- 2025-03-07 “E-001011/2025 Answer given by Mr Serafin on behalf of the European Commission The Commission would kindly refer the Honourable Member to the publicly available Financial Transparency System (FTS) 1 and the attached Annex I. On the FTS, the Commission makes available information on recipients of funds financed from the EU budget, where it is implemented in direct management. Operating grants are awarded competitively. Applicants submit proposals with the description of their work programmes, annexed to the grant agreement, which may mention, among other activities, advocacy activities. The Commission does not prescribe the specific activities in the applicants’ work programmes. Nonetheless, agreements involving activities directed at EU institutions, even if they do not breach the legal framework, may entail reputational risks for the EU. To mitigate these risks, the Commission has issued guidance 2 to all Commission services, clarifying which activities should not be mandated as a condition for EU financing. As part of a grant agreement, beneficiaries must commit to respecting EU values. The Commission does not have a general responsibility for monitoring the Member States’ funding from the national budgets to civil society organisations. For EU funding under shared management, based on the requirement of Article 49(3) of the Common Provisions Regulation 3 (CPR), a complete list of projects is publicly available on the responsible Hungarian authority’s website 4 . The implementation of EU funds governed by the CPR requires compliance with the Charter of Fundamental Rights 5 throughout the programming period, horizontal enabling condition (HEC) 6 . When the HEC is not fulfilled, the related expenditure under the CPR is not reimbursed from the EU budget. The Commission monitors through its annual Rule of Law Report 7 the situation of civil society in all Member States. In that context, it has noted that concerns related to the Hungarian State’s role in financing civil society persist 8 and has made recommendations in that respect 9 . Hungary is subject to measures under the Conditionality Regulation 10 to protect the EU budget from breaches of the principles of the Rule of Law, which include the suspension of 1 https://ec.europa.eu/budget/financial-transparency-system/index.html (The annual publications are based on Article 38 of the Financial Regulation (OJ L 2024/2509, 26.9.2024, p. 1–239), and in accordance with the third paragraph of the article, information on recipients is not disclosed in specific cases outlined therein. Information regarding financial year 2024 will be published on the portal in June 2025). 2 https://ec.europa.eu/info/funding-tenders/opportunities/docs/2021-2027/common/guidance/guidance-fundingdev-impl-monit-enforce-of-eu-law_en.pdf. 3 https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32021R1060. 4 https://www.palyazat.gov.hu. 5 https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:12012P/TXT. 6 Article 6 of the Common Provisions Regulation (https://eur-lex.europa.eu/legalcontent/EN/TXT/PDF/?uri=CELEX:32021R1060). 7 https://commission.europa.eu/publications/2024-rule-law-report-communication-and-country-chapters_en. 8 https://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=SWD:2024:0817:FIN:EN:PDF. 9 https://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=SWD:2024:0817:FIN:EN:PDF. 10 https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32020R2092.”
Rule of law in Hungary · EU engagement with civil society · Transparency requirements of EU institutions
- “My question to Executive Vice President Dombrovskis is that we see that in the second year in a row, the commission has not presented an annual sustainable growth survey. And because for us, it I mean, it was important with the economic, social and environmental agenda of the semester. So why has the Commission abandoned this instrument? And does this mean that sustainable growth is not any more the focus? And another one to Executive vice president you highlighted numerical also the effects of the social convergence framework. You know, the ample pushed a lot. It was so important for us to have it in terms of how member states react to it. What is your assessment here? Some were already mentioned, like Finland, to assess more in in practical terms what impact it has and in which areas it mainly is addressed. And if I could come back, just the question to Mr. Dombrovskis that was asked on more flexibility on investing in affordable housing. Do you see any room here for the commission? Because here you would, at least in comparison to defence, have a return if you look at Investment in public housing, for example. Thank you.”
European Semester (social dimension)
- “I believe it is crucial that access to finance is improved also in smaller member states, and that these countries can also benefit from the operations of the current and future funding instruments. So my question to you, to the member and also to the EIB, EIF and the Commission colleagues are the following, which are the parts of the shortcomings that have already been, already been, have already been corrected in the S2. Um, whether the investor who has managed to incorporate clearer indicators of ensuring additionality and measuring um, the private investment mobilised by this new instrument, and the extra bonus questions, is that now in the new design of the investor? We have also the PBIs, the national promotional banks and would I mean how how the inclusion of these new new entities, uh, um, in the in the design effect, the additionality and how this is ensured? Uh, finally, I would like to ask, um, how additionality can be ensured without adding too much reporting requirements on financial intermediaries and final beneficiaries. We understood that the principle is there, but I would really appreciate some specific recommendations on that. Thank you.”
EU approach to sustainability criteria in private investments
- “Thank you for the opportunity. I have a question regarding pillar two. Uh, the US, uh, managed to negotiate for itself, um, parallel system to to the global minimum tax. And, um, with that, I believe that somehow the European companies, uh, are at a competitive disadvantage. So the question is, uh, do you see any possibility in the tax omnibus that is coming to at least, uh, eliminate unnecessary compliance costs, like with the, uh, for example, on the CFC rules? Could you maybe revoke that for, uh, for large multinationals? And so thank you.”
