The European Union has agreed to release €16.4 billion ($19 billion) in funds previously frozen for Hungary, in a significant early victory for Prime Minister Peter Magyar, who took office after defeating longtime nationalist leader Viktor Orbán in April's election. European Commission President Ursula von der Leyen made the announcement in Brussels on Friday following talks with Magyar, declaring that "a new era has begun for Hungary" and praising the pace of change under the new government. "In only a few weeks, you have driven forward long overdue reforms," she told reporters alongside the Hungarian prime minister.
The EU had frozen roughly €18 billion earmarked for Budapest over concerns about democratic backsliding, corruption, and the treatment of LGBTQ people under Orbán's rule. The newly unlocked package consists of three tranches: €10 billion from the EU's Next Generation EU Covid recovery fund, €4.2 billion in cohesion funds aimed at strengthening regional development, and a further €2.2 billion tied to improvements in academic freedom — together comprising around €12.9 billion in grants and €3.5 billion in low-interest loans. Von der Leyen stressed that disbursements remain conditional on reforms being adopted and a series of agreed investments being implemented.
The deadline pressure is considerable. Hungary must satisfy a lengthy list of conditions — including anti-corruption measures, rule-of-law reforms and energy grid investments — before 31 August to secure the bulk of the recovery funds. EU officials said they are confident Hungary can meet the deadline, though they acknowledged the tight timeline leaves little margin for error. The situation draws parallels with Poland, where the EU quickly released blocked funds after pro-European Prime Minister Donald Tusk won power in 2023, only to see subsequent political complications slow implementation of some reforms.
Magyar's government has already made a series of symbolic and legislative moves since taking power. His parliamentary majority voted this week to abandon Orbán's plan to withdraw Hungary from the International Criminal Court, and Hungarian police announced they will not ban next month's Pride parade in Budapest — a reversal from last year, when the event was prohibited. Magyar called Friday's agreement a "historic day," saying his government "fought for each cent" and pledging to use the money to rebuild Hungary's economy, which inherited a budget deficit that the Commission projects could reach 6.2 percent of GDP in 2026 following heavy pre-election spending under Orbán. The funds amount to roughly 13 percent of Hungary's annual budget.
Not all tensions have been resolved. The Commission continues to engage Budapest over a controversial child-protection law that the European Court of Justice ruled discriminatory against LGBTQ people and contrary to EU values. Magyar also declined to commit to supporting the formal opening of EU accession talks with Ukraine, stating he first wants guarantees regarding the rights of Hungary's ethnic Hungarian minority in that country — an issue that could complicate broader EU efforts to advance files long blocked under Orbán. If all steps are completed in time, officials said, Hungary could see the first disbursement before the end of the year.