"The Commission proposes a suspension of 65% of the commitments for three operational programs under cohesion policy, amounting to an estimated 7.5 billion euros [$7.5 billon]," Budget Commissioner Johannes Hahn told reporters.
The Council of the European Union has one month to decide whether to approve the punitive measure, which would cost the eastern European nation — the EU’s second largest net beneficiary after Poland — a third of its funding under cohesion policy.
The rule-of-law mechanism process was formally launched in April after the EU accused Hungary of curbing judiciary and media freedoms.
Budapest submitted remedial measures in the past months to address EU’s concerns but the Commission said that the EU budget remained at risk "pending the fulfilment of the key implementation steps."