European Union officials met Friday in Budapest with members of Hungarian election winner Péter Magyar’s team to discuss unlocking about 17 billion euros ($20 billion) of aid for Hungary that was withheld during the reign of outgoing Prime Minister Viktor Orbán. The money was frozen over concerns of corruption and democratic backsliding during Orbán’s 16-year rule, leaving Hungary’s ailing economy waiting on decisions made far above the people expected to live with the consequences.
Who Holds the Money
The talks came as Magyar will take power in May, with the EU hoping to jump-start cooperation with the new government, European Commission spokesperson Paula Pinho said in Brussels on Thursday. Pinho said, “The clock is ticking for a number of topics,” and said the “preliminary talks” in Budapest before Magyar takes office are to “make sure that once the government is in place action can be taken, if appropriate, and that we do not waste any time.” That is the language of managed urgency: officials on one side, a future government on the other, and everyone else left to wait for the apparatus to decide when cash will move.
The EU froze the billions in funding to Hungary over concerns of corruption and democratic backsliding during Orbán’s 16-year rule. Both the EU and Hungary’s incoming leaders have prioritized releasing the money as soon as possible to give a much-needed injection of cash into Hungary’s ailing economy. European Commission President Ursula von der Leyen wrote on X on Tuesday that “there is swift work to be done to restore, realign and reform” Hungary’s policies in order to unblock the funds. She said, “Restore the rule of law. Realign with our shared European values. And reform, to unlock the opportunities offered by European investments,” and the EU executive said Orbán had often vilified her during his campaign.
What the New Bosses Want
Magyar’s party Tisza won a super-majority in parliament, which will enable deep and quick reforms, and he has said his government will prioritize policies affecting judicial independence, academic and media freedom and anti-corruption in order to get access to the money. In his first public press conference after winning in a landslide on April 12, Magyar said Monday that Hungary “is in a very difficult financial situation,” and that his new government’s task will be “to bring home the money that is hers.” He added that, unlike Orbán, he would stick to a deal struck in December to provide Ukraine with a much-needed 90-billion-euro loan. Orbán had vetoed the bill after initially agreeing to it, enraging EU officials and counterparts across the 27-nation bloc.
The funds are split between 10 billion euros of COVID recovery funds and 6.3 billion euros in cohesion funds designed to lift up struggling economics within the EU. Brussels and Budapest are rushing to first unlock the COVID funds because they are set to expire in August. Hungary, a major net recipient of EU funds, had come under increasing criticism for veering away from democratic norms. The Commission had for more than a decade accused Orbán of dismantling democratic institutions, taking control of the media and infringing on minority rights. Orbán rejected the accusations and denounced them as interference in Hungary’s sovereignty.
The Commission suspended the money to Budapest in 2022 over what it said was democratic backsliding by Hungary’s right-wing populist government and failures to tackle corruption and ensure judicial independence. A year later, the Commission found that the government had carried out sufficient reforms to have around 10.2 billion euros ($12.1 billion) released. Zsolt Darvas, a fellow at the Brussels-based think tank Bruegel, said Magyar can move almost instantly to reform Hungary enough to unlock the funds. “All the legislative work can be done in a single day if there is a will from the Tisza party to do it,” he said. “That’s relatively straight forward and not technically difficult.”
The Price of Compliance
Darvas said that would involve changing how judges are selected and what power they have. He said that out of the 16 billion euros, Hungary has already lost about 2 billion euros because the funds were suspended for two years, and Hungary has been paying 1 million euros a day since June 13, 2024, on top of a 200 million-euro fine over Orbán’s refusal to align Hungary’s asylum processing claims with EU standards. Darvas said Hungary could follow Poland’s path by staying mostly closed to migration but still respecting EU law and thus ending those fines. He said Hungary’s economic crisis won’t be solved alone by these funds, but by complying with EU regulations, the new government will signal that the country is a stable place for investments.
Hungary could also receive mass sums of money if it joins the EU’s 150 billion-euro Security Action for Europe initiative, or SAFE, which is designed to boost Europe’s defense readiness at a time when the U.S. has been diminishing its role in the continent’s security. So far, 18 of the EU’s 27 nations have received low-interest defense loans, and Hungary is eligible for 16 billion euros through the program. With the other two tranches of cash, these funds would roughly equal 15% of Hungary’s GDP, according to an analysis by Jeremy Cliffe at the European Council on Foreign Relations.
The whole arrangement shows how the people at the bottom are made to live inside a timetable set by institutions above them: the EU, the incoming government, and the financial machinery that decides when money is released, what reforms count, and which public needs get treated as bargaining chips. The language is all about cooperation, values, and stability, but the facts on the table are about leverage, conditionality, and a country’s economy being held in suspension until the right signatures and policy changes are in place.