Hungary’s €10bn Hangs On One Law

Hungary’s bid to unlock around €10 billion in EU recovery money has come down to a familiar Brussels problem with a very domestic twist: the proof Hungary needs to show the Commission depends partly on a law that is still before its own Constitutional Court.

The deadline is 31 August. Hungary has until then to file evidence that it has completed the reforms Brussels required. After that, any unfinished milestone cannot be counted towards its recovery-fund payment (Commission closure notice, ECA).

The law at the centre of it is Act XVIII of 2026, a package of transparency and energy reforms linked to access to EU funds. According to HVG and Népszava, it is the last unresolved EU-funds petition before Hungary’s Constitutional Court.

On 14 August, the court dismissed a separate challenge to a constitutional amendment, saying the petition challenged the substance of the amendment rather than the way it was adopted. Under Hungarian law, that procedural question is the only basis on which the court can review constitutional amendments (444, Kontroll). That was the simpler case. Act XVIII is ordinary legislation, so the court can examine what it actually does. Its ruling will shape what Hungary can credibly put in front of Brussels.

What the law does and why Brussels needs it

Act XVIII expands Hungary’s public-data registry from 26 August to include state-owned companies and the government-linked asset-management foundations that received public assets under Viktor Orbán’s government. Those foundations have been central to EU concerns about conflicts of interest. Hungary’s data-protection authority has confirmed the expansion (NAIH).

Government consultation documents also link follow-up decrees to energy-sector reforms in Hungary’s recovery plan (kormany.hu). In plain terms, Act XVIII is part of Hungary’s attempt to show the Commission that reforms exist in law, not just in ministerial language.

If the court strikes it down before the deadline, Hungary loses the legal footing for part of its evidence. If the court upholds it, the route to payment becomes clearer. The awkward case is a ruling after 31 August. The Commission would then have to decide whether a law still under constitutional challenge counts as a completed reform, or whether the unresolved case is enough to hold the money back.

Who benefits from delay

The petitions were filed by Fidesz-KDNP, Orbán’s party, now in opposition after Péter Magyar won a supermajority. That gives the case its political bite. An opposition party is using constitutional review to create deadline risk for a government trying to release EU money.

Whether Fidesz-KDNP is acting from legal conviction or political calculation, the effect is the same. It narrows the calendar for Magyar’s government and puts the Commission in a position where legal uncertainty in Budapest may become a payment problem in Brussels.

The Council, where EU governments vote, approved Hungary’s revised recovery plan in July, putting around €10 billion in grants and loans within reach, but only after milestone verification (Council). The Recovery and Resilience Facility, the EU’s post-pandemic performance fund governed by Regulation 2021/241, pays for documented delivery. It does not pay for a change of government, however welcome that change may be in some capitals.

Hungary must show completed reforms, file a payment request by 30 September, and secure Commission disbursement by the end of the year. The money comes in verified tranches, not as a single political reward (Tagesschau). The European Parliament, which sued the Commission over an earlier decision to unblock Hungarian funds, is another reason the Commission will be wary of looking generous on compliance.

A separate freeze on Hungary’s cohesion funds, the long-term EU budget money aimed at poorer regions, operates under a different instrument: the budget-conditionality regime tied to rule-of-law concerns over procurement and anti-corruption (Council Decision 2022/2506). That freeze has no 31 August cliff edge. The recovery-fund deadline is the immediate pressure point.

Three actors, eleven days

Hungary’s Constitutional Court can decide the Act XVIII case before its recess ends on 28 August, either leaving the law intact or striking it down. Magyar’s government can prepare replacement legislation, but anything passed after 31 August cannot be treated as timely evidence for this milestone. The Commission, meanwhile, must decide whether a law still caught in domestic litigation can count as a completed reform.

Poland’s recent positive recovery-plan assessment (gov.pl) shows the basic rule of the system: Brussels releases money when the evidence passes. That is why a court case in Budapest matters. It controls whether Hungary’s evidence is legally intact at the moment Brussels has to judge it.