Hungary’s government has launched the Saint Stephen Rural Development Programme, a new initiative aimed at strengthening rural communities and giving local residents a greater say over how development funding is spent. The pilot phase will cover 10 rural micro-regions, 100 settlements and nearly 100,000 people. If the model proves successful, it could be rolled out nationwide from 20 August 2027, potentially reaching more than 2,100 settlements and 1.8 million people.
The new programme starts in 10 regions
Prime Minister Péter Magyar announced the launch of the Saint Stephen Rural Development Programme (Szent István vidékfejlesztési program) in Parliament on Tuesday. The initiative will initially be tested in 10 rural micro-regions, covering around 100 settlements and nearly 100,000 residents.
The selected areas are:
- Zalakaros and its surrounding area
- Harkány and its region
- Bács
- Pásztó
- Medgyesegyháza
- Igal
- Tiszaújváros
- Gyöngyös
- Nyírbátor
- Gönc and its surrounding area
According to the government, the areas were selected using indicators including average per-capita income subject to personal income tax and a complex development index. The average per-capita income in the participating regions is HUF 308,629, which is 36.7% below the national average.
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HUF 1 billion for every 10 settlements
One of the programme’s most significant commitments is a HUF 1 billion annual community development fund for every group of 10 settlements. However, the government says the initiative is not simply about providing additional money. A key principle is that decisions about how the funding is used should be made locally rather than imposed from Budapest.
The 10 settlements in each participating area will be expected to work together to identify their most pressing needs and development opportunities. Local residents and experts will then assess the problems and potential of the area, draw up a joint development strategy and prepare investment plans that are both professionally sound and financially realistic.
In other words, the central government is promising to provide the funding, while local communities will have a much stronger say in deciding what the money should be used for.
Keeping young people in rural Hungary
One of the central objectives of the programme is to make rural areas more attractive places to live, work and raise a family. Magyar argued that it is not enough to simply tell young people to stay in their hometowns.
If there are no jobs, nurseries or adequate public services nearby, roads are in poor condition, or internet access is inadequate, young people may have little realistic choice but to move away. The government therefore wants to create rural communities where staying is a genuine choice rather than a necessity or sacrifice.
The programme could support improvements to local infrastructure, services, businesses and economic opportunities, although the exact projects will ultimately depend on the needs identified by each participating community.
Why does rural depopulation matter?
Many smaller Hungarian settlements have faced a combination of population decline, the departure of younger residents and shrinking access to local services. Magyar highlighted the potential chain reaction: young people leave, schools and shops close, employment opportunities become scarcer, businesses find it harder to operate and essential services become increasingly difficult to access.
Eventually, a community may no longer be asking how it can develop, but how it can simply survive. The Saint Stephen Programme is intended to reverse this trend by strengthening the population-retaining capacity of rural areas. The idea is not simply to preserve villages as they are, but to give them the economic and social conditions needed to offer residents a viable future.
What happens after the pilot?
The first phase is explicitly a pilot programme. Over the coming months, residents, local authorities and experts will work together to assess the challenges and opportunities in the 10 selected regions.
They will then develop local strategies and identify concrete investment projects. The government plans to evaluate the results of the pilot before deciding on the next stage. If the model works, it could form the basis of a nationwide rural and regional development network.
The government says that national implementation could begin after 20 August 2027. At that stage, the programme could potentially cover around 2,174 rural settlements and approximately 1.85 million people.
Major changes could also be coming to county assemblies
The announcement of the rural development programme was accompanied by another major proposal: the government is working on legislation that would abolish Hungary’s county assemblies in their current form and fundamentally restructure the system.
Magyar strongly criticised the existing county assemblies, arguing that they have become largely detached from meaningful regional development. He also accused opposition parties of using the institutions as political and financial patronage networks.
The government has already abolished expense allowances for county assembly presidents and vice-presidents and reduced the previously paid salaries of assembly leaders. According to Magyar, restructuring the system could free up additional public funds that could instead be channelled into development projects.
The exact form of the proposed new system remains unclear, however, and further details are expected when the government’s legislation is presented.
How is the programme different from existing rural initiatives?
The Saint Stephen Programme is not being introduced as a replacement for every existing rural development measure. Magyar said it would operate alongside the Hungarian Village Programme and the Competitive Districts Programme. Its distinctive feature is the emphasis on local decision-making.
Rather than having central authorities determine what a village needs and then asking local governments to fit their plans into an existing funding scheme, the new approach aims to start with the communities themselves. The government’s message is essentially: local people know their communities best, so they should have a greater role in deciding their future.
A major test for Hungary’s new rural policy
The Saint Stephen Programme represents an ambitious attempt to change the way rural development is organised in Hungary. But for now, it remains to be seen how effectively the model will work in practice.
The first 10 regions will provide an important test: can neighbouring settlements agree on shared priorities? Can local residents meaningfully influence investment decisions? And can the available funding generate improvements that make rural communities more attractive to young families and businesses?
If the pilot delivers the results the government expects, the programme could enter a much larger phase from 2027. That would bring the initiative from 100 settlements to more than 2,100, potentially affecting almost two million people.
