The European Commission proposed lifting a hold on €4.2 billion from cohesion funds for Hungary. Issuing a statement, Ursula von der Leyen, the head of the European Commission, said, "Hungary has taken important steps to strengthen the rule of law and protect the Union's financial interests," and added, "This shows that reforms deliver results."
Those steps also helped clear the way over the summer for €10 billion from the EU's post-pandemic recovery pot, which the government expects to receive at the end of the year, subject to checks on the reforms and the projects submitted. If EU countries sign off on the new recommendation, Hungary will have opened access to most of nearly €17 billion that had been on ice during the Orban era.
Peter Magyar, who unseated Orban in a sweeping April vote, moved fast on a slate of legal and institutional changes. His government advanced measures to reinforce judicial independence, dismantled politically influenced university oversight bodies, tightened transparency around public procurement and strengthened how EU spending is monitored.
As part of the reset, Hungarian students and researchers are set to return to EU education schemes, including the Erasmus exchange, after prior restrictions tied to political control over universities.
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Not all of the taps are back on. Around €2.2 billion remains frozen over past concerns linked to academic freedom, and a further €500 million is on hold until a new child protection law wins approval. Hungary is also incurring a €1 million daily fine to the EU for failing to comply with a top court ruling on its asylum system.
Officials expect to resolve the outstanding issues by year-end, including the penalty and the child law. The government also intends to submit a fresh bid for a slice of the EU's €150 billion defense fund, with Hungary remaining the only member state that still needs sign-off on its plan.
For a budget already stretched, the timing is critical. Hungary's deficit is forecast at 7.5% of GDP this year, and Magyar's cabinet aims to lower it to 3% by 2030 so the euro-entry criteria are met, paving the way to adopt the common currency later. Fresh EU money would relieve fiscal pressure, shape how Hungary borrows and spends, and ripple into local rates and growth. If you hold exposure to Hungarian assets or do business tied to the country, the pace of reforms and approvals here is the story to watch next.
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