Hungary’s investment plan for drawing on European Security Action for Europe (SAFE) funds has been completed, and the government has already submitted the documents necessary to apply for EU funds, based on a statement released by the Ministry for National Economy on Tuesday.
The Ministry also revealed that the plan includes an amount of EUR 17.4 billion, which is higher than the previously indicated EUR 16.2 billion, justified by the real, detailed, and substantiated needs of the Hungarian defense forces and related sectors.
Further arguments in favor of this include Hungary’s significant share in the SAFE program, its geographical location, its stabilizing role in the region, and its committed NATO and EU membership.
In addition to strengthening defense capabilities and developing the domestic defense industry, the EU’s armament program can contribute to strengthening Hungarian supply chains and innovation networks, increasing strategic autonomy, and even reducing budget interest expenses. The European Union’s loan is cheaper than market sources, offering a gradually drawable loan with an interest rate that is expected to be around 200 basis points lower.
In the long term, this could mean tens of billions, and then hundreds of billions, of forints in interest savings for the state budget, even through the redemption of foreign currency loans.
The aim of the instrument is to strengthen European security by developing the defense capabilities of member states, supported by favorable financial arrangements. For Hungary, this means that if the European Commission makes a favorable decision, the country will be able to access the necessary funds on favorable terms, with a long maturity and low interest rates. The size of the funds could significantly contribute to accelerating domestic industrial and military developments, as well as dual-use developments.
The announcement also revealed that
throughout the entire process of preparing the National Investment Plan, Hungary held regular consultations with the committee’s experts in Budapest and Brussels.
The submitted documentation includes the complete National Investment Plan, its mandatory annexes, and all other necessary supporting materials, in accordance with the prescribed deadline and the technical requirements specified by the committee.
The committee’s assessment will be followed by a decision by the European Council, after which the loan agreement can be concluded, most likely at the beginning of next year. Based on the current schedule, if the process goes as planned, an advance payment of 15 percent of the total amount of support could arrive in the spring of 2026.
However, MEP Kinga Gál wrote in a Facebook post that accessing the funds might be out of reach for the government, as EU Foreign Policy Chief Kaja Kallas is “threatening Hungary,” saying that the country will only have access to the defense loan available under SAFE if the government implements the “rule of law” reforms demanded by Brussels.
In reality, this is nothing more than the enforcement of political expectations: they want us to give up our pro-peace, anti-migration stance and our position on Ukraine’s EU membership,”
she stated.
“The extension of the rule of law conditions is clearly a means of exerting political pressure and an abuse of the principle of the rule of law. Citing unfounded accusations, they are using ideological blackmail to withhold EU funds. This is particularly ironic given that European institutions are currently being rocked by a series of corruption scandals. Most recently, Kaja Kallas’ predecessor, the socialist Federica Mogherini, was arrested on suspicion of corruption. However, Brussels bureaucrats are conspicuously silent on this matter,” she concluded in her post.
Related article
Defense Forces’ Lynx Armored Vehicle Fleet Growing Rapidly
The Lynx KF-41 is manufactured domestically through a joint venture with Rheinmetall.Continue reading
Via Világgazdaság, Politico; Featured photo: Honvédelem.hu
The post Access to EUR 17.4B European Security Fund Hindered by “Political Blackmail” appeared first on Hungary Today.
Source link
