Brussels looks to unlock billions of euros with plan to unfreeze Hungary funds
Brussels looks to unlock billions of euros with plan to unfreeze Hungary funds
Getty Images
The European Union is planning to release billions of currently frozen euros in EU funds to Hungary.
Around €22billion (£19billion) in funds have been frozen since last December due to law concerns, but if relaxed, will increase Budapest’s budget significantly.
The money was frozen after it was decided that Hungary was not complying with rules protecting human rights.
Thawing the funds would mark a victory for Prime Minister Viktor Orban, who swore he would not agree to any increase in the EU budget until Hungary was able to access it again.
WATCH NOW: Should Britain re-join the EU?
The EU is hoping that by reversing the freeze, Budapest will approve its increased budget to give aid to Ukraine, according to senior officials.
The EU Commission proposed a €66billion (£57.1billion) increase to the Union’s shared budget, which would include a €50billion (£43.3billion) support package for Kyiv.
The funds are set to be unfrozen by the end of November, according to the Financial Times.
Two officials who spoke to the news publication said that the decision had partially been made in hopes to secure Orban’s support for an EU budget increase.
EU LATEST:
A senior EU official said that to sway Hungary’s vote on the increased budget, the EU would have to reconsider the status of billions of euros that are being withheld from Hungary.
“I can't imagine Hungary agreeing without there first being a solution to the blocked funds,” said the official.
The EU would unlock €13billion (£11.2billion) out of the available €22billion cohesion funds to give to Budapest.
Cohesion funds are designed to help less developed members of the EU improve their infrastructure.
Sources stressed however that a deal was not certain, and would depend on Orban, who is facing economic stagnation at home.
The EU is hoping that by reversing the freeze, Budapest will approve its increased budget to give aid to Ukraine
PA“Hungary needs the money urgently, which is an incentive for reform. The Commission needs Hungary to lift its vetoes on a number of issues in return," said an EU diplomat.
“But I don't think the Commission will or can move without any movement on reforms from Budapest.”
Laws passed by Hungary this summer to increase judicial independence have helped move the deal further forward.
Last week, Brussels wrote to Budapest to seek clarification on some details of the laws.
“As soon as Hungary will have replied to these questions, the commission will continue its assessment,” a spokesperson for the EU said.
Hungary’s EU affairs minister said he expected a deal “by the end of the year”.