BUDAPEST, April 14 (Reuters) - European Commission President Ursula von der Leyen said on Tuesday that she spoke with Hungary's election winner Peter Magyar and there is swift work to be done to introduce reforms needed for unfreezing EU funding.
"We discussed immediate priorities," von der Leyen said in a post on social media platform X.
"There is swift work to be done to restore, realign and reform. Restore the rule of law. Realign with our shared European values. And reform, to unlock the opportunities offered by European investments," she added.
Hungary has a total of about 17 billion euros of EU funds frozen over rule of law concerns under the outgoing government of Prime Minister Viktor Orban.
Hungary is also still waiting for the European Commission to sign off on a 16 billion euro defence investment plan under the bloc's SAFE loans scheme for defence projects.
Magyar, whose Tisza party won a two-thirds supermajority in Hungary's parliament, has pledged to prioritise unlocking the funds and is now under pressure to quickly implement reforms to unlock the money after his government takes office, likely in mid-May.
"The ball is in Magyar's court to prove he's serious about his campaign promises of wanting to mend ties with Brussels," said one EU diplomat. "Now it's time to show, not tell," they added.
Part of Hungary's EU funding is frozen due to lack of compliance with EU standards in areas such as academic freedom and right to asylum. Around 10 billion euros from the bloc's post-pandemic recovery fund is frozen until Hungary fulfills requirements to strengthen judicial independence and accountability, with a deadline of August 31 to implement reforms.
Magyar said in a post on Facebook after the call that von der Leyen told him the European Commissionwould work closely with the new Hungarian government to make sure results are delivered within the “extremely tight deadline” available to release the funds.
Officials and analysts say introducing the required reforms will not be an easy feat.
"The most important constraint is the deadline on 31st August for completing all Recovery and Resilience Facility milestones – a window that may prove too narrow to unlock the roughly 10 billion euros of frozen EU funds available," said Liam Peach, an economist at Capital Economics.
Credit ratings agency Moody's said on Monday that "Tisza's parliamentary supermajority will facilitate the implementation of these plans". But it added that "officials appointed by Fidesz remain in position across key institutions" and "political differences across the country's institutions can complicate or delay legislative change, limiting the new government’s ability to deliver deep reforms."
(Reporting by Lili Bayer and Gergely Szakacs in Budapest; Editing by Makini Brice, William Maclean)
