There was a headline that just popped up on Bloomberg that said that the EU says that there is no reason to think that Hungary won’t uphold its EU obligations.

If a headline from a political entity says that that we shouldn’t be worried about something then that is usually the cue to start worrying.

Apparently, Hungarian Prime Minister Viktor Orban has said that he wants to abandon liberal democracy in favour of an illiberal state and has put up Russia and Turkey as prime examples.

What that means for the country itself is an unknown for me but what is worrying is the impact it could have on Europe.

One concerning note is the way he is viewing standard funding into his country from the EU. He has classed organisations that have received funds from abroad as “agents of foreign powers”;

“We’re not dealing with civil society members but paid political activists who are trying to help foreign interests here. It’s good that a parliamentary committee has been set up to monitor the influence of foreign monitors.” he said

It’s reported that Hungary relies on EU funding for almost all of its infrastructure development financing. Norway suspended €153m in grants to Hungary in May after Orban’s government switched the funding to a state owned company from the government.

It all sounds ominous, but I’m certainly not one to comment on the ins and outs of Hungarian politics. Lets face it though, most countries joined the EU for what they could get out of it not what they could put into it, so unless Hungary is going to become a major input country this news doesn’t bode well. A country leaving the EU is not as inflammatory as one leaving the Eurozone but it will have a very large negative impact, if it ever happens, as the usual contagion fears will surface.

Bloomberg covers the main details of the story here. If any of our readers are Hungarian and want to add or clarify the news then you’ll be more than welcome.