EU competences on taxation
- “Thank you. I will speak in Hungarian. The Hungarian government has been telling us to date that Hungary has fulfilled all the conditions to receive its CRF money, and that the Commission is behind, with its obligations in terms of taking a decision on it. A few months ago, the responsible minister told me that Hungary. Has fulfilled the milestones. But the Hungarian government, according to the commission's report. Has not made any requests for payments. The other interesting factor is that the Hungarian government now has launched a new public consultation about the money. So as far as I see it, the Hungarian government is not asking for this money anymore. Or thinks that they are not going to get the money, even if they do ask for it. So I was going to ask if the Hungarian government is actually doing nothing to get hold of this money. I think this would be a great loss for Hungarian citizens.”
Conditions to access EU budget
- “For the European Union, it's an historic achievement. But for Hungary, this was an opportunity lost. The RF was a third of EU funds available to Hungary. It's a huge amount, half a million forints for every Hungarian citizen. But the Orban government has renounced this help from the European reality was hidden in the small print of a recent government decree. All the implementation of the projects has been stopped, including hospital reconstructions. Training for health professionals, etc.. Orban promised to approve an anti-corruption act, but in the end they chose institutionalised corruption instead of working for the interests of urine of Hungarian people. The representatives of Tisza support all possibilities to be able to use these funds to save what we can still save. Can you? Recently you were gloating, and I quote to you that the opposition is made stronger by the worsening Level of living for Hungarians. Are you planning any more actions to cooperate with the Commission? To withdraw funds from Hungarians that would be available to them to help small enterprises? The railway network, etc.. Thank you very much. I wasn't gloating, I wasn't happy, I was very upset. This is why I spoke out. This is your responsibility. It is not up to this party that Hungary is not using these funds. You are responsible. Even if you repeat hundreds of times the same lie, it still remains a lie.”
Conditions to access EU budget
- “In addition to that, he tells a barefaced lie, saying that it's the opposition that is sabotaging access to EIB loans. I'm actually asking for the very opposite from the EIB. Please invest more intensively into Hungary. Please do more. And indeed, if I may turn to the Bank and to the European Commission, I would ask you to find ways of means of making sure that the Union resources, which are blocked right now, that they can actually be conveyed to Hungarian projects through the bank. The EIB could exert control, but could also act against corrupt corruption, sorry, by dealing with public procurement actively. In addition to which, I would ask the bank to make sure that resources are made available to small regions cities that would allow us to carry out renovation works in our schools, in our social institutions, and in our rental housing market. By the way, on the subject of rental housing. I welcome the fact that in this EIB report, we mentioned in particular the role of the Bank. In this question of the housing crisis. So it's quite clear that the European citizens expect the EIB to do good work and successful work in this respect.”
Conditions to access EU budget
- “(16:44:46 – 16:46:02): Of course. Thank you very much. Thanks to all of the colleagues for the valuable comments. I took note that, of course, we will continue with the shadow meetings. Just maybe reflect on one point on tax avoidance and aggressive tax planning and how it comes together with pillar 2. I think they are not conflicting, actually. They are actually helping each other.
So I don't see the main reason for pillar 2 was also to basically fight the race to the bottom and to ensure that sufficient resources are at member states' level either in Europe or outside of Europe. I think we need to reach this objective in a rational manner and not harm with overlapping, rather overlapping, not unnecessary, but overlapping regulatory requirements.”
Overall simplification of regulation in the EU
- “Thank you. Dear colleague, please. The draft 2026 budget doesn't just contain figures, but also looks at how we can protect values important to us our security, our future, our values and security is the most important one. But we can't take that as a given. The world has changed. There are migratory pressures, military conflicts and new challenges and the EU therefore Needs to improve its ability to defend itself, and that starts at its borders. We need controlled and safe, secure external borders. And that's a common EU interest and must be reflected in the budget. The EU has to protect its physical borders and has to develop border protection further. And that's why the Tea Party is in favour of and welcomes the increase of €300 million. We also welcome that on the initiative of Tiso, every Hungarian student will have access to the Erasmus+ programme and through training and education, we can make differences between people smaller and carry out democratic values, which is Europe's strength. So I seek your support for tomorrow's vote.”
Asylum & border control
- “Thank you. Thank you chair. And also for the for the presentations and the recommendations by the Echo. I would like to I would like to stress that I believe that actually joint undertakings are very important in terms of improving the competitiveness of the EU. And I think they can become blockbusters as well. And I'm also very reassured that the ECA has actually issued an unqualified audit opinion for all the joint undertakings. Now, I would I'm a layman to these topics and I mean to the to the technical part of this. Definitely. And but I was very impressed with the, with the, with the presentation that you gave. Nevertheless as every European citizen, of course, I'm also reading news about fusion energy that the first plants will be opened in in the US, first operating plants will be in the US in the early 2030s. And now I understand that the baseline for, for Iter is actually not just prolonging time until 2059, but also in terms of cost, it will cost more than. Almost €5 billion more than than initially planned. So I really would like to understand how does this project compare to to their counterparts worldwide, and whether the cost efficiency of what we are doing is is balanced or not.”
