EU legal adviser says billions in funding for Hungary were wrongly released

The advocate general for European Union’s highest court on Thursday urged the court to annul a 2023 European Commission decision to release billions in funding to Hungary that had been suspended over rule-of-law and corruption concerns.

The European Commission in 2022 suspended the money to Budapest over what it said was democratic backsliding by Hungary's right-wing populist government and failures to tackle corruption and ensure judicial independence. A year later, the Commission found that the government had carried out sufficient reforms to have around 10.2 billion euros ($12.1 billion) released.

But in a non-binding opinion on Thursday, Advocate General Tamara Ćapeta urged the European Court of Justice to annul the decision that unfroze the funds, arguing that Hungary had not carried out the required judicial reforms by the time they were released.

While not legally binding, such opinions are often followed by the court.

Hungary, a major net recipient of EU funds, has come under increasing criticism for veering away from democratic norms. The Commission has for more than a decade accused Hungarian Prime Minister Viktor Orbán of dismantling democratic institutions, taking control of the media and infringing on minority rights. Orbán, who has been in office since 2010, rejects the accusations and has denounced them as interference in Hungary's sovereignty.

When it suspended funds to Hungary, the Commission was worried about, among other things, public procurement — purchases by the state of goods and services or for the execution of projects using EU money. The bloc has feared that such contracts have allowed Orbán’s government to channel EU funding into the businesses of politically connected insiders.

The case contesting the Commission's release of funds was brought in 2024 by the European Parliament, which argued the Commission had committed errors in determining Hungary was eligible to receive the funding.

In her opinion, Ćapeta wrote that the Commission had “incorrectly applied the requirements imposed on Hungary when it permitted, without any explanation, the disbursement of the budget before the required legislative reforms had entered into force or were being applied.”

Billions in additional EU funding remain frozen to Hungary, a shortfall in its budget that has contributed to years of economic stagnation. Orbán, an advocate of greater authority for national governments among the EU's 27 member states, has accused the bloc of interfering in his country's internal affairs and using the distribution of funds as a means of coercion.

The autocratic leader faces what will likely be the biggest challenge of his 16 years in power during elections in April, where a center-right challenger, Péter Magyar and his Tisza party, hold a substantial lead in most polls.

Magyar has promised to restore Hungary's democratic institutions and pursue a more constructive relationship with the EU, and to quickly bring home the frozen funds.