Billions of euros in EU funds that were once frozen are flowing back into Hungary after the Central European state reformed its justice system to the satisfaction of Brussels.
Although billions more remain blocked over alleged violations of LGBTQ+ and migrant rights and concerns about academic freedom, many EU lawmakers are angry about the release of funding last month and have threatened legal action against the EU executive.
The timing of the European Commission's move caused a stir – just before a crucial summit as EU states tried to win Budapest over to its plans to start accession talks with Ukraine and offer the country long-term financial aid. Hungary ultimately blocked progress on Kiev's membership ambitions by leaving the room when it came to the vote, but Prime Minister Viktor Orban's government continues to block a deal on long-term aid.
Orban broke down with the bloc last year when he criticized the EU's sanctions against Russia. He has called on Ukrainians to lay down their arms as part of a ceasefire and was also photographed shaking hands with the Russian president last year, sparking criticism from some EU colleagues.
Hungarian Prime Minister Orban shook hands with Russian President Putin despite ongoing EU sanctions against Moscow. Image: Sputnik/Grigory Sysoyev/Pool via Portal
European Commission accused of 'succumbing to blackmail'
“We don't understand why the commission decided to give in to Victor Orban's blackmail,” Hungarian opposition lawmaker Katalin Cseh told DW.
“He used his veto power on behalf of Vladimir Putin,” Cseh said, adding that the move “leaves the door wide open for further abuse.”
The commission insisted the move was not part of a quid pro quo.
“We had to meet a deadline and this is unrelated to any other discussions or developments,” European Commission spokesman Christian Wigand told DW. “What we are doing is applying the rule of law. Hungary has met the legal conditions and that is why we have released the blocking of the funds in question.”
“We had to assess progress and there were strict deadlines for each step and we did that. We asked Hungary many detailed questions to ensure that the reforms were really what we needed.”
EU Commission chief Ursula von der Leyen says billions of euros for Hungary remain frozen for rule of law reasons. Image: Jonathan Raa/NurPhoto/picture Alliance
Hungary wants to release more EU funds
In a debate with EU lawmakers on Wednesday, European Commission President Ursula von der Leyen said around 20 billion euros ($21.7 billion) in EU funds remain beyond Budapest's reach. Hungary called this unfair and claimed it was the victim of a political “witch hunt”.
“Every cent should be paid to Hungary without further delay. Ideological blackmail is unacceptable,” Balazs Hidveghi from the Hungarian ruling party Fidesz told his fellow MPs.
Von der Leyen said the frozen money would “remain blocked until Hungary meets all the necessary conditions.”
“Those are the rules,” she said. “We have all agreed to them and we will follow them. This is what distinguishes the rule of law from arbitrary power.”
Hungary dampens the joy of the EU talks in Ukraine
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A compromise on financing Ukraine could be obvious
As the dispute between Hungary and the EU continues, there is little certainty in Ukraine about long-term financial support from the EU. The Union's plan to provide 50 billion euros in aid over the next four years has stalled for the time being.
Hungary stated that it does not reject aid to Ukraine in principle, but remains strictly against long-term financing.
“We don’t even know what will happen in a quarter, let alone four,” Orban said in a video posted on the social media platform X on Tuesday.
But a compromise may now be closer. On Tuesday, a source involved in discussions at a meeting of EU finance ministers told DW that Hungary had “expressed its willingness to have constructive talks going forward.” Details of the potential deal remain top secret, but von der Leyen said she was “confident” the bloc would find a solution.
If all else fails, the 26 other EU member states could band together to offer aid to Ukraine outside the bloc's official procedures, although diplomats say this Plan B could send unwanted signals of disunity to Russia – and to Washington, where the US lawmakers are still debating the details of their support for Kiev.
Foreign policy decisions require the unanimous consent of all 27 EU member states. Image: Virginia Mayo/AP Photo/picture Alliance
Will the EU be paralyzed by Hungarian whims?
If EU officials manage to win Budapest's support for funds in Ukraine, it will not eliminate the threat of political obstacles at every turn. An EU diplomat who did not want to be named told DW that Hungary should not “hold a gun to everyone's head year after year.”
Sergio Carrera, a researcher at the Center for European Policy Studies, said EU rules requiring unanimous support for foreign policy moves were at the heart of the problem. With this in mind, Carrera said that a single government “could jeopardize and jeopardize the entire union.”
However, changes to those rules would themselves require a unanimous vote.
“Then we’re back to square one,” explained Carrera. “We have allowed governments like the Hungarian government to falter on the rule of law for years,” he warned, arguing that Brussels should use existing legal tools to take tougher action against Budapest.
Hungary will take over the rotating EU Council presidency for the second half of 2024, giving it greater power over the bloc's political agenda.
EU leaders will meet in Brussels on February 1 to negotiate an agreement on support for Ukraine and changes to the EU budget.
Additional reporting by Jack Parrock.
Edited by: Sean M. Sinico