EU Court Adviser Recommends Annulment of Decision to Unfreeze Billions for Hungary

By Anietie anii-bassey

An adviser to the European Union’s highest court on Thursday recommended that judges annul a 2023 decision by the European Commission to release billions of euros in funding to Hungary, arguing that the country had not met key judicial reform requirements at the time the money was unfrozen.

In a non-binding opinion, Advocate General Tamara Ćapeta urged the European Court of Justice to strike down the Commission’s decision to allow the disbursement of approximately 10.2 billion euros, or about $12.1 billion, that had previously been suspended over concerns about democratic backsliding, corruption and judicial independence under Prime Minister Viktor Orbán’s government.

The European Commission had initially frozen the funds in 2022, citing what it described as systemic rule-of-law deficiencies in Hungary. Among the concerns were alleged failures to combat corruption, safeguard the independence of courts and ensure transparency in the use of EU money. The suspension marked one of the most forceful steps taken by Brussels in a long-running standoff with Budapest over democratic standards.

A year later, the Commission determined that Hungary had implemented sufficient reforms to warrant the partial release of the funds. The decision unlocked billions that are crucial to Hungary’s economy, as the country is a significant net beneficiary of EU financial support.

However, the European Parliament challenged that move in 2024, arguing that the Commission had acted prematurely and misjudged whether Hungary had fulfilled the conditions required for the funds to be restored. The Parliament contended that the reforms cited by the Commission were either incomplete or not yet fully in force at the time of the decision.

In her opinion, Ćapeta sided with the Parliament’s position. She wrote that the Commission had “incorrectly applied the requirements imposed on Hungary” and had allowed the funds to be disbursed “without any explanation” before the necessary legislative reforms had entered into force or were being properly implemented.

Although the advocate general’s opinion is not legally binding, it carries significant weight. The European Court of Justice frequently follows such recommendations when issuing its final rulings. A decision to annul the Commission’s action would represent a serious rebuke to the EU’s executive arm and could reopen a politically sensitive dispute over Hungary’s access to European funds.

The dispute over funding is part of a broader and increasingly strained relationship between Hungary and EU institutions.

For more than a decade, the Commission has accused Orbán’s government of eroding democratic checks and balances, tightening control over the media landscape and undermining minority rights. Orbán, in power since 2010, has consistently rejected those accusations, framing them as politically motivated attacks and unwarranted interference in Hungary’s sovereign affairs.

One of the Commission’s central concerns when it suspended the funds was the integrity of public procurement processes — the way in which state contracts for goods, services and infrastructure projects are awarded using EU money.

EU officials have long expressed fears that such contracts have disproportionately benefited business figures close to the ruling party, raising questions about favoritism and corruption.

While the 10.2 billion euros were released in 2023, billions more in EU funding remain frozen. The continued withholding of funds has weighed on Hungary’s public finances and contributed to prolonged economic stagnation. Budapest has repeatedly argued that the financial pressure amounts to political coercion aimed at forcing policy changes.

Orbán, who advocates for stronger powers for national governments within the 27-member bloc, has accused Brussels of using financial leverage to discipline governments that diverge from mainstream EU positions. The funding dispute has become a central theme in domestic political debates, especially as Hungary approaches parliamentary elections in April.

Those elections are widely seen as the most serious challenge to Orbán’s 16-year hold on power. Péter Magyar, leader of the center-right Tisza party, has emerged as a formidable contender, holding a lead in many opinion polls. Magyar has pledged to restore the independence of Hungary’s democratic institutions, rebuild trust with EU partners and swiftly secure the release of frozen European funds.

The pending judgment from the European Court of Justice adds another layer of uncertainty to Hungary’s political and economic outlook. If the court follows the advocate general’s recommendation and annuls the Commission’s 2023 decision, it could trigger renewed negotiations between Brussels and Budapest and intensify scrutiny of Hungary’s reform efforts.

For now, the case underscores the high stakes involved in the EU’s rule-of-law mechanism — a tool designed to tie access to bloc funding to adherence to democratic standards.

As the court deliberates, both Hungary’s government and its European partners will be watching closely, aware that the outcome could shape not only financial flows but also the future balance between national sovereignty and EU oversight.