EU Court Adviser Says Commission Wrongly Released €10 Billion to Hungary, Recommends Annulment

The top legal adviser to the European Court of Justice has recommended that the court annul the European Commission's 2023 decision to release approximately €10 billion in frozen EU funds to Hungary, concluding that Budapest had not completed the judicial reforms required for their release .

Advocate General Tamara Capeta issued her opinion on Thursday, stating that the Commission had incorrectly applied the requirements on Hungary when it permitted the disbursement of the budget without adequate explanation . The opinion, while not legally binding, carries significant weight — the court's judges typically follow advocate general recommendations when delivering their final rulings.

The funds were originally suspended in 2022 after the Commission raised serious concerns about systemic corruption and democratic backsliding under Prime Minister Viktor Orban's government . The suspension targeted Hungary's failure to ensure judicial independence and tackle corruption, marking one of the EU's strongest enforcement actions under its rule-of-law mechanism.

In December 2023, the Commission concluded that Hungary had made sufficient changes to meet the conditions and lifted the suspension, making the country eligible to receive the funds from various EU programmes . But the decision immediately drew criticism from the European Parliament, which filed a formal legal challenge in 2024 claiming the Commission had made manifest errors in its assessment .

The timing of the Commission's decision has fuelled persistent suspicions of a political bargain. The funds were unfrozen just days before a critical EU summit where Orban threatened to veto a €50 billion aid package for Ukraine and block the start of EU accession talks with Kyiv . At that summit, Orban left the room during a coffee break, allowing the other 26 EU leaders to approve the accession talks . In February 2024, Hungary subsequently lifted its veto on the Ukraine support package .

Some MEPs openly accused the Commission of political expediency, suggesting the EU struck a deal trading unfrozen funds for Orban's cooperation on Ukraine . The Commission has denied any such agreement, with a spokesperson stating that the decision was based on a thorough assessment of the reforms undertaken by Hungary to remedy the shortcomings of the judicial system .

Capeta rejected the Commission's defence, arguing that Hungary should have met all previously established milestones before receiving any funds . She said the Commission had not been transparent in its decision-making and had failed to properly assess whether the reforms to Hungary's judicial system were genuinely in force and being effectively applied .

The opinion lands at a politically sensitive moment. Orban faces what polls suggest is the most serious electoral challenge of his 16 years in power, with centre-right challenger Peter Magyar and his Tisza party leading in most surveys ahead of April parliamentary elections . Magyar has promised to restore the rule of law and repair Hungary's strained relations with the EU.

EU diplomats have been careful to avoid putting additional pressure on Orban ahead of the vote, with one diplomat telling Politico the legal opinion was not what they needed this close to the ballot . The concern is that any perceived EU interference could be spun into campaign material by Orban, who has long positioned himself as a defender of Hungarian sovereignty against Brussels overreach.

Billions in additional EU funding remain separately suspended for Hungary, prompting Orban to regularly accuse the Commission of using payments as a means of coercion and interfering in the country's internal affairs . His political director, Balazs Orban, characterised the advocate general's opinion as stemming from Hungary's opposition .

If the court follows Capeta's recommendation and annuls the Commission's decision, the practical consequences could be significant. EU law experts have said the Commission may need to recoup the money by reducing future funding allocations to Hungary . The ruling would also set an important precedent on the Commission's role in enforcing rule-of-law conditions — potentially tightening the standards it must apply before releasing suspended funds to any member state in the future.

The court's judges are expected to deliver their final decision in the coming months .