But despite the good intentions, Brussels and Budapest are at odds over how much money Hungary should get from the post-Covid fund allocation, according to the officials, who have knowledge of the negotiations and were granted anonymity to discuss the confidential talks. The Commission recommended requesting only the grants, while Hungary wants to claim the full amount.
“We are very optimistic about releasing all the blocked funds,” said Kinga Kollár, an MEP from Magyar’s Tisza party.
The allocation is split between €6.5 billion in grants, which would not need to be repaid, and €3.9 billion in loans, which need to be paid back at a favorable interest rate. Magyar’s incoming administration has until Aug. 31 to formally request the money, while the Commission has a deadline of Dec. 31 to make the payments.
The Commission is arguing there isn’t enough time to release the full €10.4 billion, since payouts are contingent on Hungary meeting specific reform targets. Funds in the form of loans would also add to Budapest’s strained public finances, with debt already hovering around 75 percent of GDP and the deficit ― the difference between how much is spent and how much is brought in ― projected to be near 7 percent of GDP in 2026.
If Magyar accepts Brussels’ advice, it will mean him leaving €3.9 billion on the table. For Hungarian negotiators, coming home with anything less than the full package would look politically underwhelming after a campaign built around a total reset with Brussels.
Last week Magyar said he’s confident that the EU will “be sufficiently flexible to allow Hungary to draw every eurocent of the funds they are entitled to.”