EU unblocks frozen funds for Hungary amidst diplomatic tensions

In a last-minute move, the European Commission has unfrozen €10.2 billion in EU cohesion funds allocated for Hungary just a day before European leaders convene to discuss new aid to Ukraine and the commencement of accession negotiations for Kyiv. Ukraine’s acceptance into the bloc is a matter vehemently opposed by Hungarian Prime Minister Viktor Orbán.

This week, the European Commission declared that Hungary's implemented measures have successfully addressed concerns regarding the independence of its judiciary, paving the way for the release of a portion of the country's cohesion policy financing.
The Commission's decision, announced in a press release, followed a comprehensive assessment and numerous exchanges with the Hungarian government. The statement stressed that Hungary had fulfilled the commitments and measures required, allowing the EU executive to release the frozen funds. Consequently, Hungary is now eligible to claim reimbursements totaling around €10.2 billion.
“After a thorough assessment, and several exchanges with the Hungarian government, the Commission considers that Hungary has taken the measures it committed to take. … This means part of the cohesion policy funding would no longer be blocked, and therefore Hungary may start claiming reimbursements of up to around €10.2 billion,” Commission’s statement said.

Prolonged dispute
Hungary has been entangled in a prolonged dispute with the European Union over concerns about human rights and the rule of law, leading to the freezing of billions in EU funds intended for the country. In December 2022, the Commission blocked approximately €22 billion in EU cohesion funds, outlining specific conditions for Hungary to meet before accessing the funds.
These conditions included, among others, implementing measures to reinforce the independence of the judiciary. Subsequently, Hungary made legal changes aimed at strengthening the National Judicial Council's role and powers, a body overseeing the administration of Hungarian courts, and enhancing the independence of the Supreme Court. While these changes led to the release of some funds, Hungary is still required to implement additional reforms related to human rights protection and academic freedoms.
The European Commission stated that it would vigilantly and consistently oversee the implementation of Hungary's measures. It emphasized, "If, at any juncture, the Commission determines that this overarching enabling condition is no longer met, it reserves the right to once again suspend funding."
According to the Commission's statement, approximately €21 billion in funding remains locked for Hungary.

Ukraine summit on the horizon
The timing of the decision, just before a crucial European summit where leaders will discuss Ukraine's accession negotiations, is noteworthy. Prime Minister Orbán, who maintains close ties with Moscow and President Vladimir Putin, has hinted at blocking further EU aid to Ukraine.
Concerns about Orbán potentially disrupting the summit prompted French President Emmanuel Macron to host him for dinner in Paris last week, aiming to find a compromise on the Ukraine issue. When questioned about the decision's timing, Commission Vice President for Values and Transparency Věra Jourová attributed it to procedural deadlines, dismissing any connection to the European Council meeting.
The Commission's move is expected to face strong opposition from the European Parliament, particularly from leaders representing major political groups. Politico reported that a draft letter from leaders of the European People’s Party, the Socialists and Democrats, Renew Europe, and the Greens emphasized that Hungary had not fulfilled the outlined conditions. Finnish MEP Petri Sarvamaa, spokesperson for the EPP on budgetary matters, called the decision "catastrophic," expressing concern that it sends a signal of victory to Orbán when playing tough, according to the newspaper.