Hungary has proposed a resolution to its dispute with the European Commission, which has left 21 universities without access to the Erasmus+ and Horizon Europe programmes. Simultaneously, the country continues to defy a €360 million fine imposed by the European Court of Justice (ECJ) for breaches of EU asylum laws.
The dispute over Erasmus and Horizon funding began in December 2022, when the European Commission excluded over 30 Hungarian institutions, citing concerns about academic freedom, transparency, and conflicts of interest linked to government figures managing these institutions. In response, Hungary’s National Assembly recently passed an amendment to reform the governance of public interest asset management foundations, or “kekva,” which oversee the affected universities.
The revised law aims to address EU concerns by preventing high-ranking politicians from joining the foundations’ management boards and ensuring proper conflict-of-interest declarations. Hungary plans to notify the Commission of the changes in the coming days, said János Bóka, Hungary’s EU affairs minister. This will prompt the Commission to evaluate whether the amendments meet its requirements and allow funding to resume.
EU Justice Commissioner Didier Reynders expressed cautious optimism, suggesting a resolution could be reached before the end of the year if Hungary’s measures adequately address the issues. However, previous efforts from Budapest have failed to meet the EU’s standards.
The exclusion of Hungarian institutions from EU programmes is tied to a broader conditionality mechanism that has frozen €6.3 billion in EU funds due to corruption concerns and rule-of-law deficiencies. This is part of a larger package of €11.7 billion in cohesion funds that remain immobilised. Hungary has also been unable to access €10.4 billion in recovery funds for similar reasons.
At the same time, Hungary faces escalating financial penalties from the ECJ for failing to comply with a ruling on asylum laws. The court imposed an initial €200 million lump-sum fine and €1 million in daily fines for non-compliance. The daily penalties have added up to €160 million since the ruling on June 13, bringing the total to €360 million. The European Commission has begun deducting the €200 million from Hungary’s EU funding allocation and may take similar action with the daily fines.
While negotiations between Brussels and Budapest continue, the European Commission insists Hungary must comply with the ECJ ruling to halt the accumulation of fines. Hungarian Prime Minister Viktor Orbán has denounced the ruling as “outrageous,” accusing the court of judicial overreach.
