EU hails Hungary’s ‘wind of change’ and unlocks €16.4bn for new PM Magyar

38 minutes agoShareSaveAdd as preferred on GooglePaul KirbyEurope digital editor

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European Commission President Ursula von der Leyen has told Hungary’s new prime minister that billions of euros in EU funding are to be unlocked subject to his government pushing through a raft of “long-overdue reforms”.

The decision is a significant boost for Péter Magyar, who has been in office for less than three weeks after a landslide election victory over Viktor Orbán.

He described his EU deal as a “historic breakthrough”, while von der Leyen said “we can already feel a strong wind of change across Hungary”.

The Commission president said a total of €16.4bn (£14.2bn) would be released to Budapest. Magyar hopes the cash will help kickstart Hungary’s flagging economy.

The funding was frozen by the EU because of democratic backsliding and corruption allegations under Orbán’s Fidesz-led government. Magyar had made unlocking the billions a key platform for his two-year-old Tisza party in the run-up to last month’s elections.

Von der Leyen praised his team for rebuilding trust with the EU, which she said gave confidence for the next steps to come. “We will take no shortcuts, we will address all issues,” she insisted.

The bulk of the money – €10bn – comes from a Covid-19 recovery fund that Magyar’s team has been in a race to unlock before an August deadline. The Commission had made the sum conditional on a series of “super-milestones” including anti-corruption and rule-of-law reforms.

Von der Leyen said there were already “strong signals that Hungary is turning the page”.

Among them, she said Hungary was joining the European Public Prosecutor’s Office, revising laws on public procurement and targeting so-called public interest trusts. Under Orbán public institutions such as hospitals and universities were turned into trusts run by government loyalists.

A further €6.4bn is being unlocked from EU cohesion funds aimed at bolstering the 27-member bloc’s economic and social infrastructure.

Magyar said talks with the EU had begun only a few weeks ago and already an agreement had been reached that was “really, really important for the Hungarian people”. He said the EU funding amounted to 13% of the total Hungarian budget.

Even two days ago there was no certainty that a deal could be struck.

Magyar has prioritised improving relations with the EU, while his predecessor accused him ahead of the 12 April election of being a puppet of both Brussels and Ukraine’s Volodymyr Zelensky.

The money unlocked by the Commission would finance the health, transport and education sectors, Magyar explained.

He said €1.5bn would go towards developing Hungary’s electricity grid, with a focus on solar panels and wind farms, while another €2bn would be spent on new intercity trains.

Accusing Viktor Orbán of lying to the Hungarian people constantly about why EU funds had been locked, he said the real reason was that “corruption was at an incredible rate in Hungary”.

Magyar said he had long argued that EU funds would begin to flow if Hungary accepted anti-corruption measures and rules against cronyism. “These steps and just a few weeks were enough to conclude a political agreement about these incredibly important funds,” he said.

Orbán stepped down as an MP last month, pledging to rebuild his party, and his future as Fidesz party chairman will be decided in June at a party congress.

His route back to power appears to have been cut off. Last week, Magyar’s Tisza party submitted an amendment to the Hungarian constitution so that a prime minister could serve a maximum of eight years. That would bar Orbán from any chance of a return to the top.

Tisza won a two-thirds majority in last month’s election, which gives the party the authority to reform the constitution.

Meanwhile, Hungarian students are to be allowed to take part again in the Erasmus exchange programme with other EU countries, the Commission president has said.

In December 2022, the EU suspended funding for more than 20 Hungarian universities because Budapest had turned them into public interest trusts under political control.

Viktor OrbánEuropean UnionHungaryUrsula von der Leyen