PM Orbán must win time in Brussels or will lose EUR billions

EUR 10 billion is in the so-called RRF fund, a bag full of EU allocations and low-interest EU loans, which is not accessible to Hungary due to rule of law concerns. The Hungarian government has 27 super milestones to accomplish before accessing the amount. However, talks are progressing slowly, and the expenditure has a pressing deadline: 2026. Therefore, the Orbán cabinet is lobbying for an extension, but e.g. Germany rejects such plans. Will Orbán win again?

On 23 February, Ursula von der Leyen, the President of the European Council, announced in Warsaw that Brussels opened EUR 137 billion for the Poles thanks to the measures the Tusk cabinet carried out to reestablish the rule of law in Poland.

Von der Leyen surprised even her colleagues with the decision, and the Polish cabinet already got the first EUR 6 billion from the Recovery and Resilience Fund (RRF). But Hungary has not received much from that yet.

Hungary is entitled to receive money from the European Union from three different funds. First, there are the agricultural allocations, EUR 8.4 billion, not frozen. That money flow has not been stopped ever.

Two money taps closed for the Orbán cabinet

The second bag is the so-called development fund, an amount of EUR 22 billion. The entire amount was frozen. But thanks to an agreement with the Hungarian government, the European Council opened EUR 10 billion last December and another EUR 2 billion later. The remaining EUR 10 billion remains frozen.

However, the mechanism of this allocation helps. In this case, Brussels pays only after the project is ready. Thus, the delay in the Budapest-Brussels cash-flow is not visible because the Hungarian government pays the support in advance and submits the relevant bills to Brussels later.

Thus, there is a chance Hungary may utilise the whole money provided there is a political agreement later. The last bill is due in 2030, so Orbán has time, Válasz Online wrote.

The third big money tap is the RRF fund: EUR 6 billion of allocation and EUR 4 billion EU loan with a low-interest rate. The latter’s interest is much lower than the interest the Hungarian state could gain loans from the markets.

In this case, Brussels pays after the Hungarian government fulfils their 27 super milestones. In 2023, Budapest could accomplish only four. And 2026 is the deadline for the program, so there is a chance Hungary will lose this money.

Currently, Hungary got only EUR 920 million from this bag. Meanwhile, the country badly needs the whole amount because its budget struggles with considerable deficit, and they must fill the gap even with indirect Chinese loans.

Orbán cabinet lost credibility

Poland got RRF money almost the moment they changed government. The Tusk cabinet promised to solve the problems with the two super milestones, and it was enough for von der Leyen. Tusk even promised to join the European Public Prosecutor’s Office, a step the Hungarian opposition has been demanding for long, even though that was not a super milestone.

Meanwhile, in the case of Hungary, the European Council accepts only those super milestones that are fulfilled and work in practice. They are not satisfied with promises. The Orbán cabinet talks about double standards, and the European Council says Orbán struggles with a credibility deficit.

Interestingly, Orbán tried to set the opening of the RRF fund for his support for Ukraine’s EU support, but he backed off in February and gave the green light without getting anything. We do not exactly know what happened, but he came home from that summit empty-handed.

New situation after the European parliamentary elections

Hungary keeps lobbying for the extension of the RRF program. EU members entitled to a lot of money (South and East) support that idea, others are not too enthusiastic. For example, Germany says such a step would be unconstitutional. Meanwhile, the French want more. Paris lobbies for a program developing Europe’s defence industry financed by a similar EU loan.

The Hungarian government wants no new projects but to keep the RRF money at the European Commission and acquire it after they reach a political agreement with the new Commission.

According to the sources of Válasz Online, the debate will end only in July, after the 2024 European parliamentary elections. The Hungarian economy really needs that money, and the election results may create a favourable situation.

Read also:

• EU funds stolen by corruption network in Hungary: charges filed – Read more HERE
• Pressure on Budapest’s suburban railway upgrade: deadline is approaching
• Budapest to get EUR 780 million EU funding for city development – Details in THIS article