Here’s what’s up with Hungary and EU funds

While press reports tend to focus on the freezing of EUR 7.5 billion in EU funds, securing EUR 5.8 billion for Hungary means a significant success.

Last week, the European Commission approved Hungary’s Recovery and Resilience Plan, granting access to EUR 5.8 billion in funding from the loans taken out jointly by EU member states due to the coronavirus crisis. Some sources might refer to it as the money from the Recovery and Resilience Facility, commonly abbreviated as RRF.

As Prime Minister Orbán said in his radio interview last Friday, time was of the essence with the COVID recovery fund, and yet the European Commission delayed its decision for one and a half years. After all this time, however, they deemed Hungary’s recovery plan “one of the best” out of 27 other documents submitted by member states.

While this is a significant success for the Hungarian government, international news reports tend to focus on a different story, namely the upholding of temporary freezing of around EUR 7.5 billion in additional EU funding for Hungary.

So why the holdup? The reasons are twofold.

Firstly, there are obvious political considerations at play here. There is, and there has been for quite some time, a difference of opinion between the European Union and Hungary on some fundamental issues: illegal migration, LGBTQ propaganda in schools, and the sanctions against Russia that are destroying European economies, just to mention a few. Also, the EU’s left-liberal leadership wanted to install a left-wing government in the last election. That is why they did not give the money to the country, instead rolling funds over to the left to (hopefully) win the election.

That was the plan, but the Fidesz-KDNP alliance won the election, and there was nothing the Commission could do, they had to negotiate. They dragged out all kinds of conditions, some of which we saw as sensible, some not so much. But since we wanted to achieve results, we were able to agree on the issues or institutions that we saw as unnecessary as well. The European Commission had 17 requests. These 17 requests have all been fulfilled.

Now we can see that there are already 18th, 19th and 20th conditions, and the Commission is talking about a set of 27 “super milestones.” They can call them whatever they want, but one thing is certain: Hungary’s government has always been open to cooperating with the EC and fulfilling their requirements, and we will continue to do so.

Secondly, there are technical reasons for freezing the rest of the money. As Tibor Navracsics, a former European Commissioner and currently the minister in charge of regional development and securing EU funds, explained countless times over the last week, the decision was “not surprising.” This is because the Hungarian government’s legislative and institution-building agenda includes several items where the deadlines are still in the future.

In 2023, just like during the last few years, the Hungarian government will do everything to convince the Commission and the European Council that the suspension should not be maintained and that Hungary should be allowed access to EU funds in all operational programs. Period.