Will Hungary have to pay back EU funds from metro expansion?

The European Commission has told Hungary that it may have to pay back money given from EU funds for the expansion of the Budapest metro network because a condition of the grant – the introduction of a congestion charge in the city – has not been met. T&E says the credibility of the rule of law is at stake over the issue.

In 2003, the EU agreed to fund the fourth line of the Hungarian capital’s metro system, by agreeing to pay €600 million of the €1.5 billion it was projected to cost. The deal struck between Brussels and the then socialist-liberal government of Hungary included several commitments by the city of Budapest, among them the introduction of a congestion charge to provide an incentive for people to use the metro rather than their cars.

The new metro line opened in 2014 but the congestion charge has still not been introduced, and the number of passengers using Line 4 (known as the ‘Green Line’) has been less than forecast. The national-conservative government of Viktor Orban says the preparation of the congestion charge is still progressing, but NGOs are worried that nothing is happening.

T&E member Levego Munkacsoport (Clean Air Action Group) asked for and received the correspondence between the Commission and Hungarian officials on the subject of the congestion charge. The latest letter from the Commission, dated 22 May 2018, says there were ‘no tangible supporting documents attached [to the letters of the Hungarian government]’ and concludes: ‘We are not in a position to confirm that the beneficiary has fulfilled all commitments they have made at the approval of the project. This situation puts the expenditure already certified for the project at risk of recovery.’

Márton Vargha of the Clean Air Action Group said: ‘We have been proposing for years the implementation of a distance and pollution-based urban road pricing system in Budapest, but to no avail. Now the Hungarian government risks not only that tens of millions of euros must be repaid, but it is also missing the opportunity to reduce the serious congestion in Budapest, to improve the city’s air quality, and to get revenues for the upgrading of transport infrastructure and replacing obsolete public transport vehicles.’

T&E’s diesel and air quality coordinator, Jens Müller, said: ‘The implications of this issue are profound. If the congestion charge doesn’t go ahead, then in theory any city from across the EU could make an application for an infrastructure project, promise all it likes, and then go back on its promises when it has the money. Ultimately it is a fundamental question of good governance, responsible use of EU funds and the credibility of the rule of law.’