Hungarian Prime Minister Viktor Orbán is threatening to veto the next long-term European Union budget unless his country unblocks funds that have been frozen due to rule of law and corruption concerns.
Points of attention
- Viktor Orbán is threatening to veto the next long-term EU budget until frozen funds are unblocked, citing rule of law and corruption concerns.
- Hungary's demand for unfreezing funds in exchange for EU budget support could lead to serious economic ramifications for the country.
- A strained relationship with the EU due to disputes over financial assistance to Ukraine and criticism of Hungary's rule of law and corruption situation is impacting Hungary's economic stability and budgetary prospects.
- The conflict between Hungary and the EU revolves around billions of euros in frozen funds, with Moody's changing Hungary's debt rating outlook to 'negative' due to the deteriorating prospects for resolving the dispute.
- The escalation of disputes between Hungary and the EU poses challenges for the country's economy, with significant amounts of funds being withheld and implications for Hungary's future financial stability.
Orban threatens the EU again
It is about the seven-year EU budget from 2028, which will require unanimity among all members of the political bloc at a time when Orbán already has a track record of delaying joint decisions.
Hungary will undoubtedly receive these funds. The funds that we don't get in 2025 and 2026, we will have to get in 2027 and 2028, because if we don't, the EU won't have a budget, because I won't accept that, he said in an interview the state radio of Hungary.
Viktor Orban
Prime Minister of Hungary
Bloomberg adds that, according to financial experts, about 20 billion euros (about 21.1 billion dollars), which the EU is currently holding due to the conflict with Hungary, is one of the serious challenges for the country's economy.
Last week, rating agency Moody's Investors Service changed its outlook on Hungary's debt rating from "stable" to "negative". This decision is explained by the deteriorating prospects for the Hungarian government in resolving the dispute with the EU.
Hungary has strained relations with the EU
In recent years, against the background of the full-scale war in Ukraine, disputes between Hungary and the European Union have intensified, especially on political and financial issues.
One of the main topics of the conflict was the package of financial assistance within the framework of the Ukraine Facility program, which provides for the allocation of 50 billion euros to support Ukraine in the period 2024-2027.
Hungary has blocked the approval of this package, demanding the unfreezing of 30 billion euros that the EU is withholding due to criticism of the country's rule of law and corruption situation.
However, earlier the European Commission decided to remove the blocking of 10 billion euros in order to obtain Hungarian consent for the start of negotiations on Ukraine's membership in the EU.
