The European Union executive is set to propose suspending billions of Euros destined for Hungary due to corruption fears, according to two officials.

During her annual policy speech to the European Parliament on Wednesday, head of the executive, European Commission President Ursula von der Leyen announced she would stop funding for members that are detrimental to democracy, specifically in regard to corruption, Reuters reports.

"We must fight for our democracies... I would like to focus on corruption," she said, without specifically naming Hungary.

However, on Sunday, her executive was forecast to propose suspending up to 70% of €22.5 billion of cohesion funds destined for Hungary from the EU’s budget for 2021-27.

Following von der Leyen’s speech, the Hungarian Forint and bonds weakened as European lawmakers criticised Prime Minister Viktor Orban “for years of dismantling the rights of migrants, gays and women, as well as the freedom of media, academics and courts,” states Reuters news agency.

"Hungary isn't really a true democracy at all," according to Gwendoline Delbos-Corfield, a Green French lawmaker.

Orban has rebuffed the criticism, but faces pressure to safeguard funding for the country’s economy. Hungary has pledged to introduce an anti-corruption agency and has said on several occasions it was hoping to reach a deal with Brussels. However, the European Commission has maintained a cautious approach.

Any cuts to funding would be in addition to around €6 billion from the bloc’s Covid stimulus set for Hungary, yet which has been blocked by the Commission over the same corruption woes.

Countries within the European Union would then have three months to make a decision on the recommendation via a majority vote.

One EU official said any decision could change should Hungary offer "more detail and implementation" of the anti-corruption measures put forward at that time.