Hungarian Tenders Still Lack Competition

In Hungary, the public procurement system is still doing what Brussels has spent years trying to stop: narrowing the field, weakening scrutiny and sending public money through structures that are hard to follow.

Last year, 19.6% of Hungarian public tenders closed with only one bidder. Procurement contracts worth HUF 309.5bn sit behind opaque private-equity ownership structures. The largest central purchasing bodies, which handled more than HUF 3,700bn between 2020 and 2025, gave little cooperation when Hungary's anti-corruption watchdog asked for information (Telex, 24.hu).

The findings come from Hungary's Integrity Authority, the body Budapest set up under EU pressure as part of its attempt to unlock frozen funds. Its 2025 summary report, published this week, is its most detailed audit of procurement so far. The authority says overpricing is not an occasional abuse but a feature of the system: competition is frequently switched off, and inflated prices are rewarded rather than challenged.

How prices stay inflated

The mechanism is simple enough. Bids are assessed against an "estimated value", but that estimate does not have to reflect the real market price. Once an overpriced contract is awarded, it can become the reference point for the next one, allowing above-market costs to become normal over time (HVG).

Contracting authorities can also shape tenders in ways that make competition look present while keeping it ineffective. Procurements are merged so only large firms can qualify, or split up to avoid open tendering (Portfolio). Technical requirements are written so narrowly that only one company fits. The same companies appear again and again, bidding together and winning together. Construction and energy, among the biggest areas of state spending, show the worst overpricing.

There is another gap in central purchasing. Contracts for public-sector energy, vehicles, furniture and travel do not appear on the public procurement platform at all. Their value is more than HUF 500bn before energy costs are included, and could be four to five times higher once energy is counted (HVG).

Three EU locks on Hungary's money

The report itself does not freeze or release EU money. Hungary's access to funds is controlled through three separate EU locks.

The first is the Conditionality Regulation, the EU mechanism that links budget protection to rule-of-law standards. Under it, the Council, where member-state governments vote, suspended €6.3bn in cohesion funds in December 2022. Cohesion funds are the EU's main investment money for poorer regions and infrastructure.

The second lock sits inside Hungary's post-pandemic Recovery and Resilience Plan. Budapest must meet 27 "super-milestones" on anti-corruption and procurement safeguards before that money can flow (European Commission). The third comes through EU cohesion rules, which can block reimbursements if governance conditions are not met, without a fresh political vote (Common Provisions Regulation).

None of those locks opens automatically because Hungary's watchdog has published a report. But the evidence matters because it comes from the very institution Brussels required Hungary to create. If that institution says procurement prices remain inflated, the Commission has to decide whether legal promises are enough, or whether money should wait until tenders become genuinely more competitive. The European Court of Auditors has also warned that traceability and transparency of recovery spending remain insufficient across the bloc.

The Poland problem

Poland makes the decision harder. In February 2024, Brussels released about €137bn in EU funds to Poland's reformist government before judicial reforms had been fully tested. That choice now hangs over every conditionality case. It suggested that political direction can count almost as much as measurable delivery.

Hungary's Parliament passed new procurement legislation on 23 June, including tighter conflict-of-interest rules and greater transparency around beneficial ownership. If Brussels releases money because Prime Minister Péter Magyar has changed the country's political direction, before procurement becomes cheaper and more competitive, the EU's rule-of-law funding tool will look less like a rule and more like a political judgment.

Slovakia is already reading the lesson. As Hungary tries to work its way back towards EU conditions after the freezing of funds, Slovakia is beginning to repeat its mistakes, Denník N reported. In April, the European Parliament called on the Commission to consider using the same mechanism against Bratislava.

The credibility test is narrower than the politics around it. What proof does Brussels require before money moves? Hungary's own watchdog has produced evidence that the procurement machine still inflates prices. What the Commission does with that evidence will say more about conditionality than any new law passed in Budapest.