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EU unfreezes regional aid funding for Hungary

Staff writer |
Hungary won access to 2 billion euros in frozen EU development funds after convincing Brussels its management of projects met European standards, reports EurActiv.

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Johannes Hahn, the EU's head of regional policy, told the Hungarian prime minister's chief of staff Janos Lazar he was satisfied Budapest was correcting the errors in Hungary's management that prompted Brussels to suspend aid in January, in part over how project engineers were being chosen.

"We have arrived at a constructive agreement," Lazar told a news conference. "Two billion euros can now be mobilised after corrections are finalised in the coming weeks," he said, adding that about 250 million euros withheld by the EU as a fine could be accessed later on so Budapest will not lose any of its money.

The agreement points to better relations between the European Commission, the EU executive, and Budapest, which have worsened over Prime Minister Viktor Orban's unorthodox economic, centralising policies.

Hungary was also the latest former communist state in central Europe to have funding from the EU suspended. The Commission froze all Czech payments last year after an investigation into allegations of graft.

The mone is for transport, environmental, water treatment and health projects, among others and which are seen as vital for the economy. Between 2007 and 2013, Hungary is entitled to receive about 8.2 trillion forints (27 billion euros) in EU aid for development programmes.

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