Hungary Picks PwC Partner to Help Defuse EU Funds Row Over Graft

Zoltan Simon
·2 min read
1

(Bloomberg) -- Hungary nominated a fraud specialist at PricewaterhouseCoopers LLP to head a new anti-graft agency, a move that is part of its efforts to rein in corruption and help unlock billions of euros in European Union funds.

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Ferenc Biro, a PwC partner in Budapest who has focused on fraud probes, will serve as the first president of the Integrity Authority, State Audit Office President Laszlo Windisch said in a statement late Thursday. President Katalin Novak is scheduled to confirm the appointment on Friday.

Prime Minister Viktor Orban is setting up the new anti-graft agency, a key part of 17 pieces of legislation that his government has vowed to approve and implement by mid-November. The steps are aimed at allaying EU concerns about widespread corruption.

The European Commission has proposed freezing 7.5 billion euros ($7.3 billion) of the bloc’s funding for Hungary. Another 4 billion euros of EU Covid recovery funds may be lost if Hungary fails to convince the bloc this year that it can shield EU money from fraud.

While EU pressure around corruption has prompted a flurry of legislative activity, it’s to be seen whether these will herald a real shift toward stricter management of public funds. During his 12-year rule, Orban has outmaneuvered EU demands to crack down on corruption and to bolster the rule of law.

Net Results

“EU pressure on Hungary is likely to net some results,” said Jozsef Peter Martin, director of Transparency International in Hungary. “It’s unlikely that Hungary will be able to access all of its EU funds by doing nothing to rein in graft.”

The new Integrity Authority will be charged with “reinforcing the prevention, detection and correction of fraud, conflicts of interest and corruption as well as other illegalities and irregularities” relating to EU funds.

Under Orban, Hungary has plunged in Transparency International’s Corruption Perceptions Index and now ranks second lowest in the EU, after Bulgaria. The country had entered a stage of “state capture,” with the state generating corruption instead of stopping it, the watchdog said. The cabinet rejects these allegations.

“The 17 pledges are needed for Hungary to show to the outside world and to make it credible that it has started on the journey toward becoming a clean and transparent country,” Tibor Navracsics, Hungary’s EU funds minister, said in an interview published Friday on 24.hu news website.

(Updates with EU context from third paragraph, selection process from seventh.)

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