Hungary’s €10bn Stuck In Court

Hungary’s case for receiving EU recovery money now depends partly on a law that its Constitutional Court has not yet cleared. The deadline for filing proof that the required reforms have been completed is 31 August — eleven days away. After that, any unfinished reform milestone cannot be counted towards Hungary’s recovery-fund payment (Commission closure notice, ECA).

The law is Act XVIII of 2026. It packages transparency and energy reforms that are 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 threw out a separate challenge to a constitutional amendment, saying the petition attacked the amendment’s substance rather than the way it was adopted — the only ground on which Hungarian law allows the court to review constitutional amendments (444, Kontroll). That was the easier case. Act XVIII is different. It is an ordinary law, so the court can examine what it actually says, and its decision affects what Hungary can put in front of Brussels.

What the law does and why Brussels needs it

Act XVIII extends Hungary’s public-data registry from 26 August to cover state-owned companies and the government-linked asset-management foundations that received public assets under Viktor Orbán’s government. Those foundations were central to EU concerns about conflicts of interest. Hungary’s data-protection authority has confirmed the expansion (NAIH). Government consultation papers also link follow-up decrees to energy-sector reforms in the recovery plan (kormany.hu).

In practical terms, Act XVIII is one of the instruments Hungary needs to show Brussels that the promised reforms exist in law, not only in government statements. If the court strikes it down before the deadline, Hungary loses the legal basis for parts of its evidence. If the court upholds it, the route to payment becomes clearer.

The awkward case is a judgment after 31 August. The Commission would then have to decide whether a law still under constitutional challenge counts as proof of a completed reform. There is no obvious precedent for that question. Brussels could treat the law as valid until struck down, or it could decide that the unresolved case is enough reason to hold back payment.

Who benefits from delay

The petitions were filed by Fidesz-KDNP, Orbán’s party, now in opposition after Péter Magyar won a supermajority. That is the political mechanism. An opposition party is using constitutional review to create deadline risk for a government trying to unlock EU money. Whether Fidesz did so to obstruct the process or because it believes the law is defective, the effect is the same: Magyar’s calendar is being squeezed.

The Council, where EU governments vote, approved Hungary’s revised recovery plan in July. That put around €10 billion in grants and loans within reach, but only if the milestones are verified (Council). The Recovery and Resilience Facility, the EU’s post-pandemic performance fund governed by Regulation 2021/241, pays against documented proof. Hungary must show completed reforms, file a payment request by 30 September, and receive Commission disbursement by the end of the year. The money comes in checked tranches, not as one political reward for a change of government (Tagesschau). The European Parliament, which sued the Commission over an earlier decision to release Hungarian funds, is another reason Brussels will be careful about how strictly it reads the conditions.

A separate freeze on Hungary’s cohesion funds is running under a different system. Cohesion funds are long-term EU budget money aimed at reducing regional gaps, the same category of funding that has shaped infrastructure and public projects across small member states such as Malta. Hungary’s freeze is tied to the budget-conditionality regime and rule-of-law concerns over procurement and anti-corruption (Council Decision 2022/2506). That process does not have a 31 August cliff. The urgent deadline belongs to the recovery fund.

Three actors, eleven days

Hungary’s Constitutional Court can still decide the Act XVIII case before its recess ends on 28 August, either leaving the law standing or striking it down. Magyar’s government can prepare replacement legislation, but anything passed after 31 August cannot be treated as proof that the reform was completed on time. The Commission then has to decide whether a law under unresolved judicial challenge is enough to satisfy the recovery-plan conditions.

Poland’s recent positive recovery-plan assessment (gov.pl) shows how the system works when the evidence is accepted. Brussels releases money when the documents pass. That is why a domestic court case can jam an EU payment. The decision in Budapest will determine whether Hungary’s evidence is legally intact when Brussels has to judge it.