Hungary's progress in reforms under its new government will allow the European Commission to unlock €16.4 billion (around $19 billion) of previously frozen EU recovery and cohesion funds for the country, European Commission head Ursula von der Leyen said.
Von der Leyen told reporters after meeting Hungary's Prime Minister Peter Magyar that the EU would unlock €10 billion ($11.6 billion) from the recovery fund, called Next Generation EU, and €4.2 billion ($5 billion) in cohesion funds, with a further €2.2 billion ($2.5 billion) as the reforms are completed.
"I can confirm that €10 billion ($11.5 billion) has been or will be unfrozen from Next Generation EU, along with €4.2 billion ($4.8 billion) from cohesion conditionality and €2.2 billion ($2.5 billion) for academic freedom, bringing the total to €16.4 billion ($18.8 billion)," von der Leyen said.
"That is quite a sum, but ...the Hungarian people deserve it. Again, many, many thanks for the outstanding work that has been done," she said.
EU funds are crucial to kick-start the Hungarian economy, which has practically stagnated for three years.
Swelling budget deficit
The new government inherited a widening budget deficit that, according to the Commission, might reach 6.2 percent of GDP in 2026 after heavy pre-election spending by former Prime Minister Viktor Orban, who was ousted in an election last month.
Hungary's central bank left its base rate steady at 6.25 percent on May 26, as expected, after a rise in global energy prices and domestic fiscal risks, but noted a significant improvement in the inflation outlook amid strong gains in the forint. The forint has been boosted by hopes that the EU funds would be unlocked.
"We will bring this money home, as we promised, to rebuild Hungary, to jump-start the economy, to restore and develop public services, and to strengthen the competitiveness of Hungarian companies and small and medium-sized enterprises," Magyar told the news conference.
He said the deal on the EU money showed his government's anti-corruption measures were paying off - fighting corruption, rampant under the Orban government, was one of the key conditions for the EU to unfreeze the money.
