Despite good intentions, Brussels and Budapest are clashing over Hungary’s post-Covid fund allocation. Officials familiar with the talks, who spoke anonymously, revealed that the Commission recommended Hungary request only the grants, while Hungary wants the full amount.
Kinga Kollár, an MEP from Magyar’s Tisza party, expressed optimism about unlocking all the blocked funds.
The allocation includes €6.5 billion in grants, which are non-repayable, and €3.9 billion in loans, repayable with favorable interest. Hungary has until August 31 to formally request the funds, and the Commission has until December 31 to make payments.
The Commission argues there isn’t enough time to release the full €10.4 billion as payouts depend on Hungary meeting specific reform targets. Accepting loans could worsen Budapest’s public finances, with debt around 75% of GDP and a projected deficit near 7% of GDP by 2026.
Following Brussels’ advice would mean Magyar leaving €3.9 billion unused. Returning with less than the full amount could appear politically weak after promising a complete reset with Brussels.
Last week, Magyar expressed confidence that the EU will be flexible and allow Hungary to access the entire fund they are entitled to.
Leave a Reply