Hungary's reset with Brussels: the money moves, the veto stays

On 23 September the European Commission asked the Council to lift the measures it imposed on Hungary in 2022 under the EU's budget conditionality rules. If member states agree, €4.2bn in suspended cohesion commitments would be reinstated, and universities run by public-interest trusts would regain full access to Erasmus+ and Horizon Europe. It is the clearest sign yet that Péter Magyar's government has turned its electoral mandate into money. It is not a sign that Budapest has given up its leverage. On Ukraine's accession the new government has kept a veto, and on Russian energy it has promised speed without taking a binding decision. That combination is likely to shape Hungary's place in the EU for the rest of this parliament.

What the election settled

Tisza won the 12 April election with 53.18 per cent of the list vote and 141 of the 199 seats, according to National Election Office figures. Fidesz–KDNP, in power for 16 years, fell to 52 seats; Our Homeland kept six. Turnout was 79.56 per cent, a record. A two-thirds majority lets the government amend the Fundamental Law without opposition votes. That has mattered more for the EU file than any change of tone, because most of the Commission's conditions required legislation, and required it quickly.

What Brussels has agreed to release

The Commission's proposal rests on measures Hungary notified on 9 September. They include stronger powers and data access for the Integrity Authority, a new system of asset declarations, more transparency over the public-interest trusts, wider judicial review of decisions by investigators and prosecutors, tighter controls on EU spending and public procurement, new beneficial-ownership rules, and accession to the European Public Prosecutor's Office. "Hungary has taken important steps to strengthen the rule of law and protect the Union's financial interests," Commission President Ursula von der Leyen said. The Council now has a month to decide. According to Eunews, only 21 universities, those operated by the trusts, were affected by the research and exchange restrictions.

The larger sum is in the recovery facility. Hungary's revised recovery plan is worth €10bn, and its milestones had to be met by 31 August. The government says it met all 27 "super milestones" and more than 100 others, after parliament amended over 100 laws during the summer, most of them on the judiciary and anti-corruption. Transport minister Dávid Vitézy said the prime minister had told ministers "not to leave a single euro cent behind". Payment requests are due by 30 September and disbursements by 31 December. That is the government's account; the Commission has yet to give its assessment. Together with €6.4bn of cohesion money that carries no immediate deadline, the package the two sides agreed in May comes to €16.4bn.

Why the money matters to the budget

The fiscal position explains the urgency. Finance minister András Kármán told parliament that, on the government's review, the inherited 2026 deficit was heading for 8.3 per cent of GDP against a planned 3.7 per cent. The revised budget, debated on 8 September, targets 7.5 per cent, a deficit of HUF 7,110bn, with spending up HUF 5,244bn and revenue up HUF 2,352bn on the original law. Kármán blamed the previous government's management, unfunded campaign spending, over-optimistic growth assumptions and overpriced contracts. Fidesz rejects that account. Its speaker András Palóc called the bill "a budget of broken promises and debt", and KDNP's János Hargitai defended the earlier practice of budgeting EU funds that had not yet been received.

Both sides have a point. Part of the gap reflects spending decided before the election; part reflects the simpler fact that EU money assumed in earlier budgets did not arrive. For the new government the practical conclusion is the same. With a deficit near 7.5 per cent, it cannot afford a delay in the recovery disbursement, and the facility closes at the end of the year.

The Ukraine veto has changed form, not disappeared

Magyar's language on the war differs from his predecessor's. In April he said "Ukraine is the victim in this war" and "We cannot ask any country to give up its territory". Tisza has ruled out sending Hungarian weapons or soldiers to Ukraine. He has also opposed fast-track accession and said membership would be put to a binding referendum in Hungary.

In practice the veto has stayed. On 9 September Euronews reported that Hungary had again blocked, at a Council working-group meeting, the opening of a negotiating cluster with Ukraine covering the internal market and competition policy, while allowing Moldova's cluster to proceed. Budapest links progress to the implementation of pledges on the educational, cultural and linguistic rights of Ukraine's Hungarian minority; foreign minister Anita Orbán said work had begun on drafting new education legislation. Kyiv says it committed to protecting minority rights during talks in the summer, and the Commission and the other member states supported opening the cluster. Other capitals have been reluctant to separate the Ukrainian and Moldovan tracks, which means a Hungarian objection to one slows both.

This is a narrower objection than Viktor Orbán's, and one that can in principle be met. It also gives Budapest a veto point at each stage of a process that requires unanimity, and that is the more durable feature.

Energy: capability claimed, decision pending

Russian energy is where statements and contracts diverge most. Around 90 per cent of Hungary's oil has historically come from Russia. After the election Magyar said "No one can change geography" and that the government would buy oil and gas "in the cheapest and safest way possible"; Tisza's stated goal was to end reliance on Russian energy by 2035, and he promised a full review of the Russian-led nuclear project at Paks. In mid-September, economy and energy minister István Kapitány told Telex: "Within a year, we will break away from Russian gas." He pointed to LNG through Croatia's Krk terminal and to pipelines from neighbouring states. The state company MVM holds a 2021 contract with Gazprom for up to 4.5bn cubic metres a year. As Kyiv Post noted, the minister described a capability, not a commitment: no formal decision to end Russian imports has been announced. Hungary and Slovakia continue to receive Russian oil under EU exemptions, and talks with Croatia on running the Adria pipeline at full capacity are continuing.

The interests are not hard to read. Russia keeps one of its last pipeline customers in the EU as long as the contracts run. The Commission wants the phase-out it has legislated. The Hungarian government wants secure, cheap supply while it closes a large deficit. If switching suppliers raised household prices before the 2030 election, the political cost would fall on the government, which is a reason to expect the formal gas decision later than the minister's timetable suggests.

What to watch

The Council's vote on the conditionality proposal is due within a month, and the Commission's verdict on the recovery payment request should follow before the facility closes in December. On energy, the test is a formal notice to Gazprom or a signed alternative supply contract, not an interview. On Ukraine, the question is whether Budapest states which specific steps by Kyiv would lift its objection. A clear list would turn the veto into a negotiation. Without one, Hungary will keep the role it held before April, with better relations in Brussels and the same leverage over enlargement.

Sources

• Eunews — Hungary: von der Leyen says reforms have been implemented, urges to release EU funds
• Euronews — Hungary says it has met all conditions to unlock full €10bn EU Recovery Fund
• CGTN — NEO confirms landslide Tisza Party victory in Hungary election
• 444 — Vita az újraszámolt költségvetésről
• Euronews — Hungary's continued veto slows Ukraine's EU accession process as minority rights row persists
• Euronews — 'We cannot ask any country to give up its territory,' Magyar says on Ukraine
• Euronews — Magyar keeps door open to Russian energy despite EU phase-out plans
• Kyiv Post — Hungary eyes break from Russian gas by next October