Hungary is set to permanently lose access to just over €1bn in EU funds on January 1, as disputes between Budapest and Brussels hamper the country’s capacity to drag itself out of recession — and undermine Prime Minister Viktor Orbán’s bid for re-election in 2026.
The freeze on EU funds has hit Hungary at a time when its government has little room for manoeuvre. Its budget deficit this year stands at more than 4.5 per cent of GDP, increasing political tensions.
Hungary’s economy shrank by 0.7 per cent in the third quarter — the second contraction in a row — plunging the economy into a technical recession amid weak demand in the automotive, electronics and pharmaceutical sectors that dominate its manufacturing base.
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