EU moves to unlock €4.2 billion in frozen funds for Hungary

The European Commission has proposed unlocking €4.2 billion in frozen EU funds for Hungary, marking a major development in the long-running funding dispute between Budapest and Brussels. The move could also restore full access to Erasmus+ and Horizon Europe for Hungarian students and researchers, following reforms introduced by the country’s new government.

According to the European Commission, Hungary has adequately addressed the previously identified rule-of-law concerns that could have put the European Union’s budget at risk, MTI reported.

“Hungary has taken important steps to strengthen the rule of law and protect the Union’s financial interests. Today, we are proposing to unlock €4.2 billion and reopen the doors of Erasmus+ and Horizon Europe to Hungarian students and researchers. I am glad that they will once again fully benefit from the opportunities our Union creates. This shows that reforms deliver results.” – said Ursula von der Leyen, President of the Commission.

The proposal would make €4.2 billion in suspended cohesion policy funding available to Hungary, although it must first receive approval from the Council of the European Union. The proposed €4.2 billion release forms part of a broader €16.4 billion package of previously frozen EU funds for Hungary. As we earlier reported, Prime Minister Péter Magyar and European Commission President Ursula von der Leyen announced in May a political agreement aimed at unlocking the funding.

EU funds for Hungary: What has changed?

The Commission’s assessment follows reforms introduced by Hungary’s new government, led by Péter Magyar. According to the EU executive, the authorities have strengthened the powers of the Integrity Authority, improved transparency in public spending and established a more comprehensive asset declaration system.

Other measures include expanded judicial review of decisions by investigative and prosecution authorities, stronger controls over EU funding and reforms addressing conflicts of interest involving public-interest trusts. Hungary’s accession to the European Public Prosecutor’s Office was also highlighted by the Commission as a further step in strengthening safeguards against corruption.

The Commission assessed remedial measures formally notified by Hungary on 9 September and concluded that the conditions justifying the 2022 financial restrictions were no longer met.

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Erasmus+ and Horizon Europe could reopen to Hungarian universities

In December 2022, the EU prohibited new funding commitments involving Hungarian public-interest trusts and institutions maintained by them. The restrictions affected the participation of several Hungarian universities in the Erasmus+ student exchange programme and the Horizon Europe research programme.

If the Council approves the Commission’s proposal, the affected institutions would regain full access to both programmes, allowing their students and researchers to participate in EU-funded opportunities again.

The restrictions did not apply to every Hungarian university, but specifically to institutions covered by the measures concerning public-interest trusts.

What happens to the remaining frozen EU funds for Hungary?

Wednesday’s announcement concerns the financial restrictions imposed under the EU’s rule-of-law conditionality mechanism. It does not mean that the entire €16.4 billion package has now been released.

Hungary is also seeking access to €10 billion in recovery funds, with the Commission’s assessment of that request still ongoing. Meanwhile, approximately €2 billion in cohesion funding remains blocked over separate concerns involving the asylum system, child protection legislation and academic freedom.

The next step lies with the Council of the European Union, which has one month to decide whether to lift the measures imposed in 2022, although the deadline may be extended in exceptional circumstances. The decision requires a qualified majority of member states.

Until the Council adopts the proposal, the affected funds for Hungary remains subject to the existing restrictions.