Hungary falls well short of EU democratic standards, notably on corruption, bribery, political funding, conflicts of interest and lack of media independence, according to a European Commission evaluation published Thursday.
The damning assessment, contained in the commission's annual rule of law report for countries in the European Union and some hoping to join it, underlined a growing rift between Brussels and Budapest.
Hungary -- which currently holds the EU presidency -- has infuriated its EU partners on a range of issues.
They include perceived democratic backsliding in many domestic areas, stalling aid for Ukraine, and Hungarian Prime Minister Viktor Orban conducting rogue diplomacy with Moscow to see on what terms the Kremlin might agree to end its war.
"Hungary is a real systemic issue for the commission about the rule of law," EU Justice Commissioner Didier Reynders told a news conference presenting the report.
Not only has Budapest made minimal to no progress on rule of law breaches identified in the last annual EU report, but the commission has lengthened its total recommended remedies for Hungary to pursue to eight -- one more than last year.
"I think that's an absolute record for the rule of law report," one EU official said on condition of not being identified.
Hungarian public-sector corruption "remains high" in the view of experts and businesses, with high-level corruption in particular not being identified by prosecutors, the report said.
That was notable when it came to public spending, with the commission saying that "high corruption risks were identified in particular for the local level and municipalities, indicating examples of how political networks can lead to abuse of tender processes."
Transparency shortcomings on political party and campaign funding "remain unaddressed", the report said.
Media pluralism and freedom were also said to be under threat, with the composition of the media regulator and the lack of transparency on state advertising and media ownership all posing problems.
Additionally, when it came to checks and balances, "increasing state interventions and arbitrary decisions of the authorities weaken legal certainty and remain a problem for the operation of businesses in the (EU) single market," the report said.
Remedial steps made in some areas were for the most part timid, nonbinding or nonexistent, according to the report.
That stood in contrast with the overall rule-of-law report, which found that 68 percent of changes the commission had recommended in last year's document had been fully or partially addressed across all the countries scrutinised.
Brussels has already frozen billions in EU funds for Hungary over its backsliding on the bloc's standards, although it released 10 billion euros ($11 billion) of that money last year in controversial circumstances.
Reynders said the 10 billion euros was released because Budapest had cleared certain narrow tests on changes to its judiciary system.
But, he said, another 20 billion euros remained frozen until Hungary addressed rule of law concerns.
A legal procedure launched in 2018 and still wending forward theoretically could eventually lead to Budapest being stripped of its right to vote in EU matters.
Reynders said that procedure was continuing, and Brussels also has "a lot of infringement proceedings before the Court (of Justice of the EU) concerning Hungary".
The eight reforms the commission urged Hungary to undertake include improvements to its justice system, boosting oversight of lobbying and the independence of the media regulator, and removing obstacles encountered by civil society organisations.
