White smoke from Brussels - the Commission unblocked access to €10.2bn of cohesion policy grants today

HUNGARY - In Brief 13 Dec 2023 by Istvan Racz

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Almost exactly one year after the EU Council's blocking decision, the EU Commission today announced the partial unblocking of the government's access to the cohesion policy development grants earmarked for Hungary in the EU's medium-term budget for 2021-2027. Just as widely expected for the last few weeks, the Commission stated that Hungary has met their requirements regarding the legal reforms to secure the independence of the domestic judicial system. This enables the Commission to unblock Hungary's access to €10.2bn worth of cohesion policy funds (grants). The remaining €11.7bn of Hungary's 2021-2027 cohesion funds quota, as well as another €10.5bn total of RRF+RePowerEU grants and loans remains blocked, given the lack of proper compliance with other required legal and technical measures. Importantly, this measure has taken form of a decision rather than a recommendation to the Council. This means that without further endorsement from the Council, Hungary can now start to ask payouts from the new unblocked quota. As usual, these payouts may take the form of reimbursements against invoices and other documentation on completed projects, as presented by the government. The government has recently said that they have presented €0.5bn worth of such invoices so far. As a rule, the Commission has 60 days to check whether the payout conditions are met for each of the invoices and to implement payments. However, the Commission will have the right to freeze the now-unblocked total amount again if at any point in the implementation phase it finds that the Hungarian judicial system still works in a way that it does not comply with its independence criteria. Taking this decision...