European Commission to Unfreeze Billions of Euros for Hungary in Bid to Support Ukraine – FT

Tuesday, 3 October 2023

The European Commission is preparing to allocate billions of euros to Hungary from EU funds, which are currently frozen due to problems with the rule of law in the country, to ensure Budapest's support in increasing the EU budget and providing significant financial assistance to Ukraine.

As Financial Times reports, if the funds frozen last year in December are unblocked, it will be a victory for Prime Minister Viktor Orbán, who has promised to block any increase in the EU budget until Hungary gets access to it.

The European Commission intends to unfreeze about €13 billion in funding for Hungary by the end of November, three informed officials said.

Two of them said the allocation of funds was partly motivated by a desire to win Orbán's support for the budget increase.

The EU froze €22 billion from cohesion funds allocated to Hungary in December last year. This happened after Brussels decided that Hungary did not comply with the rules for protecting human rights and the rule of law.

In May, Hungary implemented a judicial reform in response to demands from Brussels, which would have allowed the European Commission to unlock €13 billion – more than half of the frozen funding.

Stefan de Keersmaecker, a spokesman for the European Commission, said that on 26 September, Brussels sent a letter to the Hungarian government asking for clarification on some details of the reforms. "As soon as Hungary will have replied to these questions, the commission will continue its assessment," he added.

The progress on restoring Hungary's access to funds comes as Brussels tries to secure unanimous support for its increased budget until the end of the year, particularly to ensure continued financial aid to Kyiv.

The European Commission proposed increasing the common EU budget by €66 billion to cover the increased costs. Part of them will go to the programme of financial support for Kyiv in the amount of €50 billion, provided for the next four years.

Several capitals, including Berlin, opposed the proposed budget increase. The budget expansion requires the support of all 27 EU member states, which will have to make additional contributions from their national budgets.

Any decision to unblock the payments to Budapest will likely draw condemnation from the European Parliament, which has repeatedly demanded a tough line on the issue.

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