Budapest was confident on Monday that it would be able to prevent a reduction in EU funds as called for by the Commission over rule of law concerns.
The EU's executive on Sunday urged the Council to approve a €7.5 billion cut in cohesion funds to Hungary.
This, the Commission said, is the next step in the conditionality mechanism procedure it triggered against Hungary in April.
But Brussels also left the door open to a compromise, adding that if Budapest proceeds as scheduled with the 17 remedial measures it negotiated with the Commission the procedure could be stopped.
The measures include efforts to strengthen the process of awarding public contracts, eradicate conflict of interest among government officials and address weaknesses in the investigation and prosecution of cases regarding EU funds.
Tibor Navracsics, Hungarian Minister for Regional Development, told reporters that "this means, first of all, that no new negotiations are needed" to end the conditionality mechanism procedure against the country.
"And it also means that if Hungary fulfils the agreements and commitments reached in the negotiations, the Council's decision to sanction will not be adopted," he added.
In Brussels, however, reactions were somewhat more cautious.
Swedish MEP Malin Björk (The Left) told Euronews that "it was about time that the Commission takes resolute action against the corruption and dismantling of democracy in Hungary."
"I welcome this proposal from the Commission, which is in line with the European Parliament´s call to stop EU funding until Hungary no longer violates article 2 of the Treaty," she added.
But her Greens/EFA colleague from Germany, Daniel Freund, said the Commission "should have frozen all the European funds for now because
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