Hungary to Receive 16 Billion Euros in Frozen EU Funds After Agreement

Hungary's new government is moving to unlock 16.4 billion euros in frozen European Union funds, a critical step toward mending ties with Brussels and revitalizing its struggling economy. The agreement, reached between the Hungarian government and the European Commission, marks a significant political win for Prime Minister Péter Magyar, who took office after winning April elections on a platform of improving relations with EU partners and restoring access to the frozen funds.

The country urgently needs these funds, as its public finances are in poor condition, with the deficit projected to exceed 6% of GDP this year. "We are bringing home the money to boost Hungary's economy," Magyar stated, promising investments in education, transportation, and energy infrastructure. This agreement is a crucial part of his agenda to stabilize the nation's economic outlook.

To access the frozen EU support, Hungary must implement the measures outlined in the plan. The urgency is palpable, particularly for 10 billion euros in recovery package funds and loans that Hungary risks losing permanently if it fails to submit a plan for reforms and fund utilization by the end of August. Additionally, substantial reforms strengthening the rule of law and combating corruption are prerequisites for the funds' release.

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We are bringing home the money to boost Hungary's economy.

A Commission official described the task ahead for the Hungarian government as "enormous." The plan also encompasses regional support funds worth 4.2 billion euros and 2.2 billion euros in EU financing frozen due to the suppression of academic freedom. "This is a political agreement, now we have a lot of work ahead of us," Magyar acknowledged.

While this agreement covers most of the funds frozen under the previous government, it does not include approximately half a billion euros frozen due to Hungary's stance on LGBTQ+ rights or funds withheld for violating EU migration agreements. Magyar has indicated the new government will continue Orbán's line on migration. Hungary has also applied for 16 billion euros in EU defense loans, a request that remains under negotiation.

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This is a political agreement, now we have a lot of work ahead of us.