Budapest on the edge of a golden age? Race for EU billions begins

Hundreds of billions of forints in European Union funding could soon become available for Budapest. City leaders are already preparing for a new phase and hope that, with Hungary’s new government led by the Tisza Party, previously frozen EU funds may finally be unlocked.

“I see 2026 as the beginning of a new golden age for Budapest — or at least the opportunity for one. What once felt like hope is now becoming a tangible possibility,” Budapest Mayor Karácsony Gergely wrote recently.

Over HUF 700 billion in EU funds could reshape Budapest

According to a report by 24.hu, Budapest has so far secured agreements for around HUF 300 billion in development funding. Following the change in government, however, the city expects to gain access to more than HUF 700 billion in total from EU sources, including both the 2021–2027 budget cycle and the post-pandemic recovery fund.

On paper, this could significantly reshape parts of Budapest.

Planned projects include transport upgrades, green investments, flood protection measures and the renewal of public spaces. Many of these ideas are not new — several have been on the agenda for years but have stalled due to funding shortages or political disputes.

Mayor Karácsony also noted that the city has so far only reached two funding agreements, worth a total of 56 billion forints, while much of the roughly 300 billion forint development package has been blocked for political reasons.

At the same time, the project list includes several long-planned or partially prepared investments, such as new CAF trams, trolleybus fleet upgrades, further expansion of the city’s interconnected tram network, and redevelopment of brownfield areas.

If you missed it:

• Budapest revives Gellért Hill project after 20 years – planned funicular could carry over 1,000 passengers per hour

EU conditions and tight deadlines pose major obstacles

The biggest challenge, however, is not just access to funding — but time.

Hungary’s original recovery plan is facing extremely tight deadlines. The European Union’s Recovery and Resilience Facility (RRF) was created in the wake of the COVID-19 pandemic, with funds tied to a strict implementation timeline.

However, Hungary has so far been unable to access these resources, as rule-of-law conditions set by the EU were not fully met under the previous Orbán-government, preventing disbursements from starting.

As a result, the programme will almost certainly need to be renegotiated. This will require not only a political agreement with Brussels but also a revision of the underlying projects, as deadlines are extremely tight. Under EU rules, projects must be completed by August 2026, with final payment requests submitted by the end of September.

This poses a particular challenge for large-scale investments. The procurement of new trams or major urban development projects typically takes years to prepare and implement. By contrast, only a matter of months may now remain to turn existing plans into actual investments.

For the city leadership, the key question will be what can realistically be delivered within this timeframe. In the coming period, priority is therefore likely to shift toward projects that are already in an advanced stage of preparation and can be launched quickly.

As a result, previously planned transport developments — including vehicle procurements and network expansions — could gain renewed momentum.

Meanwhile, some projects are already in progress, including the redevelopment of two major public spaces in Budapest.