The EU is poised to give 900 million euros ($980 million) to Hungary as an advance on its part of post-Covid pandemic recovery funds which remain frozen in a dispute over the rule of law.

The European Commission said Thursday that the money, which it termed a “pre-financing,” would go towards a greening of Hungary’s energy production, once EU member states signed off on it.

Brussels’ announcement came after Hungarian Prime Minister Viktor Orban was accused of being ready to veto further EU aid to Ukraine and stall Kyiv’s push for membership talks in order to unblock the frozen funds.

The nationalist leader, who has butted heads with Brussels over alleged democratic backsliding by his government and over attempts to reform the EU’s asylum policies, has recently launched a public campaign hostile to the commission.

The EU executive on Thursday said it had given approval of Hungary’s plan to spend 10.4 billion euros set aside for it from the post-coronavirus recovery and resilience fund — but that disbursement of the bulk of it was suspended until Budapest met rule-of-law conditions.

That 900-million-euro advance, however, was not subject to those conditions, a European Commission spokeswoman, Veerle Nuyts, said.

She said it was being given to Budapest because of the “urgency” to provide “the necessary liquidity” to Hungary, whose economy is in a fragile state, and to get energy projects off the ground.

To unlock the rest of the EU money, Hungary has to meet 27 conditions imposed by Brussels called “super milestones”, covering areas such as judicial independence, the fight against corruption and rules about public procurement.

The commission spokeswoman said the EU would not pay out any requests from Hungary to tap the fund “until we find that the Hungarian plan satisfactorily complies with all the 27 super milestones.”

She said the “pre-financing” amount would be deducted from any future disbursements and the commission “will recover” them if no disbursements end up being made.

As well as the billions frozen in the post-Covid recovery fund, Brussels has placed a hold on 22 billion euros in separate cohesion funds for Hungary until it can prove reforms have been taken to ensure the independence of judges, the rights of LGBTQI+ minorities and the independence of academics.

Hungary has adopted some changes it asserts meets demands related to the judiciary in a bid to receive 13 billion euros of that money.

Nuyts said those changes were viewed as “a good step in the right direction.”
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