Menu Close

Hungary Reaches Agreement With EU on Recovery Funds

The European Union concluded a mega-agreement on Thursday afternoon in four areas, two of which directly involved Hungary. A majority of member states gave their blessing to the Hungarian recovery plan, continuing the rule of law procedure against Hungary and suspending €6.3 billion (US$6.7 billion) in aid, providing financial aid for Ukraine, and introducing a global corporate minimum tax.

The EU reached a political agreement on the four issues at an earlier meeting on Monday. The Orbán government backed away from its veto threats, and other member states reduced the extent of sanctions levied on Hungary. Thursday’s approval was the formal conclusion of that deal.

The final decision was delayed by Polish officials. Polish Prime Minister Mateusz Morawiecki, arriving at the EU summit on Thursday, said that connecting aid to Ukraine and how large companies are taxed in a single package was a mistake and an attempt at blackmailing. Warsaw caused consternation by raising a separate last-minute objection to the tax deal, but its opposition was eventually overcome.

The agreement will now permit the European Union to begin borrowing money, backed by the European Community’s budget, to send to Ukraine. Member countries will cover the interest on the loan.

By accepting the two Hungary-related issues, the Orbán government will continue implementing measures that limit corruption and strengthen judicial independence, conditions for accessing the €5.8 billion (US$6.1 billion) in post-epidemic recovery aid and €6.3 billion suspended from the EU’s cohesion fund.

The government has already carried out some of these, but plans to fully implement them only by the end of next March. The European Commission will then re-evaluate Hungary’s performance and make a proposal to continue freezing funds or release the money if it feels the country has fulfilled its promises.

If everything goes according to plan, the first installment of €800 million (US$847 million) from the EU recovery fund could arrive in the first half of 2023, but even after that, each payment will be tied to fulfilling certain “milestone” conditions. [Népszava]

Posted in European Union

Related Posts

1 Comment

  1. Misi bacsi

    Sadly, the Hungarian regime will continue to get EU funding, which enables the mafia state to engage in massive corruption, while throwing crumbs to some average Hungarians i.e. the salary increase for teachers, increase in minimum wage etc. Of course, the EU is in a difficult situation -of its own design-needing unanimous agreement on Recovery Funds, policies regarding Ukraine etc. As others have long commented, Hungarians can not wait for the EU to topple this regime, only Hungarians can do that. The model may be nearby Ukraine for only Ukraine resistance to Putin’s aggression led to massive American assistance and important aid from not only the EU, but individual nations such as UK, Poland etc. Splendid summary of some major news.

Comments are closed.