1. Skip to content
  2. Skip to main menu
  3. Skip to more DW sites

Hungary: Unfrozen funds to be investigated in EU court

Teri Schultz
March 14, 2024

Hungary's recent financial windfall of €10.2 billion faces legal challenges in the EU court, as lawmakers question the decision's adherence to rule of law principles.

EU Commission chief Ursula von der Leyen and Hungarian Prime Minister Viktor Orban
EU Commission chief Ursula von der Leyen agreed to release some funds to Hungary in December, against the wishes of a majority of EU lawmakers. Image: Ludovic MARIN/AFP

Daniel Freund isn't mincing words about why the decision to release €10.2 billion in frozen funds to Hungary should be investigated. 

"We think that this decision was illegal and we want this checked now by the court," the German Green member of the European Parliament said, explaining why his party and a majority of lawmakers want the European Court of Justice to investigate the European Commission's December 13 decision to release the funds. 

On Thursday, the court agreed to do so and the Commission has said it will defend itself. "The Commission considers that it acted in full compliance with EU law and will defend its decision before the EU courts," Christian Wigand, the body's spokesperson on justice, equality and rule of law, said.

The money released in December was part of a sum which had been withheld by the Commission a year earlier due its determination that Hungary was violating "rule of law principles," particularly with regard to judicial independence and that conditions in Hungary risk "jeopardizing the sound management of the EU's budget or the protection of its financial interests."

EU parliament wants to sue EU commission over Hungary funds

Too quick to judge?

Freund says parliamentarians don't believe the Commission adequately assessed whether, as it stated, Budapest "[met] the fundamental requirement of judicial independence under the Charter of Fundamental Rights."

This suspicion, Freund explains, is due in part to the fact that the funds were freed at the same time Hungary was blocking European Council unanimity on opening Ukraine's accession negotiations and on further financial support for Kyiv.

At a special meeting of EU leaders the day after the Commission's announcement, Hungarian Prime Minister Viktor Orban went along with a suggestion from German Chancellor Olaf Scholz that he should take a "coffee break" while the other 26 members approved the opening up of Ukraine's membership negotiations.

Freund says that timeline raises questions. "We think there is plenty of indication that this decision [to unblock funds] was not taken because of reforms that actually change something in Hungary," he said, "but because of political considerations. And that should not happen. In order for EU money to go to any member state, the rule of law in that member state has to be fully functioning and corruption needs to be effectively fought. And both those things are not true in Hungary."

He notes that, along with the decision to unblock this money, the Commission simultaneously reaffirmed the continued suspension of another €11.7 billion worth of funds budgeted for Hungary related to, among other issues, the rights of civil society organizations, academic and media freedom, and the rights of migrants and asylum seekers and of LGBTQ people.

In other words, Freund explains, while releasing part of the funds, the Commission also confirmed, "there are systematic shortcomings in Hungary, and there is such a big corruption risk for EU funds that the rest of the money absolutely needs to be frozen. And both those things can actually not be true at the same time," he argues. 

Ukraine wins EU membership talks, loses 50 billion in aid

How it's playing in Budapest

This battle is, unsurprisingly, getting plenty of attention in Hungary. Member of the European Parliament (MEP) Erno Schaller-Baross, of Orban's Fidesz party, called the move by his counterparts "legal nonsense, clearly prioritizing politics over law."

Hungarian political analyst Andras Laszlo, a former Fidesz adviser in the European Parliament, said both the European Parliament (EP) and the European Commission are hiding other political goals "beneath the rule-of-law veil." He said the Hungarian government and its supporters were willing to adapt to the "supposed rule of law concerns" of the Commission but he doubted that the other lawmakers would ever be satisfied, no matter what reforms Hungary undertook.

"The real underlying issues concern not rule of law but accepting the introduction of gender ideology into schools and kindergartens, and accepting the relocation of illegal migrants," he told DW.

Laszlo believes the EP is trying to delay payments now authorized by the unfreezing until a decision is made by the European Court of Justice (ECJ). With European parliamentary elections taking place in June, Laszlo said, "it's the last effort this EP can make before the end of the cycle and thereby extend its political pressure beyond its mandate."

'No money until rule of law restored'

Daniel Freund wouldn't deny that. In fact, he emphasizes it, noting that some €450 million of the previously suspended funds has been paid out already and that it generally takes an average of 19 months to get a ruling from the ECJ.

"We want to send the message that no money should flow until the rule of law is restored," he said, "and that the Commission in the future should think twice whether they send any additional money into the corrupt system or [to] Viktor Orban."

Edited by: Milan Gagnon