The European Commission has announced the release of €10 billion in cohesion funds for Hungary, nearly a year after the funds were frozen due to concerns over the country's adherence to the rule of law. This decision allows the Hungarian government to submit reimbursement requests of up to €10.2 billion for development projects throughout the country.

The release of the frozen funds comes after the Hungarian government implemented a judicial reform in May, aimed at strengthening judicial independence and minimizing political interference in the courts. Didier Reynders, the European Commissioner for Justice, stated that they have received sufficient guarantees regarding the independence of the judiciary in Hungary.

However, the European Commission emphasized that this decision is not the end of the process. They will continue to closely monitor the situation and react promptly if any backsliding occurs. The Hungarian government still needs to fulfill 27 "super milestones" and four "horizontal enabling conditions" to access over €30 billion in frozen cohesion and recovery funds.

While this partial release of funds is seen as a positive step, concerns remain regarding breaches of the rule of law in Hungary. Amnesty International and the Hungarian Helsinki Committee jointly analyzed the judicial reform and concluded that it falls short of addressing the shortcomings pointed out by Brussels. They argue that the adopted solutions are makeshift and violate relevant laws and the principles of the rule of law.

Hungary still faces a freeze on over €11.5 billion in cohesion funds, including €6.3 billion under the "conditionality mechanism" due to concerns related to public procurement, conflicts of interest, and corruption.

Additionally, Hungary is unable to access its €10.4 billion COVID-19 recovery and resilience plan, except for a payment of €920 million in "pre-financing" for energy projects. The Commission stated that due to the outstanding super milestones, no further payment requests can be processed at this time.

The recent release of funds coincides with Hungarian Prime Minister Viktor Orbán's threats to veto the opening of accession negotiations with Ukraine, block a €50 billion special fund for Ukraine's budget, and halt provisions of military aid. Speculation has arisen regarding a potential quid-pro-quo between Brussels and Budapest. However, the European Commission vehemently denies engaging in such horse-trading.

Going forward, the European Commission will continue to hold Hungary accountable for upholding the rule of law while fulfilling the remaining conditions to unlock the frozen funds. The leaders of the European People's Party (EPP), Socialists and Democrats (S&D), Renew Europe, and the Greens have emphasized the Commission's duty to ensure that any reforms are not reversed or weakened by subsequent legislation or decrees.

It remains to be seen how Hungary will progress in meeting the remaining milestones for accessing the full amount of frozen funds and addressing concerns raised by the European Commission regarding the rule of law in the country.