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Hungary was kept waiting for approval for a large defense spending plan financed by EU money, making it the only member state to not benefit from cheap loans to rearm.
The European Commission said Wednesday it had approved requests by France and the Czech Republic, the last two pending plans out of the 19 member states who applied for the cheap financing programme known as SAFE. Hungary remains the odd one out.
The low-interest rate scheme was introduced last year by Brussels and is designed to bolster defence industries and military readiness across the bloc in response to the threat posed by Russia. Under the plan, member states benefit from better financing conditions compared to borrowing on capital markets alone under the EU umbrella.
The Czech Republic and France will be eligible to borrow €2 billion and €15 billion once the loan agreements are signed. The first payments are expected in April.
With the French and Czech plans now cleared, Hungary is the only member state still awaiting Commission approval for its SAFE national plan, valued at €17.4 billion.
Sources with direct knowledge of the matter said Hungary’s plan is not yet ready for approval and that the assessment remains ongoing. Hungary wrote a formal letter to the Commission requesting an update on the status of the review this month.
Budapest is sitting at the centre of several disputes with the EU.
Prime Minister Viktor Orbán is blocking the bloc’s €90 billion financial package to Ukraine, despite having endorsed it at the December European Council.
EU-Hungary ties deteriorate ahead of key elections
Relations between Budapest and Brussels have deteriorated further following reports published last weekend by The Washington Post alleging that Hungary’s Foreign Minister Péter Szijjártó routinely shared sensitive information with Russian officials during confidential EU gatherings focused on foreign affairs.
The Commission described the allegations as “gravely concerning” and has called on Hungary for a quick clarification. The EU’s foreign policy chief Kaja Kallas has also demanded answers from Budapest.
Szijjártó, who initially brushed off the reports as fake news, said on Monday that he is in regular contact with Hungary’s foreign partners — including the United States, Russia, Serbia, Israel and Turkey — before and after EU meetings, because European decisions affect Hungary’s bilateral relations with those countries.
Russia, unlike the rest of “partner” countries, is heavily sanctioned by the EU, is increasingly considered a hostile actor and security risk. While the protocol of meetings is not always clear, EU member states are supposed to work in sincere cooperation.
Hungary faces a pivotal general election on 12 April, where Viktor Orbán’s 16-years power is being challenged by Tisza Party leader Péter Magyar, who currently leads opinion polls.
One of Magyar’s central campaign pledges is to unlock frozen EU funds for Hungary.
The majority of EU funds earmarked for Hungary — €17 billion of a total €27 billion — remain suspended because of corruption allegations and rule of law concerns.