The European Union is poised to finally unblock Hungary’s cohesion funds and post-COVID stimulus money, totaling billions of euros.
Euronews reports that though the decision is not final and must still be approved by other member states, the Hungarian government has satisfied the European Commission on a number of points and the final approval to release the funds could come in December.
The European Commission decided in December 2022 to withhold €22 billion of EU cohesion funds from Hungary until its government met EU-imposed conditions related to judiciary independence, academic freedoms, ‘LGBT’ rights, and the asylum system. The EU also held back Hungary’s €5.8 billion in grants from the EU’s post-COVID stimulus program until the government addresses the Commission’s concerns over the ‘independence’ of courts, though in late November it approved the release of just under €1 billion to jumpstart energy projects.
“We have come a long way,” an EU official said. “We have seen important reforms, and these are contributing to strengthening judicial independence in Hungary. But we need to monitor the effect of these reforms on the ground.”
The Commission is expected to make the official decision on the €10 billion in cohesion funds, which would not require the assent of member states, sometime before December 15.
The other half of the cohesion funds, €11.7 billion, would remain blocked as part of the so-called conditionality mechanism over concerns related to public procurement and conflict of interests.
Another €2 billion will also remain tied up due to the Commission’s objections to Hungary’s child protection law. The law, which passed last year, prohibits sharing material on homosexuality and transgender issues with minors in schools and other public places.
Hungary “has not put in place the necessary arrangements” on the issue to get the funding release, an EU official said.
Except for the €920 million that is due to be released over the coming 12 months as part of the EU RePower energy transition program, none of the post-COVID stimulus funds are on the table for release at the moment, according to the news outlet. An additional €500 million could also be released.
The Commission is considering unblocking part of the tied-up funds following a package of reforms to strengthen judiciary independence that the government of Hungarian Prime Minister Viktor Orbán passed in May.
Hungary needs to meet a total of 27 ‘super milestones’ as well as four ‘horizontal enabling conditions,’ some of which overlap, in order to have all of the funds unblocked.
Orbán contends that his government has met all of the Commission’s conditions and has called the year-long funding block “financial blackmail.”