The European Commission has proposed releasing €4.2 billion in EU Cohesion funding previously withheld from Hungary, alongside restoring full access to Erasmus+ and Horizon Europe for Hungarian students and researchers. The announcement marks another step towards normalising relations between Brussels and Budapest following the defeat of Viktor Orbán’s government in April.
Under the proposal, restrictions imposed on Hungary in December 2022 would be lifted. The €4.2 billion would become available again for three Cohesion Policy programmes covering environmental and energy efficiency, transport and regional development. Universities maintained by Hungarian public interest trusts would also regain access to new EU funding commitments under programmes such as Erasmus+ and Horizon Europe. The Council has one month to decide whether to approve the Commission’s proposal.
The decision would reverse measures introduced during a prolonged dispute over Hungary’s rule of law.
In September 2022, the Commission proposed activating the EU’s then-new Conditionality Regulation against Hungary. The mechanism allows the EU to suspend funding when breaches of rule-of-law principles threaten the proper management of its budget. Brussels had identified systemic problems with public procurement, corruption, conflicts of interest and the effectiveness of criminal investigations.
Three months later, EU governments agreed to suspend 55% of commitments under three Cohesion programmes, initially amounting to approximately €6.3 billion. They also prohibited new funding commitments to public interest trusts and institutions maintained by them, including numerous universities. It was the first time the EU had used the Conditionality Regulation against a Member State.
For years, the restrictions remained in place. The Commission’s reassessments in December 2023 and December 2024 concluded that Hungary had failed to address the shortcomings sufficiently.
The turning point came with Hungary’s April 2026 elections. Péter Magyar’s Tisza party secured a two-thirds parliamentary majority, ending Orbán’s 16 years in power. Magyar had campaigned on restoring Hungary’s relationship with the EU, tackling corruption and recovering suspended European funding.
His government subsequently introduced extensive reforms, including stronger powers for Hungary’s Integrity Authority, new asset-declaration requirements, tighter procurement rules and changes to public interest trusts. The latter are being phased out, with those responsible for higher education scheduled for termination by August 2027. Hungary has also joined the European Public Prosecutor’s Office, allowing it to participate in EU-level investigations into fraud affecting European funds.
Following Hungary’s formal notification of these reforms on 9 September, the Commission concluded that the conditions justifying the 2022 restrictions were no longer fulfilled.
The proposed lifting illustrates how the Conditionality Regulation can operate in both directions: EU funding can be suspended when risks to the budget are identified and restored when the Commission and Council determine that those risks have been sufficiently addressed.
Four years after Hungary became the first country subject to the mechanism, its restrictions could now be lifted through the same procedure that introduced them.
