Now begins a billion-dollar battle, where the future of Hungarians is at stake

After the historic election victory seen in Hungary, the leader of the Tisza party and the government official Péter Magyarin need to start building trusting relations with the EU institutions, which Viktor Orbán managed to destroy during his 16 years in power.

Hungary also needs to reform internally in order to free tens of billions of euros of frozen EU funds. Without this money, Hungary’s new government will face the same financial challenges that Orbán faced.

The freezing of billions of euros in EU funds related to administrative corruption and violations of the rule of law has had a significant impact on the Hungarian economy. In the years 2022–2026, Hungary has, among other things, lost investments and experienced severe inflation spikes.

The frozen RRF and cohesion funds of about 18 billion euros are about 11 percent of Hungary’s gross domestic product. Not getting them is considered the main reason for the collapse of Hungarian investments. The delay in the funds has also increased the interest costs of Hungary’s national debt.

Hungary for the test

From Brussels’ point of view, the question is whether Magyar is truly ready to dismantle the authoritarian system created by Orbán or whether the fogging will continue.

The Commission demands concrete and quickly implemented rule of law reforms from Hungary: the independence of the courts, joining the European Public Prosecutor’s Office, securing the freedom of the media, non-governmental organizations and universities, and rooting out corruption.

The Commission remembers well the example of Poland, where funds were released too quickly and on the basis of mere promises. In the end, the reforms got stuck in Poland’s internal political disputes, and Brussels does not want to repeat this mistake in the case of Hungary.

However, Magyar has one significant advantage over Poland. His Tisza party has a two-thirds majority in the Hungarian parliament, so Magyar does not have the same internal political brake as the then Polish prime minister had.

Hungary’s challenge, however, is a very tight schedule, because if the reforms are not implemented already during the spring and summer, the EU money may not be received in the fall.

In Brussels, it is expected that Hungary will also give up co-operation with Russia and stop the aid loan to Ukraine.

It can be considered a good sign that Magyar said immediately after his election victory that he would start anti-corruption measures, safeguard the independence of the judiciary and restore the freedom of the media and universities.

With these prospects, he also does not intend to block Ukraine’s support financing and accepts sanctions against Russia.

However, the fact that the internal atmosphere in Hungary is still quite critical of Ukraine may bring challenges. It means that too much complacency in Brussels can backfire in Budapest.

Slow, but effective

For the EU, Orbán’s loss is a geopolitical victory only if it really changes Hungary’s direction.

So far, however, the Hungarian case shows that tying the funds granted by the Union to the rule of law and rooting out corruption, combined with freezing funds, can be an effective means of keeping member countries in check. However, it is not a very fast method.

Hungary’s example also proves that the conditionality of EU money protected the Union’s funds and gave Hungarian voters an economic motive to demand democratic change in the country.

The success of the new relationship between Hungary and the EU now depends on whether Magyar can quickly show that Hungary genuinely wants to follow the EU’s common principles and does not just want the Union’s money.