Hungary could receive €4.2 billion from the EU: what has changed since the funds were frozen
Kyiv • UNN
The European Commission has proposed unfreezing €4.2 billion for Hungary following reforms. The decision must be approved by the Council of the EU.
The European Commission has proposed lifting restrictions on €4.2 billion in cohesion policy funds for Hungary after the country's new government carried out a series of reforms in the areas of the rule of law and the fight against corruption. Brussels also wants to restore access for some Hungarian universities to the Erasmus+ and Horizon Europe programmes. The final decision must be made by the Council of the EU. UNN reports this, citing Reuters and European Commission data.
Details
On September 23, the European Commission proposed that the Council of the EU lift the protective measures imposed against Hungary in 2022 under the conditionality mechanism, which allows funding for member states to be restricted in the event of violations of the rule-of-law principle that create risks to the EU budget. The European Commission said that Budapest had taken sufficient measures to address some of the problems that had led to the funding being frozen.
These include, in particular, changes in public procurement, anti-corruption safeguards, the prevention of conflicts of interest, and the operation of law enforcement and prosecutorial bodies. The assessment was carried out after Hungary officially informed Brussels on September 9 that it had implemented the relevant reforms.
Hungary has taken important steps to strengthen the rule of law and protect the Union's financial interests. Today, we are proposing to unblock €4.2 billion and reopen the doors of Erasmus+ and Horizon Europe to Hungarian students and researchers
The European Commission clarified that this concerns the restoration of approximately €4.2 billion in previously suspended budget commitments under cohesion policy. The European Commission's decision itself does not mean that this amount will automatically be transferred to Hungary – the proposal must be approved by the Council of the EU. In addition, if the proposal is approved, restrictions on Hungarian universities managed by so-called public-interest trusts will be lifted. Because of the sanctions previously imposed, students and researchers at these institutions had limited access to the European Erasmus+ student-exchange programme and the Horizon Europe research programme.
Why the EU froze Hungary's money
At the end of 2022, the Council of the EU suspended approximately €6.3 billion in funding for Hungary under the conditionality mechanism. Brussels cited shortcomings in the country's anti-corruption system, risks of conflicts of interest, and systemic violations in public procurement.
The restrictions included freezing 55% of budget commitments under three cohesion policy programmes concerning the environment and energy efficiency, transport infrastructure, and territorial development. Separately, the EU prohibited the conclusion of new financial commitments with a number of Hungarian public-interest trusts and the institutions they maintain.
Of the initial €6.3 billion, the amount of funds that can now be restored has fallen to approximately €4.2 billion.
The new government and the agreement with Brussels
After the government of Prime Minister Péter Magyar came to power, Hungary stepped up negotiations with the European Commission on unblocking European funding. In May, Magyar and von der Leyen agreed on the possibility of gradually opening access to a total of €16.4 billion in frozen funds, provided that Budapest implemented the necessary reforms. Of this amount, approximately €10 billion consists of funds from the NextGenerationEU Recovery Fund, another €4.2 billion is cohesion policy funding, and approximately €2.2 billion is linked to the fulfilment of other EU requirements, including those concerning academic freedom.
At the same time, unblocking the current €4.2 billion will not mean the automatic release of all funding for Budapest. The European Commission is separately considering the issue of approximately €10 billion from the Recovery Fund, while more than €2 billion in cohesion policy funding remains blocked because of Brussels' concerns, related in particular to the asylum system, child-protection legislation, and academic freedom.
It will be recalled
The Council of the EU must now consider the European Commission’s proposal to lift the measures introduced in 2022. Under the conditionality mechanism procedure, after the Commission submits its proposal, the member states must adopt the relevant decision.