Brussels: The European Union's executive arm on Sunday proposed suspending 7.5 billion euros (dollars) in Hungary financing as it awaits promised anti-corruption reforms from Budapest.
The European Union and Hungary have been at loggerheads for months, with Brussels suspecting the government led by nationalist Prime Minister Viktor Orban of undercutting the rule of law and using EU money to enrich its cronies.
"The commission proposes a suspension of 75 percent of the commitments for cohesion programmes and cohesion policy amounting to (an) estimated amount of 7.5 billion euros," the European Commission's budget minister, Johannes Hahn, told a press conference Sunday.
"Hungary has committed to fully inform the commission about the implementation of the remedial measures by the 19th of November," he said.
"We will assess the situation again and act accordingly."
The final decision on the proposal will be taken by the EU Council.
On Saturday, Hungary's government said that MPs would vote next week on a series of laws aimed at easing the conflict.
Gergely Gulyas, Orban's chief of staff, told reporters that MPs would vote within days on measures designed to allay concerns about graft and a lack of transparency in public procurement.
"The related bills will be submitted to parliament next week, we expect on Monday and Friday, and these laws will enter into force in November," Gulyas said, adding that this should clear the way for the tussle with the Commission to be closed.
The measures are expected to include setting up independent anti-corruption watchdogs to monitor the use of EU funds as well as steps to make the legislative process more transparent.
The conciliatory move from Budapest comes as the Hungarian economy faces increasing pressure from a weakening local currency and fast-rising inflation. Both have hit new records this year.
Last week, the European Parliament declared that Hungary was no longer a "full democracy" in a symbolic vote that infuriated Budapest.