EU payments have started to flow to Hungary

HUNGARY - In Brief 28 Dec 2023 by Istvan Racz

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When the EU Commission unblocked Hungary's access to €10.2bn of cohesion policy funds on December 13, the key question became whether they would actually start to pay out the affected funds according to the regular procedure or they would start postponing and delaying actual transfers, waiting for further information on the implementation of Hungary's judicial reforms to come in and go under thorough evaluation, just as the European Parliament's four key factions had asked. Most recent events appear to suggest that the Commission has opted for the first version, i.e., for starting to pay the funds out as their normal procedure requires. The first signal pointing in this direction was a social media post by Hungary's Regional Affairs minister Tibor Navracsics, essentially the government's chief negotiator with the Commission on the issue of EU funds, that payments are expected to start in early January, and the first €445m (0.22% of GDP) is likely to flow into the government budget shortly afterwards. However, a more direct source on the matter is the Commission's website on cohesion funds. According to this, cumulative payments of cohesion policy funds had risen by €508m (0.2% of GDP) between the Commission's unfreezing decision and December 28. As a result, so the official data of the EU is indicating, a total of €1.141bn of cohesion policy funds (0.57% of GDP) has been paid out from the 2021-2027 country quota for Hungary, of which €816m was transferred in 2023. For sure, the latter was only 38% of the total amount expected from cohesion policy and the RRF for this year, but at least the payments have started. In addition, Finance Minister Varga posted on Facebook to...