EU funds: Hungarian government concedes to EU, payments could be saved
A new Hungarian government decree significantly tightens financial controls on public and EU-funded construction projects. The move is a clear response to recent criticisms of Hungary’s public procurement system by the European Commission. The new rules aim to restore confidence in the handling of EU funds and curb uncontrolled cost increases in public works.
In April 2024, the European Commission expressed serious concerns about Hungarian public investment. The main issues identified were a lack of transparency, circumvention of public procurement rules, blurred lines around conflicts of interest, and risks associated with the use of EU funds. As a result, Brussels threatened to suspend further aid.
According to the official letter sent by the Commission, Hungarian legislation could seriously infringe EU rules on several counts, as it allowed certain projects to be exempted from public procurement obligations and failed to provide legal redress for those affected. This legal environment posed a systemic risk to the proper use of EU funds.
How does the new regulation affect the EU funds?
According to Portfolio, under the new regulation, all public or EU-funded works that meet or exceed national or EU public procurement thresholds will be subject to a detailed cost control procedure. This means, for example, that for classical contracting authorities, the lower threshold is HUF 60 million (around EUR 148,000), while the EU threshold is EUR 5.5 million (over HUF 2 billion).
However, the regulation does not only target individual projects but also considers the value of related smaller investments that fall under the same grant agreement. This measure aims to prevent contractors from “fragmenting” projects to avoid control obligations.
However, certain exceptions have been maintained. For instance, no cost control is required for emergency interventions resulting from natural disasters or industrial accidents, provided they fall below the EU procurement threshold. Projects undertaken by private companies or companies with majority municipal ownership are also exempt, if the share of public or EU funding does not exceed 50% and the total value remains under the threshold.
What’s being monitored?
The regulation covers the entire life cycle of construction projects. This includes not only implementation but also project preparation, modifications to existing contracts, execution of additional works, and the mobilisation of reserve funds. Cost controllers may therefore be involved from the planning phase and will track expenditure throughout the process.
Monitoring responsibilities are divided among several sector-specific institutions. For example:
- Rail and water projects: Institute of Transport Sciences
- Building construction: Construction Quality Control Ltd
- Road construction: Hungarian Public Roads Authority
- Agricultural projects: Hungarian State Treasury
The IT infrastructure is provided by the MÁV Service Centre, enabling the process to be administered and tracked electronically.
Applications for cost verification must be submitted online, along with various documents such as itemised budgets, technical specifications, price estimates, and supporting documentation for additional works. Based on the application, the Minister will issue an opinion, which could be pivotal for authorising procurement or contract amendments.
If the application is incomplete or incorrectly formatted, a supplementary submission is required. Failure to do so will result in the termination of the procedure and no ministerial opinion will be issued. The regulation also demands procedural flexibility—e.g., if there is a change in contractor, updated documentation must be uploaded within five days.
Regulations and the aim
A key component of the new regulation is the clarification of conflict-of-interest rules. It explicitly states that individuals who are personally or financially involved in a project may not participate in any form of cost control. This applies to project managers, designers, contractors, technical inspectors, and their subcontractors. This measure is especially important, given that one of the European Commission’s main objections was the widespread neglect of conflict-of-interest safeguards.
The regulation will come into force on 13 May 2025, and from that point onwards, all new contracts will be subject to the cost control procedure. The aim is clear: to closely monitor public investment costs, ensure the efficient use of public funds, and minimise the risk of corruption. The system is designed to maintain oversight of financial processes from project planning through to completion.
The centrally coordinated, digitally monitored control mechanism not only promotes transparency but also reinforces the rule of law and compliance with EU standards. This, in turn, may be crucial for Hungary to regain full access to EU funds and restore its international credibility in investment policy.
Stay informed! Read more about the situation of EU funds in Hungary HERE!
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Michael Steiner’s – the “Pseudonym” number that being of FULL Fidesz Party Membership that contribute using this platform of Daily News Hungary, as commentators.
We wait with “Bated Breath” – for your comments relating to the subject of this article.
REMEMBER – as part of your Fidesz Membership – the photo your must bow and “kiss the feet of ” – your submission to your “Demigod” – Victor Mihaly. Orban – prior to your – going to PRINT.
