Hungary remains one of the key recipients of European financial assistance in Central Europe, eligible for around €22 billion over the 2021-2027 budget cycle. However, a significant amount of these resources currently remains blocked by Brussels due to problems with the rule of law and corruption scandals at all levels of government in Hungary. The Hungarian authorities have turned European funds into a resource for absorbing funds and enriching themselves on this basis.
Back in 2022, Brussels set Budapest 27 so-called “super milestones” related to the independence of the judiciary, the fight against corruption and transparency in public procurement. The decision was part of the process of approving Hungary’s Recovery and Resilience Plan (RRF). The EU took this step to ensure that European funds would be spent for their intended purpose, and that the country’s judiciary would be impartial and fight corruption. Without these requirements and their implementation, access to the main funds and the Recovery Plan would remain closed. Currently, Hungary, due to failure to meet these requirements on time, will receive approximately 10.4 billion euros less from the RRF Fund. If the planned reforms and measures recommended by the EU are not implemented by August 2026, it risks losing a significant part of these funds forever.
Abuse and corruption in Hungary have long been a systemic phenomenon. The Hungarian authorities have always requested money from European funds under the pretext of infrastructure development, but have used it non-transparently and laundered it in tenders.
One of the most high-profile investigations by the European Anti-Fraud Office (OLAF) was the case of Elios Innovatív Zrt, owned by Orbán’s son-in-law, Istvan Tiborc. The investigation into it by European regulators has been ongoing for over a decade since 2014. The company participated in tenders for the modernization of street lighting in Hungarian cities and consistently won them. The technical requirements for the equipment in the tender documentation were always written in such a way that only Elios products met them. OLAF found “serious irregularities” and “conflicts of interest” in at least 35 implemented projects. The office recommended that the European Commission impose a fine of 43.7 million euros on Hungary in 2018, but Hungarian justice authorities ignored these findings for years, which became an example of impunity and irresponsibility.
Another and largest consumer of subsidies within the framework of European funds is Lorinz Meszáros, a childhood friend of V. Orbán, who became the country’s largest oligarch. His companies receive a large share of contracts for the construction of railways, roads and stadiums financed by the EU. Their characteristic feature was tenders with one participant and inflated prices for the works. The largest investigation concerned the modernization of the Budapest-Belgrade railway line and the Puszpjokladány-Debrecen section. In the latter, OLAF found an overestimation of the cost of the works by tens of millions of euros. Railway contracts have become the main source of “fast capital” for Meszáros. Thanks to guaranteed payments from European funds, his fortune grew faster in the period 2017-2021 than that of Mark Zuckerberg or Jeff Bezos (in proportional terms). According to Transparency International, up to 20% of all government contracts were awarded to firms associated with him or other “friends” of V. Orban.
There are many examples of local authorities using EU funds on a much smaller scale, but for frankly absurd and dubious projects. One of them has gained the popular name “an observation deck without a forest” and has become a meme. In 2023-2024, in the village of Nyirmártonfalva in northeastern Hungary, the authorities decided to build, as they themselves announced, an “ecological trail between the treetops”. However, during the construction, the surrounding forest was cut down and the wood was sold. After a public outcry, the local mayor explained this by saying that “the forest had reached the stage of ripeness for felling, and the new planting had not yet grown”. As a result, a wooden structure several meters high was erected on a vacant lot. 170 thousand euros were spent on this construction, of which approximately 80% was covered by the EU fund. The main manager of the construction was the mayor of the village from Fidesz – Mihai Filemon. He received a grant for construction as a private individual on land that, as it turned out later, belonged to him.
Another case of the use of money from European funds at the local level was what the locals called the “bridge to nowhere”. The local government of the village of Ekeretifulpes received a grant of 1.3 million euros from the EU in 2023 for it. The project involved the construction of a bicycle bridge across the river. After the construction was completed, an asphalt bicycle path was never brought to it. In addition, the bridge itself was built on a site where the river had already dried up. The local authorities promised to complete the paths “later, when new grants appear”, but at present the facility is completely unsuitable for its intended use.
In the village of Felchut, where Orban spent several years as a child and currently has one of his country residences, the Pancho Arena stadium was built with the help of European funds, with a capacity of 3,800 seats. Moreover, the settlement itself barely has 1,500 permanent residents. 12 million euros of EU funds were allocated for its construction. Brussels considered this as a misuse of resources, and the European Prosecutor’s Office became interested in the case.
There are dozens of such examples throughout Hungary. These seemingly local cases became resonant at one time and demonstrated the complete lack of control over the targeted use of funds at the local level, as well as the greed for European money among Fidesz functionaries and V. Orbán’s entourage.
The scale of the problem of misuse of European funds is one of the most problematic issues for the EU. Not only Hungary is a consumer of European funds. They are also received by Romania and Bulgaria, for which investigations are similarly ongoing and there are reasons to believe that they are being misused. The largest number of cases related to complex networks of “front companies” for embezzling funds for the development of small businesses is recorded in Italy and Greece.
Every year, OLAF detects irregularities involving the use of EU funds amounting to between €400 million and €600 million. The European Public Prosecutor’s Office (EPPO) estimates that the EU budget’s losses from financial crimes (including cross-border VAT fraud and corruption in funds) could exceed €14 billion per year. Due to the large scale of misuse and abuse of funds, Hungary leads the way in terms of the amount of funds that must be returned to the EU budget.
In fact, a whole business system has grown up around European funds in Hungary, with people close to Orbán receiving exclusive access to government contracts, to which independent participants were not allowed. As a result, in 2025 Hungary again found itself in last place among EU countries in Transparency International’s Corruption Perceptions Index, sharing this position with Bulgaria. For Brussels, this is not just a reputational loss, but a signal that corrective measures and restrictions are not able to change the system on the ground.