European Union to unfreeze billions of euros for Hungarys economic reform efforts

European Union Announces Release of Frozen Funds for Hungary

The European Commission has announced that it will unlock 16.4 billion euros ($19 billion) in funds for Hungary, a move seen as a significant development for the newly elected Prime Minister, Peter Magyar.

According to Ursula von der Leyen, President of the European Commission, the EU will release 10 billion euros from the Next Generation EU recovery fund and 4.2 billion euros in cohesion funds. An additional 2.2 billion euros will be released once reforms are completed.

The decision comes after Hungary’s previous leader, Viktor Orban, had seen approximately 18 billion euros ($21 billion) in EU funds frozen due to concerns over democratic backsliding, corruption, and LGBTQ issues. The EU had previously frozen these funds under Orban’s rule.

Magyar’s party holds a large majority in parliament, and the prime minister has begun initial reforms. He recently voted to drop plans to withdraw from the International Criminal Court, reversing a decision made by Orban last year. Additionally, police have announced that they will not ban next month’s Pride parade in Budapest, a reversal from previous restrictions.

Magyar described the release of the funds as a “historic day,” stating that his government had worked hard to secure these funds. He plans to use the money to rebuild Hungary’s economy, restore public services, and strengthen Hungarian companies.

The released funds amount to approximately 13 percent of Hungary’s budget, with the majority coming from the EU’s COVID recovery fund. Officials have stated that if all steps are completed in time, Budapest could expect the first disbursement of money before the end of the year.

Source: Al Jazeera