Truth is Truth.
The FEAR – of the Orban led Fidesz Party.
Given your lack of anything other than a certain style, you could just be him trying to make the “opposite side” look bad. Your comments are almost always difficult-to-follow, ad hominem, and seemingly hypocritical , given how you post neither a name nor a face. And that’s from someone who likely “agrees with” you on many or at least some points.
Whereas perhaps overdue, provided this is correctly administered, this is a step in the right direction. Would be nice if we could access all the EU funds, again. Hungary needs them, more than ever!
Evan Johnson.
I have NO difficulties in using my name, nor in fact my face.
We, my wife and I of 41 years – the email address required to use this platform of Daily News Hungary – is us.
What would really be to my liking is the opportunity to “face to face” meet with “other” commentators.
My titling of my commentaries – I endeavour to relate to the content of my writing and the subject matter of articles.
I HAVE no reason(s) to have “hidden” agenda’s.
We are fortunate to be people of “means” – that share & give, stand up for, have respect and dignity for those “less” fortunate than us.
Freedom & Liberty – availability to have a VOICE – core factors of DEMOCRACY – we EMBRACE.
Pope Francis said, yes i am a baptised practicing Catholic, of the “new” age post 1963 – not of the Hungarian Cardinal – Peter Erdo “age” of pre Vatican II, that Pope Francis said;
” WE must all Respect each other.
Everyone.”
NEVER have I been a “Political ” Animal.
Never have I been of a Political Party Membership.
I have always maintained a position of being a “flexible” voter.
Gregory Peck, asked the question by a reporter ;
“Mr Peck what is your Religion ?
Peck replied :
” I was baptized a Catholic but I don’t always agree with the Pope.”
Bit of me in Mr Pecks answer – in that I support DEMOCRACY and belief, if Hungary is to have a FUTURE – it must be under DEMOCRACY.
Churchill saying ;
“Indeed, it has been said that Democracy is the WORST form of Government, except all those “other” forms that have been tried from time to time.” – still decades on from when he made this statement meets my agreement.
I have NO “hidden” agenda.
I – “communicate” in the tone of my commentaries – through CORE values of my OWNERSHIP my beliefs that I consider would bring Europe, the Global World to a “closer” position of Unity – in acceptance and of Greater Trust & Respect – for each other that MANKIND would be the BIG winners.
Marriott Hotel – we reside (5) five minutes from our house.
LOVE to BEAR all – ask a question get an Honest and Truthful answer.
Evan – be the ARRANGER – for a meeting, if “others” can “raise there Veils ///.
A whole lot of nothing. There could be nothing behind your email address and it’s a bunch of drivel an AI could be prompted to say, or could just be a lie. It’d be meaningful if Daily News Hungary stepped in and confirmed you were a person, and an identifiable one, until then you are just the comments that the wise reader ignores. However extant or not “Michael Steiner” is- and however likely to be a paid troll, government or otherwise, I usually bother to read and consider what he writes. Far more likely you’re paid by the same team as him to make his “opposition” seem unhinged.
Free Agent – my response to Evan Johnson.
I would welcome meeting with the Editor of Daily News Hungary.
I have no hidden agenda.
I would be Respectful, Co-operative as to his IDENTIFICATION requirements if requested by him under conduct of Law.
Evan Johnson – be in attendance if an agreed meeting was arranged.
I mean…sure? I guess? It’s not like people from Iowa who lived in Hungary for a decade are too hard to track down anyway. But…somebody wants to interview me…ok?
Anyway, more likely, it’d be a lot easier for you to do things like mention the recent Novak Presidency or Mr. Orbán having worked for the Soros Organization before he was fired as a young man and indeed having it fund his graduate education in England before ‘89 and up to his Gov’t. 1.0. I’m sure he has his reasons but to be honest I’ve never once heard them, that much less so in the context of why, how, and when he founded Fidesz.
You definitely strike me as “paid government shill to play liberal bogeyman” is all I’m really saying; feel free to incorporate those issues into your future commentary if not. Otherwise you kinda seem like an intentional foil for posters like “Michael Steiner.” Most optimistically, that in itself might merit some introspection.