EU split over how much of its €10B funding Hungary should get

Hungary’s incoming Prime Minister Péter Magyar and EC President Ursula von der Leyen

Hungary’s incoming Prime Minister Péter Magyar is at loggerheads with the European Commission in the first real test of the post-Viktor Orbán reset: How much of Budapest’s frozen EU funds can he bring home?

Over the past few days, talks have intensified over the €10.4 billion Hungary is entitled to under the EU’s post-pandemic recovery fund, according to two EU and one Hungarian official. The money had been withheld over Budapest’s breaches of EU law under Orbán, who was prime minister since 2010 and lost the election last month.

In a highly symbolic move, Magyar met European Commission President Ursula von der Leyen in Brussels last week to reset relations after years of conflict with the previous government, POLITICO reports.

But despite the good intentions, Brussels and Budapest are at odds over how much money Hungary should get from the post-Covid fund allocation, according to the officials, who have knowledge of the negotiations and were granted anonymity to discuss the confidential talks. The Commission recommended requesting only the grants, while Hungary wants to claim the full amount.

The allocation is split between €6.5 billion in grants, which would not need to be repaid, and €3.9 billion in loans, which need to be paid back at a favorable interest rate. Magyar’s incoming administration has until Aug. 31 to formally request the money, while the Commission has a deadline of Dec. 31 to make the payments.

The Commission is arguing there isn’t enough time to release the full €10.4 billion, since payouts are contingent on Hungary meeting specific reform targets. Funds in the form of loans would also add to Budapest’s strained public finances, with debt already hovering around 75 percent of GDP and the deficit ― the difference between how much is spent and how much is brought in ― projected to be near 7 percent of GDP in 2026.

If Magyar accepts Brussels’ advice, it will mean him leaving €3.9 billion on the table. For Hungarian negotiators, coming home with anything less than the full package would look politically underwhelming after a campaign built around a total reset with Brussels.

Given the time constraints, the Commission assumed before the election that Hungary would eventually abandon trying to get the loans, one of the EU officials said, suggesting the Commission had already planned out this scenario before Magyar won.

...The EU leaders are liars! Before the Hungarian elections, they hinted that the funds slated for the government in Budapest would be released if Majdyar defeated Orbán. So what?

Magyar defeated Orbán, but Budapest won't receive the full amount.

At the same time the EU leadership is handing over 90 billion to the Kyiv Nazis. This means they are more important and closer to Ursula and Co. than a member state of the EU.

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