EU-Hungary megadeal closed! Brussels to unlock EUR billions for Hungary – UPDATED

Viktor Orbán
Photo: Creative Commons (CC BY 2.0)

The Czech presidency of the Council of the European Union announced on Monday night that a deal between Hungary and the EU was closed at the meeting of the member states’ ambassadors (COREPER).

The official Twitter page of the Czech presidency shared a tweet 1 hour ago stating the following:

  • EU ambassadors approved in principle a package of EUR 18 billion in support for Ukraine,
  • 15 percent minimum tax for big corporations
  • approval of Hungary’s RRP, and
  • an agreement on conditionality.

The package will be confirmed by written procedure.

According to telex.hu, based on the agreement, Hungary will receive EUR 5.8 billion from the EU’s RRF (recovery and resilience, the so-called COVID-recovery) funds. However, the Hungarian media outlet did not clarify what the agreement concerning the conditionality procedure meant in detail.

Based on the information of Világgazdaság, a government-close economic news outlet, Hungary will be granted an exemption in the case of the global minimum tax (GMT), meaning that the local business tax (abbreviated as HIPA in Hungarian) will be calculated in the GMT. As a result, no companies in Hungary will be required to pay more tax than the current amount.

Hungarian media outlets wrote before that Hungary would probably get the RRF funds. However, they argued that the development funds (7.5 billion EUR) were still at stake. The short statement of the Czech presidency uploaded on Twitter does not share anything new about that sum. We expect that the forint’s currency exchange rate will be better on Tuesday than it was on Monday, thanks to the good news.

Euro
Read alsoA leaked confidential Brussels letter shows Hungary should prepare to lose EUR billions of EU funds

UPDATE (12.13. 9.04 am)

Politico.eu writes that this successful agreement could be viewed as PM Viktor Orbán’s victory over the EU. Interestingly, Ferenc Gyurcsány, the president of the leading Hungarian opposition party, Democratic Coalition, wrote the opposite in a post stating that signing the deal meant Orbán had to lay down his weapons against Brussels.

Politico says the European Union lowered the sum they suspended for Hungary from the development funds from 7.5 billion euros to EUR 6.3 billion. Furthermore, Brussels approved Hungary’s pandemic recovery funds, EUR 5.8 billion EUR, that can be spent by 2026 on various projects, including infrastructure development. The EU withheld that grant for more than 1.5 years due to concerns about the state of the Hungarian democracy. To receive that money, Hungary must carry out 27 anti-corruption and judicial independence reforms, politico.eu argues. The news outlet says Orbán could win for two reasons: “EU system that requires unanimity on many major decisions, and an intense EU desire to preserve a united EU facade as war rages nearby.”

Budapest real estate housing crisis in Budapest's real estate market
Read alsoAn unprecedented change occurred in the Hungarian real estate market!

However, politico.eu adds that Hungary would still lose billions of euros since a large part of the development funds remained frozen.

Meanwhile, as a result of to yesterday’s deal, Ukraine will be able to get the first part of the EU grant next January, provided the EU Parliament gives the green light today.

Thanks to the good news coming from Brussels, the Hungarian forint started to strengthen this morning and currently stands around 410/EUR, which is a considerable improvement compared to the previous 420/EUR exchange rate.

Source: Twitter, Telex, Világgazdaság, Politico

Tags

5 Comments

  1. Politico also clarified this:

    “It’s a humiliating night for Orbán,” said a diplomat from another country, via text message. “He had to swallow his vetoes and hardly got a reduction on the conditionality mechanism. All to salvage his RRP [recovery plan] and thereby calm the markets at least a little bit for now.”

    Indeed, Orbán’s government has been facing mounting pressure from financial markets, which are demanding increasingly higher risk premiums for Hungarian debt. Losing €4.1 billion in recovery funds, which amount roughly to 2.1 percent of Hungarian GDP and are already planned for in the budget, would have blown a hole in Hungary’s finances.

    “But wait till they figure out he doesn’t get ANY of the recovery fund money until he does ALL the rule of law reforms,” the same diplomat added.

  2. The US has already given 100 billion to Ukraine since war. The US has half the population of Europe. No one seems to know where all that money has gone but, it’s so sweet the EU is given HU 4 billion it’s due. Corruption is haveing a leader the most popular in Europe – must be corrupt.
    Sadly the most corrupt country in the world is the USA (see the latest Twitter revelations) interesting how little interest the media here has – it just an extension of the US and it tech company’s.
    DHN devoted a whole section to Covid, that suddenly went away- no mention of the deception and how it started- you at least need to cover it for all the lives that were destroyed, if the US fails the western world will be China controlled – big business and institutions already are including the Biden family and the most powerful agency’s in goverment are covering it up and silence any opposition –
    No story there just like the EU and US role in the war in Ukraine

  3. This is a disaster. It is time for Hungary to figure out a budget that does not include money from the EU. Agreeing to the 18 billion for Ukraine is a loss for Hungary. The 18 billion has to be borrowed and Hungary as well as other EU countries will pay dearly for this loan especially as interest rates are rising. Accepting the 15% tax on companies will weaken the Hungarian economy and it will only help the US. The whole of EU is manipulated by globalists and the US. The EU might as well give up its parliament and jump when the US and globalists order.

  4. This is a disaster. It is time for Hungary to figure out a budget that does not include money from the EU. Agreeing to the 18 billion for Ukraine is a loss for Hungary. The 18 billion has to be borrowed and Hungary as well as other EU countries will pay dearly for this loan especially as interest rates are rising. Accepting the 15% tax on companies will weaken the Hungarian economy and it will only help the US. The whole of EU is manipulated by globalists and the US. The EU might as well give up its parliament and jump when the US and globalists order.
    Source: dailynewshungary.com https://dailynewshungary.com/eu-hungary-megadeal-closed-brussels-to-unlock-eur-billions-for-hungary/

Leave a Reply

Your email address will not be published. Required fields are marked *