The Hungarian forint is a very volatile national currency. Its value currently depends on the energy prices and the much-needed agreement between the European Commission and the Hungarian government. Billions of euros are at stake. The incredible sum is locked in the RRF and development funds due to corruption concerns. But there are deadlines until which the EC must decide whether they unlock those funds and accept the government’s anti-corruption measures.
Mfor.hu, a Hungarian economic news outlet, closely follows the relevant negotiations and regularly draws up future options. Today, Károly Csabai, the editor-in-chief of the news website, and Balázs Wéber, a foreign relations journalist, discussed the latest development in the issue of the EU funds, the forint and the sustainability of Hungary’s budget.
Politico wrote yesterday that the main question is decided: Hungary will receive money from the EU to stabilise its economy. The journalists of the news outlet argued “Orbán has taken the EU hostage, essentially demanding billions in exchange for lifting vetoes on everything from Ukraine aid (EUR 18 billion – DNH editor) to a global corporate tax deal.” Furthermore, he would also like to say ‘Nay’ to the global minimum tax. Since the EU decision-making process requires unanimity in such questions, Orbán’s power reaches far beyond the size of the population or territory of Hungary. Besides, he has a 2/3rd majority in the Hungarian parliament.
Of course, Index writes that the EC and the European Parliament will have a loud debate on the issue. The liberal Renew Europe group already cleared that they will hold EC chairwoman Ursula von der Leyen responsible for letting Hungary sink into the swamp of corruption.
Károly Csabai agreed that it is in both Hungary’s and the EU’s interest to transfer some of the money to Budapest. However, he believes Hungary will not get a cent until next spring. Importantly, the European Commission postponed the evaluation of Hungary’s anti-corruption measures from 22 November. The Swedish, Danish, Dutch and Finnish submitted objections which may be the reason why the Hungarian parliament has not decided yet about Helsinki’s and Stockholm’s NATO accession. Budapest is not alone. Turkey did not ratify the bids either.
19 December is the final deadline for the “Hungarian issue”. Moreover, the European Council will make the final verdict, where PM Orbán is a member.
According to Csabai, Hungary will not go bankrupt even if the decision is disadvantageous. In that case, the currency exchange rate will plunge quickly. However, after the handshake over the agreement between the EC and Hungary, even the 360 HUF/EUR level is imaginable. Another prerequisite of that favourable scenario is the continuing decrease in energy prices.
Interestingly, István Ujhelyi, a Hungarian MEP, said before that the EU would not give any money to Hungary. Balázs Wéber and Károly Csabai agreed that Hungary would probably receive money, but not as much (EUR 15 billion) as it is entitled. Furthermore, the control mechanism will be harsh, and the European Commission will regularly review how effective the Hungarian anti-corruption measures are. They suggested that Orbán should be kept on a short leash.
Source: mfor.hu, Politico, index.hu