Hungary courts €16.4 billion with reforms

Prime Minister Péter Magyar’s government has put a 110-page anti-corruption package before parliament, the first legal move needed to unlock €16.4 billion in frozen EU recovery funds before the August 31 deadline. The bill strengthens Hungary’s Integrity Authority, but leaves out judicial and media reforms Brussels had also asked for. For Maltese readers, the question is familiar enough: when EU money is tied to rule-of-law promises, does Brussels check whether the system has changed, or whether the paperwork has been filed?

• Hungary filed a 110-page bill to meet 27 EU milestones and unlock frozen pandemic recovery funds
• The government must pass all reforms by August 31 or lose access to €16.4 billion in funding
• The package gives the Integrity Authority power over procurement but omits judicial and media freedom protections
• Prosecutors charged the Integrity Authority chairman with embezzlement just as the bill was submitted to parliament
• Routing €3.5 billion through Hungary’s state development bank may limit the European Commission's direct spending oversight

Hungary's new government filed the anti-corruption package with parliament on June 9 (24.hu). It is the first delivery under a conditional deal struck May 29 between Magyar and Commission President Ursula von der Leyen.

The deal requires Hungary to 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 weakness in the arrangement is that the Commission has often released money once governments pass laws, before checking whether those laws change how power is actually used.

What the bill covers, and what it avoids

The package centres on Hungary's Integrity Authority, an EU-mandated anti-corruption watchdog. It gives the Authority power to override prosecutors who sit on corruption cases and to suspend suspect procurement contracts (DW). The bill also begins unwinding the Orbán-era public trusts that moved universities and state assets onto politically appointed boards.

The 110 pages do not include judicial independence reforms, prosecutorial autonomy, or media freedom protections, all part of the EU’s original conditionality demands. In Malta, where rule-of-law language is never abstract after Daphne Caruana Galizia’s assassination and the public inquiry that found the state bore responsibility, that omission matters. An anti-corruption authority can only do so much if courts, prosecutors and media remain exposed to political pressure.

On the day the package was filed, prosecutors charged the Integrity Authority's own chairman, Biró Ferenc, with embezzlement causing roughly €350,000 in damages. The timing weakens the very institution the legislation is meant to empower.

The Commission keeps paying before checking

In 2024, the Commission released Poland's frozen billions after Donald Tusk's election, before judicial reforms passed. President Nawrocki later vetoed those reforms. In December 2023, the Commission unfroze €10.2 billion for Orbán's Hungary days before a Ukraine accession vote Budapest had threatened to block.

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 rule-of-law conditions were not genuinely met. Her opinion in Case C-225/24, filed by the European Parliament to annul the decision, proposes a stricter standard: the Commission must show effective implementation before it pays out.

The Court of Justice has not yet ruled. If it follows the Advocate General’s reasoning, every future conditionality release would face a judicial test of real-world impact. 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". But Berlin also belongs to a group of six member states, with Sweden, Austria, Finland, the Netherlands and Estonia, pushing for strict conditionality enforcement.

Germany is caught between that fiscal-hawk alliance and its political relief at Orbán’s departure. German legal commentators have warned that the Commission risks repeating the Poland pattern.

Where oversight disappears

Around €3.5 billion in RRF funds will flow 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." Once the money enters MFB, Brussels loses project-by-project verification and must rely on Hungarian audit structures built under Orbán.

To clear all milestones by the deadline, Tisza, Magyar's party, proposed raising the cap on fast-track parliamentary procedures from six to fifteen per half-year. Tisza holds roughly 71% of parliamentary seats and needs no opposition support. These are the same emergency instruments Orbán used to push through constitutional changes.

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, currently dismantling its own anti-corruption bodies while Hungary builds new ones, is the sharper test of the system: whether the EU can distinguish between countries moving in opposite directions, or whether conditionality remains a political bargain dressed as legal discipline.