Hungary has received €779.5 million from the European Union’s so-called REPowerEU Plan, Hungarian Finance Minister Mihály Varga announced on Thursday, December 28th. This initial payment follows the European Commission and EU finance ministers’ recent approval of Hungary’s amended Recovery and Resilience Facility (RRF) plan.
REPowerEU was introduced last year in response to the hardships and global energy market disruption following Russia’s invasion of Ukraine, with the intention of helping the EU make energy production clean and efficient while diversifying its energy supplies.
Hungary will be eligible for €4.6 billion overall in the next few years under the REPowerEU Plan—€3.9 billion in low-interest loans and €0.7 billion in non-repayable grants. This comes on top of Hungary’s previously approved RRF plan, which is now worth €10.4 billion (€6.5 billion in grants and €3.9 billion in loans) in total. Mihály Varga previously said that 67.1% of the total RRF money would go towards green transition investments, such as modernising the electricity sector, accelerating the use of renewable energy, improving energy efficiency, and promoting sustainable transport.
The minister expressed hope that Hungary will soon also gain access to the rest of the recovery funds, saying the country had met every condition. The remainder of the €10.4 billion plan remains strictly linked to the fulfilment of 27 so-called “super milestones,” a series of reforms related to the fight against corruption, the strengthening of judicial independence, and the establishment of audit systems. The milestones were imposed last year and Hungary is said to have made substantial progress towards their achievement.
The RFF funds are separate from the cohesion funds, which are designed to reduce economic and social disparities between member states. Just like the RFF, Hungary’s share of the cohesion funds, €22 billion, had also been withheld by the European Commission which is saying the government needs to meet conditions related to judicial independence, academic freedom, LGBT rights, and the asylum system.
Hungary’s conservative government—in power since 2010—has been accused of democratic backsliding, but Budapest says it is being punished by EU institutions for its conservative stance on issues like migration and gender ideology. “They are withholding our EU funds completely unfairly, without any legal basis or good reason,” Hungarian Foreign Minister Péter Szijjártó said earlier this year.
However, on December 13th, the Commission announced the release of €10.2 billion in cohesion funds for Hungary to finance development projects across the country. “We have received sufficient guarantees to say that independence of the judiciary will be strengthened in Hungary,” said Didier Reynders, the European Commissioner for Justice.
Prime Minister Viktor Orbán contends that his government has met all of the Commission’s conditions—be they anti-corruption reforms or human rights concerns—and is entitled to all of the cohesion funds. Answering questions from journalists last week, he said Hungary complied with all requirements regarding the rule of law, and was cooperative, but had been “blackmailed in Brussels” despite this, and the blackmailers were members of the European Parliament.
