Hungary will permanently lose access to over €1 billion in EU funds from 1 January, as Financial Times reports, marking a significant escalation in the ongoing dispute between Budapest and Brussels that threatens to undermine Prime Minister Viktor Orbán’s re-election bid in 2026.
Russian President Putin’s ally Orbán has opposed military aid to Ukraine since Russia’s 2022 invasion, pushing for peace talks that would freeze the war and solidify Moscow’s control of occupied territories. Meanwhile, the EU has frozen funds for Hungary over concerns about corruption, judicial independence, democratic backsliding, human rights violations, and opposition to migration policies.
According to FT, of the €6.3 billion in funds frozen over rule of law concerns, €1.04 billion will be permanently lost as it must be allocated by the end of 2024 or expire. The country is also losing €1 million daily in EU funding over its illegal treatment of asylum seekers, with these losses expected to reach €200 million by year’s end. Additionally, the European Court of Justice imposed a one-off €200 million fine in June over asylum rule breaches.
The funding freeze comes at a particularly challenging time for Hungary’s economy, which FT reports has entered a technical recession after shrinking by 0.7% in the third quarter – its second consecutive contraction. The country’s budget deficit stands at more than 4.5% of GDP, while weak demand plagues its key manufacturing sectors including automotive, electronics, and pharmaceutical industries.
The total blocked funding amounts to €19 billion in post-pandemic recovery funds and other EU resources, FT reports.
Péter Magyar, a former Orbán ally whose party has surpassed Fidesz in opinion polls, criticized the Hungarian government, telling FT:
“You have had 14 years with unlimited power and billions in EU funds… This ship has sailed. Hungarians won’t wait. Enough is enough!”
FT says that Orbán’s government is seeking alternative solutions, including turning to Asian investors under a policy dubbed “economic neutrality.”
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- Orban: Hungary is negotiating to preserve Russian gas transit through Ukraine
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- Orban talks to Putin for hour, says this is “most dangerous period of war”
- Pro-Moscow Orbán meets Trump, Musk to discuss his Ukraine “peace” initiatives
- Trump sought Russophile Orbán’s advice on Ukraine after winning election, RFE/RL sources say
- Hungary to deploy air defense in east after US allows Ukraine to strike deep into Russia
- Orbán urges EU to rethink sanctions against Russia to lower energy costs
