Hungary is set to permanently lose access to just over €1bn in EU funds on January 1, as disputes between Budapest and Brussels hamper the country’s capacity to drag itself out of recession — and undermine Prime Minister Viktor Orbán’s bid for re-election in 2026.

Hungary will lose €1.04 ($1.08) billion from EU funds under the conditionality mechanism, as confirmed by European Commission spokesperson Anna-Kaisa Itkonen. This marks the first time in EU history that a country will permanently lose such funds due to a lack of governmental action.

Hungary has lost its entitlement to around one billion euros in EU aid due to breaches of the rule of law. In order for the money to be released, the country would have had to implement reform requirements by the end of 2024,

Hungary will lose €1.04 billion from EU funds under the conditionality mechanism, confirmed European Commission spokesperson Anna-Kaisa Itkonen. Due to the conditionality mechanism, Hungary is set to forfeit €1.