“We have agreed with the President of the European Commission on the release of 16.4 billion euros, approximately 6,000 billion forints, in EU funds,” Prime Minister Péter Magyar announced in Brussels on Friday.
Péter Magyar promises help for many in Hungary
At a joint press conference with President of the European Commission Ursula von der Leyen, Magyar said one of their most important campaign promises was to bring home and unlock the many thousands of billions of forints in EU funding that is due to the Hungarian people, Hungarian companies, Hungarian public services, health care, education, transportation, and the social sector.
He said that of the 16.4 billion euros, 4.4 billion euros are cohesion funds, which the Hungarian government can spend on transport development, health-care investments, social investments, environmental investments, and support for small and medium-sized enterprises. Some 2.2 billion euros will go towards education, development, and research, 1.5 billion euros will be allocated to the development of the electricity grid, and the government will be able to spend 2 billion euros on the procurement of new trains, suburban trains, and trams.
Magyar said that an agreement had been reached with the European Commission on all issues that would enable the Hungarian people to access the funds they are entitled to. “On April 12, the people gave the government an unprecedented political mandate, just as they gave it the mandate to bring the funds home and kick-start an economy that has been unable to grow for four years, one that had the highest inflation in Europe, where we are currently struggling every day to keep public services from collapsing,” he said. “The goal was clear from the start; we negotiated very hard and fought for every euro cent,” he said.
EU did not unlock the funds due to the Orbán cabinet’s corruption
The real reason why the European Union was not in a position to provide Hungary with the many thousands of billions of forints it is entitled to was corruption, Magyar said, adding the level of corruption had long been at “unimaginable” levels in both the European Union and Hungary.
He added that he had said from the very beginning that if Hungary adopted anti-corruption measures, established the National Asset Recovery and Protection Office, strengthened the powers of the Integrity Authority, and adopted conflict-of-interest rules like other countries, “then these funds would come.”
He said that a few weeks were enough to reach political agreement “on this enormous amount of EU funding“. Three or four weeks were enough to achieve “what [former Prime Minister] Viktor Orbán and his outgoing government were unable to achieve in three or four years“. “Or perhaps they didn’t even want to achieve it; we don’t know,” Magyar said.
No ideological expectations
Brussels did not have ideological expectations of Hungary regarding the release of European Union funds, but merely expected the “best possible action” against corruption, he said. He added that what the commission president requested in the interest of European and Hungarian taxpayers could have been fulfilled long ago had the Orbán government truly governed in the interest of the Hungarian people.
He said that the Tisza government advocated zero tolerance of corruption and, in certain cases, would adopt anti-corruption measures stricter than what had been requested. As an example, he said the government would overhaul and tighten the asset declaration system, making it verifiable. The draft legislation is ready and includes a provision stating that anyone who intentionally provides false information in their asset declaration is punishable by up to two years in prison, he added.
The prime minister also noted his submission to the commission president of Hungary’s application to join the European Public Prosecutor’s Office. “We are declaring zero tolerance for corruption. We will eliminate any opportunities for those in power to divert public assets into their own pockets, or to their oligarchs, or to their family members,” he stated.
Historic day for Hungary
“This is a historic day for Hungary; a historic agreement has been reached, and we are working together with great joy for the future and competitiveness of Hungary and the European Union,” Magyar said, adding that “this is a political agreement, a very strong signal.”
“We will bring this money home, as we promised, to rebuild Hungary, jumpstart the economy, restore and develop public services, and strengthen the competitiveness of Hungarian companies and small and medium-sized enterprises,” he said.
The negotiations with the European Commission and the commissioners were exclusively about unfreezing Hungarian EU funds and bringing EU money back to Hungary, and “no other topic was discussed between us,” he said.
Fidesz’s János Bóka suggests Magyar promised green light for the migration pact in return
“What did [Prime Minister] Péter Magyar promise in exchange for EU funds?”, the deputy leader of the opposition Fidesz parliamentary group said on Friday, reacting to Magyar’s announcement that he and President of the European Commission Ursula von der Leyen had agreed to release 16.4 billion euros, approximately 6,000 billion forints, in EU funds.
