EU Moves To Unblock Billions For Hungary Amid Prosecutor Dispute

by Stefan J. Bos, Worthy News Europe Bureau Chief

BUDAPEST (Worthy News) – The European Union is moving to unblock 4.2 billion euros ($4.8 billion) in funding for Hungary, saying the country’s new government has strengthened the rule of law, despite controversy over the president’s choice for chief prosecutor.

Brussels proposed Wednesday releasing the financing from EU cohesion funds frozen during the 16-year rule of former Prime Minister Viktor Orbán.

Hungarian students and researchers are also set to regain access to EU educational and research programs, including the flagship Erasmus+ exchange and Horizon Europe programs.

Prime Minister Péter Magyar, who ousted Orbán in a landslide election in April, had pledged during his campaign to secure billions of euros in EU funding blocked over corruption and rule-of-law concerns.

His government has introduced changes aimed at strengthening judicial independence, making public procurement more transparent, reforming university governance, and strengthening oversight of how EU funds are spent.

REFORMS UNLOCK FUNDS

“Hungary has taken important steps to strengthen the rule of law and protect the Union’s financial interests,” said Ursula von der Leyen, president of the European Commission, the EU’s executive arm. “This shows that reforms deliver results,” she added.

The latest measures follow the unlocking of about 10 billion euros ($11.4 billion) in COVID-19 pandemic recovery funding over the summer. Budapest expects the money to begin arriving later this year, subject to validation of reforms and submitted projects.

If EU member states approve the Commission’s latest recommendation, Hungary will have unlocked most of the nearly 17 billion euros ($19.4 billion) in funding that had been blocked during the Orbán era.

However, about 2.2 billion euros ($2.5 billion) remains frozen due to concerns about academic freedom, while another 500 million euros ($571 million) is blocked pending changes to Hungary’s controversial child-protection legislation.

Hungary is also paying a daily 1 million euro ($1.14 million) fine after the EU’s top court ruled that Budapest had failed to comply with European asylum rules.

PROSECUTOR DISPUTE

Additionally, Magyar’s governing Tisza Party is clashing with newly installed President András Baka over the choice of Hungary’s next chief prosecutor, a key appointment in the government’s anti-corruption drive.

Tisza lawmakers unanimously rejected Baka’s nomination of Zoltán Szathmáry, a senior career prosecutor. They asked the president to quickly nominate another candidate, Magyar announced on social media Tuesday.

Baka, a former chief justice who took office last month with Tisza’s backing following the departure of his Orbán-allied predecessor, has so far stood by his nomination.

The dispute highlights the importance of the chief prosecutor’s office as Magyar tries to tackle suspected high-level corruption and reduce the influence accumulated by Orbán and his allies during their years in power.

Critics of the previous government, including anti-corruption organization Transparency International, have accused Orbán-era political loyalists in the prosecution service of contributing to a culture of impunity surrounding alleged high-level corruption. Orbán and senior prosecution officials have denied corruption and political favoritism in investigations.

PROSECUTION SYSTEM

Baka noted serious problems within the prosecution service. In an address to lawmakers Monday, he cautioned that an outsider could face major obstacles in reforming the institution.

Tisza has not publicly detailed why its lawmakers rejected Szathmáry, but his senior role within the prosecution service during the Orbán era has fueled questions among government supporters about whether he represents the institutional change they expected after April’s election.

The controversy comes as Magyar’s government seeks to show at home and in Brussels that it is reversing practices that fueled years of disputes with the EU.

EU funding is crucial for Hungary’s strained finances, with the budget deficit expected to reach 7.5 percent of gross domestic product this year.

Magyar’s government plans to reduce the deficit to 3 percent of GDP by 2030 as part of its longer-term ambition to meet the criteria for adopting the euro.

EU RELATIONS RESET

Hungary still faces unresolved disputes with Brussels, including over academic freedom, asylum policy and child-protection legislation.

The government has signaled it wants to reach agreement with Brussels on the remaining issues by the end of the year as it seeks access to additional EU funds.

Despite these issues, the Commission’s latest decision marks another significant step in rebuilding relations between Budapest and Brussels after years of confrontation during Orbán’s government.

Von der Leyen had already highlighted Hungary’s changing direction in her State of the Union speech last week, telling lawmakers that years of “rule-of-law backsliding” were beginning to be reversed. Progress was being made in combating corruption and protecting fundamental rights, she noted.

Yet the confrontation over the chief prosecutor suggests that Magyar’s effort to overhaul Hungary’s institutions will continue to generate political tensions, even as billions of euros in previously frozen EU funding move closer to Budapest.