Hungary receives 375 bn Christmas present from Brussels
Between early November and early December, the EC transferred nearly HUF 375 bn to Hungary in EU funding according to our data, of which the Finance Ministry only accounted only HUF 22 bn for November in its recent data release, which further improves the budget situation at the end of the year. The government could use this room to manoeuvre to make substantial grant payments, which has not really been the case. Between early November and early December, "only" 1,211 new grant winners were announced, for a combined HUF 34 bn, and HUF 74 bn has been disbursed to earlier winners.
As the summary below shows, most of the winners were in the Rural Development Operational Programme (RDOP or VP) and the Economic Development and Innovation Operational Programme (EDIOP or GINOP).
As the chart below shows, there has been no increase in the volume of grants awarded even though the current HUF 375 bn transfer and the previous HUF 500 bn transfer in September mean the budget would have the funds for more allocations. Slower disbursement might be explained by limited invoice volumes due to time-consuming ongoing projects.
Aside from the monthly winners in the RDOP, which often produce extreme outliers, the other operational programmes are picking up again, with nearly 500 new winners in the past month.
Hungarian authorities disbursed about HUF 74 bn in November for all winning projects, which means all the winners combined in the 2014-2020 period have now received HUF 6,600 bn in grants.
Looking at the four key indicators for the 2014-2020 EU budget cycle, we see that the total volume of tenders announced are now above HUF 10,400 bn, or 114% of the original seven-year budget. The total volume of tenders won comes to HUF 9,453 bn (102.9% of the budget, by far the highest ratio on the EU), while locally disbursed funds to these projects total HUF 6,600 bn (71.9%).
With September's and November's major EU transfers, the volume of funds transferred from Brussels has reached HUF 3,496 bn according to our data (43.8% of the seven-year budget, slightly above the EU average), which has substantially decreased the gap between disbursements from advance payments from the Hungarian budget and transfers by the EU. However, the difference still remains more than HUF 3,000 bn, and as EU funds come pouring in over the coming period, this could result in significant general government surplus at certain times.
Cover photo: MTI/Prime Minister's Press Office /Zoltán Fischer
