It was barely long enough to be a confirmation battle but Ursula von der Leyen accepted defeat on Monday and asked Hungary and Romania to present new candidates for her incoming European Commission.

The Commission's president-elect was forced to go back to the drawing board after the European Parliament's Legal Affairs Committee declared that her Hungarian and Romanian nominees would be "unable to exercise their functions, on the grounds of conflicts of interest found when their declarations of financial interests were examined."

The decision means Romania’s Rovana Plumb, who was slated to take the transport portfolio, and Hungary's László Trócsányi, who was in line to become commissioner for EU enlargement and relations with neighboring countries, were out before they had even reached confirmation hearings. Those hearings got underway in the Parliament for other nominees on Monday.

Von der Leyen could, in theory, have tried to find a way to deal with the Parliament's concerns and then asked the legislature to reconsider the nominees. But, with her Commission due to take office in just over a month, she decided to cut her losses and ask Budapest and Bucharest to come up with new candidates.

The defeat puts an early dent in von der Leyen's authority as she seeks to establish herself in Brussels after a career in German politics. However, the speed with which she dropped the two nominees may fuel speculation that she was not particularly attached to them.

MEPs voted by 13 to 7 to reject Plumb as “unable to exercise” her functions as transport commissioner. They gave a similar verdict against the candidacy of Trócsányi.

A Commission spokesperson said von der Leyen had been in contact with Hungarian Prime Minister Viktor Orbán and Romanian Prime Minister Viorica Dăncilă and "expected to get new names" from them.

"The candidates must be suitable and match the portfolios. If something doesn't fit, we may have to ask for new names," the spokesperson said.

Both of the rejected nominees had been regarded as vulnerable, in part because their governments have tense relations with EU institutions, which have accused them of backsliding on democratic standards and the rule of law. However, the fact they were both ruled out before they even reached confirmation hearings from specialist committees came as a surprise.

Boos from Bucharest

Dăncilă, the Romanian prime minister, accused President Klaus Iohannis and the country's opposition parties of campaigning against Plumb's nomination.

“I saw from the president and the opposition parties a limitless denigration campaign,” she told in a press conference in Bucharest. She said Plumb “was subject to a political game."

However, Dăncilă said the government would propose another nominee. She declined to name any potential candidates. She also rejected an invitation from Iohannis to attend a consultation meeting with him on the nomination on Tuesday.

Dăncilă, a Social Democrat, is running in November's presidential election against Iohannis, a former leader of a center-right party who is seeking a second term.

The Hungarian government said in a statement that Trócsanyi had helped defend Hungary from migration, and that as a result, pro-migration MEPs are opposed to his candidacy.

As for a new Hungarian candidate, one name that Orbán suggested to von der Leyen is Olivér Várhelyi, currently Hungary’s permanent representative to the EU, according to the Commission spokesperson.

Várhelyi is highly familiar with Brussels politics. He joined Hungary’s foreign ministry in the mid-1990s and worked at the country's mission to the EU ahead of accession, and later in the permanent representation in various senior roles.

He is also a trained lawyer with experience working in Hungary’s justice ministry, and did a stint at the Commission as head of unit responsible for industrial property rights at the Directorate General for Internal Market and Services.

While formally a career civil servant, he is known as highly loyal to Orbán and as an assertive advocate for the Hungarian government’s political priorities in ambassadors’ meetings.

A senior official in Orbán's right-wing Fidesz party predicted von der Leyen would back Várhelyi but suggested the prime minister had taken a hit by having to abandon his first-choice nominee.

“I think she will accept him. He has been a diplomat, [he's] politically less vulnerable than anybody else. But I think this is a serious defeat for the PM," said the official, speaking on condition of anonymity.

Committee's concerns

At a closed-door meeting of the Parliament’s Legal Affairs Committee on Monday, MEPs voted by 13 to 7 to reject Plumb as “unable to exercise” her functions as transport commissioner. They gave a similar verdict against the candidacy of Trócsányi, with 12 votes in favor of rejecting his candidacy as the future enlargement commissioner, and 9 votes against.

The vote clarified decisions from last week, when the committee made clear it had concerns about both candidates but did not explicitly state that they could not carry out the duties of a commissioner.

Plumb was called before the committee last week to account for two loans worth nearly €1 million that she did not declare in her original financial declaration scrutinized by MEPs.

The committee in particular queried a donation of 800,000 Romanian lei (almost €170,000) she made to her Social Democratic Party through a loan from a “physical person operating professionally in the area of tourism." The MEPs said it’s not clear how “this outstanding loan is to be paid back in an open and transparent manner,” according to a letter sent to Parliament President David Sassoli last week.

Trócsányi, a former justice minister, came under scrutiny over links between a law firm he founded and work that it carried out for the Hungarian government.

On Monday, both Plumb and Trócsányi sent letters to the committee chair attempting to answer the MEPs’ concerns. But the panel was unimpressed.

In her letter, Plumb said she offered two apartments she owns in Romania to the creditor of the loan in question as a repayment, which the creditor accepted. “Consequently the debt which generated your concern does not exist any longer,” she wrote in the letter, seen by POLITICO.

Former Hungarian Justice Minister Trócsányi, meanwhile, defended his candidacy by sending MEPs a document, also obtained by POLITICO, with bullet points refuting the committee’s concerns about his relationship with a law firm he founded in 1991 and what the committee termed his “connections to Russia.”

“No payment of any kind has been disbursed to me by the firm since my current leave of absence that began in 2007, with a single exception: in May 2018, I withdrew my equity share in the firm at par value (which represented 12.6% of the firm’s share capital at the time),” Trócsányi wrote.

He said a controversial decision he took to extradite suspected Russian arms dealers to their home country despite a U.S. extradition request — resulting in their release — was above board. “Regardless of the possible political dimensions alleged by the Committee on Legal Affairs, the decision to extradite the Russian national to Russia was reached solely as a matter of law,” he wrote.

Trócsányi also accused the Legal Affairs Committee of making a politically motivated decision to punish Hungary's government, which has clashed with Brussels on migration, the rule of law and other issues.

“Given that the Committee’s accusations are devoid of any factual basis despite the Committee’s having been in possession of the above facts prior to making its statement, I must assume that its objections in fact relate to my former membership of Viktor Orbán’s government — a position which it cannot, however, take publicly,” Trócsányi wrote to MEPs.

Carmen Paun contributed reporting.

This article has been updated.

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