Violations of the rule of law
EU withdraws billions in aid from Hungary
Updated 01/01/2025 – 10:11 amReading time: 2 min.
Hungary has not implemented EU reform requirements. This will cost the country dearly.
Hungary has lost its right to EU aid worth around one billion euros due to violations of the rule of law. In order to release the money, the country would have had to implement reform requirements by the end of 2024, as a spokeswoman for the European Commission confirmed to the German Press Agency.
The forfeited funds are 1.04 billion euros that were intended for Hungary from programs to promote structurally weak areas. The funds were frozen at the end of 2022 because the EU Commission came to the conclusion after analyzes that Hungary was ignoring various EU standards and fundamental values.
In order to release the funds, Hungary would have had to implement sufficient reforms by the end of the year. These include, among other things, changes to laws to prevent conflicts of interest and combat corruption. But that didn’t happen.
In order to fill financing gaps, Hungary’s right-wing populist Prime Minister Viktor Orban recently relied on China, among other things. In April, Hungary called off a loan worth one billion euros that the country took out from Chinese state banks. This happened discreetly and only became known in July, when the Hungarian Center for Public Debt (AKK) published some key data about it. The loan therefore has a term of three years. The amount of interest and the repayment intervals are not known.
China is heavily active in Hungary. The electric car manufacturer BYD is building a large factory in Szeged, southern Hungary, and the battery cell manufacturer Catl is building a mega-factory in Debrecen, eastern Hungary. Chinese companies are building the new railway line from Budapest to the Serbian capital Belgrade. For the construction of the Hungarian section, Hungary took out a loan of almost 900 million euros from the Chinese Exim Bank.
Despite Chinese financial aid, Orbán continues to try to release frozen EU funds. According to the EU Commission, a total of around 19 billion euros in EU funds are currently blocked for Hungary, including further funding and Corona aid. At the beginning of December, Orbán threatened to veto the EU’s next seven-year budget if Brussels did not release the EU funds currently blocked for Hungary. Negotiations on the next long-term EU budget from 2028 to 2035 are expected to begin in mid-2025.
It was not the first time that Orbán threatened to block key EU decisions. It was only at the EU summit in mid-December that he refused to agree to the extension of the Russia sanctions, which expire at the end of January. Diplomats suspected that he also wanted to extort concessions from EU partners in other areas – such as the release of frozen EU funds.
In December 2023, despite ongoing criticism of violations of the rule of law in Hungary, the Commission released frozen EU funding worth around ten billion euros for the country. MEPs – including those from the German government parties SPD, Greens and FDP – criticized this at the time and accused Commission President Ursula von der Leyen of allowing herself to be blackmailed by Hungary. Orbán had previously announced that he would block the start of EU accession negotiations with Ukraine and a billion-dollar EU aid package for the country attacked by Russia.
Swiss
