(Bloomberg) — The European Parliament called for withholding further European Union funds to Hungary until Prime Minister Viktor Orban’s government satisfies all criteria aimed at reversing the erosion of the rule of law. The forint dropped against the euro.

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The European Parliament voted 345 to 104 on Thursday in favor of a resolution that also orders a legal review of the European Commission’s decision last month to release to Hungary €10.2 billion ($11.1 billion). That was about a third of the funds that were blocked a year earlier for democratic backsliding and graft under Orban’s rule.

While the resolution is non-binding, it boosts pressure on the European Commission and EU member states to take a harder line on the release of further funds to Hungary ahead of the EU elections in June. Speaking to EU lawmakers on Wednesday, Commission President Ursula von der Leyen said the €20 billion still frozen will “remain blocked until Hungary fulfills all the necessary conditions,” including on LGBTQ and asylum rights.

The forint dropped after the resolution passed. The currency fell as much as 0.5% against the euro to the weakest level in more than two weeks.

Hungary won’t meet demands to amend controversial laws that the bloc says curtail the rights of asylum seekers and restricts LGBTQ content, Cabinet Minister Gergely Gulyas told reporters on Thursday. The laws are “red lines” for the government, he said. Still, Gulyas said he’s “optimistic” that Hungary will be able to eventually tap the rest of blocked funds.

The EU has set out 27 so-called super-milestones to push Orban to rebuild some of the democratic guardrails after years of cajoling, legal wrangling and the threat of suspending Hungary’s vote in the bloc failed to bring him into line. But there’s little sign that the pressure is affecting Orban, who has ruled by decree since the Covid pandemic and has been able to finance the budget from the market.

The government last year started enforcing a law that mandates that books with LGBTQ content be wrapped in plastic at stores in Hungary, under the threat of fines. A new state agency charged with rolling back foreign influence in Hungary starts work next month. Transparency International rates Hungary as the most corrupt nation in the 27-member EU.

The EU released a third of Hungary’s blocked funds in December after Orban’s government was deemed to have met demands to bolster judicial independence.

–With assistance from Jorge Valero.

(Updates with forint drop in fourth paragraph.)

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