János Bóka, the former European affairs minister, said in a Facebook post that based on the announcement by Magyar and von der Leyen, “it is clear that the Hungarian prime minister has accepted the migration pact.” “This is bad news,” Bóka added.
He said what was interesting was something that neither of them mentioned: according to Bóka, part of the EU funds due to Hungary had so far been withheld as a form of “political pressure” due to Hungary’s stance on migration, the Russia-Ukraine war, and child protection. “But these funds belong to the Hungarian people, and they would have received them in any case. The question now is: at what cost will they receive them,” Bóka said.
Hungary’s economy may be poised to gather momentum
The commission president said that following consultations with the Hungarian government, up to 10 billion euros from the EU’s Next Generation Fund could be released to Hungary, contingent on the adoption of reforms and the implementation of investments.
In addition, following progress in meeting key milestones, the European Commission has also released 4.2 billion euros in cohesion funds linked to the conditionality mechanism. An additional 2.2 billion euros in cohesion funding could become available upon the implementation of reforms related to academic freedom.
As part of this, Hungary will gradually phase out the system of public interest asset management foundations and adopt legislation addressing EU concerns regarding conflicts of interest and integrity rules, she said.
Strong wind of change
Von der Leyen declared that “we can already feel a strong wind of change across Hungary“, noting that the Hungarian parliament elected the new prime minister on Europe Day, adding that the playing of the European anthem and the return of European flags to the Hungarian Parliament building both signalled the opening of a new chapter in the country’s history.
She also commended the fact that the new government was formed in record time and quickly began implementing measures aimed at economic recovery, the fight against corruption, and the restoration of the rule of law.
Von der Leyen said that the EC and the Hungarian government immediately set to work on addressing the EU’s concerns regarding corruption and the rule of law. She added that Hungary would join the European Public Prosecutor’s Office, strengthen the Integrity Authority, review public procurement rules, and gradually phase out public-interest asset management foundations, which the commission viewed as structures posing a risk of state capture.
She said that these reforms not only served to curb corruption but also enable the release of billions of euros in previously frozen EU funds.
Funding covers the energy, housing, and transport sectors
Speaking about investments, von der Leyen announced that an agreement had been reached on the projects to be funded under the revised Next Generation EU plan. The funding covers the energy, housing, and transport sectors, as well as small and medium-sized enterprises. She added that the parties have agreed on a stable and secure financing framework.
Regarding fundamental rights, she said that regarding the child protection law “more steps will have to be taken, but we are on a good direction of travel“.
She made special mention of the Erasmus programme, stating that Hungarian youth will once again have the opportunity to participate in one of the EU’s best-known education and mobility programmes, meaning they can rejoin the Erasmus community as early as the next academic year.
At the end of her speech, von der Leyen said that the markets were beginning to sense these changes, and investor confidence in Hungary was returning, which could provide further momentum for the reform processes.
She said the EC intended to continue working closely with the Hungarian government in the future for the benefit of both Hungary and the European Union.
Enlargement remains merit-based process
Answering journalists’ questions, the president said the commission and the Hungarian government would work closely together to implement the migration pact, adding that the pact created uniform conditions across the bloc, and the commission would work closely with the Hungarian authorities on its implementation. She said it was important to apply the pact with clear objectives.
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She rejected the suggestion of a link between talks with Hungary and Ukraine’s EU accession process, saying the Next Generation EU recovery fund and cohesion funds were not linked to enlargement negotiations.
Talks, she added, had touched on accession, and the commission’s position remained that enlargement was a merit-based process.
Regarding the details of the agreement with Hungary, von der Leyen said that intensive negotiations in recent weeks had succeeded in establishing a solid framework for handling rule-of-law issues, other reforms and investment matters.
The basis of the agreement, she said, was the implementation and completion of the committed reforms and the realisation of investments. The disbursement of the related EU funds is linked to the achievement of individual milestones, so, for example, once a given reform law is adopted by parliament, the associated support can be paid out immediately.
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