Hungary Working to Unfreeze EU Funds, Caution Still Needed Due to Corruption

As the end of August approaches—the deadline for Hungary to unfreeze more than ten billion euros from EU funds—the country’s top anti-corruption body is warning that the influx of such a large sum into a system with a long history of corruption could create new opportunities for abuse.

Ferenc Pal Biro, head of the Integrity Authority, told Brussels-based Politico that after years of tolerating corruption, Hungarian institutions must remain vigilant against fraud, even as the new government of Peter Magyar promises a complete break with corruption.

“When you are forced to spend a lot of money, there will be people who will try to abuse the opportunities,” Biro said.

The Hungarian government has until August 31 to accelerate reforms in order for the European Commission to approve the payment of 10.4 billion euros to which the country is entitled under the post-pandemic recovery fund.

The funds were frozen because Budapest, under Viktor Orban’s rule, violated EU law. Now, Hungary is on track to receive the funds, two EU officials told Politico.

“We are working extremely hard on this,” Minister of Culture Zoltan Tar told the Brussels portal, adding that many ministers are working solely on this issue.

Yesterday, during Hungary’s national holiday celebration, Tar said he expects a small portion of the funds will not be realized due to missed targets, but he is confident that the majority will arrive. He also said the government has heard that the Commission is satisfied with the steps taken so far.

The Integrity Authority, established in 2022 as part of reforms demanded by Brussels, oversees the spending of EU funds. The Authority says that during Orban’s rule, they were pressured and intimidated, and were asked to halt investigations.

Under Magyar, the Authority has gained new power and momentum. Biro said that many cases he flagged for investigation during Orban’s rule are now “reappearing” because officials who “always wanted to do the right thing” can now do so.

One cited case involves a contract worth 650,000 euros allegedly awarded without tender to the brother of a high-ranking Fidesz politician, for which the Authority said the price was 51 times higher than the going rate. There is also a 275-million-euro EU-funded program for the elderly, which is being investigated by the tax authority due to suspected fraud.

Biro estimates that during Orban’s tenure, about 105 billion euros of public money ended up in private hands or was taken out of the country. He believes that a “fairly large portion” can be recovered, although much of it may be in places like the Caribbean and Latin America, which would mean a process lasting several years.

The Integrity Authority has examined the spending of about one billion euros from EU funds over the past two years.

Corruption allegations have been rejected by former Orban political director, now MEP, Balazs Orban, who also accused the new Hungarian government of political bias.

He said the new government enjoys unprecedented support in Brussels institutions, while those same institutions remain silent on anti-democratic measures identical to those for which they previously accused Orban’s governments.

“The new government has decided to give the Authority exceptionally broad powers that exceed those of similar bodies in other EU countries,” Balazs Orban said.