After meeting Hungarian Prime Minister Peter Magyar, European Commission President Ursula von der Leyen said the EU would unlock €10bn ($11.6bn) from the recovery fund, known as Next Generation EU, and €4.2bn from cohesion funds. A further €2.2bn will be released as reforms are completed.
“I can confirm that it is €10 billion that have been unfrozen or will be unfrozen from Next Generation EU, then the €4.2 billion from the cohesion conditionality and 2.2 billion for the academic freedom, which makes it €16.4 billion”, von der Leyen said.
“That is quite a sum, but ... the Hungarian people deserve it. Again, many, many thanks for the outstanding work that has been done”, she added.
Magyar Wants to Rebuild Hungary
“We will bring this money home, as we promised, to rebuild Hungary, to jump-start the economy, to restore and develop public services, and to strengthen the competitiveness of Hungarian companies and small and medium-sized enterprises”, Magyar told the news conference.
He said the deal showed that his government’s anti-corruption measures were paying off. Fighting corruption was one of the key conditions for the EU to unfreeze the money.
Magyar also called the agreement with Brussels a “historic breakthrough”. He said he had agreed with von der Leyen on all the steps needed to release the funds and that Hungary would be able to pass the necessary laws.
Getting the Economy Moving
The EU money is crucial to kick-starting Hungary’s economy, which has practically stagnated for three years.
The new government inherited a swelling budget deficit which, according to the Commission, could reach 6.2% of gross domestic product in 2026 following heavy pre-election spending by former Prime Minister Viktor Orban, who was ousted in last month’s election.
Hungary’s central bank left its base rate unchanged at 6.25% on 26 May, as expected, after a rise in global energy prices and domestic fiscal risks. However, it noted a significant improvement in the inflation outlook amid strong gains in the forint. The currency has been boosted by hopes that the frozen EU funds would be unlocked.
(reuters, lud)
