Hungary gets NRRP approval; Budapest must unlock ten billion by end‑August

Brussels –Green light for Hungary’s recovery plan. At last. This marks the end of the dispute between Budapest and the European Union over respect for the rule of law, and also the end of the NextGenerationEU post-pandemic recovery programme, whose funds must be used by 31 August this year. The Hungarian strategy had been approved by the EU Council on 15 December 2022, but the country was subsequently unable to proceed with its implementation, as a result of which not a single euro of the more than 10.4 billion euros has been disbursed to Hungary to date. Now, however, the new version of Budapest’s National Recovery and Resilience Plan (NRRP) allows for the release and disbursement of 10 billion euros (6.5 billion in guarantees and 3.5 billion in loans).

Hungary was weighed down by delays in meeting the main targets set out in its previous national plan, compounded by rising energy prices that, officials in Brussels note, effectively “made the plan unworkable because of higher costs.” It amounts to yet another criticism of Viktor Orbán’s former administration. But it was above all respect for fundamental rights that proved the main stumbling block, and it is no coincidence that the Council of the EU emphasises that the new Hungarian recovery plan “also includes measures aimed at strengthening the independence of the judiciary and the rule of law.”

The emphasis is not accidental. Due to the failure to respect fundamental rights, the Commission has frozen European funds earmarked for the Budapest government through various EU programmes, and today’s developments (10 July) are further evidence of the change of course in Péter Magyar’s new Hungary. Now, for him and his government, the real test will be a race against time: the funds from the Recovery Fund, which finances national recovery plans, can be released by 31 August.

English version by the Translation Service of Withub