EU, Hungary Reach Deal to Release €16.4 Billion in Frozen Funds, Tying Aid to Anti-Corruption Reforms

After intensive negotiations in Brussels, the European Commission has agreed to release a package of frozen funding for Hungary, marking a turning point in EU-Hungary relations. The move follows the electoral defeat of Viktor Orbán and the installation of a new government committed to democratic backsliding reforms.

A new era of cooperation

President von der Leyen spoke of a palpable "wind of change" in Budapest, praising the new government for acting with "speed and determination." She noted that in just a few weeks since taking office on May 9, the Magyar administration had made "long-awaited reforms."

We have reached a safe and solid landing zone. Subject to adoption of reforms and implementation of investments, we can unblock €10 billion for Hungary.

Prime Minister Magyar called the accord a "historic breakthrough," adding, "We bargained for every cent, even in night-time negotiations."

The deal's components

The total package comprises three main streams:

The cornerstone is the €10 billion Recovery and Resilience Facility (RRF), which includes €6.5 billion in grants and the remainder in low-interest loans. An additional €4.2 billion from cohesion funds, frozen since late 2022 due to governance shortcomings, will also be unlocked. A further €2.2 billion—suspended after the Orbán government stripped public control from universities—will be made available once remaining reforms are completed.

Reforms and conditions

Access to the money is conditional. Hungary must pass legislation strengthening anti-corruption mechanisms and ending opaque financing structures. Péter Magyar has formally applied for Hungary to join the European Public Prosecutor's Office. "We have agreed to take all necessary steps to facilitate their release," he said.

It was a race against time, but we have won.

The comment refers to a Sunday deadline by which Hungary must submit a new recovery plan to keep the RRF funds alive.

Spending plans

Magyar outlined key investment priorities: €2 billion for new regional trains, €1.5 billion to expand the electricity grid, and a broader push into renewable energy to reduce dependence on Russian oil and gas.

Today is a historic day, especially for Hungary. If I come back with this amount of money every time I visit Brussels, I will come back many more times.

Political ramifications

The deal underscores a dramatic shift from the Orbán era, when most EU funding was frozen over democratic backsliding. Brussels is now signaling strong support for the new administration, hoping the influx of cash will stabilize the economy, restore public services, and bolster competitiveness among small and medium-sized enterprises.