After some delay, EU countries decided to freeze payments worth billions from the Community budget to Hungary. As announced by the Czech Presidency of the EU Council, the written procedure was completed on Thursday with the necessary majority. Concerns that EU money would be embezzled in Hungary due to insufficient anti-corruption efforts have blocked €6.3 billion – an unprecedented move.
The decision is part of a package of four resolutions that should be finalized on Wednesday. This includes a resolution for extensive aid to Ukraine and an important directive on the implementation of the international minimum tax for large companies. At the last minute, however, Poland had announced that the minimum tax was to be revised.
Prevent profits from being diverted to tax havens
The purpose of the minimum tax is to prevent corporate profits from being shifted to tax havens. International companies with a turnover of at least 750 million euros per year must pay a minimum of 15 percent tax, regardless of where they are located. The aid to Ukraine involves making loans of up to EUR 18 billion available to the country that will be attacked by Russia next year via the EU.
Since both decisions must be taken by unanimity, Hungary was able to block them for weeks. That deadlock was resolved earlier this week, according to EU diplomats, with countries like Germany threatening to block approval of Hungary’s plan to use EU coronavirus aid.
Payments must be made first
This would have meant that at the end of the year 70% of the available EU funds of €5.8 billion had been irrevocably forfeited. The confirmation of the Corona Plan is the fourth part of the package that was decided on Thursday. However, payments may only be made if a total of 27 requirements are met, for example to fight corruption.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
