"The Council of the European Union will adopt a position on whether to suspend funds committed to Hungary from EU cohesion programs in December. The government of the Republic of Estonia will also formulate its position by that time, after taking into account the European Commission's assessment of the state of implementation of the reforms promised by Hungary," foreign ministry spokesperson Kerstin Meresma told ERR on Friday.

In April, the European Commission triggered the budget conditionality mechanism against Hungary, which would allow funds to be withdrawn, citing issues related to public procurement and weaknesses in procedures to investigate corruption. The process provides a basis for withdrawing EU funds from a country, which does not uphold rule of law.

In response, Hungary committed itself to 17 substantive reforms, the implementation of which ought to have resolved the stand-off with the EU. However, in mid-September, the commission proposed the withholding of 65 percent of Hungary's cohesion fund payments due continued issues related to rule of law.

On Wednesday, Politico reported, that although the European Commission was in favor of approving plans made by Hungary to spend recovery funds, it was also made clear that until it fulfils requirements to upgrade 27 specific issues related to rule of law, no money would be forthcoming.

"For Estonia, respect for the rule of law is of the utmost importance. Violations of the rule of law in Hungary must not harm the European Union's budget or financial interests," said Meresma.

The final decision regarding whether to cut Hungary off from EU funds must be taken by the Member States by December 19. However, according to Politico, the precise date upon which the debate over the issue will take place remains unknown. Politico also noted, that a meeting of EU finance ministers scheduled for December 6 may come too soon for the Member States to formulate their positions.

Hungary risks losing a total of €7.5 billion in cohesion funds, in addition to €5.8 billion earmarked to  aid the country's recovery from the Covid-19 crisis.

In order for the decision to withhold funds to be approved by the Council of the EU, a qualified majority of Member States is first required. This means the proposal must be supported by at least 55 percent of EU countries and 65 percent of the EU's population.

Politico also pointed out, that the decision is indirectly linked to several other important EU issues, including the approval of an €18 billion aid package for Ukraine and a global deal on a minimum corporate tax, both of which have so far been blocked by Budapest.

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