Hungary, led by Prime Minister Viktor Orbán, is not ready to concede. The government is pressing to secure a total of 13.3 billion euros in European funding for Hungary, consisting of 7.5 billion from cohesion funds and 5.8 billion from the Next Generation EU program. In response, Budapest has chosen to exercise its veto and block key votes at the European Union Council during the upcoming assembly, signaling a firm stance on financial arrangements that affect the bloc’s economic posture. The discussions hinge on two high-stakes items: a proposed 18 billion euro package to support Ukraine and a 15 percent minimum corporate tax on large multinational corporations. Capable ministers from across Europe are watching closely as this unfolds. — Council of the EU, 2023.
Representatives from Hungary, speaking to Ecofin, emphasized that they do not support altering the current financial framework. They signaled that while they cannot accept the package as proposed, their objective remains intact. The plan is to deploy aid to Ukraine at the start of January, and they indicated a willingness to seek a solution with the backing of all 26 member states. Zbyněk Stanjura, the Czech Republic’s finance chief serving in the European forum, framed the position as a matter of ensuring that existing multiannual financial commitments stay intact while alternative mechanisms are explored. He also noted that any new approach should avoid disrupting the core budget cycle that governs long‑term EU spending. — Council of the EU, 2023.
The tension extends beyond Ukraine aid. The Czech presidency of the EU has also had to withdraw plans to advance rulemaking on an issue tied to a minimum corporate tax rate. The 15 percent floor, agreed within a global framework overseen by the OECD, targets multinational groups with annual revenues exceeding 750 million euros. Any decision required the unanimity of all Twenty-Seven, and Hungary again blocked the path forward, reiterating that these matters are not automatically linked to the disbursement of European funds. Yet diplomatic circles acknowledge the apparent linkage as a strategic negotiation tactic. — Council of the EU, 2023.
Funds for Hungary
The bloc’s deliberations reached a standstill, with the Twenty-Seven delaying a formal decision and leaving 7.5 billion euros in compliance funds in limbo. Some member states, including Hungary, argue that the proposal should be reexamined in light of reforms pursued by the Orbán government since late November. This reexamination could open room to reduce the amount currently frozen, though officials stress that timelines remain tight. The decision window closes on December 19, and failing to reach a verdict could lead to a formal stalemate that does not impose immediate sanctions on Budapest. The specific plan to rescue Hungary remains the only path to unlocking the 5.8 billion euros, with the remaining 7.5 billion hanging in the balance. — Council of the EU, 2023.
Brussels has signaled a willingness to approve the plan, provided that milestones tied to reforms aimed at fighting corruption and strengthening judicial independence are met. The urgency is clear given the potential loss of roughly seventy percent of the allocated funds if Ecofin does not endorse the Hungarian plan by year-end. An absence of a decision would push the Czech presidency to call an extraordinary cabinet session next week or to escalate the matter at the EU leaders’ summit scheduled for mid‑December. The debate underscores a broader pattern where fiscal support and governance reforms are being weighed together in a critical budgetary moment for Europe. — Council of the EU, 2023.