Hungary’s newly appointed PM Péter Magyar has set out his government’s approach to utilizing EU funds but stated he will maintain the contentious windfall taxes, despite Brussels’ conditions for fund release.
On Thursday, Hungary’s new Prime Minister Péter Magyar will dispatch a letter to European Commission President Ursula von der Leyen, detailing his administration’s stance on the politically challenging conditions linked to EU financial aid.
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Magyar revealed this at a press briefing after his government’s inaugural cabinet meeting in Ópusztaszer.
He committed to reclaiming €17 billion of EU funds that had been frozen under former Prime Minister Viktor Orbán due to concerns surrounding corruption and legal governance. Out of this amount, €10 billion from the EU’s Recovery and Resilience Facility faces expiration at the end of August if the government fails to utilize it adequately.
During his address to reporters, Magyar explained some of the key disputes linked to the funds.
«The primary issues involve project matters, including recapitalizing the Hungarian Development Bank, establishing a dedicated project company, and structuring investments in transport, railways, and suburban railways in ways acceptable to all parties,» Magyar said, noting that his administration is also preparing rental housing and energy efficiency initiatives.
Currently, Hungary is reviewing a national development plan developed by the previous cabinet and intends to submit it to the European Commission by the end of May.
Magyar recognized that several EU stipulations for fund release are politically delicate for his government, signaling that not all will be adopted.
«For instance, the European Commission expects a gradual phasing out of some special taxes by the government. While this aligns with Hungary’s economic interests, given the current budgetary constraints, it is not feasible for the government to commit to this,» Magyar explained.
Hungary has implemented various sector-specific levies on banking and energy sectors, which the European Commission has critiqued in its country-specific recommendations.
«Tomorrow, I will send a comprehensive letter to Commission President Ursula von der Leyen explaining where we can be flexible, what remains acceptable from the perspective of Hungary’s economy and populace, and what does not. I am aware of these points now, but we expect to find a consensus,» Magyar stated.
The Prime Minister also confirmed that a senior European Commission delegation will visit Budapest next week for five days of negotiations on the frozen EU funds.