The European Commission announced on Wednesday it will move to subtract Hungary’s 200 million euro fine from the country’s EU funds, European Commission spokesperson Balazs Ujvari confirmed.

This decision was made after Hungary failed to meet the second deadline for the payment of the fine imposed by the Court of Justice of the European Union (CJEU). The European Commission seeks to apply the “off-setting” procedure. which grants this institution the power to reduce the share of the EU budget allocated to Hungary.

In the 2020 CJEU case Commission v Hungary, the court found that Hungary’s migrant policy and standards for the reception of asylum seekers were contrary to EU law. Because of this, the court’s Grand Chamber obligated Hungary to fulfill its obligation as a Member of the European Union.

Under Article 260(2) of the Treaty on the Functioning of the European Union (TFEU), the Commission can bring a case before the court when it believes a member state has failed to comply with a previous judgment. In this case, the Commission brought a case before the court of the EU, which delivered a judgment in June 2024. Here the court established the failure of Hungary to comply with the decision in Commission v Hungary. Besides this, the court imposed a penalty payment of EUR 100 000 per day until compliance, and a lump sum of 200 million euros, which Hungary has now failed to pay.

Hungary has been critical of this EU decision. Prime Minister of Hungary Viktor Orbán has published on X (former Twitter) various statements criticizing EU asylum policies and the court’s fine. For example, Orbán supported the news of the Dutch plan seeking to opt out of EU asylum rules. He also mentioned “Germany is introducing border controls to stop migrants, meanwhile, Hungary is punished for defending the external borders of the EU. This is political chaos!,” referring to the fines.