Lack of EU Deal May Cost Hungary €1.4 Billion

  • 4 Jul 2022 8:10 AM
  • Hungary Around the Clock
Lack of EU Deal May Cost Hungary €1.4 Billion
The government’s failure to submit a plan that would be approved by the EU and pave the way for the release of EU reconstruction fund money for the country has cost Hungary €1.4 billion, Népszava writes.

Hungary was to originally receive €7.2 billion from the EU’s pandemic recovery fund, but this will be reduced to €5.8 billion after the European Commission on Thursday adjusted the amount in line with the Hungarian growth data for 2020-22, which significantly exceeded the previous expectations.

In order for the Hungarian government to have access to the money, the European Commission must approve the government’s plans for spending it.

The two sides could not reach agreement, and an important deadline came in the meantime.

The calculation of the maximum financial contribution was updated in June, in line with regulations, taking into account the results for the change in aggregate GDP in 2020 and 2020-2021. This is what happened now, and the budget was reduced by €1.4 billion.

And it could get worse, Népszava adds, as Hungary will not even get most of the reduced amount if the two parties do not manage to come to an agreement soon. If no agreement is reached by the end of the year, then the country could lose 70% of the total amount.

As the approval process in Brussels takes several months, the deal must be finalised in September at the latest so that the money is not in jeopardy.

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