EU withholding billions in funding is damaging Hungary’s economy, says Hungarian finance minister

EU budget commissioner Johannes Hahn (L) and Hungarian Finance Minister Mihály Varga. (Mihály Varga, Facebook)
By Dénes Albert
3 Min Read

The European Commission owes significant sums of money to Hungary, with the debate on the issue hampering the performance of the Hungarian economy, said Finance Minister Mihály Varga after talks with Johannes Hahn, the European Commission’s budget commissioner.

According to a statement by the Hungarian Finance Ministry on Tuesday, Varga stressed that in addition to demanding the withheld recovery funds, Hungary is also waiting for a firm answer on how the EU commission intends to help member states protecting the Schengen borders finance the ever-increasing migration burden.

The finance minister said that the Recovery and Resilience Facility (RRF) has not fulfilled several of its initial promises, five member states have not received any financial support at all, and the delayed disbursement of funds has a negative impact on the competitiveness of Hungary and Europe as a whole.

Varga said that if the funds Hungary is entitled to had been used, the economy would have expanded by more than 5 percent last year. By withholding the funds, the European Commission has damaged Hungary’s economic performance and competitiveness. Despite this, as well as the war in the neighborhood and the inflation triggered by the sanctions in its wake, Hungary has achieved growth of 4.6 percent, above the EU average, and has significantly reduced its deficit and public debt.

The Hungarian budget is holding its own in the midst of crises and in a dangerous international environment, the finance minister said, adding that “in parallel with the importance of the EU funds we are entitled to, we also draw attention to the costs of protecting the Schengen borders.”

He continued by saying: “As I stressed after last week’s meeting of EU finance ministers, this year our border protection expenditure could exceed HUF 650 billion (€1.73 billion), but Brussels has reimbursed just over 1 percent of this amount since 2015. We do not want to give up on recovering these costs with the European Union.”

Varga pointed out that Hungary is supporting the victims of the Russian-Ukrainian war with the largest humanitarian aid operation in its history, with more than HUF 40 billion in aid so far. On EU support to Ukraine, the minister said that joint borrowing may seem quick and easy, but it cannot be a solution to all challenges in the longer term.

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