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UPDATE 1-Hungary to submit new laws to unlock EU funds next week -PM aide

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BUDAPEST, Sept 17 (Reuters) – Hungary’s government will submit new laws to parliament next week to end a stand-off with the European Commission and unlock access to European Union funds, Prime Minister Viktor Orban’s chief of staff said on Saturday.

The EU executive will recommend suspending billions of euros earmarked for Hungary over corruption concerns, two officials told Reuters on Wednesday, in what would be the first such move against Orban.

On Thursday, a large majority of EU lawmakers voted to condemn damage to democracy in Hungary under veteran Orban, in power since 2010, stepping up pressure on the bloc to cut funding for the ex-communist country.

Hoping to end the stalemate that has pressured the forint and bond markets, Budapest has announced that it would create an anti-corruption authority and a working group with non-government groups to oversee the spending of EU funds.

“The government has either accepted the requests of the European Commission, or, in the areas where we could not accept them, we have managed to reach a compromise that is satisfactory to both parties,” Gergely Gulyas told a media briefing.

“At today’s meeting the government has discussed these commitments and has approved them,” he said, adding that Orban’s government would ask parliament to pass the relevant legislation via a fast-track process.

The new laws are scheduled to take effect in November, which Gulyas said could mark the end of punitive action against Hungary, with access to billions of euros hanging in the balance.

“Instead of mutual distrust, the constructive series of negotiations with the Commission over the past two months can be seen as a step towards mutual trust,” Gulyas said, adding that Hungary was awaiting the EU’s ruling with “perfect calm”.

Hungary had by far the highest share of irregularities in the whole bloc in spending EU funds in 2015-19, according to the EU anti-fraud agency. Brussels has long called for transparency, competition and accountability in Hungarian public procurement. (Reporting by Gergely Szakacs and Krisztina Than; Editing by Pravin Char and Alex Richardson)

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