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Hungary’s new Prime Minister Péter Magyar will send a letter to European Commission President Ursula von der Leyen on Thursday, setting out his government’s position on politically difficult conditions tied to EU funding.
Magyar made the announcement at a press conference following the first cabinet meeting of his government, held in Ópusztaszer.
Magyar pledged to recover €17 billion in EU funding blocked under his predecessor Viktor Orbán over concerns about corruption and the rule of law. Of that total, €10 billion under the EU’s Recovery and Resilience Facility is at risk of expiring at the end of August if the new government fails to absorb it.
Speaking to journalists, Magyar outlined some of the specific disputes surrounding the funds.
“The most important are project problems, such as the recapitalisation of the Hungarian Development Bank, the creation of a special project company, and how we can structure transport, railway and suburban railway investments in a way that makes them acceptable,” Magyar said, adding that his team is also working on plans for rental housing and energy efficiency programmes.
Hungary is currently reviewing a national development programme drawn up by the previous government and will submit it to the European Commission before the end of May.
Magyar acknowledged that several EU conditions for releasing the funds are politically sensitive for his government and indicated he does not intend to implement all of them.
“The European Commission’s expectation, for example, is that the government should gradually phase out some of the special taxes. This is obviously also in the interest of the Hungarian economy, but in the current budgetary situation, the Hungarian government certainly cannot undertake this,” Magyar said.
Hungary has introduced a series of sectoral levies on banking and energy companies. The European Commission has criticised these measures in its country-specific recommendations.
“I will send a detailed letter to Commission President Ursula von der Leyen tomorrow, in which I will describe where we can show some flexibility, where that remains acceptable from the point of view of the Hungarian economy and the Hungarian people — and where it does not. I know this now, but we will reach an agreement,” Magyar said.
The Prime Minister also confirmed that a high-level European Commission delegation will travel to Budapest next week for a five-day round of negotiations on the frozen funds.