Hungary’s watchdog flags HUF 310bn in opaque deals

Hungary's Integrity Authority, the anti-corruption body Budapest was forced to create as a condition for receiving EU funds, has published a 322-page annual report with a blunt conclusion: overpricing in public procurement is not a system failure. It is how the system works (eGov, Telex).

The finding matters because the EU built this body as proof that Hungary could be trusted with European money. The body now says the spending architecture around it remains structurally broken.

The Tricks Are Specific

Contracting authorities are not required to benchmark prices against real market data before launching tenders. That one gap enables everything else. Estimated contract values get inflated at the start. Previous overpriced contracts become the reference for the next round. Technical criteria get written so only one bidder can realistically qualify. Procurement gets bundled or split to avoid meaningful competition (Átlátszó, HVG).

The numbers confirm the pattern. According to HVG, nearly one in five successful tenders in 2025 had only a single bidder. Telex reported that HUF 309.5 billion worth of procurement sat behind opaque ownership linked to private-equity funds, with the worst overpricing risks clustered in construction and energy.

The Authority did find one case where oversight worked. In an EU-funded food-package programme, a later procurement round bought food at nearly 40% below retail prices, after earlier rounds had paid 1.5 to almost 2 times retail. The same money delivered more than twice as many packages (Integrity Authority). One success, though, does not prove the system changed.

A Watchdog Without Teeth in an Enforcement Chain Full of Gaps

The EU created the leverage through its budget conditionality law (Regulation 2020/2092, which allows funds to be suspended when rule-of-law failures put EU money at risk). In December 2022, the Council of EU member states froze about €6.3 billion in Hungarian cohesion commitments under that law (Council, European Commission). Separately, the Commission approved Hungary's recovery plan under the EU's post-pandemic Recovery and Resilience Facility, but releasing actual payments requires Budapest to meet anti-corruption milestones first. The Commission verifies whether milestones are met; the Council can block disbursement if they are not.

The enforcement chain running beneath all of this has a missing link. The Integrity Authority can identify risks, run checks and make recommendations. It cannot prosecute anyone, suspend payments, or release them (Integrity Authority). Hungarian prosecutors would normally handle criminal cases, but EU-budget fraud could fall to the European Public Prosecutor's Office (EPPO, the EU body that can actually investigate and charge people for crimes against EU money). Hungary's pending accession to EPPO could add real enforcement (EPPO, Euronews). Whether EPPO's jurisdiction will reach contracts signed before accession remains legally unresolved, and that timing question determines whether the billions already spent under inflated tenders can ever be prosecuted at EU level.

The Commission Owes an Answer

Bulgaria's competition authority is already investigating an alleged cartel across 350 food-supply tenders (BTA), which suggests the procurement design problem the Authority described is not uniquely Hungarian. But the immediate question is narrower: which of the Authority's findings are tied to milestones Hungary must meet before EU money flows?

The record shows that EU conditionality can force governments to build oversight institutions. It has not yet shown it can force those institutions to change the spending economy underneath. The Commission owes a public answer: which findings require payment suspension, and what evidence would prove procurement prices are actually falling rather than being validated by the same inflated benchmarks the Authority just exposed.