The incoming Prime Minister of Hungary, Peter Magyar, has entered into a dispute with the European Commission over the amount of funds that Budapest can receive from the frozen EU recovery fund after the pandemic, writes "Politico".
According to information from European and Hungarian representatives, the talks in recent days have focused on the 10.4 billion euros that Hungary is entitled to receive. The funds were blocked for violations of European law during the rule of Viktor Orban, who lost elections last month after 14 years in power.
Last week, Magyar met with European Commission President Ursula von der Leyen in an attempt to restore relations between Budapest and Brussels after years of tension.
However, disagreements remain, with the EC recommending that Hungary request only the 6.5 billion euros in grants, while Budapest insists on receiving an additional 3.9 billion euros in loans.
"We are very optimistic about the release of all the blocked funds," said Kinga Kolar, an MEP from the Hungarian "Tisza" party.
Brussels believes that the time until the deadline is not enough to release all the funds, as payments depend on the implementation of specific reforms. The commission also warns that the loans would increase pressure on Hungary's public finances, with public debt around 75% of GDP and a budget deficit expected to be close to 7% in 2026.
For Magyar's government, refusing the loans would seem like a political compromise after an election campaign promising a full "reset" of relations with the EU. Last week, he said he was confident that the EU "will be flexible enough to allow Hungary to draw down every euro cent of the funds it is entitled to".
Hungary plans to present a new plan with revised reforms and targets by the end of May. Brussels is insisting that some of the more difficult measures, including elements of the pension reform, be dropped because they are unlikely to be implemented by August.
Magyar is due to be sworn in on Saturday.