EU unblocks €16.4 billion for Hungary after Magyar’s reform push

The European Union on Friday announced that it will release €16.4 billion ($19 billion) in previously frozen funds to Hungary, marking a major victory for Prime Minister Peter Magyar.

European Commission President Ursula von der Leyen said that the decision has been taken after Hungary's government undertook a series of governance reforms.

The funds had been withheld during the administration of former Prime Minister Viktor Orban over concerns related to democratic standards, corruption, academic freedom and the treatment of LGBTQ communities.

Speaking after talks with Magyar in Brussels on Friday, von der Leyen said that the Hungarian people deserved access to the funds after the progress made by the new government.

More from World

Funds to be released in stages

According to an Al Jazeera report, €10 billion of the funds will be released from the EU’s Next Generation EU recovery fund, while another €4.2 billion will come from cohesion funds. A further €2.2 billion is expected to be made available once remaining reform commitments are fully implemented.

The frozen funds form part of a larger package of nearly €18 billion that the EU had blocked during Orban’s tenure. Hungary has been seeking access to these funds for several years, arguing that the money is essential for the country in terms of economic growth and public investment.

The funds include nearly €17 billion from the EU budget, of which around €10 billion was at risk of expiring at the end of August if Hungary failed to meet the required conditions.

EU officials have also indicated that Hungary could gain access to more than €16 billion in low-interest defence loans in the future, the report said.

Reforms aim to restore trust

To secure the funding, Hungary has committed to a series of reforms demanded by Brussels. These include stronger safeguards against corruption, protection of the right to asylum and measures to strengthen academic freedom.

The Magyar government has already begun reversing some policies associated with the previous administration. Earlier this week, Hungary’s parliament voted to abandon plans introduced under Orban to withdraw from the International Criminal Court.

In another notable development, Hungarian police announced they would not ban next month’s Pride parade in Budapest, reversing a decision made under the previous government.

Economic boost for Hungary

Magyar described the release of the funds as a “historic day” for Hungary, saying his government had “fought for each cent” of the money.

He said that the funds would be used to rebuild the economy, improve public services and strengthen the competitiveness of Hungarian businesses, particularly small and medium-sized enterprises. According to the prime minister, the funding package is equivalent to roughly 13 per cent of Hungary’s national budget.

EU officials said that if Hungary completes all remaining reform requirements on schedule, the first payments could begin before the end of the year, further advancing efforts to rebuild trust between Budapest and Brussels after years of strained relations.