Nuclear energy
- “Thank you. Chair. Thank you. It might sound a bit hackneyed to say that Europe is facing historical challenges, but at the same time it's a fact. The aggression by Russia has demonstrated that we need a defence capacity that is also serving as a deterrence. And then we've got the tariff war, which has pointed towards our economic dependency and weaknesses. These are two threats. And to some extent the answer to these threats is increased investments. The EIB is the union's bank, and it really needs to play a primary role in this regard, because the bank is there as the most appropriate stakeholder that can mobilise private equity and apply the logic of the market. But without private equity, we cannot meet the challenges that I just mentioned. Having said that, we shouldn't be neglecting either the investments necessary in our EU member States in order to put them on an equal footing. There are poorer states in the EU and they have far less access to infrastructure investing into the health care or indeed education. And that is precisely what we need in order to allow those states to catch up. Unfortunately, I have to say to this House that long term investments have been neglected, and in Hungary it's been a deliberate policy over the last 15 years. Janos Lazar, who is the Hungarian minister responsible for construction and transport, not only put a halt to a whole bunch of investments.”
Defence spending
- “(16:25:50 – 16:30:51): First of all, I would like to thank already the colleagues because we have had some consultations before drafting the report, and I tried to already take these opinions into account. I actually had discussions with the European Commission representatives, OECD market participants, academic researchers, and NGOs. So we tried to do our homework already at the start of drafting the report.
Now the report starts from a very clear premise. International cooperation is imperative to maintain effective corporate taxation. However, as the international environment shifts, the EU must also adapt to these changes. In recent years, the EU has championed international tax reforms and with good reason. The 21st-century global economy is digitized, borderless, and hypermobile.
While the OECD G20 pillar solution represented a comprehensive effort to reflect these new realities, the actual implementation has since fractured. Most notably, the United States has stepped back from pillar 1. Furthermore, despite initially promoting a global minimum taxation, the US ultimately secured a quasi-exemption from pillar 2 rules. Consequently, implementation is restricted to roughly 55 countries out of the 148 inclusive framework signatories.
Just last week, in our trip to Brazil, we learned that they have applied also for a side-by-side exemption, and China is expected to follow. So we must take stock of why this fragmentation is occurring. I believe that pillar 1 is actually under-ambitious. By capping the scope to the world's 100 largest MNEs, mostly US headquartered, it alienated American political support. I think a broader scope might have yielded a different American response.
On pillar 2, the struggle is that it's maybe a bit too overambitious. By bypassing local tax codes, it forces companies to calculate minimum global taxes using parallel financial frameworks mixed with complex OECD adjustments. The separate burdensome accounting layer has spiked compliance costs and triggered demands for side-by-side carve-outs.
On the positive side, pillar 2 fulfilled its main objective. The number of very low tax jurisdictions has decreased, and about 90% of large MNEs are in scope of the global minimum tax, either through domestic top-up taxes or other elements of the GMT. But as we see the international response to that, I think we need to adapt our strategy as well.
The report examines how the EU should respond, focusing on several key topics. First, it calls for addressing the competitive imbalances caused by the parallel side-by-side system in order to safeguard the competitiveness of European companies. Weakening the competitiveness and investment capacity of our domestic companies will ultimately compromise European macroeconomic strengths, and we cannot allow that.
Second, it highlights the importance of simplification. We must avoid significant overlapping administrative burdens and high compliance costs associated with pillar 2. In this regard, we need to review older legislation such as ATAD, the DAC framework, and the parent-subsidiary directive.
Third, the report addresses the issue of digital taxation. It recognizes that in the absence of a fully coordinated global solution, several member states have introduced national digital services taxes. To prevent further fragmentation within the single market and avoid retaliatory trade measures, the report underlines that the long-term multilateral solution remains the preferred outcome.
Overall, continued international cooperation in taxation matters is vital, but we must ensure a level playing field for European businesses. For this to happen, EU member states should cooperate and coordinate their positions and engage collectively at the OECD and the UN levels in order to shape global tax standards together and with a view to protecting European interests. I look forward to the amendments of the colleagues, and the deadline is actually on June 9.”
Priorities of taxation policy in the EU
- “One. There is something which is in which Hungary is leading in Europe for SMEs. They used to be a very simple and beneficiary tax regime for micro companies. But unfortunately, the Orban government abolished this regime. So for small companies to pay the tax is a major burden. Hungarian company spends five times as much time with tax administration than an Estonian company. The Orban government uses the double standard also in tax policies. Some tax bands are evidently beneficial, but there is a clandestine increase of other tax types. There are 60 types of taxes in Hungary in place now, and it is unjust. The poor pay 6% more in line with their incomes than the rich. This is therefore would introduce introduce a government with less tax. We will introduce the Qatar regime for small companies for 2 million people will decrease the Taxes and the VAT will be decreased for various food products and other medical products will be VAT free and therefore it will be simpler. Regulations will allow for less loopholes that this will therefore introduce a more predictable, more just and simple tax regime which will lead the way in Europe.”
Priorities of taxation policy in the EU