The European Commission announced today that it is releasing around 10 billion euros earmarked for Hungary, around a third of the total amount that has been suspended due to a range of rule of law concerns.

The development comes a day before European leaders discuss new aid to Ukraine and the start of Kiev’s accession talks, which Orban has strongly opposed.

The Commission argued that Hungary has fulfilled a set of judicial reforms and therefore deserves to access part of the funding on merit.

In its announcement, the Commission states:

After a thorough assessment and many exchanges with the Hungarian government, the Commission considers that Hungary has taken the steps it committed to take in order for the Commission to consider that it fulfills the horizontal condition of the EU Charter of Fundamental Rights regarding judicial independence .

This means that part of the Cohesion Policy funding will no longer be blocked, and therefore Hungary can start claiming refunds of up to around €10.2 billion.

The veto threat

In December 2022, the Commission had frozen €21.7 billion of EU funds earmarked from the Cohesion Fund for Hungary, due to violations of the rule of law. The Commission’s announcement comes a day before the European Council is called on to take major decisions on political, economic and military aid to Ukraine, under threat of a veto by Hungarian Prime Minister Viktor Orban.

In its announcement, the Commission emphasizes that Hungary’s reforms to improve the independence of its judicial system are sufficient and therefore it can start claiming refunds of up to around 10.2 billion euros.

Specifically, the European Commission issued two decisions on the state of the rule of law in the country. One relates to the horizontal conditions of authorization regarding the reform of the judicial system in Hungary and the other to the budgetary conditionality mechanism. With these decisions, the Commission is following up various procedures launched by the Council in December 2022.

It is noted that Hungary, like all member states, must ensure the fulfillment of the favorable conditions throughout the period of the cohesion policy. The Commission will closely and continuously monitor, in particular through audits, the implementation of the measures by Hungary and emphasizes that if at any time, it is found that the authorization condition for claiming the funds is not met, it may decide again to block the funding.