Now it's all about the money

The “new Orbán” faces a Herculean task

(Bild: Krone KREATIV/AFP/FERENC ISZA, Imre Antal)

TISZA leader Péter Magyar brought the Orbán era to a close in impressive fashion on Sunday. Celebrations were exuberant not only in Hungary but also in European government circles. However, the major challenges are only just beginning...

For the winner of the Hungarian election, the difficult task of bringing the largely impoverished country back into the fold of the EU will begin immediately—as soon as he replaces Viktor Orbán as head of government. 

“Hungary is economically ruined. Millions live at or below the poverty line. The minimum pension is only 80 (!) euros. Whether Magyar is better at economic policy remains to be seen, but impoverished neighboring countries are not good for us,” explained “Krone” political expert Peter Filzmaier recently.

The EU is withholding around 20 billion euros in funding for Hungary—roughly eight percent of Hungary’s GDP. TISZA has promised to recover these funds. With a two-thirds majority, Magyar can carry out this task more easily—but Orbán has placed loyalists in key positions who can make life difficult for him.

In any case, the handover of power will likely take weeks, during which time Orbán—who has vowed “never, never, never” to give up—will likely still be pulling some strings. “I call on all the puppets that the (Orbán) government has saddled us with to resign,” Magyar declared to his opponents after his election victory. Those who have profited from the system so far will not be too pleased to hear that.

Enormous sums of money are at stake for Hungary
The funds administered by the European Commission have been blocked by the European Union due to various violations of the rule of law in Hungary. Since the Orbán government has not fully met the conditions for the release of the funds, Hungary has already permanently lost 1.04 billion euros, and will lose an additional 1.08 billion euros at the end of 2024 and 2025, respectively, from the EU Recovery and Resilience Facility (RRF).

European flags are flying again in Hungary—young voters in particular contributed to the change in power.(Bild: Imre Antal)

With 98 percent of the votes counted, Magyars TISZA holds 138 of the 199 seats.(Bild: AFP/FERENC ISZA)

Voter turnout of nearly 80 percent sets a new record for parliamentary elections in Hungary.(Bild: AFP/FERENC ISZA)

“Russians, go home,” chanted the people in Budapest.(Bild: AFP/FERENC ISZA)

Currently, 7.6 billion euros in funds from the EU Cohesion Policy remain frozen because, in the view of the European Commission, Hungary is violating its own Charter of Fundamental Rights through the so-called “Child Protection Act,” which bans depictions of homosexuality and transgenderism to minors and prohibits Pride parades.

The funds also remain blocked due to serious risks to academic freedom and the right to asylum, as a Commission spokesperson stated. An additional 10.4 billion euros would be due to Hungary under the EU Recovery Fund and remain on hold for now—of which only 919.6 million euros have been disbursed so far as pre-financing. 

The EU Commission justifies this by stating that Hungary has failed to implement so-called “super milestones” aimed at protecting the Union’s financial interests and strengthening the independence of the judiciary.

“Super-milestones”

• These “super milestones” are a series of 27 specific conditions and reform requirements that the European Commission has imposed on Hungary in order to release the frozen funds.
• These measures are primarily aimed at strengthening the rule of law and combating corruption. A central point is strengthening the independence of the judiciary to limit government influence.
• Measures are also required to increase transparency in public procurement and to establish more effective anti-corruption procedures, as well as regulations designed to prevent conflicts of interest in public office.

TISZA Wants to Engage with EU Partners
To receive the frozen 10.4 billion euros from the Recovery Fund, Hungary would first need to submit an updated plan by August. “TISZA will bring the EU funds home. To unlock them, we will submit a complete national recovery and resilience plan by the end of August,” the “Politico” portal quoted TISZA’s EU representative, Márton Hajdu, as saying.

“We will discuss with our EU partners how best to implement this, also in light of the election results and what we find after Fidesz (Orbán’s ruling party, ed.) once we are in government.”

With a two-thirds majority in Parliament, Magyar can more easily carry out certain judicial reforms and dismiss high-ranking officials close to Orbán. However, experts told “Politico” that Hungarian President Tamás Sulyok, who is backed by Fidesz, could delay legislative proceedings and refer laws to the Orbán-friendly Constitutional Court.

EU Hopes for an End to the Deadlock
In any case, Magyar was welcomed with open arms in the EU. Commission President Ursula von der Leyen tweeted just minutes after Orbán conceded defeat: “Hungary has chosen Europe. Europe has always chosen Hungary. Together we are stronger. A country is returning to its European path. The Union will be stronger.”

Many other heads of government joined in the celebration and also declared a victory for Europe. Polish Prime Minister Donald Tusk immediately spoke with Magyar by phone and shared an excerpt of their conversation. In it, referring to Orbán’s defeat, he stated: “I’m probably even happier than you are!”

The reason is clear: Orbán had repeatedly paralyzed the EU. European partners now hope that Magyar will put an end to Hungary’s obstructionist policies. This is particularly true with regard to Ukraine, where Orbán is currently blocking the crucial 90-billion-euro loan and the next package of sanctions against Russia. 

While Magyar’s victory is being celebrated by the Greens and left-wing parties, in terms of policy, the Hungarian has little in common with these parties. Even on the issue of the Ukraine loan, the “new Orbán” has so far held back from taking a clear stance. There are fears that he, too, might try to “pressure” the release of frozen funds. Although Magyar has so far acted much more pro-European than Orbán.

Hungary is speculating on a Polish model
His first foreign posting will be Poland. This is no coincidence! Following the change in power and the ousting of the national-conservative PiS government at the end of 2023, the EU Commission acted swiftly in favor of the new pro-European government.

Péter Magyar is the big winner in Hungary.(Bild: AP/Darko Bandic)

Just two months later, the EU authority in Brussels approved the release of around 137 billion euros for Poland, funds that had been frozen due to concerns about the rule of law—even though the necessary reforms had not yet been implemented.

Three months later, the European Commission also dropped the Article 7 proceedings initiated against Poland for violations of the rule of law. Since then, such proceedings have been ongoing only against Hungary ...