introduce changes in the country after the rule of Viktor Orban.
The European Commission will refer the retail tax case in Hungary to the European Court of Justice this week, two people familiar with the decision told the FT. This concerns regulations imposing high and progressive tax rates on foreign companies operating in Hungary on their turnover, which – according to “FT” – Budapest used to “plug budget gaps”. Peter Magyar's Tisza Party opposed this tax and announced its gradual phasing out. “However, Brussels' move to raise this topic this week may disrupt today's meeting,” the daily emphasizes.
See also: Magyar accuses Orban's “mafia”. The packing of suitcases and the export of fortunes abroad will continue
— Referring Hungary to the CJEU regarding the retail tax system would be a key step in counteracting illegal restrictions on retail trade, Hans K Reisch, CEO of the Spar chain, told the FT. — Discriminatory retail restrictions in Hungary, such as the tax, put us in a losing position, he added.
The European Commission refused to comment on this matter to FT.
