Hungary is set to lose over €1 billion in EU funding due to ongoing disputes with Brussels over the rule of law. This financial blow comes at a critical time for Hungary's economy, which is already in a technical recession.
Hungary is set to permanently lose access to just over €1bn in EU funds on January 1, as disputes between Budapest and Brussels hamper the country’s capacity to drag itself out of recession — and undermine Prime Minister Viktor Orbán ’s bid for re-election in 2026. The freeze on EU funds has hit Hungary at a time when its government has little room for manoeuvre. Its budget deficit this year stands at more than 4.5 per cent of GDP, increasing political tensions. Hungary ’s economy shrank by 0.
7 per cent in the third quarter — the second contraction in a row — plunging the economy into a technical recession amid weak demand in the automotive, electronics and pharmaceutical sectors that dominate its manufacturing base. Of the €6.3bn in funds frozen by Brussels over concerns about the rule of law, Budapest will permanently lose €1.04bn because this amount must be allocated by the end of 2024 or it expires. Hungary is also missing out on €1mn per day in funding from the EU over its illegal treatment of asylum seekers; its total losses over the treatment of asylum seekers will amount to €200mn by the year’s end. Both come on top of a one-off €200mn fine imposed by the European Court of Justice in June over breaching asylum rules and ignoring an earlier judgment. In total, €19bn in post-pandemic recovery funds and other EU resources remain blocked. János Bóka, EU affairs minister for Hungary, said in mid-December that it was “very difficult” not to interpret the withdrawal of funds as “political pressuring”, adding that Budapest would take action to “remedy this discriminatory situation”. The government is also seeking compensation for the ECJ’s June ruling that led to the multimillion-euro fines, in another sign that relations between Brussels and Budapest have reached a new low. The Hungarian opposition has seized the opportunity to blame Orbán’s government for the economic malais
EU Funding Hungary Viktor Orbán Rule Of Law Recession
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