EU funds 28 December 2023, 2:00pm

RePowerEU advance due to legal loophole arrives in the Hungarian budget

Portfolio

€779.5 million, or nearly HUF 300 billion, has been transferred to Hungary from RePowerEU funds, Finance Minister Mihály Varga announced today. The first advance payment was expected to arrive by February, as no EU procedure is blocking its disbursement, but the government needs to take urgent action to get the full allocation of around €3.9 billion. Regional Development Minister Tibor Navracsics said that the first cohesion payments could also start in January.

Hungary's amended recovery plan was approved by the EU finance ministers on 8 December, thus removing the obstacle to the disbursement of the funds due to Hungary, Mihály Varga began his announcement, and then went on to say that

€779.5 million, or nearly HUF 300 billion, of the RePowerEU funds have been transferred to the budget.

As we have repeatedly reported, the European Commission will not make any payments to the Hungarian government under the Recovery and Resilience Facility (RRF) until the 27 super-milestones attached to it are fully met. This means that the €5.9 billion will still not be received.

However, a legal loophole in the case of the RePowerEU chapter of the RRF, which finances energy security investments, could lead to advance payments being made by the European Commission. This means that no rule of law and transparency requirements had to be met for two payments of 10% each.

In addition, the Hungarian government can expect to receive payments from the €10.2 billion of cohesion funds that have now been released, after the European Commission said the cabinet had met the horizontal eligibility criteria with the judicial reform. This was the reference made by Regional Development Minister Tibor Navracsics in a Facebook post on Thursday, who said that payments from the operational programmes could start in January.