The incoming Hungarian government led by Péter Magyar is already facing its first major test in rebuilding relations with the European Commission, as intense negotiations continue over billions of euros in frozen EU recovery funds.
According to reports by Politico, cited by 444.hu, Brussels is increasingly sceptical that Hungary will be able to access the entire EUR 10.4 billion available under the European Union’s post-pandemic Recovery and Resilience Facility (RRF) before the final deadline at the end of August.
The funds were frozen during the government of Viktor Orbán because of rule-of-law concerns, corruption risks, and transparency issues.
Dispute focuses on how much money Hungary can still secure
The debate between Brussels and the incoming Tisza-led government is reportedly no longer about whether Hungary will receive money, but rather how much can realistically still be claimed within the remaining timeframe.
The package consists of EUR 6.5 billion in grants and EUR 3.9 billion in loans.
European Commission officials reportedly believe there is no longer enough time for Hungary to complete all the reforms and project milestones required to unlock the full amount.
According to Politico’s sources, Brussels is encouraging the new Hungarian administration to focus on securing the grant component while abandoning at least part of the loan package.
Commission officials are said to be concerned not only about the limited timeframe but also about Hungary’s strained public finances. Hungary’s national debt currently stands at around 75% of GDP, while the budget deficit could approach 7% by 2026, according to the reports.
Tisza government pushing for full amount
For Péter Magyar and his Tisza Party, however, recovering the full amount of frozen EU funds is a key political promise.
Kinga Kollár, an MEP from the Tisza Party, told Politico that the party remains optimistic about unlocking all blocked EU resources.
Behind closed doors, discussions are reportedly also testing how flexible Brussels may be toward democratic and anti-corruption reforms under Hungary’s new political leadership. While relations between Hungary and EU institutions appear to be improving after the change of government, EU officials reportedly insist that the bloc’s conditions and legal expectations remain unchanged.
Time running out before August deadline
The challenge is particularly urgent because Hungary is the only EU member state that has not yet begun drawing money from the Recovery and Resilience Facility.
Under EU rules, all RRF-related targets and spending commitments must be completed by 31 August 2026. Any unused funds will be permanently lost.
The Orbán government previously failed to fully implement the so-called “27 super milestones” required by Brussels, including anti-corruption safeguards, transparency reforms, and judicial independence measures.
Although the outgoing government made partial progress in some areas, several EU demands remained unmet.
Existing projects could be “relabelled” to save funding
According to Népszava, the new government is considering an oversized project list exceeding the total available funding envelope, hoping that at least the maximum possible amount can ultimately be approved before the deadline.
One possible solution being discussed involves “relabeling” already completed or ongoing projects previously financed through cohesion funds so they could instead be counted under the recovery fund framework.
A European Commission source told the newspaper that around EUR 800 million worth of projects may already be under consideration for such reclassification. These could include energy-efficiency investments completed in recent years.
This strategy could buy valuable time because cohesion funds have more flexible spending rules and longer implementation deadlines than the RRF.
Large infrastructure projects may prove impossible
Some projects originally included in Hungary’s recovery plan are now considered highly unrealistic within the few months remaining before the deadline.
Among them is the modernisation of Budapest’s suburban HÉV railway lines, a massive infrastructure project unlikely to be completed in time.
According to Népszava, one option could involve creating separate organisations responsible for completing such developments after August while still preserving part of the EU financing structure.
Sources close to the Tisza Party reportedly say their top priority is ensuring that as much EU funding as possible supports long-term investments benefiting the Hungarian economy.
What’s next? Schedule revealed how Péter Magyar will be elected prime minister this weekend
Informal negotiations continue before official inauguration
The talks remain technically informal for now because Péter Magyar’s official inauguration as prime minister is scheduled only for Saturday.
Nevertheless, discussions between Hungarian and EU officials are already underway at a technical level, focusing on which parts of Hungary’s original recovery plan remain feasible and what new reforms could realistically be completed within months.
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