The coronavirus pandemic forced the European Union to introduce novel financing solutions. This is how the so-called recovery and resilience funds were established – with the consent of every member state. The aim of these funds is to help speed up public investments and reforms – which serve the interests of the EU while also allowing member states to deal with the economic and social impacts of the pandemic. All so that the economies of the EU can be more sustainable and resilient.
Hungary is to receive 16.8 billion euros from this plan. Of this, 7.2 billion euros are direct grants and 9.6 billion euros are loans. The money is due our country, but Brussels is holding back these resources.
By doing so however, they make it difficult to achieve goals that the European Commission itself is demanding from member states.
This includes, for example, goals in the field of energy which have only become all the more important due to the energy crisis and the Russian-Ukrainian war. This program of the recovery plan could strengthen energy independence and security by reducing import dependence. It would ensure affordable energy as well as increase renewable energy sources while reducing the emission of harmful substances. Therefore, within the framework of the recovery plan, the Hungarian government would help establish a flexible and safe electricity network for channelling weather-dependent renewable energy sources. This contributes to increasing domestic solar panel usage along with modernizing heating systems. It would also provide an opportunity for the poorest to be able to replace expensive and polluting heating systems with sustainable and more affordable solutions. There would also be money for increasing geothermal energy.
By delaying EU funds to Poland and Hungary, the European Commission is essentially going against itself. After all, it is not promoting the actualization of goals that are in the interest of the whole continent. And this weakens the European Union itself.
The Hungarian government started negotiations with Brussels over the resources back in December 2020. Then, in April 2022, right after the elections, the Commission announced it would launch proceedings against our country to “protect” the EU funds. According to the Hungarian government, this is motivated by political interests.
It was no coincidence that Prime Minister Viktor Orbán told the German-language newspaper, Budapester Zeitung, that the EU institutions are “used as weapons” by the government’s political opponents and that “they’re punishing us and openly blackmailing us with EU money.” He also noted that the government does not want to argue but rather cooperate. That is why our country will implement the 17 points requested by the European Commission. However, according to Viktor Orbán, Brussels will probably come up with even more requests afterwards.
At the same time, the contracts should be able to go forward at the end of the year as there will be no reason to refuse payments once the conditions are met. The Prime Minister emphasized though: “Hungary cannot be forced into a corner financially.”
The latter is shown by the fact that the Hungarian government has already started to pre-finance the implementation of the objectives from domestic sources in several areas. Significant funds have been dedicated to providing the population with solar panels, just as the development of the electricity network starts at around 103 billion forints (~ 2.5 million euro). This is to contribute to bringing in as many renewable energy sources to the network as possible.
(Photo: Kurucz Árpád)
