The Hungarian government has failed to “unlock” frozen EU funds by the end of the year. The European Commission announced today (Monday) that Hungary’s reform measures remain insufficient. As a result, approximately €6.3 billion will remain blocked under the Rule of Law Mechanism. For the first time ever, a portion of these frozen funds—around €1 billion—will irrevocably expire at year-end. Over the past two years, the Hungarian government has not fulfilled Brussels’ reform demands in the areas of rule of law and anti-corruption. Additionally, Hungary’s penalties for failing to comply with a European Court of Justice ruling now amount to €386 million. This has resulted in billions in financial losses for the Hungarian population. As of today, nearly €22.5 billion in EU funds for Hungary remain frozen under various mechanisms due to rule of law violations.

Daniel Freund, Green negotiator for the Rule of Law Mechanism, comments:

“The European Commission is sending a clear signal to Viktor Orbán: his superficial reforms are not enough. It is both consistent and necessary for the Commission to stand firm and continue blocking EU funds. These funds should only be fully disbursed once democracy and the rule of law are secured in Hungary. Orbán’s policies are costing Hungarian citizens dearly.”

“Billions are being withheld because Viktor Orbán refuses to restore fundamental democratic principles. The damage to Hungary is immense. This money could have been used to renovate dozens of hospitals or schools. It is shameful that Orbán remains unwilling to act. We are now looking at two years of reform deadlock. Orbán’s stubbornness is becoming very costly for Hungarians.”

The European Commission’s press release from today (Monday):
https://ec.europa.eu/commission/presscorner/detail/en/ip_24_6465

Overview of frozen EU funds for Hungary:

• Rule of Law Mechanism: €6.3 billion (of which €1 billion will expire at year-end).
• COVID-19 Recovery Fund: €10.4 billion.
• Cohesion Funds (frozen under the Common Provisions Regulation): €11.7 billion (including the €6.3 billion frozen under the Rule of Law Mechanism).

€386 million has already been permanently lost due to penalty payments. For every additional day the judgment remains unimplemented, another €1 million is added in penalties.