Péter Magyar’s incoming Hungarian government will be in a race against time to save up to €10 billion of EU funds within days of taking office next month.
After a landslide election victory that swept Viktor Orbán’s far-right, populist Fidesz party from power after 16 years, Magyar inherits a state bureaucracy stacked with Orbán loyalists and political appointees.
Magyar, a Fidesz insider who broke with Orbán to set up an anti-corruption opposition movement, will need to learn how to steer this captured state machine and do so quickly.
On the table is €10.4 billion in EU grants and loans Orbán’s government could not claim because Brussels held up their release over concerns the rule of law had been undermined in Hungary.
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The ability of Magyar’s new government to rush through reforms necessary to unlock the frozen EU funds will be an early test of his administration, as well as a signal about his willingness to work with, rather than against, the European Commission.
That money has to be paid out by the end of this year, so Magyar needs to use it or lose it, which will prove tricky.
A team of senior officials from the commission, the powerful executive arm that holds the purse strings, were in Budapest on Friday for early talks.
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The delegation includes commission president Ursula von der Leyen’s top adviser, Bjoern Seibert, and other high-ranking officials. That is a sign the union’s executive is keen to move fast to reset the relationship after years of attacks and obstruction from Orbán.
The €10 billion is Hungary’s slice of a huge pot of cash the EU borrowed as a bloc to kick-start national economies after the Covid-19 pandemic.
The scheme is due to expire at the end of this year, hence the urgency for Magyar.
Although one EU official said the deadline is “set in stone”, political expediency could see it pushed back.
The new government will probably have to draw up a plan of reforms it could complete quickly. That will have to be done within a fortnight or so of the Tisza party being sworn into office next month.
“The clock is ticking and it is ticking very quickly,” a commission spokeswoman said.
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Magyar, a conservative, campaigned on a platform of breaking apart the authoritarian-light regime Orbán had created in the central European state, turning away from the outgoing prime minister’s cosy relationship with Russia and repairing ties with other European powers.
Tisza unexpectedly won a parliamentary supermajority, which will give the government the power to push through sweeping changes.
Turning back on the EU funding tap was a key election promise. A further €7 billion in EU “cohesion” funds for development projects is on ice, but the Tisza government won’t be up against a clock to unlock that money.
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Magyar is deeply suspicious of the state institutions his government is about to take over. Weighing up how deeply he can “purge” Orbán and Fidesz loyalists without causing things to grind to a halt will be a difficult call.
He is largely an unknown quantity in Brussels.
Orbán had made life incredibly difficult for other EU states, using national veto powers to block vital foreign policy decisions to aid Ukraine and sanction Russia, which needed to be agreed by all 27 states.
The incoming prime minister’s early statements suggest he won’t hold up the €90 billion EU loan to Ukraine that Orbán had been blocking. That would buy Magyar a lot of early goodwill, something he will need from the top of the commission over the next few months.
