Belgium, (Brussels Morning Newspaper) The Hungarian parliament adopted the first bill in a package of reforms aimed at regaining access to EU funds.
Budapest is looking to regain access to its EU allocation as the country’s economy is contracting and currency weakening, according to Reuters reporting on Monday.
According to the adopted amendment, Hungary is to allow judicial reviews if corruption reports are dismissed or corruption investigations are closed without indictment.
The bill was passed with 136 MPs voting in favour, 7 against and 17 abstained. It aims to fulfil one of the 17 commitments that the government made to the EU Commission to regain access to EU funds.
If the Commission approves Budapest’s reforms and releases Hungary’s allocation, it will lower pressure on the country’s national currency.
US financial services company Bank of America (BoA) predicted that Hungary will fulfil EC’s demands by the end of the year and regain access to recovery funds.
BoA concluded “from Hungary’s side, the cash-strapped administration has no choice but to compromise.”
Gazprom shows understanding
Also on Monday, Russian energy company Gazprom reached a new gas supply agreement with Hungarian power utility MVM Group.
According to the new agreement, MVM is to defer its payments for gas deliveries if prices exceed a set level. This will allow the utility to pay for purchases over three years if gas prices continue to soar.
“We agreed on a threshold value, and the part exceeding this we don’t have to pay for now, but it goes into deferred payment,” noted Márton Nagy, Hungarian Minister of Economic Development.
He pointed out that the agreement will ease pressure on the forint, noting that Hungary’s national currency dropped as gas prices surged. Nagy noted that the agreement will stay in effect until March next year.
According to Nagy, MVM will defer up to 1 billion euro worth of payments if spot prices stay at the current level.
In addition, Gazprom decided to allow MVM 30 days to buy the euro to pay for gas deliveries, up from the previous 5 days, which will further ease pressure on the forint.
Last month, the Hungarian National Bank warned that the country’s deficit reached the “danger zone” and called on the government to take action.
