Hungary files reforms to unlock €16.4 billion

"title": "Hungary offers reforms in push for €16.4 billion EU payout", "dek": "Prime Minister Péter Magyar’s government has sent a 110-page anti-corruption bill to parliament, the first serious move towards unlocking frozen recovery money before the August 31 deadline. The package strengthens the Integrity Authority, but leaves out judicial and media reforms Brussels had sought. The Commission now has to decide whether laws on paper are enough, even as the watchdog’s chairman faces embezzlement charges and questions grow over where oversight ends.", "story_glance_bullets": [ "Hungary has filed a 110-page bill meant to meet 27 EU milestones and unlock frozen pandemic recovery funds", "The government must pass the reforms by August 31 or lose access to €16.4 billion", "The package gives the Integrity Authority new powers over procurement, but avoids judicial and media freedom protections", "Prosecutors charged the Integrity Authority chairman with embezzlement on the day the bill went to parliament", "Sending €3.5 billion through Hungary’s state development bank could reduce the Commission’s direct control over spending" ] } }

Hungary’s new government sent a 110-page anti-corruption package to parliament on June 9 (24.hu). It is the first down payment on a conditional deal agreed on May 29 between Prime Minister Péter Magyar and Commission President von der Leyen.

The bargain is simple enough in form, if not in politics. Hungary must meet 27 reform milestones to unlock €16.4 billion from the Recovery and Resilience Facility, the EU’s post-pandemic investment fund. The deadline is August 31. After that, unspent RRF money disappears.

The harder question is what counts as meeting a condition. The Commission has a habit of releasing money once governments pass the required laws, before it is clear whether those laws change anything in practice. Hungary is now testing that habit again.

What the bill covers, and what it avoids

The bill is built around Hungary’s Integrity Authority, the anti-corruption watchdog created under EU pressure. It would give the Authority power to challenge prosecutors who leave corruption cases idle and to suspend procurement contracts that look suspect (DW).

It also begins to unwind the Orbán-era public trusts that moved universities and state assets onto politically appointed boards. Those structures mattered because they put large parts of public life beyond the normal reach of elected government, while keeping them close to the old ruling network.

What is missing from the 110 pages is just as important. The package does not include judicial independence reforms, prosecutorial autonomy, or media freedom protections, all of which were part of the EU’s original rule-of-law demands.

On the same day the bill was filed, prosecutors charged the Integrity Authority’s own chairman, Biró Ferenc, with embezzlement causing roughly €350,000 in damages. That timing weakens the very body the new legislation is supposed to strengthen.

The Commission keeps paying before checking

There is a recent pattern here. In 2024, the Commission released Poland’s frozen billions after Donald Tusk’s election, before judicial reforms had been passed. President Nawrocki later vetoed those reforms.

In December 2023, the Commission unfroze €10.2 billion for Orbán’s Hungary days before a vote on Ukraine’s accession process, which Budapest had threatened to block. The message received in many capitals was that legal conditions could bend when the political moment was difficult enough.

Advocate General Ćapeta, the senior legal adviser to the EU’s highest court, later concluded that the Commission should never have released those 2023 funds because the rule-of-law conditions had not genuinely been met. Her opinion in Case C-225/24, brought by the European Parliament to annul the decision, sets out a stricter standard: the Commission must show that reforms are effectively implemented before money is paid.

The Court of Justice has not yet ruled. If it follows the Advocate General’s reasoning, every future conditionality release would have to pass a real-world impact test. A judgment is expected in late 2026.

Germany shows the split inside the Council, where member-state governments negotiate EU decisions. Chancellor Merz publicly praised Magyar’s “fresh start”. At the same time, Berlin is part of a six-country group with Sweden, Austria, Finland, the Netherlands, and Estonia pressing for strict enforcement of conditionality.

That leaves Germany caught between fiscal caution and political relief at Orbán’s exit. German legal commentators have warned that the Commission risks repeating the Poland pattern: paying for reform before the reform exists.

Where oversight disappears

About €3.5 billion in RRF money will move as block capital into Hungary’s state development bank, MFB, which will then lend to businesses and housing projects. Commission officials warned in May that this route would “significantly reduce the Commission’s oversight of spending.”

The mechanism matters. Once the money enters MFB, Brussels loses direct project-by-project verification and has to rely on Hungarian audit structures built under Orbán. For a rule-of-law dispute, that is a large concession hidden inside a financing channel.

To pass all milestones by the deadline, Tisza, Magyar’s party, has proposed raising the cap on fast-track parliamentary procedures from six to fifteen per half-year. Tisza holds roughly 71% of parliamentary seats, so it does not need opposition support.

The uncomfortable part is that these are the same emergency instruments Orbán used to push through constitutional changes. A reforming government is now using the machinery of the system it says it is dismantling.

The Commission has not published which milestones it considers already met. According to the FAZ, nobody in Brussels could specify the exact count.

A further €530 million remains frozen over LGBTQ+ and asylum disputes outside the May 29 deal. Slovakia, which is dismantling its own anti-corruption bodies while Hungary builds new ones, gives the EU the sharper test: whether conditionality can tell the difference between governments moving in opposite directions, or whether it remains politics dressed in legal clothes.