Explainer: Why Hungary Didn’t Really “Lose” EU Funds

The European Union beat Orbán for the first time, but the game is far from over

1 December 2022

Iván László Nagy

Marcin Król Fellow

It would be false to assume that Hungary “lost” billions of euros – but the Union could nevertheless declare a small, but meaningful victory. We take a look at the Hungarian government’s Janus-faced efforts for the elusive cohesion and recovery funds.

After eight long months of back-and-forth negotiations between Brussels and Budapest, billions of euros worth of EU funds remain frozen for Hungary. Still, it would be wrong to assume that Viktor Orbán has ultimately been penalised for 12 years of wrongdoing.

On 30 November, the European Commission assessed the Hungarian government’s rule-of-law commitments, and despite the intensive lawmaking and wide-scale optimism in Budapest for the past several months, they concluded that Hungary did not deliver the guarantees Brussels were looking for upon triggering the rule-of-law mechanism. So what does this mean?

The rule-of-law mechanism affects two sources of income for Hungary. One derives from the 2021-2027 EU budget’s cohesion funds and involves 65 per cent of the funding for three operational programmes, worth €7.5 billion altogether that are withheld until the Union is convinced that Hungary can spend them fairly. The other lump sum, worth €5.8 billion, comes from the Covid-19 recovery fund.


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Iván László Nagy

Marcin Król Fellow

Marcin Król Fellow. Ivan Laszlo Nagy is a 23-year-old Budapest-based political journalist, writing for a leading independent Hungarian news site, hvg.hu. As a UK graduate, his academic research about the communication techniques of populist regimes transformed into critical reporting about global democracy, with a special focus on quasi-authoritarian political flows in the West and in Hungary. His work as a reporter, analyst and commentator revolves around understanding the dynamics of societies oppressed by modern semi-dictators and working out ways for meaningful civic action within them, with special emphasis on mobilising young people for democratic action.


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