Brussels to Withhold EUR 200 Million Fine from Hungary's EU Funds

The European Commission is set to withhold EUR 200 million from Hungary's EU funds, as Budapest continues to defy a fine imposed by the European Court of Justice (ECJ). The fine, related to Hungary's violations of asylum rules, may be deducted directly after Prime Minister Viktor Orbán's government refused to comply.

The European Court of Justice had slapped the EUR 200 million penalty on Hungary due to the country’s ongoing restrictions on asylum rights—a violation the court called an “unprecedented and exceptionally serious breach of EU law.”

Budapest was ordered to pay the sum as a lump sum to the European Commission, but with Hungary missing an initial deadline in August and a second on September 17, the Commission has decided to take matters into its own hands.

“The offsetting phase starts today,” a Commission spokesperson confirmed, explaining that Hungary’s share of the EU budget will now be scrutinized, and any potential funds earmarked for the country could be diverted to cover the fine. With around EUR 21 billion in cohesion and recovery funds already frozen due to concerns over Hungary’s rule-of-law backsliding, the latest move marks a new escalation in the tensions between Brussels and Budapest.

Hungary has yet to explain what steps, if any, it has taken to comply with the court's ruling. Meanwhile, Orbán has remained defiant, labeling the fine as “outrageous and unacceptable.” He has even demanded the EU pay his country EUR 2 billion for its efforts to defend European borders since 2015, a figure the Commission flatly rejects. "We should not be punished," Orbán said recently, insisting Hungary's achievements in border protection deserve recognition, not fines.

In a further twist, the Hungarian government has hinted at retaliatory measures, including a proposal to bus migrants to Belgium "voluntarily" and "free of charge," a provocative threat that has drawn immediate condemnation from both Belgian and EU authorities. While no such transfers have occurred yet, the plan has sparked outrage and added fuel to the already intense showdown.

The standoff is deepening with additional concerns over Hungary's decision to extend its National Card scheme to Russian and Belarusian citizens, a move the Commission warns could enable sanctions evasion and threaten the integrity of the Schengen Area. Budapest, however, denies any risk to security, claiming the extension is simply a response to domestic labor shortages and is designed to streamline the hiring of foreign workers.