Hungarian Parliament building in Budapest, Hungary. dimbar76/Adobe Stock

Following victory in April’s elections, Hungary’s new Prime Minister Péter Magyar must now work to address not only economic concerns but also damage to the rule of law inflicted under his predecessor, Viktor Orbán. Magyar formed his first government in May, but even before that he’d already shown – albeit indirectly – that repairing the rule of law will be a top priority.

Within days of the election, he visited Brussels to discuss how Hungary will go about unblocking €17bn in EU funding that’s dependent on addressing a number of rule of law issues. ‘To begin with, anything around the rule of law and rectifying the situation here in Hungary will be done in light of what is required to release the EU funds,’ says Viktória Szilágyi, Co-Chair of the IBA European Regional Forum.

It’s through this report that the EU has made a number of recommendations, which form the basis of the 27 ‘super milestones’ that Hungary must meet to allow EU funding to flow. While the details of the measures Hungary will implement are being discussed by Magyar and the EU, the ‘milestones’ cover judicial independence, anti-corruption, building an electronic public procurement system to increase transparency and strengthening the role and powers of the council that appoints judges in order to depoliticise it.

The final agreement with the EU is expected to become public by the end of May. Timing is key as access to the EU funding has a deadline of 31 August. But Magyar is described by observers as ‘decisive,’ someone who can get things done fast. For instance, the new Hungarian government has already removed the state of emergency introduced by Orbán’s regime – first as a result of the Covid-19 pandemic, while later the government used the war in Ukraine to justify it. ‘At last we are going to see the end of government by decree where laws are imposed on everyone, and we are going back to a proper parliamentary system,’ says Szilágyi, a partner with Lakatos, Köves and Partners in Budapest.

The conundrum to resolve, however, lies in how to re-establish the rule of law while also respecting the processes required to uphold it. In practical terms, Magyar may want to dissolve everything from his predecessor’s regime. But that was an approach taken by Orbán in the 2010s, as he claimed to be removing various systems and organisations that represented the old communist regime. ‘Magyar could adopt laws to get rid of Orbán-appointed personnel, but that in itself could be a violation of the rule of law, which is what the new government will probably not want to do,’ says Michael Meyer-Resende, Executive Director of the NGO Democracy Reporting International.

There are numerous judges and officials appointed directly or indirectly by Orbán. Magyar has published a list of people he believes should resign, including the President of Hungary. But so far, this hasn’t resulted in any departures. ‘Will he go further and use his super-majority in the Hungarian parliament to force a personnel change?’ asks Szilágyi. ‘That could be effective but it leaves us without the checks and balances we need going forward of Magyar’s own people.’

Alongside this are pressing concerns around the Hungarian economy, which is suffering from low growth and productivity, and which has a high fiscal deficit. But EU funding could change that by, for example, injecting investment in infrastructure and energy. There’s optimism too that the change of regime itself could refresh the economy. ‘From a business perspective, we expect to see new investments coming in, private equity coming back,’ says Szilágyi. ‘We’ll be looking at new sectors so that Hungary is not solely reliant on the automotive and battery industries.’

No one is underestimating the challenges ahead, which are compounded by the fact that the new government is populated by ministers who lack political experience. Prior to their new roles, one worked at an oil company, while another ran a zoo, for example. ‘They are professionals from outside politics. They are not politicians,’ said Zsófia Banuta, a Hungarian and co-founder of the NGO Unhack Democracy, at a talk in London recently. ‘How will they manage? And they will lose the support very quickly if they don’t listen to their supporters.’

Observers are confident that despite Magyar’s immediate plan of action and the time constraints attached to EU funding, he is also aware that real change will take time and nuance. ‘Magyar knows that he cannot change the years of toxic politics straight away,’ says Szilágyi, as ‘there are distorted frameworks that have interfered with the economy, the rule of law. He can’t just dismantle it – but he will have to disentangle it.’