RRF application: when could EU funds reach Hungary?

Hungary has submitted to the European Commission its payment request under the Recovery and Resilience Facility, or RRF, worth nearly HUF 3,700 billion. The submission is an important step because it starts the official EU assessment process at the end of which — if the decision is favourable — the funds may indeed arrive. At the same time, filing the request is not the same as disbursement: the key question in the next period will be whether the EU institutions consider the agreed conditions to have been fulfilled.

What is the RRF, and how much money is involved?

The RRF is the central instrument of the European Union’s recovery fund, through which member states can finance reforms and investments. According to the European Commission’s earlier information, Hungary’s recovery plan includes €6.5 billion in non-repayable grants and €3.9 billion in loans, meaning a total envelope of more than €10 billion.

According to the European Commission’s Q&A page, Hungary had previously already received a REPowerEU pre-financing payment of €920 million. However, it can access the remaining funds only if the payment request receives a positive assessment and Brussels accepts that the related conditions have been fulfilled.

What does the current submission mean?

The request submitted now indicates that the Hungarian side considers the commitments on the basis of which it can request money from the EU fund to have been met. According to Portfolio’s report, the submission was made in the last possible statutory time window, so the timing carries particular weight.

This step is therefore not merely an administrative formality. It could also be a turning point from an economic and budgetary perspective, because from this point the question is no longer whether Hungary will submit the request, but whether the EU institutions will accept that the commitments have been fulfilled.

What stages will the request go through?

Under the RRF system, the payment of funds is not automatic but performance-based. Under EU rules, member states must demonstrate that the milestones and targets set out in their national plan have been met, and only then can disbursement begin.

For this request, the Commission’s assessment comes first. In this process, it examines whether the reforms and investments linked to the Hungarian plan have indeed been implemented in the way undertaken, and whether the key conditions have been met.

According to HVG’s report, as well as other press reports, after the assessment the opinion of the Economic and Financial Committee, or EFC, is also needed for the final transfer. This means that for the money to arrive, the request must pass through several levels of EU scrutiny.

The 27 super milestones are the most important filter

According to the European Commission’s 2023 statement, Hungary’s plan is linked to 27 so-called super milestones, mainly related to judicial independence and the institutional and control framework for anti-corruption measures.

These are not simple technical conditions but key elements of the payment system. Based on the Commission’s statement and an earlier HVG report, a precondition for the actual disbursement of the funds is that these super milestones must be fully met.

In practice, this means that the Commission does not look only at whether a law or measure has been adopted, but also at whether its actual effect and operation comply with the commitments. If Brussels considers that any key condition has not been properly met, payment may be partially or even fully suspended.

Where could there be disagreement between the Hungarian and Brussels assessments?

Submitting a payment request always starts from the premise that the applicant country considers its commitments fulfilled. Even so, that does not necessarily mean the European Commission will assess the situation in the same way. In the current case, this is precisely the main uncertainty.

The essence of the Hungarian position is that the necessary reforms and commitments have been completed, so the way is open for payment. By contrast, earlier Commission statements and several press reports stressed that fulfilment of the super milestones would be examined separately, and the result of that assessment cannot yet be regarded as a settled matter.

In other words, the current step is more the start of the verification phase than the end of the process. In the next period, the decisive issue will be how far the Commission sees the practical fulfilment of the commitments as having been proven.

What would the money be used for if it arrives?

According to government information and the official page of the Recovery and Resilience Plan, the amended Hungarian plan targets, among other things, the modernisation of the electricity grid, improvements in energy efficiency, and the digitalisation of education and healthcare. Over the longer term, these could also affect competitiveness and the functioning of public services.

The economic significance of such funds lies not only in their ability to finance investments, but also in the fact that they can ease pressure on the domestic budget. This may be especially important at a time when the state is simultaneously trying to support growth, maintain investment and keep the deficit under control.

When might the Hungarian economy feel the effects?

The most immediate impact would not necessarily first appear at investment sites, but rather on the side of public finances and funding. According to Portfolio, a positive decision could provide meaningful liquidity and budgetary relief, while the absence of payment could increase the need for adjustment. Since this is an economic assessment published in a press source, it is better treated as a possible scenario rather than a certain outcome.

If approval is granted, the arrival of the money could improve the state’s financial room for manoeuvre, and this could also indirectly affect the pace of investment programmes. However, the actual economic impact also depends on which projects the funds are linked to, how quickly they can be accounted for, and to what extent they replace spending already financed from domestic funds.

In short, the effect of the money may appear sooner in the macroeconomy than in visible developments in everyday life. Households and businesses are more likely to feel the consequences indirectly, for example through budgetary room for manoeuvre, state investment or economic sentiment.

What timeframe is worth preparing for?

EU payment procedures do not typically conclude within days. The Commission must check the implementation documentation, further clarifying questions may arise if necessary, and this is followed by the opinion of the financial bodies and the final decision-making stage.

For this reason, the current submission should not be interpreted as an immediate inflow of money. Rather, it means that Hungary has entered the official assessment phase of the request, the outcome of which could materially influence budgetary and economic room for manoeuvre in the coming period.

If the process ends favourably, EU funds could improve the financing situation and give momentum to programmes aimed at developing the energy network, digitalisation and public services. However, if shortcomings emerge in the assessment, the current submission alone does not guarantee that the full amount will in fact arrive.

The current situation therefore represents both progress and a test at the same time: the request is already in Brussels, but the decisive question comes only after this.